The following document on Asia was presented to the 14th World Congress of the Committee for a Workers’ International, as background information. The congress convened in Berlin, Germany, from 27 to 31 July 2025. Delegates attended in person from Europe, Asia, Africa and North and South America and online from Australia. The Congress also hosted guests from Israel-Palestine, Kazakhstan, Romania and Sweden.
Once regarded as the powerhouses of Asia and the drivers of global economic growth, China and India are now confronting the limits of export-led and finance-driven growth. China’s slowdown – reflected in a GDP growth rate declining from over 10% per annum in the 2000s to under 5% by the mid-2020s – has some predicting it may even drop below 4%. High in comparison with US and European capitalism but in China’s case a big fall that will impact on living standards. Similarly, India’s rapid growth, driven by the service sector and capital inflows, has failed to generate broad-based industrialisation or secure employment for its vast working population. Informal labour still accounts for over 80% of the workforce. It is becoming the fourth-largest economy in the world – and some, like JP Morgan, predict it will surpass Germany and Japan by 2027 to become the third – but this remains largely meaningless to the vast majority of the population.
Several other countries in the eastern region that benefited from China’s export-led expansion – such as the Philippines, Malaysia, Vietnam, and Indonesia – are also facing an uncertain future.
The World Bank has reduced Malaysia’s growth forecast to 3.9% for this year. Following the COVID-19 pandemic, Malaysia’s public debt rose sharply, reaching 64% of GDP. In 2024, around 16% of total government revenue was spent solely on servicing debt. Enormous borrowings – primarily from China – fail to add to the economic productivity. Instead, much of the debt has gone towards large-scale infrastructure mega-projects. At the same time, household debt has also soared, reaching 84% of GDP, as the cost of essential needs, particularly energy, continues to rise.
The Asian region has collectively contributed to more than half of global economic growth in recent decades. Any shift in the economic trajectories of these countries will have a profound global impact. This region, home to over 60% of the global population, also houses 60–65% of the global middle class. Though most corporate profits over the last decade were made by U.S. multinationals, these profits relied heavily on cheap labour in Asia to produce goods cheaply and to access what has become the world’s largest consumer base. For example, 60% of Apple’s profits and 40% of Amazon’s products are tied to this region.
The decades-long shift of manufacturing to Asia has concentrated global production in the region. Around 90% of semiconductors – critical commodities worldwide – are produced in Taiwan, South Korea, and China. Bangladesh, India, and Vietnam dominate the textile and apparel industries. In addition, China and other regional powers now dominate the auto industry, renewable energy markets, and more.
While initially boosting the profits of many western-owned companies this rise has come to challenge the dominance of the US and other Western economies, prompting increased geopolitical tension and protectionist measures. The election of Donald Trump accelerated these trends. Tariffs and sanctions have added pressure to many economies. While ‘de-coupling’ from China has contributed to its slowdown, domestic factors have played a major role as well. China’s property market is on the verge of a crisis, with falling prices, rising mortgage defaults, and an aging population worsening the situation.
India, meanwhile, has not overcome its fundamental economic problems: shadow banking issues, excessive credit in the banking sector, the closure of small industries, falling wages, and a decline in goods exports. Unemployment stood at 5.6% in May this year, according to official data, though many doubt the credibility of these figures. Despite ongoing recessionary trends from the pre-pandemic era, recent growth has been driven mainly by cheap Russian oil and limited increases in FDI, especially in the tech sector. Since the Ukraine war, Russia has become India’s top crude oil supplier. India has benefited marginally from the shift away from China, but its poor infrastructure remains a limitation.
Debt is another critical issue. Many economies, including India, have experienced debt-driven growth. Large economies may be able to manage high debt-to-GDP ratios, but smaller nations do not have similar manoeuvrability. Though Sri Lanka was the only country in the region to officially default in 2022, several others – Pakistan, Bangladesh, Vietnam, Mongolia – also reached crisis points. Think tanks such as IEEFA (the Institute for Energy Economics and Financial Analysis) suggest that India has now reached bottlenecks in many sectors.
