AUKUS: Myth of a New “Cold War” Between the U.S. and China/Russia

by Jeff Mackler Socialist Action,  September 27, 2021

Friends, Jeff presents a different but useful perspective on China (and Western relations with China) from what you usually see here.  I invite discussion around this point. [jb]

AUKUS, or the new and secretly negotiated $66 billion nuclear-powered submarine agreement between Australia, the United Kingdom and the U.S., has momentarily ruffled some political feathers around the world, particularly in France and China. Without consulting with France or its military-industrial corporations, AUKUS principals cancelled France’s huge contract with Australia to construct some dozen now deemed  “obsolete” diesel-powered submarines over the course of a decade. The $66 billion deal was transferred to U.S. and UK corporations, including Lockheed Martin, which contracted to build nuclear-powered but not nuclear-armed submarines. The former require qualitatively less refueling and thus facilitate Australian patrolling of the vast Pacific region in tandem with the already present U.S. Pacific fleet.

Outraged French President Emmanuel Macron denounced the Biden-approved agreement as blatant “Trumpism” and withdrew the French ambassador to the U.S., the first and only such termination of diplomatic relations with France in some 250 years. “Trumpism” has in recent years come to be defined as “America First” or “MAGA,” Make America Great Again, including the imposition of U.S. tariffs not only against China but against Western European nations and Canada. At the time Democrats and leading U.S. corporate think tanks, including the Council on Foreign Relations, pilloried Trump’s tariffs but the Biden administrations has largely maintained them all and indeed, expanded their scope and impact. No doubt, there are always major divisions within the U.S. ruling class – not to mention among and between their international counterparts – when their base economic interests are in conflict.

Pivot to Asia

The corporate media has characterized the AUKUS deal as new evidence of a U.S. “pivot to Asia,” and a new Cold War against China, if not a U.S. abandonment of NATO and a tilt to deepened economic and military relations with Boris Johnson’s UK, whose Brexit the U.S. supported while the main NATO nations, Germany, and France, especially, opposed it.

Behind the hoopla about a “new Cold War” however, is the unrelenting economic competition between the leading world capitalist-imperialist nations marked especially by the two major contenders, the declining and still leading U.S. imperialism and the rising imperialist giant, China. The former has military hegemony, with U.S. bases around the world aimed and maintaining and advancing U.S. imperial interests. The monopolized U.S. military-industrial complex also guarantees super profits. War is always good for, indeed necessary for, capitalist profits! China has but a single military base outside its borders, but its ever-modernizing industrial and financial capacities, including its Belt and Road infrastructure initiative and its founding of the Shanghai Cooperation Organization (SCO), in 2001, bitterly opposed by the U.S., make Chinese capital more attractive to poor nations previously unable to secure loans at rates less than U.S.-dominated financial institutions.

Today, the SCO includes eight member states, China, India, Kazakhstan, Kyrgyzstan, Russia, Pakistan, Tajikistan and Uzbekistan, as well as four “Observer States” interested in acceding to full membership (Afghanistan, Belarus, Iran, and Mongolia) and six “Dialogue Partners” (Armenia, Azerbaijan, Cambodia, Nepal, Sri Lanka and Turkey). No doubt a serious U.S. “pivot to Asia” to challenge China’s increasing influence over capital markets and advantageous investment opportunities will include more than the future construction of a fleet of Australian submarines!

No serious player in the world capitalist system today acts on the premise that China is anything resembling a socialist society, its ruling Chinese Communist Party notwithstanding. Neither France nor Germany today favor a new “cold war” with China. Indeed, Germany’s trade with China surpasses its trade with the U.S. and all other nations, and France is not far behind. Both are heavily dependent on Russian fossil fuel imports and on exports to China’s burgeoning internal market for industrial and major consumer commodities aimed at China’s 400 million “middle class” consumers. Both opposed U.S. efforts to block new Russian pipelines from the East, preferring cheap Russian fossil fuel, Russia’s primary export, to the more costly distantly-shipped U.S. variant.

New Cold War or imperialist rivalry?

