Clinton Goes to China:
Diplomacy and Domination

Revolutionary Worker #965, July 12, 1998

Clinton lectured the Chinese people about "human rights"--but the U.S. has propped up and sponsored death squads and brutal dictators in Africa, Latin America and Asia and the CIA has been involved in fixed elections and drug running.

Clinton criticized Chinese leaders for "rounding up dissidents"--while political prisoners like Mumia Abu-Jamal sit in U.S. prisons, locked up for their beliefs. And the U.S. government is in the midst of a prison-building boom to accommodate the criminalization and imprisonment of tens of thousands of Black, Latino and other poor youth.

Clinton condemned the Chinese Government for the 1989 Tiananmen Massacre--but the real truth is, the U.S. ruling class fully supported the reactionary Deng Xiaoping government and their murderous efforts to "restore stability."

During Clinton's recent trip to China, he gave a speech in Tiananmen Square. He called Tiananmen a "historic place," referring to several past events that had taken place there, including the government massacre in 1989. But conspicuously, there was no mention of what happened in Tiananmen Square in 1949--when Mao Tsetung stood before millions of people and said, "The Chinese people have stood up!"

Before 1949, China had been dominated, exploited and ravaged by countries like the U.S. and Britain. But the revolution led by Mao kicked foreign powers out and embarked on the road of socialism. For over 25 years, the Chinese people built a new, revolutionary society, aimed at getting rid of all oppression. Then in 1976, a reactionary coup, led by Deng Xiaoping, overthrew proletarian rule in China and restored capitalism. China was re-opened for imperialist powers to exploit. And today foreign powers dominate China once again.


Clinton's trip was about deepening U.S. economic penetration in China. It was about further cementing a relationship between the U.S. and China that serves U.S. imperialist strategic geo-political interests in the region and throughout the world. And it was about taking measures to contain the Asian crisis. Clinton put it like this, "I am going for one reason: to advance America's interests. America's future will not be secure if Asia's is in doubt.... America has an interest in a stable, secure and open China that embraces political pluralism, free markets and the rule of law and joins us in working to build a secure international order."

Paving the Way for
More U.S. Economic Penetration

The restoration of capitalism in China has meant widening inequality throughout society--between rich and poor, between peasants and workers, between the rural areas and the cities. And it has meant the establishment of unequal relations between China--a basically poor, Third World county--and big imperialist powers like the United States.

The U.S. is the most powerful imperialist country in the world and the strongest military and political power in the region. And when Clinton goes to China and meets with China's leaders, it is the U.S. which is principally setting the agenda and calling the shots. Clinton's trip to China was to advance the interests of the U.S. monopoly/imperialist ruling class--and not in the interest of the masses of people in the U.S. and around the world.

One of Clinton's aims in China was to pave the way for more opportunities for investment and exploitation by U.S. companies in China.

In 1979, there were 100 foreign-owned enterprises in China--today there are 280,000. More than half of the Fortune 500 companies have operations in China and many other smaller U.S. companies also do business there. Only Japan has a bigger business relationship with the U.S.

Since 1993, U.S. businesses have made more than $4 billion in direct investment in China and have transferred huge amounts of technology and know-how in strategic industries like aerospace, autos, electronics and telecommunications. Boeing is a good example of how important U.S. companies see investments in China--much of the company's expected airplane sales over the next 20 years depends on China.

Kodak is another example. Kodak bought out three Chinese competitors, opened up two factories and put its yellow boxes in stores throughout China. Kodak plans to invest $1 billion over the next two years and claims to sell more film in China than any other company, domestic or foreign. China is now Kodak's No. 3 worldwide market, behind the U.S. and Germany and ahead of Japan.

But while U.S. investments and exports to China have continued to grow, China's exports to the U.S. have soared. And the U.S. now has a $50 billion trade deficit with China--last year, China sold America $62 billion worth of goods and bought only about $12 billion worth. This trade deficit is expected to be as high as $60 billion this year and this issue was a big item on Clinton's agenda in China.

The U.S. wants China to open its markets up even further to the U.S.--to lift tariffs and other trade barriers limiting American sales to China. Clinton expressed the needs of U.S. multinational corporations when he told reporters, "The Chinese have too much access control and...too much access denial."

In fact, U.S. multinational corporations have been pushing for an end to the mild restrictions on trade and investment financing that were imposed by the U.S. government after the 1989 Tiananmen massacre. And they are also pushing for China to be allowed to join the World Trade Organization (WTO)--an imperialist dominated body that sets rules and regulations for world trade.

