By Kumar David –

Prof Kumar David

The 18-th Chinese Communist Party Conference which opened in Beijingon 8 November had none of the stardust and electricity that Obama’s Chicago campaign head quarters had flashed across global TV screens only a few hours earlier. Hu Jintao’s address was as staid and sombre as Obama’s victory speech was pure flight of rhetoric. Still, of the two mandates ratified that day, the former is probably of greater significance for the world at large. The dull Chinaman epitomises an economic revolution and the escape of hundreds of millions from poverty. In America, the optimism November 2008 inspired had all but petered out by November 2012. (Still Obama won; that’s a line of thought that I cannot pursue today).

This transition of leadership (Hu and Wen handing over presidency and prime ministership to Xi Jinping and Wiz-kid Li Kequan, repectively) has been incorrectly called the fifth generation hop. This is not a fifth gear shift; it is part two of the third shift. Mao,Chuand Li Sao Chi symbolise the first generation that made revolution and created the People’s Republic. Then the Deng Xiaoping phase made startling economic reforms, openedChinato the world and encouraged a strong capitalist sector to flourish. When Deng stepped back into the shadows and the Jiang Zemin, Li Peng-Zhu Rongji “Shanghaicabal” moved in, it was not a new phase, it was more of the same; it was 2b.

The change to Hu-Wen in 2003 can, to stretch a point, be described as significant since an apparatchik based centre in the CCP formalised the state, not tilting too much to capitalism, but not subduing it either. They led China’s state owned giants (banks, communications and petroleum, and heavy industries) into the global economy. The state remained neither capitalist nor socialist; in class relations neither new capitalists, nor workers and rural people controlled it; the CCP’s monopoly of power mediated and arbitrated between classes, while pandering, within limits, to a rising educated middle class.

The passing of the baton to a new contingent at the November 2012 congress will be a case of phase three continued, 3b; not an ideological or political gear change but more of what has been in the last ten years. This is why I say there have only been three periods; first the old revolutionaries, then the 1979 to 2003 reform phase dominated by Deng Xiaoping (Zhao Ziyang and Jiang Zeming, among others, were the nominal heads of state), and third, consolidation of a state-form (as yet unclassified in the taxonomy of theoretical Marxism), from 2002 to now, and likely till 2022.

Cues from Hu Jinto’s address

It is dangerous to make predictions 10 years ahead, so I will speculate only on basic trends in the foreseeable future. President-in-waiting Xi Jinping comes across as a grey suited apparatchik with no interesting ideological spirit. He is the son of one of Mao’s close associates but that did not save him from hard labour during the Cultural Revolution; he spent two years in the countryside cleaning pigsties or whatever it is that people did during Mao’s insanity. The consensus among China watchers in Hong Kong is that Xi is an insipid character but inclined to market reform and promoting the private sector.China is likely to shift to the right in the next decade while remaining a non-capitalist state, while, in contrast, the West, under the hammer blows of the New Depression, is compelled to adopt global state capitalist practices. Sauce for the goose is not sauce for the gander.

The more interesting chap is prime minister in waiting, Li Kequang, about whom much is known. Li (57) has strong intellectual credentials and belongs to the first group of graduates after Chinese universities reopened in 1977 after Mao’s demise. This is called the “knowledge explosion” generation following the intellectual barrenness of Maoism. He has a degree and Master’s in law from Beijing’s top university, and a PhD in economics, which makes for a contrast within the engineer dominated Polit-Bureau. Li has easy fluency in English and has been China’s spokesman in the highest global economic forums. To make an early judgement, I think he is tinged with reformism and his main interests are modernist. He will not be an ideological impediment if China shifts somewhat more to the right in the next decade.

The themes Li has taken up in international and local forums are climate change and sustainable development, green energy (will he have a friend in Obama?), the importance of reducing income inequality, organisational modernisation, the global economic crisis and the need to turn China more strongly towards the domestic economy. He seems to be a centrist intellectual, not a serious Marxist; but nowhere in the world after the first generation of revolutionaries, have national leaders been heavy on Marxist scholarship and ideology. I think this is just as well; national leaders had better get on with the job of developing their countries and leave the tasks of interpreting and philosophising about the world to scholars better equipped to do so.

