As the U.S. Withdraws From Afghanistan, China Forges Ties With the Taliban

Toward Freedom welcomed Jacqueline Luqman onto the board of directors on March 17. Jacqueline brings a background in activism and in journalism, and describes herself as a “Pan-Africanist, anti-capitalist, anti-imperialist revolutionary.” Jacqueline co-hosts the weekday radio show, “By Any Means Necessary,” on Radio Sputnik as well as the weekly Black Power Media show, “Luqman Nation.” She also is the organizer of the Mid-Atlantic Region of the Black Alliance for Peace and is an organizer with Pan-African Community Action. Besides all that, Jacqueline is the moderator and member of the Board of Social Action of the Plymouth Congregational United Church of Christ in Washington, D.C.

Here’s what Jacqueline told Toward Freedom’s editor, Julie Varughese.

What got you interested in joining Toward Freedom’s board of directors?

I enjoyed the content of the publication and particularly like how Toward Freedom incorporates entertainment critique with political commentary.

Your background is in activism and in journalism. How do you reconcile what are normally seen as mutually exclusive endeavors?

Activism is the response to issues being reported in the news that are the result of politics and policies. Activism is the response to the injustice of those politics and policies on communities that have little to no say in how those policies are made. So reporting on the impact of those policies and politics on the people in the streets is a necessary aspect of activism, as it connects people who are doing the work with many who may not know what is even going on.

Tell us about Bruskie.

He is my 10-year-old furbaby. He thinks he is a person. He may be channeling my late husband, Abdus. But he is a complete 100-pound clown and big baby. He also is a very good Protest Dog, except when other people’s dogs are around, and then he forgets that he’s supposed to be Comrade To All Man and Dogkind. He’s working on that.

What is the next big story Toward Freedom should try to pursue?

The impact the war in Ukraine has had on de-prioritizing the U.S. dollar in developing countries in Africa; multi-polar solidarity among Global South and African nations, and in and between working-class movements in those countries; as well as the role of China as the new leader of the multi-polar world and what that means to the international working class.

On February 25, 2021, Chinese President Xi Jinping announced his country of 1.4 billion people had pulled its people out of poverty as it is defined internationally. Since 1981, 853 million Chinese people have lifted themselves out of poverty thanks to large-scale interventions from both the Chinese state and the Communist Party of China (CPC); according to the data of the World Bank, three out of four people worldwide who were lifted out of poverty live in China. “No country has been able to lift hundreds of millions of people out of poverty in such a short time,” Xi said.

When UN Secretary-General António Guterres visited China in September 2019, he gushed over this accomplishment, calling it the “greatest anti-poverty achievement in history.”

“You reduced infant and maternal mortality rates, improved nutrition, reduced stunting and halved the proportion of the population without access to safe drinking water and sanitation,” Guterres said.

In 1949, at the time of the Chinese Revolution, the infant mortality rate in China was 200 per 1,000 live births; this declined to fewer than 50 by 1980. A World Bank study from 1988 noted, “Much of China’s success in improving the health of its people can be attributed to the health policies and the national health service delivery system.”

This is the historical context for Secretary Guterres’ 2019 comment; in other words, the Chinese state institutions—products of the revolution led by the CPC—improved the social conditions of life.

Before the Revolution

In 1949, China was one of the world’s poorest countries. Only 10 countries had a lower per capita GDP than China. Chairman Mao Zedong’s famous words at the inauguration of the People’s Republic of China—“The Chinese people have stood up”—is a reflection of a century of humiliations that produced terrible poverty in the country.

The degree of this national suffering may be seen in the fact that between 1840 and 1949 almost 100 million Chinese people died in wars, which directly resulted from foreign intervention, or were victims of civil wars and famines related to those interventions. China had suffered the longest Second World War, from 1937 to 1945 (with a civil war following that lasted until 1949); the death toll was at least 14 million (as documented by Rana Mitter in his book, Forgotten Ally: China’s World War II, 1937-1945). From the Opium Wars beginning in 1839 to the Japanese invasion in 1931, China struggled to establish its sovereignty and its future.

