Posts Tagged ‘Xi Jinping’

The system that dare not speak its name

April 20, 2016

This is a very thoughtful little essay from Yu Keping, dean of the school of government at Beida. It is hard to see how the Chinese government’s praxis could be out of line with such clear thinking. And yet it is. ‘Democracy’ remains one of hundreds of terms that you cannot search for on the Chinese Internet.

The original article is posted here, on the site of The Conversation.

 

Crossing the river by feeling the stones: democracy’s advance in China

April 15, 2016 1.31am BST

Author

  1. Yu Keping

Chair of Politics, Professor and Dean at the School of Government, Peking University

The Conversation is funded by the following universities:Aberdeen, Anglia Ruskin, Bangor, Bath, Bath Spa, Birmingham, Bradford, Brighton, Bristol, Brunel, Cambridge, Cardiff, Cardiff Metropolitan, Central Lancashire, City, Coventry, Durham, Edge Hill, Edinburgh Napier, Essex, Exeter, Glasgow, Glasgow Caledonian, Goldsmiths, Heriot-Watt, Hertfordshire, Huddersfield, Hull, Kent, King’s College, Lancaster, Leeds, Leicester, Liverpool, Loughborough, LSE, Manchester Metropolitan, Newcastle, Northumbria, Nottingham, Nottingham Trent, The Open University, Oxford, Queen Mary University of London, Queen’s University Belfast, Royal Holloway, Salford, Sheffield, Southampton, Stirling, St Andrews, Surrey, Sussex, UCL, Warwick, Westminster and York.

It also receives funding from:Hefce, Hefcw, SAGE, SFC, RCUK, The Nuffield Foundation, The Ogden Trust, The Royal Society, The Wellcome Trust, Esmée Fairbairn Foundation, The Alliance for Useful Evidence and Lloyd’s Register Foundation.

 

Renowned as one of China’s leading political thinkers, Yu Keping from Peking University featured in this year’s Encounter hosted by the Sydney Democracy Network (SDN) at the University of Sydney on April 12. His article is a contribution to the Democracy Futures series, a joint global initiative with SDN. The series aims to stimulate fresh thinking about the many challenges facing democracies in the 21st century.

To say “democracy is a good thing” means that democracy can benefit the people. Yet if democracy is to benefit the people, a precondition is that social order must be maintained and hardship shouldn’t burden them. If democracy causes unrest, the people will lose hope, corruption will go unchecked. Under these circumstances, who would still wish for democracy?

Those who are against democracy often use this possibility to frighten their audience. The truth is that there is much evidence to show that the advancement of democracy will not necessarily produce disorder. Just the opposite: over the long term, it is only democracy and the rule of law that will provide for the long-lasting peaceful rule of the nation.

Direction

The China dream is about supporting the great revival of the Chinese nation. This revival includes many things, but a high level of democracy and the rule of law are an indispensable part of the vision.

The movement towards democracy everywhere is a political trend that cannot be reversed. China is no exception. Sun Yat-sen once said:

Worldwide trends are powerful. Going with them will bring success, going against them will bring disaster.

The main global trend he referred to was nations becoming independent, countries growing wealthy and strong, and their people wanting democracy. Today, when we speak of political civilisation, we mainly refer to democracy and the rule of law.

Democracy is the lifeblood of our republic. The central meaning of “The People’s Republic of China” is that the people are the masters and make the key decisions. The 16th Party Congress emphasised that intra-party democracy is the lifeblood of the party; the 17th Party Congressemphasised that the people’s democracy is the lifeblood of socialism. It is no longer a matter of whether or not one likes democracy: democracy is a trend that cannot be blocked.

The political development of socialism with Chinese characteristics is in fact the organic unification of three things:

… the leadership of the party, the role of the people as masters and decision makers; and the ruling of the nation in accordance with the law.

The sovereign people are at the heart of these three components. The goal is to enable “the people to be the masters”. In the final analysis, the “leadership of the party” and “the rule of law” serve to ensure that the people are the masters.

The 18th Party Congress emphasised the same point: the people must indeed remain the masters. The continual advancement of democracy and the rule of law is the historical responsibility of those in the Communist Party. This is our correct direction.

Timing

The delay of political democratic reforms in China will breed a host of problems. If there are no breakthroughs in the reform of key policy areas, then illegal corruption may turn into legitimised special privileges.

The achievement of democracy depends on real-world conditions. It needs to be linked to economic and cultural realities and the actual foundations of society. As we discovered when “running towards communism”, rushing ourselves will not work; it will bring disastrous consequences.

But moving too slowly in matters of democratic political reform will also not work; the problem of corruption that we hate to the bone won’t be solved. The fact that corruption, until this day, hasn’t been effectively controlled is linked directly to the slow pace of reforms, as are such dilemmas as publishing the property holdings of officials and dealing with declining public trust in government.

Identifying the proper timing of political reforms is the responsibility of politicians, who need to have great wisdom and be willing to take action. Of these qualities, willingness to take action and a sense of responsibility are most important.

Handing over a weighty responsibility: Hu Jintao congratulates his newly elected successor as president, Xi Jinping, in 2013. Reuters/China Daily

Route

To deal with its problems, China, as a great power, must draw up a clear roadmap for political reforms.

I have always believed there are three routes from which to choose: the first is a transition from intra-party democracy to social democracy. The 16th, 17th and 18th Party Congresses have consistently emphasised this point. Democratic development needs to choose a pathway that is most efficient and exacts the lowest toll.

The second pathway is a transfer from grassroots democracy to upper-level democracy. Grassroots democracy is directly aimed at the common people, to bring them direct benefits.

In political life, the ideal situation is that the people trust all levels of government. In reality, China is the exact opposite of America: American citizens have a very low level of trust in the federal government.

We (in China) have high levels of trust in the central government, but our trust in base-level government tends to be lower. “If the base level is not solid, the ground will shake and the mountains will sway.” We need to pay attention to this possibility.

The third pathway involves a shift towards greater political competition. Democracy requires competition: without competition, how are we to elect the most outstanding individuals?

Our democracy will naturally be one with Chinese characteristics. But democracy cannot be separated from elections and competition. Consultative democracy is very important, but consultation should not exclude elections.

Methods

Democratic development in China requires achieving a balance among six policy areas:

1 We want democracy and we also want the rule of law. Democracy and the rule of law are two sides of the same coin. Any politician who speaks of democracy cannot avoid discussing the rule of law, looking to the experience of the West, or to the experience of our nation, China.

2 We want deliberation and we also want elections. Chinese democracy, to a great degree, is in fact deliberative in nature; deliberation is part of our historical traditions. Elections, on the other hand, are the product of the modern world. Democracy is naturally inseparable from elections: the two need to be combined.

3) We want freedom and we want equality. These are basic values of democratic governance. In the past, we have over-emphasised equality. Since the reforms began, freedom has been emphasised, to the point where equality and liberty are in great tension.

4) We want efficiency and we want justice. These are two indispensable basic values. In the early stages of the reforms, the issue of efficiency was more salient, but now the issue of justice becomes central.

