Tag Archives: Communist Party

Party Time

A ceremony marking the centenary of the Communist Party of China (CPC) is held at Tiananmen Square in Beijing, July 1, 2021. Photo credit: Xinhua/Lan Hongguang

CENTENARIES SHOULD BE celebrated—that of the Party’s founding deserves to be much as any other. The parties, with a small p, pizzazz and propaganda are well underway. History, like all good history, is being reshaped for the future.

This Bystander doubts that Mao Zedong and his small band of revolutionary brothers could have conceived on July 1, 1921 how China would look 100 years later. Their struggle was to take power, which would take most of the following three decades heavily marked by international and civil war.

Yet the Great Helmsman would have cause to be satisfied. The Party has kept its leading role even as other communist governments collapsed. It has proved resilient and adaptable in the face of significant periods of political, social and economic turmoil, setbacks and missteps. Most of all, it is led by a general-secretary (chairman to be, perhaps) who shares Mao’s nationalism and ability to impose his vision, personality and will on the Party with an iron hand that is as ruthless as it is purposeful.

The Party faces a challenging first decade of its second century externally and internally. The demographic dividend, which propelled China’s enabling wealth since Deng Xiaoping’s opening up of the economy to reverse the deprivations of Mao’s Cultural Revolution, turns into a demographic deficit just when the country has to clear the middle-income gap to become an advanced economy. It has unfinished business over Taiwan to attend to in some fashion. It has to adapt to being a world power, with the choices on deploying military might to support its national interests that will force on it.

Most of all, it has to continue to deliver a better life for its citizens to justify and sustain its monopoly on political power.

Authoritarianism’s ‘most compelling success story’ may well continue to defy predictions of its decline, let alone death. By the time of the next big centenary celebration — of the Party’s victory in the Civil War in 1949 — it will be clearer how deep into its second century the Party’s absolute control has run and if the by-then nonagenarian Xi Jinping has secured his legacy to match or supplant Mao’s.

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The Core Of The Matter

CPC General Secretary Xi Jinping (centre) and other Politburo Standing Committee members seen at the Sixth Plenum held in Beijing, October 24 to 27.THE SIXTH PARTY plenum just concluded puts General Secretary Xi Jinping (above, centre) at the core of the leadership.

All party members should ‘closely unite around the Central Committee with Comrade Xi Jinping as the core’, said the the communique issued after the four-day behind-closed-doors meeting of the Party’s 400 top officials. Thereby, Xi enters a leadership pantheon comprising Deng Xiaoping, Jiang Zemin and the benchmark for all such Party leaders, Mao Zedong — though it was Deng who first articulated the term when designating Jiang as his successor in 1989.

Thus elevated, Xi has reinforced his authority over the party, potentially allowing him to extend his dominance for years to come. Another five years as General Secretary, along with his other two jobs as President and head of the People’s Liberation, now seems a given.

The Sixth Plenum decided that a Party Congress  — the quinquennial meeting of the Party’s top 2,000 members — would be held in the second half of next year. That is the forum for appointing the new top leadership for the next five years. Under current Party rules, all but Xi and Prime Minister Li Keqiang among the seven-strong Politburo Standing Committee, the apex of power, will have to retire on the grounds of age, opening the way for Xi to pack it with his proteges.

From the new appointees will come the leadership through which Xi will exert his power after his retirement, assuming he does not flout the convention of stepping aside after two five-year terms to stay in office as well as power.

Xi’s authority is far from absolute, which gives the plenum’s other important decisions — the adoption of strict rules of Party discipline that apply at all levels and revised codes of intra-party political life — their significance.

Xi has been steadily consolidating his power through his anti-corruption campaign and by centring the leadership’s decision making in areas such as military reform, security and the economy on central committees that he controls. This in part is because systemic corruption at the local level has frustrated his plans for ‘rebalancing’ the economy that he sees as essential for maintaining the Party’s ability to retain its monopoly grasp on political power.

However much power at the top concentrates in the general secretary, Xi cannot avoid the fact that China’s social stability depends on maintaining a delicate balance between the top-down authority of the central leadership and the bottom-up legitimacy of local governance.

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Sidelining The Thinking Classes

IT IS NOT unknown for Chinese intellectuals to be seen on state television confessing to their alleged crimes. It is not unknown for hyphenated Chinese, Chinese-Americans in particular, to be seen doing the same.