The Chinese government has been seeking membership in the WTO in order to expand exports and acquire new technology. And it has reduced tariffs and restrictions in order to meet the requirements of joining the WTO. But the U.S. wants more sweeping freedom for U.S. exports to China, which would also allow for U.S. services such as banking, securities and insurance. Clinton told China's leaders that unless the U.S. gets more access to China's markets, the U.S. won't support WTO membership for China and also won't grant China "Most Favored Nation" trading status (which allows Chinese goods to enter the United States at the same tariffs as goods from most other countries).

U.S. Regional Concerns

Clinton's trip was also about larger, state-to-state, diplomatic issues--protecting U.S. imperialist interests in China overall and safeguarding U.S. military and strategic interests in the whole region.

A significant aim of Clinton's trip was to get China to play a bigger political role in promoting U.S. interests in the whole region. Long-time spokesman for imperialist interests Henry Kissinger argued against U.S. politicians criticizing Clinton for going to China. He said, "Do we really want to turn the world's most populous nation and second largest economy into an enemy at a time when Japan is in economic crisis, South Asia is entering the nuclear age, Indonesia is in turmoil, the Russian evolution is uncertain, the Persian Gulf unsettled and the Balkans on the brink of war?...China supports no political movement hostile to American interests and, except for Taiwan, does not challenge the existing world order."

The U.S. is worried about increasing instability in the region and wants China to use its state-to-state relations and influence to bolster U.S. foreign policy. Clinton argued that, "Working with China serves our interest in a stable Asia" and a major issue he pressed with Chinese leaders was the need to condemn and contain the use of nuclear weapons in India and Pakistan.

In May, after India and Pakistan carried out a series of underground test explosions of atomic weapons, the U.S. imposed economic sanctions on and suspended direct aid to both countries. For the biggest superpower in the world--which threatens the world with 3,500 long-range ballistic missiles with nuclear warheads and many other nuclear bombs of different types--this was the height of hypocrisy.

The U.S. concern is that it will be harder for the U.S. to control, bully and terrorize smaller states if they have even minor nuclear capabilities. Some of the countries the U.S. is most worried about in this regard--India, Pakistan, Iran and North Korea--are neighbors or near-neighbors of China, and China exerts varying degrees of influence on them. Clinton has said, referring to the India/Pakistan issue, that, "Because of its history with both countries, China must be a part of any ultimate resolution of this matter."

In talks with China's leaders, Clinton made a point of applauding China for joining the U.S. condemnation of India and Pakistan--while at the same time warning China that it must stop supplying other countries with nuclear technology. (In the 1980s, Beijing sold nuclear technology to Pakistan, Saudi Arabia and Syria and during the Iran-Iraq war it gave weapons to both sides.)

On this issue as well, the U.S. is holding a stick over China, saying that the remaining limited sanctions against China won't be lifted unless China joins the U.S. in its policy on nuclear nonproliferation. In response--right before Clinton's arrival--China announced it was implementing rules on the export of dual use nuclear equipment and pledged to stop transfers to Iran of anti-ship missiles. And on his trip Clinton got China to sign a joint statement on nuclear arms in South Asia, including pledges not to export to India or Pakistan any missiles, missile equipment or materials capable of delivering nuclear weapons.

Containing the Asian Crisis

One of the most pressing concerns behind Clinton's trip to China was the U.S. efforts to contain the growing economic crisis in Asia. Clinton said, "When markets tremble in Hong Kong or Tokyo, we feel the tremors on Wall Street--and Main Street." Treasury Secretary Robert E. Rubin explained that "If a major crisis were to develop, the effects in our nation could be great." And Kissinger said, "Chinese prosperity and Chinese cooperation are essential to Asian recovery. If the economy of Asia stays flat, and surely if it declines, the global economy would risk a worldwide recession."

The Asian crisis, which hit several countries a year ago, has worsened. The economies of Hong Kong, Malaysia and Indonesia have shrunk in the first quarter of 1998. Japan, South Korea and Thailand are also facing recession. And even those Asian countries that have managed to keep growing, like Taiwan and Singapore, are being affected by the crisis.

The U.S. is worried that if the Asian crisis continues to spread and deepen, it could have a devastating impact on not only the U.S. economy, but the whole world. And now with a major economic crisis in Japan, these concerns have only magnified.

The Japanese economy constitutes 70 percent of the Asian economy and many bourgeois economists have looked to Japan as key to the region's recovery. The U.S. had hoped Japan would provide a market for troubled Asian economies. But Japan's recession has meant that other Asian nations (as well as the U.S.) have not been able to export more goods to Japan. And as the value of the yen has fallen, Japanese goods have become cheaper and more competitive in the world market.