Few, if any, serious political thinkers believe that today’s so-called Cold War between the U.S. and China-Russia is in any way analogous to the post-WWII period. In that era the Soviet Union (in 1917) and its subsequent Eastern European allies, along with China, and later Cuba and Vietnam, had broken with capitalist exploitation, abolished private property and established nationalized and planned economies that prioritized human needs, not capitalist profits. They all established a state monopoly of foreign trade that blocked the penetration of their economies from cheaper U.S. and European goods that undermined their own development. These accomplishments were based on popular social revolutions that defeated wartime fascist/capitalist-led governments in Eastern Europe. Pro-Soviet Communist Parties in Western Europe led in the resistance to Hitler’s occupation when the French and Italian (Vichy and Mussolini) governments welcomed and allied with Hitler’s onslaught and wartime occupation. The Vietnamese defeated both the French imperialist efforts to retain their former colony and the U.S. ten-year genocidal war that murdered four million Vietnamese in that U.S. horror for U.S. neo-colonial domination.

The post WWII Eastern European pro-Soviet governments facilitated the construction of socialist-oriented societies characterized by a generalized social equality, including free education and health care for all and broad investments in housing and cultural endeavors. These combined to rip a huge section of the world out of the U.S.-dominated and exploitative capitalist orbit. The new workers’ states additionally threatened the imperialist world by providing a modicum of support to various anti-colonial national liberation movements around the world, usually to keep imperialist colonizers at bay, but insufficient to definitively break from capitalist rule. Indeed, the Stalinist policy toward various national liberation movements most often consisted in using these just struggles for self-determination and freedom as “bargaining chips” with imperialism to secure secretly negotiated deals with the U.S. and other imperialist powers to limit aid in return for concessions to the various Russian and Eastern European Stalinist bureaucrats, for whom the maintenance of their privilege superseded their interest in advancing socialist revolutions.

The new East European workers’ states – however much they were bureaucratically deformed by their Stalinist leaderships, and devoid of even a semblance of workers’ democracy, were nevertheless the central reason for the U.S. imperialist-orchestrated Cold War, that focused on the near-total exclusion of these new societies from the world capitalist economy, including from all international financial and banking institutions. Their encirclement by military blocs, including NATO and SEATO (Southeast Asia Treaty Organization), with the future prospect of restoring capitalism, was their central objective.  In time, this included the establishment of 1,100 U.S. military bases in some 100 countries, all aimed at preserving and extending U.S. economic, political and military hegemony around the world and at bringing down the workers’ states, whose rapid economic growth and broad social welfare measures initially posed a serious alternative to the West.

Capitalist restoration in Russia and China

The Stalinist policy of  “peaceful co-existence,” that is, the subordination of support to social revolution around the world to negotiated deals with imperialism, in time and inevitably led to the disintegration of these workers’ states and the restoration of capitalism in the USSR in 1990-91 led by Stalinist bureaucrat head of state, Boris Yeltsin.

The restoration of capitalism in China began a decade earlier, but in a more controlled manner in 1979 led by the new Chinese Communist Party leader Deng Xiaoping, who signaled world imperialism that China was more than willing to re-open to imperialist penetration and plunder. Even prior to Deng, the Sino-Soviet “dispute” gave proof that Chinese Maoists were more than willing to side with U.S. imperialism on a world scale, having declared that the USSR was the “main danger.”  This included formal meetings between the Chinese leadership, culminating in the 1972 visit by U.S. President Richard Nixon to China during the Vietnam War when the U.S. was raining death and destruction on that beleaguered country. China’s subsequent recognition – the first in the world – of the 1973 U.S.-orchestrated military coup in Chile, where General Augusto Pinochet slaughtered some 60,000 leftists after overthrowing the Salvador Allende government, and then China’s 1979 U.S.-supported military invasion of Vietnam, signaled the Chinese Stalinist’s capacity for deadly alliances with U.S. imperialism. At that time China supported the genocidal Pol Pot Khmer Rouge government when Vietnam intervened to halt Pol Pot’s systematic murder of millions of Cambodians.

