ourEconomy: Opinion

China’s Covid-19 recovery is intensifying class exploitation

With increased marketisation and a sophisticated surveillance apparatus, China’s response to the pandemic is further disempowering its domestic and peripheral populations.

Promise Li
5 June 2020, 4.57pm
Workers making toys at a factory in Zhangjiajie, China, May 28 2020
Xue Yuge/Xinhua News Agency/PA Images

China’s GDP shrank by 6.8% in the first quarter, which was its largest contraction since 1992. As one of the first countries to relax lockdown restrictions, China is now seeking to boost domestic and international demand.

Despite over 80% of manufacturing returning to its former level by late February, consumers are hesitant to spend amidst increased job insecurity and rampant unemployment.

Many experts argue that domestic consumption will continue to suffer as workers face a dearth of social protections. Yet with a mounting debt problem that raised alarms even before the pandemic hit, and the growing prevalence of employer-based social security and insurance systems – safeguarding workers’ protection will likely not be at the forefront of China’s response.

In fact, China’s recent actions towards countries struggling with debt under the Belt and Road Initiative (BRI) and reforms to its domestic industrial workforce, foreshadow how the country will react to this crisis: increasing marketisation and semi-colonial measures to enforce capital gains from workers and countries on its periphery.

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Last week, Chinese Premier Li Keqiang announced that China would be committed to adding 9 million urban jobs to support workers. Looking at recent trends, this may be more of an opportunity to expand low-cost, precarious labor than to empower workers’ livelihoods and power.

For example, a recent report by Australian Strategic Policy Institute details how the Chinese government has been systematically relocating Uyghur minorities to work in low wage factory jobs for global corporations such as Nike, Adidas, and Uniqlo. An extension of the regime’s surveillance and ethnic cleansing campaign in “re-education centers”, this initiative forced over 80,000 Uyghurs to relocate from Xinjiang to other industrial clusters in south China and accept low wage work under constant surveillance.

Since the 1990s, Uyghur laborers and farmers have been dispossessed and exploited by imposed quotas to sell agricultural and other natural resources to Han state-owned enterprises centered around the coastal regions. Despite international pressure, China has shown no signs of ending its systematic abuse of the Uyghurs. On the contrary, the continued expansion of Uyghurs from “re-education” programs into the industrial supply chain workforce suggests that China will further harness racial divisions and draconian exploitation as a remedy for its economic woes.

As the countries linked to the BRI are increasingly likely to default on their infrastructure loans, China’s exploitation of its periphery economies is also likely to continue during the post-pandemic period.

“The BRI loans are not foreign aid. We need to at least recoup principal and a moderate interest”, an unnamed researcher at China Development Bank, which centrally facilitates loans for BRI projects, explained in April to the Financial Times. “In general, our loans are issued according to market principles.” This admission from the center of the BRI’s lending engine offers a glimpse into a more insidious reality than the one posed by researchers like Johns Hopkins’ Deborah Brautigam, who suggests that China’s loans may offer more progressive alternatives to global south economies than its Western predecessors. While the BRI may offer some flexible terms, the economic dependence enforced by debt will remain.

China is expected to fail to meet its pre-Covid goals of boosting annual GDP by 6% and doubling 2010’s GDP and per capita income levels by next year. Regardless of whether its export market returns or a domestic stimulus package is introduced, China will likely continue its perpetuation of class exploitation under the guise of progressive commitments to social justice – as the coronavirus era will further legitimize the demand for sophisticated digital technology and surveillance infrastructure. The workers making this hardware from Sri Lanka to Xinxiang will likely continue to suffer.

Whilst China outwardly boasts its public image through delivering needed personal protective equipment, the phenomenon described in Foreign Policy for Xinjiang’s workers is pertinent to Chinese state-owned firms across the board: “forced labor is concealed behind the euphemistic facade of poverty alleviation.” It remains to be seen how China’s economy will recover following the pandemic, but one thing remains all but certain: radical structural changes to empower the democratic capacities and social welfare of ordinary citizens will not be on the agenda.

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