The political economy of the US sanctions against China
Chapter draft for Sanctions as War (Brill 2022), edited by Stuart Davis and Immanuel Ness
Zhun Xu (John Jay College, City University of New York), Fangfei Lin (Xinjiang University)
One important sign of an increasingly unstable global capitalism has been the visible
tension between the US and China in the last decade. The tension, so far, has been mostly driven
by the aggressions from the US side. This was evident from the American “pivot to Asia” under
the Obama administration, as Lieberthal (2011) claims: “Obama moved boldly to shift the center
of gravity among the key multilateral organizations in Asia…and leading them to take approaches
favored by Washington but are neuralgic for Beijing.” However, it was under the Trump
administration that the negative opinions on China became much more explicit in the US
mainstream media and politics. Even though there are many things that the Trump administration,
establishment Republicans and the Democrats would strongly disagree with each other, they have
reached a holy alliance regarding containing China.
The resentment and perhaps some regret over the “soft” approach towards China is now
visible among some US elites. In July 2020, Mike Pompeo, the US Secretary of State, made a
speech titled “Communist China and the Free World’s Future” in a symbolic venue, the Richard
Nixon Presidential Library and Museum. Pompeo lamented the failure of the US’ China strategy,
arguing that US engagement with China since Nixon benefited China at the expense of the US
economy and “way of life”; and it did not induce China to evolve “towards freedom and
democracy” (Pompeo 2020). In another blunt racist revelation in 2019, Kiron Skinner, a former
Director of Policy Planning at the United States Department of State, highlighted the threat of
China since “it’s the first time that we will have a great-power competitor that is not Caucasian.”1
All these opinions have been preparing new ground for sanctions against China. In many such
narratives, China previously was someone that needs to be and can be saved by peaceful
engagement/education of the West. Now China has somehow become uneducable and needs to be
taught its place in the world.
Since the founding of the People’s Republic in 1949, China was for a long time a target of
the strictest US-led sanctions. A trade embargo was not lifted until the normalization of the US-
China relationship in the early 1970s. Since then, China has deeply integrated into the global
capitalist economy and become a major producer and trader. Despite certain long-term trade
restrictions and occasional exceptions, the US has largely refrained from imposing significant new
sanctions on China. Thus, it is concerning to see the emerging new hostility from the US and the
resulting new sanctions on a large number of Chinese companies, universities, and research
The return of US sanctions against China poses two important questions for understanding
both the working and the crisis of global capitalism. First, we need to understand the causes behind
this new wave of sanctions: is it a short-term measure from the US capitalists which could change
with a new administration, or a long-term policy change that will bring back part of the experiences
during the Cold War? Second, we can explore whether these sanctions will make an impact on
1 Skinner made the point in “Future Security Forum 2019” hosted by New America and Arizona State University.
The full event video can be found here: https://www.newamerica.org/conference/future-security-forum-2019,
accessed January 1, 2021.
both the Chinese economy and politics, particularly the industrial upgrading of and labor
conditions in the Chinese industries, as well as China’s relationship with the West and the global
This chapter explores these questions from a political economy perspective, which debunks
some of the allegations behind the US sanctions, and examines the consequences of such sanctions
in the context of global capitalist crisis We argue that the baseless sanctions are imperialist
responses to the crises of global capitalism of which China has been an integral part. However,
such actions only hurt the working people in both US and China, and will tend to destabilize global
capitalism even more. The next section briefly reviews the history of the US-China relationship
after 1949. The third section examines the current US sanctions against China and their
consequences. The last section concludes the chapter.
The evolving US-China relationship
When the Chinese Communist Party (CCP) defeated the Guomindang (Nationalist) Party
in 1949, the US did not seem to immediately make a firm decision on its strategy towards the new
socialist country. The US government, although still supporting the Guomindang regime in Taiwan
economically, was at least preparing to cut its military aid to the Guomindang (Cohen 2019, p.183-
4). As Cohen (2019) suggests, the US government was ready to live with the new China and would
not intervene further in the Chinese civil war (the reunification with Taiwan). Meanwhile, the US
already started to impose trade restrictions on China as part of its broader Cold War policies. In
1948, the value of US exports to China was 273.4 million USD, but it dropped to 82.6 million
USD in 1949, and 33 million in 1950 (January to August) (Tao 1997). Industrial goods such as
fossil-based products declined by more than 90 percent and the remaining was mostly cotton since
it was not strategically significant (Tao 1997).