Tax cuts for the rich, attacks on working and living conditions, and the Reserve Bank of India’s efforts to use foreign reserves to protect the rupee have failed to resolve the crisis. Modi’s ‘Make in India’ and Xi Jinping’s ‘Made in China 2025’ initiatives have so far failed to produce the results that they hoped for, though they have achieved some partial gains.
China’s strategy of redirecting focus to the domestic market and subsidising key sectors has only delayed the inevitable. The unique form of Chinese state capitalism allows the government to intervene decisively in state-owned enterprises through restructuring and bailouts. But even with such measures, overproduction in some sectors continues to lead to deflationary pressures.
Chinese regime’s efforts to balance this economic crisis have not gained widespread support. For instance, China’s attempt to enforce an eight-hour working day is seen by many workers as a wage cut due to stagnant wages. This discontent fuelled strikes at BYD, one of China’s largest car manufacturers, where workers across different plants coordinated action. What continues to exist is the ‘996-work ethic’ ( working 9am to 9pm, six days a week). Without adequate wages, most workers are trapped in this work pattern though massive opposition exists, particularly among young workers. Hence young workers promoting the ‘tang ping’ (lying flat) movement – to work less.
China’s economic slowdown is also affecting its flagship regional projects like the Belt and Road Initiative and the China–Pakistan Economic Corridor (CPEC). Lending by Chinese banks is declining, while all major Chinese banks reported reduced profits this year. As the world’s largest lender, China is expected to collect $21 billion in repayments from developing nations in 2025, according to the Lowy Institute. Efforts to restructure these loans could increase geopolitical tensions as some may default on their loans. This can increase further tension. Economic collaboration among nations is weakest in this region in comparison to any other region in the word. There is always the threat of escalation of tension between nations. The BRICS, now the world’s largest economic bloc mainly due to China, India, and Brazil, lacks coherence and is a loose body. It serves more as a counterweight to the dollar and western influence than as a unified economic alliance.
Tensions between India and China remain high and could escalate sharply, as seen during the recent India–Pakistan Kashmir war, where China supported Pakistan with military equipment supply, including aircraft which outperformed India’s French-supplied aircraft. The Taiwan situation also remains a potential flashpoint, although a growing pro-China faction within Taiwan is changing the internal dynamics. Even Taiwan’s right-wing elements indicated that they prefer an ‘arrangement’ over war.
No economy in the region is expected to perform strongly in the near future. The impacts of this slowdown – coming from regions that have driven global growth – are only just beginning to be felt. Even the World Bank has noted that global growth in the coming years “will be the slowest of any decade since the 1960s.”
The crises facing the smaller economies in the region are unprecedented. Dramatically increased foreign debt, depleting reserves, and high inflation have become common traits. To avoid default, many economies are resorting to further borrowing, which only compounds the crisis.
Pakistan narrowly avoided default through an IMF loan of around $7 billion, alongside investments from China under the CPEC project – debts some claim now exceed $30 billion. However, the terms imposed by the IMF have significantly worsened life for millions, with some commentators calling it “economic butchery”. In certain sectors, up to 60% of wages are taxed. Prices of essentials like electricity and fuel have surged to the point where rural populations can no longer afford them. The average wage has fallen to around $250 a month – below Sri Lanka’s $350 – with many workers earning less than $70. While the government is committed to debt repayment and safeguarding the profits of the ultra-rich (who saw their wealth increase by at least 15% last year), over 120 million people – nearly half the population – now live below the poverty line. Health and education services have deteriorated as budget cuts continue.
Bangladesh has surpassed Pakistan in GDP terms and has made some reduction in poverty, largely due to its textile sector. However, these gains come from extreme exploitation. A University of Nottingham study reports that up to 80% of women and children in the textile sector work under slave-like conditions, with most earning less than $100 per month. A shocking 100% of minors interviewed were employed illegally, and 32% of adults were paid below the legal minimum wage.
Geopolitical shifts, tariffs, and aid cuts are now impacting the textile industry, causing a broader economic slowdown and rising prices of essentials. The new interim government, backed by leaders of the mass movements, has prioritised corporate interests. The June budget cut spending on health and education, increased taxes on goods, and protected corrupt industries and hidden wealth – known in the country as ‘black money wealth’ of the rich. Crackdowns on workers and the poor amid economic decline will not fix the economy but will deepen poverty and despair.