5) We want participation and we want order. Political scientist Samuel Huntington once said that the greatest challenge for political modernisation is to manage the relationship between public participation and political stability. As the interests of different social groups become more diverse, the desire of citizens for participation becomes more intense by the day. We need more open channels for political participation. Without legal channels, citizens will certainly resort to irregular, or even illegal channels, and social unrest will result. Democratic participation then becomes problematic.

6) We want a balance between individual rights and public rights. Rights belong to the individual, and the legal rights of citizens are guaranteed by the constitution. But we also need public rights, because our nation and society are a community.

The impacts of Chinese economic reform can be seen in Shenzhen. flickr/Blake ThornberryCC BY-NC-ND

Strategy

China is facing many reform challenges, and we need to get a firm grip on the most important of them. We must discover those breakthrough reform points that enable us to “move the entire body by pulling one strand of hair”. The restraint of power through intra-party democracy is among these most important breakthrough points.

There needs to be better overall planning; put in terms of mainstream political thinking, “scientific development” is needed. This means that economic development needs to be combined with political development, social development and cultural development. There need to be upper-level designs and reasonable plans based on facts.

What is also needed is an institution responsible for co-ordinating different interests, especially at the level of the central government. Governmental reform should be matched with Party reform.

There also needs to be continuous testing and expansion of reforms, so that we “cross the river by feeling the stones”. Many reforms that have been effective have suffered from discontinuity. The problem is that when politicians leave office their policies often lapse, or are not institutionalised.

To overcome this weakness, efforts need to be made to achieve advances in areas of greater strategic importance. We speak much about supervision, but too little about restraints. We speak even less of restraints on leaders at all levels of the Party.

Everyone fears that advancing democracy will cause a loss of order and will bring social unrest. Everyone meanwhile hopes that by strengthening democracy we can maintain social stability.

However, as I see it, it is only through the deepening of reforms of our political system, and through the genuine advancement of democracy and the rule of law, that we will be able to provide for the long-lasting peaceful rule of our nation, enabling democracy to benefit the people.

 

Joined-up economics

August 17, 2015

Here is a rare thing. A dynamic theory from an economist — whereby the solution to today’s problem may not be the solution to tomorrow’s problem. It’s David Dollar, former World Bank country chief for China talking about the role of institutions in development…

 

What institutions do Asian countries need to keep growing?

31 May 2015

Author: David Dollar, Brookings Institution

The notion of a ‘middle-income trap’ has entered the lexicon of policymakers in emerging markets in Asia and elsewhere. Many leaders of countries that have experienced fast growth — such as Chinese Premier Li Keqiang — worry that economic growth will come off the boil as their countries reach middle-income status.

Chinese workers construct residential buildings of a government-funded housing project in Tiemenguan city, China, 2 May 2015. (Photo: AAP).

Growth for virtually all advanced economies was slower in the 2000s than in the 1990s; meanwhile growth rates in poor and middle-income countries accelerated. But there is a lot of variation in these broad trends, especially for the middle-income countries. Some of the latter have seen very impressive growth spurts, while others have stagnated.

What explains why some countries grow fast and others languish? There is a strong empirical relationship between the quality of institutions (as measured by the World Governance Indicators’ Rule of Law index) and economic growth. But institutional quality does not change very much from year to year or sometimes even from decade to decade, which makes it hard to explain why countries have periods of high growth followed by low growth (or vice versa).

Institutions which are well-suited to one phase of economic development may be ill-suited to another. One way to resolve the paradox of persistence of institutions and non-persistence of growth rates is to focus on the quality of institutions relative to the level of development. It turns out this can help explain why China and Vietnam, for instance, have seen such high growth in recent times: they have relatively low institutional quality in an absolute sense, but they have above-average quality institutions given their stage of development, which might, for instance, help to attract foreign investment to China or Vietnam rather than other Asian countries with similarly low wage levels but weaker institutions.

Another question is whether authoritarian institutions are better for economic growth than democratic ones. It may depend on the stage of a country’s development. When we look at the historical experience, in countries that have a per capita income below US$8,000, authoritarian institutions seem more conducive to growth. But at higher levels of income, democratic countries are likely to see higher growth than authoritarian ones. Why might this be so?

One explanation might be that at low levels of income, the economic priority of government should be to establish basic law and order and an environment in which private investment, including foreign investment, can operate. This is a catch-up stage, in which innovation is not yet particularly relevant. But the usual economic strategy for authoritarian governments relies on capital accumulation, which becomes less effective as countries get richer. When an economy reaches the point where acquiring more and more capital is no longer sufficient for rapid growth, the need for political and economic institutions that promote competition, innovation and productivity growth becomes paramount.

Interestingly, it is about at the US$8,000 per capita GDP mark that two of East Asia’s great developmental success stories, Taiwan and South Korea, were also becoming free and open polities. By the early 1980s for Taiwan and the mid-1980s for South Korea, a move had been made away from authoritarian institutions, which continued until both reached fully democratic status as measured by Freedom House’s civil liberties metric.

Of the countries that have witnessed rapid growth in Asia recently, Vietnam has shown some steps towards political liberalisation, with its civil liberties score moving to five, which is slightly better than either South Korea or Taiwan at the same stage of development. But Vietnam is entering the stage of development where the line of thinking presented above implies a need for further political reform. Greater freedom will be necessary to strengthen property rights and the rule of law in order to bring about an environment for innovation and productivity growth.

China, on the other hand, has largely eschewed political reform. Although he has placed a lot of emphasis on the idea of implementing the ‘rule of law’ in China, President Xi Jinping has made it abundantly clear that he wants to pursue economic reform without political liberalisation; some observers even point to backsliding in recent years on the question of freedom of ideas and debate. The historical evidence would suggest that this will weigh on the growth of the Chinese economy in the future. At the stage of development at which China now finds itself, South Korea and Taiwan were on the way to becoming more or less free societies.

Of course, just because no authoritarian country (apart from oil producers and, depending on how you classify it, Singapore) has reached more than 35 per cent of US GDP per capita does not mean that it will be impossible for China to do so. But the historical evidence should caution Chinese policymakers against thinking that the kind of political institutions that have facilitated China’s astonishing growth up to now will be sufficient or optimal for the next stage of its development.

David Dollar is Senior Fellow, John L. Thornton China Center, Brookings Institution. He was the former World Bank Country Director for China and Mongolia in the East Asia and Pacific Region.

This article summarises a paper prepared for the Pacific Trade and Development Conference in Singapore this week.

New year’s resolutions wanted

December 30, 2014

Two articles pasted below remind us how far China has to go before it can be deemed a ‘developed’ country.

First, from the 29 December Washington Post, the well-known Chinese lawyer Teng Biao says that China under Xi Jinping has no serious commitment to rule of and by law.

Second, from Caixin, Sheila Melvin recounts the story of Hu Feng, a writer and Party member whose belief in the rights of the individual within a socialist state brought him into head-on collision with Mao Zedong and the doctrines set out in Mao’s Yan’an Talks. It is the utilitarian logic of the state as representative of the ‘mass line’ that continues to make rule of law impossible in today’s China.