The Korean civil war in 1950 prompted the US to take a more aggressive stance against
China. After the war broke out, the US government immediately sent its Seventh Fleet to the
Taiwan Strait to prevent the Chinese revolution from moving into Taiwan and essentially started
establishing Taiwan as an anti-communist outpost. The US later upgraded its sanctions to a total
embargo and seized all Chinese government assets and some private Chinese assets in the US after
China intervened in the Korean War (Tao 1997). U.S. controls on strategic trade with China were
even stricter than those imposed against the Soviet Union, which was known as the “China
Differential” (Meijer 2015).
All these US-led aggressions made China choose to side closely with the USSR. Thanks to
the massive economic and technical support from the USSR and the Soviet bloc, China was able
to start its rapid industrialization despite the sanctions in the 1950s. However, the political and
economic tensions between China and the USSR starting from the late-1950s gradually
deteriorated the Sino-Soviet relationship. This was further aggravated by the sudden withdrawal
of Soviet technicians in 1960. This forced China to explore trade relationships outside the Soviet
bloc in the 1960s, which was also in the interest of the US as it hoped from the beginning to
separate China away from the Soviet Bloc.
The effort to diversify trade partners worked well for China. As early as 1966, more than
half of Chinese imports came from major capitalist economies such as Japan, Western Europe,
Canada, and Australia, though the US trade embargo was still in place (Chen 2006). Hong Kong
also played a special role in the anti-sanction struggle (Tao 1997). It was virtually impossible to
cut the connections and legal/illegal trading routes between Hong Kong and the mainland. The
CCP decided to not liberate Hong Kong immediately as the British-occupied city essentially served
as a door through which China could break through the embargo. Thus, China was able to use the
commercial interest of US allies to effectively reduce the damage from the US sanctions.
At the same time, the US was facing great challenges by the revolutionary struggles in
Vietnam and beyond. It had some strong incentive to have a working relationship with China,
partly to isolate Vietnam and partly to take advantage of the Sino-Soviet split (Meijer 2015). The
Chinese leadership under Mao was also interested in the normalization of its relationship with the
US-led capitalist world and gaining access to advanced technology and capital equipment. The
trade embargo was partially lifted after Nixon's visit to Beijing in 1972 and China increased its
foreign trade by 74 percent in a year (Chen 2006).
A real change in the US-China relationship had to wait until the rise of the post-Mao
leadership in China and the increasing tension between the US and the USSR following the war in
Afghanistan. The new Chinese leadership, led by Deng Xiaoping, was determined to break away
from Maoism and thus much more enthusiastic in developing a close collaboration with the US-
led capitalist world. Meanwhile, the Carter administration was also looking for more explicit
strategic cooperation with China. This quickly led to the US further loosening trade restrictions on
China (allowing military equipment sales) and forging military collaboration between the two
countries (Meijer 2015). The close collaboration was based on a common strategic interest against
the USSR throughout the 1980s, and then a common business interest for the elites from both
countries to work together after the demise of the USSR. The political turmoil in China at the end
of the 1980s led to a brief period of US sanctions, but many of those were quickly lifted (Mann
1991). The US established Permanent Normalized Trade Relations with China in 2000 and, with
support from the US and others, China joined the World Trade Organization in 2001.
Despite some major differences in their politics and ideologies, since the rise of
neoliberalism China and the US have been playing largely complementary roles in the global
economy. This was made possible first by industrial relocation/outsourcing in the US starting from
the 1980s. Moreover, China dismantled its rural collectives in the 1980s and privatized much of
urban state-owned enterprises in the 1990s, creating a large reserve army of labor. US firms
outsourced less sophisticated industries to China, while the post-structural reform working class
in China proved to be sufficiently flexible, productive, and cheap to make China the leading
workshop of the world. The US business community in general has greatly benefited from such a
relationship (sometimes called the Chimerica) as it provides cheaper consumer goods and lowers
interest rates (Ferguson and Xu 2018). China has also enjoyed a very rapid rate of capital
accumulation and growth and accumulated a large sum of foreign reserves.2 At the same time, the
US-China relationship is far from equal. The US monopolizes science and technology whle China
mostly produces or assembles cheap commodities for the US and others. Despite its rapid
economic growth, China remains in the semi-periphery category in terms of its position in the
world division of labor; a large part of China’s massive foreign reserves was also held in US dollar
assets, which in essence constitute China's informal tribute to US imperialism (Li 2020).
