The following is based on a presentation given as part of Red Spark’s Anti-Imperialist Marxism Seminar Series in Melbourne and Sydney, held in October 2025. The original title was “China’s Challenge to the US Stranglehold”.

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In this short presentation I’ll basically do two things. For most of the presentation, I’ll comment on the specifics of China’s development as a challenge to imperialism. But, first, I want to frame the question in a historical and somewhat theoretical context. Without this context, it’s not possible to understand the conflict between China and Imperialism today.

My article “The Second China Shock: Finally breaking the U.S. Stranglehold?” published on red-spark.org in September, defined the most decisive fact of imperialist dominance over the Global South as imperialism’s ability to monopolise the process of “revolutionising the instruments of production.”

The approach was taken directly from the Communist Manifesto:

“The bourgeoisie cannot exist without constantly revolutionising the instruments of production, and thereby the relations of production, and with them the whole relations of society… Constant revolutionising of production, uninterrupted disturbance of all social conditions, everlasting uncertainty and agitation distinguish the bourgeois epoch from all earlier ones.”

In other words, what we are talking about is the ability to develop new productive technology, new techniques, that transform human labour processes. Today, while many capitalist societies, including in the Global South, produce large numbers of commodities at scale, what has distinguished the imperialist societies and therefore the imperialist system is, again, imperialist monopolisation of the ability to continuously develop new productive technology and bring this to market.

Marx was writing before capitalism’s imperialist stage, when monopoly capitalism, as Lenin defined imperialism, had not yet become the dominant feature of the system.

Under imperialism, the initiative and control over “revolutionising the instruments of production” that Marx observed as a general feature of capitalism had been monopolised. This monopoly was held not only by a small number of increasingly powerful monopoly companies, but also by the small number of imperialist states in which these giant capitalist corporations were located.

The accuracy of Lenin’s proposition has been borne out over the following 100 years. The group of nations forming the club of imperialist plunderers in 2025 is almost the same as those in 1916 – indisputable evidence of their powerful monopolistic position.

In a Marxist analysis, the key reason such a small part of the globe could retain control over the vast majority is ultimately due to their control over the labour process itself. It is not primarily control over money, military, laws, culture or trade – although all these are components of imperial control. At root all these branches come from control over one central factor: the human labour process. That is what gives humans the ability to reproduce their society.

Monopoly Imperial Control

Monopoly over the ability to initiate how the human labour process develops means that the imperialist countries are able to gain power over the labour process as a whole. But how exactly does this work? The question is perplexing and counter-intuitive, especially since an increasing volume of production is carried out in the Global South.

The key lies in the following observations:

First: it is only possible to revolutionise production by replacing an older technique with a new and more advanced one. On the other hand, if a new labour process is not more advanced, it will not be able to dominate and supplant the old. So, by definition, the creation of a new “revolutionising” technique is the development of a more advanced process.

Second is a crucial point: by definition, advanced labour processes are inherently monopolistic. It is a fundamental characteristic of a new and sophisticated technique that it cannot easily be replicated. That obviously stands to reason, because it is novel, complex, and has not been implemented prior. Therefore, replicating new and advanced techniques – generalising them – takes time to achieve.

Understanding this characteristic of advanced labour processes is crucial to understanding imperialism. It is a fundamental reason why capitalist firms, even in the pre-monopoly stage of capitalist development, could raise their rate of profit above that of other firms through the introduction of new machinery, new processes, and new innovations, as Marx observed in Capital.

This process follows two general steps:

First, it takes time for the new technique to become generalised. In the time period before a technique is generalised, the first movers obtain higher-than-average profits and pay off their greater-than-average investments. 

Second, after it is generalised – after it becomes a social norm – the profit rate of the “innovating firm” sinks to the social average. However, they then pass to the next business cycle still holding a greater average accumulation of capital and may be able to repeat the process.

That is a core, “molecular” feature of capitalist development Marx identified that we need to understand very well if we are to analyse what is happening in China and how it effects imperialism. This core feature has not been abolished by the imperialist system – only its form of operation has been altered – as we’ll see.

Increase in Scale

Now, a related fundamental tendency of capitalism is its constant increase in scale – relatively small firms becoming giant corporations with vast operations across the globe or penetrating multiple sectors of the economy.

Here we need to consider one aspect of the scale question. Increasing scale of production itself inevitably also means increased scale and difficulty in fulfilling the requirements for the development and preparation – the “revolutionising” – of new productive techniques.