It is exceedingly rare for a non-ethnically Chinese foreigner to be seen doing so. That makes the case of Peter Dahlin so exceptional.

The Swede had been detained since early January amid a crackdown on human rights lawyers and activists, before being expelled from the country today.

Dahlin founded Chinese Urgent Action Working Group, commonly known as China Action, a non-governmental organization that provides legal aid to people alleging human rights violations and assistance to uncertified lawyers in rural areas.

Authorities accuse China Action of receiving foreign funding to ‘instigate confrontations’ and to have ‘trained others to gather, fabricate and distort information about China’. They say they have ‘smashed an illegal organization that sponsored activities jeopardizing China’s national security’.

Well, they would, wouldn’t they, this Bystander is tempted to say.

However, beyond the particulars of this case, what are the general implications? Is this the sending of a chilling message — as seems to have been the case of the disappearing Hong Kong booksellers including Gui Minhai, who holds a Swedish passport and who was apparently detained in Thailand in what is seemingly an early example of the exercise of the new national security law that gives security forces international reach.

Or does it fit into a broader pattern of deterrence, and, if so, a pattern of what?

Certainly, there has been a crackdown on human rights lawyers and activists since last summer. Scores of Chinese lawyers and their staff have been detained for interrogation, leaving many facing political subversion charges that carry potential sentences of life imprisonment.

Giving this operation the veneer of rooting out a Western conspiracy against China provides popularly acceptable patriotic cover. And if it is on television, it must be true.

However, the crackdown goes wider than civil rights lawyers. Last year, more than 30 university officials were accused of taking bribes or other corruption. Their number included Zhou Wenbin, the high-profile head of Nanchang University who was sentenced last month to life imprisonment for taking bribes and embezzlement. At least seven other university presidents, including that of the Communication University of China in Beijing, have been removed from their posts in the sweep.

Visiting and Chinese scholars talk of an academic chill having descended. Indeed, it may be the worst time to be an open-minded academic since the anti-bourgeois liberalisation campaigns of the 1980s following strict new guidelines on criticism of Party and government.

The leadership’s centralization of power to protect the Party’s political monopoly has imposed, inevitably, severe constraints on civil society as it represents a possible alternative centre of political activity that could challenge the Party. Notions of human rights, judicial independence and multi-party democracy are seen as particular threats to the Party’s supremacy that need to be countered.

The effect is self-censorship within academia and the avoidance of controversial issues.

Top leadership believes the Party faces an existential struggle. The example of post-Communist eastern Europe has been noted. There, professors, writers, lawyers and journalists became politicians and the intellectual leadership of new political groupings.

This distrust of potential rival sources of power coincides with the emergence of the notion among the leadership that it no longer needs intellectuals to inform it and shape policy, a traditional role that political scientists within universities have played.

The increasing prominence of ministry-sponsored think thanks taking on that role is no coincidence. At the same time, the capability of the security apparatus to gather mass information — and of ‘big data’ to analyse it — provides a new potential alternative to critical independent scholars.

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Beijing Shakes As Bo Xilai Suspended From Politburo

As aftershocks go, this will have stronger reverberations than even the original earthquake. Bo Xilai, the sacked Party boss of Chongqing, has been suspended from the Politburo and the Central Committee for suspected “serious violations of discipline”. His wife, Gu Kailai, has been placed under judicial investigation, along with a family employee, Zhang Xiaojun, in connection with the death of a British businessman and long-time family associate, Neil Heyward, who was found dead in a hotel room in the city last November. State media say police are now considering it to be a murder case.

Bo’s fall from grace has already sent tremors through Chinese politics in the run up to a leadership transition in which he had been expected to be promoted to the Party’s ruling inner sanctum, the Politburo standing committee. One of the Party’s rising leaders and, like his wife, a princeling, the charismatic and popular Bo’s sacking triggered–or was triggered by, it is hard to be sure in the opaque world of Party politicking at the highest level–the biggest political crisis since 1989 and the days of Tiananmen Square.

What comes next is anyone’s guess, or at least of anyone outside Zhongnanhai, the leaders’ compound in Beijing. There is a deep, if not clean factional divide between those who want the Party’s legitimacy to monopoly rule to be based on ideology derived from the mandate of Mao (in which camp Bo and his supporters fall), and those who wish to continue to base that legitimacy on the Party’s ability to go on delivering rising living standards for all Chinese, a course that now turns on scaling back the state’s role in the economy and giving the private sector more scope to expand. That raises, first, the question of how far can the Party scale back its economic control without yielding political control, and, second, how to deal with the challenge economic reform poses to many of the vested interests among the princelings and the military who derive their power, money and influence from the institutions and honeypots of a heavily state-directed economy.

