Creation: Proletarian Liberation Struggle Association Political Economy Group
On March 12th, the official WeChat public account “Yuyuantan Tian” of CCTV News Channel published an exclusive report titled “Ministry of Commerce and Other Departments Summon Walmart.” The article stated: “Informed sources disclosed to Tan Zhu that, regarding Walmart’s recent possible demand for Chinese suppliers to lower prices, on March 11th, the Ministry of Commerce and relevant departments had already summoned Walmart to understand the situation… If the information is true, Walmart’s behavior is not conducive to its business development in the Chinese market. Walmart can fully leverage its positive influence in U.S. domestic politics and endure hardships together with Chinese suppliers. Chinese and U.S. enterprises should jointly respond to the tariff challenges posed by the U.S. government.”
As the world’s largest retail monopoly capital, Walmart is most famous for its supply chain, which it claims to be “as precise as a Swiss watch.” Through direct orders to industrial capital, Walmart avoids having its profits divided by middlemen; at the same time, due to its large procurement scale, upstream industrial capitalists compete eagerly to cooperate with Walmart, keeping its product supply in a state of “over-supply” for a long time. This gives Walmart a significant bargaining advantage over its suppliers. Although Walmart manufacturers can earn some profit through contracts with Walmart, Walmart’s demand for “high-quality zero-defect” products forces them to increase production costs. As a result, these manufacturers cannot easily terminate their contracts with Walmart, or they risk bankruptcy in the short term because they lack commercial capital to save on business turnover costs and cannot sell their high-cost inventory at high prices. With these means, Walmart attracts a large number of middle and lower-class customers with its “everyday low prices” marketing strategy, achieving commercial success; subsequently, it expanded its business to upper-class small asset owners and the bourgeoisie through high-end retailers like “Sam’s Club,” maintaining its monopoly position.
Originally, about 60% of the goods purchased globally by Walmart came from China. The Chinese market played a significant role in Walmart’s growth. In the past fiscal year, Walmart’s same-store sales in China increased year-on-year by 12.5%, 13.8%, 15%, and 23.1% across four quarters; its main profit source, Sam’s Club, also opened six new stores last year. However, with Trump increasing tariffs on various countries, Walmart’s operations have been impacted. On February 20th alone, Walmart’s stock price plummeted by 6.53%, the largest single-day drop in 15 months. Walmart’s financial report also predicts that the profit growth rate for fiscal year 2026 (February 2025 to January 2026) will be as low as 3.5-5.5%, far below the 8.6% of the previous fiscal year. However, Walmart cannot choose to significantly raise prices to counteract tariffs, or it will lose its competitive advantage over other retail monopoly capital. If it does not pressure suppliers to lower prices, the tariffs imposed by the Trump administration will directly impact its profits. Therefore, Walmart unilaterally demands that Chinese suppliers sell at “loss-making” prices, transferring part of the losses onto China, resulting in a bizarre scene where a monopoly giant is “summoned” by bureaucratic authorities.
But why does such a huge business giant encounter resistance when demanding price reductions from Chinese suppliers? The answer lies in how Chinese manufacturers, supported by the Chinese government, have found new ways out. In recent years, the Chinese government has supported a large number of monopoly enterprises through subsidies, tax reductions, and other measures, giving the green light for direct procurement from monopolistic retail capital like Yonghui Superstores, Pang Donglai, and others. In terms of the proportion of direct sourcing, these companies have caught up with Walmart’s global supply chain accumulated over decades within just a few years. Yonghui’s direct sourcing ratio has reached 70%, while Pang Donglai’s is as high as 80%. According to “Yuyuantan Tian,” some of these suppliers are even taken from Walmart. All these phenomena indicate that the Chinese government is intensifying its attack on Walmart, which has already occupied a significant share of the domestic market. This is a clear manifestation of the Chinese government’s attempt to further monopolize the domestic market, strengthen fascist dictatorship, and indulge in exploiting the masses.
Using its mouthpiece, the Chinese government advises Walmart to “unite against the U.S. government,” claiming that “both Chinese and U.S. enterprises are victims of tariffs,” which can be seen as somewhat comical. When “Yuyuantan Tian” talks about “fair competition” and “the interests of Chinese and U.S. enterprises and U.S. consumers,” patriotic right-wing petty bourgeoisie might praise their government’s magnanimity. However, we should not be deceived by the illusion of conflict between monopolistic capitals; we must recognize the essence of monopoly exploitation by Chinese imperialism and expose the hypocrisy of both sides harboring ulterior motives in this U.S.-China trade confrontation.
https://mp.weixin.qq.com/s/DP42xyGgzUbRvDzGFYo4GQ
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