Tag Archives: Politics

Elections with Chinese Characteristics

Since late May this year, some 30 Chinese citizens have announced their intentions to run for the local People’s Congress elections this year. This candidacy wave has burst into nation-wide enthusiasm, not least because many of them announced their candidacy on Weibo, which means their campaigns will be followed by people throughout China. Prominent intellectuals and figures, including Han Han and Yu Jianrong, have openly declared their support.

This is not the first time that independent candidates have run. Famously, Yao Lifa won a seat in the local People’s Congress of Qianjiang in Hubei in 1998, and lawyer Xu Zhiyong did the same in his Beijing district in 2003. But they are rare cases of success. Already, officials have interpreted the laws to their own advantage, suggesting that certain bureaucratic hurdles need to be overcome for independent candidates. This was what the National People’s Congress Legal Affairs Committee said on 8 June:

In the county and village level People’s Congress elections, only parties, people’s organizations and voters can legally nominate ‘representative candidates’, who will then be confirmed as ‘official representative candidates’ after discussions, consultations or pre-selections. There is no such thing as ‘independent candidates’. ‘Independent candidates’ have no legal basis.

How far these candidates can go remain uncertain, as the Communist Party is applying various tactics to rein them in. Three independent candidates, Liu Ping, Wei Zhongping and Li Sihua, all from the city of Xinyu, received various kinds of harassment from the local government ever since they announced their candidacy, and prior to their being disqualified for the election in late June. Another candidate, Shanghai businessman Xia Shang, was visited by the Ministry of State Security this month, and had his two companies selected for tax audit. A prominent candidate, media worker Li Chengping, also had his Internet service to his home cut off earlier this month.

In China, direct elections are restricted at county and township level People’s Congresses. In principle, everyone can run for elections. But in practice, most candidates are nominated by the Communist Party or official election committees. Independent candidates often face many significant hurdles and official interventions which undermine their electoral fortunes. This could range from official denouncements, banning of media reports on local elections, official and quasi-official intimidation and inducements targeted at voters, to manipulation and fraud at the ballot boxes.

Hu Ping, a New-York based democracy advocate, has recently written an article describing the realities of elections with Chinese characteristics. He himself belonged to the candidacy wave which prevailed in early 1980s, a by-gone era of a more relaxed political atmosphere. In 1980, as a philosophy student at Peking University, he was elected as a people’s delegate in China’s first local People’s Congress elections conducted under the then newly-in-force Election law. Sadly, some thirty years later, he still sees little progress in China’s migration towards elections of any real meanings.

Hu Ping: Better Call Them ‘Self-Nominated’ Candidates

Elections for local People’s Congresses in China are approaching. The appearance of “independent candidates” has sparked much heated debates.

The word “independent candidate” originates from elections under a democratic system. It refers to candidates who are not affiliated with any political parties. Democracy, usually described as party politics, is essentially competition for public duties. In order to win elections, you can be an independent candidate, but a better way is to utilize the resources of an organization. Therefore, people with different political stances form different parties, and put up their own candidates. Election then becomes a competition between parties. However, there are also some contestants who do not belong to any parties. We call them independent candidates.

China is a one-party authoritarian state. People are stripped of their rights to form parties and organizations. Therefore, there is no inter-party competition in Chinese elections. In the local level People’s Congress elections, the so-called nominated candidates from parties and people’s organizations are in fact candidates endorsed by the Communist Party. But even the Communist Party thinks that it does not look good if local level People’s Congress elections are tightly controlled. Hence, apart from candidates nominated by the party, a person with the recommendations of ten or more voters can also become a candidate.

According to the Election Law, the number of candidates recommended by a party cannot exceed the number of seats in that district. Furthermore, to ensure that the election is competitive, the number of candidates should exceed the number of seats by one third to double the amount. That is, if there are two seats in a district, there should be three to four candidates. As the party can only put forward at most two candidates, the remaining one or two candidates would have to be recommended by voters. There are nearly one million election districts in the whole of China, and over two million local People’s Congress representatives. Theoretically, there would also be over two million candidates who are nominated by voters.

In some districts, for example Beijing, there are specific regulations which stipulate that party-nominated candidates cannot exceed 20% of the number of seats. In such districts, the election results are usually moderated at a 20:80 ratio. In fact, in the two local People’s Congress elections held in Beijing in 2003 and 2006, party candidates did not get 20% of the seats, while voter-recommended candidates got more than 80%.

