 Ac felly rydyn ni'n byw'r un ar ddiwedd yn gweithio'n glas o'r ffordd. Felly Mae'r Gwreng Pwg Assylfaenau yn gweithio o'i ddweud o gynnig $300b o ddaf yn cyflwyno 450b o'r bwysig oedd y peth yn gweithio'r gwaith. A'i gweithio'r gweithio'r gweithio'n gweithio'r gwaith oherwydd yn gweithio'r gweithio'r gweithio'r gweithio'r gweithio. The Chinese government is facing the same kind of dilemmas that the U.S government and the European governments faced about 13 years ago. How they respond to this, whether they decide to bail out Evergrande or even nationalise, will reveal the real nature of the current regime. What is Evergrande and why that is happening? China's boom, at least for the last 12 or so years of it, has been fuelled to a very large extent by a property boom, or property speculation, which makes up a massive 30% of Chinese GDP by now. Many, many property developers, most of them probably, of which Evergrande is the largest, borrowed unsustainable amounts in order to participate in this speculative boom in an attempt to get ahead of their peers to out-compete each other to grow as quickly as possible. They borrowed and borrowed and borrowed, and now, of course, the consequences are here. In fact, Evergrande and I think some other companies, and this is a widespread practice, started borrowing even from their own employees in an attempt to gain more capital more quickly. One particular model that they have, which demonstrates the feverish, short-sighted character of this boom is the so-called 3691 model, which refers to the need to start developments within three months of the plans being drawn up, to start off-plan sales within six months, so to start sales of the properties before they've even been finished, and to finish construction within nine months, and then return the money with interest to the banks within a year, hence 3691. And it's no surprise that many companies are going bust, because you can see with that kind of turnaround, it's not really going to be sustainable, and the reason for that, the reason for the need to turn around so quickly is because of the huge amounts of debt they have taken up. I've been told to speak more loudly, but I think I'm going to start having to actually shout, which is going to be a bit awkward. So, yeah, the entire industry was borrowing unsustainable amounts of money. On the assumption that house prices, property prices, would just perpetually go up, which of course sounds very familiar to many of us. The industry's total debt is thought to be, according to Goldman Sachs, around $2.8 trillion, or 18% of Chinese GDP, for one industry, which is a huge amount. But of course, if anything should burst that bubble, in other words, if anything should cause property prices to stop rising, then the entire model would collapse, and that is what appears to be happening. The debt load would sink all of these firms, basically, which is what is happening to Evergrande. It is, by the way, one of the biggest property developers in the world. It is the second biggest in China, and it has total liabilities, in other words, it owes, in total, 3% of Chinese GDP in one company. That's how much it owes. It is the most indebted property developer in the world, and therefore it's collapsed, threatens the world's second biggest economy, and therefore, by extension, the world economy. But why is it collapsing specifically? Well, the Chinese government has sparked this crisis in reality because it's placed obstacles on borrowing, essentially. It started to create what are called three red lines, essentially, to taking on more debt, making it harder and harder to borrow more money. And therefore, of course, their whole business model is going out the window, and they need to borrow money to pay off the previous debts that they have. And so what they're attempting to do, the Chinese government, is essentially to have a kind of controlled explosion of this bubble, to let it down calmly before it gets too big and threatens the entire economy. However, it's not clear that that isn't already the case and that their attempt to do so is already spiralling out of control. For example, Fantasia Holdings, which is another property developer, has just developed, that just defaulted on its debt. Modern Land, a couple of weeks ago, another developer asked for an extension on its repayments. And Cynic, and not spelled like a C-Y, spelled S-I-N-I-C. And also Fujian Fusheng, two other properties developers, have also defaulted. So it appears to be widespread. Home sales by value fell in the year to September by 17%, and in the year to August by 19.7%. And in some cases, what we're seeing is stricken property developers like Evergrande selling off their flats with massive discounts of 30 or more per cent because they're desperate to get access to cash. They've got to pay off these debts. They can no longer borrow more money to do so because of the Chinese government regulations. And so they're just flogging off their flats at below value in order to gain access very quickly to cash with which to pay off their debts. And of course the effects of that will be to crash the property market because of all of these companies doing that kind of thing, property prices will go down and that will further cause a crisis in the property sector of the economy. And of course this cannot fail to have massive implications for the rest of the economy. As I said, it's 30% of GDP in itself that is vast. But they're all enmeshed with each other. Evergrande is not only actually a property developer, it also has a car manufacturing business. And of course many Chinese companies that aren't property developers will own little bits of Evergrande and other companies, all have lent them money. So it is a problem for the entire economy. That's the nature of capitalism in every country these days. There aren't really private companies that are just sealed off and owned by a couple of people. They all own little bits of each other and are all mutually interdependent. So its crisis will lead to a crisis in the entire economy. But why has property been such an important driver of the Chinese economy for the past 12 or more years? Given that