State Capital vs. Finance Capital: Why China is not -- and Cannot Become -- an Imperial Hegemon

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by Charhapiti
Published: 2025-11-20 (last update: 2025-11-21)
20-35 minutes

Tearing apart ultraleft arguments about the UN and Russian and Chinese imperialism.

The United Nations and the "Security Council"

Days ago, the People's Republic of China and the Russian Federation abstained from a UN "resolution" on Gaza, citing serious concerns about the "integrity of the Security Council" and failures of the document to defend the sovereignty of Palestinians. Russia and China's abstention (as opposed to veto) was a strategic move to avoid being seen as obstructing Gaza's stabilization while also refusing to endorse a U.S.-led plan they disagreed with, thus making the U.S. solely responsible for the plan's implementation. China and Russia used their explanatory statements to voice strong criticisms. Unfortunately, vetoing the "resolution" could prove equally disastrous, as: Can you imagine being held responsible for Palestinian genocide because you are the only two countries who blocked the "resolution" that gave colonizers the excuse to fully take over Palestine? Hence, the abstention and the criticism of the integrity of the security council. Further, the U.S. has significant influence in the security council to get their way.

Look, a veto by China or Russia would have been counterproductive and would not have changed the reality on the ground. Unfortunately, the alternative to the resolution was not, as if by magic, to establish a free Palestine; it was the total absence of a resolution, which would have left the United States and its allies completely free to act without the slightest international oversight or accountability. Meanwhile, the resolution was supported by most Arab and Islamic countries, including the State of Palestine and the four Muslim-majority countries that are currently non-permanent members of the Security Council: Algeria, Pakistan, Somalia, and Sierra Leone.

If China or Russia had exercised their veto, they would only have weakened their position vis-à-vis Arab and Islamic nations and, consequently, further strengthened that of the United States. During the seventy years since the Bandung Conference, China has worked tirelessly to build and maintain a united global front of newly independent and developing countries, despite the painful and difficult compromises that this sometimes entails. Moreover, a Chinese or Russian veto on this occasion would not have substantially deterred the United States or Israel from going ahead with their plans.

By abstaining, China and Russia expressed their disagreement with the resolution without undermining the overall international consensus or the possibility of lasting peace. As Fu Cong stated, the decision was made taking into account "the fragile and serious situation in Gaza, the urgent need to maintain the ceasefire, and the positions of the countries in the region and Palestine."

In the midst of this, some people on the Internet have spared not a second to decry Russia and China as imperialist, because they are permanent members of the Security Council. It bears an explanation of what the UN and the Security Council really are, and what imperialism is, because there is a deep level of illiteracy towards these subjects. The presence of countries as permanent members in the Security Council does not de facto make them imperialist countries, as their bureaucratic position is immaterial to their actual position relative to finance capital.

The UN-based "international cooperation" is bourgeois idealism. The idea that all these countries are equal parties to make agreements, even the permanent members of the security council, is naive and idealist. The purpose of the UN is as a tool to formalize the goals of finance capital (whose current form is in US imperialism), with all other countries being forced by group pressure to participate defensively due to the relative disadvantages that exclusion brings to each member country's national security and global stability. Their use of the Security Council is a manifestation of this defensive struggle against the hegemon, not the exercise of a comparable imperialism or even equal agency. To claim otherwise is to engage in a form of "anti-imperialism" that, in practice, objectively sides with the main enemy by blurring the lines and paralyzing effective resistance. The slight margin of being able to veto the U.S. is usually the reason that makes it worthwhile, but its utility is extremely limited relative to the appearance of the U.S. being a "good guy" for participating in these bureaucratic tricks. Nothing less than absolute mayhem can come about from the UN and the Security Council. The veneer of equality, the veneer of consensus, the veneer of consent, serves to smooth over the abject violence of finance capital.

The real enemy and the real motive force behind ALL events within the UN and the Security Council (I feel this is redundant) is....none other than finance capital. Everything else is a smokescreen.

