Huawei, China’s leading maker of telecoms equipment and 5G networks, has risen to global prominence by way of partaking in specialised hardware and software networks through joint ventures with foreign companies and government contracts. In particular, as well as capitalising on Chinese state support, it benefited from its 2003 joint venture with the 3Com corporation, an American digital electronics company. The venture focused on supplying networking and software equipment to companies. Investing heavily in research and development, Huawei went global in 2005, when its foreign sales exceeded the domestic ones and partnered with Vodafone and the British Telecom, supplying transmission equipment for the BT’s twenty-first Century network. In 2007 and 2008 Huawei began joint ventures with America’s security software vendor, Symantec Corporation, and with Australia’s telecom company, Optus. The partnership with Symantec aimed at providing encrypted data solutions and security to various business networks. In 2012, Huawei bought Symantec’s share, as Symantec pulled out of the venture on grounds of fear—as the New York Times reported at the time—that the American government would prevent the company from obtaining classified information related to cyberthreats.1 Huawei acquired the much-needed technological and managerial know-how through joint ventures with various transatlantic and Australian companies. Also, by investing heavily in research and development, Huawei succeeded not only to compete on equal footing with foreign conglomerates; it also surpassed them to such a degree that, today, it has become the leader of 5G digital networks across the globe, even investing in 6G technologies since August 2019.2 The Trump administration considers Huawei as a threat to its security and urges other states to steer away from doing business with the company. On 1st December 2018, the company’s chief financial officer, Meng Wanzhou, was arrested at Canada’s Vancouver airport and has since been facing criminal charges in the USA related to theft of trade secrets and violations of sanctions on Iran. Yet, in the midst of the Covid-19 pandemic in March–April 2020, Huawei “delivered 500,000 masks, 50,000 goggles, 30,000 gowns and 120,000 to hospitals in New York”.3
This book demonstrates that the Chinese political economy follows a similar trajectory to primacy as that of Huawei.4 This short story of how an insignificant Chinese company gradually rose to such a global prominence by “joining and combining forces” with western companies goes a long way to show that America’s globalisation project, which is the empire’s chief response to its overaccumulation crisis in the 1970s, has in the long run benefitted China more than America itself. China’s integration in America’s globalisation project has helped to establish China’s increasing importance in world economy, undermining America’s supremacy. Put differently, uneven and combined development (UCD) has been strengthening China’s political economy at the expense of the transatlantic economies as a whole, not the other way around.5
Since the late 1970s, China has been on a path of economic growth and ascendance. By the time of the Great Recession of 2007–2008, more than 700 million Chinese, mainly peasants, had been brought out of poverty creating a sizeable middle class surpassing the size of the entire population of the United States. Witnessing extraordinary rates of growth, China began contributing substantially to the globe’s GDP, also by way of investing in, or offering foreign aid to, Asian, African, Latin American and Eastern European countries. Chinese global corporations have also penetrated the markets of the transatlantic core, with acquisition of assets and signing of contracts in the EU/UK, Australia and the US. Some of these attempted acquisitions, it should be noted, are often blocked due to fear that this may lead to a complete domination of Chinese interests over vital technological sectors of the core (China, of course, retaliates by blocking access to its domestic market). As we shall see, Chinese cutting-edge global ascent in banking and finance, digital innovation, biotechnology, nanotechnology and science creates massive competitive pressure on the economies of the core. This is a competitive constraint upon the transatlantic economic bloc, disrupting processes of integration in it and, as such, cannot be ignored. China’s competitive pressure, among others, forced the transatlantic economies to resort to harsh austerity in post-2008 conditions, with the Trump administration even initiating trade wars.6 In EU/Eurozone contexts, this meant further radicalisation of the post-1992 Treaties towards stricter budgetary controls of national governments on the basis of ordoliberal orthodoxy.7
We posit that China’s entry into WTO in 2001 boosted its domestic economy on a programme that, predominately, did not resemble supply-side economics due to the guiding/re-structuring role the Chinese state and the local government maintained in the making and re-distribution of the total composition of social capital. The modern state, as Nicos Poulantzas argued in his last theoretical statement, is not only present in the reproduction of social relations of production and social/technical division of labour, but also in their very constitution and genesis.8 Post-Maoist China is not an exception. In fact, the Chinese state has grounded its integration in global capitalism by way of asserting its independence from, rather than dependence upon, US capitals and power. As we shall see, key, in this respect, have been China’s state-owned enterprises (SOEs) and the way in which they benefit both from state funding and their articulation/combination strategies with western corporations operating in China and abroad. China continues to borrow at the rate of circa $2bn a year from the World Bank not because it needs these funds but because, as Eswar Prasad put it, “there is a glaring optics problem”.9 The reason they still borrow is because they feel that the expertise of the World Bank is valuable to them. World Bank loans come with advisers and auditors who help implement (and monitor) bank-funded projects. Thus, Bert Hofman, the World Bank’s country director for China, says “China gets access to international experts; the World Bank remains engaged with China and is able to see how new projects play out”, so this is a “win-win”. We show, therefore, that China’s integration into global capitalism is not driven by US/foreign capital. Primarily, it is driven by an independent sovereign actor: the Chinese state.10
Further, we show that China’s response to the Great Recession has been the extreme opposite to the West’s: whereas, by and large, the transatlantic bloc reinforced austerity measures and supply-side public policy, China shifted its policy to boosting aggregate demand management, raised real wages and increased welfare spending. Thus, rather than being an independent variable in a complex set of causal international inter-dependencies favouring a quasi-hegemonic reproductive capacity of the American state and its globalisation strategy, UCD is being steered by the domestic needs of the Chinese state and society. UCD has thus assisted China’s rise in global political economy undermining America’s primacy in the international system.11 In this respect, the strategy of neo-liberal financialisation—sustained by what the late Peter Gowan called Dollar-Wall Street Regime (DWSR)—put forth by the USA after the end of the Bretton Woods system, did not restore America’s supremacy in the capitalist core but undermined it further.12 As we shall see, however, there are strong domestic and international pressures on China to adhere to the neo-liberal programme by way of, for example, abolishing capital and financial market controls.
To wrap up this rather long introduction, we will be arguing that China’s rise in global political economy is the complex result of: (a) the global American project of neo-liberal financial statecraft, which created unsustainable levels of financial growth and vulnerability due to the erosion of the real economic sector and loss of labour productivity—debt vulnerability is one such instance; and (b) China’s distinct path of domestic economic development, which is the result of western capital penetration since the 1980s and the relative, both political and economic, autonomy of the Chinese state to steer America’s global project and private enterprise to its own advantage. The international instance is not ignored. It is encompassed via its interpenetrating mélange with the do...