When the value of the yen plummeted in mid-June, this put tremendous pressure on other Asian countries to devalue their currency--in order to make their own exports cheaper and competitive. A year ago, the Asian crisis was triggered when Thailand devalued its currency, setting off a domino effect in other east Asian countries. Now, the decline in the yen is threatening to send out new waves.

Japan, the world's second most powerful economy, is the main strategic ally of the U.S. in the region--50,000 U.S. troops are stationed in Japan. But it is also the main U.S. economic rival in the region. The U.S. efforts to make China into a major trading partner present a challenge to Japan's dominant economic position in the region. And closer U.S.-China ties could also lead China to rely more on the U.S. for its infrastructure needs, squeezing out Japanese companies that have long done business in China.

Hoping to Keep the
"Island of Stability"

China's economy, while it is only one-sixth the size of Japan's, is the only one in the region that has maintained a high growth rate. It would be bad for U.S. economic interests if China got swept up in the Asian crisis. And the U.S. needs China to play a role in containing the Asian crisis. This is why during his trip to China Clinton repeatedly told Chinese leaders that they must not devalue the yuan. U.S. Treasury Secretary Robert Rubin has repeatedly described China as "an island of stability" in the Asian crisis because China has refrained from devaluing its currency.

When the yen fell, the U.S. was especially worried that China would devalue its currency and that this would set off a rash of competitive devaluations--which could be even more devastating and far-reaching. In fact, China--which sends one-fifth of its exports to Japan--started talking about how it might have to devalue the yuan. And this was a major factor in the U.S. making a dramatic and unprecedented move--buying up $4 billion worth of yen in foreign exchange markets in order to shore up the Japanese currency.

While in China, Clinton repeated the message that China must maintain a stable currency. And Rubin met with top Chinese leaders to obtain China's commitment to keep China's currency stable.

But there are growing pressures for the Chinese government to devalue the yuan in order to keep exports from declining. A cheaper yen hurts China because it allows Japan to sell goods cheaper--and this threatens China's share of export markets. Asian markets, including Japan's, account for 43 percent of China's exports. And already, because of the Asian crisis, these countries are buying fewer Chinese-made textiles, farm products, toys or low-cost electronics. After increasing 20 percent last year, China's exports declined by about 1.5 percent in May.

The Human Rights Hype

Clinton's trip to China was full of shadow-play and hype. Night after night, TV viewers were treated to "spontaneous" (well-scripted and planned) exchanges between Clinton and China's President Jiang Zemin in which Clinton supposedly pressed his case for "human rights and democracy" in China. There were numerous photo ops of Clinton talking "freely" with the Chinese people. And there was the famous "unprecedented" live broadcast of the American president "daring" to criticize the Chinese government for the 1989 Tiananmen massacre.

A few things need to be said about this hypocritical hype. The U.S. has some nerve talking about freedom. It has propped up one ruthless and brutal dictator after another, from Pinochet in Chile, to Mobutu in Zaire, to Suharto in Indonesia. It has trained death squads in El Salvador and Guatemala, and financed counter-revolutionary Contras in Nicaragua. Its CIA has been deeply involved in fixed elections, political assassinations and drug-running operations.

Clinton criticized Chinese leaders for "rounding up dissidents" and the Tiananmen massacre. But people should remember that the U.S. fully supported the reactionary Deng Xiaoping government--and people like Kissinger defended the Tiananmen massacre, saying that China needed to "restore stability." And as for the treatment of "dissidents"--there are many political prisoners in the U.S.--like Mumia Abu-Jamal--who have been framed up, railroaded and locked up for their political beliefs and activism. And while Clinton lectures the Chinese about an "authoritarian society"--the U.S. government is in the midst of a prison-building boom to accommodate the criminalization and imprisonment of tens of thousands of Black, Latino and other poor youth.

Media mouthpieces dutifully repeated the idea that as the free market expands in their country, the Chinese people are experiencing more freedom and democratic rights than ever before. But this is a lie.

Clinton was quick to talk about how a small class of entrepreneurs are now buying up cell phones and getting on the internet. But he didn't travel to desperately poor areas in the countryside where peasants find it hard to get enough to eat. He didn't "dialogue" with any of the millions of peasants who have migrated from rural areas because they couldn't survive and now live in huge shantytowns outside China's cities, homeless and unemployed. TV stations beamed shots of Clinton under neon lights at China's stock exchange, but there was no video of the tens of millions of workers in China who are becoming unemployed because of plant closings. Why didn't Clinton go to a Nike factory, where young women are subjected to sweatshop conditions, and talk to them about the virtues of the free market?