Despite its appearance as some abstract inscrutable thing, finance capital is the most violent dangerous thing in the world.

What is finance capital?

Everyone needs to know and understand that imperialism is about finance capital, which emerged in the late 19th to early 20th century.

The very basic function of imperialism is domination through its weapon of finance capital.

This isn't just "money." It's the new, dominant form of capital where banks and industry are inseparably intertwined, creating a ruling oligarchy whose power is based on financial domination. The state becomes a tool for this oligarchy to project its power globally.

This is the primary economic mechanism of imperialism. It's not about selling goods, but about establishing a system of perpetual exploitation by owning the means of production in other countries. This creates a world divided into a handful of creditor (exploiter) nations and a vast majority of debtor (exploited) nations. Here's how it works:

Capitalism's internal competition leads to the concentration of production into huge cartels, trusts, and corporations. These monopolies can dominate entire industries and set prices, killing free competition.
Banks transform from humble intermediaries (simply holding deposits and facilitating payments) into powerful monopolies. They begin to concentrate all of society's money capital.
The big banks and the big industrial monopolies fuse together: Banks buy industrial shares, becoming major owners of industrial enterprises. Industrial monopolies buy bank shares, becoming major owners of banks. The same individuals sit on the boards of directors of both banks and industrial corporations.
This fusion of bank capital and industrial capital creates a new, unified entity: Finance Capital.

Comparison:

Industrial Capital: Its primary logic is M-C-M' (Money -> Commodity -> More Money). It makes profit by producing and selling real goods and services. It has an interest in a stable, productive economy.

Finance Capital: Its primary logic is M-M' (Money -> More Money). It seeks to bypass the messy process of production altogether. It makes profit from speculation, debt, and financial engineering. It is inherently myopic, volatile, and parasitic.

What is imperialism?

Lenin's imperialism is the stage where capitalism becomes reactionary and parasitic, sustained by the financial exploitation of the entire world by a handful of monopolies.

Lenin argued that imperialism is not a policy but a specific, unavoidable "stage" in the development of capitalism. It arises from the concentration of production and capital into such massive units that they dominate economic life. This stage is defined by five key features, which must not be mechanically misapplied like a checklist:

The Concentration of Production and Monopolies: Free competition gives way to massive corporations, cartels, and trusts that can control entire industries and set prices.
The Merging of Bank and Industrial Capital into "Finance Capital": This is the core of Lenin's theory. As industry grows, it becomes dependent on huge banks for credit. Simultaneously, banks shift from being simple intermediaries to powerful monopolies that directly invest in and control industry. This fusion creates a new, parasitic power: "finance capital," and a tiny, super-wealthy "financial oligarchy" that commands the entire economy.
The Export of Finance Capital vs. Commodities: In this monopoly stage, the "core" capitalist countries are flooded with "surplus capital" because profitable domestic investment opportunities are exhausted. This makes the export of capital (investing in loans, factories, and mines abroad) more important than the simple export of goods. Capital is exported to colonies and weaker nations where labor is cheap, resources are plentiful, and profits are far higher.
The Formation of International Monopolist Associations: Rival monopolies from different countries temporarily carve up the world market among themselves into international cartels to reduce competition and secure their super-profits.
The Territorial Division of the World Among the Major Capitalist Powers: This is the logical conclusion. The struggle for economic spheres of influence leads to a frantic political and military scramble to colonize the entire world, ensuring exclusive access to resources, markets, and investment opportunities.

Why Russia and China are not imperialist

The fundamental contradiction in the world is imperialism. What certain "Marxists" debate is how imperialism today actually looks like. I argue that the principal contradiction in the world today and how imperialism shows up is between U.S.-led finance capital imperialism and the forces of sovereign national development, exemplified by the struggle for a multipolar world.

There are two basic competing ideas:

The position that imperialism today takes the form of, on one hand, a U.S.-led imperialism which seeks to maintain its unipolar hegemony and, on the other, the forces of sovereign development and multipolarity. This position states that the current conflict is not a simple, symmetrical inter-imperialist rivalry like World War I. Rather, it is a struggle between a decaying, aggressive hegemon and emerging multipolar centers of power.
The position that imperialism is a global system of world powers "aggressing" against each other, i.e. inter-imperialist powers like it was in WWI.