Bo’s suspension from the Politburo means he has now lost all his key Party posts. As such it marks an important turn in that debate. How its consequences will shake out, and particularly if there will be a wider purge of the old guard — Zhou Yongkang, the Party’s security head and considered a Bo ally, may be the key figure to watch in this regard — takes a braver observer than this Bystander to hazard guesses at at this point. The political ground in Beijing is still shaking, and we are yet to see who else will be rattled.

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Mr Xi Visits America Again

Xi Jinping, the Chinese vice-president the rest of the world is taking to be China’s next president, visits the U.S. this week. It is a land he knows better than apparently the U.S. knows him. Xi is seen above (center, with plastic cup) at a picnic in Muscatine, Iowa 27  years ago with a visiting Hebei provincial agricultural delegation. He will be returning there with great PR fanfare during his latest trip. This Bystander thought it timely to republish a piece we first published last July  looking at Xi and China’s most important leadership transition in the three decades since Deng Xioaping set the party and country on the road of economic reform.

China’s next top leaders will, for the first time, be men born after the Party seized power in 1949. With their ascendancy, modern China will cross a political and demographic Rubicon. Their generation is the great, great grandchild of Mao’s first generation of leaders. Their youth occurred during the Cultural Revolution, when many of their families were purged, but they embraced the Party nevertheless, and many advanced through its ranks by being “redder than red”. They are more worldly than their predecessors, mostly educated at top Chinese universities, more likely than their predecessors to have social science rather than engineering degrees, and be more likely to send their own children to top U.S. and European universities. Their working political life has only known China transforming itself as a rising political and economic power, yet they are as pragmatically committed as their predecessors to the Party’s monopoly on power, if divided over whether the basis for that should be ideological or economic.

The distinction matters. China is at a critical stage of its economic development. It has, self-evidently, developed at great pace through the initial phases of industrialization and urbanization over the past 30 years. Now it must kick on and leap the great wall that has stopped other developing nations completing the transformation to a developed economy.

When per capita income reaches $10,000-12,000 a year (in 2007 dollars), developing economies tend to stop developing without institutional change. China’s annual per capital income is $4,000. At current growth rates that gives it less than a decade–the watch of the new leadership–before it hits the wall. It will need to make deep structural reforms, both economic and political, if it is going to be able to vault it. Regardless of the fact that even if it does clear the wall, China will still be a middle-income country–absolute size of the economy is irrelevant in this respect, even if China passes the U.S. to become the world’s largest economy–no country has yet managed to be both developed and a single-party state.

That sets up a dilemma. If the Party’s legitimacy to monopolistic rule depends on continuing to deliver the economic growth that keeps its citizens getting richer and the country stronger and if China’s rapid economic growth cannot continue beyond a certain point without institutional reform, then managing the role of government in the economy and overcoming state-owned vested interests–in other words reforming itself–becomes the new leadership’s most important concern.

If, on the other hand, the Party’s legitimacy to monopolistic rule rests on an ideology of the mandate of Mao, it will still need to forge a statist economy that can deliver the economic development to ensure social stability and regional clout, and be unable to escape the fact that economic growth cannot continue beyond a certain point without institutional reform to support its move up the arc of development and prevent the ossifying of incumbent interests. So, again, managing the role of government in the economy and arbitrating between state-owned vested interests becomes the new leadership’s most important concern.

China is not only self-evidently non-Western, but it has a self-consciously distinct history, culture and political system, so it could develop a distinct economic system. Chinese exceptionalism is not anymore unreasonable than American exceptionalism. But in that event, the Party will still have to operate and against a back-drop of a globally connected economy in a world that is already wary of China’s perceived mercantilism and rising power and status. Though unlikely, that could make China turn inward and neo-isolationist, relying on its growing internal market and a demographic bias to becoming a deficit country over the next decade, to drive the next stage in its economic development.

For now, there is every indication that China will continue on its present course. Indeed, there is a plan for that. The new leadership will come into position midway though the current five-year plan. Yet what looks from the outside to be a seamless transfer of power from one generation of leadership to the next belies the factional infighting that occurs out of public view.