Clinton lectured the Chinese on "bourgeois democracy" and the importance of the "rule of law." The U.S. says China needs to build a whole new legal system, patterned after the one in the United States. But what is the real concern here on the U.S.'s part?

The U.S. wants a "rule of law" in China in order to break down barriers to "free trade" and "free market" imperialist penetration. At the 15th Party Congress last fall, President Jiang Zemin devoted half of his discussion of political reform to the subject. In 1979 there were two law schools and 2,000 lawyers in China. By 1997 there were 200 law schools and 100,000 lawyers. But almost all these lawyers work on business deals, not defending people accused of crimes.

U.S. companies want to strengthen "rule of law" in China in order to enforce contracts. American companies say they lose billions of dollars a year because Chinese companies make illegal copies of Prozac, Windows 95, Titanic videos, and many famous drugs, software, movies and music that carry American trademarks and copyrights.

The U.S. needs economic and political stability to expand and protect its investments. And this is what's behind the "human rights" and "democracy" hype Clinton spun on his trip to China.

Recent events in Indonesia underscore the problem the U.S. has when its lackeys become discredited. The U.S. backed the corrupt and dictatorial Suharto regime for over 30 years. But when serious economic crisis hit Indonesia, mass rebellion broke out in the streets. A huge political crisis developed in which U.S. interests were severely threatened and Suharto was forced out of power.

Clinton's picture of China hid the real truth. For the masses of Chinese people, imperialist penetration and the free market has meant more inequality, a growing gap between the rich and poor, and deepening economic instability.

And it is socialism--not capitalism--that brings the masses real liberation. During the Cultural Revolution the Chinese people experienced the most freedom to fully participate in every aspect of society --collectively transforming factories, farms and schools. And most importantly, the masses of people were mobilized to consciously work toward building a society free of classes, inequality and where profit is no longer in command.

Tremors Beneath the
"Island of Stability"

U.S. Treasury Secretary Rubin refers to China as a "island of stability." But right now, China is going through major economic restructuring that threatens instability. At the same time, the U.S. wants China to maintain political and economic stability in order to contain the Asia crisis and keep China open to foreign penetration.

The Asian crisis continues to affect China's economy--resulting in fewer exports and slower growth overall. In addition, the Chinese government is in the midst of trying to carry out a major restructuring of industry. Last year, China's Prime Minister announced a major effort to privatize or close down much of state-run industry. The government hoped that an export boom would provide jobs for most of the displaced workers. But the Asian crisis dashed this hope, and it is estimated that by the year 2000, these plant closings will add as many as 30 million unemployed--to China's already 180+ million unemployed.

At 6.5 percent, the official unemployment rate in China is already at the highest it has ever been since 1949. And this figure does not account for the 12 million to 15 million Chinese who enter the job market each year, the millions of state workers who have already been "sidelined" at reduced salaries or the "floating population" of more than 100 million peasants who have left their villages to seek jobs in the cities. It is estimated that 100 million workers, nearly the size of America's entire workforce, are employed in state-run industries in China. And the Chinese government is really worried that throwing them out of work when China is already experiencing record unemployment could lead to an increasingly unstable social and political situation.

China's coal industry predicts it will lose a half-million workers in three years. Last year, more than 10 million workers were laid off and some workers have taken to the street to demonstrate. Cities like Xian, which Clinton visited, once centers of industry, have been hit by demonstrations of unemployed workers. On June 16 in the city of Wuhan, some 2,000 workers laid off from a construction company protested against the lack of unemployment benefits. A month earlier, 50 workers from a cotton mill in the northern Hebei province stormed a government building and occupied the cafeteria to protest against unpaid wages.

The Chinese government, worried that such demonstrations could get out of hand, has issued instructions for how to deal with these demonstrations. Hong Kong newspapers reported that in a secret document, the Communist Party Central Committee ordered all government agencies to be on guard for challenges to the regime. Government agencies are resorting to desperate measures to head off a social explosion. In Beijing, the Municipal Peoples Congress has banned all nonresidents from holding employment in the city. It is attempting to push unemployed workers to return to a peasant farming existence. Similar measures in the northeast province of Heilongjiang are said to have led to more than 200,000 former factory workers returning to the countryside.

When Clinton walked through the streets of Shanghai, TV commentators remarked on the splendor of the "new Shanghai"--full of new skyscrapers, fancy hotels and young entrepreneurs racing through the streets with cell phones. They could hardly conceal their glee at all the signs of foreign business and conspicuous consumption. But beneath the glitter of capitalist growth in China are growing tremors of economic instability and social discontent that could present the Chinese government with a political crisis and become a real threat to U.S. imperialist interests.

This article is posted in English and Spanish on Revolutionary Worker Online
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