Critics from position 2 criticize advocates of position 1 of "Kautskyism" due to the idea that "we are moving towards a multipolar world order". However, this argument presupposes that the "global powers" (U.S., China, Russia) are all imperialist powers and that they are moving towards peace. It bears summarizing what Kautsky actually argued:

That rival imperialist powers might eventually learn that conflict was too costly

That they could enter a phase of joint exploitation of the world through peaceful alliances and cartels

Essentially, that the major capitalist powers could supersede their rivalry and collaboratively manage the global system

⇒ Lenin famously tore this theory to shreds. He argued that the uneven development of capitalism made such a lasting, peaceful alliance impossible. Competition for markets, resources, and spheres of influence is inherent to the monopoly stage of capitalism; any alliances would be temporary and preparatory for deeper conflict. History has proven Lenin correct (World War I, World War II, the Cold War). There is no point engaging this accusation since position 2 has not proven that Russia and China are imperialist. The core contradiction between position 1 and position 2 is: are Russia and China imperialist? Let's dive into it. The question that must be asked is who controls and dominates the global system finance capital?

Is Russia imperialist?

Applying this to Russia clarifies the picture. Russia is a capitalist country, everyone knows it. Is it imperialist?:

Russia's economy is not dominated by a powerful, globalized finance capital sector. Its primary source of wealth is the export of raw materials (oil, gas, minerals).
Its capital exports are largely the flight of oligarchic wealth to Western financial centers (again, a symptom) or state-led investments tied to securing energy markets.
While it acts as a great power and defends its sphere of influence, its global economic role is fundamentally different from that of the U.S.-EU-NATO core. It lacks the systemic power to structure the global economy for its own parasitic benefit. Its actions are primarily defensive within the context of NATO expansion and the preservation of its state sovereignty.

Since we have established that Russia as a capitalist power cannot be imperialist, let's turn towards China.

Why China -- whether you think it is capitalist or not -- is not imperialist:

To claim China has fully achieved socialism is an error. However, to claim it is identical to a bourgeois imperialist state is a greater error. It is to fundamentally fail to comprehend imperialism. The "China is imperialist" line is based on a vulgar and mechanical misreading of Lenin, one that ignores the core concept of finance capital and the dialectics of a contested global system.

China's economy is structurally different:

China's global financial influence is substantial, but it operates through a different model centered on state policy rather than private finance capital.

