Book Review: The Rise of China and the Demise of the Capitalist World Economy by Minqi Li

by tigermanifesto


Most of the rhetoric around the rise of China in the West is either pure demagoguery calling Chinese workers job thieves or the intertwining discourses about China’s inevitable world takeover or inevitable decline. As Li points out in the second paragraph of his book, The Rise of China is more about “the ‘demise of the capitalist world economy’ than ‘the rise of China.'”¹ Drawing primarily on Marxist economic thought and world systems theorists like Wallerstein and Arrighi, Li’s book explores the implications of China’s rise on the capitalist world economy as a whole. As for his conclusions in that regard, he tips his hand from the title onward: the prospects for global capitalism in the twenty-first century are not good, and the rise of China represents only one of the insurmountable obstacles he sees in its future.

To establish why China poses such an existential threat to the smooth operation of the global capitalist system, Li first has to properly grasp the internal reasons for China’s rapid ascent since 1989. Unlike most authors on this issue, Li pins the primary reasons for China’s succeeding where most peripheral Third World countries have failed on the achievements of the Mao era. From 1949-1976, the Communists oversaw the industrialization of the country, rapid advances in health care, education, and standards of living, and the creation of a powerful  nation-state capable of imposing its will on economic activity.

Revolutionary China was quite successful at accumulating capital  in isolation from the world market, protected from the distorting influences of being relegated to a reserve of cheap labour and resource extraction––well, at least until the reform era––and able to develop a strong and independent industrial base. He certainly offers a left critique of the Chinese party-state during this time, noting the creation of a new bourgeois technocratic class and the failure of the Cultural Revolution in dissipating the threat they posed. He also criticizes the Great Leap Forward for being an overambitious failure of policy while refuting claims (à la Jung Chang and Halliday) that it was some human-engineered act of madness or “the largest famine in history.” In Li’s estimation, though China’s communists succeeded in creating a modern state and establishing general social welfare and capital accumulation, they failed in the intense class struggles that developed after the revolution despite the Cultural Revolution––and, in many cases, because of the mismanagement of the CR itself.

He then engages in an analysis of the class system of China after the Deng Xiaoping reforms and in particular in the wake of privatization and liberalization in the 1990s. He concludes that, despite all the fuss over the rise of China’s entrepreneurial and middle classes, the most dramatic shift in China’s demographics has been the decline in the rural peasantry and the rise of an increasingly organized and dense industrial proletariat. Given the history of labour movements, he concludes that this means the Chinese working class will grow more and more conscious and active within China, able to challenge capital for at least a larger share of the immense wealth accumulated in the country each year.

Still, that material is only background for the true purpose of the book, which is to explain why the capitalist world system will be unable to accommodate a China that demands even middle-country status. For Li, it’s all about population, as China “has a labor force that is larger than the total labor force in all of the core states.”² China’s sheer size and the number of proletarian workers there who are currently agitating more and more for greater wages and higher living standards means that the global economic system will struggle to accommodate these demands in its current form. Given the environmental limits on the amount of energy use and capital accumulation that exist, Li argues, there is a hard limit on capital’s ability to expand geographically to cover up its weaknesses. Given only one Earth, he concludes, the rise of China (and India) will mean the inevitable collapse of the current capitalist system, though its replacement by a socialist/communist world system is far from inevitable.

Though the book ends on something of a grim note––and makes some potentially Malthusian comments about the inevitability of a collapse in the human population that could be taken badly out of context––Li, as a Marxist, does not simply concede global society to oblivion. He does, however, believe that capitalism will end, for good or bad, by around the middle of this coming century. His work is both a timely warning and a call to action for those who want to found a human society free of want, and accomplishes all the above while being readable and quite brief. I would eventually like to see a fuller elaboration of his theses––and Robert Biel has produced something more systematic in this vein––but Rise of China has an undeniable relevance to our current moment and a reminder of the inevitability of change, demanding that we take charge of its direction.


  1. Minqi Li, The Rise of China and the Demise of the Capitalist World Economy (New York: Monthly Review Press, 2008), ix.
  2. Ibid, 109.