By Sara Flounders
September 10, 2025

This article will appear as a chapter in an upcoming anthology titled “China Changes Everything.” This book is scheduled for publication in Autumn 2025 by World View Forum. Some of the book’s formatting style has been retained in this article.

China’s emergence as an economic powerhouse is a game-changer on a world scale today, with its Belt and Road Initiative, the Shanghai Cooperation Organization, the BRICS+ trade alliance and numerous bilateral trade agreements. China is the top trading partner of over 120 countries and has become an alternative to the International Monetary Fund and the World Bank and their brutal structural adjustment, deregulation and privatization programs (SAPs). Every international gathering, trade agreement and aid shipment confirms that China is a lifeline for the Global South.

China was able to end poverty for 800 million people — something neither the U.S. nor any other capitalist country has been able to do. Life expectancy is on par with the U.S., and China has achieved the fastest growth in living standards of any country in the world.

In the 1950s, when Japan and much of Europe were in ruins, the United States led the world by almost any economic measure. It manufactured half the world’s goods, possessed over 40% of the world’s income and had by far the highest standard of living. For more than 60 years, the U.S.-based monopolies maintained their domination, but in the decades since the 2008 crisis, China has overtaken the U.S. in total production and especially in manufactured goods.

How is This Possible?

The corporate media presents the competition between the U.S. and China as a contention between two nation states and falsely accuses the Chinese government of not playing fair. In reality, China’s advantage arises from the sharp difference in two wholly different forms of organizing society.  In the United States, nearly all resources are privately owned by a handful of  billionaires. Even public forests, waters and raw minerals are ripe for exploitation for private profit. In China, the overwhelming bulk of resources — oil, gas, coal, gold, gems, rare earth minerals and water — are socially owned and used for the development of the whole society.

We will show some of the ways this difference in ownership impacts further modernization and the ability to adapt to new technology in the two societies. We will also discuss how the U.S. ruling class is reacting to challenges it faces from China and from the crisis in its own capitalist system. Right now, the U.S. politicians and media are waging an ideological assault on China. Refuting their lies and propaganda is helpful, but the fundamental reason behind their hostility must also be exposed. This reason lies in the class and property differences between People’s China and U.S. imperialism.

Cooperation in a Global Market

Ruthless competition for profit, the fundamental feature of capitalism, disrupts cooperative work that is needed to solve the enormous environmental and social problems that confront the whole planet. In fact, a higher stage of industrial and technical development in a more complex society actually requires a higher stage of social organization. Since it employs little to no planning, capitalism can’t solve the overarching problems humanity faces on a global scale.  It is beyond dispute that U.S. living standards and quality of life, measured in health care, education, housing and infrastructure are in sharp decline.

High-Tech Infrastructure

Higher levels of production need a high-tech infrastructure to move what is produced to global markets. China dominates the global commercial shipbuilding market, producing over 50% of the world’s new ship orders, while the U.S. share has dwindled to less than 1%. China’s shipbuilding industry is backed by a vast industrial base with government support, allowing it to compete on a larger scale than the U.S.

China’s workers have laid down tens of thousands of miles of high-speed rail that connect 500 Chinese cities and are still expanding to connect to neighboring countries. Meanwhile in the U.S., both freight and passenger railroads are in decline. China has gone green, rapidly adopting solar power and has put half a million electric city buses on its streets. Most U.S. city buses are still belching out pollution from burning fossil fuels.

A significant portion of China’s free higher education starts with an emphasis on STEM (science, technology, engineering and math) education, graduating some 3.5 million STEM graduates each year. This is approximately 10 times as many as those from U.S. educational institutions. High levels of skill and advanced education are essential for intervention in today’s world.

The internet is widely available even in rural China due to government initiatives like the National Broadband Strategy. This level of internet penetration, a massive increase over the past, enables economic development and improves quality of life for rural residents.

The U.S. is Desperate to Preserve Its Hegemony  

The capitalist class in the U.S. has grown frantic about the decline of its global dominance and is therefore doubling down on imperialism. The Democratic and Republican parties both agree to blame China. The Pentagon agrees. NATO agrees.

They direct new sanctions, new tariffs and new rounds of propaganda at China. In the Pacific Ocean and South China Sea, U.S. strategists are rushing to construct a military alliance similar to NATO. It will include Japan, Australia, New Zealand, South Korea and the Philippines and is directed against China. Every arm of the imperialist colossus is predicting and planning for war. The vicious and relentless propaganda, the expanding military budget, the relentless war “games” and military maneuvers all confirm the build-up. Think tanks and strategists promote the idea that war with China is inevitable.

Sharp Economic Differences between U.S. and China

Voices in all imperialist centers are united in slandering China, calling it an imperialist country, no different than past or present imperialist looters. Constant repetition of their propaganda attacks can make the slanders stick, even in the ranks of anti-imperialists. That’s why it’s important to underline the class differences between People’s China and the U.S.