The stability of such a fundamentally collaborative but hierarchical relationship is the very
basis of the post-cold-war global economy that we live in. Thus, it is of clear importance to
understand the origins of the recent new sanctions and whether this means the beginning of the
end of the current global order.
2 From a critical perspective, the working classes in both countries have not fared well in the
process. For example, the labor shares of national income in both US and China have had some
significant decline during the neoliberal era.
Examining the recent sanctions
For years, the US has been blaming China for many of its own problems. However, under
Trump anti-Chinese sentiments have reached a historic high. For example, one of his high-level
advisors, Peter Navarro, made his name by writing fearmongering books such as The Coming
China Wars and Death by China. Trump himself is a master demagogue and for years, he has
blamed China for “stealing” US jobs and technology.3 After all, the Trump administration started
the prolonged trade war with China by imposing new tariffs first on solar panels and washing
machines (Schlesinger and Ailworth 2018), and later on a large number of Chinese products.
Many accusations directed at China by the US government are misleading at best. China
does enjoy a huge trade surplus with the US, but actual gains from trade are exaggerated.
According to Ma et al (2014), foreign-invested enterprises operating in China created nearly 45%
of the domestic content in Chinese exports, whereas processing Chinese-owned enterprises only
contributed by less than 5%. Moreover, in terms of income distribution, foreign factory owners
captured more than half of the value of Chinese exports. China has seen some dramatic industrial
expansion in the last few decades, but this was mainly based on domestic capital. For example, the
United Nations Conference on Trade and Development (2020) documents that the foreign direct
investment (FDI) only constitutes 2.3 percent of China's gross capital formation in 2019, which
was lower than the number in the US (5.6 percent) or the world (7 percent).
Moreover, US firms outsourced to China and other countries not due to some secret scheme
of the Chinese government but primarily because of cheaper productive labor and the massive
market. Since these foreign companies make their own investment decisions on a profit basis, it
3 He demonized China in his presidential campaign, see here https://time.com/4508768/presidential-debate-
trump-clinton-transcript, accessed January 1, 2021. And he continued to do so while in office.
would be indeed absurd to assume the Chinese government can somehow force global capital to
give away technology and sacrifice profits. As for the number of jobs, although total urban
employment increased dramatically, the neoliberal reform starting from the late 1990s that
prepared China for the export boom cost the Chinese workers more than 50 million jobs in the
urban formal sector, and those formal jobs were never restored (Chen and Xu 2017). As a
comparison, according to Scott and Mokhiber (2020), the alleged number of US job losses due to
the trade deficit with China was 3.7 million between 2001 and 2018.
Although related to broad claims such as job/technology theft, the most recent US sanctions
are based on more concrete allegations. We divide these newly implemented sanctions into three
categories: first, sanctions against enterprises because of their relationship with the Chinese
military; second, sanctions against enterprises based on the Chinese trade with US “enemies” such
as Iran; and finally, sanctions against local governments and enterprises because of alleged human
rights violations, such as the case in Xinjiang.
The first category involves the question of military connections. A large number of firms
and universities in China have been under export control with the Entity List and Unverified List
(often a precursor to the Entity List).4 Students in some leading universities in China suddenly lost
access to standard software such as Matlab, as the US firm MathWorks has suspended its service
for these universities (Chen 2020). The list also includes institutions that do not have a clear
connection with the military. For example, it includes Anhui Institute of Metrology, which is an
institution providing service of measurement in Anhui Province; and it also includes Renmin
University, which is a leading university famous for social sciences and humanities.
4 The full list can be found here: https://www.ecfr.gov/cgi-bin/text-
It is quite hypocritical to accuse Chinese universities of having military connections when
all the leading US universities and many large companies have deep connections with the US
imperialist military force which has invaded countries around the world and keeps an active
military force around China. In one grant for research equipment alone, the US Department of
Defense gave 49 million USD to 91 institutions in 2020 (US Department of Defense 2019). In the
same year, the US Department of Defense also gave out about 434 million under “University
Research Initiatives”.5 Moreover, the US enthusiastically sold military equipment to China not
long ago (Meijer 2015).
