Material World: Straits and narrow (2025)

The Material World column from the March 2025 issue of the Socialist Standard

Taiwan is an island about a hundred miles from the Chinese mainland, across the Taiwan Strait, and is officially the Republic of China. Its population is just under 24 million, its land area about the same as the Netherlands, and it is ranked 22nd in the list of the world’s largest economies. In particular it is the leader in the manufacturing of semiconductors, which are used in computers, smartphones and many other products. It is a big trading partner for a number of countries, with exports massively exceeding imports. The US, for instance, has a trade deficit with Taiwan of around $50bn a year. The UK, however, exports about £5bn a year to Taiwan, and imports around £3.6bn; the biggest exports from Britain are beverages and tobacco, also cars, while the imports are headed by office machinery and metal goods, and nearly £2bn of financial services are ‘exported’ each year from the UK.

Taiwan was once joined to the Asian mainland. The so-called indigenous people there, who speak a variety of languages, number around six hundred thousand. Over the centuries Taiwan was visited at various times by people from China and Japan. In the sixteenth century Portuguese sailors termed it Ilha Formosa (‘beautiful island’), and it was sometimes known as Formosa. In the following century the Dutch East India Company controlled part of the island and encouraged Chinese farmers to migrate there and cultivate rice and sugar. Later in the seventeenth century the Qing dynasty rulers of China annexed the island, which was again invaded by Japan in the late nineteenth century. From 1895 Taiwan was ceded to Japan after a war, and much industrialisation took place. In 1949 the Nationalist Party was defeated by the Chinese ‘Communist’ Party in the civil war and escaped to Taiwan.

Nationalist rule was extremely vicious and authoritarian, with martial law in force until 1987 and political opposition suppressed by means of imprisonment and execution. After that a transition to capitalist-style democracy took place, and links with mainland China (the so-called People’s Republic) increased. Taiwan businesses have invested over $200bn in China, and trade across the straits is around $160bn a year, with China being Taiwan’s biggest trading partner. Taiwan has over fifty dollar billionaires, the richest being Barry Lam, who is worth $11.7bn. In 2024 the combined wealth of the top fifty increased from $155bn to $174bn (forbes.com). At the same time, there are officially 400,000 unemployed and a large number of homeless people (drastically undercounted in government statistics).

At the end of last year, China’s leader Xi Jinping said in a speech that ‘The people on both sides of the Taiwan Strait are one family. No one can sever our family bonds, and no one can stop the historical trend of national reunification.’ Over the centuries, the borders of China have expanded massively from the original area around the valleys of the Yellow and Yangzi Rivers. They now include the so-called autonomous regions of Tibet, Inner Mongolia and Xinjiang (which means ‘new frontier’). But as for the idea of ‘one family’, this is just nationalistic nonsense.

China’s interest in Taiwan is for two reasons. One is financial or industrial, with Taiwan being economically very important in a number of areas, as mentioned above. The other is strategic, with Taiwan an important location in the South China Sea and potentially a significant part of China’s naval empire. The Chinese government views Taiwan as a province of China, which will one day be re-united with it. However, there is a Taiwan independence movement, which believes it should be an independent state, which in effect would be a formalisation of the current situation.

Large Chinese maritime forces have been assembled around Taiwan, and the use of force to achieve unification is still in principle on the table. China’s armed forces are far more powerful than those of Taiwan, though any invasion would be likely to be costly in terms of lives and also expensive in terms of materiel. The US Council on Foreign Relations states that ‘To invade Taiwan, China would have to conduct an extraordinarily complex military operation, synchronising air, land, and sea power as well as electronic and cyberwarfare’. Which does not mean it will never happen, though. The invasion of an offshore island would inevitably be more problematic than the Russian invasion of Ukraine.

This is clearly a case of a very powerful capitalist country, one that is still expanding its economic and military might, seeking to conquer another territory as a way of increasing its power and influence.

Paul Bennett

What future for the Beautiful Island? (2010)

From the September 2010 issue of the Socialist Standard

A look at the 'other China'

Start with Hong Kong. A bouquet of modern capitalism. Concrete, glass, steel. Banks, hotels, skyscrapers. Streets bedecked with anti-pollution face masks. And residents who advise visitors come to marvel not to drink the water. Then escape to a leaf-shaped island of some 24 million population which became known to untroubled, disinterested people outside only because it was the country of origin of much of the cheap electrical equipment they bought from their local branch of Currys or Comet. Once reliant on the export of cheap textiles or consumer goods the island rose to be among the world’s leading manufacturers of computer software and hardware. Not to overlook bicycle parts, some of which are used at a London East End branch of the not-for-profit Social Enterprise to help train locals who are homeless, isolated or unemployed (or perhaps all three) to make a kind of living as bicycle mechanics.

Within the island’s demographic stew there are some half a million descendants of about a dozen aboriginal tribes, settled with others who came over from mainland China. Together they can claim to be now one of the most peaceful societies in Asia. So – welcome to the island of Taiwan, to Ilha Formosa (beautiful island), to the Republic of China – a misleadingly splendid name for a state which is no longer a member of the United Nations and is recognised by only the likes of Belize, Malawi, the Vatican… Welcome to the beautiful scenery, the mountains, the golden beaches. To the flyovers whisking you above the factories and past the driven schools. To the nation state which exists by, through and in with, one tough work-ethic.

Martial Law

Of the competing mercantile powers it was the Portugese who, about 1590, “discovered” Taiwan – and gave it the name Ilha Formosa. A long period of war, rebellion and murderous poverty while Taiwan was a “province” of China ended in 1895 when the Japanese occupied the island. This was supposedly “in perpetuity” but it came to an end in 1945, after a half century of martial law. Japanese rule was harsh – an estimated ten thousand people were killed – but not corrupt and it developed an educational system as well as roads, railways and industry. In 1943, as the Allied leaders were carving up the Far East in expectation of Japan’s defeat in World War Two, a “peace” conference in Cairo decided that, as a spoil of war, Taiwan would be “returned” to China under Chiang Kai-shek’s Nationalist Kuomintang (KMT). United States Vice President Truman’s response described the island as “America’s unsinkable battleship”.

