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Understanding China–its economy, its politics, its worldview–is a global growth industry, and for good reason: A country that was poor, rural, and collectivist just a generation ago is today one of the new superpowers, a manufacturing powerhouse that is quickly translating its economic prowess into political and military might. At the same time, the country remains undemocratic, and the oppressed rights of a billion-plus people is impossible for the world to ignore, especially as its eyes turn to Beijing for the Summer Olympics. There are no easy answers to what its ascent means, but that hasn’t stopped China watchers from churning out book after book to explain how the country works.
The latest entry into this fast-growing library is What Does China Think?, by Mark Leonard, executive director of the European Council on Foreign Relations. Like others, Leonard posits that China’s rise “is the big story of our age and its after-effects could echo down generations to come.” The task he assigns himself is daunting. One should look skeptically at any book that promises to explain how a country as large as China thinks, particularly when it only has 224 pages.
Leonard’s approach is to economize. He doesn’t tell the reader what China as a whole thinks; rather, he acquaints the reader with the ideas of a small group of individuals he describes as the “intellectuals” who are shaping their country’s future. But the dozens of figures discussed at length in the book are all “insiders,” friends, if not members, of the political establishment–figures like economist Zhang Weiying, the first associate dean of the Guanghua School of Management at Beijing University; Wang Hui, a research professor at Tsinghua University; and Yan Xuetong, the director of the Institute of International Studies at Tsinghua University. The author interviewed none of the many influential dissident Chinese intellectuals based in China and overseas.
Oddly, it is clear that he has spoken with such people. In the acknowledgements section, Leonard lists the names of seemingly all the Chinese intellectuals with whom he has ever associated, including Qin Hui, a professor at Tsing-Hua University. Qin is an outstanding independent Chinese intellectual, and it would be good to read his views. But there isn’t a single paragraph introducing his viewpoints, or the viewpoints of those like him, in the entire book. Apparently, Leonard believes that it doesn’t matter what Chinese thinkers like Qin–reformers who are outside the establishment–think.
Such narrow coverage of China’s “thinking” presents at least two problems. First, ever since the Tiananmen Square massacre of June 4, 1989, a chasm has emerged between the thinking of the establishment and that of regular Chinese and the growing number of dissidents. It is hard to accept what intellectuals “in good standing” with the state and the party have to say: Are they being truthful, or are they merely acting as mouthpieces for the establishment? Second, it means that many intellectuals, myself included, hold viewpoints that are very distinct from those introduced in the book. The differences among us are not limited to just values, concepts, and political assertions, but also the very descriptions of political realities. We see a fundamentally different China than they do.
For a place as foreign to the West as China, and as important, this is dangerous. If you are totally unfamiliar with the ideas of the dissident community–and, by extension, a large swath of the public–then you will easily believe the one-sided explanations coming through in books like What Does China Think? This is particularly risky because they present a China that is unified and happy. The reality is much different, and Western policymakers need to understand what the differences are, and why many Chinese think this way–because it is the public discontent with their current situation, particularly over corruption and the course of privatization that will determine the country’s future stability.
Despite media coverage of this spring’s crackdown in Tibet and the occasional worker strike, China is awash in tensions that rarely make it into the international public consciousness. Take the widening gap between the rich and the poor. As the Beijing Olympics approach, the American media is full of stories about the burgeoning Chinese middle class. But in reality, the income gap is not only very large but also of a particularly malevolent nature, exacerbating discontent in a way unlike, say, the rich-poor gap in the United States. It is not, as many reports indicate, a normal byproduct of rapid economic growth. China’s economic disparity was not created by history or market forces, but by conscious, autocratic rule. Particularly since the wave of privatization began in the 1980s, China has seen an enormous transfer of wealth from the whole people to the wealthy and powerful. Many live in poverty because their possessions are regularly seized by those in power to build high-rise apartments, enormous infrastructure projects, even entire new cities with home prices most Chinese cannot afford.
This reality does not come through in What Does China Think? It only tells the optimistic version of growth in China, held tightly by the leadership and the establishment intellectual class. These people generally believe that as long as the economy grows fast enough, income disparity will gradually decrease, and the underprivileged will see their living standards rise. They assume that if the government continues to raise taxes on the poor, it will be able to establish a social security system that will help reduce economic disparity. Moreover, they believe that the problem of corruption will be contained once the legal system is established and perfected. President Hu Jintao and Premier Wen Jiabao have further reassured optimists by constantly reiterating the need to provide for the weak and powerless and to overcome corruption through legal measures.