It was the terrible burden of this past that brought together a range of radicals to establish the CPC in July 1921 in Shanghai. The small group of 13—including Mao—met in Shanghai’s French Concession and then on a tourist boat on Nanhu Lake after the foreign police came for them on the information of a spy. The principal task of the CPC was to organize and guide the working class. By May Day 1924, 100,000 workers marched in Shanghai, while 200,000 workers marched in Canton. “The time is past when workers are only cannon fodder for the bosses,” the workers wrote in a leaflet. The CPC threw itself into these struggles, growing through setbacks—including the Shanghai Massacre of 1927; leadership by the CPC in the protracted, anti-imperialist war against Japan led it to eventual victory in 1949.

Phases of Socialist Construction

The Chinese Revolution had to confront a broken state, a destroyed economy and a society in deep turmoil. In 1949, China’s people lived three years less than the world average. They were less well-educated and deeply unhealthy. By 1978, they lived five years longer than the world average. Literacy rates had risen, and health care data showed a marked improvement. As China in 1978 was 22 percent of the world’s population, never in human history had such an immense step forward taken place.

From 1978, with the introduction of “reform and opening up,” China achieved the fastest economic growth ever calculated by a major country in recorded history. From 1978 to 2020, China’s annual average GDP growth was 9.2 percent. Since 1978, China’s household consumption has increased by 1,800 percent, twice that of any major country. This means that everyday life has improved markedly in China. China’s literacy rate is now 97.33 percent, up from 95.92 percent in 2010, far above the literacy rate of 20 percent in 1949.

By 2025, China will become a “high-income” economy by World Bank international standards, according to Justin Lin Yifu (a standing committee member of the Chinese People’s Political Consultative Conference National Committee, and dean and professor at the Institute of New Structural Economics of Peking University). That is, in about 75 years, a single lifetime, China will have gone from almost the world’s poorest country to a high-income economy—with all the enormous improvement in human living standards, life expectancy, education, culture and numerous other dimensions of human welfare this results in.

With a handful of people founding the Chinese Communist Party 100 years ago, the Chinese people gained a leadership body that could deliver them from a struggle that dates back to 1839. Now, the CPC will play a decisive role in determining the fate not only of China but of the world. This historical context is too often lost when Western media and politicians play down China’s socioeconomic victories or imply they came out of nowhere. China’s people have fought for this outcome for centuries.

This article was produced by Globetrotter.

Vijay Prashad is an Indian historian, editor and journalist. He is a writing fellow and chief correspondent at Globetrotter. He is the chief editor of LeftWord Books and the director of Tricontinental: Institute for Social Research. He is a senior non-resident fellow at Chongyang Institute for Financial Studies, Renmin University of China. He has written more than 20 books, including The Darker Nations and The Poorer Nations. His latest book is Washington Bullets, with an introduction by Evo Morales Ayma.

John Ross is a senior fellow at Chongyang Institute for Financial Studies, Renmin University of China. His writing on the Chinese and U.S. economies and geopolitics has been published widely online, and he is the author of two books published in China, Don’t Misunderstand China’s Economy and The Great Chess Game. His most recent book is China’s Great Road: Lessons for Marxist Theory and Socialist Practices (1804 Books, 2021). He was previously director of economic policy for the mayor of London.

With the United States imposing technology sanctions on China, the world’s electronics industry is facing turbulent times. After the sanctions, Huawei has slipped from its number one slot as a mobile phone supplier—which the company held during the second quarter of 2020—to number seven currently. Commenting on this slide, Huawei’s rotating chairman Guo Ping has said that the company’s battle is for survival right now. According to Reuters, Guo in a note circulated internally maintained that Huawei “will not give up and plans to eventually return to the industry’s ‘throne.’” On that count, Huawei is not only surviving but doing quite well. It is still the world leader in the telecom equipment market with a hefty 31 percent revenue share, which is twice that of its nearest competitors Nokia and Ericsson, and profits of nearly $50 billion in the first six months of 2021. But will Huawei be able to retain its market position without China catching up with the latest developments in chip manufacturing and design technologies?