The second category is closely related to the US sanctions on Iran. Since 1979, the US has
imposed various sanctions on Iran. This was partly loosened by the Joint Comprehensive Plan of
Action (JCPOA) between the five permanent members of the UN Security Council (China, US,
France, Russia, Britain) plus Germany and Iran. The JCPOA basically allowed Iran to
reduce/redesign its nuclear facilities in exchange for significant sanction relief. However, in 2018
the Trump administration quickly withdrew from the JCPOA and re-imposed sanctions. This has
had some major impacts on Iran as companies around the world have abandoned their
investment/trade plan with Iran. 6 For example, the Swedish corporation Ericsson once
collaborated with Iran’s second-largest mobile operator MTN-Irancell to develop 5G network, but
later was forced to leave Iran due to the US pressures (Khaasteh 2020). Some Chinese firms have
been doing business with Iran despite the sanctions, including ZTE and Huawei. Both ZTE and
Huawei are telecommunications equipment companies. Huawei is a leading producer in the global
5 Based on the table complied by The Associate of American Universities, see the details here:
FY21-Funding-Table.pdf. Accessed January 1, 2021.
6 See some of the negative impacts listed here: https://www.iranwatch.org/our-publications/policy-briefs/how-
market and has been promoting its 5G network around the world. It made steady progress in Iran
after competitors like Ericsson left (Khaasteh 2020). While the US government has long been
accusing Huawei of spying the foreign countries for the Chinese government with no evidence,
they started with ZTE first. In 2017, ZTE pleaded guilty to exporting U.S. technology to Iran and
North Korea and was fined 1.2 billion USD (US Department of Justice 2017). In 2018, the US
government announced that ZTE did not do enough to discipline its employees who were involved
in the violation of the sanctions and banned U.S. companies from providing exports to ZTE for
seven years (US Department of Commerce 2018a). This paralyzed ZTE’s business as it relied on
the core technology from the US. Later the ban was lifted after ZTE paid another 1.4 billion USD
and replaced the entire board of directors and senior leadership (US Department of Commerce
, The US started to deal with Huawei a few months after reaching an agreement with ZTE
in 2018. In December 2018, by the request of the US, the Canadian government arrested Huawei’s
top executive Meng Wanzhou, daughter of its founder and CEO Ren Zhengfei. Meng and Huawei
were accused to have violated the US sanctions on Iran. The arrest based on the alleged company's
violation of sanctions was a bold move. As Jeffrey Sachs, a leading American economist
commented, the United States rarely arrests senior businesspeople for alleged crimes committed
by their companies, and “to start this practice with a leading Chinese businessperson – rather than
the dozens of culpable U.S. CEOs and CFOs – is a stunning provocation to the Chinese government,
business community and public” (Sachs 2018). The US government later put Huawei among others
on the so-called Entity List, which prevents Huawei from accessing items produced domestically
and abroad from U.S. technology and software (US Department of Commerce 2020). This has
caused major disruptions in Huawei’s production, as like ZTE, Huawei is reliant on US chips and
technology (Pham 2020).
With the leading role of US technology in the global economy and the long arm of the US
jurisdiction, the case of Huawei perfectly showcased the imperialist power of the US. The US’s
sanctions and arrests directed against these Chinese firms is reinforcing the brutal sanctions on
Iran. More importantly, it is a blunt threat to all the countries that the US is quite resourceful and
determined in implementing severe punishment to those who dare to challenge US interests and
The last category of sanctions is linked to the alleged violation of human rights, particularly
in the Xinjiang Uyghur Autonomous Region (XUAR). Since 2019, the Trump administration has
imposed a series of harsh sanctions on Chinese organizations and enterprises in the name of
concerning human rights violations and abuses targeting Uyghur and other ethnic minorities in
Xinjiang. In October 2019, the U.S. Department of Commerce took the lead to add 28 Chinese
organizations to its Entity List, including twenty government organizations in XUAR and eight
high-technology companies throughout China. These entities were accused to be “implicated in
the implementation of China’s campaign of repression, mass arbitrary detention, and high-
technology surveillance” (U.S. Department of Commerce 2019). In May 2020, the US announced
its intention to penalize 33 Chinese entities for helping the Chinese government spy on the Uyghur
population (Shepardson and Freifeld 2020). In early July 2020, the US issued the Xinjiang Supply
Chain Business Advisory in warning companies of legal, economic, and reputational risks of doing
business with Chinese firms involved in human rights abuses (U.S. Department of State,
Department of the Treasury, Department of Commerce and Department of Homeland Security
2020), and then announced to sanction one Chinese government entity and four government
officials, including Chen Quanguo, the Communist Party Secretary of XUAR in connection with
human rights abuses against ethnic minorities in Xinjiang (U.S. Department of the Treasury 2020).
On December 2, 2020, the US officially ban cotton and cotton products imports from the Xinjiang
Production and Construction Corps (XPCC) (Lawder and Patton 2020).
