This article has been translated from Lutte de Classe #257, the journal of the French Trotskyist organisation Lutte Ouvrière. While it addresses the reasons for US imperialism to try to flex its muscles against China, it also explains why China is not "imperialist", a common misapprehension among some on the Left...
On 14 June, the United States announced a memorandum of understanding with Iran. It outlined terms for an end to the war. There is no guarantee that this agreement, the details of which remain unclear, will be finalised. What is evident, however, is that US imperialism, under Trump's leadership, is looking to reaffirm its global supremacy. But beyond this war, the main obstacle to the US reasserting itself globally with the ease it is accustomed to, is the apparent influence of China.
China's rise to power over the last forty years, the penetration of its capital into international markets and its transformation, albeit only to a very limited extent, from the 'world's workshop' into a competitor to Western firms, is very real. Behind the diplomatic smiles, American imperialism has for several years now, recognised that the Chinese state is not only robust enough to withstand pressure on its domestic market, but is also strong enough to help its national companies capture markets in the Middle East, Latin America and Africa.
A vast territory, a large population, a centralised and interventionist state
China's rise to power in recent years can be explained largely by the strength of its state, which rules over 1.4 billion inhabitants, and over 7.2% of the world's landmass. This gives it considerable resources. However, China's size would mean little were it not administered by a centralised state - which, moreover, has been able to protect itself from the pressures of imperialism ever since the 1949 revolution, and which imperialism has still not managed to subdue nor control.
In the 19th century, China was forcibly integrated into the world market and carved up by the Western powers. This marked the beginning of the "Century of Humiliation". It was not until 1949 that the national revolution led by the Chinese Communist Party (CCP) under the leadership of Mao Zedong put an end to the carving up of the country. But it did not put an end to imperialist pressure. The Chinese state has been built from the 1950s to the present day in opposition to Western imperialism. It is this history that explains its current characteristics.
The 1949 revolution, while led by the Chinese Communist Party could only have been a "bourgeois" revolution. The working class had not yet recovered from the crushing defeat it had suffered in 1927 and remained merely a spectator. The CCP was "communist" only in name. In reality it had become a nationalist party, made up of cadres drawn mainly from bourgeois intellectual circles. The revolution relied entirely on the peasantry rising up in huge numbers in order to defeat Chiang Kai-shek's troops, who were supported by American imperialism. By then, even the small and weak Chinese bourgeois class had turned its back on Chiang Kai-shek's regime, as utterly corrupt and ineffective. A whole section of this class could thus identify with the fourth star on the CCP's flag, the one symbolising the patriotic "bourgeoisie"!
The revolution accomplished several of the democratic tasks on the agenda, nevertheless. It unified this vast country, freed the peasants from their quasi-serfdom, wrote off their debts and drove out the landlords.
It also drove out imperialism! However, capitalist property remained untouched. Only the island of Taiwan, which had become Chiang's refuge under American protection, remained outside the scope of the revolution.
After 1949, the CCP had to rebuild the state whilst facing an imperialist embargo. This bourgeois state very quickly had to function without the bourgeoisie, who were concerned only with their immediate interests and the embargo imposed by the United States. The demands placed on them by the CCP soon convinced the Chinese capitalists - those portrayed as patriots by Mao - to continue their business abroad, starting with Hong Kong, Taiwan and Macao. A few of them remained in the country to represent their families' interests and became part of the state apparatus. It fell to this state to administer the entire economy until the late 1970s.
It was not until 1972, on the initiative of President Richard Nixon, that the United States decided to end China's isolation. China once again opened up to foreign capital. Some of the émigré Chinese capitalists returned from abroad to do business under the control of the state, while its ruling strata appropriated entire sectors of the economy. Thus, in contrast to developments in many imperialist countries, it was not the capitalist class which turned the state into a tool for its domestic domination and expansion, but rather the ruling stratum at the head of the state and the CCP that imposed itself - in its own interests - including over the resurgent Chinese bourgeoisie. It is this distinctive feature, a product of its history, that enabled China to avoid being carved up when it reopened to foreign capital - following Nixon's visit, after Mao's death in 1976, and then when it was fully reintegrated into the global market in the 1990s, culminating in its admission to the WTO in the early 2000s.
The West's subcontractor
In the 1980s and 1990s, China initially integrated into the market as a subcontractor for Western multinationals. It became the 'world's workshop', providing international capitalism with a young, educated but underpaid working class numbering hundreds of millions. It exported textiles and electronic components, goods manufactured on behalf of Western or Japanese multinationals, or components incorporated into goods produced by these foreign multinationals.
