Monday, August 22, 2005

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Does China contradict the liberal paradigm, part deux

Following up on my post a few months ago on whether China's economic liberalization will lead to democratization, the Economist asks similar questions about the trajectory of Hu Jintao's government -- and comes up with the same muddled answer:

Mr Hu's (in fact, fairly consistent) conservatism has been evident in his belief that the Communist Party, riddled with corruption and other abuses of power, is quite capable of cleaning up its own act without the need for any checks or balances. This year, for instance, he has ordered millions of party officials to take part in many hours of mind-numbing ideological training designed to tighten party discipline (known as the “education campaign to preserve the advanced nature of Communist Party members”)....

Publicly, Mr Hu's comments have been moderate in tone. But he has been tougher at closed-door gatherings, such as during a meeting of the party's Central Committee last September. The plenum was of crucial symbolic importance for Mr Hu. It appointed him as the supreme commander of China's armed forces, thus completing his takeover of the country's three top positions, following his appointment as party leader in November 2002 and president in March 2003. The contents of Mr Hu's maiden speech have not been published in full. In the still secret portion, Mr Hu reportedly railed against “Western hostile forces” and “bourgeois liberalisation”. It was a worrying throwback to the paranoid language that suffused official rhetoric in the wake of the Tiananmen Square protests of 1989....

Yet for all Mr Hu's rhetoric, he has yet to strike out at perceived wayward tendencies with anything like the vigour shown by Mao Zedong, Deng Xiaoping or even Jiang Zemin, whose crackdown on Falun Gong, a spiritual movement, in 1999 sent many thousands to labour camps. The complaints of Beijing's intellectuals are offset by other signals that China's economic reforms are continuing, even if government enthusiasm for the kind of mass privatisation of state-owned enterprises that occurred in the late 1990s and early this decade may have abated. In February the government issued new guidelines for private investment in areas hitherto the preserve of the state. This month it issued a draft of China's first law on property rights, aimed at protecting individuals and companies from arbitrary appropriations by the state. Many say the new law is inadequate, but it is still something of a concession to a growing middle class.

Even in the realm of privatisation, the government continues to experiment. In May, a new attempt was launched at off-loading state-owned shares in the 1,400 companies listed in China's stockmarkets. The government has indicated that the reform plan will not mean selling off its controlling stake in “key enterprises”. But it will relinquish at least some of its firms.

Given the increasingly conspicuous inequalities emerging in China as a result of the country's embrace of capitalism, it suits Mr Hu to appear to pour cold water on the idea of laisser-faire economics, blamed for a growing gap between rich and poor, between regions and between urban and rural areas. In the past couple of years there has been an upsurge in the number of protests triggered by these disparities, as well as by rampant corruption. Mr Hu is trying to strengthen the party's legitimacy by stressing its sympathy for the disadvantaged.

Mr Hu's catchphrase is “balanced development”. This will be a central theme in a new five-year economic plan (a still cherished relic of the central-planning era) due to be discussed by the Central Committee in October and ratified by the legislature next March. It will be Mr Hu's first opportunity to put his stamp on a long-term economic strategy. But rapid growth will remain his first priority. Mr Hu has shown no sign of retreat from the core belief of party leaders since the early 1990s: that growth is essential to social stability and thus the party's survival. If redistributing wealth were to jeopardise that, even the conservative Mr Hu would back off.

posted by Dan on 08.22.05 at 08:30 AM


What are your thoughts on China, and other Asian countries to a lesser degree, getting slammed by high energy prices since they subsidize so much to keep gas prices low? Seems to me it could lead to a huge slowdown in China's economy, and reveal just how much the gov't is propping up this allegedly unstoppable economic juggernaut.

posted by: Don Mynack on 08.22.05 at 08:30 AM [permalink]

Hasn't this same argument - that engaging China via capitalism will bring democracy - been used for the better part of 20-25 years now?

Has it? So they haven't had a Tiananmen-style massacre recently. Congratulations,but that hardly makes it a democracy.

posted by: Dan on 08.22.05 at 08:30 AM [permalink]

Just a couple of what degree is the Chinese government's preference for stability, etc. also a preference among the population? And, despite the occasional protests in Chinese rural areas, there also seems to be a fair amount of nationalism among Chinese citizens...I wonder to what degree that sentiment undermines pressure for political change?

posted by: Chris Rugaber on 08.22.05 at 08:30 AM [permalink]

I think the most honest answer to this is that we don't know. How much can we rely on the stats coming from the CCP? Yes, China is growing. Yes, China is more properous than it was. How much? What's really going on?

The economic development in Stalin's Russia was the wonder of the West once upon a time, too. But eventually we (and the Russian people) learned that the books had been cooked.

We don't know how much capitalism there is in China, or how much growth there has been, or how much reform there has been, or much of anything else with any real confidence.

posted by: Dave Schuler on 08.22.05 at 08:30 AM [permalink]

What is the democratization timeframe we're talking about here?