China’s empty promise of rule by law

By Teng Biao December 28 at 6:52 PM
Teng Biao is a human rights lawyer and a visiting fellow at Harvard Law School.
During the year that is drawing to a close this week, much has been made of the Communist Party of China’s new emphasis on “governing the country according to law.” But those who imagine that fundamental reforms will flow from this rhetoric would do well to remember the warning that Foreign Ministry spokeswoman Jiang Yu gave in response to questions about the legal justification for a 2011 incident of press mistreatment: “Don’t use the law as a shield.” I don’t understand why some are so willing to believe what the party says while disregarding what it does.

This is hardly the first time the Communists have raised the banner of “rule of law.” Even before they seized power and established totalitarian rule, they promised liberty and constitutional democracy. In 1997, the idea was written into the report delivered at the party’s 15th Congress, and in 1999 it was written into the Constitution. But that same year saw the savage repression of the Falun Gong. Since President Xi Jinping came to power, hundreds of rights defenders and intellectuals have been thrown into prison for political reasons. Properties have been expropriated or demolished, free speech has been restricted, religion has been suppressed, women have been forced to have abortions, and torture has multiplied. In Xinjiang and Tibet, the authorities have carried out one shocking human rights catastrophe after another. The abuses have never stopped.

To the Chinese Communist Party, “governing the country according to law” does not mean rule of law as you and I understand it. The essential element required for rule of law — using the law to limit the power of the government — stands in ideological opposition to the purpose of the party. In reality, the rule of law that the party talks about is “Lenin plus Emperor Qin Shi Huang” — modern totalitarianism combined with pre-modern Chinese “legalism.” It is nothing more than a tool to further control society. Rule of law is always superseded by the rule of the party, and there is not a shred of doubt about this.

The legislative organs controlled by the Communist Party have promulgated volumes of statutes. The judicial organs, also controlled by the party, are busy with cases. The legal professions have been developed. But is the law at the center of the governing order?

As University of Hong Kong law professor Fu Hualing has pointed out, many extra-legal processes — and extra extra-legal processes — stand above and apart from the law. These include shuanggui (an extralegal detention and interrogation system used to enforce discipline within the party), media restrictions, house arrest, secret police, “black jails,” chengguan (a para-police force that works with police across the country to enforce minor city rules and regulations), spying on citizens, torture, disappearances and Internet police. Without such tools, how long could the Communist Party continue to rule?

This year’s “governing the country according to law” is just another attempt by the party to address its crisis of legitimacy. Such slogans may help the party fool people within China and the international community. But legitimacy can come only via recognition given through free elections, and here the party is stuck. Clinging to one-party rule, it completely rejects general elections, even in Hong Kong. True rule of law would mean the end of the one-party system. This is the limitation on the legalization process that cannot be overcome.

Over the past 10 years, I and other human rights defenders have consistently sought to use Chinese laws to carry out our human rights work, and occasionally we’ve had success. But the limitations are obvious. Whenever the authorities begin to feel a threat from civil society, they move to suppress it. I have had my lawyer’s license revoked, been expelled from my university and been kidnapped several times. When the security police were torturing me, they shouted: “Don’t talk about any of this law stuff with us.”

In enumerating the progress being made in China, some observers have pointed out the falling number of death sentences, a new criminal procedure law, the abolishment of re-education through labor, reform of the local courts, the government’s willingness to release more information and the ongoing anti-corruption campaign. But it is questionable whether this represents progress. And even if it does, the major driving force for these changes has been not the party but the people — each change a result of pressure by rights lawyers, democracy activists and countless Chinese on the lower rungs of society.

Xi Jinping once talked about locking up power in a cage, but this is not much different than a magician wrapping an iron chain around himself. In reality, what party officials would like to do, and are doing, is to lock the people in a cage. Sycophants are able to imagine a “spring” for rule of law that doesn’t exist only by ignoring human rights disasters suffered by Ilham Tohti, Xu Zhiyong, Cao Shunli, Gao Zhisheng, Uighurs, Tibetans, petitioners, Falun Gong adherents and house churches.

This kind of selective blindness has prevented Western readers and politicians from understanding the reality in today’s China. It’s no surprise that this type of seemingly even-handed wishful thinking has become the excuse for Western governments to adopt short-sighted policies of appeasement in dealing with autocratic regimes and for favoring trade over human rights.

 

In praise of Hu Feng

By Sheila Melvin

Hu Feng (1902-85) is a name that most students of PRC history have undoubtedly encountered at one time or another. I remember reading it for the first time years ago in Jonathan Spence’s “The Search for Modern China.” It stuck in my mind because back then I found it incredible that a nationwide campaign could have been launched against a lone writer who was himself a loyal member of the Communist Party, his only “crime,” in essence, to suggest that China’s creators and consumers of culture needed a little space in which to breathe.

Later, I heard Hu’s name in a more personal way from my friend and teacher Gui Biqing, because her beloved younger brother, Wang Yuanhua, had been an associate of Hu’s, both men active leftist writer/critics from Hubei working with the League of Left-Wing Writers in pre-liberation Shanghai. One day in 1955, Shanghai’s chief of police asked Wang to admit that Hu was a counter-revolutionary – warning Wang that if he did not, the consequences would be “severe.” Wang spent a long sleepless night in detention and the next day told the police chief that he did not consider Hu a counter-revolutionary. He was thus declared a member of the “Hu Feng counter-revolutionary clique” and jailed for the prime of his life; his wife was punished, too, and later, in the Cultural Revolution, even his sister, my teacher, was locked-up for eight months.

But, beyond the bare bones of his case and my teacher’s stories, I knew little about Hu Feng and always felt that I should learn more. The opportunity recently presented itself when I came across Gregor Benton’s 2013 English translation of “F: Hu Feng’s Prison Years,” a 1989 memoir by Mei Zhi – Hu’s wife, an established writer in her own right – that recounts in gripping, heartrending detail the Kafkaesque detentions, disappearances, and arrests to which her husband was subjected by a Communist Party so intent on crushing those who refused to tow its line that it ate its own, destroying the best and brightest intellectuals of an era.

Hu Feng was a product of the May Fourth Movement and a disciple of Lu Xun, a committed leftist who believed that literature should inspire social transformation and reflect reality, but who also insisted on the role of the individual in the creative process. In the lingo of the era, he supported “subjectivism” and argued that artists and writers should not be dictated to and controlled by political bureaucrats – instead, they should be granted some autonomy so they could actually be creative.

This stance earned him enemies early on – well before 1949 – but he refused to back down, instead warning that a blind insistence on obedience to Party dictates would turn China into a “cultural desert” and founding several literary journals – like “July” and “Hope” – in which he promoted the works of like-minded young writers (among them the poet Ai Qing, the father of Ai Weiwei). Hu’s beliefs became increasingly problematic after Chairman Mao gave his speech at the Yanan Forum on Arts and Literature, in which he decreed that “There is no such thing as art for art’s sake, art that stands above classes, art that is detached from or independent of politics” and after which the Party began exerting ever tighter control over writers, artists – and the individual in general.