Today, a signifi cant part of China's production apparatus remains part of the value chain dominated by Western multinationals, as exemplifi ed by Apple, which still outsources a very large proportion of its phone manufacturing to China. However, support from the central government, provincial authorities and municipal administrations, along with the protectionist measures they implemented - notably by mandating joint ventures between foreign and Chinese companies, which were compulsory for anyone wishing to do business in the country - enabled a number of companies to develop their own ecosystems, acquire the necessary technologies and launch their own production lines. Thus, consciously and patiently, over the course of the 2000s and 2010s, the state built what it termed "national champions": companies capable of competing with their Western counterparts, including in finished and high-tech products.
On 14 and 15 May, on his visit to China, Trump was accompanied by around twenty leading American CEOs, selected because they all had trade disputes or issues to resolve with the Chinese government. Jensen Huang, the CEO of Nvidia, for example, has seen sales of his chips, which are essential for artificial intelligence, drop to almost zero since the US administration forced him to sell only restricted versions in China. The Chinese government has taken advantage of this to develop a domestic industry capable of competing with Nvidia across a whole range of its products. The CEO of the US company Micron Technology, which sells other types of semiconductors, has seen his products effectively banned by the Chinese state on the pretext of national security - a response to the barriers erected by the US government against the import of Huawei's products.
All in all, it is very difficult to say what the outcome of the behind-the-scenes negotiations has been, but US capitalists, despite all their power, must once again acknowledge that they cannot do as they please in China.
Imperialism's containment and trade war
The developments of the 1990s and 2000s have thus given rise to a rivalry that US state leaders have described as "systemic". They assume that they are dealing with a state that is completely beyond their control and whose development threatens their hegemonic position. This shift in imperialism's attitude did not begin with Trump, but had been under consideration as early as 2007, under George Bush. In 2011, Obama implemented a "strategic pivot" involving the redeployment of a significant portion of US military forces to Asia, where, in the words of imperialist leaders, China needed to be contained and held in check.
The United States stepped up pressure against what it regarded as China's intolerable spheres of influence.
It also strengthened its military bases and alliances with Japan, the Philippines, Vietnam and Malaysia. Since then, the US, in conjunction with France, Britain, Japan and Australia, has been organising operations off the Chinese coast known as Fonops (for Freedom of Navigation Operations), under the pretext of safeguarding freedom of navigation, which they claim is threatened by the Chinese navy. This just goes to show that the concept of "freedom of navigation" does not carry the same meaning, depending on the seas over which it is contested!
In 2017, Trump set the US on the path to a trade war by imposing tariffs on, or banning the entry into the United States, of a number of goods, such as those produced by Huawei. Biden, who then served as president between 2021 and 2025, made only minor adjustments to the trade war initiated by Trump. In October 2022, his team stated: "The priority is to maintain [our] competitive advantage over China" and that: "The People's Republic of China is the only competitor that intends to reshape the international order, and which also increasingly possesses the economic, diplomatic, military and technological power to achieve its aims".
In 2025, at the start of his second term, Trump sought to escalate the trade war but achieved only marginal results. Owing to the weakness and limitations of their domestic market, many Chinese companies found ways to circumvent the barriers to their exports by setting up operations in Mexico, Brazil, Vietnam or Hungary, as the car manufacturer BYD has done, for example. They also found other markets in Asia, Latin America and Africa. As for US restrictions on exports of sensitive products to China, the Chinese government responded by
redoubling its efforts to develop industries in semiconductors, electric vehicles and robotics. Ultimately, albeit in a limited number of sectors, the arena for this competition is no longer confined to the domestic market - where Chinese companies have, as in the electric vehicle sector, partly ousted their Western competitors - but has extended to international markets.
The export of Chinese capital
The fact that China exports capital leads some to claim that it has become an imperialist power comparable to the old Western powers that had reached the imperialist stage, as described by Lenin in 1915. This criterion, however, is not sufficient. Singapore, Hong Kong and Luxembourg export ten or twenty times more capital per capita per year than the United States, without this making them imperialist powers.
When Lenin described imperialism as the highest stage of capitalism, he was referring to nations where free competition had given way to monopolies, where banking and industry had merged, where the bourgeoisie had transformed itself into a financial oligarchy and was using the state as its instrument to conquer the world. Economic and territorial division, colonisation and militarism, wars against peoples and wars between imperialist powers went hand-in-hand with the export of capital. Whilst all these characteristics of imperialism are still those of the United States, France, Great Britain or Japan, they do not all pertain in China. Nor has China always exported capital: foreign direct investment flowing out of China, remained marginal until the early 2000s. Then between 2001 and 2016, following China's accession to the WTO, the value of this capital flowing out of the country soared. Indeed, Beijing was at that time encouraging its state-owned enterprises (SOEs) to secure supplies of raw materials and to acquire cutting-edge technologies. Capital outflows grew very rapidly until 2016, when they reached an all-time high of around $196 billion.