It was only in capitalism’s early years that individual scientists or engineers could come up with important new productive inventions. Soon, the application of science to production meant that any new advances in technique could only be invented and developed scientifically at scale. This required large teams of the most educated people, resourced with the latest equipment, with stable funding, and so on.

But as scale kept increasing, even the giant corporations were not big enough to meet the ever-increasing demands. The requirements for revolutionising the production process could only be achieved on the basis of collaborative capitalist networks in conjunction with the capitalist state.

Under monopoly conditions the decisive role of the capitalist state apparatus for preparing the basis for revolutionising productive technique is a major reason why the rich–poor polarisation in social conditions for the last 100 years has occurred to a very large extent along state lines; that is, with the imperialist/Global North states being rich and the Global South states poor.

The imperialist states and their monopolist corporations reached the point of establishing a global monopoly for themselves over the highest echelons of science and technology. This global monopoly made impossible the emergence of new, competing imperialist powers or the emergence of social and productive parity.

That is the history of the century after Lenin’s book on imperialism: the whole of the Global South has been prevented from developing in the same way as the imperialist societies.

Beyond the National Boundary

However, development of imperialism’s structure did not stop there. Today, it looks like the imperialist global monopoly is being progressively weakened and undermined.

As stated, production today has reached a scale where only the highest institutions of capitalist society – ultimately the imperialist states – can meet its ever-expanding demands. At least this is the case for the demands specific to revolutionising the production process.

At the same time, however, constant growth also tends to overstep this national boundary; the boundary where all the imperialist nations share a collective monopoly over the production of advanced techniques thus depriving all the oppressed nations of this ability.

Marx was already observing, even by 1848:

“In place of the old local and national seclusion and self-sufficiency, we have intercourse in every direction, universal inter-dependence of nations. And as in material, so also in intellectual production. The intellectual creations of individual nations become common property.”

Well, the system of imperialism has in practice been a system of monopolisation of the intellectual productions of all nations by a small group of nations.

But that has created a problem for them too—a certain “dependence”, as Marx put it. This is what I think the problem for imperialism is today.

Monopolising the ability to revolutionise production has meant concentrating these monopoly activities inside the imperialist states – things like design, research and development, advanced engineering and so on. But concentrating those types of labour inside the imperialist states also means, increasingly, divesting from all other types of labour.

So the polarised structure of the world economy also concentrates all the other processes, i.e. the non-monopoly processes, the so-called “bulk production”, in the Global South – especially in the People’s Republic of China (PRC).

There is a degree to which, in order to monopolise everything, imperialism increasingly makes nothing. At the very least, there are whole spheres of production where imperialist societies are completely dependent on the Global South, especially for labour power. This is the essence of what now seems to be undermining and weakening imperial control.

This process, in which capitalism’s productive forces at the international level are outgrowing their shell – both the shell of the nation-state and also of capitalist property relations themselves – seems to be expressed most sharply in the conflict between the US and China.

The China Shock

Today, the location of multiple supply chains of various types, sometimes exclusively inside the PRC, effectively gives it a “monopoly” of sorts over aspects of ordinary labour, or non-monopoly production.

As mentioned, non-monopoly, “ordinary” production cannot be the basis of sustainable or long-term super-profits because – by its nature – it is relatively easy to duplicate (see King, Imperialism and the Development Myth, 2021, p.114).

Yet both types of labour – monopoly and non-monopoly – are still indispensable. No product can be made without both types of labour. For this reason, the high degree of concentration of non-monopoly production in the PRC, especially at scale, gives China substantial power to push back against and weaken imperial control and exploitation over itself.

Also, China is a single, large nation with a single state power that is politically independent of imperialism as a consequence of revolution. That means China’s concentration of non-monopoly production represents a concentration of power that is, in a way, resented by imperialism.

It is this economic and political concentration of power in the PRC that large sections of the US ruling class appear determined to destroy – reflected in their long-held aim of removing the Communist Party from power and replacing it with a more compliant regime. This imperialist desire is motivating the bipartisan US support for punitive and aggressive tariffs and sanctions on China.

The “China Shock” article on Red Spark zooms in to examine how exactly Chinese economic competition since the pandemic seems to pose significant problems for the ability of imperialism to reproduce itself in the old manner, and how China is tending to undermine imperialist monopoly in increasingly important sectors.

As an aside, China–US competition grabs attention due to the aggressiveness of US policy. However, it is likely that Chinese economic competition with other imperialist states is even more direct and damaging to those states, especially to those with big manufacturing export sectors like Germany, Italy and Japan.