Sri Lanka’s so-called debt restructuring – merely a delay in repayment – has not addressed the root causes of its default. Remittances and tourism alone cannot revive its economy.
Political Crisis
With up to 100 million members and various levels of structures, institutions, and with the affiliation of significant number of workers’, farmers’, and youth groups, the Chinese Communist Party (CCP) is one of the most powerful political organisations in the world. At its helm, Xi Jinping has consolidated an enormous amount of power, said by some to surpass even that of Mao’s era. There is no visible opposition, and significant dissent has already been silenced. This party is neither a communist party as it was in its early days, nor a social democratic party, but rather a party integrated into the state with highly centralised control, while still maintaining some elements of a support base.
The party apparatus is used to control and limit all opposition. Even small online chat groups that discuss mobilising workers or raising political disagreement to the regime are met with the full force of state surveillance and crackdowns. It reflects the leadership’s fear of the masses or of any independent movement that might emerge. But no amount of repression, control, or denial of fundamental democratic rights can completely suppress the emerging resistance among the youth. There is a strong yearning among the new generation for democratic freedoms.
Of course, this desire can feed into pro-capitalist democratic movements or cross-class protests with significant capitalist influence, such as the Umbrella Movement we saw in Hong Kong. However, the current economic slowdown has also led to a rise in workers’ struggles: migrant workers demanding unpaid wages, labourers seeking compensation after the closure of small factories, and increasing calls for better wages and working conditions.
These emerging struggles have shown a growing level of militancy – at times even clashing with CCP authorities and police, as we saw in Shaanxi province earlier this year. Many well-educated young people in China increasingly feel they have no real prospects beyond enduring harsh working conditions. Unemployment is also on the rise, with some reports putting it at over 18%.
At a ceremony in May this year honouring ‘model workers’, Xi Jinping urged young workers to “struggle, struggle, and struggle to the end.” While he meant they should work harder, they might instead choose to struggle politically: to challenge the regime itself.
Despite severe repression and tight control, numerous political discussions and groups are emerging both online and offline across China. Some are even reviving Maoist traditions, as many young people view the early days of Maoism in a positive light. According to a New York Times report, these ideas are experiencing a resurgence.
However, the regime is quick to suppress anything connected to ‘revolution’ or perceived revolutionary Marxist or Maoist ideas. Xi, who holds a doctorate in Marxist theory, knows all too well Marx’s quote: “All that is solid melts into air”, especially when the masses begin to enter the pages of history. Repression alone cannot stop the movement of workers and youth in China.
India’s so-called ‘strongman’ Narendra Modi and his right-wing BJP appear powerful only due to the absence of real opposition. Despite being in office for over 11 years and facing dwindling support, no opposing force has emerged to pose a serious challenge to him. The BJP governs without winning a national majority, relying on alliances and an electoral system that disproportionately give them more seats by winning in key states like Uttar Pradesh. However, the BJP has seen electoral setbacks, not only in Chhattisgarh, where it has long been unpopular, but also in Madhya Pradesh, Rajasthan, the Delhi Assembly (2023), and Maharashtra (2024).
A combination of middle-class stability, triumphalist propaganda, and nationalistic rhetoric (e.g., becoming the world’s fourth-largest economy or war with Pakistan) has helped the BJP maintain support.
However, Modi’s increasingly authoritarian regime, with the far-right RSS at its core, faces growing resistance. From Assam to Kashmir to Tamil Nadu, nationalist opposition to the central government is rising. While many workers and farmers are told to be patient and wait for economic ‘trickle-down’ benefits, in reality most of the gains have gone to the super-rich and an expanding middle class. Propaganda, media control, and data manipulation obscure the true extent of poverty. The World Bank’s claim that extreme poverty in India fell to 5.3% is disputed by other agencies who argue the $3/day poverty threshold is inaccurate given rising living costs. Research from institutions like the Great Lakes Institute suggests that 83% of India’s population lives on around $2/day when adjusted for purchasing power parity.