Towards the end of the war there was a subtle change in the vocabulary of the Allied powers’ intentions; Taiwan was to be “temporarily occupied” on their behalf by the KMT. But this was soon undermined when civil war broke out on mainland China between the KMT and Mao Tse Tung’s “communist” forces. Preoccupied by those more pressing events, Chiang left the running of Taiwan to his deputy Chen Yi, whose regime was barbaric enough to provoke many “liberated” Taiwanese to regret the end of Japanese rule. In 1947 a minor incident connected to the state monopoly of the tobacco trade inflamed a series of widespread protests which were crushed with mass arrests, torture and execution of up to 30,000 people. (The day when it started – 28 February – is now a national holiday in Taiwan and New Park in the capital city Taipei was re-named 2-28 Peace park). That horror was a foretaste of things to come

White Terror 

By 1949, as the KMT on the mainland were facing defeat Chiang Kai-shek took refuge in Taiwan, where he continued to insist that one day he would prevail. Meanwhile martial law returned under The White Terror, with mass arrests of those alleged to be “attempting to overthrow the government”. Over 90,000 were taken in this way and at least half of them were executed. The scene of much of this was Green Island Lodge – a prison on a volcanic island separated from Taiwan by a few miles of nausea-inducing Pacific Ocean. Here there is lush scenery, one of the world’s three seawater hot springs, golden beaches, pristine coral reefs and dazzling tropical fish. This is where many Taiwanese come to enjoy a short break – if they can ignore that close by are a museum and a human rights memorial in place of the notorious prison where so many victims of The White Terror suffered and perished.

Apart from his willingness to commit atrocities, the defeated Chiang Kai-shek became something of an embarrassment to the Americans. In 1971 President Nixon and his Secretary of State Henry Kissinger offered an “opening” – a carefully chosen word of flexible interpretation – to China and, as if that was not enough, Taiwan lost its membership of the United Nations to China. During the following year the US and China met and agreed on a “communiqué” which, while not actually saying that Mao had won the civil war, “acknowledged” (more of those careful words) that the new China was a unified country of which Taiwan was a part. This betrayal of what was supposed to have been an unshakeable commitment was settled after the negotiators had been pleasured by an especially sumptuous meal, encouraging Nixon’s odious chief arm-twister, replete, to assure his hosts “After a dinner of moatal and Peking Duck I’ll sign anything”. Well, he was Henry Kissinger wasn’t he…

Elections

Chiang Kai-shek died in 1978 and his son Chiang Ching-kuo took over with an easier, less repressive hand. While martial law was still in operation it was possible in 1986 for the first official opposition – the Democratic Progressive Party – to be formed and to win a significant number of seats in the next election. In process with these changes in 1987 martial law was brought to an end; free elections are now an established part of political life on the island and the election of 2000 brought an end to KMT rule. It should be said that it is not unknown for elected members to try to sort out their differences through a punch-up in the Chamber and for political business to be obstructed through allegations of corruption. In 1991 the KMT claim to link Taiwan and the Chinese mainland was formally abandoned. Symbolic of the clearing away of a lot of the obstructive anachronisms imposed on the Taiwan of the 1940s, many of the statues of Chiang Kai-shek were vengefully torn down. It was symbolic too of Taiwan feeling its way into place as an independent competitor in global capitalism.

Part of this process is Taiwan’s promotion of itself as a tourist attraction to rival the best offered by the likes of Thailand, Singapore, Indonesia. “Where else” bellows a full page ad in a Sunday newspaper colour supplement “would you find time-honoured traditions that thrive in perfect harmony with the chic and the avant-garde”’. Apart from its “breathtaking scenery” the island’s vibrant ambition is testified to by “the city’s skyscrapers” – among them Taipei 101, the world’s second highest building, with the fastest elevator to whisk you from ground level to the top viewing spot in a matter of seconds so smoothly that you are unaware of moving. All of which demands that the Taiwanese people live by a patriotism manufactured as surely as those computer parts. And it all soaks down to the children, who devotedly learn the officially sanctioned Mandarin language – often along with English and Japanese – during an average 12 hour day in the classroom with extra tuition in Maths and Science at private cram schools on a Saturday.

Unemployment 

But hard work, to whatever degree, has not been able to insulate Taiwan from capitalism’s chaos. The present world recession has cruelly broken the dream of ever-flowing Taiwanese prosperity. Unemployment is an encroaching problem no longer confined to the poorer, under-educated families but now also affecting graduates. A government subsidy intended to persuade companies to take on graduates has had the effect of worsening poverty at large by forcing applicants to accept lower starting wages – at about half the national average. Many employers – as in England – have pressed their workers to take temporary unpaid leave, or have stopped taking on new staff altogether. And there remains a serious problem of youth unemployment, with the rate for 15-24 year olds about twice that for the workforce as a whole and looming over it all is the real prospect of them being sucked into the ranks of the long-term unemployed.

After a history of savage repression, Taiwan is struggling now for a place among the trend-setters of Twenty-First Century global capitalism. For example they are trying for admission to bodies such as the United Nations and there are missions working for unity with China. As one guide (Robert Kelly and Joshua Brown, Lonely Planet ) put it: “So is Taiwan at a crossroads, or a precipice?” And it may also be asked – what will this do to a beautiful island which has already suffered so grievously? Will it turn out to be a modern capitalist power as frantic, as restless and as abrasive as Hong Kong?

Ivan

Facing facts in Formosa (1953)

From the April 1953 issue of the Socialist Standard

A new war scare is going the rounds. General Eisenhower, in his State of the Union announcement, says that the American fleet would no longer be used to prevent raids by the Nationalist Chinese against the Chinese mainland. Such a decision would be in the fashion these days—of a big power using a small one as a cat’s paw. This contemplated extension of the war in Korea to the great Asian mainland, has aroused the fear that this may be a step towards World War III.