So far, it is the princelings, the descendants of Mao’s original revolutionary leaders, an elite collective dynasty of some 400 families who hold extensive sway over the Party, army and the economy, that are coming out on top. One of their own, Xi Jinping, born 1953, is emerging as Hu Jintao’s successor as paramount leader, successively taking over from Hu the positions of Party general secretary in 2012, president in 2013 and chairman of the Central Military Commission in 2014. By then the top Party, state and military jobs will again be united in one man, if Xi successfully consolidates over the course of the two-year transition his position as the first ranked in the Politburo’s standing committee, the small group of men, currently nine, that constitute the inner sanctum of the Party’s–and China’s–power.

Xi has outflanked Li Keqiang, the only other post-49er to make it to the Politburo’s standing committee, where he ranks seventh out of nine, one place below Xi, and who was Hu’s protege until Hu bowed to political realities and switched his support to Xi. Li, like Hu rose through the Party’s other leading faction, the Communist Youth League (YCL) whose power base is the party’s grassroots. Princelings dismissively refer to the leaders who come up through the YCL as “sons of shopkeepers.”

Xi rise from provincial official to national leader has been rapid. Cunning, calculating and ambitious Xi plays politics like a chameleon playing poker. He has worked in the countryside and in cities, north and south, in villages and in big cities, giving him a broad network of connections. He is a student of Marxism but not known to be ideological. Though never in the army, he has strong links with the armed forces. His father, General Xi Zhongxun, was a founding father of Mao’s revolution and his wife, Peng Liyuan, is both a celebrity folk singer and a major general in the PLA. He has a reputation for being pro-business (his father was purged by Mao for promoting economic opening and became one of Deng Xiaoping’s key mentors and lieutenants in instituting economic reform, particularly the early experiments in Guangdong and Shenzhen) but he is also famous for being ‘clean’, having cleared up corruption in Fujian in the 1990s and Shanghai in the 2000s, and is disdainful of China’s nouveau riche. He is calm and cautious, and above all seen as a team player–while all the while skillfully climbing a ladder of political patrons.

Though scarcely charismatic, Xi will be a more imposing figure on the world stage than his predecessors (though Hu set a low bar). Physically, he is tall and stocky so photo shoots with other world leaders will play well at home. With a sister in Canada, a brother in Taiwan and a daughter at Harvard in the U.S., to which he has been a visitor since the 1970s, he knows more about the world than the world knows about this plain- if rarely outspoken man who plays his political cards close to his chest–or about what he and his fellow new leaders want to do once they reach the apex of power they have scrabbled so hard to ascend.

As already noted, they will take over half way through the current five-year plan, so their initial path is set. But the next Politburo’s composition (all of its nine members save for Xi and Li are expected to retire in 2012) will also reflect the balance of power between those who believe that maintaining economic growth is necessary to legitimize the Party’s right to monopoly rule, in short the economic reformers, and those who think that legitimacy should be based on ideology, a group for whom the current Maoist nostalgia stands proxy. Many other currents–political, nationalistic, regional and demographic–cut across that divide. Even the princelings are not a monolithic bloc. Factional alliances exist among those who want to develop a more harmonious form of capitalism with a strong safety net, a narrowing of the wealth gap and more environmental protections; those harderliner economic reformers who want to diminish the power of the public sector and open up political reforms to embrace a new propertied class; and the so-called neo-comms, who want to asset China’s global power through cultural diplomacy, military strength and taking a greater role in international institutions.

Who gets promoted from the Politburo to its standing committee, and how they rank, will reveal to some extent how those divides lie and thus how China develops over the next decisive decade. But all are united in preserving the Party’s grip on power.

Footnote: State media have published the transcript of written answers Xi gave to questions from the Washington Post on the eve of his visit to the U.S. His comments on Sino-American relations were mostly pro-forma, including a note of warning sounded to the U.S. over its military stance in the Pacific.

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The Battle Behind The Birthday For A Billion

China's top leaders mark the 90th anniversary of the Communist Party of China in Beijing, July 1, 2011.

China’s Communist Party is celebrating the 90th anniversary of its founding on July 1, 1921 with even more pomp and pageantry than it exhibited two years ago on the 60th anniversary of its coming to power in 1949. But behind the “birthday party for a billion” (though the Party has only 80 million members) is its most important leadership transition in the three decades since Deng Xioaping set the party and country on the road of economic reform.