If we describe candidates nominated by voters as independent candidates, can we say that independent candidates achieve landslide victories in these elections because the Communist Party got less than 20% of the seats?

The answer is no. This is because the so-called voter-nominated candidates are in fact controlled by the Communist Party. Technically speaking, the government will divide voters into groups, and appoint a leader in each group. The leader will then chair meetings which select candidates, who will then go on and secure the required number of voter recommendations. It goes without saying that these candidates are trusted by the government, and most of them are Communist Party members. For example, in the Beijing local People’s Congress elections in 2003 and 2006, over 70% of elected candidates endorsed by voters are party members.

How about the “independent candidates” that we are all paying attention to? The important thing is not whether they are nominated by voters, but that they volunteer as candidates by themselves, and then secure enough voter nominations. They are neither official candidates, nor being recommended, but are self-nominated. It is on this point that they break the official control of the election, either in public or secret.

In other words, the so-called voter-nominated candidates can be classified into two types: one is being recommended, in fact appointed officially; the other is self-nominated. It is the latter type which is causing the controversy, and which the government is most afraid of.

Lei Tao from the Beijing Academy of Social Science’s Center of Sociology has written a book called The Logic of Participation, which tracks the behavior and participation of Beijing voters in elections. The book discusses the various names for self-nominated candidates: “independent candidates”, “people-nominated candidates”, and “self-nominated candidates”. The author thinks that the description “independent” is only relative to party-nominated candidates; “people-nominated” also fails to describe the nature of these candidates. He insists on using the term “self-nominated candidates”. I think Lei’s conclusion is logical. Let’s call them “self-nominated candidates”.

Of course, this term also has its own problems. It may cause confusions for people outside mainland China: “self-nominated candidates”? Could there be candidates who are not self-nominated? In democratic societies, even party-nominated candidates have to first declare by themselves their intention to stand for the election.

This is a so-called “Chinese characteristic”. In mainland China, most candidates in different levels of People’s Congress are not self-nominated, but recommended by someone else, mostly party leaders. In the eyes of the leaders, self-nomination is a kind of heresy. From this point, we can see how far away Communist China is from real elections.

Advertisements

Mo Zhixu on the Crackdown of the Southern Media Group

On 27 January, Chang Ping, one of the most respected and independent-minded journalist in China, was sacked from his job at the Southern Media Group. He was not alone. Two other prominent journalists, Li Wenkai, opinion page editor at the Southern Metropolis Daily, and Peng Xiaoyun, chief editor of Time Weekly’s opinion section, respectively faced involuntary transfer and leave. As a recent report at Asia Sentinel put it, it may signal a new round of crackdown on liberal forces in China’s media.

In a recent blog post, prominent writer Mo Zhixu examined the political context behind the crackdown, specifically focusing on the Southern Media Group. The so-called Southern family of papers usually refers to papers under the group, which include the Southern Weekend, Southern Metropolis Daily, 21st Century Business Herald and Southern People Weekly. The group, which originates from Guangzhou, then at the forefront of reform, is known for its liberal stance even though it is an official Communist Party newspaper group. But apart from this core group of papers, Mo pointed to the wider significance of the Southern Media Group:

More broadly speaking, the Southern Media Group is the result of recent years of expansion. Because of Southern Media’s collaborations with Beijing News (新京报) and Yunnan’s Information Times (信息时报), these newspapers’ ideological missions are close to that of Southern Media. Perhaps there exists a more abstract ‘Southern family’. Because of the group’s success, its former professionals are targets of recruitment by other new media. These people are now widely scattered in various new ventures, and carry with them the same spiritual consensus.

It is difficult to define the spirits and values of the South Media Group and its professionals. But generally speaking, it includes: affirmation of market economy, globalization, rule of law, human rights and universal values, and the promotion of political reforms. In essence, there are two main points: political reforms, and responding to the demand of rights by the newly emerging social class.

His key thesis was that it was not the Southern Media Group becoming more aggressive, but the diminishing space of political reform which makes the group more conspicuous as a dissenting force within the system:

We should say that most of the opinions [from the Southern Media Group] do not exceed the official stance or touch the red line. In fact, for a time these opinions were promoted officially in order to effect political reforms and to respond to the demands of the emerging social class. Recognizing that the South Media Group is part of the system, the objective of advocating reforms and responding to new demands is in fact to inject new energies and to prolong the life of the current system.