Formosa was part of the Chinese Empire for 400 years from the time of Kublai Khan until European traders arrived on the scene, since when it has been a bone of contention. The Dutch who occupied the tip in 1624 were ousted by the Spaniards. The Dutch retook the island after defeating the Spaniards. A Chinese force from the mainland defeated the Dutch and took possession in 1662. Then came the Japanese in 1895 who took six years to subdue the islanders. After the conclusion of World War II, the Chinese Nationalists then in power in China, took possession in 1945. The Communists on the island revolted in 1947 but the attempt was put down with great severity.

Immediately after the defeat of Japan, the U.S.A. backed Chiang Kai-Shek in the civil war against the Communists. American post-war financial backing from 1945 until 1949 amounts to U.S. $3,875 million. ("China Stands Up” by R. K. Karanji). This turned out to be a bad investment for the American Capitalist class because the Nationalist military machine lost the war, and took refuge in the Island of Formosa where they have since remained as a quisling government, lavishly supported by the U.S.

The British Government considers that support to Chiang Kai-Shek is throwing good money after bad, and with their long and intimate experience in China were amused at the American policy of pouring money into Chiang Kai-Shek’s coffers. Much of this money is lost in graft and most of the arms have found their way into the hands of the opposing Communist side.

American Strategy

Formosa is an island cross-roads, halfway between Shanghai and Hongkong, and halfway between Tokyo and Saigon, so that control of the island by the Chinese Nationalists means that they (on behalf of their mentors) appear to control these routes. Another aspect of the island’s strategic position is that along with Japan and the Philippines it acts as a bastion of American defence, or as a spring-board in case of invasion to the Asian mainland.

Another use of Formosa to the U.S.A. is that so long as control is invested in the Chiang Kai-Shek clique, there is always the inherent danger of invasion of the mainland, and this risk keeps large bodies of Chinese troops tied down—soldiers who would otherwise be available for service against the Allies in Korea.

But viewed from Peking, the American threat may take on a different aspect—it may appear as a sign of weakness. The Chinese may think that after two and a half years of fighting, the armies of the West can no longer see hope of victory arising from action on the battlefield, and are therefore casting about for some other means.

The Clash Between British and American Interests

Britain and the U.S.A. in the Far East have been traditionally hostile to one another—the friction arising over sharing the spoils from the China trade. Britain, the first on the scene, got the lion’s share—an untenable state of affairs for American interests.

The temptation to grasp this juicy plum has tantalised the U.S. even more since the atrophy of British power and the rise of American power in the “free” world.

The lusty adolescent U.S. capitalist power is swashbuckling with a full purse in the Far East, with the cynical, older and more experienced Chinese and British rulers watching for the main chance.

A blockade would destroy the prosperity of the British Crown Colony of Hongkong—before the Korean War, China consistently accounted for over one-third of Hongkong’s total trade, and moreover, British ships are the leading cargo-carriers on the Hongkong/Shanghai route. Furthermore, the British presumably still remember the consequences of their aggressive action against China in the 1st Opium War of 1839/1844, which resulted in driving China into closer diplomatic and economic relations with Russia.

If China were Blockaded

A study of the situation would not be complete without estimating the probable effects of blockading the China coast. On the credit side for America capitalism firstly, the previously stated tying-down of Chinese forces to counteract the possibility of Nationalist landings on the mainland. Secondly, to the extent that a blockade was effective, it would mean that fewer supplies, directly or indirectly useful in prosecuting the war in Korea, would be received by China—the real enemy of America on the Korean peninsular. Thirdly, the loss of trade that would undoubtedly result from a blockade might increase to danger-point the opposition to the present Chinese government, and thus induce them to sue for peace terms in Korea to the advantage of American imperialism.

Against the above factors, we must remember that the risk of offensive action by Chiang Kai-Shek on the mainland, has in fact already tied down a million Chinese troops, and that possibly the Chinese Government would not need to increase this number.

As to the cutting down of supplies—the Chinese Government has, since its inception in 1949, pursued a policy of economic self-sufficiency, coupled with development of trade with Russia and with other East European countries. Thus the Chinese, never a seafaring race, have of recent years become even less dependent on sea routes. The Financial Times (11-2-53) states that:—

"In 1950 Chinese trade with other Communist countries accounted for 26 per cent. of her total trade. By 1951, according to Chinese sources, the percentage had risen to 61 per cent; and in 1952 the figure is expected to be .over 70 per cent.

Trade between China and the United States has almost ceased. There have been no shipments of U.S. goods to China since 1950 and licences for U.S. imports from China are now restricted to cases where the refusal to grant a licence would cause severe distress to U.S. importers.

The general conclusion which emerges is that China has little to offer of which the world cannot secure adequate supplies elsewhere, with the possible exception of bristle and tung oil, and that China needs little, except rubber, which she cannot buy from behind the Iron Curtain.”

Against the third point—of exciting internal opposition, it may be doubted whether there is any possibility of effective opposition from the capitalists in China.

For the purposes of this review, we are assuming that a blockade by Chinese Nationalist forces, even with the assistance of the U.S. 7th Fleet, will be efficient, but this is most unlikely. The corruption, and consequent ineffectiveness, of the Chiang Kai-Shek clique has been a major scandal even in the Orient (where venality is taken almost for granted). Moreover, smuggling is big business in China and has been practised successfully for years in opposition to an efficient administration. It would be surprising indeed if a blockade from Formosa brought sea-going traffic to a standstill.

In considering the possibility of a successful invasion of the mainland, it may be useful to recall the behaviour of Nationalist troops in contact with the Red Army during the civil war which ended in 1949; these peasant troops, favouring the Communists Party’s Land Reform programme, had no stomach for fighting and were glad to surrender and get the opportunity of returning to their homes. There seems to be no reason why this could not happen again.

Is Eisenhower Bluffing ?

We must not forget that Eisenhower has only just been elected President of the U.S.A., and his sponsors, the Republican Party, in their first success in this direction for many years, are much concerned in maintaining the interest of the electors. General Eisenhower, as a soldier, is expected to talk tough, and anyway, tough talk costs nothing.