you'd have seen that it was property and the crash of the property sector which sparked the 2008 financial crisis you'd think it's kind of a bit of a mistake to repeat that policy. Well if we go back to 2008 it actually briefly went into recession. I remember at the time that millions and millions of workers were being laid off and it looked like a serious, basically part of the world crisis and it was going to have massive repercussions for China. But in only a few weeks the economy started growing again and workers started being hired. Why was that? It was because of the fiscal stimulus that the government launched in 2008 which is possibly the biggest in history or certainly one of the biggest in history. It was about $586 billion of stimulus that the Chinese state pumped into the economy at that time in an effort to keep things going and it did work in a sense. And not only did it pull China out of recession but it actually arguably stopped the world economy going into an outright depression at that time which is what it looked like it was going to do because the growth of the Chinese property sector in particular that was a product of this led to a boom in raw materials and in capital goods so countries like Germany and Australia in particular but many many countries throughout the world benefited from this, countries that were selling things to China basically. But the key thing is that because China was by now a capitalist economy this was not done by means of a plan of production but by means of debt basically a massive explosion of debt. And if China's companies were in 2008 holding back investment and laying off workers as I mentioned that they were briefly there was a good reason for it it wasn't just a result of a sort of irrational, silly fear that some government money would dissuade them of and then everything would be okay again. There were far deeper reasons for this and that's because in the middle of a world financial crisis one of the biggest in history there's obviously a limit to how many Chinese made things you know cars, smartphones, clothes, etc. There's a limit to how many of those things the world market can absorb because of the crisis and workers being laid off all over the world. And that doesn't go away just because the Chinese government starts lending a lot of money the limited demand of the world economy of course remained and therefore if in its desperation the Chinese state starts lending a lot of money starts basically drowning companies in cheap credit which is what they did these companies will in general tend not to spend it on productive investments in other words on building new factories and taking on more workers for productive things instead they would tend to spend it speculatively and that usually means and it did mean in China on a housing speculation So what happened is that all kinds of companies including importantly state-owned enterprises a lot of the Chinese economy remains state-owned about 40% of it but these state-owned companies do not work to a plan of production to meet social needs they work fundamentally to make profit operate like private capitalist companies and so many of these companies including them if you look into it they started up their own shadow banks at the time semi-legal banks basically which they were taking on all of this money from the Chinese banks that the state controlled and they were encouraged to lend it to spend it but what they actually did is they set up their own shadow banks and lent it themselves in a lot of cases to property developers to get in on the action of the housing market because it was thought those prices would keep on going up and actually these financial arms of these companies were frequently more profitable than their core business as Marx explains, credit allows capital to go beyond its natural limits in other words to extend the period of boom and delay the crisis but it means that the crisis will still come on a higher level because those loans have to be paid back with interest and of course it generalises that crisis as well the nature of finance and that is generally what has happened in China as more debt has been issued it becomes less effective for example it now is thought to take around about four dollars of debt to produce an extra dollar of growth in the Chinese economy whereas before the stimulus it was thought to take about one dollar and forty cents to produce an extra dollar of growth the main reason for this is because a lot of the new debt that is taken on is simply to pay off old debts that have proved unviable essentially in other words a lot of money has been spent on what have ended up being ghost towns empty apartment blocks just the other day in Yunan province in the south they demolished about 15 apartment blocks they were just empty and there was no real demand for them in other words there has been a lot of feverish economic activity which yes does increase employment and spending and it does increase the GDP figures but actually it is not profitable it is not sustainable and of course then those debts need to be repaid but there haven't been any profits with which to repay those debts and what essentially has been happening is that instead of defaulting then and going bankrupt a lot of people a lot of firms have been then borrowing more money in order to pay off those previously unsustainable debts therefore what this has been doing is just delaying the crisis and extending it and it means that there is an avalanche of bad debt waiting to be defaulted upon before 2008 before 2008 I think Chinese debt, total Chinese debt all of these figures are somewhat approximate and a lot of them you know there is a lot of hidden debt but it is thought that before 2008 all of the debt in China was equivalent to about 160% of GDP by 2016 that was the most recent figure I could find there was 260% of GDP by the way back in the 70s before China returned to capitalism it was 0% a deficit so it is kind of an index of how developed capitalism has become in China and how developed the contradictions of capitalism have become with the total amount of debt just keeps on going up and up and up just as in