China’s Rise and Imperialism
Let China sleep,” the French Emperor Napoleon Bonaparte once warned, “for when she wakes, she will shake the world.” China’s meteoric rise is a testament to Napoleon’s prophecy. As the world’s largest economy by measure of Purchasing Power Parity (PPP) and the second largest by Gross Domestic Product (GDP), Beijing’s juggernaut economic apparatus is now a key revisionist player in reshaping the global geopolitical landscape (Edel, 2018; Page, 2022). However, the West remains skeptical about the rise of Chinese capital and Beijing’s growing footprint in the Third World; some have related China’s rise to a new dawn of neo-imperialism. In this essay, by examining Beijing’s saturated domestic condition, its “debt-trap diplomacy,” and state-monopoly capitalism, I argue that China is inherently an economic imperial power.
Definition and the Hobson-Leninist Rationale of Imperialism
Before exploring the relationship between China and imperialism, we must first define “imperialism.” The Cambridge Dictionary defines the term as “a situation in which one country has a lot of power or influence over others, especially in political and economic matters” (Cambridge, 2022). It can be understood generally that the corrosion of a state’s sovereignty bears the hallmark of imperialism.
As motives offer explanation to behavior, it is imperative to understand the driving force behind imperialism. To begin, English economist Hobson’s economic theory can provide some insight: His thesis departs from the traditional interpretation of imperialism as motivated by nationalism to capitalism; expansion abroad, he argued, happens when a state’s domestic economy has reach a state of saturation (Brooks, 2005). In addition, the Marxist theorist Lenin, in Imperialism: the Highest Stage of Capitalism, reinterprets Hobson’s discourse, additionally equating capitalism at its highest stage to imperialism (Lenin, 1917). To illustrate this theory, we turn to imperial Japan: the empire’s saturated domestic economy and its depleting resource reserves provided the incentive behind the Japanese incursion of the resource-rich Manchuria in 1931 (Pollard, 1939). This is precisely what Hobson and Lenin described, capitalism fueling Japan’s imperialist vision. Likewise, in this essay, discussing the interconnectivity between the desires of imperialism and a state’s domestic factors, the Hobson-Leninist thesis shall provide a framework for evaluating the starting point of Beijing’s imperialism.
China’s deteriorating domestic condition draws parallels to the Hobson-Leninist theory. Since President Xi’s swift ascent to power in 2012, the Communist Party of China has veered into pursuing an increasingly aggressive foreign policy (Edel, 2018). Its national ambitions are enshrined under the principles of the “Great Rejuvenation” and the “Chinese Dream,” promising the Chinese people a prosperous New China; these principles serve vital functions, “such as domestic political legitimacy for the CCP leadership, [and] mobilization of citizens around a cohesive national identity.” However, after China’s massive financial boom in earlier decades, Beijing is now faced with overcapacity (European Central Bank, 2017). For some contextualization, in 2018, 11-percent of Chinese firms produced, on average, 20-percent more goods than market demands (CSIS, 2020). With the room for domestic expansion and the “Chinese Dream” bottlenecked, firms look abroad to developing countries whose rich natural resources and rising infrastructural demands coincide with Beijing’s appetite for expansion (Edel, 2018). The trademark of Beijing’s rapid globalization, the Belt-and-Road Initiative (BRI)—launched in 2013 by President Xi—alludes to China’s ambitious westward economic push via infrastructural projects in more than 138 countries along the old Silk Road, totaling $29 trillion as of 2019, signifying the deep economic ties between China and the developing world (Chatzky & McBride, 2020; Center for Strategic & International Studies [CSIS], 2020). Hence, nationalism and capitalism—the two pillars of imperialism—provide the ideological drive behind Beijing’s global expansions.
Chinese Loans and “Debt-Trap Diplomacy”
“There are two ways to conquer and enslave a country,” quoting the American President John Adams, “One is by the sword. The other is by debt” (Nikkei, 2018). China opts for the latter approach—debt.