The slowing global economy, ongoing geopolitical tensions, and rising tariffs will only intensify the hardship for India’s most vulnerable. Mounting anger could explode. We’ve seen large farmers’ protests in the past and similar uprisings could recur. The mass movements seen in Sri Lanka and Bangladesh could also emerge in India.
Yet the experience of these mass movements – and their limitations – is also shaping popular consciousness. In Sri Lanka, the Aragalaya movement successfully ousted the Rajapaksa family from power. However, it failed to secure lasting democratic rights. In Bangladesh, the removal of the Hasina regime was hailed by some liberal and right-wing groups as a full victory, yet the deep-rooted problems remained.
In each of these movements, brave youth and workers led the charge, only to be persuaded to trust that opposition figures would deliver justice and democracy. The failure of protesters in Sri Lanka to form lasting organisations rooted in communities, trade unions, and workers’ organisations allowed bourgeois opposition forces and populists to fill the vacuum. In the event that such organisations emerge, even if they contain cross-class elements, the revolutionary section can struggle within them to win mass support for a far-sighted programme. The right-wing UNP, under the guise of an ‘interim’ period, implemented harsh laws, jailed protesters, and worked to crush the movement entirely.
The populist NPP, led by the JVP, came to power riding this wave of anger. Yet it has so far refused to take meaningful action against corruption or the Rajapaksa family, and has continued many of the same capitalist policies. Even the IMF praised the new government’s budget, and Modi’s government welcomed it with open arms. The Chinese government secured its interests under the banner of ‘debt restructuring’. Essentially, the NPP is delivering for capitalists and foreign powers more effectively than the previous regimes.
Debt burdens, though delayed, will eventually be levelled on the working class. As the JVP-led NPP’s popularity fades, militancy is growing among radical youth. The JVP is now using authoritarian tools: invoking draconian anti-terror laws, threatening to ban unions, and declaring that strikes are no longer necessary. Support among minorities – Tamils, Muslims, and hill-country communities – is fading fast. But given their role in Aragalaya, many youth are now resisting ethnic chauvinism. It will not be easy for the current government to use the attack against minorities to strengthen its grip on power. Those actions could divide the NPP.
In Bangladesh, the bourgeois BNP (Bangladesh Nationalist Party) is also plotting its return. The so-called National Youth Party (NCP), meant to unite youth and workers from the movement, has failed to gain traction. Simply forming a political party is not enough; a clear socialist programme and organisational structure rooted in workers’ struggles are essential.
In both Sri Lanka and Bangladesh, ‘interim periods’ are being used to pacify the masses and give space for at least a section of the old ruling elites to regain control. In Bangladesh, youth inspired by the Sri Lankan uprising hoped the interim government would go further. However, the Yunus administration, despite making a few gestures, remains loyal to capitalist interests. Elections continue to be postponed, and the so-called reforms have served to strengthen the elites rather than empower workers and farmers. The latest budget attacks labour rights, slashes public services, and further enriches the corrupt ruling class.
In this vacuum, with the former ruling Awami League (AL) banned, the bourgeois Bangladesh Nationalist Party (BNP) is attempting a comeback and is likely to win if elections are eventually held. In Sri Lanka, Namal Rajapaksa – the ‘prince’ of the Rajapaksa family – is aiming to return to power. In Indonesia, the Suharto family did not have to wait long for a comeback. The current president, Prabowo Subianto, an ex-general and Suharto’s former son-in-law, has begun to revive military influence in society. This year, he introduced a law allowing military personnel to hold civilian government positions, and military representation in the government has already increased significantly.
This rising militarisation is paralleled by a growing wave of student protests, youth mobilisations, and workers’ strikes. Earlier this year, all Indonesian student unions organised nationwide protests. Protests have taken place against cuts to education and public services, as well as against increasing military control. A real fear is spreading among broad sections of the population that the country is drifting back toward the authoritarianism of the Suharto era.
However, fightbacks are also developing. New organisations are forming, and discussions around methods of struggle and political alternatives are beginning to gain traction. While defending democratic rights and opposing militarisation, we must ensure that the right-wing populist forces do not simply rebrand and recycle themselves back into power. Instead, we must fight to end this cycle once and for all – for the masses. That means building the forces that can struggle to win support for a socialist programme aimed at dismantling the capitalist system entirely.