In a capitalist economy, run for the benefit of corporate billionaires, the CEOs and Boards of Directors must base their decisions on maximizing profit — usually, in the shortest term. If they fail, they will lose their positions. Market cycles, not human needs, drive every decision in capitalist production; what is produced is decided by what can be immediately sold for profit.

In China, whose economy is still developing and is catching up in many areas, the major productive forces are owned collectively. Since decisions are not driven by profit, let alone short-term profit, rational planning is possible. Planned production is different from the boom-and-bust swings in capitalist economies. China has enjoyed steady development, year after year, for 75 years, without the recessions and rock-bottom depressions that have been a feature of every capitalist economy for 400 years.

The U.S. Military Budget: A Drain on the Economy

A capitalist economy depends on the state apparatus enforcing private ownership of all means of production and all resources. The police, the courts, the largest prison system on the planet and the giant, U.S.-commanded NATO military machine act as its enforcers. The U.S. military, by far the largest in NATO, has been U.S. capitalists’ shortest path to the highest profits for decades, with its huge, guaranteed, multibillion-dollar annual subsidy.

In 2025, President Trump announced the largest military budget in history, more than $1 trillion. “Nobody’s seen anything like it,” he bragged. This means that the U.S. strategy is still to impose its military domination at the expense of funding for industrial development and infrastructure. Federal funding has been pumped into the military for over four generations, providing huge subsidies and a guaranteed source of profits to U.S. defense corporations. But this “quick fix” has become a drag on the economy. It adds nothing of real value and weakens civilian infrastructure by draining the resources needed for vital social programs, including those that feed, house, provide medical care and educate the U.S. workforce.

The Chinese Revolution Shook the World

The Chinese Revolution was an upheaval that shook the world. It aroused workers and peasants globally. It achieved victory, because it was led by the Communist Party of China (CPC), which broke with the dominant imperialist powers that had looted China. The early accomplishments made by what was then a totally impoverished country were enormous, including evicting the imperialist powers from China and opening the road to a new society. China faced enormous impediments in this task; its many contradictions led to fierce debates within the CPC.

In an all-out effort to strangle this revolution, the U.S. and its allies walled China off from Western trade and technology during its first 30 years after the revolution. During that time, the CPC reorganized agriculture as well as the basic industries that had survived decades of civil war and Japanese and Western colonial occupation.

Every step forward required a mass mobilization involving the great energy of millions of people. They collectively organized mass immunizations and literacy programs and built basic schools, sanitation and irrigation systems, dams and other infrastructure. They collectivized the land and enthusiastically ripped out the feudal landlord system, root and branch.

1978: Reform and Opening Up – The Compromise 

However, the world dominated by monopoly capital was also changing fast, and the leadership of the CPC decided to turn toward gaining access to Western technology and trade. Beginning in 1978, China focused intensively on its development and on gaining Western investment. This necessarily opened China’s economy to hostile class elements, as Western investments of money, machinery, technology and skills flooded into China, creating a new domestic capitalist class.

The compromise included concessions and profits to the capitalist class internationally and distortions of China’s socialist structure. Some observers wondered if the CPC could balance the emerging contradictions and still maintain the party’s socialist goals, and many in the West said that the enthusiasm engendered by Western corporations’ heavy investments in China had already succeeded in bringing China back into the capitalist orbit. Judging by their enthusiastic focus on China, the big corporate investors certainly must have assumed that they would be able to overturn China’s socialist base.

The emergence of a class of Chinese millionaires and billionaires and a stratum that looked to and studied in the West was certainly politically disorienting. Many who had been strong supporters of China in the past assumed that the socialist base of the Chinese state was totally lost. But both the Western capitalists and the disillusioned supporters of China were wrong.

‘Socialism with Chinese Characteristics’

The most important aspect of defending China today is recognizing the socialist base of the Chinese economy and the leadership of the Chinese Communist Party in building an economy of a new type. This is not a finished product; according to the CPC, China is building “toward socialism” or is in the “primary stage of socialism” and is not yet a fully developed socialist country with equality for all.  This phase of socialist construction is described by the CPC as “Socialism with Chinese Characteristics.” It is also described as “market socialism” or “socialism with a market.” China today has a “market” built on socialist pillars, and its people-oriented central planning remains decisive. Step by step, China has opened a controlled capitalist market, while holding on to state ownership of the major industries and banks.

Five Year Plans Since 1949

China still faces imbalances, insufficiencies and enormous difficulties from past imperialist looting and from U.S. military encirclement and economic sanctions today. Yet the Communist Party of China keeps firm political control over this complex and uneven process by employing socialist planning at every level of society. Major economic and social targets are set in advance and coordinated nationally, by province, by county and by municipality.

The 14th Five Year Plan, which was focused on raising the level of the whole society and balancing historic inequality, is now ending. The 15th Five Year Plan will focus on expanding consumption and the “market” by increasing social benefits, especially in health care, day care, elder care and particularly protections for migrant workers and new urban residents. These improvements in social life can simultaneously unlock service consumption, enhance social mobility and promote social equality.

