Socialist Worker

Rise of China behind textile row

Issue No. 1968

“Bra wars” was the idiotic way in which even the supposed quality media covered the row over Chinese textile quotas. The real story is about where capitalism is going.

Ten years ago it was agreed that restrictions on international trade in textiles would be scrapped at the beginning of 2005. Entirely predictably, this led to a huge surge in textile imports from China into the rich countries in the early months of this year.

Equally predictably textile manufacturers in the US and the European Union (EU) made a huge hullabaloo as they saw their markets vanish. So in June, EU Trade Commissioner Peter Mandelson negotiated a deal with China reintroducing temporary import quotas.

Then European clothes retailers keen to import cheap Chinese goods made their own hullabaloo. The result was the deal partially relaxing the quotas that Mandelson negotiated last week when he visited Beijing in the entourage of Tony Blair.

In essence, the row reprises those that took place between the US and Japan during the 1980s. Despite its verbal commitment to free trade, the administration of Ronald Reagan forced Japan to accept temporary restrictions on its exports of cars and electronic goods to the US. Like the EU, George Bush’s trade negotiators are pursuing exactly the same strategy towards China today.

Within Europe exponents of free trade and protectionism have been swapping blows. Gordon Brown launched an attack in the Financial Times on “the new protectionism” as “the last stand from those who believe we can stop the clock”.

A leading advocate of controls on textile imports is Green Party MEP Caroline Lucas. She argues that China’s export surge is crowding other Third World countries out of the market, as well as manufacturers in the North.

Deeper problem

But the problem lies much deeper than this debate suggests. As Andrew Glyn documents in the latest issue of New Left Review, the Chinese boom is having a profound impact on the world economy.

In the past quarter century China’s share of global income has risen from 5 percent to 14 percent. Glyn comments, “If current trends continue for another decade or so, China will be challenging the US’s title as the world’s largest economy.”

Like Japan and the East Asian newly industrialising countries before it, China is reshaping international trade patterns.

The political rows in the EU and the US over Chinese imports are some of the ripples caused by this profound realignment in global production and trade. But it’s important not to mystify this process, depicting China’s rise as a juggernaut reflecting some historical inevitability.

What we are seeing at play is the latest version of the process of capital accumulation that Karl Marx portrayed in Capital. Huge investments are being made to take advantage of China’s huge reserves of relatively skilled labour.

These are being made by the Chinese state and private capitalists. But they are also being made by multinational corporations that see China as a platform from which to they can lower their costs of production in intensely competitive global markets.

As Glyn points out, China is a very heavy importer of manufactured, often hi tech components that are assembled there and then re-exported. Exports to China have helped to keep economies like those of Japan and South Korea afloat.

So China is itself being shaped by vast global processes. These can work against it. There was a fascinating piece in the Financial Times recently reporting that European clothing multinationals are shifting from China to Turkey and Eastern Europe. They need to be closer to their markets to respond quickly to fast changing fashions.

Advocates of free trade such as Gordon Brown would have us all bob around passively, carried hither and thither by the tidal movements of global capitalism. But the real alternative isn’t to try to shut these movements off.

What we need instead is to create a movement that can take control of the vast productive resources to which our labour around the world is constantly adding. Then economic change will cease to be something that arouses fear.

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Alex Callinicos
Sat 17 Sep 2005, 00:00 BST
Issue No. 1968
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