It is not just the Chinese companies alone that are facing tough times. With growing chip wars between the United States and China, the global supply chain for electronic chips has been affected, leading to chip shortages across several sectors. Semiconductor chips are used in almost every product, from household equipment—microwave ovens and toasters—to the automotive and defense industries. The auto industry’s biggest bottleneck today is the chip shortage, which has badly hit their production. If the chip wars continue, the crisis of the chip shortage may affect other industries as well.

This crisis, meanwhile, has raised several questions: Is the crisis of the semiconductor industry the precursor to the fragmentation of the global supply chains? Will it lead to warring blocks, with the United States at one pole and China at the other? With this fragility of the supply chain, are we seeing the end of globalization as a paradigm?

The electronics industry is one of the most capital-intensive and research-and-development-intensive industries. No other industry has this characteristic. Power or steel plants are capital-intensive; pharmaceuticals are R&D-intensive. But no other industry is both. ASML, a little-known Dutch company that produces the lithographic machines for chip manufacturing, is worth more than Volkswagen, the world’s largest car manufacturer. This is due to the high R&D costs of ASML’s lithographic machines: it is the only company that can deliver the machines that the most advanced chips require. In order for a new fabrication facility to make the new generation of chips today, it will cost $20 billion, which is more than the cost of an aircraft carrier or a nuclear plant. Only two fabricators, Taiwan Semiconductor Manufacturing Company (TSMC) and Samsung, have the capability to produce the most advanced chips that the industry uses.

The United States and China compete in areas such as artificial intelligence, computers, mobile networks and phones. The basic building block for all these technologies is semiconductor chips. The more circuity we can pack into a chip, the more computing power it has. The bulk of the market consists of older fabricators using 180 nm to 28 nm level technologies, with only 2 percent of the chips below the 10 nm level. The only fabricators that can make such chips are TSMC and Samsung, the world’s largest chip fabricators. Semiconductor Manufacturing International Corporation (SMIC) of China, the third-largest chip fabricator globally, has only recently moved from the 28 nm level to the 14 nm level. With Chinese government support, SMIC is investing in production lines that can go below 14 nm. Intel, once the world leader in chip manufacturing, is still stuck at the 14 nm level. However, it also has plans for developing the next generation of chips.

The United States has chosen the electronics/semiconductor industry as a battleground for its geostrategic competition with China. It believes that it has a significant technology lead and commands a major market share in this industry. China is a late entrant here. Though it has a comparable market share to that of the United States, it still depends on certain core technologies. The United States and its allies—the European Union, Japan and South Korea—control these core technologies. That is why the United States has chosen Huawei and SMIC, two major Chinese players in the technology and the semiconductor industry respectively, as its target for sanctions. The United States has put more than 250 Chinese companies on the entities list, which require a special license to import equipment or components. However, it is not a blanket ban.

The United States is following up on its sanctions against Huawei and SMIC with a plan to bar China from what it calls “foundational technologies” under its 2018 Export Control Reform Act. The argument that the United States is building is a simple one: they are ahead of China in certain critical technologies required for advanced chip manufacturing; all they have to do to maintain this lead is to deny China access to these technologies; this will ensure the United States lead for the future and its dominance over the electronics industry.

John Verwey, an investment analyst who writes about semiconductor technology on his website Semi-Literate, discusses what can be considered a foundational technology in the electronics industry. At first sight, chip-making could appear as a foundational technology and the target of U.S. sanctions. This is what the United States did when it barred Huawei from buying the latest 7 nm scale chips from TSMC.

SMIC then tried to set up its fabrication line for 7 nm chips and needed to import extreme ultraviolet (EUV) lithography machines from ASML, each costing around $120 million to $150 million. These lithographic machines are the critical part of the production lines of chip fabrication. Though the EUV machines are from the Netherlands, they use software developed in ASML’s U.S. subsidiary and therefore they fall under the U.S. sanctions regime.

The U.S. sanctions mean that ASML cannot sell the EUV lithography machines to China, though it can sell other lithographic machines for lower-end chip production, keeping China out of the high-end under-10-nm technology, and, therefore, a generation or two behind the market leaders.

This brings us to the question of how to define foundational technology. Though chips are the key driver of electronics, they are not as foundational as the machines that produce them. A country at the cutting edge of technology needs to master the technology of chip production and the machines that run such production lines. That is why ASML’s lithography machines are the bottleneck for China.