The core of China's economic power lies in its real economy, specifically manufacturing and industrial output, not in a dominant financial sector. The government intensifies efforts for "self-reliance" in strategic manufacturing and high-tech sectors, often using state support to achieve these goals. This state-driven industrial policy is utterly different from an economy dominated by the interests of private finance capital.
China's system, even with its capitalist features, is not dominated by the M-M' logic mentioned earlier. Its state-owned banks are tools for directing capital into industrial production and infrastructure (the M-C-M' logic). The goal is building productive forces and strategic independence, not enabling a parasitic financial oligarchy to extract wealth through global speculation.
China is not a magnet for financial capital. A financial hegemon typically attracts global capital. However, data shows China is experiencing the opposite. Inbound Foreign Direct Investment (FDI) fell by 27.1% in 2024, and the country ranks very low on FDI openness indexes, being described as "one of the world's most closed major economies". This trend contradicts the idea of a rising financial hegemon that is opening its markets to global finance. An analysis from China Daily reports that the country's capital market "remains partly closed, with foreign access limited to specific channels." The article, representing the aspirations of the Chinese national bourgeoisie, argues that a "decisive step toward comprehensive openness is essential" for China to become a true financial power. This is a stark contrast to the open markets of New York or London. Of course, the proletarian government stands in the way of such a thing taking place.
An analysis of global influence shows that while China is a rising power, a significant gap remains with the United States. One index measuring foreign presence (economic, military, soft power) scored the U.S. at 29% and China at 20%, with the U.S. holding a twofold lead in economic and military presence. This suggests a world not under Chinese financial hegemony, but one still transitioning from U.S. dominance.
China's focus is on trade surplus, not financial export: China's record-breaking and growing trade surplus, on track to surpass $1 trillion, is a key indicator. It is an economic model powered by selling goods to the world, not exporting capital to control foreign financial systems or generate profits via interest and financial instruments (the hallmark of financial hegemony).
While China is a massive state-directed creditor, it has not achieved the deep, open, and market-driven financial hegemony characteristic of traditional Western finance capital. A comprehensive report shows that China's overseas lending and grant portfolio totals a massive $2.2 trillion spread across 200 countries, making it the world's largest official creditor. This lending is not driven by an independent financial class but is an arm of state policy. The activities of Chinese state-owned creditors are closely aligned with national strategic priorities like "Made in China 2025," focusing on acquiring high-tech assets and securing critical resources. As competition with other powers increases, the percentage of China's lending that qualifies as traditional philanthropic aid has plummeted. Its financial operations are also becoming more opaque, using shell companies and secretive terms, which is the opposite of the transparency required for a truly dominant, open financial system. Despite its outward lending, China's own financial system lacks the maturity and global integration of established Western systems.
The flow of capital is not just one-way. In 2025, a significant dynamic is Gulf sovereign wealth funds from the Middle East making major investments in China's financial, energy, and tech sectors. This shows that China is still working to attract and stabilize foreign capital to fuel its own growth.

A brief comparison between China and an actual imperialist (finance capital) hegemon:

⇒ Imperialist Hegemon: Dominance of finance capital (banks, investment firms, currency) where the financial sector dictates industrial policy. Shapes international monetary system; currency serves as primary global reserve. Export of finance capital in pursuing maximum, short-term financial returns and establishing control over foreign economies. Control over financial flows, financialized profits, and monetary policy. Generally promotes open capital markets to facilitate financial flows. Mobile, private capital flows seeking the highest return, often with speculative characteristics. Private financial markets & institutions (banks, investment firms) offer loans and investments to dominate key sectors. Deep, open capital markets; currency as primary reserve asset. Highly open, free flow of capital. Primary tools are equity markets, bonds, and complex financial instruments.

⇒ China: Reliance on a state-led, industrial model focused on manufacturing, exports, and high-tech production. Integrated into global supply chains as a manufacturing hub and top trader of goods; focus on building a record trade surplus. Investment-led growth model fueled by high domestic savings, leading to industrial overcapacity. Export of industrial capital for the purpose of offshoring industrial overcapacity; securing supply chains; building strategic influence. Direct investment in infrastructure and physical assets (e.g., Belt and Road), state subsidies to industry, bilateral agreements, and export of physical goods. Ranked as "one of the world's most closed major economies" for foreign direct investment (FDI). State-owned creditors & policy directives; policy banks, state-owned entities, strategic loans & acquisitions; e.g., loans from state-owned policy banks for infrastructure projects (e.g., Belt and Road Initiative), often tied to use of Chinese contractors and materials. State-to-state contracts and development loans. The capital is a tool for achieving strategic and industrial policy goals. World's largest official creditor, but focused on loans & infrastructure. "Partly closed" capital, with foreign access limited to specific channels.

Mistaking scale for systemic dominance

China is a formidable economic power and a massive state-directed lender, but this does not make it a hegemon of finance capital. Its financial system and mode of engagement are fundamentally different from Lenin's definition of "finance capital" hegemony. It is a state-directed industrial and trading power whose financial activities serve strategic, political, and developmental goals, not the deep, private, and open global market and the parasitic, profit-driven imperatives of a private finance capital oligarchy.

