By Kumar David –
Last week I discussed the economic restructuring programme adopted at the Chinese Communist Party’s 18-th CC Plenum of November 2013. I held back my views as there will be plenty of time in the future for that, and focussed on giving readers an account of decisions and their implications with only marginal comments. This week I relax this style, move from economic to social and political matters and interject my views more frequently. This piece picks up first the relaxation of the one-child policy, and touches on corruption, the judicial system and worsening relations with Japan. Finally, I intervene in the perennial debate on authoritarianism and the discourse on the nature of the state in Twenty-first Century China.
The ‘one-child’ policy is to be relaxed and the share price of condom maker Humanwell Healthcare Group has plunged! Even previously, couples who where both only-children, were allowed a second child; rural residents too were allowed two if their first child was a girl or disabled; ethnic minorities were permitted three. Now, if even one parent is an only child, two children are permitted. As a result of previous policies 117 boys are born for every 100 girls as female foetuses were preferentially aborted. This sex imbalance ratio has given rise to many social problems.
Relaxing the one-child policy will not influence urban birth rates; the Chinese middle class has got into the practice of small families like Northern Europe and Japan. The overall birth rate among young women in cities has fallen to one of the lowest in the world; 0.88. The population in China has begun to taper and will start declining within this decade. This is giving rise to two serious problems, an ageing demographic profile and an end to the era of cheap labour. These are the reasons why hard-nosed Chinese Communists are abandoning the strict one-child policy.
Corruption and legal reform
Corruption is widespread and President Xi has made it a test of his leadership that he will bring it under control. The high profile Bo Xilai case is a starter. Bo, a former politburo member and secretary of the powerful Chongqing party branch, and his wife, were brought to a show trial and convicted of massive corruption; his wife was also convicted of murder. Xi has pinned his legacy on the ambition of going down in history as a leader who made a mark. Deng’s fame is founded on a quantum policy leap and releasing China’s animal economic spirits. Xi has set his heart on two things; continuing Deng’s reforms to the next stage, and ending pervasive corruption.
However it is not the anti-corruption drive per se but economic reforms that will make sleaze unattractive. The source of corruption is an economy that is too rigidly controlled by Ministries and state bodies. Political interference and sleaze go hand in hand. Managers bow down to high state and party bureaucrats and obediently execute bad instructions; in return they are protected when indulging in crooked practices. In last weeks article I described the effort to break the party-state grip on state enterprise management and loosen ownership. If this bond is snapped it will expose state owned enterprises to greater scrutiny and erode linkages that facilitate corruption.
At present there is a lack of clarity in the criminal justice system and an absence of coherence in commercial law. A thorough overall of the statutes is needed to bring China’s legal system in line with its role as an economic superpower and its global political importance. Some initiatives have been included in the programme; for example, the court system will be financed directly from the Centre to strengthen its independence from local interference.
East China Air Defence Zone (ECADC)
The announcement of the ECADC just two weeks after the November 9-13 Plenum meeting was no accident, but neither was it planned at the meeting. My view is that in order to dilute the backlash from conservatives, the leadership decided to brandish jingoism against Japan and South Korea and placate Chinese nationalism. The ECADC extends military vigilance beyond China’s territorial waters and requires all aircraft entering it to notify Chinese authorities. The sting was the inclusion of the disputed islands of Senkaku (Japanese name)-Diaoyu (Chinese name) within the zone. This tiny uninhabited outcrop is ‘administered’ by Japan currently. The ECADC also annoyed South Korea by overlapping Ieodo island.
This move provoked the US to over fly the ECDAC with two B-52 bombers the next day without notifying the Chinese; the Japanese and South Koreans did the same a day later. China responded by sending fighters a few days later but it cannot respond to these taunts. The leadership has suffered egg on its face; but whipping up nationalism within will derail the reform programme. The way out eventually will be to recognise the blunder, fire the Defence Minister (or Defence Secretary!) as a scapegoat, and lick its wounds. Intelligent leaders know that an international spat is dangerous, even for a China-sized giant. They will not sacrifice the reform programme in foolish gambles, but I am curious to watch the fallout. It will signal how smart the Xi-leadership team is in getting out of a fix and what its real priorities are, reform or nationalism.
Adaptivity and meritocracy versus democracy
The nature of the state in China has been a topic of debate since the collapse of the Soviet Union. I took up my theoretical position in 1998 (see last week’s piece for the reference) and it has been validated in the last 15 years. Furthermore, the nature of the state in China will not change in a foreseeable period such as a decade or two. It is not a capitalist state; terms like state-capitalism and bureaucratese are old fashioned and fail to ring true, and I have no intention of popping out some smart-ass term. The meaningful approach is a descriptive one where facts not semantics are the focus.
It is abundantly clear that the Chinese Communist Party will not countenance any loosening of its grip on power. What can be said in its defence is that it has delivered the goods and the Party has proved to be immensely adaptive. Internally, it is built on meritocracy- not dunces dancing to a presidential sakkili band. In the last 30 years, say the World Bank and IMF, one billion people in the world have been pulled out of poverty. What they are careful not to add is that 700 million of these have been in just one country. China is on course to pulling off the swiftest exercise in the expansion of material production and the alleviation of poverty in recorded history. Like me, you too can abhor the curtailment of political freedoms, but at the same time, facts remain facts.
It is said that Chinese communism is rigid and incapable of adapting to internal and global challenges. Nothing could be further from the truth; the reverse is the reality. Consider the transition from revolution to Maoist great leaps backwards and forwards, to ending the commune system, to Deng’s ground-breaking reforms, to bubbling town and village enterprises, and now to the status of economic superpower. This is a remarkable sequence of evolutionary adaptations that will startle even sleepy old Darwin. This is no fossilised creature incapable of change. Sure a horrendous price has been paid along the way; starvation, conflicts that brought the country close to civil war, and purges. Like me, you too can abjure the opacity of Stalinist style decision making and the strange lingo of CCP-speak, but at the same time, facts remain facts.
The Chinese one-party state has been successful in unifying and developing the country and reducing poverty; it has also been highly adaptive to changing conditions. It scores high marks on practicality and adaptability, but it fails on democracy. But again the story is more convoluted because of the Party’s cadre building programme. I knew of it indirectly. A brilliant young Mainland fellow who came to Hong Kong as my PhD student, was, I am sure, a rising star sponsored by the CCP’s Organisation Department. The OD’s programme is described by Eric X Li in a TED talk:
A million young people are chosen each year (CCP membership is about 75 million) and put through higher education and training, and then given rising levels of on-the-job responsibility leading up to administration of districts with millions of people, or running SOEs with multi million dollar budgets. Through this process the top 40,000 are filtered to a higher stage. The 350+ member Central Committee is creamed from this over the years; at least that’s the OD’s narrative. The claim is that that meritocracy underlies the CCP advancement process. This is a return to traditional Mandarin and Confucian schema that governed China for two millennia. The proof of the pudding, it is claimed, is in the eating. Electoral democracy in developing countries is floundering in droves, and in developed ones, it is deadlocked. Superficially what is being said is “Just look at our success”. The deeper argument is that western style bourgeois democracy is not the only model in the world and China has perfected a system that suits its needs.
This argument may be persuasive but for the groundswell of millions demanding transparency and greater access to political rights. This tide will force the Party to liberalise in a society becoming more educated by the day. These forces brought Soviet Communism to its knees. In China, they will not overthrow of the Party, but they will compel its unceasing transformation.