Chinese competition with imperialist corporations is not new. However, its impact on imperialism today may have recently undergone a qualitative change.

Twenty or thirty years ago, increasing Chinese dominance in clothing, footwear, TVs or other low-margin assembly operations did not hurt imperialism’s position. Imperialist societies benefited by divesting from low-margin production. This freed up capital for re-investment in more profitable sectors, and allowed imperialist economies to import very cheap products, lowering costs and once again increasing profits.

Today, however, Chinese competition seems to have climbed so far up the “value chain” that a so-called “Second China Shock” is seriously encroaching on areas more central to imperialist profits—especially automotive and battery production. Car makers in particular seem to be caught in a serious bind.

Electric Vehicles: An Illustrative Example

The transition in progress today from old-style motor vehicles powered by internal combustion engines (ICE) to more modern battery electric vehicles (BEVs), represents an almost classical case study of exactly the sort of revolutionising of production that constitutes the historical basis of imperialist super-profits.

However, the reality is that most large imperialist-based car companies today are hesitant to make that transition.

Since the Covid pandemic, car makers have reduced and delayed their pace of investment in electric vehicles. Smaller brands like Volvo, that set rapid investment plans, and Porsche, have copped financial hits. The largest car makers, like Toyota and Volkswagen, have essentially adopted a dual strategy: develop some electric models while also continuing to develop new ICE models for a long period to come. Now major car makers have reduced or delayed investments in electric vehicles. The EU, for example, is considering pushing back the final date set for ICE vehicle sales beyond 2035.

This slow pace is because there are lower profit margins for BEVs, since Chinese companies already produce competitive, high-quality electric vehicles at scale. To fight for serious market share, or to dominate BEV sales today, companies like Toyota, Volkswagen or the American makers would need to massively expand investments in production of BEVs. But because China is already a mass producer, doing so would have a lower profit margin than their existing investments in ICE vehicles. That is why they hesitate—lack of profits.

The historical pattern of imperialist super-profits relies on imperialist investment in a new area and then several years of monopolistic – essentially exclusive – production before other producers catch up. But in the important area of vehicle building China is already there.

As a result, the imperialists are re-investing for longer periods in a more backward technology: ICE vehicles. These are more “backward” in an objective sense because they are a waste of labour, not only in the production of fossil fuel but also in producing the cars’ motors and associated parts. In China BEV and plug-in hybrid vehicle sales and exports are close to 50 percent, compared to an OECD average of around 22 percent.

Renewable Energy

Currently, the percentage share of renewables on China’s electricity grid is below Australia and much of Europe – at roughly 20 percent versus roughly 33 percent. China’s share of renewables is roughly equal to the United States. Since the Covid pandemic, however, China has begun increasing their uptake of renewables far more rapidly than the rest of the world. 

Renewable electricity also represents a more advanced form of the labour process than fossil-fuel-powered generation. Again, this is because it requires less labour. For that reason, renewables are now the cheapest form of new-build energy.

Yet significant factions of the capitalist class in the imperialist countries are actively trying to undermine the transition such as the new Queensland government and, of course, Trump. While they may not be very effective in the long term at stopping the transition, they are certainly slowing the pace. Meanwhile, in China, the national policy contained in the current Five-Year Plan is to accelerate adoption of renewables. This is partly for environmental reasons, partly due to price and partly for national security.

Isn’t that interesting? National security in the Global South involves adopting renewables—at least in this important case.

The Second China Shock article also outlines the dramatic picture of Chinese domination of battery production. Batteries are considered the high-end component in BEVs, more so than their engines. But globally their production is highly concentrated in China.

So, the overall picture is of China, a Global South country, increasingly dominating – at least in terms of bulk production – certain strategic new industries. This is a completely new scenario.

Undermining, Not Surpassing Imperialism

I want to clarify one other aspect of the current developments. What is happening is that Chinese development is undermining the foundations of imperialism and imperial stability. Undermining is very different from surpassing imperialism, which is what most people reflexively think of as soon as the question of any sort of Chinese challenge to imperialism is raised.

The question of “China’s challenge” to imperialism is usually understood in one of two ways. Either China is surpassing imperialist production and then taking over the imperialist position in the world (arguably an analysis reflecting the outlook or fear of the imperialist bourgeoisie). Or China is surpassing imperialist production and thus breaking free of imperialist oppression and exploitation in a peaceful, evolutionary way; the latter seems to reflect the CPC’s public position.

