China’s Challenge to the West: Possibility and Reality

ABSTRACT

Leo Panitch and Sam Gindin’s article “The Integration of China into Global Capitalism” argues that China will follow the pattern of post-war Japan to become a supplemental, junior partner in supporting US hegemony. They claim that due to the close trade and financial ties between the United States and China, there is no question of China challenging America’s dominance of the global system (Panitch and Gindin 2013). This article will critically examine the premises of this claim, taking account of the post-war history of Japan; the measure of transition to market forms in China’s economy; the role of trade; China’s overall level of development; and the growth of the country’s domestic corporations. The article focuses particularly on the level of China’s domestic technology measured through Patents in Force (PiFs). It argues against Panitch and Gindin that China is poised to challenge Western dominance of the world economy.

KEYWORDS:

• Globalisation
• transition
• national income
• China
• imperialism

Disclosure Statement

No potential conflict of interest was reported by the author.

Notes on Contributor

William Jefferies completed his PhD at Manchester Metropolitan University in 2014. His doctoral dissertation was published in 2015 by Routledge as Measuring National Income in the Centrally Planned Economies: Why the West Underestimated the Transition to Capitalism. This text is the first history of the application of national income measurements to the centrally planned economies, and shows how the hypothetical “national income” attributed to them by Western agencies meant that the transition to capitalism was grossly underestimated when the real market, and so real national income, was reintroduced to them. This study also helps explain the use of physical “value” series by Piero Sraffa, and the insights gained from it formed the basis for Jefferies's article “Piero Sraffa and the Production of Commodities by Means of Magic,” published in the Journal of Critical Sociology. This is presently the subject of a polemical exchange around the issues therein.

Notes

1 Data from the Office for National Statistics, UK (https://www.ons.gov.uk/file?uri=/employmentandlabourmarket/peopleinwork/).

2 Data from the UNCTAD Statistical Database (“Foreign direct investment: Inward and outward flows and stock, annual, 1970–2015,” http://unctadstat.unctad.org/wds/TableViewer/tableView.aspx?ReportId=96740).

3 Curiously, Smith does not notice this point.

4 The Groningen Growth and Development Centre (GGDC) was established by Angus Maddison to develop estimates of world growth. It uses different versions of purchasing power parity (PPP) measures for longitudinal measures of GDP and productivity. In particular it applies the Geary-Khamis method of aggregation. This creates an international numéraire, with the US dollar as the benchmark against which the output of all nations can be compared. One side effect of this procedure is that it obliterates distinctions between different modes of production. It can measure the value of output that does not have value or output that is useful but which is not sold. It does not distinguish between the output of a centrally planned non-market economy and that of a market one, or between the output of a subsistence farmer who consumes his or her output and that of an agribusiness that sells its output. This has its most substantial effects on measures applying to countries undergoing transition. It is much less significant for developed economies like Japan and the United States. While GGDC estimates are necessarily imprecise they are nonetheless indicative of the overall level of development of an economy. The author accessed the GGDC database on February 17, 2016 for the total economy database (https://www.conference-board.org/data/economydatabase/index.cfm?id=27762).

5 See http://www.stats.gov.cn/tjsj/pcsj/jjpc/1jp/indexch.htm.

6 Data from World Bank website (Exports of goods and services [% of GDP], http://data.worldbank.org/indicator/NE.EXP.GNFS.ZS?locations=CN-Z4).

7 Data from UNCTAD Statistical Database (“Foreign direct investment: Inward and outward flows and stock, annual, 1970–2015,” http://unctadstat.unctad.org/wds/TableViewer/tableView.aspx?ReportId=96740).