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Party’s attitude is: ‘I can do it and you can’t. And because you can’t, I will.’ The Party’s logic is circular. There can be no alternative, because none is allowed to exist.
With the public shut out of formal politics, few ordinary citizens could even recognize most of the nine men in the Politburo’s inner circle who lined up on stage at the congress’s closure.
But for most Chinese, the Politburo was a distant body, bloated with power, but devoid of character and personality.
Possession of the ‘red machine’ means you have qualified for membership of the tight-knit club that runs the country, a small group of about 300 people, mainly men, with responsibility for about one-fifth of humanity.
The US has the Ivy League, the Beltway, K Street and the military-industrial complex, and a host of other labels to signify the opaque influence of well-connected insiders.
Hu’s fantasy about being chosen by the ‘whole country’ skated around the fact that the delegates to the 2007 congress, and earlier such meetings, had been the only citizens allowed to vote. Even then, the 2,200-odd congress attendees were deprived of any choice.
The Central Committee acts as a kind of enlarged board of directors for the Party in China. With about 370 full- and part-time members, the committee includes ministers and senior regulatory officials in Beijing, leaders of provincial governments and large cities and a large bloc from the military. Some, but not all of the heads of China’s big state-owned enterprises are Central Committee members.
The Central Committee elects, or to be more precise, selects the Politburo, which has about twenty-five members. The Politburo, in turn, selects the Standing Committee, the inner sanctum of the leadership, which in its present incarnation has nine members.
Should they be accused of bribery, fraud or any other criminal conduct, they are investigated by the Party first and only turned over to the civilian justice system on its say-so. Even then, any punishment meted out by the courts is at the behest and direction of party organs, which ultimately control the judges directly, and the lawyers indirectly, through legal associations and licensing.
The division of roles between the Party and government is more than just perplexing for outsiders.
Aside from a few largely symbolic exceptions, every senior government minister or official is a party member. By contrast, every senior party official does not always hold down a government post. Many instead work for the key party departments, which outrank mere government ministries.
‘Democratic government is the Chinese Communist Party governing on behalf of the people,’
In place of Mao’s totalitarian terror, the Party has substituted a kind of take-it-or-leave-it compact with society. If you play by the Party’s rules, which means eschewing competitive politics, then you and your family can get on with your lives and maybe get rich. But the deal does not exist in isolation. It is buttressed by a pervasive propaganda system which constantly derides alternatives to the Party. The underlying message is that the Party alone stands between the country and the kind of murderous, impoverishing instability that has engulfed China at numerous times in its history.
The visible hand of the state and the invisible hand of the market, far from being contradictory, are made to complement and reinforce each other. These days, Chinese officials treat questions of any inherent contradiction between a communist political system and a capitalist economy as almost banal.
The rich have not just been getting richer. In the boom times, they have been doing so at the expense of the poorest people in the land. In the two years to 2003, the average incomes of the poorest 10 per cent in China fell, at a time when the economy was growing rapidly, and the incomes of the top 10 per cent of the population were rising by more than 16 per cent annually.
Once dominated by workers, and then by peasants–who alone made up nearly half the membership until as late as 1978–the Party now seeks out star students and wealthy entrepreneurs.
The state’s investment in bank restructuring was immense. The total cost to the Chinese taxpayer of bank reform was an estimated $620 billion, equal to about 28 per cent of Chinese economic output in 2005, and becomes even greater once capital injections announced in 2008 are taken into account. To put that into perspective, the Bush administration’s highly contested financial rescue plan in late 2008, known as TARP, also cost $700 billion, but was much smaller in relative terms, equal to about 5 per cent of GDP that year.
A similar department in the US would oversee the appointment of the entire US cabinet, state governors and their deputies, the mayors of major cities, the heads of all federal regulatory agencies, the chief executives of GE, Exxon-Mobile, Wal-Mart and about fifty of the remaining largest US companies, the justices on the Supreme Court, the editors of the New York Times, the Washington Post and the Wall Street Journal, the bosses of the TV networks and cable stations, the presidents of Yale and Harvard and other big universities, and the heads of think-tanks like the Brookings Institution and
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The downside of the stellar growth rates that local dynamism has provided is the wasteful investment-led growth economic model that it has spawned, a phenomenon that is now a matter of legitimate global concern. India has achieved growth rates of 7 to 8 per cent by investing about one-quarter of its gross domestic product. China, by contrast, as local governments spend willy-nilly to keep up with the Wangs and the Zhangs next door, has invested nearly half of GDP to get a few percentage points more than its giant neighbour. As long as China continues to invest more than it consumes, its
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If Hu Jintao and Wen Jiabao were to be judged by their ability to meet their promise to rebalance China’s economic growth model, their first five years were an abject failure, for much the same reason.