China enters the WTO

Convinced that capitalist restoration in China was on the order of the day in 2001, the U.S. ended all aspects of hostility toward China and presided over China’s admission to the World Trade Organization (WTO). The terms were simple enough; China would allow U.S. corporations to set up shop and employ endless numbers of Chinese workers at near slave wages laboring in state-of-the-art U.S. factories to produce unprecedented numbers of commodities for the U.S. and world marketplace. This super-exploitation of Chinese labor had the effect of temporarily boosting declining U.S. profit rates, closing non-competitive U.S. factories, and freezing or reducing U.S. wage rates – more than a 10-year bonanza for U.S. corporations, which happily shipped back to the U.S. Chinese-made commodities from U.S.-owned factories at near zero tariff rates. Indeed, U.S. tariff rates at some 1.5 percent or zero on most Chinese imports were among the lowest in the world. And why not? Why would corporate America tax Chinese made commodities manufactured by U.S, corporations?

China emerges as chief U.S. rival

In the 20 years since China was admitted to the WTO, China went from operating as one of the world’s lowest technology nations to today, when Chinese technology rivals or exceeds almost all other nations on earth. In the past 20-plus years China was transformed from providing “internal migrant” teenage girls from the countryside, producing garments in prison-like foreign-owned dormitory factories at six cents per hour and seven days a week, to a nation with some of the most modern Chinese-owned factories in the world, producing world-class industrial tools and machinery and state-of-the-art 5G (fifth generation) electronics and telecommunication products.

Super-high-tech 5G Chinese corporations like Huawei are today capable of challenging and exceeding the world’s most sophisticated operations. A 2017 Financial Times survey of the global mobile infrastructure market showed that Huawei had a world market share of 28 percent, with Sweden’s Ericsson at 27 percent, Finland’s Nokia at 23 percent and ZTE, another Chinese firm, at 13 percent. Japan’s Samsung had 3 percent. All the others, including the U.S. corporation, Cisco, had but 6 percent between them.

Chinese imperialism

Capitalist-imperialist China has come a long way since its 2001 entry into the WTO. China stands first in the world in the number of billionaires at 1,058 in 2021 compared to 696 U.S. billionaires. Most revealing, in 2020 the number of Chinese billionaires stood at only 626! As in the U.S., with the likes of billionaires Elon Musk and Jeff Bezos approaching trillionaire status via their skyrocketing investment portfolios, China’s super rich similarly use their fortunes in endless speculative ventures on the various Chinese and international stock exchanges.

As in the U.S., China’s super rich are pressed a bit, for public consumption, to “share the wealth,” as with Biden’s new proposals to increase corporate taxation. China’s President Xi Jinping’s recently announced plans to spread “common prosperity,” compelling some of the corporate elite to announce sizeable multi-billion dollar charitable contributions to education and health care – social measures that in China have long been banished as free government-mandated policy.

Chinese tax administrators have similarly pledged to crack down on tax dodgers, fining Zheng Shuang, for example, one of the country’s most popular actresses, $46 million for tax evasion (Shuang is 30 years old and got all that money initially from starring in tv shows for teenagers- she ought to pay taxes [jb]). In China, as it is near official practice in the U.S., the corporate elite are largely free from taxation. A September 20 New York Times headlined story described how “The PwC,” the giant PricewaterhouseCoopers accounting firm, “helped the world’s largest companies avoid taxes.” PwC’s method was simple and described in detail by The Times. They placed PwC employees in various Treasury Department posts, where they concocted specific tax code loopholes for PwC patrons to avoid taxes. That is, they re-wrote and manipulated U.S. tax laws for the benefit of the corporate elite in much the same manner that is the norm with regard to all legislation produced by the U.S. Congress, including the present  “politicking” with President Biden’s ever-changing $3.5 trillion so-called infrastructure package.

China’s capitalist elite

The Chinese Supreme Court, weighed in on Xi’s “wealth sharing” and “common prosperity” rhetoric when it recently declared that the 72-hour work weeks common at many private-sector companies, were illegal. This corporate-enforced  “996 work hour system” derived its name from its requirement that employees work from 9:00 am to 9:00 pm, 6 days per week, that is, 72 hours per week.