But whatever the next move by the ruling class in the dangerous game of power politics, in the final analysis it is the workers who make the armaments and fight the wars for the protection of their masters’ interests and their acquiescence is necessary for the carrying out of policies. At the present time, for instance, the workers may be sufficiently fed-up with war and war conditions to make themselves heard in opposition to a government extending a local war into a world war.

Frank Offord

50 Years Ago: Facing facts In Formosa (2003)

The 50 Years Ago column from the April 2003 issue of the Socialist Standard

A new war scare is going the rounds. General Eisenhower, in his State of the Union announcement, says that the American fleet would no longer be used to prevent raids by Nationalist Chinese against the Chinese mainland. Such a decision would be in the fashion these days — of a big power using a small one as a cats paw, This contemplated extension of the war in Korea to the great Asian mainland, has aroused the fear that this may be a step towards World War III [. . .]

Formosa is an island crossroads, halfway between Shanghai and Hongkong, and halfway between Tokyo and Saigon, so that control of the island by the Chinese nationalists means that they (on behalf of their mentors) appear to control these routes. Another aspect of the island's strategic position is that along with Japan and the Philippines it acts as a bastion of American defence, or as a springboard in case of invasion to the Asian mainland.

Another use of Formosa to the USA is that so long as control is invested in the Chiang Kai-Shek clique, there is always the inherent danger of invasion of the mainland, and this risk keeps large bodies of Chinese troops tied down — soldiers who would otherwise be available for service against the Allies in Korea.

But viewed from Peking, the American threat may take on a different aspect — it may appear as a sign of weakness. The Chinese may think that after two and a half years of fighting, the armies of the West can no longer see hope of victory arising from action on the battlefield, and are therefore casting about for some other means.

Britain and the USA in the Far East have been traditionally hostile to each other — the friction arising over sharing the spoils from the China trade. Britain, the first on the scene, got the lion’s share — an untenable state of affairs for American interests.

The temptation to grasp this juicy plum has tantalised the US even more since the atrophy of British power and the rise of American power in the “free” world.

The lusty adolescent US capitalist power is swashbuckling with a full purse in the Far East, with the cynical, older and more experienced Chinese and British rulers watching for the main chance.

[From 'Facing facts in Formosa', April 1953 Socialist Standard.]

Will Formosa touch-off World War III? (1958)

From the October 1958 issue of the Socialist Standard

As this article is being written shells are raining down on Quemoy and every day some of the 125,000 military and civilians on the island are being killed or maimed. As the news is heard over radio and television in the comfort of our homes, or read in the papers, some are asking, or at least thinking, “ Is this the start to World War III?

Mr. Dulles said:

“Military dispositions have been made by the United States so that a Presidential determination, if made, would be followed by action both timely and effective.

“The President and I earnestly hope that the Chinese Communist régime will not again, as in the case of Korea, defy the basic principle on which world order depends, namely, that armed force should not be used to achieve territorial ambitions. Any such naked use of force would pose an issue far transcending the offshore islands and even the security of Taiwan.

"It would forecast a widespread use of force in the Far East which would endanger vital free world positions and the security of the United States. Acquiescence therein would threaten peace everywhere. We believe that the civilised world community will never condone overt military conquest as a legitimate instrument of policy.”

How it started

Immediately after the defeat of Japan, the U.S.A. backed Chiang Kai-Shek in the civil war against the Communists. American post-war financial backing from 1945 until 1949 amounted to U.S. 3,875 million dollars. (China Stands Up, by R. K. Karanji.) This turned out to be a bad investment for the American Capitalist class because the Nationalist military machine lost the war, and took refuge in the island of Formosa, where they have since remained as a quisling government, lavishly supported by the U.S. Quemoy is one of the islands between Formosa and the Chinese mainland.

The British Government considers that support to Chiang Kai-Shek is throwing good money after bad, and with their long and intimate experience in China were amused at the American policy of pouring money into Chiang Kai-Shek’s coffers. Much of this money is lost in graft, and most of the arms have found their way into the hands of the opposing Communist side.

It would be a feather-in-the-cap for the Chinese Government to capture Quemoy and help to develop a spirit of chauvinism in the Chinese people, who so far seem somewhat lacking in patriotic fervour. And, in any case, Quemoy is a step towards Formosa itself. 

American Strategy

Formosa, together with the outlying islands, including Quemoy are an island crossroads, halfway between Shanghai and Hongkong, and halfway between Tokyo and Saigon, so that control of the island by the Chinese Nationalists means that they (on behalf of the U.S.A.) control these routes. Another aspect of the island’s strategic position is that along with Japan and the Phillipines it acts as a bastion of American defence, or as a spring-board in case of invasion to the Asian mainland.

Another use of Formosa to the U.SA is that so long as control is invested in the Chiang Kai-Shek clique there is always the inherent danger of invasion of the mainland, and this risk keeps large bodies of Chinese troops tied down. American assistance is vital for the defence of Formosa, even apart from the fact that every year the personnel of Chiang’s forces get a year older. There is little in the way of replacement as the families of these men have mostly been left on the mainland. Although some native Formosans have been drafted into the army, these are unreliable troops. There have been a series of rebellions throughout the islands from time to time, including trouble amongst the Formosan cadets. The Chinese administration is loathed as alien and corrupt. But the “democratic” American Government regard Chiang’s control of Formosa as vital to their interests at present.

Formosan capitalist class

But Formosa, with a population of over nine millions, has its own rapidly developing capitalist class which, supported by the workers, would no doubt oust the Chinese administratfon and resume trade with the huge Chinese market on the mainland. It is simple for the capitalists in Formosa to attribute the workers’ problems to the foreigners in control. This, of course, is a time-honoured dodge, but it always seems to work, because the workers there, as elsewhere, are not Socialists and do not understand their class interests.

The development of Formosa reads like an American success story. The index of industrial production, for instance, has risen from 49.4 in 1949 to 142.2 in 1957, and it is very much the same story for other aspects of the economy.