Local governments are being reoriented from prioritizing mid- and low-end manufacturing toward investments in productive services and livelihood consumption. This includes funding for culture, theater, domestic tourism, improved recreational services and increasing rural residents’ pensions. This approach shifts the growth drivers from volatile external market demands toward a resilient domestic cycle that benefits the people.

Role of the Communist Party

The CPC now has more than 100 million members. Its cells, elected from within the ranks, are in virtually every workplace, neighborhood, school and department. The party organizations are committed to defending socialist property and determined to protect Chinese sovereignty. They are the backbone of its extensive social programs.

The CPC considers that while imperialist corporations have exploited and profited from hiring Chinese labor, this was a temporary compromise to gain access to Western technology and factories and to accumulate investment funds. The key economic role is assigned to a state controlled by the working class. Every major industry, especially banking, remains under state control — a state controlled by a massive Communist Party. The central banks play a crucial role in subsidizing and developing key industries. The state decides where to allocate funds and what kinds of investments will be prioritized. Labor intensive, low-paid industries are now being phased out, and high-tech industries with specialized skills are the future.

The Role of SOEs

Today in China, raw materials, high-speed railroads, airlines, most forms of energy, communications and most key areas of the economy continue to be state-owned enterprises (SOE). These state-owned enterprises, a very precise category in China’s state planning, have laid the foundation for China’s further development over a long period of time.

The SOEs also enjoy many advantages, particularly in credit lines and interest rates granted by state-owned banks. These banks play a critical role in stimulating technological innovation in all fields, such as robotics, nuclear power, space, etc. Without the major innovations and key core technologies achieved by SOEs, there would be no economic independence and national security for China. Without their long-term commitment to a large number of social responsibilities, there would be no continuous improvement in people’s lives.

Today hundreds of millions of Chinese urban workers, especially the youth, are well-informed, well-trained, highly educated, in good health, have access to good jobs and modern housing units that they own outright and are using fast and efficient transportation facilities. A current goal is to bring these high standards to the rural and least developed areas of China.

Small production, food delivery apps, numerous restaurants and coffee shops, artisan booths and craft facilities in both urban and rural areas are largely in private hands. Much further development in many levels of production is also still a long-term goal. The majority of the workforce is still employed in a wide mix of small-scale private, co-op and township ownership plans, in the cities and in the countryside. Large-scale development of all the productive forces is far from complete in China.

Capitalism: an Impediment to Social Progress

Today in the U.S., the center of imperialism, virtually everything that we touch, eat and wear, every pill we take, every hospital we visit, every cup of coffee we drink is controlled by giant capitalist monopolies. The cars we drive and the homes and apartments we live in are mostly mortgaged to the banks, which are all privately owned. Bank lending and government subsidies are given mainly to the corporations that have the immediate potential to make a high rate of profit.

U.S. imperialism is incapable of modernizing in order to regain its place in today’s global economy, because it is totally chained to an outmoded form of production — capitalism. Ruthlessly lowering wages, cutting social benefits, infrastructure investments and education is the billionaires’ only strategy. The private ownership of the means of production and the expropriation of all socially produced wealth by a handful of billionaires means fabulous wealth for a few, in the short term, but ultimately it is an impediment to the ability to modernize industry in the context of today’s global supply chains.

U.S. imperialism can still threaten to destroy its opponents to impose its demands. This is a powerful threat. But the capitalists will discover that military might not backed up by industrial capacity becomes a paper tiger, growling without substance.

The interests of workers and oppressed people in the U.S. are bound up with the development of the people of the whole world. Only through increased solidarity will our class here develop the ability to solve the enormous global problems. The ability to rationally plan and invest socially created wealth into rapidly improving technology and infrastructure is decisive, and this requires socialism.

Socialist economies, based on planning and cooperation, are alone capable of solving the problems that the world now faces. Therefore, stepping up to defend China, its revolution and its accomplishments is necessary for the collective future of humanity.

Which Side Are You On?

“Which side are you on?” is the oldest formulation in the class struggle.

Political movements, parties and organizations of the working class that take sides in the global class struggle are the most able to withstand the crisis confronting their class and all oppressed peoples. Without this anchor, this basic understanding, workers and activists are cast adrift in the onslaught of each imperialist flood.

A growing number of left forces are using a Marxist lens to understand a complex world development of a new type. China’s gains hold a liberating potential for humanity. If we can explain the reason for U.S. imperialism’s hostility and why Washington calls Beijing “the greatest threat,” we can strengthen popular resistance to the U.S. drive toward war. We urgently need to take the defense of China to a more serious and higher level. We need to challenge the attacks in the U.S. corporate media, in social media and in academia that have increased as the Chinese economy has skyrocketed past the imperialist economies.

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Sara Flounders has been an anti-imperialist political activist and author committed to a socialist future for over 50 years. She is a contributing editor of the Workers World newspaper and a leader of the International Action Center, the United National Antiwar Coalition and the SanctionsKill Campaign.