July 6, 2026
There is much confusion when various Americans describe the tensions between mainland China and Taiwan. There are those that view China as socialist or communist, which they may like or dislike, and others who recognize that current day China is a capitalist state, albeit with a good deal of state control. Then there are many who view Taiwan as an outpost of capitalism, and or democracy, that should be defended, or not, against annexation by China. We on this blog have made clear that we do not believe China is red any longer (https://multiracialunity.org/2023/08/31/if-china-is-red-revolution-is-dead/), and that its interests in Taiwan involve control of important sea lanes and crippling the US, which is still highly dependent on its chip manufacturing. Nor do we believe that Taiwan is anything other than a capitalist country that is characterized by exploitation, inequality and racism, like all capitalist societies.
Most importantly, the dynamics of inter-imperialist rivalry dictate that the contest for the world’s resources and monetary control between the largest rival blocs, now the US and China and their allies, will eventually become militarized, as happened in two world wars already. Smaller conflicts, such as those over Iran or Ukraine, will eventually give rise to direct and larger wars, be it in a planned or accidental manner. But in any case, the result may well be nuclear war and the destruction of much of the planet and its people.
Our only hope of avoiding such disaster is that all the workers of the world recognize that these battles between their bosses are against their interests and refuse to fight them. Moreover, we must recognize that it is capitalism and the deadly competition it engenders that leads to wars, climate change, epidemics, poverty and misery for millions. Thus our only path to survival, survival where our own wellbeing is maximized, is to unite internationally as a class and forswear all loyalty to all capitalist rulers. We must not be caught up in taking sides between various capitalist entities.
In this article we will attempt to explain the capitalist nature of China and Taiwan and why we should not be choosing between them, but attempting to unite with workers in both countries in anti-capitalist struggle.
China
In our previous discussion of China we made clear that production is for goods to be sold at a profit, not based on workers’ needs, as would be the case in a communist society, and workers are treated as commodities and a means to making profits. 60% of China’s output comes from the private sector, although the state does play a major role in regulating private capital and in industrial planning. This system has encouraged huge levels of corruption, in which capitalists offer high-stakes rewards to powerful officials in exchange not just for contractual speed, but also for access to exclusive, lucrative privileges, including cheap credit, land grants, monopoly rights, procurement contracts, tax breaks, and the like.1 U.S. intelligence says Xi Jinping and his family have $1 billion in assets, and that 65% of all government officials receive income through bribery or graft.2
Perhaps most telling is how China treats its own 725 million workers. Each worker must have an officially registered household location, and anyone living outside this area forsakes many social services. Nonetheless, about 300 million rural workers have migrated to the cities seeking work and face discrimination in housing, employment, health care and education. Even for urban workers who do have health insurance it has very limited coverage for out-patient care or medications.Schooling is free for only nine years and unavailable to migrants. For the past 30 years there have been many labor strikes, in which the police always intervene to suppress the workers. The legal right to strike was removed in 1982, and the only legal union today is one run by the Communist Party.3 Wages are on average about one fourth of those in the US, and, although it is illegal, many workers are required to work 12 hour days, 6 days a week.4
China is also steadily overtaking the US in goods manufacturing. In 2024 it produced 26% of world industrial output, nearly double that of the U.S., while their export of manufactured goods was almost triple that of the U.S.5 China’s outward foreign direct investment was 12% of the global total, including about 52,000 foreign enterprises controlled or created by Chinese investors in 190 countries. Much of the over $3 trillion foreign capital that China controls passes through tax havens like offshore holding companies, that have indirect ownership, or corporate opacity, just like other imperialist nations.6 Moreover, China dominates the world’s supply chains of minerals needed to produce “clean” energy – electric car batteries, solar panels, cell phones, and other electronics – accounting for 60% of world-wide production and 85% of processing capacity.
In addition to mining its own resources, China is well entrenched in Africa and is dominant in Democratic Republic of Congo (DRC), Guinea, Zambia, South Africa, Zimbabwe. In DRC, over 40,000 children dig cobalt, lithium and other rare earth elements out of the earth with their hands and shovels and many die every year from accidents and the effects of pollution and poverty. DRC supplies 70% of the world’s cobalt, and China either owns or has a stake in nearly all the mines. In the Central African Republic (CAR) many people die from mercury poisoning related to Chinese gold mining.7 China also owns 50 factories in Indonesia, and invests in mining and manufacturing in Peru, Argentina, Bolivia, Brazil, Chile, Colombia, Ecuador, Mexico, and (until recently) Venezuela.
China has established a new financial bloc, BRICS, originally involving Brazil, Russia, India and South Africa, but now also including the authoritarian nations Egypt, Indonesia, Ethiopia, Iran and the UAE. Many other Asian, African and Latin American countries have lesser “partner” status. BRICS’ major aim is to reduce dependency on the dollar as the world’s reserve currency and engine of trade and replace it with the Chinese renminbi, although the dollar still finances 80% of international transactions.8
China has increased its military budget 13-fold in the last 30 years. The navy now has more ships than the US and is increasingly able to perform missions outside the Indo-Pacific island chain. The air force has the world’s largest arsenal of ballistic missiles, 600 nuclear warheads and hundreds of military use satellites. Just today, July 6, they launched a long range ballistic missile from a submarine9 and sent heavily armed Coast Guard vessels to patrol the South China Sea.10 China’s main weakness is that it has not fought a war in recent times, but they now estimate they could take over Taiwan military within a few years if they wished..11 Of course, much would depend on whether the US would militarily oppose such a move.
