Magazine of Socialist Action in Australia

Behind the South China Sea tensions

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Last month the US and China signed a pact in Washington aimed at trying to avert conflict when their aircrafts operate in close proximity to each other. This pact is particularly aimed at the ongoing tensions in the South China Sea where China’s building of artificial islands is provoking a bellicose reaction from the US. The pact may calm the situation for a while but the underlying conflicts will ensure more crises in the future.

During the last half of the 20th century, the US was the dominant economic and military power in East Asia as a result of its victory over Japan in World War Two. This is now being challenged by China.

The 1949 Chinese Revolution – despite being led by a peasant-based Stalinist Chinese Communist Party (CPP) rather than an urban democratic workers’ movement – led to economic recovery in the form of basic infrastructure development and rudimentary health and education for the masses. However the nationalised economy and land reform was mismanaged by a bureaucratic layer at the top of society. Extreme zigzags in policy led to the disasters of the Great Leap Forward and the Cultural Revolution. In desperation the CCP began to re-open the economy to capitalist relations in 1979.

Since then capitalist development has seen gross disparities in income opening up. A recent University of Michigan study showed that since 1980 the Gini coefficient in China has grown from 0.3 to almost the most extreme in the world at 0.55 by 2010. Anything over 0.5 is considered “severe disparity”.

On the other hand economic growth – overwhelmingly favouring an elite and a relatively small middle class – has mushroomed. China’s economy is now larger than that of the US. A capitalist sector runs parallel with a still significant state-run banking and utility spine overseen by a strong CPP-controlled state machine. It is best described as a unique form of state capitalism.

China’s economic power comes from being the world’s chief manufacturer, racking up a trade surplus of A$382 billion last year and foreign exchange reserves of US$3.8 trillion – both world records.

As a net importer of raw materials for its industries, China is vulnerable to the still militarily-dominant US potentially using its might to create “choke points” to block shipping lanes in places like the Malacca Straits. To counter this, China is developing ballistic missile systems to counter US navy power in the region as well as creating artificial islands in the South China Sea to expand safer zones for its shipping.

From the perspective of US imperialism, this is a threat to its dominance in East Asia. The US has been desperately trying to organise a coalition of Japan, Australia, Vietnam, Philippines and others to counter China. They are not willing to share military dominance in the region with China, let alone hand over its number one spot.

All political conflicts in East Asia today need to be seen through the prism of rising tensions between the economically decaying but still militarily-dominant US versus the rising economic power of China.

The best defence for the Chinese people from US imperialism comes not from military confrontation but from building alliances with working class people in the region. Ordinary people throughout East Asia have a common interest in opposing a wasteful regional arms race and dangerous military tensions.

In Australia working people must oppose the push by both the major parties to support and actively join in the sabre-rattling of the US towards China. The alternative to capitalist regional tensions and military conflict is international working class solidarity leading to a federation of democratic socialist states that cooperate across the region.

By Stephen Jolly


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