If "...growth is essential to social stability and thus the party's survival" are we not still faced with the party's survival as the paramount objective, to which others may be sacrificed?

What are the "wayward tendencies" at which Hu Jintao has not struck? Has he not struck at them because he is different (because of priorities different from earlier Chinese leaders or for other reasons; because the "wayward tendencies" are of lesser magnitude than Falun Gong or the pre-Tian An Men democracy movement; or because the "wayward tendencies" are directed more at local authorities than at the central Communist authority in Beijing, and are hence seen as answerable by means other than straightforward repression?

How, if at all, is the liberal paradigm different in a country many times larger than almost any other?

posted by: Zathras on 08.22.05 at 08:30 AM [permalink]

1) How liberal is the liberal paradigm in China? A lot of this is state sponsored capitalism using authoritarian tools to enhance economic development. Is what is going on in China really 'liberal' in the sense we conventionally apply or only in the relatively weak sense that it isn't overtly a strong command economy?
2) The time frame question raised above is a good one. The PRI regime in Mexico lasted about 75 years, showing that a hybrid capitalist-authoritarian-semisocialist system can be pretty durable with competent leadership. Despite recent developments, no one would call present day Mexico an established, thorough democracy.

posted by: Roger Albin on 08.22.05 at 08:30 AM [permalink]

Having been to China a number of times there is clearly economic progress occuring. The coastal cities no longer have crews of black shirted workman coming out with shovels and hoes to tend to potholes or fix sidewalks. prada gucci and western cars are common sights and the amount of building is quite literally astounding.

all that said there has been a marked increase in protests, it's not just a few occuring in the countryside either. More and more are actually being reported now in the west. the reasons aren't lack of democracy either, rather the massive indemic corruption at all layers of the communist party, especially the lower tiers in the countryside is the driving impetus for the unrest. if anything will unseat the communists its the corruption. corruption brought all the other dynasties low, I see no reason why this one would be any different after 3000years of repetition.

market capitalism and democracy are not intimately tied together either, still not sure how this idea started. One is certainly capable of existing without the other...India still isn't what i'd call an open economy, and singapore clearly isn't a democracy.

I'd posit the hype about china is somewhat akin to that of the 80s concerning japan, definitely a country on the rise but not quite to the extent that it's going to take over the world. and like japan i'm far more interested to see how china deals with it's demographic time bomb as the population ages rapidly in the next 3 decades...

excellent article on india and china

posted by: johnnymeathead on 08.22.05 at 08:30 AM [permalink]

Chris, speaking as someone who speaks to Chinese nationals about their politics every once in a while, I get the feeling that they view democracy as a bit of a luxury compared with economic growth. In addition, there's not much of a democratic tradition in China.

Finally, I get the feeling that there's a bit of the fear of the masses and worry that if there isn't a strong central government, there will be mass chaos.

posted by: Klug on 08.22.05 at 08:30 AM [permalink]

Two comments:
1) I don't think the Chinese people are more liberal than the government. They are certainly more willing to confront Taiwan militarily, for example, and are almost unanimous in their support of the notorious urban modernization plans (3 Gorges, hutong demolition, etc.).

2) A lot of paradoxes can be thought of as conflicts between different "branches" of the government. The State Council is only intervening occasionally; day-to-day, the ministries are in charge. Some, like MOFCOM, are very pro-Western. Some, like Security, are not so. It is very common to find conflicting "Regulations", as the legally enforceable proclamations of the ministries are called.

posted by: Kevin on 08.22.05 at 08:30 AM [permalink]

It seems to me that the closest recent historical parallel to China's rise may be the rise of Bismark's Germany.

This gives rise to some concerns, because during Bismark's latter years the economic and political landscape started shifting to Germany's detriment. These problems were exacerbated by the fumblings of Bismark's less-competent successors and culminated in the pressures which led to two World Wars in this century.

Right now China is not an adventurous state. It's foreign policy is less expansionist than it was 30 years ago. China is focussed on getting rich and doing so very successfully. What worries me are factors which could change that.

China's current economic niche is in low-cost manufactures. Some of China's industries are going upmarket into higher-value products but the base remains the low end. Three things could threaten China's current happy equilibrium:

Demands from China's low-cost labor for a bigger share of the pie (akin to the rise of the Socialists in Germany in the 1880's). This is almost certain to happen sooner or later, I think.

A persistent rise in world prices for raw materials. Oil is the most prominent example but far from the only one. This will tend to hurt low-end manufactures more than any other sector, and may prompt China's capitalists to 'sweat' their labor force in response. Which in turn could help spark (or pour kerosene onto) a 'socialst labor' movement described above.

Widespread western protectionism could hurt although I think this would be a marginal factor exacerbating China's other (hypothetical) troubles rather than a primary cause in itself, although this assumes that something like the Great Depression doesn't happen in the interim.

posted by: Don on 08.22.05 at 08:30 AM [permalink]

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