Taiwan12
The Past
Through the early 1600s, Taiwan was inhabited by an indigenous Austronesian population, until European colonial powers came to see it as useful for international trade. The Dutch moved in in 1624, after displacing the Spanish, and imported rural Chinese as farm workers and soldiers. As the natives resisted, they were displaced and their land taken to produce rice, sugar and other crops. In the 1660s, successive Chinese dynasties pushed out the Dutch and imported more Chinese workers to produce crops for export to China. In 1895, the Chinese lost the Sino-Japanese war and Japan took over Taiwan. They expanded and modernized Taiwan’s farming, mining and transport and succeeded in suppressing the persistent indigenous resistance.
During World War II, the western allies decided to turn Taiwan back to the anti-communist Chinese Kuomintang under Chang Kai-shek (KMT), even as the conflict between the Chinese Communists and the KMT escalated. The Taiwanese people had no say, but generally did not prefer the KMT to the Japanese, under whom a self-determination movement had grown. In 1949, the KMT lost the war against the Chinese Communist Party (CCP) on the mainland, and about 1.2 million of their adherents fled to Taiwan, where they maintained authoritarian rule over the population that was now about eight million.
After the Korean War, the US financed further industrialization and export of goods in Taiwan. By the 1980s, the supply of workers willing to work in factories was nearly used up, leading to a wave of labor demands. This led to hiring low wage workers from Asia, increasing mechanization, and building new industries like that for semiconductors. Many companies also moved their companies to the Chinese mainland in search of lower wage costs. While this was at first illegal, it eventually became tolerated and was supported by subsidies from the CCP. Taiwan’s economy now ranks 22nd in the world.
As in all capitalist economies, racism and sexism played a big role in Taiwan. Under Japanese rule, Japanese had the best jobs and wages, and under the KMT, it was the mainland Chinese. Rural women and indigenous workers were always at the bottom, a position shared with immigrant workers today. The official guest worker program today strictly limits how long workers can stay and limits them to the most undesirable and low wage jobs.
In the late 1970s, the mostly middle class Democratic Progressive Party (DPP) was founded, largely in opposition to systematic discrimination against the Taiwanese population, and represents the interests of capitalists who are invested in Taiwan, while the KMT represents capitalists who are invested in China. The Wild Lily Student Movement of the 1990s demanded elections of a parliament and presidency, and the first election in 1996 was won by the KMT leader, Lee Teng-hui.
The Present
Since Xi Jinping took over China in 2012 and its economic power rapidly expanded, many Taiwanese were worried about increased financial and political control of their island. The DPP took power in 2016 with a nationalist line, but even the youthful Sunflower Movement has focused the independence of Taiwan and not on capitalist exploitation or its racist nature. Meanwhile, China’s growth as a world power has meant its increased interest in control of access to the Pacific and the Taiwan Strait, now an important global trade route, and opposition to Taiwan’s alliance with the US.
US relations with China, and thus Taiwan, have fluctuated in the last 50 years. Nixon, and then Carter, aimed to ally with China against the USSR in the 1970s, and the US reduced its forces on the island. However, Congress then passed an act mandating the US supply defensive weapons to Taiwan. This ambiguity persists to this day. Meanwhile, to date, China offers the island some autonomy and the ability to maintain its own form of capitalism.
The Future
As China’s military strength increases it is likely to be able to take over Taiwan by force. The second question is to what extent the US, still dependent on Taiwanese semiconductors, would come to its defense. With its allies in India, Australia and Japan, US military bases are being expanded. At the moment, the interdependency of the economies of the US, Taiwan, China may hold off open conflict. However, the basic road to conflict competing imperialist giants has not changed. If the war on Iran reignites, as is likely, it may become more critical in China’s need for Mideast oil, which may be one path to wider conflict.
In any case, our task is to recognize that all nations in the world today are capitalist, capitalists who compete against one another in war and peace. We owe none of them our loyalty. Wherever we may be, let us build a workers’ movement for a society we control in our interests – a communist society – and unite with our international class allies to do so.
1. https://www.chinadebate.com/chinamacroreporter/how-corruption-powers-chinas-economy
3. spectrejournal.com/why-china-is- capitalist/
4. https://wage.is/china/vs/united-states/
5. https://x.com/econovisuals/status/1947272850890797345
6.https://www.facebook.com/groups/457920714226660/posts/27202332456025456/
8. https://www.cfr.org/backgrounders/what-brics-group-and-why-it-expanding
10. https://www.nytimes.com/2026/07/05/world/asia/china-taiwan-east-coast-guard-patrols.html
11. https://www.csis.org/analysis/chinas-military-10-charts
12. The entire section on Taiwan is based on this comprehensive article: https://spectrejournal.com/what-everyone-on-the-left-should-know-about-taiwan-at-the-minimum/)