the west in fact and again I emphasise it is important to understand that this stimulus was delivered by these methods that were guaranteed to produce a housing bubble it did it by means of debt because it is not a planned economy anymore so you can't just say if you are not a planned economy if you are a capitalist economy you can't just say we have these amount of resources this amount of workers therefore we can produce this amount of stuff to meet need and that is what we are going to do you can't do that because you don't own the economy the economy is in private hands and those sections of it which are not in private hands still operate largely according to profit so you cannot make them do what you want to do and therefore you have to stimulate by means of debt and hope that that will lead to productive activity but in this case it by and large it hasn't now the fact that Evergrande could only grow by taking on more and more debt obviously and is now in crisis because they are not allowed to do so shows it was inherently unsustainable and in that respect it is like a microcosm in Chinese capitalism as a whole which again has only been able to grow by taking on more and more debt now what is going to happen we have explained what has been taking place but the real key question is going forward what is likely to take place as far as I can see there is no evidence of a plan to bail out Evergrande whether that may still happen however it is unclear if it even can really be rescued first of all to do so would be to create what they call moral hazard in other words it would incentivise other companies to just continue taking on more and more debt and making reckless investments because they would know if we borrow more money we will get bigger and therefore we will out compete our rivals we will capture more market share and yet it might lead to crisis further on but it is fine because the Chinese state will just rescue us because by then will be a huge company it will be too big to fail essentially that is the thinking that is what they call it moral hazard runaway debt would actually accelerate probably even more quickly than it is now so they don't really want to do it for that reason to bail it out would also be phenomenally complex Evergrande has about 1.6 million properties that have been sold but they are not finished they are in the process of being built the people who have bought them and they need them to be finished and if they are not finished once again that will lead to a massive collapse in the property market but if you are going to bail them out and if you are even going to nationalise them then you have to figure out how to finish those properties they are spread out throughout China throughout about a thousand different local governments it would be phenomenally complex to organise and plan for those properties to be finished and to figure out exactly how that is going to happen and again there is no evidence of any plans being made for this furthermore there is a political dimension to this as well Xi Jinping is pursuing this policy which I will come on to explain more in a moment for political reasons there is very good reasons for why he is doing this and he is attempting as I think you probably know he is attempting to present himself as basically a friend of the common people who are these greedy reckless capitalists who are threatening the economy, who are corrupt etc and he has really he has staked his political fortunes on this and so then to bail them out to bail out this reckless greedy company by the way their owner is the notorious figure he is kind of a poster boy for like anti you know anti greed essentially he was known as belt brother because at one point he turned up a Chinese communist event with an incredibly expensive belt which he was showing off he became a kind of figure of hatred in society for that reason so to then just bail them out of course would obviously massively undermine the attempt to cut these people down to size essentially and to show them that there are consequences to their actions and also it is just putting off the evil day it is just delaying the crisis isn't it and everyone knows that that is and we've seen that in the west we've seen the consequences of bailing out banks or even whole countries in the EU it doesn't solve any problems the debt problem in the west in Europe, in Greece, in Italy is as bad as it was if not worse none of this has really been paid off despite the years of austerity and all of the bailouts that have happened nothing's been solved and in the next financial crisis we'll have all the old problems re-emerging and the question of the break up of the EU the collapse of the Greek economy the Italian economy they will all re-emerge, nothing has been solved and in the process they have succeeded in creating a stagnant economy what they call zombie capitalism because all these firms that are unsustainable that should be going bust because of the liquidity that's been pumped into the economy by the central banks and the quantitative easing that we've seen over the past 10 years these firms that should have gone bust that are unproductive they've been kept alive because they get cheap credit basically and that has created a stagnant economy a low productivity economy which is a big problem for capitalism that is China's future if they go down that path and I'm sure the regime knows it on the other hand to do nothing would crash the economy probably it would lead to a massive collapse in the housing market and as I've explained the rise of that and the indebtedness and the links to the rest of the economy I think it would inevitably lead to a massive recession which has also has massive and serious consequences for the regime so the regime is kind of damned if it does and damned if it doesn't which of course is what happens with capitalist crises this crisis reveals the limits to the capitalist system and the end of the period of break net growth and seeming stability for the Chinese regime now there are many supporters on the left well maybe many is an exaggeration there are some supporters on the left throughout the world of the regime