Needless to say this massive intensification of labor, deemed by many as a Chinese system of modern-day slavery, along with massive tax evasion and stock market speculation, and the exploitation of workers around the world, accounts for the vast fortunes of the Chinese elite. That China presided over the construction of more coal-fired energy plants abroad than the rest of world combined informs us that here too China’s imperialist system knows no limits. But here too, to counter China’s horrendous reputation as the world’s largest green house gas polluter, President Xi recently announced that China planned to stop construction of all coal-fired plants abroad. Abroad! Yet, China is still constructing massive numbers of coal-fired power plants at home. Xi offered no accounting of either its domestic coal operations or its greenhouse gas emissions reduction targets. In 2020, China said it hoped to reach a “peak in green house emissions” by the end of this decade and reach net-zero emissions by 2060, a deadly scenario akin to world imperialism’s other major polluters, including the Pentagon, among the largest polluters on earth. Further, Xi’s recent UN pledge to end coal-fired plant production abroad, no doubt to burnish China’s image as COP26 UN climate talks begin in Glasgow in November, was not without its ambiguities. Was China ending the physical construction of coal plants abroad, but providing the financing for such construction? Would private Chinese companies be allowed to build coal plants abroad?

According to Credit Suisse Research Institute, China’s top 1 percent own nearly 31 percent of the country’s wealth, up from 21 percent in 2000. In the U.S. the top 1 percent own some 35 percent.

In 2016-17, monopoly capitalist-imperialist China, the world largest industrial producer, consumed 59 percent of the worlds’ total supply of cement, 47 per cent of its aluminum, 56 percent of nickel, 50 percent of coal, 50 percent of copper, 50 percent of steel, 27 percent of gold, 14 percent of oil, 31 percent of rice, 47 percent of pork, 23 percent of corn, and 83 percent of cotton. A large portion of all these commodities is supplied by Africa, Asia and Latin America, with whom China maintains classical imperialist relations centered on the massive extraction of surplus value, that is, super profits for Chinese capitalists.

China’s largest four banks, among the largest, if not the largest in the world, are significant shareholders-partners with major U.S. banks operating in China including CitiBank, Bank of America and JPMorgan Chase. All these U.S. mega banks operate in China under Chinese law, with Chinese capitalist hands in the till. How could it be otherwise?

Chinese “shadow banks,” private institutions operating with the barest of government regulation, are akin to their U.S. counterparts in leveraging massive debt in real estate speculation that today threatens to bring on a crash similar to the U.S. 2008-09 banking/real estate catastrophe.

Inter-imperialist competition

To conclude, there is no ”new Cold War” emerging between the U.S. and China, but rather the classic intensification of inter-imperialist competition and rivalry between the major world economic powers with the less powerful imperialist states, whose interests are continually undermined by their “bettors,” ever pressed to take sides in increasingly fruitless efforts to maintain their own interests and profits. No doubt, Chinese diplomats bitterly denounced the AUKUS nuclear-powered submarine deal, even though the planned subs are not scheduled to hit the high seas for perhaps a decade. AUKUS notwithstanding, the ever-deepening inter-imperialist competition for world markets, resources and the “right” to oppress and exploit poor nations and working people everywhere is the driving force behind the ever-deepening crises that humanity faces.

Globalized and predatory capitalism and its imperial superpowers have no solutions other than at the expense of the vast majority. Endless wars, bloated military budgets [wherein monopolized corporations reap super profit for manufacturing ever sophisticated instruments of death and destruction] racism, sexism and LGBTQI discrimination are all capitalism’s calling cards. The same is the case with fossil fuel-induced global warming and the resulting catastrophic climate horrors as well the current and future deadly pandemics. All are inherent in the capitalist-imperialist system. The organization of working people in the U.S. and worldwide to challenge and bring down that system is central to humanity’s future.

Jeff Mackler is a staff writer for Socialist Action newspaper, contact Jeff at

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