Trump trashes the United States while Xi tries to build a “sustainable China”

from Richard Smith and issue 82 of the RWER

As Trump walked away from the Paris climate accord, Xi announced his intention to “take the driver’s seat in international cooperation to respond to climate change”. Not only that but Xi’s government has also pledged to wipe out the last vestiges of poverty in China by 2030 and turn China into a “moderately prosperous society” where the basic needs of all including jobs, housing, and healthcare, are met. Trump, as we know, has different priorities: tax cuts for the rich.

In short, the contrasts between Donald Trump and Xi Jinping could hardly be more striking. Little wonder, then, that more and more people around the world look to China to take the lead to save us from climate collapse. 

Systemic drivers of destruction

Alas, that is not going to happen. I don’t doubt Xi’s earnest intentions. But for all of that, I’m going to argue here that Xi Jinping cannot lead the fight against global warming because he runs a political-economic system characterised by systemic growth drivers – the need to maximise growth beyond any market rationality, the need to maximise employment, and the need to maximise consumerism – which are, if anything, even more powerful and even more eco-suicidal than those of “normal” capitalism in the West, but which Xi is powerless to alter.

These drivers are responsible for China’s irrational “blind growth”, “blind production” and out-of-control pollution, what Xi himself describes as “meaningless development at the cost of the environment”.^[1] But Xi cannot systematically compel his subordinate officials to stop squandering resources in useless overproduction and overconstruction, and stop polluting the country and the planet because for all of his nominal authority as head of the most powerful and ferocious police state in history, in reality, power is widely shared throughout the 88-million-member ruling party. This means that most of the time, he cannot force officials to give up their ruinous practices when to do so would undermine their economic interests.^[2] Furthermore, I contend that for all his eco-socialist rhetoric, Xi does not try very hard to suppress these destructive practices because Xi Jinping himself is the leading driver of “meaningless growth at the expense of the environment.” Xi’s priority is not to build an “ecological society.” His overriding priority, like Mao and Deng before him is to make China rich and powerful, to achieve superpower status equal to if not superior to the United States, to “Make China Great Again” and reclaim its role as the centre of the world economy.^[3] These achievements are the sine qua non of ruling-class reproduction and guarantor of the communist party’s grip on power. The problem with Xi’s vainglorious ambition is that the hyper industrialization required to realize this China Dream of great power status compels him to break the “harmonious coexistence between man and nature”, to let the polluters pollute, pump China’s CO₂ emissions off the chart, and thereby bring on the ecological collapse not just of China but the whole planet. Why is that?

Here’s why: In capitalism, competition is the motor that drives growth like a perpetual motion machine. It’s automatic: Competition forces producers to cut costs systematically, find cheaper inputs, wider markets, bring in new technology – in short, to constantly revolutionise the instruments and processes of production on pain of failure and extinction in the marketplace. Growth is built in and cannot be exorcised. All efforts to date to “green capitalism” – cap-and-trade, carbon taxes, the dematerialisation of production, and so on – have foundered on the brutal reality that no government or industrialised economy will accept binding limits on greenhouse-gas emissions because no one has yet found a way to staunch emissions without staunching economic growth.^[4]

Yet in capitalism there is a one built-in, if temporary, limit to growth: profits. If companies can’t make a profit, they will cease production and lay off workers, sometimes masses of workers. Now and again, economic recession or collapse brings growth to a halt, at least temporarily, until sufficient value has been destroyed such that the cycle can begin all over again on an enlarged scale. Hence the business cycle. Further, in capitalist democracies, there is still some freedom to organise, so environmental organisations have been able to impose some restraint on pollution – gains which, as we know, are now under unprecedented assault.

But most of this does not apply in China state-sector economy because China’s rulers are not private capitalists – at least not with respect to their state economy (though plenty of them have private businesses on the side, not to mention millions and billions stashed away in Panama and other hideaways).^[5] China’s rulers are bureaucratic collectivists who run a hybrid bureaucratic-collectivist capitalist economy, a system largely – though, of course, not entirely – exempted from the laws of capitalism. It’s difficult to make generalisations about the “Chinese economy” because what’s true of the state-owned sector (about half the economy) is not necessarily true of the foreign-invested joint-venture sector (about a third of the industrial economy) or the domestic private-capitalist sector. Here I’m mainly concerned with the state-owned, state-controlled, state-planned economy because this is the main engine of the economy and because it over-determines the rest as well. China’s State-Owned Enterprises (SOEs) do not live and die by the rules of the market. For all the market reforms since 1978, the government has not allowed a single major SOE to fail and go bankrupt, no matter how inefficient, no matter how indebted, because those industries serve a different purpose. They do not exist just to make money. They exist to fulfil the wishes of China’s Communist Party rulers, especially as they contribute to import substitution and national industrialisation. China’s statist economy thus abides by different laws of motion, different drivers, which I shall try to elucidate in what follows.   read more

[1] People’s Daily, ‘President Highlights Importance of Protecting the Environment’, 21 April 2017, http://en.people.cn/n3/2017/0421/c90000-9206085.html.

[2] See my ‘China’s Communist-Capitalist Ecological Apocalypse’, Real-World Economics Review 71 (May 2015): 19–63.

[3] See Howard W. French, Everything Under the Heavens (New York: Alfred Knopf, 2017).

[4] Richard Smith, Green Capitalism: The God That Failed (Bristol, UK: World Economic Association Books, 2016).

[5] Stuart Lau, ‘Chinese Dominate List of People and Firms Hiding Money in Tax Havens, Panama Papers Reveal’, South China Morning Post, 10 May 2016, http://www.scmp.com/news/hong-kong/article/1943463/chinese-dominate-list-people-and-firms-hiding-money-tax-havens-panama; Patti Waldmeir and Tom Mitchell, ‘Panama Papers: Top Officials Tied to Offshore Companies’, Financial Times/CNBC News, 7 April 2016, https://www.cnbc.com/2016/04/07/panama-papers-top-china-leaders-tied-to-offshore-companies.html.