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CHINA'S FACELIFT: ECONOMIC DEVELOPMENT AND POLITICAL TRANSITION

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By Hamid Elyassi

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The Montréal Review, April 2013

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Group photo of members of Standing Committees of 17th, 18th CPC Central Committee Political Bureau (Xinhua/Ju Peng)

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In March this year, the moulting of the political structure of the People's Republic of China was completed at the annual plenary session of the National People's Congress and the old faces at the top politely offered their seats to their younger colleagues. The facelift, taking place after the set interval of ten years, certainly helped dispel the received notion that leaders of communist regimes, having survived an often perilous road to power, tend to cling to it until death. What it did not do was to counter the uneasy feeling that the intended rejuvenation was only skin deep.

The routine endorsement of the new leadership by the People's Congress was the second phase of the rejuvenation procedure. The rather ritualistic exercise had begun in November last year when the Communist Party of China (CPC) held its less frequent National Congress to announce new party leaders. The Party, which at one time used to pawn its impressive revolutionary credentials to lend legitimacy to an oppressive, totalitarian state, has for some time been clutching at the success of the Chinese economy to justify its endurance and avoid the inescapable question of its relevance in a country well-versed in the ways of capitalism. Of course, the way the Congress was managed gave no indication of a once bright star on the wane. Indeed, in a perfectly choreographed exercise in form, the new Party leaders presented to the Party Congress in November were later transplanted to the top of the state apparatus. The operation took place before the delegates to the National People's Congress who played the rather convincing part of parliamentarians empowered to give, and presumably withhold, their votes of confidence in people set to run China for the coming ten years.

Quite possibly, the sequence of events meant to convey some kind of cryptic message for the benefit of the observant onlookers, perhaps to confirm that, in spite of all, the Party is still in charge and has the first say about who should govern the country. If such a message was indeed intended, probably only the delegates to the two Congresses took any interest in decoding it. To the outsider, the new leaders had been chosen long before the Party Congress, and had been coached by their elders to present a younger face to the world and carry on the old ways. As for the Chinese people themselves, one can only guess how they might have appraised the ritual. Most probably they stood in awe of the splendid spectacle of hundreds of well-behaved individuals, gathered twice in the space of a few months to applaud soft-spoken proposals made under red and red banners of communist China. The more history-minded among them could even sense traces of a long celebration of some Imperial jubilee.

The high point of the ceremonial replacement of the leadership of both the Party and the state was the declaration of intent by the new leaders who spoke of their support for the continued growth of the economy and their determination to combat the evils of corruption and income inequality. They also took care not to encourage any hope of fundamental political change by emphasising that there would be no deviation from the principle of Socialism with Chinese Characteristics, the slogan which, during the past thirty odd years, has lifted the Chinese economy out of poverty, chaos and confusion and turned it into one of the fastest growing economies of the world.

The Socialist workshop of the world

The notion of Socialism with Chinese Characteristics, or new Chinese communism for short, was proclaimed in late 1970s in face of imminent collapse of an ideologically managed economy. Although over the preceding thirty years or so, the Maoist revolution had brought political stability to a fragmented land and had succeeded in feeding the nation for the first time in many years, the regime's subsequent attempts at forging economic reality to fit into the straightjacket of Maoist ideology had spelt disaster on more than one occasion. Socialism with Chinese Characteristics was a typically refined Chinese euphemism for the overhaul of Maoism, just as Maoism had revised the conventional Marxist-Leninist ideas to suit the needs of an agrarian economy ravaged by years of civil war. And just as Maoism had managed to save the nation from death by starvation, Socialism with Chinese Characteristics was expected to raise it above the breadline.

It is, of course, impossible to guess whether the inventors and followers of the idea of Socialism with Chinese Characteristics meant it to go as far as turning a socialist economy into a capitalist one, as it has. But regardless of their intentions and the jargons they have coined, today, the capitalist features of the Chinese economy are too prominent to be concealed under the veneer of socialist slogans and affirmation of faith in any version of communism. Today, the People's Republic of China holds the title of the “Workshop of the World” as a prominent phase in the conventional road of capitalist development. And as an early stage on that rather bumpy road, it promises the Chinese “proletariat” more pain than pleasure for some time to come.

