How China became the world’s industrial superpower – and why the US is desperate to stop it

In this detailed and informative video explainer on Geopolitical Economy Report, Ben Norton discusses China’s extraordinary rise and the economic dynamics of the New Cold War.

Ben notes that in 1950, China represented just 5 percent of global GDP. In purchasing power parity (PPP) terms, it currently represents 19 percent of global GDP, compared to 15 percent for the US. No other country in history has undergone such a dramatic transformation in so short a period. Ben makes the critically important point that this progress is the result of socialist, not capitalist, economics. He notes that in China’s socialist market economy, the commanding heights, including finance, infrastructure, transport and energy, are run by the state, and that the state continues to guide the economy overall, via five-year plans and multiple other mechanisms. China’s strategy has succeeded in transforming an overwhelmingly agrarian country into a leading industrial power, thereby creating the resources needed to develop more advanced socialism.

China’s rapid industrialization has led to it becoming the world’s largest manufacturer, and a leading innovator in advanced industry. This has some important – and contradictory – consequences for the West. Firstly, the West – and particularly the US – has been deindustrializing while China has been industrializing, and it now finds itself in a position where it is unable to outcompete China in terms of industrial innovation. This leads the US towards notions of ‘decoupling’ and trying to engage in various forms of economic coercion to suppress China’s rise. Secondly, however, China has become the global manufacturing center, and its high levels of productivity and innovation make it integral to multiple crucial value chains. As such, Western companies tend to be unwilling to ‘decouple’ or divest from China.

These competing needs are fomenting divisions within the Western ruling classes and are leading to decidedly incoherent foreign policy in Washington, London and elsewhere. The US is intent on preventing China from continuing to develop and becoming the world’s foremost economy, and yet the US’s financialized capitalism lacks the means to compete with (or indeed decouple from) China.

3 thoughts on “How China became the world’s industrial superpower – and why the US is desperate to stop it”

  1. I am from Vancouver, Canada and i wanted to say that in 1848 in Europe the Capitalists wanted to get rid of the remnants of Feudalism.
    The Capitalists couldn’t do it on their own so the working class in Europe helped to get rid of the remnants of Feudalism.
    At the present time the capitalists are in the same position as the remnants of Feudalism were in 1848. The Capitalists will go down just like the Feudal Landlords did form 1848 to the beginning of the 1850s. Socialism is on the rise like Capitalism was in the late 1840s. Capitalism is on its way out and Socialism is getting rid of the remnants of Capitalism.

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