However, the Southern Media Group is increasingly seen as a dissenting force within the system. Deng Xiaoping’s ‘two basic points’ are upheld, and China’s economic development is not accompanied by corresponding political change. In this context, the fruits of economic development are transferred by the system to vested interests. This creates a symbiotic relationship between the system and the vested interests, and develops a trend of conservative thoughts. The goal of this conservatism is to maintain the current network of interests though the rejection of any fundamental changes.

It is the strengthening of this network of vested interests and the natural ideological alliance of the Southern Media Group with the emerging social class which makes the group an obvious target of suppression:

China’s economic and social developments lead to the emergence of a new social class, which is demanding their fair share of rights and interests, and a change to the current establishment. The onset of marketization, globalization and informatization also bestows them with new tools to challenge the system. This is shown by the increasingly numerous rights defense and protest actions, and the demanding of rights in the media and internet. Although these challenges still cannot effect any fundamental change in the system, they are picking up steam.

As a result, because of its continuous advocacy on reforms, the Southern Media Group is seen as a dissident force within the system, and a part of the emerging challenge of the new social class. It needs to be suppressed. In a system which emphasizes stability and resists any great change, the Southern Media Group has no choice but to support the status quo and the existing network of interests. Hence the purges.

Therefore, the attacks on the South Media Group come from political reality – defending the existing network of interests and denial of any reforms in the name of stability. From this angle, the firing of Chang Ping and transfer of Li Wenkai are subtle psychological incidents. They indicate that even advocates of reform within the system will not be tolerated.

Rich State, Poor People

‘Guo jin min tui,’ or ‘the state advances, the private sector retreats’ has now become a catch-phrase among China watchers. It refers to the rising dominance of China’s state-owned sector at the expense of the vibrant private enterprises. Debates surrounding this phenomenon have been focused on the economics side. For example, in a New York Times report back in August, Michael Wines observes:

Those who see little evidence of an expanding state sector generally believe that China has a decade or more of robust growth awaiting it before its economy matures. Theirs is a Goldilocks view of state intervention — not too much or too little, but just enough to push a developing economy toward prosperity.

The skeptics have a darker view: they believe distortions and waste, in no small part due to government meddling, have resulted in gross misallocation of capital and will end up pushing growth rates down well before 2020. What drives their pessimism, the skeptics say, is that China, like Japan a generation ago, has too much confidence in a top-down economic strategy that defies conventional Western theory.

In a recent piece, Mo Zhixu, a prominent Chinese blogger, approaches the debate from a political point of view. ‘Guo jin min tui’ is not really an economic phenomenon per se, but an expression of political will to maintain the authoritarian structure. He claims that since the economic reform, key industries have remained in firm government controls. This includes strategic sectors such as defense, electricity, petrochemicals, telecoms and transportation. There is also no fundamental change in the financial sector, the crucial sector for resource allocation. This is also true in social sectors including education and culture.

Because maintenance of the authoritarian regime is the primary objective, efficiencies and marketization are not really top priorities of the regime. As Mo observes:

The so-called ‘small government, big market’ is just an elusive goal created by academics, and has never been a policy option for the government. State planning proved to be a failure during the first 30 years [of the PRC]. Without marketization, it was a dead end for the Chinese government. However, to introduce marketization, the Chinese government has to abandon its control over the economy. More seriously, following a ‘small government, big market’ policy entails transforming the authoritarian structure, in which politics dominates over the society, into a constitutional structure, in which politics is accountable and subordinated to the society. This is what Deng Xiaoping and Chen Yun cannot accept. As their ‘two focal points’ illustrated, introducing marketization and constraining it to specified areas are the gist of reform.

Yang Jisheng’s book, Political Struggles in the Reform Era, once quoted a saying by Chen Yun to Zhao Ziyang: ‘CCP’s political authority is underpinned by its economic authority.’ According to my understanding, political authority is not only manifested in central-local relationships, but also in the relationship between the administration and society as a whole. In order to maintain absolute social control in this authoritarian structure, the government not only needs to resist political reforms and supervisions, but also needs to control economic and social resources. But the challenge lies in the inefficiencies, wastes and corruptions in the governmental structure and state-owned enterprises (SOE). The private sector, given its higher efficiency, will soon overtake the state sector. And inefficiencies, wastes and corruptions will soon kill the state sector.