Nonetheless, Hu survived the transition to the PRC and was appointed to the editorial boards of the prominent journal People’s Literature and the Chinese Writer’s Union. He used these positions to promote professionalism, criticize the nation’s stagnating intellectual life, and decry the idea that writers could only focus on the lives of workers, peasants and soldiers – didn’t other people’s lives matter, too? In March of 1954, he drafted a 300,000 word “Report on the Real Situation in Literature and Art Since Liberation” and submitted it to Xi Zhongxun – the father of current president Xi Jinping, who then supervised cultural policies for the Party – who reportedly welcomed it. For good measure, Hu appended a long letter to the Politburo complaining that he had been ostracized and deprived of his right to work, and asking them to intercede.

Chairman Mao did not respond well. On the contrary, he personally helped launch a campaign against “Hu Fengism,” which was rolled out nationwide to drill home the dictate that every individual must subsume his will to that of the Party and the State. Members of Hu’s “clique” – most of whom he had never met – were rounded up and arrested. Hu and his wife were taken away in the middle of the night while their three young children slept – she was imprisoned for 70 months and he for 10 and a half years. Mei Zhi’s account opens at this point, in 1965, when she has heard nothing from her husband for a decade and fears he may be dead – but he isn’t.

Out of the blue, she is informed that she can visit him at Qincheng Prison. “Ten years without ever seeing someone dear to you. What will he be like? Will he be the man of my dreams? Will I recognize him?” They talk about family and, inevitably, politics, since she is under intense pressure to make him confess and repent, even though she knows he won’t – “Hu Feng didn’t know how to play it safe and always ended up saying what he thought, so he became the victim of an unprecedented onslaught.” Hu bemoans all the people who were implicated and suffered because of him but steadfastly maintains his innocence. “I was always being told to confess but I had nothing to confess,” he tells her at one point, at another, “I have not lost faith in the Party.”

The visits continue – she brings food, but he wants books, so she lugs him a Japanese edition of the complete works of Marx and Engels – and finally he is released. He sees his children, now grown, they celebrate Chinese New Year and plan to rebuild their lives. The reader sees the Cultural Revolution coming like an impending train wreck, but they do not. They are sent to Sichuan – for their own safety – and live in exile, carving out a life together even as they are sent to ever more remote areas. Then, in 1967, Hu is arrested again and Mei Zhi is left to fend for herself in a mountain prison camp. When Hu is returned to her five years later, he is a man broken in body and spirit, afraid even to eat a tangerine: “If I eat that, they’ll denounce me.” He leaps to attention in the middle of the night, calls himself a murderer, spy and traitor and becomes increasingly paranoid. “I would restore him,” Mei Zhi vows. She makes progress, but after the death of Zhou Enlai, which leaves him sobbing, he worsens, hearing voices talking to him through the air and threatening her with a kitchen knife while imagining he is trying to save Chairman Mao. She begs him to recover: “If you can survive, we will have won. You must live.”

He does live, he is freed, he is exonerated. And then his body betrays him, just as his Party had, cancerous cells devouring his heart. “How he longed to stay alive!” Mei Zhi, ever faithful to the man for whom she has sacrificed so much, promises him, posthumously, to “spend the rest of my life washing the remnants of dirt from your face and showing your true features to the world!”

Mei Zhi is gone, but her mission remains important – Hu Feng still matters and his case is well worth our study. Artistic and literary expression still sometimes get writers and artists detained, and jailed – and, in the worst cases, innocent spouses suffer too, just like Mei Zhi. Hu’s ideas also remain critically important. Debates between those who advocate the May Fourth Spirit and those who prefer something closer to Mao’s Yanan vision remain very much alive – and Yanan, in recent years, is gaining ground. President Xi has called for “innovation, innovation, innovation” and the Chinese government has done much to promote the creative arts. But history has proven that Hu was correct – real innovation and creativity can happen only when artists and innovators are given the space and the freedom to test their own ideas, express their own creativity, and make their own mistakes, without fear of punishment. We should all continue to support Mei Zhi’s quest, and learn from Hu Feng.

 

Latest thoughts on the Chinese economy / the ‘new normal’

December 16, 2014

China held its Central Economic Work Conference last week, chaired by president Xi Jinping, so here are a few thoughts on the current state of the Chinese economy and a few links to an article I have written, and talks I have given, recently about the Chinese economy.

First up, the slogan du jour is definitely ‘new normal’ (新常态). Xi Jinping has been using this for about six months, but now he is really using it. Xinhua’s short, official report on the conference has ‘new normal’ in the headline and ‘new normal’ six times in the text. See here for the English version.

What does it mean? It means that local politicians, state firms, and everybody else should dial back their expectations about credit and growth. The increase in both is slowing and that is the way it is going to be as China undertakes a deleveraging process in the banking and corporate sectors. There is not going to be the kind of collapse in growth that many have predicted. The government has plenty of room to fine tune the slow-down, Chinese exports remain competitive, and the global economic environment, while not great, is not a disaster from the perspective of China’s needs. Look out for reported GDP growth in 2015 between 6-7 percent.

Against this background reforms will continue to increase the extent to which the market prices credit in China’s economy. There has already been a big shift in favour of lending to the private sector since the global financial crisis (see my review of Nicholas Lardy’s new book, below), and this is one aspect of an ongoing financial liberalisation process. To my mind, this explains the recent strong performance of the Chinese stock market much better than claims it is down to an interest rate cut (which wasn’t really a cut at all given falling inflation). Previous run-ups in the Chinese market have coincided with periods of financial sector deregulation. The difference this time I suspect is that the bull market will last longer.

All in all the outlook is a not unattractive one: slower growth, better credit rationing hence higher quality growth, and a rising share for consumption in the economy at the expense of slowing investment. The main risk — as was the case during Zhu Rongji’s long period of ‘structural adjustment’ in the 1990s — is that the central government listens to local politicians who say they cannot maintain ‘social stability’ without more credit and growth. Zhu didn’t listen to such imprecations, and we have to hope Xi won’t either. As the slogan says, China needs and is getting a new normal. Otherwise the books really cannot be balanced and financial system risk will become unmanageable.

Later re. the new normal: Damian Ma has written an excellent piece for the new issue of Foreign Policy around the theme of the ‘new normal’. Well worth a read, with a lot more detail than I can offer here.

 

Links:

Below is a link to download the review of Nick Lardy’s latest book, Markets Over Mao, that I wrote for the latest China Economic Quarterly. The book makes an important contribution to the optimists’ case that China will overcome its current slough of non-performing loans in the banking system.

2014 CEQ Q4 final Markets Over Mao review

 

This next link is to a download of a synopsis of a talk I gave at the Madariaga College of Europe in Brussels (an EU think-tank) a couple of weeks ago. It is about how China’s development model is similar and dissimilar to those of Japan, Korea and Taiwan. The theme will be familiar to anyone who has read How Asia Works, but there are some additional, up-to-date thoughts about China as well as responses to questions raised by the Brussels nomenklatura. The precise topic I was asked to speak on is ‘What can east Asian countries learn from China’s economic policies?’

2014-Dec-01 – Madariaga – CN lessons to East Asia_final

 

The Youtube video below is a speech I gave at the National University of Singapore in October (blog entry about that trip here) on the subject of ‘When will governance matter to China’s growth?’ (governance here meaning institutions like a free and fair and prompt judiciary). Roger Cohen of the New York Times speaks first about the role of the US in east Asia. Then I speak at roughly the 25-minute mark. Then there is a joint Q&A.

