Battle for China's Past : Mao and the Cultural Revolution

THE BATTLE FOR CHINA’ S PAST
private firms, foreign enterprises and family farms made up 50 per cent
of the Chinese economy as early as 1998, with that share rising to 62 per
cent if private firms that were still officially labelled collectives were
counted (Garnault and Song 2000). Multinational corporations now
account for 34 per cent of Chinese industrial output, which is greater than
the 30 per cent share attributed to state-owned enterprises, and the
percentage of the former keeps growing (Wang 2003).
Joining the transnational capitalist world
The third perspective from which one can argue that China is either
already a capitalist country or rapidly moving towards it is that China
increasingly is run by transnational capitalist firms (Hart-Landsberg
and Burkett 2007). Take the automobile industry as a case in point.
Nowadays, all the important car production plants in China are owned
by either foreign companies or joint venture companies. Professor Hu
Xingdou (2005) argues that by making China the sweatshop of the
world, the developed West not only exploits cheap Chinese labour but
also Chinese intellectual and knowledge sources. He asks his audience
to think of the example of Guangdong and the Pearl River Delta, where
on a car journey from Guangzhou to Shenzhen, from Zhuhai to
Foshan, a journey of thousands of miles, one would see nothing but an
endless stream of factories. But according to Hu, even with a manufacturing
industry of this scale, the total GDP of Guangdong is no greater
than the profits of a multinational company like McDonald’s.
One commentator calls this kind of development the Dongguan
model and increasingly Suzhou and even Wenzhou are moving
towards it (Jin Xinyi 2005). Suzhou used to have its own industry and
product brands such the Xiangxuehai refrigerator, Kongque television,
Chunhua vacuum cleaners and Changcheng electric fans. These local
brands have now disappeared. The Xiangxuehai refrigerator disappeared
after its manufacturer entered into a joint venture with a
Southern Korean company, Sansung; the Kongque television disappeared
after its makers entered into a joint venture with the Dutch
corporation, Phillips (Han Yanming 2004).
The strategy employed by foreign companies is first to enter into a
joint venture with an existing Chinese enterprise and demand the best
assets, tax and infrastructure concessions while making use of Chinese
labour and expertise. They then use their technological and financial
advantages to squeeze the Chinese partners out of the enterprise. This
happened to Xibei Bearing Co Ltd with a German company FAG, to
Ningxia Machine Co Ltd with a Japanese company, to a petroleum
equipment company in a joint venture with an American company,
and to the Lanzhou Camera Plant with a Japanese company. 2
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