Spy stories and state owned enterprises

By Heiko Khoo
0 Comment(s)Print E-mail China.org.cn, May 24, 2014
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A cooked-up threat [By Yang Yongliang/China.org.cn]

 A cooked-up threat [By Yang Yongliang/China.org.cn]

A World Bank report published this April claims that China is set to surpass the United States as the world's largest economy. Arguably, this figure is misleading, as the size of China's population means it remains a developing economy. However, the belief that China is about to take the number one spot represents an important transformation in global mass psychology. It means that the Chinese Communist Party has reshaped the world balance of power; and it has done this on the basis of public ownership of the commanding heights of the economy and state planning. This represents a body blow to the dominant ideology of free market capitalism and the "Washington consensus."

U.S. accusations of Chinese spying should be seen in this light. In a provocation that was clearly authorised by President Obama, the U.S. Attorney General Eric Holder Jr. announced that a Grand Jury in Pennsylvania has indicted five members of the People's Liberation Army for cyber spying against U.S. companies and the U.S. steel workers' union. For dramatic effect, the FBI issued wanted posters, and its Director James Comey claimed: "For too long, the Chinese government has blatantly sought to use cyber espionage to obtain economic advantage for its state-owned industries."

It is not accidental that U.S. allegations focus entirely on the economic position of China's state owned enterprises (SOEs). A video discussion on the Financial Times website slated U.S. hypocrisy but saw the allegations as an attempt to influence Chinese policy makers and the senior executives of SOEs. The remuneration of SOE executives is lower than that of their colleagues in foreign private companies, and China's anti corruption campaign has curtailed many illegal opportunities for personal enrichment. So U.S. intelligence agencies view this milieu as susceptible to capitalist ideology. They see this as a weak link in the Chinese Communist Party's system of power.

The privatisation of SOEs remains the centrepiece of U.S. "suggestions" to "help China" to "reform." The champions of free markets advocate subjecting Chinese SOEs to restructuring, in order to prepare them for privatisation. They say that SOEs should sink or swim in free markets. According to this theory, private companies are inherently better than state owned companies. But China's growth and development disproves this. Indeed, U.S. actions are a tacit admission by the leading capitalist state that China's SOEs are seen as a mortal threat.

The U.S. government, judiciary and state, act like the sales agents and security guards of private capitalist interests. They dragged the U.S. steel union into their Grand Jury Indictment in a desperate attempt to draw the public behind their anti-China campaign. What sort of secrets could the U.S. steel workers' union have, that China needs to spy on to discover? The very idea is ridiculous.

The dominant role of public ownership is enshrined in the constitution of the People's Republic of China. SOEs are its beating heart. The largest SOEs are direct instruments of state policy. They are also the economic foundation of the Communist Party's power. It is true that many Chinese SOEs are dependent on state support: to develop their market influence and advance their technical capability. However, the weakness of individual SOEs is overcome by the combined power of the whole state economy. This arises from the integration of SOEs into the national and local planning system, which is designed and organised to meet the development objectives of the Party and state. This is why China's SOEs are the backbone of its economic miracle.

As U.S. economic power wanes, its government is adopting an increasingly hostile stance towards China. President Obama wants to distract attention away from the crisis of U.S. capitalism, its failed military operations in Iraq and Afghanistan and the global spying activities of the National Security Agency (NSA), revealed by Edward Snowden. The U.S. campaign against China is not designed to be rational or consistent: indeed, its blatant duplicity is obvious. It seeks, instead, to implant and reinforce illogical paranoia in the minds of U.S. citizens. This coincides with U.S. foreign policy initiatives in East and South East Asia, where, behind the appearance of territorial disputes at sea, U.S. allies are being encouraged to clash with China.

Chinese state enterprises should counter U.S. corporate and state propaganda by launching bold infrastructure initiatives inside the U.S. itself, for example, in ecological and socially beneficial sectors. Such projects should be developed in conjunction with local governments, communities and trade unions. This could drive a wedge between the working people of America and the anti-China campaign of the U.S. government.

The author is a columnist with China.org.cn. For more information please visit: http://china.org.cn/opinion/heikokhoo.htm

Opinion articles reflect the views of their authors, not necessarily those of China.org.cn.

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