The "China is imperialist" crew sometimes link to CPI (Maoist)'s PDF, whose claims I will debunk. The CPI (Maoist) analysis is a textbook example of metaphysical thinking. It confuses the form of certain economic phenomena in China with the substance of Lenin's definition of imperialism, which is the global dictatorship of a parasitic financial oligarchy. In doing so, it objectively sides with the main enemy -- U.S. imperialism -- by blurring the principal contradiction. It disorients the anti-imperialist movement by attacking a power that is objectively weakening the main enemy (U.S. imperialism) and provides leftist cover for U.S. propaganda.

The CPI (Maoist) argument is fundamentally dogmatic. It takes Lenin's five characteristics of imperialism as a static checklist. If they can find evidence that seems to fit a point (e.g., "monopolies exist," "capital is exported"), they declare the box ticked and the analysis complete. They ignore the dialectical relationship between these characteristics and the qualitative class nature of the state power directing them.

1. Claim: "China is the world's biggest creditor! It has lent trillions globally. That's the export of capital = imperialism." and "China exports vast amounts of capital, just like imperialists."

It's state capital, not finance capital. This is the most critical distinction. Lenin was talking about finance capital! Even the DRC (Democratic Republic of Congo) exports capital, but that doesn't make it imperialist. The $2.2 trillion in overseas lending isn't from private Chinese banks like J.P. Morgan or Blackrock chasing the highest possible short term profits and super-profits. It's from state-owned policy banks (China Development Bank, Exim Bank) and state-owned enterprises. This state-directed capital used as a tool for long-term strategic goals: securing resource flows, building infrastructure to open trade routes, and creating international political alliances. The driver is national strategy (Belt and Road Initiative), not the autonomous profit motive of a financial oligarchy.
When Western finance exports capital, it demands structural reforms, privatization of public assets, and open capital markets (the "Washington Consensus"). Chinese state capital often builds infrastructure (ports, railways, power grids) that serves material needs and is economic development. The result of imperialism, by contrast, is economic underdevelopment, by structurally adjusting economies to become dependent exporters of raw materials and importers of finished goods. The form of the capital is clearly different.
While BRI has its contradictions, its primary form is building infrastructure (ports, railways, power grids). The "debt-trap" narrative is largely a Western myth; most empirical studies show the terms are often comparable to or better than Western lenders.
China holds a lot of U.S. debt, and this is not a sign of strength but of a structural dependency on the U.S.-led system. China holds Treasuries because it needs a safe, liquid place to park the dollars it earns from its trade surplus with the U.S. It is a symptom of its deep integration into the existing imperialist financial system, not proof that it commands its own rival system.

2. Claim: "China has massive corporations like Alibaba and Tencent. That's monopoly capital!" and "China has monopoly capital and a ruling bourgeoisie."

In Lenin's finance capital, the state serves the monopoly capitalists. In China, the monopoly capitalists (where they exist) are ultimately subordinate to the party-state. Their function is to serve national development goals, not dictate them. The 2021-2022 regulatory crackdown was a definitive demonstration. The Chinese Communist Party (CCP) can and does dismantle the power of private monopolies overnight when they threaten social stability or party control (e.g., halting Ant Group's IPO, Didi, restructuring Alibaba). Can you imagine the U.S. government dismantling Amazon or Google "for the good of national development"? In China, the party demonstrated it holds the whip hand over private capital. This is unthinkable under a true finance-capital oligarchy.
The "red capitalists" and SOE bosses are not an independent class that controls the state; they are appointed by, and can be removed by, the party. Their function is to serve national strategic goals (e.g., "Made in China 2025," technological self-reliance).

3. Claim: "The Yuan is being internationalized. They are challenging the dollar. That's financial hegemony!"

As recently highlighted in analyses of China's capital markets, the system "remains partly closed, with foreign access limited to specific channels." A true financial hegemon requires open, deep, and liquid capital markets that the world can freely use. China's are not. They are carefully managed and gated.
A key sign of financial hegemony is attracting global capital. The opposite is happening: Foreign Direct Investment (FDI) into China fell by 27.1% in 2024. This is a vote of "no confidence" in its financial hegemony, not a sign of its rise. A financial hegemon that is simultaneously a "partly closed" fortress to foreign capital is a theoretical and practical impossibility. The data shows China is a major destination for productive capital, not just a source of it.