The US attacks on the violations of human rights in Xinjiang can be specifically identified
as two major issues: Uyghurs ‘genocide’ and coercive or forced labor in Xinjiang. In June 2020, a
report written by Adrian Zenz and published by Jamestown Foundation claimed that, according to
China’s official statistics, Xinjiang’s natural population growth rate has sharply declined from
2015 to 2018, since the Chinese government has implemented a large-scale campaign of
compulsory sterilization towards Uyghur women and other Muslim minorities and promoted the
policy of ‘Han colonialism’ in Xinjiang (Zenz 2020a). The rumors of forced Uyghur labor in
Xinjiang mainly originated in a report from Cave et al (2020) entitled “Uyghurs for Sale” published
by the Australian Strategic Policy Institute (ASPI) in March 2020. In the report the Chinese
government was accused of facilitating a mass coercive labor transfer of Uyghurs to factories. In
mid-2020, new rumors have begun to spread that the Xinjiang government has forced Uyghurs,
especially the graduates of vocational education and training centers, to engage in onerous cotton-
picking work in XPCC’s cotton fields. Most US sanctions towards the XPCC and its officials and
the ban on cotton/cotton products from Xinjiang, particularly after July 2020, have been imposed
under the banner of opposing and prohibiting the acts of forced labor.
The reports backing up these sanctions afford no factual support for the claim that Xinjiang
has carried out the policies of ‘genocide’ or ‘Han Colonialism’. Since 1978, the population growth
rate of ethnic minorities, especially Uyghurs, has been higher than that of Xinjiang’s Han
population. From 2010 to 2018, the Uyghur population rose from 10.17 million to 12.71 million,
while the Han population in Xinjiang merely increased to 9.01 million from 8.82 million (Li 2021).
Also, Xinjiang revised its population and family planning regulations in 2017, granting the same
and equal policy to all ethnic groups: urban couples can have two children, rural couples can have
three (Xinjiang Uygur Autonomous Region Health Commission 2019). Rumors of ‘forced Uyghur
labor’ are also inconsistent with the history and current situation of the cotton industry in Xinjiang.
Around 2000, Xinjiang has become China’s largest cotton-producing region. Yet, Xinjiang’s
cotton cultivation at that time was incompatible with the operational requirement of cotton harvest
machines, and a large amount of manpower was urgently demanding during the cotton harvest
period. Hundreds of thousands of migrants, thereupon, have seasonally moved from central and
eastern provinces to Xinjiang’s cotton fields. It should also be noted that the occurrence of Uyghur
cotton pickers, as labor migrants in Xinjiang’s cotton fields, is not a newly emerging phenomenon.
Some news reports suggest that, around 2003, or even earlier, many Uyghur farmers from Hotan
or Kashgar have embarked on their migrant journey of working as seasonal cotton pickers in Aksu
(Xu et al 2005). Their motives for seasonal migration varied little from that of Han seasonal cotton
pickers from inner provinces, unrelated to forced labor but largely derived from the desire for
increasing cash income to maintain or improve livelihood that has been greatly affected by
commodification of subsistence during the process of China’s capitalist agrarian changes after
1978. Since the number and scale of Uyghur cotton pickers was much smaller than those who
migrated from inner provinces, they did not receive widespread media coverage and attention.
However, it is undeniable that the group of Uyghur cotton pickers has been a key and long-standing
labor force for manual cotton harvesting.
.Since 2010, the labor demand for manual cotton pickers, who have been rapidly replaced
by machines, has dramatically decreased in northern Xinjiang. However, mainly restricted by the
dilemmas of land fragmentation and existing cotton varieties’ inadaptation in machinery
harvesting (Deng and Ning 2020), southern Xinjiang, though accounting for nearly 70 percent of
the total cotton-producing area in Xinjiang, has yet to fully implement machinery cotton harvesting
— the percentage in south Xinjiang was merely 34.7 percent in 2019 (Department of Finance of
Xinjiang Uygur Autonomous Region 2020). Thus, the labor demand still exists in southern
Xinjiang. As we previously mentioned, enrolling Uyghur cotton pickers has been commonly seen
in cotton fields of south Xinjiang. Based on one of the authors’ (Fangfei Lin) field observations in
2013, both XPCC’s companies and private cotton planters in Aksu had widely recruited Uyghur
migrants through private relations or Uyghur labor agents. Cotton planters there prefer hiring
Uyghur migrants, merely because they can reduce the cost of travel expenses that are paid for
Uyghur migrants, though the salary of Uyghur migrants is basically the same as that of Han
migrants. In this sense, hiring Uyghur migrants in Xinjiang’s cotton fields definitely is a market-
driven employment, unrelated to “forced labor”.
