[Marxism] China & stimulus

J Rothermel jayroth6 at cox.net
Wed Dec 3 23:42:38 MST 2008


China & stimulus

Published Nov 16, 2008 6:47 PM


China has become vulnerable to trends in the worldwide capitalist system 
since it allowed market mechanisms to coexist alongside state-owned 
industries. That seemed highly desirable when the world capitalist 
economies were ballooning up. China sustained double-digit growth year 
after year. Allowing investment in companies that exported everything 
from household items to clothing, it became the world’s fourth-largest 
economy. It also sustained such a favorable balance of trade with the 
United States that today China has $1.2 trillion in its currency reserves.

Now that the market for China’s exported products is drying up, however, 
it is experiencing bankruptcies and a big loss of jobs—just like the 
capitalist countries. China’s economic growth has slowed sharply, 
dropping from 12.6 percent in the second quarter of 2007 to about 9 
percent in the third quarter of this year.

However, China is different, because it went through a great revolution 
against landlord oppression and imperialist domination that led to mass 
efforts to build socialism. Even though the retreat toward the market 
began 30 years ago, the role of the state in the economy is still a 
major force. And that state, unlike in so much of the world today, has 
its hands on a lot of cash.

So it’s not surprising that China has come up with a stimulus plan for 
its economy that is very, very different from those in the United States 
and Europe. It is not handing over billions to bail out banks and 
insurance companies.

Instead, under the plan, China will spend $586 billion over the next two 
years “to finance programs in 10 major areas, such as low-income 
housing, rural infrastructure, water, electricity, transportation, the 
environment, technological innovation and rebuilding from several 
disasters, most notably the May 12 earthquake.” (Xinhua, Nov. 10)

Environmentalists in China see these times as ideal to increase efforts 
at reducing greenhouse gas emissions. Some of the billions will go to 
develop mass transportation—especially trains and subways.

The American Society of Civil Engineers estimated in March that the U.S. 
needs to spend $1.6 trillion over the next five years to shore up this 
country’s crumbling infrastructure, including roadways, bridges, 
drinking water systems, public parks, railroads and the power grid. The 
budget debated by Congress this year would cover less than a fifth of that.

If China can build public housing and subways and update its electric 
grid, why can’t the U.S.? Millions of jobs could be created to partially 
offset the looming crisis of unemployment. But it will take a militant 
mass movement to force this banker-ridden political system to change its 
priorities by even a penny.

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