In Malaysia Anwar Ibrahim’s so-called ‘unity government’ has maintained its grip on power by promising reforms such as implementing a minimum wage, enhancing labour protections, and improving governance. However, many of these promises have either been delayed or stalled in various parliamentary committees. As living conditions continue to deteriorate – particularly among Malay youth – the Islamist party PAS and the Perikatan Nasional coalition, led by Bersatu, are seizing the opportunity to gain support. They are positioning themselves as defenders of Malay-Muslim identity, capitalising on growing discontent and economic hardship.
What Now?
The militant sections that led mass movements are now side-lined in many countries, while liberal and even right-wing factions of the movement, who never truly challenged the status quo, have been promoted and absorbed into governance structures. In every country where mass action occurred, establishment parties, military elites, or authoritarian regimes are either plotting a comeback or entrenching repressive measures to prevent future uprisings.
Fearmongering – suggesting that any further unrest will lead to bloodshed and counter-revolution – will not be enough to contain the growing anger. From India’s urban slums to the impoverished suburbs of Bangladesh, hunger and desperation are spreading and it is this fuelling the anger. Promises of growth and prosperity have not materialised for the vast majority. Hopes for clean governance and democracy have also failed to materialise. As we saw in Myanmar, a desperate situation led to a mass uprising, and the brutal repression of that movement eventually gave rise to armed resistance against the junta. A new generation of youth, who once naively raised the Hollywood movie Hunger Games symbol of peace during protests, declaring, “You messed with the wrong generation”, have been forced to take up arms against the Junta.
The energy and determination of the youth who have risen up to fight back is undeniable. But they lack the most powerful weapon: a clear Socialist programme. Such a programme is essential to unite the urban workers and youth with the ethnically divided populations of the rural areas. It must stand firmly for full democratic rights, including the national and cultural rights of all oppressed communities, and aim to organise the country’s resources for the benefit of all.
This necessarily means challenging the capitalist class and their representatives, and fighting for a socialist, planned economy that can lay the foundation for a more transformed Myanmar. Without such a programme – and a mass organisation capable of advancing it – Myanmar risks remaining trapped in a prolonged tragedy.
Although the junta has been significantly weakened, it continues to cling to power through mass killings and the military support it still receives from China. The economy lies in ruins, largely due to the ongoing military campaigns aimed at crushing all forms of opposition.
The opposition, though widespread and determined, remains fragmented. The civilian resistance lacks unified leadership and a coherent national strategy, making it difficult to pose a decisive challenge to the regime. Ethnic armed organisations play a crucial role in the resistance, but they are divided on ethnic lines and not able to fully connect with the urban pro-democracy movement. The unresolved national question, especially the demands for autonomy by various ethnic minorities, are not addressed by the urban middle-class youth who are still heavily influenced by the Buddhist chauvinism of the past.
Even in the event of the Junta collapsing, these divisions will come to the fore and can also result in prolonged civil war. The NUJ (national unity government) that includes the National League for Democracy (NLD), the party of Aung San Suu Ky, is utterly incapable of addressing the national grievances of various ethnic groups or religious minorities.
Myanmar’s crisis has thus become increasingly protracted, with continued instability, repression, and economic collapse bringing even more misery to its population.
Although no clear opposition force has yet emerged, it is only a matter of time. Mainstream left parties such as CPI and CPIM in India, or the JVP in Sri Lanka, are transforming into pale imitations of social democratic parties of the past. They are not even willing to go as far as liberal forces in delivering basic democratic rights. While ceremonial general strikes may maintain a nominal presence in labour struggles, these parties offer no strategy or path forward. This has further deepened the distrust among the youth toward traditional party structures.
There is no clear way out being offered to workers and the poor in the region. The illusion that economic growth would eventually improve their living standards is fading. The much-hyped rise of the Asian middle class (estimated to exceed 3.5 billion people by 2030) painted a temporary picture of progress based on capitalist expansion. But now, as Bloomberg columnist Karishma Vaswani wrote, that “Asian dream is waking up to reality.” Based on data, she shows “Middle-class families are being forced to rethink their money priorities… Growth is slowing, urban salaries – particularly in the largest cities – are contracting, and spending is declining.” Many within this middle class – who once supported harsh capitalist policies because they too benefitted – are now being squeezed out. They are increasingly joining protests, demanding democratic rights and transparency.
