Chinese rulers face economic slowdown, sharpening rivalry with Washington

By Roy Landersen
January 27, 2025
Deep-water port at Chancay, Peru, is majority-owned by China shipping company COSCO. Linked by rail to Brazil, it will cut shipping times for Latin America’s agricultural and mineral exports to China by a third. U.S. rulers are alarmed at Beijing’s challenge in their “backyard.”
Deep-water port at Chancay, Peru, is majority-owned by China shipping company COSCO. Linked by rail to Brazil, it will cut shipping times for Latin America’s agricultural and mineral exports to China by a third. U.S. rulers are alarmed at Beijing’s challenge in their “backyard.”

China’s state capitalist rulers are suffering through a yearslong slowdown in economic growth, at the same time that they confront mounting competition with rival capitalist powers, above all, Washington. As economic conditions worsen, millions of working people in China are looking for ways to resist, despite Beijing’s repression.

The Chinese government is using state funds to boost manufacturing to try to export its way out of the crisis. China’s trade surplus set a new record of almost $1 trillion in 2024, more than a third of that with the U.S. But corporate profits in China have declined for a third straight year.

Chinese capitalists dominate global manufacturing, surpassing Japan as the world’s leading car exporter in 2023. Their solar panel plants, which produce double the global demand, will increase output by 50% more this year.

Capitalist powers in the European Union and Washington have ramped up anti-dumping tariffs on these imports. Governments in Brazil, Turkey, Indonesia and India are raising tariff barriers against Chinese goods as well.

The incoming Donald Trump administration plans to use the preponderant size of the U.S. rulers’ domestic market as a weapon in its conflicts with Beijing, imposing more tariffs.

China’s rulers are more dependent than ever on exports to developed capitalist markets — and more vulnerable to trade disputes as a result.

After the 2008 global financial crisis, the Chinese rulers’ industrial production was boosted by a huge government stimulus. But massive spending on urban infrastructure and housing fueled glut. There are now about 80 million unoccupied housing units across the country. The collapse of this property bubble is the biggest drag on China’s economic growth. Millions of construction workers have lost their jobs.

One reflection of the crisis is the fall in China’s population. Birth rates have plummeted by 50% since 2016, while death rates have risen. Youth unemployment hit a record high of 21.3% in June 2023. Many young people stay with parents because they can’t find a full-time job, while others face bosses’ relentless demands for longer working hours.

“There’s a big difference between China doing well and Chinese people doing well,” Moxi, a former psychiatrist, told the BBC. He quit his job because of overwork.

For decades the bureaucratic regime in Beijing hoped to secure the acquiescence of working people by assuring them better living standards. But during the rulers’ iron-fisted pandemic lockdowns anti-government protests spread.

China Labour Bulletin, published in Hong Kong, reports that last year there were hundreds of strikes and protests by workers across the country. Many were in the construction and manufacturing industries, mainly over wage arrears and lost jobs. Workers from the garment industry, hospitals and warehouses also took action.

Protests by middle-class layers have also spread in response to the loss of bank savings, rising debts and the fall in the value of their houses.

Beijing vs. Washington rivalry

Beijing has extended its reach into Asia, Africa and Latin America with its global Belt and Road infrastructure projects. They’re funded by China’s state-owned banks, and lead to increased debts for the countries involved.

In Chancay, a remote town in Peru, the Chinese shipping giant Cosco is building a deep-water megaport to facilitate the supply of agricultural goods and metals from Latin America to China. Washington is alarmed that the facility can double as a military base for Beijing.

China is investing billions of dollars in Latin America to transform trade across the Pacific, cutting shipping times to China by a third and expanding Beijing’s influence in a continent that Washington considers its backyard.

Beijing is increasing its military clout in the Pacific region, which the U.S. rulers consider one of the spoils of their bloody victory in World War II.

The Chinese navy launched its largest exercise in the Taiwan Strait in almost 30 years in December. Over 100 warships entered maritime approaches to Taiwan in a dress rehearsal for an invasion. Beijing says it wants to reclaim the territory. Washington has vowed to take military action if it tries.

Beijing has also expanded its military presence in the South China Sea, harassing and ramming vessels inside what the Philippine rulers consider their exclusive economic zone.

This heightens instability in a region that carries one-third of world shipping, including 65% of China’s total trade and 40% of global oil supplies.

Beijing is modernizing its warships and missiles, fighters and bombers, as well as its cyber warfare capacities. However, the U.S. rulers still have by far the largest and most lethal military forces in the world.

Washington’s capitalist rulers and the incoming Trump administration are determined to defend their place at the head of the imperialist world order. NATO commander Adm. Rob Bauer told the Jan. 7 Financial Times, “If tectonic plates shift, you have earthquakes. If the plates of geopolitical power shift, you have wars.”