Wealth is produced whenever a good investment appears, as was shown last year in the successful sale of stocks and bonds amounting to 40 million Formosan dollars of the Ta Tung Engineering Corporation and the Formosan Cement Corporation. How fortunate these Capitalists are to have such industrious workers slaving away for them!

Also, the progress of the Chinese Petroleum Corporation in the island must be a great comfort to the shareholders; present plans in course of fulfilment are providing an output over four times the 1947 figure. But this is not sufficient for them. Like Capitalism elsewhere they need an efficient and economical administration with as little graft as possible, although there is always a certain amount of corruption in present-day society where money opens so many doors.

But Chiang Kai-shek does not provide what is required and the more Capitalism develops in Formosa the more is the need felt for a better administration. The pot is reaching boiling point, with the Nationalists sitting on the lid.

Probably neither the governments of U.S., China, Russia, or even Chiang Kai-Shek or Formosa particularly want war. But there is always the chance that the sparks now flying may ignite these fire-eaters and the situation may grow out-of-hand and embroil the world.

The Hope for Peace

Should war result, no benefit will accrue to the workers, who will be induced to fight the war. Whatever side they support they will be the losers, even though some of their masters may win markets, trade routes and sources of materials to enable them to increase the profits their workers turn out for them. THE ONLY ANTIDOTE TO WAR LIES IN THE SPREAD OF SOCIALIST KNOWLEDGE. When the workers realise the Capitalist cause of wars they can no longer be misled by their ruling-class into support of them and this alone will see the end of these scourges of mankind. This is one of the reasons why the spread of Socialist knowledge is so very urgent.

One Damned Thing After Another

But let us face it—even if the fighting over the Formosian islands is settled, the threat of war will remain —and possibly on a grander scale. Chinese Capitalism has designs on Indian territory and is steadily working towards a showdown there. The July issue of China Pictorial, an official Chinese organ, showed a big chunk of North-eastern Assam and parts of Bhutan and Ladakh as belonging to China. On September 4th the Indian Premier, Mr. Nehru, said that “the Chinese Communist Government had failed, in spite of repeated reminders, to revise its maps of China so as to exclude territories which are indisputably Indian.”

Elsewhere Chinese exports of manufactured goods are ousting the Japanese products, among others and relations between the governments are growing more strained.

Capitalist development generally is making the whole world a danger zone for war. It is difficult to foretell the result of the present fighting because of the complications that lie behind, but certain it is that the Formosan incident will not be the last.

Frank Offord

World View: The two Chinas (2000)

From the March 2000 issue of the Socialist Standard

The President of Taiwan (the Republic of China) is today Li Têng-hui, a spokesman for the big capitalists with the greatest stake in the island’s wealth. Opposing him and his colleagues of the Kuomintang are the island’s smaller capitalists, campaigning for Taiwan’s independence as a nation-state. China has threatened to invade Taiwan and impose Beijing’s rule should the Taiwan nationalists ever topple the Kuomintang. The large capitalists of China and Taiwan now engage in full trade relations and the difference in flag colour is largely irrelevant. While Taiwan remains under the rule of the Kuomintang and its new sister parties it remains a province of China in reality, under “renegade” rule in name alone. In the eyes of China’s—and Taiwan’s Chinese—capitalists, the real “renegades” are the Taiwanese capitalists seeking a “completely separate” nation-state, an ambition which is unlikely to be realised.

Li Têng-hui and Têng Hsiao-p’ing possibly manipulated the Taiwanese national elections by the staging of Chinese military manoeuvres in the Taiwan Strait at which Li could pose as the champion of Taiwanese independence and an opponent of China, stealing votes from the nationalists. Whatever the future of the two states, workers in Taiwan have to realise they have no interest in supporting either side in what is a struggle between gangs of rival businesspeople for the right to exploit the workers most efficiently.

Têng Hsiao-p’ing, the hero of the Chinese peasants, is now dead. A hero for the peasants of the 1930s fighting against the feudal landlords, he was no friend of China’s workers at the end of the century and is not to be missed by them any more than any other engineer of mass exploitation. While China’s government is still run by the so-called “Communist” Party, private businesses are proliferating and the greater exploitation of people and resources in the interest of profit is gaining ground as never before. Rampantly exploitative and pollutant capitalist industry is booming. (This includes the clearing of the Yangtse for greater commerce through the extermination of one of the world’s rarest species of dolphin.) China is now a trading superpower and the seeds of future conflict with the United States are steadily being sown.

None of this is in the interest of the Chinese working class nor of the majority of humankind, who must still face the task of organising to establish a world community of common ownership of the Earth—if we, human beings, are to avert another, and final, world war, and survive as a life-form at all.

Anthony Walker

Pathfinders: Tales from the Crypto (2022)

The Pathfinders Column from the April 2022 issue of the Socialist Standard

One of the less apparent effects of the ongoing Ukraine situation has been a rejuvenated interest by western governments in regulating cryptocurrencies, into which Russian oligarchs, among others, have invested billions. The problem with crypto, from the capitalist state’s point of view, is that it is a decentralised, peer-to-peer money system over which the state has no control. Naturally the state will point out that crypto is a gift to organised crime because transactions are not trackable through any central bank system, but they will also pedal hard on the urgent necessity of regulating the market for the sake of protecting you, dear consumer.

The real motivation is that state power over your money means great power over you. For instance, in response to a recent truck driver protest disrupting Ottawa’s main road network, the supposedly liberal and progressive Canadian government used emergency powers to freeze protesters’ personal and business bank accounts (bit.ly/3CWJFV3). Obviously, if you have all your money in crypto, the state can’t grab you by the proverbial short and curlies.

Small wonder then that China has banned crypto entirely. In somewhat less draconian style, the US Justice Department has set up a National Cryptocurrency Enforcement Team with the FBI providing backup services in ‘blockchain analysis and virtual asset seizure’. UK regulators are also calling for tighter controls, again flying the consumer protection flag, with the Treasury and Bank of England in urgent consultation on the matter (bit.ly/3CYkAc2). Conversely, after having first banned it last September, Ukraine has just performed a volte-face and legalised Bitcoin, as crypto donations to its war chest have surged north of $100m (bit.ly/3uhBG0C).