4. Claim: "China exploits its own workers."

This is a question of internal vs external exploitation, and a confusion of capitalist exploitation with imperialist super-exploitation.
Yes, the Chinese working class labors under capitalist relations of production, which generate exploitation. This is a feature of the current, primary stage of the socialist transition -- a period where a Communist Party wields state power to consciously guide and limit the scope of capitalism in order to build the productive forces necessary for a higher stage of socialism. However, this internal dynamic is categorically different from imperialism. Imperialism, as Lenin defined it, is not merely the existence of exploitation, but a specific, highest stage of capitalism characterized by the global domination of finance capital and the territorial division of the world among rival monopolist powers. To conflate the two is a fundamental theoretical error.

5. Claim: "They exploit the global south like Africa and Asia for resources, just like the West!"

Yes, China seeks resources. But to equate this with U.S. imperialism is a profound error. The U.S. uses the IMF, World Bank, and military violence to enforce a global system that benefits its finance capital. China's engagement is primarily through bilateral trade and state-to-state loans.
China does not have the power to set the rules of the global financial system. It is a participant, and often a target, within a system it did not create -- but it is also striving to build global alternatives.
China's primary need is resources for its industrial capital economy. The model isn't about using finance to own the means of production abroad to extract super-profits from cheap labor for purely financial gain. The goal is fueling domestic industrial growth and securing supply chains. Its growth has been driven by an investment-led model where high domestic savings are channeled into manufacturing and infrastructure, leading to significant overcapacity in sectors like steel, EVs, and solar panels. The push for exports and projects like the Belt and Road Initiative is, in part, a state-driven strategy to offload this excess industrial capacity onto the world market.
Unlike the colonialism by the West, China respects political sovereignty, doesn't install military bases to govern foreign territory, establishes contractual interdependence rather than extractivism (the host country retains ownership), and rather than forced assimilation there is no cultural imposition whatsoever.
This is still a relationship between sovereign states. The partner countries (in Africa, Asia, etc.) are active agents, not passive victims. They negotiate deals, often play multiple powers (China, US, EU) against each other, and use Chinese capital for their own development goals. The dependency is mutual, not imperialist.
Quote: "Moreoever, despite critics' worries that China could seize its borrower's assets, we do not see China attempting to take advantage of countries in debt distress. There were no "asset seizures" in the 16 restructuring cases that we found. We have not yet seen cases in Africa where Chinese banks or companies have sued sovereign governments or exercised the option for international arbitration standard in Chinese loan contracts. Restructuring a loan is only one of a menu of options for an underperforming project. Other options might include public-private partnerships (PPPs) involving equity injections from Chinese companies. Yet, although Chinese firms participated in some African debt-equity swaps in the 1990s, we have not yet seen this happening in the new millennium." [link]

6. "Imperialist powers inevitably conflict"

Imperialist powers do inevitably conflict, but you are mistaking inter-capitalist rivalry for identical class character. The U.S. is the hegemon of the global financial bourgeoisie. China is a national capitalist power challenging that hegemony. The conflict is real, but it's not a symmetrical war between two identical finance-capitalist empires. It's a struggle between the enforcer of the existing system and a challenger operating on a different logic. Labeling the China-U.S. rivalry as an "inter-imperialist contradiction" is a mechanical and incorrect application of theory. The conflict is not between two identical imperialist systems, but between a defensive state and an offensive, finance-capital hegemon.
They are not the same. The U.S.-led system is the established hegemon of global finance capital. It uses tools like the dollar system, control over SWIFT, and institutions like the IMF to enforce a global order that benefits its private financial interests. Its actions are offensive and expansionist by nature. China's actions are primarily defensive and developmental. It seeks to break the U.S. monopoly and create a multipolar world to secure its own development path. Its use of state capital is to protect its sovereignty and build strategic alternatives to U.S.-dominated networks (like building its own SWIFT alternative). This is a struggle for national sovereignty within a capitalist world system, not a clash of two finance-capital empires for global domination.
A true financial hegemon has open, deep, and liquid capital markets that the world can freely use to invest and pull out capital. China's capital markets, by contrast, are famously "partly closed," with capital controls limiting the free flow of money. In 2024, high-tech industries attracted 34.6% of foreign investment, a 6-percentage-point increase from 2020. Despite global FDI declines, China continues to draw significant investment, especially into its high-tech manufacturing and service sectors. Multinationals are not treating China as a rival imperialist power, but as a critical market and production base for their own global operations.
Therefore, to label the U.S.-China conflict as 'inter-imperialist' is not just a semantic error; it is a strategic one that disarms the global anti-imperialist movement by misidentifying the main enemy and equating the jailer with the most powerful prisoner.