First the Chinese government, and then the Western powers, put a stop to this surge - for reasons which will be detailed later - and, since 2017, the volume of this foreign investment has stagnated at between $150 billion and $190 billion per year. By way of comparison, FDI outfl ows from the United States are more than double those of China, at between $350 billion and $400 billion per year - equal to the foreign investment of the EU and Britain combined. Capital outflows from Japan - a country whose imperialist nature is beyond doubt - are slightly lower than those of China.
In fact, if we compare the capital exported to the size of the population of the countries concerned, China ranks much lower, between 30th and 45th place globally, since capital fl owing out of the country amounts to between $100 and $135 per capita per year, compared with $800 to $1,500 for the United States, Germany, France and Japan. Brazil and India, for their part, mobilise between $15 and $30 per year per capita for exports, far behind China.
In other words, China remains in many respects a poor country that can only play a role in global competition through its state, which is capable of extracting a few dozen dollars from each of its inhabitants, whilst the imperialist countries extract ten times that amount!
The role of the state is central when it comes to the export of capital: with a few rare exceptions, it is not private companies that are setting out to conquer the world; rather, it is state-owned enterprises that are building infrastructure abroad and securing sources of raw materials, with all these operations taking place under state control, as the state negotiates with one country or another, lends money, and organises the market. It is this capacity for state centralisation that enables China to surge far ahead of other poor countries. A poor, but centralised country, of sufficient critical mass Although the Chinese state produces only $100 to $135 per capita per year, the size of its population means that the total volume of capital exported is comparable to that of many imperialist powers. And that is precisely the imperialists' problem.
For example, the Strait of Hormuz has become a major arena of economic confrontation between the United States and China, and this was the case well before the war against Iran. In just a few years, China has carved out a position in the market of the oil monarchies - a prime market due to the wealth concentrated there - that would have been unimaginable twenty years ago. Over two decades, China has invested nearly $270 billion in the Middle East, with a marked increase between 2014 and 2023. In 2025, Beijing even injected more capital than the United States, amounting to nearly $20 billion in property development in Saudi Arabia alone, for example. Chinese oil companies have invested in Qatar's gas production and developed oil pipelines, ports and storage facilities throughout the region. In the United Arab Emirates, several Chinese companies are building the brand-new rail network. Such investments can be found in many countries, including Egypt, Morocco and, of course, Iran.
Unlike investors from imperialist countries, Chinese companies do not act independently; they remain under state control, their policies are discussed at the highest levels of the state and the CCP, and, if necessary, their leaders lose their positions under the guise of the anti-corruption campaign. Thus, it was primarily the Chinese state that abruptly curbed the outflow of capital in 2017, concerned about the nature of these overseas investments. Indeed, large private conglomerates were at the time borrowing heavily from Chinese state-owned banks to purchase prestigious but non-strategic assets: European football clubs, luxury hotel chains and Hollywood fi lm studios. Beijing is thought to have feared that the indebtedness of these private groups might threaten the stability of China's state-owned banks. By curbing these prestige investments, the state also intended to rein in a section of the Chinese capitalist class which, through these FDI transactions, was seeking to shelter capital abroad - secured in dollars or euros - beyond the reach of the authorities. In August 2017, the Chinese State Council issued a directive prohibiting or restricting overseas investment in the defence industry, gambling, the hotel sector, entertainment and sports clubs, whilst encouraging investment in infrastructure along the Silk Roads, high technology and energy.
Made necessary by a capitalist economy already stifled within its national borders, these investments have largely consisted of lending to countries such as Pakistan, Sri Lanka, Malaysia, Venezuela, Kenya and many states in the Middle East... enabling them to finance infrastructure projects at a better price than American, European or Japanese companies. In return, these countries - often neglected by companies from imperialist nations - entrust these projects to Chinese firms, even if it means their populations subsequently having to foot the bill for these loans. China thus uses the billions from the Silk Road initiatives as a bargaining chip, enabling it to counterbalance Western companies and draw a number of Asian and African countries closer to itself, politically.
The imperialist reaction
Chinese investment abroad has led Western powers to fear that their national industrial jewels might slip from their grasp. From 2018 onwards, they began erecting regulatory barriers on a scale rarely seen before. In the United States, Congress significantly expanded the powers of CFIUS, the committee responsible for vetting foreign investments. CFIUS systematically blocked takeovers of US technology firms and even forced Chinese investors to sell off shares acquired years earlier. Similarly, in 2019, the European Union introduced its first framework for assessing foreign direct investment. Germany, France and the United Kingdom tightened their national laws, blocking several takeovers of companies in the semiconductor and robotics sectors.