who basically say that the regime has a decades long plan to use capitalism or bits of capitalism to build up the economy and to lay the basis for socialism because of course you need, referring to Marx's theory that seems to be credible right, Marx said you need to have capitalism first before you have socialism you need to develop an urban economy a large proletariat and so that's what they've been doing and Xi Jinping with his turn to the left and his concentration of power in his hands he is the one who is going to return China to the planned economy and in fact there was even a blog post that was highlighted by the official media in China recently that was sort of hinting that this was happening and the fact that the state media promoted this blog post and shared it shows that they wanted to encourage that view now if this were correct and Xi Jinping were a communist surely this crisis that is taking place now would represent the perfect time to nationalise key sections of the economy not least Evergrande it would be the culminating point of decades of capitalist growth which have succeeded in creating a very very big working class the largest in the world easily an urban economy quite an advanced economy in certain respects one of the most advanced economies in the world it would be all of the basis for socialism surely has been laid by now and now we have a crisis of these greedy companies who are deeply unpopular in large layers of the population and Xi Jinping has concentrated unprecedented power in his hands it would be the perfect opportunity for him to come in expropriate Evergrande expropriate other similar companies and say we're moving back to socialism essentially but there's no evidence of this at all there's no suggestion that that is what's going to happen and in fact we look at the energy crisis that's also been afflicting China recently we can see the opposite movement so there have been some blackouts in parts of China in recent weeks because the price of coal has gone up so high for various reasons I won't go into because the price of coal has gone up so high there have been blackouts because the energy companies which operate according to profit they have a cap on how by law there's a cap on how much they can charge consumers so that working class Chinese people can afford to pay their bills but because of those price caps and the very high price of coal that they have to pay for to power their power stations a lot of them just switched their power stations off didn't buy any more coal and just switched them off rather than make a loss because they operate according to profit so what has the regime done has the regime stepped in and said that's outrageous Chinese working class people they need energy you're profiteering, we're going to nationalise you have they done that? No, in fact the plan is to liberalise the energy industry in China to remove those price caps so that working class Chinese people will pay more for their energy and profits can be made again and we won't see any more blackouts that is the plan so there's no evidence of this move towards socialism essentially now to what extent will this crisis should it fully unfold affect the rest of the world economy well I think there's no doubt it will be it will have a massive effect China's corporate debt is 31% of all corporate debt in the world which is the biggest proportion of world corporate debt which not only shows how much of a big chunk of the world economy China now represents but also shows how indebted the Chinese economy is if they make up such a vast proportion of corporate debt a credit crunch in China would have massive ramifications throughout the world now some say that this won't happen or at least it won't happen in a particularly bad fashion because of decoupling in other words in the recent period there's been a lot of protectionist measures think of trumps trade wars with China the attacks on Huawei blocking Huawei from installing 5G gear in most western economies these kinds of things these tariffs etc have kind of separated off China from the rest of the economy or at least from America and Europe so a crisis in China won't affect America or Europe that much is the thinking well those developments are very true and they're very important it is profoundly important that there's a rise in protectionism that has huge consequences for the world economy not good consequences by the way it's a sign of how unhealthy capitalism is that that is happening and it tends to drag down GDP globally in fact a reduction in trade however it shouldn't be overstated I think it's impossible to decouple China from the world economy it's far too important now it's far too deeply enmeshed in the world economy it's the it's share of global trade 13.6% is the highest in the world it represented 28% of all global growth between 2013 and 2018 double that of the US so you know it's far too important economy for that to happen in a significant enough way anyway and in fact earlier this year in the summer there was a survey by the European Chamber of Commerce of European companies European businesses that found that 60% of them plan to increase their investments into China up from 51% in 2020 the main reason being is more profitable to be in China and China seems to have recovered from the pandemic more than other countries essentially so you had to be there if you want to make money I think some of that won't materialise because of the crisis and because of the ongoing protectionist measures against China etc so I'm not saying this increased investment will necessarily take place but the fact that that was thought to be the case only a few months ago shows how key, how vital China is for the health of world capitalism how much of a chunk of the profits that world capitalism makes take place in China and therefore again a crisis in China will have enormous ramifications decades of growth in the Chinese economy on a capitalist basis yes they have raised living standards there's absolutely no doubt about that they've also massively raised inequality in fact China was one of the most equal societies in the world back in the 70s it is now