One reason why states haven’t cracked down harder and faster may be cultural inertia due to perceived notions of value, as people struggle to come to terms with the idea of currencies that are simply conjured into being, and virtual commodities like non-fungible tokens (NFTs) that have no physical or independent existence. How can you buy a thing that isn’t there using money that’s been made up?

For socialists though, all commodities are essentially imaginary, in the sense that their ‘value’ is a socially agreed perception and not an intrinsic physical property of the object. In socialism, where everything is free, things will be valued only in terms of their usefulness, not in terms of what they’re ‘worth’ in a non-existent market transaction. And currencies – at least government-issued fiat currencies – are all made up anyway. These days, as currency is no longer convertible on demand into gold, that piece of paper in your pocket may say £10 on it, but it’s only worth £10 because governments say it is and because we accept it is. Otherwise it’s just a firelighter. It’s the same with NFTs, which can be thought of as virtual limited shares. You can sell a share in anything, a meme, a song, a photo, if someone is willing to buy it, no matter how ‘worthless’ it might seem to anyone else. It might sound bonkers but that’s capitalist logic for you.

One vital consideration in all this is that it must not be possible, under any circumstances, to sell the same thing twice over, or the whole system is instantly discredited. Until recently, all money was managed through the central state banking apparatus, making double accounting impossible. Now blockchain technology prevents double accounting without central state involvement. Another essential requirement is ensuring that the supply of this virtual currency doesn’t increase exponentially, causing runaway inflation. The genius – if that’s really the word – of Bitcoin and other cryptos is to make the process of issuing or ‘mining’ new currency so extravagantly difficult through artificial problem-solving processes that they require enormous and ever-increasing amounts of computer number crunching. The solution of both these requirements has allowed crypto and NFTs to break free and take on a life of their own.

None of this is without cost however. Currently Bitcoin mining uses more electricity than 185 countries and 7 times Google’s global consumption (bit.ly/34XFWtC), with a growing carbon footprint that’s surpassing that of New Zealand (bit.ly/3tsNRbQ).

Now chip manufacturers are producing custom ‘blockchain accelerator’ chips especially for crypto-mining, which demonstrates, if you hadn’t already realised it, that what capitalists want and what governments want isn’t always the same thing (bit.ly/3L104dF). And crypto has largely contributed to the well-known chip famine of the past couple of years. These days, it’s chips with everything as the world surges ahead with 5G and the Internet of Things, VR, augmented reality, smart cities, lights-out factories, drone swarms, robotics, 3D printing, AI, electric vehicles, self-drive tractors, you name it. The problem is, the manufacturers of all these gadgets generally don’t make the microchips in-house, as the R&D and the ‘fabs’ are too expensive. Instead they outsource the work, mostly to one key place in the world, Taiwan, which has a GDP of around $670bn, close to that of Saudi Arabia, and a per capita workforce productivity 6 times higher than China’s.

Taipei is home to the Taiwan Semiconductor Manufacturing Co (TSMC), the world’s largest and most sophisticated semiconductor ‘foundry’. In 2020 TSMC accounted for 54 percent of global semiconductor revenues, and is a supplier to Apple, Qualcomm and Nvidia. No other foundry comes anywhere close, not even Samsung in South Korea or GlobalFoundries in the US, and China is not even in the picture.

Which, incidentally, adds a David and Goliath element to the tense situation between China and Taiwan over questions of political ‘sovereignty’ and strategic questions of control over the South China Sea.

So, while Ukraine spends its crypto windfall on guns before butter, China is currently keeping its cards close to its chest over the Ukraine question, and watching Nato very closely to see how muscular its response to Russia is. Today Ukraine, tomorrow Taiwan, is the big question exercising the geo-strategic wargamers. Just when you think capitalism can’t make things any worse, it displays its true inventive genius.

Paddy Shannon

Material World: a world without war (2022)

The Material World Column from the January 2022 issue of the Socialist Standard

We go into another new year and as in previous years, it is under the looming prospect of war. Working people may once again be called upon to take part in another slaughter where men, women and children will suffer.

It is easy to blame individuals for starting wars, and some are certainly guilty, but the fundamental culprit is the capitalist system. Since capitalism is a predatory social and economic system, predatory personalities tend to rise to power who view the world through a lens of aggression. But it’s not merely a capitalist delusion, they are in fact surrounded by enemies.

When the Soviet Union disintegrated into independent regimes of oligarchs, and when China’s Communist Party promoted private enterprise as government policy, the intellectuals who had insisted that the Cold War was a conflict between competing ideologies were proved wrong. Meanwhile the small Marxist voices that had always explained the rivalry between the Great Powers as an economic one for the control of raw materials and trade routes were shown to hold the more accurate analysis. The danger of war arises inevitably out of the very nature of capitalism.

As 2022 begins we are faced with a number of flashpoints that could feasibly ignite into war. These are:

1. The important sea-lanes of the South China Sea with its scatter of strategic small islands, as well as the unresolved status of Taiwan. The UK, USA and Australia have established the AUKUS security pact, complementing treaties with Japan, the Philippines and others, aimed at the encirclement of China. Capitalism forces countries to compete in the world market and to strive for aims that cannot be satisfied. The rivalry between China and the US is unavoidable and a trade war can so easily escalate into an actual blood-and-guts war.
2. With echoes of the Eastern Front, at the borders of Ukraine and Belarus, Russian forces confront those of the NATO alliance. Army manoeuvres are regularly taking place to be prepared for military conflict.
3. Iran, an aspiring regional power in the Middle East, enduring the slow strangulation of stringent economic sanctions, challenges the neighbouring oil sheikdoms using proxy militias, and the Gulf States now have a new friend in Israel. A shadow war is already being engaged in with the mining of ships and in the Straits of Hormuz, the main sea route for oil tankers, the scene is of regular stand-offs between warships.
4. And then there is the Horn of Africa, where countries are too poor to feed their peoples yet have the ability to build armies and engage in wars which too often involve other countries.