Therefore, to protect the authoritarian structure, the government needs to use its power to interfere in the market at a time when marketization proceeds. To compensate for the deficiencies of the state sector and to maintain the leading role of the state-owned economy requires executive control and monopolization. Hence, the marketization process is twisted. To achieve the same [authoritarian] objective, the dual tools of inflation and low interest rates are also employed. They have the effect of transferring economic resources from the private to the state sector. We therefore observe the phenomenon that the growth in monetary supply is faster than GDP growth for over three decades, and executive control in the financial sector has never been loosened.

This observation highlights the political dimension of China’s state intervention in the economy. If maintaining the authoritarian system is what it is all about, the regime will achieve it at the expense of inefficiencies, wastes and corruptions. Economists’ concerns about the disadvantages of state intervention then miss the point: what they are arguing about are just the symptoms, rather than the root cause of the problem. Putting economics at the service of politics is the real issue, and in the words of Mo Zhixu, it is ‘an open conspiracy with a political intention which is all too clear.’

Hu Xingdou: Wen Jiabao, Hero of the Chinese People

China's greatest hero!

China’s Premier Wen Jiabao really has been on a roll in the past 8 months, seemingly mentioning the need for political reform and the importance of universal values like human rights, freedom and democracy on every possible occasion, starting with his prominently featured article about his former mentor Hu Yaobang in March.

The reactions have been diverse. Parts of the Western press celebrated Wen as China’s new reformer, weighing the possibility of fundamental change in the country’s political system. In liberal Chinese media too he was applauded for his orientation and determination on further reform, especially in the run-up to the party plenum in mid-October when hopes where running high that political reform might be a central issue – which it was not. Others stayed skeptic. Writer Yu Jie suggested that he was merely putting on a show in an attempt to mollify a public that is increasingly unsatisfied with the practices of officialdom. Others, like Hu Ping, pointed out that he might be sincere, but still in no position to take any kind of action.

Still, support has been pouring out to Wen, especially since it became known that the words of the Premier himself had repeatedly fallen prey to the censorship system, most notably his discussion of political issues (see below) during a CNN-interview in late September, cementing his status as a leading figure of the Chinese liberal wing. He also seems to have gotten a verbal smack on the back of his head: A prominent editorial in the party-mouthpiece People’s Daily dismissed the possibility of introducing Western-style democratic institutions (no surprises there) but also stated that “the idea that China’s political reform is seriously lagging behind its remarkable economic development is contrary to […] objective facts” – which seems to be a direct rebuttal to his words in Shenzhen (also see below).

Maybe the greatest impact of his speeches was that they served as an “ideological beacon” for intellectuals to launch their arguments for political reform and discuss specific steps deemed necessary (see for example here and here), but also to voice their general support for universal values and the ideals of freedom and democracy.

When I first read the article below on Hu Xingdous blog I filed it under the latter category, since it contained no explicit reform suggestions. When I found that the article had been harmonized a few days later, not only from his blog but also from others where it had been re-posted, I started wondering about why it had been deemed censorable. While it seems that a few posts containing parts of Wens harmonized interview have been deleted and the way Wens words were pieced together on Hu’s blog does make him sound like a co-author of the Charta 08, the use of the word “hero” and its implications might also have been a reason.

Grandpa Wen always has an open ear for the people...

Once someone is elevated from the status of a normal person – which even Grandpa Wen still is – and is adapted as the hero of a cause, his original words and actions become less and less important. A hero serves as a canvas on which hopes, ideals and expectations are projected. He can become a catalyst for change.

Translation

Wen Jiabao, Hero of the Chinese People

Hu Xingdou, October 8th, 2010

Wen Jiabao is a real hero of the people and a true man of modern China. Within the last couple of month he has brought up [the topic of] political reform on six occasions, showing extraordinary courage. Especially the views that he expressed during an interview with CNN on September 23rd were groundbreaking:

  • “The people’s wishes and need for democracy and freedom are something that cannot be stopped.”
  • “No political party, organization, or individual should be above the constitution and the law. All must act in accordance with the constitution and laws. I see this as a defining feature of a modern political system. I have summed up my political ideals in the following four sentences: to let everyone lead a good and dignified life, to let everyone feel safe and secure, to create a fair and just society and to let everyone have confidence in the future.”
  • “Although there are various debates and views in society and in spite of all kinds of obstacles, I will do everything in my power to unswervingly pursue the realization of my ideals and advance the process of political reform. I would like to say the following to underline my determination: ‘In spite of strong wind and harsh rain, I will not yield until my last breath.'”
  • “It is the people and the power of the people that determine the history and the future of the nation. The wishes and will of the people are irresistible. Those who will walk along this way will thrive; those who go against it will fail.”