What then drives the advances in key technologies of the machines and chip production? As Marxists know, knowledge drives the productive forces—in this case, the advances in chip design. This knowledge is captured in the software design tools and the lithography machines. They are both highly knowledge-intensive and require people with very specialized skills.

The United States and its universities are still the major source of knowledge development, the key to the advances in this sector. But here is the long-term problem facing the nation: The research programs of the U.S. universities are mostly staffed by international students, with the bulk of them from China, India and other developing countries. Many of them stay back in the United States and provide the human power required for the advances in knowledge that the United States has today.

If Chinese students and researchers are not welcome in the United States, this source of knowledge development will weaken. Unfortunately, countries like India do not have high-quality education institutions and research laboratories to be a substitute for the stream of Chinese students who enter U.S. universities. China has invested heavily in its universities and research institutions and produces more Ph.D.s in science and technology today than the United States. It is also building a pipeline of innovations from the universities/research institutions to the technology industry.

China is the biggest market for the U.S. semiconductor industry’s chip designs and design software. The U.S. companies also design high-end chips, which are then manufactured in Taiwan and China. In the short run, the U.S. sanctions will damage China’s advanced chip production and the production of electronic devices based on such chips. But it will also mean that the U.S. companies will lose a significant part of the revenues that they now receive from the Chinese market from the sale of their design tools. It will also lead to a loss of revenue for advanced chips that the U.S. companies like Qualcomm and Nvidia design and then manufacture in Taiwan’s TSMC.

For the high-tech U.S. companies, the loss of this income means less money for their R&D and the slow erosion of the country’s position as the global knowledge hub. Suppose the U.S. companies lose the Chinese market and, therefore, a significant part of their revenues. In that case, it will seriously affect their ability to compete in the future. In the short run, they may gain, as they are doing with Huawei losing its number one spot in smartphones. But still, the loss of revenues will mean less ability to produce the knowledge that gives the United States its edge in technology. Less money in research means an eventual loss of leadership because, unlike other countries, the United States increasingly does not produce the chips or the machines, but the knowledge that goes into both of them.

This is what the U.S. semiconductor industry has argued in its submission to the U.S. Department of Commerce. If the U.S. companies delink from the Chinese market, it will mean a significant loss of revenue for them. In the long run, it will lead to a loss of U.S. leadership in electronics. Already, the U.S. sanctions have led the Chinese companies to remove the U.S.-designed components from their product lines. Sanctions are double-edged: they hit Huawei and other Chinese companies and their U.S. suppliers.

How long will China take to erase the lead in semiconductor technologies that the United States and its allies have? Analysys Mason, a leading consulting company, says in its May 2021 report that China will be able to attain self-sufficiency in semiconductors in three to four years. The Boston Consulting Group and Semiconductor Industry Association have modeled the impact of breaking up the global supply chain of China and the United States delinking their supply chain and markets. The model predicts that with such a policy, the United States would still lose its leadership to China. According to the Semiconductor Industry Association, the only way that the United States can preserve its lead is to export to China, except in the strategic military sector. The United States can then use its profits from these exports for developing a new generation of technologies. Of course, the loss for not exporting in the strategic sector must be compensated with hefty subsidies from the U.S. government.

Meanwhile, India missed the semiconductor manufacturing bus when it decided not to rebuild Semiconductor Complex Limited its premiere chip-making facility in the city of Mohali, after it was destroyed in a mysterious fire in 1989. Its policymakers decided that India should leverage its strength in software and systems and not worry about manufacturing chips. Vinnie Mehta, formerly the executive director of the Manufacturers’ Association for Information Technology (MAIT), had said to Mint, “A nation without silicon (technology) is like a person without [a] heart.” That heart is still missing in India’s technology ecosystem.

If the United States wants to retain its position of being a world leader in the electronics industry, it has to match China by investing in the generation of knowledge for future technologies. Why, then, is the United States taking the sanctions route? Sanctions are simpler to implement; building a society that values knowledge is more difficult. This is the pathology of late capitalism.

This article was produced in partnership by Newsclick and Globetrotter.

Prabir Purkayastha is the founding editor of Newsclick.in, a digital media platform. He is an activist for science and the free software movement.