Of all the many problems that capitalism has not solved, war is a perennial and always ominous threat.

War is fought for the interests and advantages of the ruling class, to protect or extend capitalist profits. Of course, no politician will ever admit going to war for such shabby motives. Every war has to be justified with such reasons as ‘humanitarianism’, the defence of the national interest, or upholding international ‘justice’, otherwise, very few citizens would sacrifice their lives or surrender their liberties so willingly. Each nation’s political leaders will argue that ‘our’ government’s foreign policy is ‘just’ while ‘their’ government’s foreign policy exists because their leader is a warmongering militarist adventurer. ‘Our’ side was forced into a ‘defensive’ position due to the other nation’s ‘aggression’. The noble talk about protecting ‘democracy’ is cant and hypocrisy. Every war is justified by a massive propaganda effort to demonise the enemy. It is the bait to hook us into giving our approval to an orgy of armament spending and profiteering.

Capitalism breeds wars. In order to secure peace we need to create a cooperative commonwealth where things are no longer produced for profit, but to satisfy people’s needs. This involves a struggle known as the class war, and this is the only war which workers should engage in. Yet the tragic reality remains that men and women still seem more willing to work and die for capitalism than to work and live for socialism.

If we are to eliminate wars we must understand that we need to transform the minority class ownership of the means of production and distribution into common ownership, producing for use instead of for profit.

ALJO

Material World: Antics in the South China Sea (2009)

The Material World Column from the April 2009 issue of the Socialist Standard

The recent incidents in the middle of the South China Sea, in which a large American ship was “harassed” by various Chinese boats, have a comical aspect. The “harassment” seems to have been mostly a matter of uncomfortably close approaches, flag waving, and beaming lights. The most violent moment was when the Americans used fire hoses to drench the sailors on a boat that had come too close, inducing them to strip to their underwear.

These antics, however, may be the prelude to more serious conflict. An armed clash between China and the US is, perhaps, more likely to occur in the South China Sea than in the context of a putative Chinese invasion of Taiwan.

A spy ship

Many reports have described the American vessel, USNS Impeccable, as a “survey ship” or “ocean surveillance ship.” This creates the misleading impression that such ships exist for the purpose of oceanographic mapping or scientific research.

In fact, although they are unarmed and have civilian crews, the “survey ships” belong to the US navy and their function is to collect military intelligence. They are really spy ships.

The main job of the survey ship deployed in the South China Sea is to track the Chinese submarines that patrol there, operating from a base at the southern tip of Hainan Island. These are nuclear submarines carrying intercontinental ballistic missiles – that is, they constitute China’s “nuclear deterrent.” The tracking is done by means of underwater sonar arrays attached to the ship by cables. There was some attempt by Chinese sailors to sever the cables and set the arrays adrift.

It is true that USNS Impeccable, lacking armaments more powerful than fire hoses, does not by itself pose a direct threat to the submarines. But the data it collects could be passed on to another vessel equipped with anti-submarine missiles. In other words, the spy ship is a key component of anti-submarine warfare capability. It is therefore no surprise that the Chinese government should want it to leave the area.   

Legalities of carve-up

It is in large part with a view to securing a sanctuary for its nuclear submarines that China asserts the right to control most of the South China Sea, an area of some 2 million square kilometres – to turn it into a “Chinese lake.” The legal case cooked up by its diplomats involves claiming the three main archipelagos in the sea as Chinese territory and then demarcating an Exclusive Economic Zone (EEZ) 200 miles (320 km.) wide around them as well as Hainan Island and along the shore of the mainland.

Finally, China seeks to erase the distinction between territorial waters and an EEZ. The UN Convention on the Law of the Sea (UNCLOS) prohibits the presence of a spy ship in territorial waters, but not in an EEZ. The US position is that USNS Impeccable did not enter China’s territorial waters – it was 75 miles (120 km.) off the coast of Hainan at the time of the incidents – so its activity is perfectly legal. 

Of course, it does not matter to us as socialists which side has the better case in terms of international law. The whole world is the common heritage of mankind, and we do not recognize the right of capitalist powers to carve it up among themselves.

Other issues

While the military issue is the direct cause of the current clash between China and the US, as it was of a similar clash involving aircraft in 1991, there are also other major issues at stake.

First, rights in the South China Sea are crucial to control over vital shipping lanes. The shortest route between the Indian and the Pacific Ocean passes through the sea. This, for instance, is the route taken by tankers transporting crude oil from the Gulf to East Asia. One rationale for the US presence is to keep the sea routes open: if China were allowed strategic dominance it could close off the Malacca Strait, which connects the South China Sea with the Indian Ocean.

There are also plenty of resources to fight about in and under the sea, including valuable fishing grounds and still unexploited oil and gas fields. This is the underlying reason why it is so difficult to unravel the complicated tangle of territorial disputes over the sea and its islands among the six coastal states: China, Vietnam, Malaysia, Brunei, Taiwan and the Philippines. In 1974 and 1988 these disputes led to military clashes – in both cases between China and Vietnam.

Stefan

China - Mouthing it again (1996)

From the March 1996 issue of the Socialist Standard

The eyes of US foreign affairs experts will be fixed firmly on Taiwan during the coming weeks. For this is when nine months of tension between Taiwan and China is expected to come to a head. Taiwan is not fully recognised internationally as an independent state and has no seat at the UN. Many in Taiwan believe this will end during March when the island holds its first all-party elections—elections that could sour Taiwan’s relationship with China to the point of a military strike by the latter should the former opt for independence.

China claims that Taiwan is a Chinese province and has no right to seek independence. Many argue that such a claim ended in 1949, when the Kuomintang took refuge in Taiwan under the protection of the US following defeat by Mao’s forces. Military rule soon followed and was only lifted in 1989, with something resembling liberal democracy appearing during an election held in 1992.