Asia is also home to 68% of the world’s employed population (85% live in the Global South), according to the International Labour Organization (ILO), with the highest concentration in China and India. Mega-factories and industrial hubs have brought together massive concentrations of workers, creating the largest industrial working class in history. Across the region, workers are organising for better wages and conditions. However, governments are responding with brutal crackdowns, wage controls, and the suppression of strikes. While recent protests have forced some wage increases, inflation and rising taxes have erased most of those gains.
One example of growing labour militancy can be found in South Korea. Once a showcase of success and prosperity, South Korea is now grappling with rising inequality, declining living standards, stagnant wages, and increasing poverty. Economic growth is expected to fall below 1% this year, as exports to both the United States and China contract sharply. Attempts by employers to limit wages and conditions – combined with government efforts to introduce anti-labour legislation – have faced combative resistance from workers.
In a historic first, Samsung Electronics workers went on strike in 2024, starting with a one-day protest and escalating into an indefinite walkout. The strike eventually forced management to concede on pay and working conditions. Not only in South Korea, but Samsung workers in India and other countries also joined the mobilisation. In addition, thousands of doctors, bus drivers, and over 60,000 metalworkers also took strike action to demand higher wages and improved working conditions.
A key focus of labour actions has been the ‘Yellow Envelope Bill’, which, though in a limited way, seeks to protect subcontracted workers and guarantee their right to collective bargaining. The bill, however, has faced fierce opposition from big business and their allies in government. The Korean Confederation of Trade Unions (KCTU), which has over 1.2 million members, has taken coordinated strike action and is now calling for a general strike to pressure the government into implementing the proposed legislation.
The class struggle is intensifying. With a capitalist world economy in turmoil and sharpening competition between the rival nations and capitalists, neoliberal ‘tighten your belt’ policies are the only response being offered. As Bangladeshi protesters recently put it: “Our belts have already broken.” Middle-class entrepreneurs and small business owners are also being crushed as the middle class is forced to tighten its belt, as researchers in Bangladesh note. The vast population of internal migrant workers across India and China – who moved from region to region in search of work – do not even have belts to tighten.
The failure of recent cross-class mass movements to achieve their full demands has caused setbacks and confusion. But the collective experience gained during the mass protest movement is not all lost. People now understand that mass action can shake powerful regimes. A new generation is gaining political awareness, but is now facing increased repression, complex geopolitical realities, and the threat of war.
There is still widespread illusion in the idea of Western-style democracy. Corruption, scandals, and authoritarian control have been the experience of the masses in many Asian countries, which strengthens the desire for cleaner, more democratic alternatives. This was at the heart of many protest movements, the desire to ‘cleanse’ politics by replacing corrupt elites with ‘good people’. But this illusion is often used by capitalist representatives to preserve the system, as if changing the faces in power will fix the underlying rot. For socialists, democratic demands and the purging of corruption, looting, etc. are important issues but their full slogans should be tied to ending the rotten capitalist system.
There is also fear, often justified, of international retaliation if bold economic steps are taken. In Sri Lanka, for example, calls to suspend debt repayments were dismissed as ‘utopian’ due to concerns over punishment from global and regional powers. Moreover, there is a general lack of experience in using labour strikes and worker power as tools to strengthen and lead movements.
The evolving global order is laying bare the structural weaknesses and limits of capitalism, not just in Asia, but across the world. It is increasingly clear that this system cannot meet the basic needs of the majority, nor can it uphold even its own promises of democratic governance.
What is emerging is not just a crisis of economics, but a deeper crisis of legitimacy: of who the system serves. If the masses in Asia – workers, youth, and farmers – are to change their fate, it will not come through waiting for ‘trickle-down’ prosperity or the promises of populist leaders. It will require mass organisation, a clear socialist programme for action, and the courage to fight for a fundamentally different future in Asia and the entire globe.