An integral component of the BRI, Chinese infrastructural loans are subject to intense controversy. As the world’s largest creditor, Beijing has lent approximately $1.5 trillion to more than 150 countries worldwide between 1949 and 2017, exceeding 5-percent of global GDP (Horn et al., 2020). Whereas the Marshall Plan and the Molotov Plan granted significant development aid—free of charge—to prop up post-war Europe following the end of the Second World War, Chinese loans demand repayment regardless of its debtor’s fiscal state. Thus, a less sympathetic verdict has associated China’s lending practice to “debt-trap diplomacy.” The term alludes to accusations of Beijing’s weaponization of its loans to fund economically-unviable megaprojects in developing countries, imposing stringent terms upon default to seize key assets from its debtors (Gulati & Babu, 2022). The developing world is no stranger to this practice: During the late 19th century, Egypt surrendered control of its Suez Canal to the British and French to repay its crippling debt to Western banks (European Business History Association, 2007). Similarly, France extended itself colonial reach into Tunisia, seizing control of the country’s finances, when the Tunisian Bey failed to repay the country’s 1863 and 1865 infrastructural loans to France (Penet & Zendejas, 2021). Haunted by the harrowing memories of imperialism, many fear the resurgence of imperialism in light of China’s predatory lending practice.
Several developing countries have already fallen prey to Beijing’s loans. In particular, Sri Lanka is often cited as the poster child of China’s “debt-trap diplomacy.” In 2017, Sri Lanka ceded 70-percent of control of its Hambantota port to the state-run China Merchant Group, with allegations that Beijing intentionally mired Sri Lanka in Chinese debt (Abi-Habib, 2020). Moreover, Sri Lanka is not alone; her woes resonate throughout the BRI. Overall, an AidData study reveals that “42 countries now have levels of public debt exposure to China in excess of 10% of GDP,” with debtors on the brink of ceding assets to repay their “hidden debt” to Beijing (Malik et al., 2021). Skeptical of Beijing’s rising sway and the Chinese debt across the globe, Malaysian Prime Minister Mahathir Mohamad has urged against China as “a new form of colonialism” (Hornby, 2018).
In response, Beijing has initiated a pushback blitz. Its rebuttal rests on two main ideas: denial and “mutual benefits.”Beijing dismisses accusations of its “debt-trap diplomacy” as Western propaganda. It argues that “[n]ot a single developing country has fallen into the so-called debt traps because of Chinese loans” (Hua, 2021). While it is indeed difficult to distinguish whether a country acts out of purely economic incentives or pressure from Beijing, a deeper scrutiny unravels the mystery: First, Beijing’s loans come with a 4-percent interest rate—almost four times higher compared that of the IMF and the World Bank (Wang, 2022). Second, the repayment period for Chinese loans are almost 20 years shorter than that of other lenders, with significant leeway for China to facilitate debt repayment. These observations, thus, indicate that China has intentions to complicate its debtors’ debt crisis, relevant to its attempt to saddle them with substantial debt and, ultimately, lead them right into Beijing’s debt trap. Moreover, the regime refers to the notion of “mutual benefits” in its justification. Delivered by President Xi, Beijing’s “Five Principles of Peaceful Coexistence” rhetoric stresses the importance of fostering a “mutually beneficial,” pro quid quo relationship with its partner countries (Xi, 2014). Beijing often cites Africa as the prime example. With China as Africa’s largest trading partner, strong bilateral economic ties are deeply rooted in Sino-African relations, key in closing the continent’s infrastructure gap (Stein & Uddhammar, 2021). A recent study conducted by Boston University and Johns Hopkins University finds that, “[o]n a continent where over 600 million Africans have no access to electricity, 40 percent of the Chinese loans paid for power generation and transmission. Another 30 percent went to modernizing Africa’s crumbling transport infrastructure” (Bräutigam, 2021). Therefore, the massive benefits that Beijing brings to the table are undeniable. Regardless, mutual benefits do not justify imperialism; often times, they co-exist. Despite the immense contribution made by the British Raj to India’s breakneck modernization during the turn of the 20th century, it did not make British imperialism a moral argument. Following the same line of thought, mutual benefits do not excuse Beijing from its underlying imperialist argument. Hence, by enslaving the periphery world with debt, China is guilty of imperialism.