Yu says his surveys have found that as much as 30 per cent of the fiscal budgets of the government in Hebei are raised through the sale of land, a finite resource. Throughout China, about 60 per cent of protests are related to anger over local governments selling land.
If China continues to invest far more than it consumes, the domestic economy will eventually stagger under the weight of its own imbalances, with an impact on the rest of the world.
Nian’s statement–that ‘Deng perfected socialism’–captures in three words the topsy-turvy world that the Party and the private sector have come to inhabit in China. The Party, which espouses socialism, spends much of its time deferring to the market. Entrepreneurs like Nian, who worship the market, are careful to defer to the Party. In this environment, it is little wonder that the dividing line between what is public and what is private in China is often still impossible to detect.
Deng, and Jiang after him, grasped what many of their conservative opponents never did–that the Party had much in common with private entrepreneurs, who disliked democratic politics and independent unions as much as they did.
‘We will never take simplistic measures like launching a strike,’ Fu told me. ‘With the union there will be a harmonious relationship between labour and capital.’
As pleased as they were about their political victory in forcing Wal-Mart to establish a union, neither of them tied the breakthrough to improved wages and conditions for company employees.
In the same way that government officials all learn by heart the speeches of their leaders, even if they ignore them in practice, so too have entrepreneurs memorized the script justifying the Party’s presence in their companies. The party committee was there to mediate the grievances of employees, much like a trade union, they said, and provide ‘ethical’ and ‘spiritual’ guidance. ‘It’s quite important in terms of company morality,’ said Li Rucheng, who headed Youngor, one of the country’s biggest private clothing manufacturers housed on a sprawling site in Ningbo. ‘You have to have a spiritual
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The propaganda department does not underestimate the gravity of its task in enforcing the official line. Nothing less than national security is at stake. ‘In China, the head of the Central Propaganda Department is like the Secretary of Defense in the United States and the Minister of Agriculture in the former Soviet Union,’ said Liu Zhongde, a deputy-director of the department for eight years from 1990. ‘The manner by which he brings leadership will affect whether the nation can maintain stability.’
Stories like Yu’s shocked Yang. ‘I did not foresee this level of cruelty,’ he said. ‘There was cannibalism in ancient times in famines. People used to talk about “exchanging children to eat”, because they could not bear to eat their own children. But this was much worse.’ Even the final nationwide death toll, a figure which has been known in the west for more than two decades, was a revelation.
it wasn’t until Yang came knocking on his door in the nineties that he put forward for wider publication his own estimate of a death toll of 35 million.
The Party has a harder time making the economy do its bidding, but it can still mobilize the system in an emergency. At the end of 2008, when the economy dropped into a hole with the rest of the world in the financial crisis, the Party ordered banks to lend, which they did with gusto. In the opening months of 2010, the Party reversed course, and told the banks to slow down, a diktat followed with much greater reluctance, but followed nonetheless. The
Party’s power is also being felt on the environment. After decades of largely ignoring the issue, the central authorities have now attempted to take hold of a national environment policy. They have done this not by suppressing development but by turning the environment into an economic opportunity, by giving huge incentives to business to invest in alternative energies. In a few short years, as a result, China emerged as the largest producer of wind turbines and solar panels and the biggest investor in so-called clean coal technologies.
The Chinese growth model has well-documented flaws and is unsustainable in its present form. Martin Wolf, the Financial Times economics commentator, summed up in late 2009 the deep distortions of a system that has suppressed personal consumption in favour of investment and exports with a devastatingly simple calculation. ‘In 2007, personal consumption was just 35 per cent of GDP. Meanwhile, China was investing 11 per cent of GDP in low-yielding foreign assets, via its current account surplus,’ he wrote. ‘Remember how poor hundreds of millions of Chinese still are. Then consider that the net
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