thought to be one of the most unequal societies in the world in fact it has a higher Gini coefficient which is a measure of inequality than the USA and Britain it has about as many billionaires as the United States and it's the equivalent of its parliament the national people's congress the top 20 members of it in other words the equivalent of MPs the top 20 richest MPs effectively in China are worth 534 billion dollars far, far richer than the equivalent in the US or in Britain over the last year the Huron rich list the list of the richest Chinese people the wealth of the people on that increased by 24% it is becoming an ever more despite Xi Jinping's seeming shift to the left it's becoming more and more unequal society so it's no surprise that these thoughts dominate they really dog every sort of the regime which is obsessed with this question of inequality now in January Xi Jinping declared he said the following we cannot allow the gap between the rich and the poor to continue growing we cannot permit the wealth gap to become an unbridgeable guff comments like these have given him help to give him something of this reputation for being a communist I should say that it's not exactly the most radical of statements we shouldn't allow the gap to keep on growing we shouldn't allow it to become too bad essentially is what he's saying it's not really a sign it's not really a Leninist call to arms to be honest it's just a sign that they're very concerned about the effects on stability that this will have on Chinese society and therefore for their regime essentially and this has led to a big rise I think in class consciousness though of course there's no easy way to measure that although the website China Labour bulletin does try to measure the rate of strikes strike rates in China seem to go up all the time but there does seem to be a profound alienation amongst Chinese people certainly young Chinese people quite similar to what we see in the west I mean this growth that's been taking place over the last 12 years for example thanks to the fiscal stimulus as I mentioned yes it has given out jobs obviously it has also raised the cost of living some big Chinese cities are some of the most expensive cities to live in in the world and that has created a profound alienation amongst young Chinese people then if you're aware of this phenomenon of lying flat which spread throughout on the internet amongst young Chinese people basically an idea of a kind of an expression of hopelessness essentially that rejection of the system but the inability to organise in any way to fight back because of the nature of the regime so you have this idea of lying flat giving up they see everything as a rat race this horrible kind of rat race to succeed and it's exhausting so there's many indications of this but the biggest indication of it is the response of the regime itself there is sort of and I will come on to this in a moment it is presenting itself to the left and it's clearly deeply worried about inequality and that shows they know what's going on they study what's going on very very closely that there is an enormous amount of discontent and class consciousness is increased not just by inequality but by the increase in inequality the rate of that increase in China as compared to any other country pretty much is staggering and there is a perception in China that this is a communist country and that our communism has been betrayed essentially we have fake communists in charge and the rich have gotten rich by foul means by means of corruption and it's not just kind of natural they've been good at their jobs kind of thing which some people of course in the west do believe but there is this idea that this is inherently corrupt all of this obscene wealth that we have I also think I won't go out of time to go into these questions but I also think that the inequality and the discontent that they are worried about is partly behind the tensions with Taiwan and the other kind of you know it's an enormous amount of fear of China basically in the west and the press is obsessed with China to be honest and what it's doing in all these countries and it's military exploits it's building islands in the South China Sea flexing its muscles and in particular over Taiwan with all of these I don't know if you're aware but flying planes over Taiwan trying to intimidate the government is what we hear about in the west it's hyped up but the way it's described is purely that China is a bully and China thinks it can get what it wants I think the more important factor is the need to increase national chauvinism as a distraction from the problems at home they're aware of what's going on they're aware of the problems in the economy how could they not be and they're trying to hype up nationalism and the idea that we're on a sort of long crusade against the west who've held us down and this is our mission you can't give up now kind of thing that's the kind of story that they're trying to create they're trying to sell to the Chinese people and I think that's a big part of the reason for these tensions in particular with Taiwan but on this question of the regime itself and the nature of it and what it's doing why it's sort of seeming to make all these southern left statements or attacking the rich and what does it mean I think it's an attempt to maneuver in advance of an outbreak of class struggle of strikes of mass protests and to establish the idea that this regime is on the side of the ordinary Chinese people to cement an advance of such a movement that we are opposed to the rich and we're prepared to take action against the rich that is what they're trying to establish in the minds of working class Chinese people I should also say that whilst here we hear about all of these things in a kind of slightly scandalous fashion the attack on Jack Ma for example and this sort of all sounds quite dramatic at the same time for every attack like this there is a corresponding reassurance to the bourgeoisie within China that isn't really reported over here for example on the September the 6th Liu Hei, the Deputy Prime Minister tried to reassure private business people and I quote saying