 

 

And here is another Youtube video where I spoke separately about How Asia Works at the National University of Singapore. There is quite a long Q&A in which lots of questions about development from a more Singaporean perspective are addressed.

 

 

Geez mate…

December 8, 2014

Start the week with Australian Trade Minister Andrew Robb losing his cool when pressed about why he thinks China is moving steadily and smoothly towards a democratic future. Just three minutes of Oz radio to listen to.

 

Tits and bums

November 24, 2014

Oh, so now you’re paying attention.

In the past couple of weeks I have posted blogs that seemed to me important. About the Xi Jinping-Obama understanding on emissions that paves the way for a global deal to arrest climate change in Paris next year. And about Adair Turner’s argument that governments may have to print money to pay for fiscal expenditure and monetise part of their debts if we are to head off another asset bubble by raising interest rates while at the same time avoiding global economic depression.

Well, these momentous developments have garnered little more than the usual rate of traffic on this blog. So, looking at email addresses of the several hundred people who now subscribe to every single post (dear oh dear), I note that most of you are academics, researchers, money managers, NGO-types and ‘activists’. So it occurs that what you really want is a bit of gratuitous demi-porn to take the edge off your lives of monotonous intellectual mind-wrestling.

Fortunately I am in a position to indulge you. The peg is the recent APEC summit in Beijing, which was important not just for an apparent meeting of minds between the Chinese and US presidents, but also for an alleged pass made by the Russian president, Vladimir Putin, at Xi Jinping’s wife.

Personally, I don’t think there is much to it, although Putin is now officially a single man, which puts him (even more) firmly in the frame in terms of motive. However the extraordinary reaction of Chinese censors, who moved immediately to expunge any trace of Vlad’s let-me-get-your-coat-darling moment from the Chinese Interweb, reminds us that in Chinese Communist Party cultural terms Vlad was indeed on quite thin ice. Here, side by side, are the photo (similar to the one below) briefly posted by Chinese state news agency Xinhua and, to the right, the notice you got shortly after/still get at the same URL saying in Chinese that the page has been deleted.

Obama to Xi: 'Looks like Ukraine is not the only thing Vladimir wants to get into.'

Obama to Xi: ‘Looks like Ukraine is not the only thing Vladimir wants to get into.’

And here is a brief story from Foreign Policy about the whole incident, including a link to video if you really want more.

The Putin-Peng Liyuan (yes, she has a name) frisson got me thinking, as I am sure it has you, about the broader subject of global leaders hitting on other leaders, their wives and partners. So here, in no particular order, are some memorable moments I have been able to come up with:

 

1. Henry Kissinger’s ever-penetrating analysis. These must surely be among the most famous images of the genre, as Henry first enjoys a full frontal review of Lady Diana’s strategic assets, and then follows up from behind with a sly ass-check.

kissinger Di 1 kissinger Di 2

 

 

 

2. The Brezhnev. But did you know that back in 1973 Kissinger’s own date, former Bond girl Jill St. John, was subjected a famous occular eye-over by the leader of the Unfree World, Leonid Brezhnev? In the photo below you can almost see Brezhnev calculating out the potential upside of detente with the Americans. Coincidentally, it was in 1973 that Kissinger was quoted in the New York Times saying that: ‘Power is the ultimate aphrodisiac.’

Brezhnev Jill St John 1

 

 

 

 

 

 

 

 

Here is a shot that shows Kissinger (back to camera) and Jill as another guy (described in Walter Isaacson’s Kissinger biography as a ‘naval aide’) gives Jill’s ass a caressing gaze too.

Brezhnev and Jill St. John at Nixon Pool Party

 

 

 

 

 

 

 

 

3. Size doesn’t matter. Deng Xiaoping. There is no killer photo here, just various official ones like that below. However, when Ronald and Nancy Reagan visited China in 1984 and were received in the Great Hall of the People, Deng said to Nancy (in range of the foreign press corps): ‘I hope you’ ll come the next time and leave the president home.’ After translation, the ever-cool Ron batted the remark away.

Deng XP Nancy R and Ron R

 

 

 

 

 


 

4. Obama-Gucci Helle. These images are so recently famous they hardly bear posting. Except to tee up the less well-known 5., below. Here Obama flirts with Danish prime minister Helle Thorning-Schmidt, known to her countrymen as Gucci Helle for her rather un-Danish love of branded designer clothing.

obama helle 1

 

 

 

 

 

 

 

And here is the US president after a bollocking from his wife, who was sitting on the other side of him all along. (There is another image of Brave Dave Cameron forcing his way into Helle and Obama’s selfie, but it is just too depressing to post.)

obama no-helle michelle

 

 

 

 

 

 

 

5. Obabma and Lil sis’ Yingluck. Now here is the collector’s item. It is Obama and Thaksin’s little sister Yingluck, who was running Thailand after Thaksin was thrown out in a coup, at least until Yingluck was also thrown out in a coup. What was that song about ‘One night in Bangkok’?

Obama Yingluck

 

 

 

 

 

 

 

 

 

To be fair to Obama, however, I think the story may have been that it was young Yingluck who was providing the come-on.

Obama Yingluck 2

 

 

 

 

 

 

 

Targeted consumer boycotts

October 8, 2014

Here is a very interesting article from Foreign Policy about possible future strategies in the Hong Kong protests. It is written by academic researchers of successful non-violent protest movements around the world.

Following my FT oped, the idea of targeted consumer boycotts is what jumps out…

In addition… there were lots of comments on the FT article. As with this blog, I don’t think that comments which do not add substance, or challenge substance, in what is being said are useful. But several people did say things on the FT site that seem to me interesting enough to re-post. I was struck by the comparison with Singapore. Is it possible the Harry and the PAP are more responsive on the question of social equity and competition than the Hong Kong government? I think the full answer would be more nuanced than the commenter suggests, but it is an interesting idea.

Great article.  So true.  We Chinese generally don’t take to the streets unless our bellies are empty.  Usually too busy working and making money!

Singapore has a supermarket chain run by the National Trade Union Congress, which was put in place to keep prices competitive.  Its produce is often superior to the so-called upmarket chains.  I remember as a child the beginning of this chain and how it put the lid on the supermarket chains left behind by the British.  In fact, one of those chains, Fitzpatrick ended up going out of business!

As for food, there are many hawker centres where hawker stalls are rented out at ridiculously low rents to stallholders who “inherited” these stalls from their parents or other relatives.  As a result, you get delicious food (from secret recipes passed down generation to generation) at super-low prices.  I just had a “home-cooked” type meal of rice and dishes (1 veg, 1 meat and 1 toufu) for a total of S$3, in the Central Business District.  And it gets cheaper in the “heartlands”.

At the last General Elections, the PAP lost seven seats to the opposition.  It is now implementing even more social transfers in response to popular sentiment.

I think that’s what ordinary Hongkongers want.  Someone to listen to their woes and take action.

I came across the following stats at Bloomberg to quantify the hurt inflicted on so many living in HK as a result of money and power being in the hands of so few.