7. Claim: "The state controlling capital means literally nothing"

The assertion that the state-led character of Chinese capital "means quite literally nothing" is a profound theoretical error. It is the decisive factor. In Lenin's analysis, the fusion of bank and industrial capital creates a financial oligarchy that commands the state. In China, the relationship is inverted: the party-state commands the capital. The state uses capital as a tool for national strategy. This is why China can crack down on its own tech giants overnight and direct massive resources toward strategic goals like semiconductor self-sufficiency—actions unthinkable in a system where the state is a mere instrument of finance capital.

8. Claim: "China is building a rival imperialist bloc (BRICS, SCO, BRI)."

The core of the U.S. imperialist project since the Cold War has been offensive and totalizing: to create a unipolar world where all states are subservient to its capital. The core of the Chinese and Russian project is defensive: to break this unipolarity and create a multipolar world where they can maintain their political sovereignty and development models. BRICS, the SCO, and the AIIB are attempts to create alternatives to the U.S.-dominated WTO, IMF, and World Bank. They are instruments of a sovereignty project, not a hegemonic replacement. They seek to dilute U.S. power, not to replicate its global empire.

9. "BRI = IMF"

IMF/World Bank Loan: Imposes austerity, forces privatization of water/electricity, dismantles tariffs to flood markets with Western goods, and leads to deindustrialization.
Chinese BRI Loan: Funds the construction of a power plant, a port, or a railway. Adds physical productive infrastructure that the host country did not have before. Often, the debts are even forgiven or dramatically reduced.
To say otherwise is to argue that building a railway in Africa is the same as forcing a country to sell off its public water system.

Socialism, not imperialism

Before we get confused about the term "state capital", this mustn't get confused with "state capitalism". The fundamental difference lies in which class holds state power and for what purpose. In a bourgeois state, "state capitalism" means the bourgeois government directly controls or manages sectors of the economy to stabilize the capitalist system and maximize profits for the bourgeoisie as a whole. The end goal is the preservation of capitalism. (Example: Nationalized industries in post-war Europe). In China, the Communist Party, which upholds the dictatorship of the proletariat in theory and practice, directs the economy to build the productive forces necessary for a future socialist and communist society. The state control of capital is a means to a socialist end.

The core of socialism is the working class wielding state power to direct economic development, a transition stage before higher stages of socialism and the development of communism. China meets all the criteria of being in this transitional phase and method, albeit in the early phase. China exists in a transition where a Communist Party, representing the proletarian dictatorship, consciously utilizes capitalist forms to build the productive forces and secure national sovereignty against the imperialist core. The key question is not the existence of capitalist forms, but which class project is ultimately commanding them.

Any further elaboration is beyond the scope of this essay.

The tragedy of not understanding imperialism

Since imperialism is the primary contradiction in the world today, it affects so many aspects of life that a poor understanding or non-understanding of it is deleterious to one's health and life, and to the well being of all. Imperialism should be a required field of study. If only more people understood imperialism, we wouldn't all be arguing the same tired things. That's why you should read my easy summary of Lenin's theory of imperialism and rebuttals to critiques.