that he said their endeavours were critical to the country's economy shortly after the slogan of common prosperity was launched that is the main kind of policy at the moment of Xi Jinping, the idea that we need to build a society that is not too unequal so we need common prosperity but shortly after that was announced the party took the time to reassure the capitalist class that common prosperity will not be achieved and I quote by robbing the rich that's their words we will not rob the rich in order to build common prosperity so they are attempting to say they are attempting to please two classes essentially is what they are trying to do and what this demonstrates is the nature of this regime which is to say that it is a Bonaparteist regime it's a regime which balances between the classes essentially it is not controlled by the capitalist class like the regimes of the West are or even that has begun to fray in recent years but they are not really controlled by the capitalist class but they do defend capitalism and in fact many of them are themselves very rich they are capitalists themselves but the Chinese state operators have a great degree of independence over individual capitalists and that's because of the way capitalism was introduced into China it was introduced by the state the state nurtured and developed capitalism the Chinese capitalist owe their existence to the Chinese state which has gradually built up into becoming the relatively rich and powerful class that it is today and that goes back to the nature of Stalinism itself which Trotsky explained that the bureaucracy of a Stalinist regime is not a feature of socialism but is a threat to it because at the end of the day they are interested in their power and their privileges and are mentally interested in and therefore if they are surrounded on a world stage by more rich more powerful more technologically advanced countries like the United States or Japan this would always be a temptation for them maybe we can establish similar property rights over here and become rich ourselves or maybe we can just open up the economy a little bit to their investment gain access to their technology and yes of course get a bit rich in the process and make our society more advanced essentially that is or was what their thinking was and they thought that they could control the process I don't think that they necessarily intended to create a full fledged capitalist economy I don't think it was necessarily with that degree of foresight what they wanted was the investment and the technology and they thought that they could control and master that process but this seemingly all powerful regime is discovering that actually there is something more powerful still and that is the contradictions of the capitalist economy that if you develop capitalism capitalism becomes the predominant mode of production in your economy you cannot avoid the crisis of capitalism you know if you accept capitalism you have to accept the laws of capitalism now the regime is obsessed with stability that is well known that is their watchword stability stability stability and you can see many signs of them attempting to maneuver in advance as I've explained the recent shift to the left in words at least and in policy to some extent is an attempt to do that there's many other signs of it in 2015 de Tocqueville's The Old Regime and the Revolution the famous account of the French Revolution and why it happened basically was made required reading for all high-ranking party members what does that mean why was that made required reading because they are anticipating revolutionary crisis within Chinese society and they want to prepare for it or they want to prevent it from happening even with the right kind of policies last year Xi Jinping also specifically cited Thomas Piketty's Capital in the 21st century as a warning to the consequences of excessive inequality and they've looked at the experience of the west over the past 10 years and the rise in populism the polarisation of politics the massive discontent and they've drawn the conclusion that that's due to the economic crisis it's due to inequality and therefore that's a warning sign for us and we need to move now to correct those things from getting out of control so that we don't get overthrown ourselves that is essentially what is going on but as I said if you accept capitalism to accept the laws of capitalism there's no magical recipe by means of which you can maintain permanent stability and economic growth under capitalism not least because you're in a world economy so there's only so much you can even control economically speaking anyway there is a limit to how much you can do and yes you can keep the ball rolling for a while with a fiscal stimulus but then that will only build up more problems for the future you cannot maintain stability under capitalism forever and you cannot cancel the class struggle the class struggle will always reassert itself because capitalism is based upon the exploitation of the working class so they're walking a tightrope and they won't be able to maintain balance forever the crisis of capitalism will catch up with the regime in fact I would argue it probably already has caught up with it and that crisis when it fully blows up will transform China and of course the world not just for the past 12 years since the financial crisis but actually for the past 30 years the world market has depended upon China I think that a world crisis of capitalism was delayed because of the entry of China into the world economy it gave it another lease of life the cheap labour that could be exploited and then the growing market that things could also be sold to that has given capitalism a big shot in the arm and kept it going at least until 2008 and then of course that crisis as I said was limited by thanks to the intervention of the Chinese state with the fiscal stimulus but I think that's used up now and the main point of the future is not going to be like the past China's not going to have another 30 years like this and neither will world capitalism and it's just another sign that we are entering into an era of turbulence and class struggle