Hong Kong’s Gini coefficient, a measure of income inequality, rose to 0.537 in 2011 from 0.525 in 2001, the government said last June. The score, a high for the city since records began in 1971, is above the 0.4 level used by analysts as a gauge of the potential for social unrest.

The average gross household income of the poorest 10 percent of the population fell 16 percent to HK$2,170 a month in 2011, from 10 years earlier, according to a government report. The comparable income for the richest 10 percent jumped to HK$137,480 a month, a 12 percent increase.

Not good for creating social harmony.

Studwell’s refocus on economic questions is correct, and would be very good for Hong Kong, but it would never receive the kind of universal support that the Western press has given the democracy movement. In fact, the West is proposing the opposite of Studwell’s economic fairness: to break the current Chinese social structure and open the gates for multinational business, a kind of Yeltsin years for China. Every Western journalist knows that democracy without campaign finance will lead to the election of money – i.e., the election of a tycoon or someone backed by one (CY Leung was an anti-tycoon candidate compared to Henry Tang, and look where he is now).  Studwell seems concerned with actually improving Hong Kong, but that is not what the press coverage of the democracy movement is about, otherwise they would have used real facts rather than cinderella stories. Nevertheless, the FT should be commended for printing this piece, as well as for keeping comment board open.

There is no questions that HK is run by monopolies, duopoly and oligopolies and things are more expensive than it could have been.

However, the author who learn much by looking in the back yards, especially the VAT inclusive prices here..  For example, one can run a price comparision between watsons.com.hk and boots.com, Johnson baby shampoo 500ml cost £3.35/£0.67 per 100ml at boots and cost HKD56.9/£4.60 for the 800ml version -> £0.575 per 100ml.

Toyrus HK : Nerf CS18 : HKD399.9 / £32.07,  ToysrUS UK : £39.99
HK Electricty prices : Max HKD186.4 or £0.1495 per kwh
http://www.hkelectric.com/web/DomesticServices/BillingPaymentAndElectricityTariff/TariffTable/Index_en.htm

UK Electricity prices: British gas £0.1535 per kwh.

Looks like we all have our own ‘monopolies’ problem to deal with (for us, including the one at Brussels).

It is encouraging to read an FT an article which says it like it is regarding Hong Kong and much of Asia, perhaps best summarised as ‘Winner takes all, loser hard luck’. Consider the Gini coefficients of wealth inequality and you’ll find Hong Kong and Singapore, two of the ‘wealthiest’ places on the planet with the worst ‘developed nation’ Gini coefficients, these being on a par with some of the poorest African nations. It’s long been apparent that the propertly developers, Government, ‘managed land releases and sales’ operate in a manner beneficial to the few and disenfranchising the majority. Arguments that this is a hang over from the past don’t quite stack up, as the present leaders have all the powers they need to do something about it. One has to ask why not, with the answer perhaps reducing to such tolerance of vast inequalities being an inherent part of the region’s social fabric and culture. Surprising that the majority have tolerated this for so long but then this too, fortitude in the face of injustice, even from within, is a regional trait. Perhaps, with modern dissemination of information, so that it is clearer to all as to what is going on, the majority will start to exercise their influence. Without this, nothing is likely to change.

Visibility on Xi / Heineken government

July 17, 2013

Xi Jinping close

There has been a lot of good quality think-tank and media stuff in the past few weeks about what the new Chinese president Xi Jinping may be thinking and planning. Since what his government implements in the next two to three years will largely decide how far China can go with its developmental project, I am posting some highlights here.

The big lacuna, for me, is that there is no similar debate about what premier Li Keqiang may be thinking and planning and what his capacity to act (semi-) independently of Xi may be. Premiers are also important in the Chinese system and, from time to time, you get ones like Zhao Ziyang or Zhu Rongji who define an era more than the president. Anyhow, the Li side of things is not much addressed here.

 

The background

Recall that Obama did two days of unscripted discussions with Xi in California in June in an effort to find out what is happening in Xi’s head. My sense is that Obama didn’t get a very clear view.

 

1. Francois Godemont’s essay Xi Jingping’s China, published by the European Council on Foreign Relations. Godement has Xi as the new Chinese Big Man, streamlining the bureaucracy and limiting corruption but doing almost zero at the institutional development level. I found this sort of interesting but not compelling in the sense of really giving visibility.

The blurb says Godement argues that:

  • Xi has accumulated more power and more personal authority than any leader since Mao Zedong. His top-down approach will probably leave little room for major political reform or economic liberalisation; his “hardline modernisation” approach seeks instead to combat behaviour such as corruption and loose credit.
  • The economy is the one area where Xi doesn’t seem fully in control. The price he has paid for broad support from party elders and conservatives is also an endorsement of major vested interests, which will constrain those arguing for major economic reform.
  • Xi is ignoring his predecessors’ “low profile” approach to foreign policy, and claims a role for China as a global power. Xi seeks strategic parity with the US while its regional approach is based upon China’s superior strength.

“Xi Jinping is pursuing a neighbourhood policy based on strength in which China subjugates small countries while building a “big power” relationship with the US. Xi seems to want to combine 19th century geopolitics with 20th century Leninist politics, in order to gain the upper hand in the globalised 21st century world.” François Godement

….

2. Here is a resume of what Tim Summers at Chatham House in London thinks we know so far. Again, the expectation seems to be that we are not going to get significant institutional reform or indeed incremental moves in the direction of political pluralism. However the author sees moves in social policy areas like environmental degradation as some sort of half-way house between pure economic reform and more politically sensitive reform. This would have some echoes in 1970s Japan or 1980s Korea. (There is a reference to me at the end. I don’t know Mr Summers.)

China’s Current Reform Agenda

by Dr Tim Summers, Senior Consulting Fellow, Chatham House

There is an ongoing debate about reform in China which centres around questions of how far and how fast reform – political and economic – might go.Political reform – at least in most western discussions – encapsulates the possibility of changes to China’s political system. Under the country’s new leaders there is little sign of fundamental shifts so far, though there are campaigns to clean up the bureaucracy and make the Party-state more responsive.Economic reform is often reduced to greater marketization and a reduction in the state’s role in the economy. This has been prompted partly by a sense that state-owned enterprises have become too powerful, that the private sector has insufficient space to develop, and that factor markets are still too much in the hands of government officials.