China’s next top leaders will, for the first time, be men born after the Party seized power in 1949. With their ascendancy from next year, modern China will cross a political and demographic Rubicon. Their generation is the great, great grandchild of Mao’s first generation of leaders. Their youth occurred during the Cultural Revolution, when many of their families were purged, but they embraced the Party nevertheless, and many advanced through its ranks by being “redder than red”. They are more worldly than their predecessors, mostly educated at top Chinese universities, more likely than their predecessors to have social science rather than engineering degrees, and be more likely to send their own children to top U.S. and European universities. Their working political life has only known China transforming itself as a rising political and economic power, yet they are as pragmatically committed as their predecessors to the Party’s monopoly on power, if divided over whether the basis for that should be ideological or economic.

The distinction matters. China is at a critical stage of its economic development. It has, self-evidently, developed at great pace through the initial phases of industrialization and urbanization over the past 30 years. Now it must kick on and leap the great wall that has stopped other developing nations completing the transformation to a developed economy.

When per capita income reaches $10,000-12,000 a year (in 2007 dollars), developing economies tend to stop developing without institutional change. China’s annual per capital income is $4,000. At current growth rates that gives it less than a decade–the watch of the new leadership–before it hits the wall. It will need to make deep structural reforms, both economic and political, if it is going to be able to vault it. Regardless of the fact that even if it does clear the wall, China will still be a middle-income country–absolute size of the economy is irrelevant in this respect, even if China passes the U.S. to become the world’s largest economy–no country has yet managed to be both developed and a single-party state.

That sets up a dilemma. If the Party’s legitimacy to monopolistic rule depends on continuing to deliver the economic growth that keeps its citizens getting richer and the country stronger and if China’s rapid economic growth cannot continue beyond a certain point without institutional reform, then managing the role of government in the economy and overcoming state-owned vested interests–in other words reforming itself–becomes the new leadership’s most important concern.

If, on the other hand, the Party’s legitimacy to monopolistic rule rests on an ideology of the mandate of Mao, it will still need to forge a statist economy that can deliver the economic development to ensure social stability and regional clout, and be unable to escape the fact that economic growth cannot continue beyond a certain point without institutional reform to support its move up the arc of development and prevent the ossifying of incumbent interests. So, again, managing the role of government in the economy and arbitrating between state-owned vested interests becomes the new leadership’s most important concern.

China is not only self-evidently non-Western, but it has a self-consciously distinct history, culture and political system, so it could develop a distinct economic system. Chinese exceptionalism is not anymore unreasonable than American exceptionalism. But in that event, the Party will still have to operate and against a back-drop of a globally connected economy in a world that is already wary of China’s perceived mercantilism and rising power and status. Though unlikely, that could make China turn inward and neo-isolationist, relying on its growing internal market and a demographic bias to becoming a deficit country over the next decade, to drive the next stage in its economic development.

For now, there is every indication that China will continue on its present course. Indeed, there is a plan for that. The new leadership will come into position midway though the current five-year plan. Yet what looks from the outside to be a seamless transfer of power from one generation of leadership to the next belies the factional infighting that occurs out of public view.

So far, it is the princelings, the descendants of Mao’s original revolutionary leaders, an elite collective dynasty of some 400 families who hold extensive sway over the Party, army and the economy, that are coming out on top. One of their own, Xi Jinping (second from the right in the picture above), born 1953, is emerging as Hu Jintao’s successor as paramount leader, successively taking over from Hu the positions of Party general secretary in 2012, president in 2013 and chairman of the Central Military Commission in 2014. By then the top Party, state and military jobs will again be united in one man, if Xi successfully consolidates over the course of the two-year transition his position as the first ranked in the Politburo’s standing committee, the small group of men, currently nine, that constitute the inner sanctum of the Party’s–and China’s–power.

Xi has outflanked Li Keqiang (second from left in the picture above), the only other post-49er to make it to the Politburo’s standing committee, where he ranks seventh out of nine, one place below Xi, and who was Hu’s protege until Hu bowed to political realities and switched his support to Xi. Li, like Hu rose through the Party’s other leading faction, the Communist Youth League (YCL) whose power base is the party’s grassroots. Princelings dismissively refer to the leaders who come up through the YCL as “sons of shopkeepers.”

