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Partido Comunista chino

How China Uses Forced Labor For Competitive Advantage

The Chinese Communist Party provides the most important and attractive competitive advantage to entrepreneurs seeking profitability

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The Chinese Communist Party following Xi Jinping’s model has intensified the persecution of religious minorities in Xinjiang. It has modernized and provided technological security in concentration camps where, in addition to indoctrination, forced labor has been denounced.

The new policies of “labor education” echo the Maoist obsessions denounced by the press. In order to intensify socialist thinking, Xi Jinping has urged students and workers to work with the rank and file of the Chinese Communist Party.

Labor Freedom vs. Indoctrination

The United States has a legal system that facilitates job creation and provides the employee with tools to negotiate in a robust market of opportunities.

President-elect Joe Biden and his union allies have announced an increase wage of $15 per hour, which analysts say will affect the creation of thousands of jobs. However, despite U.S. union pressure, the U.S. still has a system of free labor.

By contrast, Chinese workers are channeled from an early age to meet the requirements of the Chinese Communist Party. Its labor force is attractive to entrepreneurs investing in China based not only on the strength of the Chinese labor market, but also on the conditions that Beijing offers.

The younger generations in China are less open-minded, more nationalistic, more in favor of an authoritarian Chinese Communist Party and more isolated from a common set of facts and norms that previously facilitated peaceful international exchanges. (EFE)

Xi Jinping’s leadership has given the Asian giant the tools to mitigate protest, control the media, as well as the power to manipulate and create a competitive advantage with students and workers now having narrower minds, according to a Freedom House report. Indoctrinated workers tend to avoid labor protests and allow the Communist Party to guarantee companies a lower cost.

China’s growth is driven by its authoritarian system. According to Freedom House, in order to pursue national interests, the Chinese Communist Party has taken advantage of COVID-19’s misinformation to the West, sophisticated forced labor, and reinforced indoctrination of its citizens.

A new system

When foreign businessmen negotiate with Chinese companies, they aren’t negotiating with the CEO of a company, but they are negotiating with the entire Chinese Communist Party.

On the other hand, the Chinese Communist Party has succeeded in incorporating local and foreign companies into its scheme. Before the arrival of Xi Jinping, citizens enjoyed a certain freedom of enterprise. Now, in China the division between private property and the state in the era of Xi Jinping is almost nil.

China owns companies that are listed as the largest in the world. For example, the largest metro, infrastructure, and telecommunications companies are owned by the Chinese Communist Party.

With the new commitment to the mastery of technological platforms based on the success of the Ant Group owned by businessman Jack Ma, Xi Jinping has shown a Chinese Communist Party that, according to Jude Blanchette, an expert in China related issues, has become “a sui generis system that is creating a completely new political-economic order, which is already leaving a deep impression on the global order.”

The system to which the expert Jude Blanchette is referring to holds that the Government of China is no longer an entity separate from the capitalist system, but that the new Chinese Communist Party is also a business conglomerate.

Capitalism in the service of the Chinese Communist Party

Beijing is using economic development to strengthen the Communist Party. Withf Xi Jinping at its head, the party has been strengthened on all fronts. In the area of security, it passed a new national security law in early 2021 aimed at protecting so-called “national interests.”

During 2019 and 2020, measures to control the press were reinforced, and confinements have served Beijing to control the citizenry even more. The human rights violations and forced labor that had been going on for decades were reinforced in recent years by the sophistication of the concentration camps in Xinjiang.

Tesla Partido Comunista chino
In February thousands of workers returned to the Tesla assembly line in Shanghai, many of them brought in government-provided buses from dormitories secured by officials to prevent them from mixing in with the community. (EFE)

In addition, foreign companies that decide to invest in China, besides following the guidelines and basic rules laid down by Beijing, must serve the interests of the party, according to analysts.

Successful examples of American entrepreneurs in China abound. However, the one that has stood out most recently is the case Elon Musk’s Tesla. The automobile company made world news for the way it adapted to the pandemic.

With strong support from the Chinese government, Musk managed to start his plant in Shanghai, China, while millions were confined by COVID-19, according to the press. Bill Russo, CEO of Automobility Ltd., a Shanghai-based consultant, said, “Tesla achieved its great success because China is interested in Tesla having it.”

According to analysts, Tesla’s growth in China competitively benefits the Chinese government. Technologies developed in collaboration with the Chinese Communist Party will become Chinese, as happened with telecommunications.

The government has also provided incentives for citizens to access technologies that the Party considers strategic. Now it is a financing Communist Party, millions of dollars are earmarked to promote industries, projects and even governments that favor the Chinese interest.

Xi Jinping’s model for Chinese growth

Not making a clear difference between the public and the private, the president of the State Commission for the Supervision and Administration of the Chinese State Assets, SASAC, Peng Hao, explained that in China “regardless of whether they are state-owned or private companies, all are Chinese companies. The government strongly promotes the integration of large, medium and small enterprises, with coordinated and innovative development to jointly build a world-class group of enterprises.”

Therefore, Chinese companies, not being in the hands of private citizens, don’t have to go through what entrepreneurs in the West do, for example, the consequences of the pandemic, government regulations or basic labor rights standards.

China didn’t report details of COVID-19, which gave it an advantage to grow economically against countries like the United States. (EFE)

According to Bloomberg, the revival makes China “the only major world economy that expanded last year. The press has reported that the growth of the Chinese economy was 2.8%.”

Despite the fact that consumption lagged behind in industry, and families experienced a decrease in their salaries as in the rest of the world, Bloomberg highlighted that China had advantages over the West thanks to COVID-19, which allowed Chinese and foreign companies in China to show positive numbers during the pandemic.

By the end of February 2020, most Chinese cities were already past the confinement stage and were starting to project the control of the crisis, while the United States began to react in mid-March, and still could not control the epidemic.

This advantage resulted in the gross domestic product rising at 6.5% in the last quarter compared to 2019, which led to growth of 2.3% for the whole of 2020, according to the press. In addition, China increased its market share in the world economy at the fastest pace on record, according to the World Bank.

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