Reform in motion

The coming months will see further debate, inside and outside China, about what sort of reforms China’s new leadership might consider. President Xi Jinping confirmed to Barack Obama in California in June that the Party machine was working on a medium and long-term policy plan for comprehensive economic reforms, and precedent suggests that this will be unveiled at this autumn’s Party Plenum.In fact, the new leadership has already set in train some elements of a reform programme. At the National People’s Congress (NPC) in March it was agreed that the railways ministry would be reduced to a policy administration and its operations would be fully corporatized. Other changes to government structure included the establishment of a new, stronger agency for food safety, symbolic of the desire to respond to growing popular concerns.After a meeting of the State Council (cabinet) in May, a subsequent policy document set out the most comprehensive statement of government priorities for economic reform this year since the NPC. Some of these are economic: reforms to the fiscal system, financial sector reform such as further marketization of interest rates and internationalization of the currency, encouraging more private and flexible investment, and freeing up the pricing of resources. There do not appear to be plans to shake up state-owned enterprises. Other points address livelihood issues, such as low income protection, ensuring food and medicine safety, and dealing with the environment.The highlight so far is administrative reform, in particular reducing government approvals needed in certain areas and devolving other responsibilities from the centre to the provinces. These reforms amount to making the government more responsive and efficient, but without changing the fundamental political structures. Part of the motivation is to help stimulate innovation and economic efficiency, but there is also a social element in the suggestion that these reforms could improve the delivery of public services.Social element

Less noticed is the extent to which social and livelihood issues feature. Even when it comes to resource pricing, for example, there are aims to differentiate pricing in electricity, water and gas (planned for some time) to support livelihoods.

Indeed, the ‘economic reform’ document for 2013 has as its guiding principle dealing with the state’s relationship not just with the market, but also with society. A reference to ‘reform dividends’ benefiting people ‘more justly’ highlights the social element. This is not a manifesto for economic efficiency alone.

Social issues have also been prominent on the agenda of the State Council, under new Premier Li Keqiang. According to official accounts of its meetings, major issues discussed over recent months include air pollution, developing the solar panel industry, safety in (industrial) production, providing safe and high quality milk powder, managing the agricultural sector to ensure supply and stable prices, and dealing with the earthquake which hit Sichuan in April.

A social policy emphasis makes a lot of sense. While economists and investors have stressed their desire for market-oriented economic reforms to improve efficiency, from a political perspective the most pressing issues the leadership faces are social and popular concerns.

There were hints of this as soon as Xi Jinping took over from Hu Jintao as head of the Chinese Communist Party back in November. Xi’s first public comments highlighted people’s desire for ‘better education, stable jobs, more income, greater social security, better medical and health care, improved housing conditions and a better environment’.

All of this suggests we should rethink the way we understand ‘reform’ in the Chinese context. Social, or livelihood, issues are at the forefront of Chinese policy making. And economic reform does not just mean the economics of efficiency (to borrow a phrase from Joe Studwell’s How Asia Works), but also addressing social and livelihood issues through the economics of equity.

3. Kerry Brown, once of Chatham House, now based in Australia, has some nice bullets on what we may know about Xi. The final bullet is one I think I would have gone for. What interests me most is to understand the mechanics of the political tendency to increasing consensus and conservatism in fast-developing states. Is it just the effect having more money that encourages politicians to buy off constituencies and avoid confrontation for as long as possible?

The New Leadership in Beijing: Political and Economic Implications

Evidence to Parliament
Kerry Brown, July 2013

This is a submission to the Foreign Affairs Committee, House of Commons, on 2 July 2013.

  • China’s new leadership is one of political scientists, historians, economists, lawyers and social scientists. The era of the technocrats has come to an end.
  • This is a leadership set up for a domestic agenda and that will resist attempts to pull it more deeply into international affairs, which are seen as lying beyond what the elite define as in China’s national interests (preservation of stability, building up economic strength, safeguarding sovereignty), despite the very real pressures that will be put on it to that effect.
  • They view international relations in a more emboldened way than their predecessors, and show their awareness of their country’s new economic status and how this needs to be reflected in how the world talks to and engages with China.
  • Underneath the bolder presentation of reformist intention towards corruption, economic policy and use of political language, the Chinese Communist Party in the 21st century lives with the paradox that a movement founded in revolution has become, in its seventh decade in power, self-preserving, highly cautious, led by people with remarkably little diversity, and extremely conservative.

4. Michael Komesaroff is a thoughtful commodities specialists who writes the Metal Man column in the China Economic Quarterly. I am not posting his presentation because you should register at his Urandaline site in order to get it. However it, and other useful things he posts, are free. Who said that Australians are tighter than Scots? Here is his blurb.

After Hu: More of the same, is the title of a presentation I made in April to the Sydney based clients of UBS. The presentation develops a theme I have been articulating for sometime, namely that Western observers of China are likely to be disappointed in the reforms they seem to be expecting from China’s new leadership.The presentation includes a positive forecast on China’s need to import greater quantities of iron ore, but this is offset by changes in market power so thermal coal is less attractive. After Hu: More of the same can be found here.

You are receiving this e-mail because some time back you registered at my websitewww.urandaline.com.au to receive notification when additions were made to the site.  At the time of registration these are the log in parameters you chose:

5. A macro-economic aside. In terms of the raw economic problem that the new government faces, this graph from Gavekal Dragonomics is useful. It shows how much nominal growth banking lending produces — in other words a proxy for a pure Incremental Capital Output Ratio. The point is that chucking money around is producing diminishing returns, as one would expect at this stage of development, and so structural adjustment and institutional change are suddenly very important as means to improve Chinese bang-for-buck.

The question is whether Xi and Li do only economic structural adjustment — such as interest rate reform, a revision to the centre-provincial fiscal arrangements in place since 1994, more action on welfare transfers and inequality — or whether they add any institutional medicine from education system to legal system to media to political pluralism modernisation.

….

6. More media-type stuff now. This is an op-ed from Russell Leigh Moses, Dean of Academics and Faculty at The Beijing Center for Chinese Studies, who is writing a book on the Chinese political system.

Xi Jinping’s Rare Scolding of Top Party Leaders (Wall Street Journal)

By Russell Leigh Moses

After telling the lower ranks of the Communist Party to shape up and make a clean break from past practice, Chinese leader Xi Jinping has taken aim at a new target:  the Party leadership itself.

And he’s done so with authority and openness from the highest pulpit of politics in China–the Politburo, the very place where the senior leaders sit and make policy.

In a speech at the conclusion of a three-day special meeting that was covered across Party media and took up nearly half of the evening newscast on Tuesday evening, Xi proclaimed that senior members of the Party needed “to play an exemplary role,” and that they had to be “broad-minded enough to reject any selfishness…to adhere to self-respect, self-examination and self-admonition” in their work (in Chinese).

It’s extremely rare for Politburo proceedings to be spoken of in such detail and openness.  And it’s unprecedented in modern times for the Party boss to start taking swings at his colleagues at the top by so directly reminding them of their responsibilities—a move that suggests he might be planning something even stronger soon.

Having just admonished lower-level cadres in a salvo last week, some observers might think that Xi is simply putting on a show here. After all, it’s difficult to demand improvement in the work-styles of the rank and file without at least paying lip-service to the idea that those at the top could stand to do a little better themselves.

But the tone of Xi’s comments and the play they’ve received in the state media suggest this is far more than just rhetorical window dressing.  It wasn’t enough for high officials to “strictly abide by party discipline and act in strict accordance with policies and procedures,” Xi said. Those at the top must also “strictly manage their relatives and their staff and refrain from abuse of power.”

“The sole pursuit” of senior members of the Party, Xi insisted, should be tied to “the Party’s cause and interests” – in other words, “to seek benefits for the Chinese people as a whole.”

Whether it’s misuse of official license plates or the high-end looting of state assets (in Chinese), Xi knows that corruption is not always confined to lower-level cadres.

