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China’s labour-intensive take-off coincided with the onset of global neoliberalism, and trade liberalisation in particular, promoted by the US in the 1980s, which intensified competition in the market for many goods and services.This gave rise to a new model of capitalist accumulation, which combined the high level of exploitation and repression of the old state capitalist model with growth predicated on exporting to global markets.Yet the Chinese economy itself is facing huge problems as a result of unprecedented accumulation and increasing challenges from its own working class.This article looks at the reality behind the hype of China’s economic rise, the deepening contradictions that it faces and its impact on interstate economic and geopolitical rivalry.
This mode of accumulation was grounded in the centralised coordination of economic resources, repression of consumption, draconian restrictions on rural-urban migration and the intense extraction of agrarian surplus through rural collectivisation.
Competitiveness in the export market was also underpinned by devaluation of the renminbi against the dollar.
In the short term, rising incomes from new market opportunities in the countryside and the beginnings of a consumer society in urban areas meant that most segments of society benefited from the reforms, albeit very unevenly.
After Deng Xiaoping had emerged victorious from the intense power struggle at the top of the Chinese Communist Party (CCP) following Mao’s death in 1976, a series of reforms were pushed through.
These reforms—consistent with Deng’s claim that to “get rich is glorious”—paved the way for the emergence of China as an economic power-house.