Beijing’s State-Monopoly Capitalism in Africa
Beijing’s state-monopoly capitalism has likewise sparked debates. The term refers to
China’s rapid monopolization of industries and resources beyond its borders. Owing to the continent’s intertwinement with Beijing’s vested interest, Africa has seen the most significant level of Chinese penetration. To put it into context, Huawei, a Chinese state-run telecom behemoth, has built 70-percent of Africa’s 4G infrastructures (Ehl, 2022). Likewise, Chinese firms control 75-percent of Sudan’s oil sector (International Arbitration Africa, 2018). More than 95-percent of the Democratic Republic of Congo’s cobalt reserves are owned by China, (Reuters, 2020). Chinese monopoly has thus engulfed the continent.
Despite widespread accusations, Beijing denies its association with state-monopoly capitalism. It points to the fact that the private economy accounts for 60-percent of the Chinese economy, suggesting that private firms do not endorse Beijing’s national agenda (Global Times, 2021). This, however, contradicts with a Central Committee report, titled “Opinion on Strengthening the United Front Work of the Private Economy in the New Era” (Olsen, 2020). The report underscores the necessity of maintaining a symbiotic relationship between the government and private companies in order “to better focus the wisdom and strength of the private businesspeople on the goal and mission to realize the great rejuvenation of the Chinese nation.” Chinese companies and the government are, thus, inseparable. Contrary to Beijing’s rhetoric, Chinese private monopolies overseas remain an effective instrument to advance Beijing’s agenda.
As described by the Hobson-Leninist theory, monopoly capitalism is synonymous with imperialism. The notion of exporting monopoly capital, in and of itself, is the equivalent of exerting control over other countries. We can see the relationship between imperialism and monopoly capitalism in the case of the United Fruit Company, an American banana monopoly corporation, often regarded as the archetype of American imperialism in the Western Hemisphere, in Guatemala. Operating under the guise of helping cultivate the periphery country’s land, the American multinational enterprise came into possession of 42-percent of Guatemala’s land; in 1952, the corporation submitted an ultimatum to the Guatemalan government, offering the country to buy back almost half of its lands from the monopoly (Bucheli, 2008; Táíwò, 2021). Similarly, Beijing’s growing monopolist influence in the status quo serves as an admonition of a new surge of imperialism. Against the backdrop of the New Cold War, the alarming weaponization of China’s monopoly on Africa’s rare earth elements (REE) reserves— with Beijing exploring the possibility of denying the US access to the strategic resource—has relegated the African continent to a mere pawn in Beijing’s drive towards hegemony (Hanke, 2021). It is imperialism at its peak.
Today, with China stepping up its exertion of economic and political influence worldwide in its strife for dominance, it is more important than ever to recognize Beijing’s imperialist nature. Fueled by dissatisfaction with the country’s domestic condition, China’s economic behemoth provides Beijing with the means to attain its ends; the enslavement of entire nations with debt as part of China’s “debt-trap” strategy is concurrent with its exportation of state-monopoly capitalism, which seeks to dominate foreign industries and resources. With regards to the shifting geopolitical dynamics, we must not shy ourselves from the broader implications: With the world entering a new phase in history—the New Cold War, an ideological struggle between China and the US—the developing world, caught in the crossfire and with its significance overshadowed, is gradually becoming a battlefield for vying imperialist powers. The status quo is merely a harbinger for more to come. Ergo, I conclude that despite the fact that China is indeed a neo-imperial power, it is one that brings positive implications.
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