These facts debunk the accusation appearing in Zenz (2020b) that the Chinese government
has deliberately impeded the development of machine-based cotton harvesting in order to compel
the Uyghurs to conduct heavy cotton-picking work. The varying degree of mechanization among
Xinjiang’s cotton production probably is closely related to the unbalanced developmental status of
agrarian capitalization in Xinjiang — this exact problem is worth discussing further yet will not
be thoroughly analyzed in this article. In short, the labor demand of Uyghur seasonal cotton pickers
in south Xinjiang is largely decided by its relatively low degree of agricultural capitalization, not
due to the ‘special treatment’ towards labor migrants of a certain ethnic minority.
The US has not provided an adequate factual basis for its allegations of forced labor or
compulsory birth control towards the Uyghurs in Xinjiang. So, what is the motivation for the
United States launch a range of sanctions against China over Xinjiang? An analysis from the
perspective of political economy requires us to examine which group’s interests will be harmed
and which group will ultimately benefit through those issued sanctions. Sautman argues that the
case of Tibet, in which the narratives of China practicing ‘genocide’ and ‘Han colonialism’ in
Tibet have been circulated and uncritically accepted by the media and politicians in the West,
reflects political mobilization dominated by the West, “where charges go unchallenged due to
confusion over what is genocide, the sacralized popularity of the Dalai Lama, a constructed image
of Tibetan victimhood, anti-Communism, and anti-Chinese racism” (2006: 257). This logic also
can apply to examinations of the US accusations against Xinjiang’s human rights, that through
constructing the Uyghur victimhood to “obtain a bottomless line of moral credit” (Todorov 2003),
the US and some Uyghur political speculators might fulfill the unreasonable demands or achieve
their political goal of discrediting China. US accusations about human rights violations in Xinjiang,
as Prashad (2020) remarks, “are being made for political and commercial ends not on strictly
human rights grounds”.
Like other sanctions, the recent US sanctions on China are unlikely to help the people in
either country. For example, the US ban on cotton in Xinjiang will have severely negative impacts
on the livelihoods of Xinjiang cotton farmers, whose human rights seems to be totally neglected
by the Trump administration while imposing the sanctions. Textile enterprises in Xinjiang,
including those providing the Uyghurs with guaranteed and reasonably paid employment, also
have confronted the threat of bankruptcy because of the US cotton ban7. Will the US government
7 Based on one of the authors’ short conservation with an official of the Xinjiang Cotton Textile Association in
December 2020, he admitted that the US cotton ban will definitely have a great attack on Xinjiang's cotton textile
industry, but for now, the losses have yet to be precisely estimated.
be responsible for these Uyghurs who may lose their jobs? The answer is most likely no. These
sanctions do not help the US economy and create jobs for the US people either. Even if it does
suppress certain industries or firms in China, US capital can easily outsource jobs elsewhere. And
the Chinese and US economy are closely interconnected in the global economy. The US
theoretically cannot delink from China without a fundamental change in the global political
economy that probably means a major capitalist crisis. As Rennemo (2020) writes, given China’s
importance, the United States “risks harm to its sanctions tool, longstanding alliances, and
ultimately its geopolitical position if its posture remains one dimensional and overly coercive.”
How the US-China relations evolve in the next 10-20 years might be vital for the survival
of world capitalism. In terms of its position in the world economy, China has not and is not
competing with the US. But China has been able to maintain its rapid growth, relative political
autonomy with a ruling communist party over the last few decades, which posed some uncertainty
(rather than challenge) to the US-led imperialist order. The US could well tolerate such minor
uncertainty when capitalism is going strong throughout much of the neoliberal era. But this all
changes when the capitalist world started struggling with secular stagnation and deepening
political crisis, particularly after the global financial crisis.
The US ruling class needs an “other”, an enemy, and this paranoia makes them desperate
in identifying the potential threats to its rule. China serves as such a perfect scapegoat. The US
thus wrongly interpret the deep problems of capitalism as some power struggles and competition
with China, even though China has been a major supporting pillar of the existing capitalist world
economy. The sanctions against China are destroying the neoliberal global economy, which will
only make capitalism even more unstable everywhere.
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