Xi was careful to concede that there have been some positive developments in the ways by which the Politburo and other Party bodies operate, such as “improvements in research and reporting.”  Meetings have been shortened and presentations streamlined, “enhancing the majority of party members’ and cadres’ sense of purpose, as well as the view of the masses” towards the Party leadership, he noted.

But it’s clearly morality at the top — not the way that decisions are made — that concerns Xi and his allies the most.   As Xi’s speech noted, “as long as Politburo comrades always and everywhere set an example, they can continue to call the shots, for that will have a strong demonstration effect, and the Party will be very powerful.”

But Party leaders “must follow their own strict requirements first.”

Xi’s reprimand seems to imply that some of them are not.  His predecessors talked about the general threat to Party rule from the evils of corruption; but in nearly every case they chose to scold officials in the abstract, instead of smacking them around.  As with so many other efforts, Xi’s being different.

Indeed, such comments raise the very real possibility that Xi has someone specific in mind – that he could be about to strike against one or more of the conservatives who populate the Politburo and who might be standing in the way of further reforms.

Whatever form the next round of fighting takes, Xi and his reformist colleagues are clearly interested in creating a fresh sort of politics, even at the very top of the system.  This is risk-taking and resolution of a high order–and it brings a real political showdown with opponents of Xi’s brand of reform all the closer.

7. And this is an op-ed from Ching Cheong, the venerable Straits Times journalist who was locked up in China for three years accused (among other things) of spying for Taiwan. It talks about Xi’s encounter with Hu Dehua, which was referenced above.

海峡时报 (新加坡)

Opinion  |   Others  |   By Ching Cheong, Senior Writer  2013-06-28

Outspoken China princeling takes on President Xi 

 CHINESE President Xi Jinping’s conservative stance on political reform has led to a major split within the princeling community, whose members share a common interest in preserving the ruling status of the Chinese Communist Party (CCP).

Mr Hu Dehua, the third son of the late party chief Hu Yaobang, openly criticised Mr Xi at a seminar held by the liberal magazine Yan Huang Chunqiu in mid-April. It was by far the most severe criticism lodged against Mr Xi since the latter became CCP general secretary last November.

Mr Hu Yaobang was the CCP general secretary from 1982 to 1987. He was known for “liberating” thousands of senior CCP officials purged by CCP founder Mao Zedong. For this reason, he wielded considerable moral strength within the party. Mr Hu Yaobang’s death in 1989 triggered a massive democracy movement in Tiananmen Square that was put down bloodily.

Thanks to his legacy, his two sons, Deping and Dehua, stood out as symbols of political reform amongst the princelings.

Before Mr Xi became CCP chief last November, he let it be known that he paid a visit to Mr Hu Deping and had a long chat with him. Many considered this an attempt by Mr Xi to build an image as an enlightened leader.

Now, however, Mr Xi has been taken to task by Mr Hu Dehua.

He started with Mr Xi’s speech to party colleagues during his southern tour early this year. In it, the President stated that the Soviet Union collapsed because the party had disarmed itself by allowing the army to be loyal to the country rather than the party. “One lesson to draw is that we should forever grasp firmly the gun and not to disarm ourselves,” the President said.

Mr Xi also lamented that when the country faced disintegration, given the size of the Communist Party of the Soviet Union (CPSU), there was no one “man enough” to come to its defence.

To refute him, Mr Hu Dehua cited Russian Communist Party leader Gennady Zyuganov’s view that the Soviet Union collapsed because the CPSU had monopolised resources, political power and truth. “If this was the case, then there was nothing to regret if the Soviet Union or the CPSU collapsed,” he said.

Mr Hu Dehua then hinted that Mr Xi had misread the reason for the collapse of the CPSU. Mr Hu cited a CCP document of July 14, 1964, entitled On Khrushchov’s Phoney Communism And Its Historical Lessons for the World, saying that there emerged in the Soviet Union a privileged class represented by the CPSU.

“The members of this pivileged stratum have converted the function of serving the masses into the privilege of dominating them. They are abusing their powers over the means of production and of livelihood for the private benefit of their small clique,” the document said.

“The members of this privileged stratum appropriate the fruits of the Soviet people’s labour and pocket incomes that are dozens or even a hundred times those of the average Soviet worker and peasant. They not only secure high incomes in the form of high salaries, high awards, high royalties and a great variety of personal subsidies, but also use their privileged position to appropriate public property by graft and bribery. Completely divorced from the working people of the Soviet Union, they live the parasitical and decadent life of the bourgeoisie,” said the document.

Mr Hu Dehua pointed out that this was the real reason for the collapse of the Soviet Union. Turning to present-day China, which was plagued with problems similar to the Soviet Union’s, he said pointedly: “We blame everyone else, but never try to find problems from within. Is this a correct attitude?

“Why can’t we learn from the Kuomintang (in Taiwan), reform ourselves and get elected, basing our legitimacy on people’s authorisation and not on guns and cannon?” Mr Hu Dehua asked.

He then queried Mr Xi’s remark that no one was “man enough” to save the CPSU. “What does it mean by ‘man enough’?” he asked.

“Driving third-generation battlefield tanks against your own people is ‘man enough’? Or resisting orders to kill your own people and opt to face martial court instead?” he asked.

“When the ruling party faces a crisis, there are two options: to suppress the opposition or to reach reconciliation with the people,” Mr Hu Dehua said.

“We should learn from the experience of Chiang Ching-kuo (the late Taiwanese President who scrapped martial law). Be bold enough to reflect on the Feb 28, 1947 incident (where demonstrators were bloodily suppressed) so that historical pains could be redressed without bloodshed, revenge or purges.”

Clearly, Mr Hu Dehua was referring to the Tiananmen incident.

He then turned to Mr Xi’s latest assertion that one should not use post-reform history to negate the pre-reform years.

Mr Hu argued that without turning its back on the traumatic Cultural Revolution (1966 to 1976), the CCP could not embrace reform and open the door to usher in a period of prosperity.

“If one should not negate the first 30 years, does it mean that we still have to uphold the Cultural Revolution, uphold Mao Zedong’s purges of senior cadres, including his remark that Mr Xi’s father, Xi Zhongxun, was a counter-revolutionary who used novels as a weapon to conduct anti-CCP activities?”

This last question put the Chinese President in an extremely awkward position.

Mr Hu decided recently to release the transcript of his speech on the Web.

Mr Chen Ziming, a dissident branded as the black hand behind the 1989 Tiananmen incident, speculated that the recent salvos of propaganda attacking constitutionalism might have prompted Mr Hu to take Mr Xi to task.

Mr Hu’s open criticism of Mr Xi also suggests that the princeling community is sharply divided over how to preserve the ruling status of the CCP, especially over whether rampant corruption and widespread unrest can be dealt with without political reform.

Do you feel enlightened? I feel very slightly less in the dark. Rather like thousands and thousands of Chinese cadres, not to mention the general population, who are waiting to find out what Xi4Li3 (a homonym of Heineken’s Chinese name Xi3Li4 – you heard it here first) are actually going to do. I don’t mind a bottle of Heineken. But is that all this nation of 1.3 billion can offer us?


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