The most important bit of the first day was the closing portion of outgoing President Hu Jintao’s address: “If we do not tackle corruption it will be fatal for the Party and the state will crumble”. This is strong stuff, very strong stuff. I don’t know whether the Xi-Li entourage can surmount the challenge, but the Chinese leaders realise that out-of-control sleaze is destroying the legitimacy of the Party and creating chaos in the state. Hu can talk this way because most top leaders (probably) do not line their pockets through graft, though they are wealthy – with children in the best US universities and sometimes ostentatious lifestyles. Some, like Bao Xilai are crooks and have been brought to trial, but even in the case of Premier Wen, where it is alleged his extended family is worth $1.2 billion, fraud has not been alleged. I make this point to contrast with Sri Lanka where, if the government’s top leaders speak up against graft, they will choke on their own vomit.

The second important feature of Hu’s address is the emphasis he placed on reducing the widening inequality and the urgent need to address “the gap”. This is easier said than done because it is rooted in China’s basic economic strategy since Deng Xiaoping, which is growth driven by export orientation, and emphasis on high investment rates. These two strategies engender wealth and income inequality, although they also drive high growth rates and employment creation. After the global economic crisis efforts are being made to turn to domestic development; basic health care for all has been introduced, education spending boosted, and a rudimentary social welfare network put in place. However, there is a long way to go to significantly reduce wealth and income inequality (communist China’s Gini Coefficient is higher than capitalist America’s!).The new leadership has its work cut out.

Democracy, any style

Western style democracy is said to be unsuitable for China with its millennial Confusion practices and 65 years of CCP one party rule. Then what style democracy is suitable for China, if ultimately power is to be vested in the people and if authoritarianism is to be whittled away? Ten years ago China experiment with direct democracy at the grassroots level in some regions in the south and east but soon abandoned the effort. No reason was given but presumably local party cadres, who against their expectations were rejected by local peoples, pressured higher levels.

Nevertheless, pressure for a more open and representative society is growing and the Party will yield, but only gradually. There is no demand to overthrow the Party; I have met hardly any Chinese people who want to drive it out of power; it is seen as the agent of economic prosperity and social stability. The near universal demand, especially in the middle-class, is for greater openness and representation, while more radical sections would like to see the constitution amended to establish a competitive multi-party system.

The balance of power between the people and the Party has changed;Beijingis now alarmed by social instability and sometimes retreats when challenged. The time when the primacy of economic growth smothered a desire for political reform has ended. The country’s six or seven hundred million netizens are winning the battle against censorship, or circumventing it. Thousands of demonstrations and protests see the authorities back down frequently. One billion mobile-phone users symbolise a brave new world. The time of unfettered autocratic rule is over; it is impossible to keep down a country which is going through perhaps the greatest economic revolution in recorded history and is sprouting a middle-class, which by 2050, will likely exceed the whole population of the United States. Furthermore, this is a real middle-class by the objective rules of economic demographics, not a terminological inaccuracy as in the West, where the new working class (creators of surplus value using new technologies) is mistakenly called a middle-class because of education and life style. When Obama and Hu refer to the middle-class in their political gloss, they are referring to sociologically different entities. The term is properly used by the latter only.

It is significant that President Hu made strong reference to the emergence of a massive middle-class in the course of his address. He is aware that this is where the challenge to one-party monopoly of power will come from. My conclusions, in broad line outline, for the next decade are as follows: China will shift further to the right in policy but will remain a non-capitalist, non-socialist state for the foreseeable future; the trend to political liberalisation is unstoppable but it won’t be Western style; the monopoly of power in the hands of the leadership of the (83 million strong) CCP will ease; the economy will grow, but at a slower pace (say 7% on average). “Aiiyoo” you will say, “all same, no change”. Don’t blame me; I am only reporting history, not making it. And truthfully, this summary does make for moderate and interesting change, if you think about it.