This dual crackdown has completely redrawn the map of Chinese overseas investment. Flows to Europe and North America have declined, whilst capital has been redirected towards South-East Asia, Latin America and the Middle East: towards poorer countries attracted by Chinese prices and payment terms. Today, the stock of Chinese FDI is estimated at $3,000 billion, slightly less than the $3,600 billion held by Western powers in China alone.
Trade competition and military interventionsFor Western capitalists, overseas markets and investments are crucial, to the extent that they push their governments to go to war to defend them. But the Chinese state's trade offensives have not, so far, resulted in greater military interventionism. US imperialism, for its part, has more than 700 military bases outside the United States and is said to have intervened militarily abroad 150 times since 11 September 2001. Meanwhile, China has acquired only one base outside its borders, in Djibouti, and has not waged any wars of invasion or carried out any bombing raids abroad.
Its international military projection has been confi ned to the framework of the UN and to safeguarding its economic interests, whilst its use of force remains focused on its periphery - in the South China Sea, around Taiwan and in Ladakh, on the border with India.
This does not mean that Chinese interests have not been harmed in one part of the world or another. For instance, the ousting of Maduro in Venezuela and the US war against Iran are also blows to Chinese interests. However, China has not sent weapons to the Iranian regime to help it defend itself. And whilst it has suffered the economic consequences of the blockade of the Strait of Hormuz, it has confined itself to seeking ways to circumvent it.
The Chinese state is obviously no more devoted to peace, in principle, than any other state. It certainly has far fewer resources than US imperialism, but it does have resources, as it regularly demonstrates. However,
it is clear to its leaders that a military response on its part, anywhere in the world, would place it on the same footing as Western imperialism and harm its commercial development, given how much China depends on its exports. The Chinese leadership therefore prefers to promote what they call multilateralism in the face of imperialist aggression.
Thanks to the power of its state and a working class numbering hundreds of millions of workers, and despite remaining a poor country in many respects, China has succeeded in developing a significant capitalist class, has developed its city centres and much of its infrastructure, and it exports capital. As for imperialism, the fact that its domination is no longer direct, as it was in the colonial era, leaves gaps into which China has been able to slip. It has therefore secured commercial footholds in Asia, Africa, Latin America and the Middle East.
However, these footholds are not backed by a military presence and remain precarious, subject to the balance of power.
What are the prospects?
US leaders consider that China's rise to economic power is a threat - the threat of their capitalists being ousted in 10, 20 or 30 years' time by Chinese capitalists who would assert themselves globally just as they imposed themselves in the past, when they overtook their European rivals in the mid-20th century. They can only seek to counter such a development. Yet they must still find the political and military means to do so.
Only the future will tell whether the developments we are witnessing today mark the beginning of a new world war, but in this confrontation between the United States and China, revolutionaries cannot remain neutral. Regarding the Sino-Japanese War of 1937, Trotsky wrote: "If Japan is an imperialist country, and if China is the victim of imperialism, we side with China. [...] A Japanese victory will mean the subjugation of China, the end of its economic and social development, and the terrible strengthening of Japanese imperialism".
Today, a victory for imperialism over the powers that oppose it would likewise set the world back by
decades. One can only hope for its defeat and, in any case, that it lacks the means to win. Beyond solidarity with the peoples who are victims of imperialist aggression, revolutionaries must stand with the countries under attack. They should also stand with China if it were, in turn, to become the target of imperialist aggression, as imperialism pursues its logic of reaffirming its power across the globe.
Of course, such a stance on the part of revolutionaries cannot be enough. The slide towards a world war, the full contours of which we cannot yet discern, is not merely the product of American aggression; it is a sign of the impasse to which capitalist development has arrived, of its decadence and of the crisis in which it is mired. It is a bloody impasse for humanity. But the future of humanity cannot, either, be embodied by the Chinese regime and its 'communism', which is nothing other than a form of national capitalism that the state is attempting to regulate. Only the historical delay of the proletarian revolution can explain the significance that such nationalist regimes have come to assume today, to the extent that they may appear to some as the heroes of anti-imperialism. It is the imperialist system as a whole - as a system of domination by finance capital over the entire world economy - that must be brought to an end in order to move towards a collective, planned economy on a global scale. Only the revolutionary proletariat can achieve such a goal. China's development has given rise to a working class of over 700 million proletarians, including more than 400 million industrial workers, who share common interests with workers throughout the world. This is the best guarantee for the future. Revolutionary activists must not only know how to take a stand in current conflicts. Their main task is to build communist workers' parties and a revolutionary international, capable of fighting with complete class independence to overthrow capitalism and all regimes which, to varying degrees, are instruments of the capitalist class.
14 May 2026