Socialist Imperialism or Groundwork for a Future World Revolution?

Abstract

Sri Lanka’s selective default in April 2022 stemmed primarily from a combination of severe macroeconomic imbalances and policy missteps. Heavy reliance on external borrowing – much of it on commercial terms – made the country highly vulnerable to shocks. The collapse of tourism following the Easter bombings and the COVID-19 pandemic drastically reduced foreign exchange earnings. Concurrently, the government pursued expansionary fiscal policies and extensive central bank financing, leading to excessive money creation, high inflation and a rapid depletion of foreign reserves that ultimately forced the default.

Against this backdrop, debates about China’s role through the Belt and Road Initiative remain inconclusive. While Chinese lending to Sri Lanka contributed to the overall debt burden, the evidence to date does not clearly establish a deliberate ‘debt-trap diplomacy’ strategy. Nonetheless, Chinese investments have become politically contentious, particularly when perceived as supporting domestic elites rather than productive sectors – raising the question of whether such practices resemble ‘socialist imperialism’.

This chapter draws a parallel with early Chinese thinkers like Liang Qichao and Chen Duxiu, who criticized proletarian dictatorship and emphasized the need for a genuine proletarian socialist movement. Applying this perspective, the discussion suggests that if foreign investment enriches an idle class and undermines a country’s working population, it diverges from the egalitarian ideals of Marx and Engels, even if those ideals are difficult to realize in practice.