In my opinion neither of these scenarios is correct. Both are premised on the idea of “surpassing.” That cannot happen. The surpassing view is based on a failure to distinguish between revolutionising production techniques and non-monopoly bulk production—forgetting that they are different and, in an important sense, opposite things. If you do not draw that distinction, what you perceive is China going up and up the value chain, and you assume that China can and will simply keep going up the value chain indefinitely into the future.

In reality, apparent “domination” of car production—for example, the fact that China makes the most cars—is not actual domination if what it means is only that the final assembly of cars occurs mostly in China, but that the Chinese assemblers remain dependent on overseas suppliers for the most advanced components or essential factory machinery.

The same would be true for phones, cameras, solar panels, wind turbines, microchips and every other product; the same would also be true for each of the component parts of all these final products; the same for all the machinery involved in producing those components, and so on. To know where dominance really lies, we would need to investigate all these industries.

One important example is commercial passenger jets, in which China is not at all dominant and not even internationally competitive. COMAC, the state-backed Chinese plane manufacturer, relies on imports from the US, France and elsewhere for almost all the advanced components, in order to complete production at all.

Another important example is Shipbuilding. Today, strikingly, a majority of the world’s large cargo ships are built in China, something that seems to greatly worry the Pentagon, the US Navy and the Whitehouse. On face value it would seem to be another example of increasing Chinese dominance. But it is a good example of the contradiction that exists. Yes, the loss of shipyards and other industrial capacity necessary to build ships must be a terrible danger to imperialist control, especially in war. But does this example indicate imperialism’s loss of technical supremacy? The answer seems to be “no”—at least in the most sophisticated aspects of the ship building process.

While China, and to a lesser extent Japan and South Korea dominate the final construction of the ships, it is Germany and Switzerland, in partnership with Korea, that dominate the design, development and construction of the ships’ engines – the most sophisticated and profitable part. China dominates supply in tonnage – and probably the necessary labour time. Korea and Germany dominate the high-end parts and profits.

Another important example that could be looked at is advanced microchip production. This requires specialist machines produced only by ASML in Holland. These are now subject to US export controls and not shipped to China. High-tech machinery in general – for example, semiconductor lithography, advanced robotics, aerospace manufacturing – usually must be imported to China.

Rare Earths – A Counter Example

The PRC does have a huge monopoly, 90-plus percent, in rare earths. But this is not an advanced industry.

Chinese monopoly in that area is characteristic of the Global South competitive advantage in general: a monopoly over super-exploitable labour and a preparedness to accept massive environmental damage in pursuit of non-super-profits.

Rare earths was a monopoly of the US from the 1960s to the 1980s, but US production was wound down in the 1990s and 2000s under price competition from China – similar to the pattern for many other non-high-tech industries during the era of neoliberal globalisation.

To properly understand the nature of Chinese apparent dominance in the production of products such as, solar panels, wind turbines, electric vehicles, batteries and more, would require researching the technical balance between Chinese and imperialist producers within each supply chain. The time required for such an investigation would be immense. Evidently, we need many more Marxist political economists.

However, in all the industries I have looked at—most recently ship building—the same general pattern always emerges.

The Real Danger to Imperialism: Generalised Destruction of Monopoly

In the areas of greatest Chinese productive dominance, what appears to be happening is not that Chinese producers are replacing the old imperialist monopolies with their own monopolies of the same type. Rather, they are destroying monopoly itself—at least monopoly in the imperialist sense of super-profitability based on technical superiority.

Perhaps the most well-known example, though still in progress, is the massive competition from Chinese electric car makers with Tesla.

If we rewind five to ten years from now, BYD and other Chinese BEVs were considered significantly inferior in quality to Tesla and other imperialist car makers. As a result, Tesla could sell its cars with a massive price mark-up, giving it huge super-profits and propelling the company to become the most valuable automotive company in the world and Elon Musk the world’s richest person.

However, after the pandemic, BYD and other Chinese car makers have been able to dominate the Chinese domestic market and achieve huge exports across the world (besides the US, where they are blocked by high tariffs), because they are now viewed around the world as comparable in quality to Tesla and other imperialist-based brands. As a result, Tesla has been forced to cut its prices.

Tesla was an early mover into new energy vehicles. As mentioned, the majority of the legacy car makers have not even started to fully transition yet.

What might happen if Chinese competition in car making proves too strong is a repeat of a different historical pattern. The imperialist corporations would cease making cars altogether and re-invest instead in other areas—as has already happened in clothing manufacture, electronics assembly and countless other sectors in the past.