Xi rise from provincial official to national leader has been rapid. Cunning, calculating and ambitious Xi plays politics like a chameleon playing poker. He has worked in the countryside and in cities, north and south, in villages and in big cities, giving him a broad network of connections. He is a student of Marxism but not known to be ideological. Though never in the army, he has strong links with the armed forces. His father, General Xi Zhongxun, was a founding father of Mao’s revolution and his wife, Peng Liyuan, is both a celebrity folk singer and a major general in the PLA. He has a reputation for being pro-business (his father was purged by Mao for promoting economic opening and became one of Deng Xiaoping’s key mentors and lieutenants in instituting economic reform, particularly the early experiments in Guangdong and Shenzhen) but he is also famous for being ‘clean’, having cleared up corruption in Fujian in the 1990s and Shanghai in the 2000s, and is disdainful of China’s nouveau riche. He is calm, cautious, and above all seen as a “team player”–while all the while skillfully climbing a ladder of political patrons.

Though scarcely charismatic, Xi will be a more imposing figure on the world stage than his predecessors (though Hu set a low bar). Physically, he is tall and stocky so photo shoots with other world leaders will play well at home. With a sister in Canada, a brother in Taiwan and a daughter at Harvard in the U.S., to which he has been a visitor since the 1970s, he knows more about the world than the world knows about this plain- if rarely outspoken man who plays his political cards close to his chest–or about what he and his fellow new leaders want to do once they reach the apex of power they have scrabbled so hard to ascend.

As already noted, they will take over half way through the current five-year plan, so their initial path is set. But the next Politburo’s composition (all of its nine members save for Xi and Li are expected to retire in 2012) will also reflect the balance of power between those who believe that maintaining economic growth is necessary to legitimize the Party’s right to monopoly rule, in short the economic reformers, and those who think that legitimacy should be based on ideology, a group for whom the current Maoist nostalgia stands proxy.  Many other currents–political, nationalistic, regional and demographic–cut across that divide. Even the princelings are not a monolithic bloc. Factional alliances exist among those who want to develop a more harmonious form of capitalism with a strong safety net, a narrowing of the wealth gap and more environmental protections; those harderliner economic reformers who want to diminish the power of the public sector and open up political reforms to embrace a new propertied class; and the so-called neo-comms, who want to asset China’s global power through cultural diplomacy, military strength and taking a greater role in international institutions.

Who gets promoted from the Politburo to its standing committee, and how they rank, will reveal to some extent how those divides lie and thus how China develops over the next decisive decade. But all are united in preserving the Party’s grip on power.

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The Persistence Of Party Power Over China’s Private Enterprises

Xinhua has lifted the skirts of the Party’s influence over private enterprises. Some 3.8 million grassroots Party organizations, which will include those in private enterprises, but also everything from private schools to non-governmental organizations, now exist, up from 2.1 million in 1978, it says. The exact number of Party cells in companies is difficult to determine, though we have seen statistics that said there were Party organizations in 250,000 companies (including foreign owned companies such as Wal-Mart) with 3 million members at the end of 2006, plus 800,000 self-employed Party members. The numbers have surely risen since, as overall Party membership has risen from 70 million to 80 million, with 23% of the total, or some 18 million people now, managerial level staff in public and private enterprises. The implication of the Xinhua piece is that the Party’s goal is to have a presence in every private enterprise with at least 80 employees.

The Party has never made any secret of its belief that it provides the political guidance for the whole economy. In a country where the Party mimics the organs of government and state and once controlled all businesses of any size, to do the same for the private-sector economy should come as no surprise. Free-market capitalism has no meaning in China, if by free is meant free from the Party’s leading role.

Yet beyond the statistical titillation of the apparent success of a policy to  grow formal representation in private enterprises that was kick started in 2002 lies the questions of whether this provides an explanation of how private companies’ business goals are kept aligned with Party policy and how it changes the structure of the country’s elites. Have the old elites secured control of the new economy: or is their power only temporarily persisting in it, to wane as market institutions eclipse the administrative power of the cadres; or are the old elites just being replaced those made newly wealthy by business?