To be the workshop of the world is to put a poorly paid labour force to work for the benefit of foreign consumers. It means rapid economic growth, alongside numerous economic and social problems, some of which have been noted by the Chinese leadership. In the Chinese workshop of the world, millions of unskilled and semi-skilled workers earn a meagre living by working in conditions that would verge on the illegal in more advanced, officially proclaimed capitalist countries. To maintain the tempo of economic growth and retain a competitive edge in the world markets, the standard living of the Chinese masses is kept depressed by low wages and involuntary saving - including rather dubious habit of amassing huge foreign exchange reserves - to pay for heavy domestic capital formation and attract foreign investment. This course of intensive capital accumulation is, of course, needed to lift hundreds of millions of people out of poverty and lead them on to prosperity. But in the process, it can easily create social and political backlashes that, if not treated, can put an end to the hope of turning the “sweat” workshop of the world into an advanced welfare state. And that is why the custom of changing faces at the top of China's political establishment and keeping the substance unchanged cannot go on much longer without causing concern.

Capitalism and its imperatives

Of all economic systems in history, capitalism is unique in that it divides society into a minority that dominates and decides the fate and very survival of the majority without feeling the need for even a pseudo-ethical justification. The capitalist class dominates the rest of society by virtue of command over material resources alone, and not because of claims to a “moral” right by birth, creed or divine providence. Capitalism as an economic system carries an open invitation to revolt by the many against the few, with predictable results. No matter what material defences capitalists try to build around themselves and their interests, they can hardly escape speedy destruction by the “exploited” masses that outnumber them by a huge margin. Thus, capitalism is an inherently unstable set-up which should breed its own prompt demise at its inception. Yet, for over two hundred years, capitalism, in different forms, has lived on to become the dominant economic system of the modern age.

The ardent advocate of free enterprise may attribute the longevity of capitalism to its superior qualities and exceptional resilience. The fact, however, is that like all other stages in economic history, capitalism has survived only where it has been placed in an amenable social and political environment. And rational argument and historical evidence tell us that capitalism needs democracy to survive and flourish.

It is not hard to discern the organic relationship between capitalism and democracy. While capitalism thrives on the material dominance of a small minority over the majority, democracy gives the majority the right to assert its will over the few. And while capitalism reduces citizens to mere factors of production, democracy gives them the individual right to seek, and the collective power to demand reparation.

China's Capitalist expansion

Needless to say that capitalism never arrives with a knapsack of democratic rights and institutions. Indeed, the dominant capitalist class is expected to put up a fierce resistance to democratic encroachment upon its material prowess and political prerogatives. The marriage of capitalism and democracy takes place in a more subtle way.

What happens is that just as capitalist development consists of a sequence of evolving stages which the social system internalises is habituated to them, so is the introduction and consolidation of democratic rule. And in this process, it is important to note the fundamental historical lesson that the democratisation of politics should not be allowed to fall behind the capitalist development of the economy. This is a crucial consideration in judging whether, as some have projected, China is going to dominate the global economy in the next few decades, or the country is in danger of reverting to what it was thirty or forty years ago, or worse.

Before the introduction of economic reforms in China, the People's Republic was an economically backward state on the margin of world affairs with a government intent on trying out unlikely economic experiments in an internationally isolated country. We can imagine that even then, there were those in China who realized the harm that an ideologically inclined government was doing to their country. But under a regime not disinclined to resort to violence or incite and exploit mass hysteria to crush criticism and suppress the slightest deviation from the official line, they kept their peace and bided their time. The notion of Socialism with Chinese Characteristics was probably the brainchild of some such individuals.

When economic reforms were launched, it was not accompanied by a declaration of intent to bring about social liberation and grant political freedom. The Tiananmen Square episode was to demonstrate this a few years later. Even today, the Chinese leadership is at pains to dispel the slightest doubts about their commitment to the political ideals of the founder of the People's Republic. Yet, once the reform movement took roots and the steady progress toward economic liberalisation began, state control over private lives of citizens had to diminish and to a large extent, relieve the people from the indignity of government sponsored regimentation. In that way, the stage was set for the promise of a “great leap forward,” this time with capitalist limbs.

The change of direction introduced in 1978, did bear fruit. During the past decade or so, the People' Republic of China has become the latest “economic miracle” in the history of capitalism and the country has been transformed from a little communist curiosity into a global economic force to be reckoned with. More importantly, China's economic potentials seem to be far from exhausted and it will be some time before rapid growth of the economy slows down. But there are pre-conditions.