If car making as a whole is captured by non-monopoly producers in China, Thailand, Mexico and other Global South countries, what will happen is that Tesla will concentrate its investment in satellites, rockets, software or other new areas, and wind down or sell its car business – just as IBM sold its PC assembly business to the Chinese company Lenovo twenty years ago.

We can see the problem here—a kind of imperial marginalisation.

Satellites and rockets, while perhaps highly profitable, are arguably far more marginal than cars in terms of their overall social prominence and, importantly, in the total labour time necessary for their production and operation. If more of the major, basic areas of the production and distribution of goods are captured by non-monopoly producers, the spheres where monopoly profits remain a possibility progressively shrink. If the imperialists are literally driven off the earth to control only production in space (!) it is hard to imagine them forestalling a revolutionary crisis and transformation of society for very much longer.

Perhaps the most immediate and dramatic challenge for life on earth is this: if China can master existing production techniques in ever more sophisticated areas and in ever faster times, this makes future monopolistic investment unfeasible in general.

Think about the implications: if the moment an imperialist company puts a new product on the market, similar or identical products would rapidly appear and undercut its price. In that case the expected super-profit obviously cannot materialise. But any truly new product of the type imperialists have produced historically relies on very large investments in new plants, new equipment, new research, new development, training and so on. None of that can be justified unless there is an expectation of a super-profit to pay for it all.

If China has now developed to the stage where almost any significant new industrial process can be replicated in a relatively short period of time—or even if the imperialist corporations estimate there is a high chance it could be replicated – then they cannot profitably invest in any new major technologies.

Speaking bluntly: without super-profits, the imperialists can no longer finance the reproduction of technical dominance. Without super-profits, without technological monopoly, there is no imperialism as it has existed for 100 years.

Social and Political Impacts of Imperialism’s New Crisis

Super-profits are the core reason the imperialist societies are richer than Global South societies. Without them, this international order will start to unravel – though perhaps very slowly.

This new situation developing will not only affect the bourgeoisie but all social classes – including, for example, the consumption of working people in the imperialist countries. Speaking politically, “class-collaborationist” politics within the working class – i.e. racism, social chauvinism and reformism – are indispensable historical props of imperialism. Imperial bribes to sections of the working class, and to chauvinist “leaders” like those in the Australian Labor Party, are also funded by imperialist super-profits. The period after the Covid pandemic has already seen reductions in spending power in Australia, as in all other countries. It is easy to imagine that much more dramatic impacts are possible.

On the other hand, imperialist efforts to crush China, or crush Global South production more broadly, are in effect also efforts to crush the Global South bourgeoisie and the Global South working class—effectively to cut them out of the relative gains in income and consumption made in important countries like China over the last 30–40 years. What would be the political effects of any imperialist success in this endeavour?

Allowing Global South capitalists to increase their income during the neoliberal period—as the payment for their role in bringing the Global South working class into the world export market—has been at the core of imperial stability for a whole epoch.

Cutting out the Global South, to the extent that is even possible, could be a recipe for more phenomena in the future similar to the Caracazo in 1989—in essence a food and poverty riot—that triggered a political radicalisation process in Venezuela and ultimately led to the election of Hugo Chávez in 1998. During the neoliberal period, the Venezuelan revolution was an isolated exception. Prior to neoliberalism, anti-imperialism was far more widespread across the Third World. In the future that may become the case again.

China’s challenge to US imperialism over the last few years shows that China does not need to surpass or replace imperialism to undermine imperialism’s structural foundations.

The imperialist system appears to have reached such an advanced stage of contradiction and redundancy that any significant economic development in the Global South has the impact of undermining and weakening it. At the same time the imperialist system is entirely dependent on widespread, perhaps even expanding, super-exploitation of Global South labour for its survival.

This may be an impassable contradiction—though one that is far too complex to predict what precise form the crises, ruptures and explosions might take. What is clear is the urgent need to energetically re-build the socialist movement inside the imperialist societies like Australia and the US, in order to prepare working people to react to these coming ruptures in the spirit of international solidarity, co-operation and peace—and prepare them to take action against the imperialist bourgeois, who will certainly attempt to solve these crises in their own favour at all costs.

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Further reading on this topic from the author:

The “Second China Shock”: Finally breaking the U.S. Stranglehold?

Is China an Imperialist Country? Part 1: What is imperialism?

Why World Polarisation between Rich and Poor Societies Keeps Deepening

Imperialism and its myths: how to correctly understand the shape of the world