We suspect the answer lies along the lines of the second option and that temporarily is being strung out over decades by the adeptness of local Party committees in keeping their fingers in the decision-making pie of private enterprises thanks to a institutional environment that is already based on formal and informal personal connections. For companies, sponsoring a Party cell, is as much about winning a “red hat” as it is about making a “black hat” available for local officials whose careers have been judged by their success in achieving local economic development. A vested interest shared limits the resistance to reform. Political capital is still as important as financial capital to an enterprise in China. Close ties between a company and local officials make access to scarce resources such as capital easier for a company via the Party’s network of connections, and minimizes the risk of the thing any business most dislikes, uncertainty, particularly policy uncertainty.

It is anyway a delicate line to walk for a Party whose commitment to national economic growth is taken as a basis of its political legitimacy to rule. The growing liberalization, internationalization and industrialization of the economy demands to an increasing degree professional managerial expertise in enterprises. Cadre core skills such as price controls, plan fulfillment and quota setting are not the functional expertise required of a manager in a modern company.

State-owned companies, by definition, already have a high degree of political involvement, including those with publicly-listed subsidiaries, which may prompt some interesting corporate governance and disclose-to-shareholder questions. Perhaps such companies should have to list in the their annual reports their top-ranking Party members as they are required to list their directors and top earners?

What strikes this Bystander is how the liberalization of China’s economy has been accompanied by a relatively stable power structure and the survival of the political elite, which has also acquired an extensive stake in the economy. Unlike in Russia, part, not full privatization of state-owned enterprises, particularly in the pillar industries, has been an important to prevent the creation of large areas of privately owned property in the economy beyond officialdom’s sway.  The Party has, so far at least, found a way of absorbing the rise of private power that which elsewhere in industrializing economies has led to the rise of new centers of political power. Indeed for central government, the bigger challenge is the power of semi-independent local party bosses on whom have to be imposed periodic crackdowns from the center in the form of anti-corruption campaigns.

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The Beijing Wall

The 20th anniversary of the opening of the Berlin Wall is taken to mark the fall of communism, but more accurately it was the fall of the Soviet empire. Communist parties still rule in Cuba, North Korea and, of course, China. But the anniversary does prompt a couple of questions, why did communism not fall in those countries, and why in Europe did it fall in 1989 and not in other years of protest such as 1956 or 1968 or 1979. The rulers in Beijing ask themselves those questions repeatedly. The Party’s continued grip on power depends on getting the answers right.

The key point to grasp about the year is that it followed the first free legislative elections in the Soviet Union since 1917 as Soviet leader Mikhail Gorbachev’s pushed ahead with what was essential a European social democratic program of economic, social and political reform. The newly constituted Congress of the People’s Deputies then elected representatives to the Supreme Soviet, and many of those elected were not Party candidates. Beijing has been careful not to lose control of the electoral process.

The Party leadership has also recognized the way centrally directed economies cause economic stagnation, and by extension political unrest, and that unleashing the power of the private sector is necessary. But the Soviet Union, to Beijing’s mind, went too far in its privatizations, creating an unruly and group of oligarchs and too little government control over strategically important industries. While Beijing has held a hard line on political reform, it has pushed ahead, as we well know, with modernizing the economy, prodding the state-owned enterprises into greater efficiency, which keeping them state-controlled, and giving more rein to small and medium sized enterprises.

Eastern Europe got freedom but East Asia got rich. For how long economic reform can continue independently of political reform remains the great unanswered question.

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The Post-Quake Struggle For Hearts And Minds

Li Yuanchao, who heads the Party’s Organization Department, says Party members should take a leading role in reconstruction after the May 12 earthquake in Sichuan, Xinhua reports. He emphasized the need to build Party branches at the local level.

Does that suggest that senior Party officials are concerned that NGOs have managed to occupy too much of the ground the Party would traditionally consider its own during the rescue and recovery phases of the quake relief effort? It would be a ‘hearts and minds’ battle that would have long-term ramifications if the Party were to lose it. Hence the reining-in of NGOs and the press in recent weeks.

The scale of that battle is indicated by a new quake situation map (.pdf) posted by ReliefWeb, a snapshot of which is below:

There is also a lengthy series of statistics showing the devastation the quake caused, both to individuals and property. The economic damage is put at an estimated $86 billion, but the human numbers are staggering:

2,000: No. of orphans
9,000: No. of children killed in collapsed schools
17,420: No. still missing
69,172: Official death toll
374,159: No. injured
5 million: No. homeless
10 million: No. living below poverty line
15 million: No. evacuated
46.2 millon: No. affected

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Filed under Politics & Society, Sichuan earthquake