But this is just talk. Because the powerful say it, many believe it. But the fact is that the privatization of China’s economy lacks legitimacy. It is a phenomenon without precedent in China or abroad, and it is therefore little understood, particularly outside the country. China’s circumstances are totally different from that of, say, Russia or Eastern Europe following the collapse of communism in the 1990s. Those regions suffered their share of problems while implementing economic reform and the privatization of their economies, but they have nevertheless done so under public control and with democratic participation. Said differently, their political systems reinforced their economic systems. These countries have experienced numerous transfers of power over the past decade, and throughout even tumultuous political turnovers, property rights have been universally acknowledged and respected. As a result, the credibility of the government and the legal validity of the reforms have not been in doubt, even when they have appeared unfair and even, at times, corrupt.
Circumstances could not be more different in China. Economic privatization is being carried out with neither public control nor democratic participation. For example, in 2006, Shandong’s largest business, the state-owned Luneng Group, with total assets of 73.8 billion yuan, was sold to two obscure private companies for a mere 3.7 billion yuan. One year later, the company was sold back to the state, but the state amazingly paid the two companies 900 million yuan more. Even now, no one (outside the inner establishment, of course) knows exactly the background of the two private companies at the center of the deal. But it is no stretch of the imagination to surmise that behind it stand powerful individuals who have profited immensely off the manipulation of public property.
What’s more, such theft is increasingly portrayed as legal and legitimate by those who profit from it. Between 1999 and 2000, in the name of “clarifying property ownership,” the city government of Changsha, in Hunan province, issued two legally binding documents, “Opinions on Some Issues Regarding the Acceleration of the Reform and Development of State-Owned Enterprises” and “Detailed Implementation Rules on the Ownership System Reform of State-Owned Enterprises in the City of Changsha.” They established a multi-stage path to reform of state-owned enterprises. First, state assets were divided into two parts. Assets going back 20 years and assets representing initial investments were considered state-owned, while the subsequent “accumulation” of wealth generated by these assets was defined as assets belonging to the companies’ management, i.e., the insiders. As a result, between half and 80 percent of the assets in many enterprises simply disappeared from the “state owned” accounting category and fell into the hands of insiders. Second, insiders were then permitted to buy what was left of the state-owned assets, according to the stipulation that a “one-time purchase of state-owned property rights can take a 50 percent discount.” That left just 10 percent of the total assets for the state–i.e., the public. But even that was too much. So, as a third step, the documents redefined many of the remaining assets as “enterprise assets”–a vague category–which were then disbursed in a “one-time quantitative distribution to individuals.” This distribution was by no means equitable. Rather, it went overwhelmingly to the management. As a result, the former leaders of the enterprises became capitalists, while most of the workers, who acquired very few shares, lost the security the state-owned enterprises had promised them and became employees of private companies.
This is but one of countless instances where the lion’s share of state-owned assets have gone, without compensation, to certain individuals, most of whom were among the small number of former leaders of state-owned enterprises and party members. The public has no right to speak, vote, or even know what is going on. They are expected to accept the results passively.
As if this weren’t insulting enough, one of the peculiarities of China’s economic reforms is that the government has consistently shifted responsibility for the disastrous results of the mistakes it has made in recent decades to the common people. At the same time, a great many government officials have taken credit for, and misappropriated on a massive scale, the wealth created by the labor and creativity of the people over several decades.
Amazingly, the public is also expected to take institutionalized corruption as the price of progress. As the Carnegie Endowment for International Peace has documented, some 10 percent of government spending is lost to kickbacks, bribes, and outright theft. Indeed, the system and the corruption prevalent within it are mutually reinforcing: The anonymous author of 1996’s Tiannu (The Wrath of Heaven), a banned novel depicting corruption in the Beijing mayor’s office, has one of his characters point out that the Communist regime allows officials at all levels to enjoy the fruits of corruption as the price for their full-fledged support–”corruption,” he says, “makes our regime more stable.” A few years ago there was a popular saying about corruption among government officials: “Executing all of them would possibly result in injustice, but executing only half would certainly let some off.” This saying illustrates not only the great number of economic criminals among officialdom, but the deep resentment they provoke in ordinary people. Although they may find the specifics opaque, everyone knows there is something rotten in the state’s rush to modernization.
Corruption has, to be sure, created a split within the establishment leadership, particularly among the modernizing intellectuals in the “New Left” and “New Right” wings. But the split is less significant than it at first appears. Those on the New Right, such as Zhang Weiying, think that the corruption is the price China has to pay for the reform, while the New Left opposes corruption, but only as a consequence of opposing privatization itself. Both are off base. Privatization is inevitable, but corruption is not. The question they both evade is: how to privatize?
That question may be the most important facing China today. For many, it is a hopeless exercise. As one important intellectual insider (though one not featured in Leonard’s book), Wen Tiejun, the vice secretary-general of the Research Institute of China’s System Reform, has pointed out, China cannot implement American-style democratic reform, because the vast majority of Chinese officials are guilty of economic corruption, and the vast majority of entrepreneurs are also engaged in illegal practices, or have gained their fortunes from ambiguous sources. Given that it would be impossible to exclude all of these individuals, he and others conclude pessimistically, China is obliged to continue under the centralized leadership of the Communist Party.