That the Chinese leadership has recognized that rapid economic growth has been accompanied by inequality, bad working conditions and corruption is an encouraging sign. But their insistence on solving these problems by preserving a political system which denies the basic democratic rights of the citizen, does not augur well. Put more explicitly, the existing political the system lacks the in-built mechanisms to spot and at least modify these evils and provide a safety valve to prevent destructive pressures from building up. Nowadays, even in the restrictive media environment of China, there are occasional reports of isolated incidents of unrest and the tendency of the state to try the old remedies of a paternalistic state to deal with them. The usual causes of these incidents seem to be public anger at economic inadequacies or administrative shortcomings. The best official response has usually included severe punishment of guilty officials and small doses of concessions to the citizens.

The solution may have worked in the past, and may work for a little while longer. But as the economy grows and the citizens' dream of having a full stomach changes to the desire to be the masters of their own destiny, the gap between the political demands of the people and the capacity of the existing political system to respond to them widens. And if the gap is not closed in time, it can undermine the process of economic development in the short-run, and endanger the fabric of society in the long run.

It is natural to condemn an undemocratic regime for oppressing its subjects and violating their basic rights. What is automatically overlooked is that those in charge of such regimes may themselves become the victims of their own misdeed. There is, of course, their constant fear of violent mass uprising, but even with a most docile population, the authoritarian state, conscious of the lack of empathy of its subjects, grows to mistrust and fear them. It is now that the state, eager to diminish the risk of physical confrontation with the people and avoid its unforeseeable consequences, resorts to bribe them into compliance, or at least inaction. And this is a costly business which, alongside the handsome reward expected by the agents of state suppression, saps away valuable resources from productive channels to be used to coax a potentially hostile citizenry and fatten an expanding army of oppressors. What is more, in a growing economy with rising standards of living, expectations of both recipients increase rapidly and impose an ever heavier demand on the state coffers. Thus, the undemocratic rulers can have not hope ruling over a prosperous country or safeguarding their regime by keeping their subjects, and their oppressors, happy. China's recent exercise in leadership rejuvenation must be viewed against such a possibility.

China and the world

At one time, the revolutionary rulers of China believed that assumption of power was the license to practice their ideological puritanism. As such, they had no qualms about using the nation's wealth to pursue their own ideals by brainwashing, regimenting and suppressing as the need arose. More recently, Chinese rulers, having opted for a much more moderated appreciation of the benefits of ideology, have often relied on niggardly concessions to calm the few dissenters in a still poor country. But as the economy grows, expectations rise and it becomes unbearably costly to buy loyalties or subdue challenges. Put more explicitly, in a richer country, the state cannot afford to take on the responsibility for everything that goes wrong and dip into its pocket to compensate the claimants. It has to delegate power to the citizens and let them decide their fate, and shoulder the responsibility for the actions of their elected rulers. And this requires democratisation of the political structure in support of capitalist development.

Of course to advance the notion of the compatibility of democracy and capitalism is not to say that the combination necessarily provides the best state of human affairs. The pressing technological and moral problems of the present age clearly challenge such a conclusion. What the notion implies is that with the current state of technology, capitalism, at least in some of its versions, has proved a workable economic arrangement while, given our current state of knowledge, philosophical standing and moral values, democracy provides the optimal political and social framework for the efficient working of capitalist organisation of production. At the same time, social man can never cease the search for better ways of ensuring greater human happiness. This would contradict the most fundamental principles of human civilisation.

For the time-being, the People's Republic has chosen to take the global centre stage by setting a successful example of capitalist development, rather than offering some unsellable ideological model. The choice carries political responsibilities which the Chinese state must accept, or risk losing the gains they have made far made, and even more.

The decision which the news Chinese leadership will make between now and the next round of change, will be crucial not only for their country, but for the rest of the world as well. The People's Republic is no longer a country of impoverished masses, isolated by the Idiosyncrasies of some off-the-beat ideological regime. It has become a major global player with extensive international economic links whose fate is bound to affect the world at large. And not just because of the country's huge foreign currency reserves and the dependence of global markets on the output of its factories. Any disruption in this enormous country with an enormous economy sends out shock waves that destabilise the world far beyond its borders. A China gripped by growing political unrest, with its economy in ruins and tens of millions of its citizens in flight is too horrifying a picture to contemplate.

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