Taiwanese capitalists, many recruited by President Lee Teng Hui, believe Taiwan’s economy is incompatible with that of China and that the years of prosperity they have experienced since the Vietnam war will flounder if the two are re-unified. For Taiwan’s capitalist class, the status quo must be maintained, not least because China is Taiwan’s second biggest export market after the US. Tight import restrictions also mean China in return experiences difficulty exporting to Taiwan. This has resulted in a 1995 trade surplus of $24.20 billion.

China’s sabre-rattling began many months ago and seems to coincide with international calls for Taiwanese independence. In the past six months, China has tested missiles, carried out military manoeuvres and announced that a region of coast feeing Taiwan is a "war zone". In recent weeks it has announced plans to recommence nuclear missile tests.

Taiwan, though overly “confident" it can hold the People’s Liberation Army at bay during a conventional war, nevertheless takes China's threats seriously and has appealed to the US for arms.

The US, which established a military base on the island in the 1950s, has been ambiguous in its response to pleas for help from its former “unsinkable aircraft carrier". When US/Sino relationships soured in 1979, the US withdrew from the island and abandoned a joint defence treaty. However, the US is still, committed under the Taiwan Relations Act, to providing arms of a “defensive nature".

Chinese sabre-rattling appears to be aimed as much at the US as it does Taiwan. With presidential elections coming up in the US later this year, China is hoping that the US will not risk coming to the aid of Taiwan for fear of upsetting US voters— the desired result being that this realisation will force Taiwan to succumb to Chinese calls for re-unification.

In early January Chas Freeman Jr, the US Assistant Secretary of Defence, returned from a trip to China with news that the PLA was making preparations to launch one missile per day for 30 days at Taiwan. In all probability this is hype, aimed at intimidating Taiwan and forcing the US to re-think its policy on Taiwan.

Freeman went on to relate how one Chinese official pointed out that the US care more about Los Angeles than Taiwan, and how another asked if the US were prepared to sacrifice the "millions of men" and "entire cities" over Taiwan that China would.

Not wishing to have been seen internationally as having turned the other cheek, the US responded by sailing the US Nimitz, a nuclear-powered aircraft carrier, and five support ships through the Taiwan Straits—the first time a US warship had been near the Chinese coast in 17 years. The upshot has been a slump in share prices in Taiwan, though nothing yet near the 40 percent stock exchange dive when China first began its threats.

All of this might sound familiar—it should. Last March it was the Philippines who were on the receiving end of Chinese threats when China vented its spleen over the disputed Spratley Islands, or rather the oil reserves beneath its reef. Neither is Taiwan alone in trying to extricate itself from China’s territorial claims. The island is in fact one of ten neighbouring states upon which China has irredentist claims.

While the world awaits the outcome of all, this in the Far-East, Socialists remain aware that none of it is to be taken lightly. All, too often small territorial claims—which at the end of the day mean big profits for the real disputants—lead to war. The 20th century is punctuated throughout with such instances, none of which has benefited the working class, the primary casualties in the globo-political search for profit.

The fact that the Chinese capitalists have threatened to expend three million lives over a tiny island, when all China could have a share in a world of abundance and free access with no cost to life, shows that the case for Socialism has never been more pressing.

John Bissett

Pieces Together (2009)

From the April 2009 issue of the Socialist Standard

CRISIS? WHAT CRISIS?

"At an exclusive soiree tomorrow evening at an upmarket London bar, an elite circle of VIPs will sprawl on velvet beds as they receive relaxing, complimentary massages. Around the corner at an equally glamorous event, guests will be entertained by circus performers and big-name DJs as they sip champagne. Most of Britain may be in cost-cutting mode as the recession worsens, but it seems that someone forgot to tell the fashion industry. London Fashion Week kicked off its 25th anniversary celebrations by popping bottles of Moet et Chandon before 10am yesterday, and fashion labels promised a weekend of opulent and expensive parties." (London Times, 21 February)

A FREE SOCIETY?

"A jobless Taiwan man released from prison two years ago asked police to send him back so he could eat, police and local media said Tuesday, a grim sign of hard economic times on the island. When police found the 45-year-old convicted arsonist lying on a street in a popular Taipei shopping district, he requested a return to life behind bars, nostalgic for the 10 years he had already served, the China Post newspaper reported. Wang had also contacted police separately with his request, a spokesman said. Officers who found him bought him a boxed lunch but declined to send him back to prison, the police spokesman said. ‘We advised him to keep looking for work,’ he said. ‘I don't know why he can't find a job. Maybe employers think he's not suitable or that he's too old.’ Taiwan is in recession, with a slump in exports leading a record economic contraction in the fourth quarter of last year." (Yahoo News, 24 February)

PREPARING FOR WAR?

"China is aggressively accelerating the pace of its manned space program by developing a 17,000 lb. man-tended military space laboratory planned for launch by late 2010. The mission will coincide with a halt in U.S. manned flight with phase-out of the shuttle. The project is being led by the General Armaments Department of the People's Liberation Army, and gives the Chinese two separate station development programs. Shenzhou 8, the first mission to the outpost in early 2011 will be flown unmanned to test robotic docking systems. Subsequent missions will be manned to utilize the new pressurized module capabilities of the Tiangong outpost. Importantly, China is openly acknowledging that the new Tiangong outpost will involve military space operations and technology development. (Spaceflight News, 2 March)

IT'S A MAD, MAD WORLD

"Supertankers that once raced around the world to satisfy an unquenchable thirst for oil are now parked offshore, fully loaded, anchors down, their crews killing time. In the United States, vast storage farms for oil are almost out of room. As demand for crude has plummeted, the world suddenly finds itself awash in oil that has nowhere to go. It's been less than a year since oil prices hit record highs. But now producers and traders are struggling with the new reality: The world wants less oil, not more. And turning off the spigot is about as easy as turning around one of those tankers. So oil companies and investors are stashing crude, waiting for demand to rise and the bear market to end so they can turn a profit later. Meanwhile, oil-producing countries such as Iran have pumped millions of barrels of their own crude into idle tankers, effectively taking crude off the market to halt declining prices that are devastating their economies." (International Herald Tribune, 3 March)