He has a point: The twisted pattern of wealth distribution that privatization has spawned cannot be recognized or accepted by the people. In fact, the intensification of China’s economic reforms has not stimulated political reform, but rather the opposite. China’s reforms have been nothing but an instrument for those with power and influence to plunder the country with utter brazenness under the protection of the iron hand of Communist dictatorship. Consequently, the further economic reforms advance, the less amenable to political reform the wielders of power and influence become. But the result is not political stagnation. Rather, it is a brewing crisis, and one the Chinese leadership is increasingly unable to handle and unwilling to recognize–as evidenced by its complete absence from Leonard’s book.
Indeed, the Chinese people have begun raising their voices over the last decade. As early as 10 years ago, the eminent Dushu magazine published a short essay quoting an old peasant from Shanxi. Referring to Deng Xiaoping’s policy of “letting some people become rich first,” the peasant observed, “Before the liberation in 1949, my village had one landlord and two rich peasants, and this was already considered ‘letting some people become rich first.’ If things were going to turn out like this, why bother in the first place?” Last year, a worker who had just been laid off wrote on a blog, “The planned economy definitely needs reform, and a price must be paid for this reform. But it is you, the Communist Party, which invented the planned economy, not us workers, so why is it the workers and not the Communist Party who are paying the price? Why do you force us into unemployment while you transform yourselves into capitalists?” In the United States, denouncing the ruling party on a blog is a common occurrence. In China, it is a revelation–and one that is happening with increasing frequency. Yet Leonard’s book fails to feature the voices of striking workers, rioting farmers, and demonstrating students. All of these–and there are millions of them–represent the real thinking in China today.
To be fair, the Chinese government has put forward a few measures meant to improve the situation of socially disadvantaged groups, for example by setting up a nationwide minimum-income guarantee system. But these measures are mere palliatives, treating the symptoms, not the disease. All the Chinese leadership can hope to achieve with these measures is to delay the most acute effects of these social contradictions and to use moderate coercion as a means of achieving sustainable exploitation. A little more money each month is nice, but it does nothing to allay the fundamental public anger brewing at the bottom. In fact, it is difficult to imagine a price that would suffice as compensation for the vast public resources that have been stolen.
Rising dissent in many places would be a concern, but not an existential one. In China, however, common questions about social and economic policy, about lessening the burden on the poor, take on a radical hue. Since the June 4 massacre in 1989, China’s reform has proceeded down the road to perdition. The further the country moves down this path, the more difficulty it will have changing course. Yet despite the difficulties, the rest of the world must still do all we can to bring it back onto the right track.
This poses serious concerns about the prospects for progressive democratic reform. As soon as the people get some voice, one can imagine a wave of angry sentiment unleashed. There may very well be a day of reckoning for the privileged and rich, with violence not out of the question. The public will demand that the economic cards they have been dealt be reshuffled and that economic injustices of the past be redressed, demands that, if met even in part, could have drastic implications for the Chinese economy. The existing framework of distribution of wealth will undergo large-scale upheaval and a fundamental disruption, and it will be a very long time before a widely accepted and recognized new economic order can gradually be established. In this scenario, the economic chaos Russia and Eastern Europe experienced in the past will be dwarfed by what China will face in the future. And this time the ramifications could very well radiate outward, undermining regional political and economic stability.
Two possibilities present themselves. First, if a serious crisis erupts soon, the repressive apparatus of the Communist Party may malfunction, releasing all sorts of suppressed contradictions and plunging Chinese society into massive turmoil. Even if democratic mechanisms came into play under these
circumstances, they would be unlikely to yield immediate results. The alternative is no better: If the Communist regime manages to survive while buying time to “cleanse” bribes on the one hand and somewhat mitigating the gap between the rich and the poor on the other, it will have done so by relying even more on anti-democratic, repressive measures. In such a scenario, we would face an even more overbearing, and thus even more autocratic, regime, one that would pose a serious threat to world liberty and peace. Clearly, either prospect is dreadful to contemplate, but the second one is particularly worrisome.
With China portrayed in the news every day as an economic and political powerhouse, the rest of the world, at least those parts that treasure freedom and peace, should pay attention to the real China and develop a real strategy to promote Chinese democratization. To be sure, the struggle for democratization currently faces many obstacles and considerable peril. But we need to recognize that if we put off the struggle, the dangers and obstacles will become even greater. Mark Leonard has written a de facto primer on the polite debates occurring in the state- and party-friendly intellectual elite. The future of China, however, is more likely to be determined by the passionate dissent bubbling right below.