Wen Jiabaos “appeal” represents the conscience of officialdom and the hope of the people. It embodies the determination of the people and is a call out from a developing society. His words resonated with and shook the soul of every Chinese.

Before this interview, Wen Jiabao cited and further developed Deng Xiaoping’s ideas during his recent speech in Shenzhen:

  • “We should not only promote the reform of the economic system, we also have to move forward with a reform of the political system. If we don’t ensure a reform of the political system, we are in danger of loosing the advancements we made in the economic reforms and will not be able to realize our goal of modernization.”
  • “We must continue to emancipate us from old ideas and dare to explore. We cannot stagnate and even less move backwards. Stagnation and regression might not only ruin the achievements of 30 years of political reform and destroy valuable opportunities for development, it could also suffocate the vital undertaking of socialism with Chinese characteristics. Furthermore, acting against the will of the Chinese people can only be a dead end.”

At the National Work Conference for Legal Administration, Wen Jiabao – referring to the lack of rule of law and the personal rule that has taken hold in China – stressed, that the rule of law is the most important benchmark of a mature and modern political system, we must “govern according to the law and built a government founded on the rule of law”. “In a time of peace and development, the greatest danger to a ruling party is corruption. And the root of corruption is a lack of supervision and restriction of power. If these issues are not sufficiently resolved, the nature of the political power itself can change, leading to a situation where the whole undertaking comes to a stop because the leading figure ceases to exist.”

Wen Jiabao can be described as the direct successor of Deng Xiaoping in the cause of reform and opening-up. He holds up Deng’s ideas and continuously appeals for a liberation from old ideologies and further political reform. He cares about civil rights and peoples livelihood. Sparing no effort, walking into impoverished villages and dangerous mines, he also was the first to appear in the earthquake disaster area and at the location of the mud-slides. Countless Chinese were moved by these actions and history should always remember the name of this great Premier.

In one of his answers, Wen also pointed out that “democracy, rule of law, freedom, human rights, equality and fraternity are not [values] exclusive to capitalism, [but that] these are common achievements of the entire world reached in a long process of civilization and values pursued by all of humankind.” He believes that universal values are the root of the party and the foundation of the republic.

Thousands sacrificed their lives for the universal values of freedom and democracy. But now a group of people – that had once proudly pursued these ideals – has sunken into vested interests. “Freedom” and “democracy” became a thorn in their sides and thus turned into “sensitive” and “filtered” words. Have these people done justice to their predecessors and comrades-in-arms that sacrificed themselves for freedom and democracy? The word “republicanism” itself contains the concepts of freedom and democracy and thousands of corpses have piled up in the building of the republic. So when groups with vested interests and reactionaries try to ban those ideals today, they are essentially trying to subvert the republic and overturn the state!

Fortunately the people’s hero Wen Jiabao defends the founding principles of the party and the republic like a lone soldier and courageous knight. But he is by no means alone, the majority of 1.3 billion people stand behind him.

A small number of people – failing to understand high-level politics – criticize the Premier who is fighting bravely on his own for “showing off and playing nice” and insinuate that he is “all talk but no action”. They do not comprehend that Wen is only one person amongst nine and accounts for only one vote in nine, even less that his policy making power lies in the domain of economics. Expecting him to abolish the reeducation through labor system and to release certain people [is futile since these] are by no means things that he can accomplish. Furthermore [it should be considered] that for politicians speaking actually equals acting. [Speaking] is a form of social mobilization and its power and value might even be stronger than that of some particular actions.

Some people object that Wen is only about saving the existing system, since he always uses [official] terms like “socialistic” and other such concepts in his speeches, and that he hasn’t really pushed for independence of the legal system and freedom of the press as [a realization of] universal values. This understanding is indeed naïve. If Wen Jiabao – who is part of the system but also wants to promote social progress – had abandoned the language conventions of said system (and as a matter of fact, real socialism isn’t such a bad thing), he would have been cast of the stage a long time ago. And where are the opportunities to do something good for the people then? With populists and ultra-leftists accusing him of being a “capitalist roader” he is already being attacked from all sides.Therefore Wens distinctive way of speech actually reflects his great political wisdom.

Some denounce the support for Wen Jiabao as “infantilism” and think that it is a manifestation of a “servant mentality” of relying on wise monarchs and honest officials. Actually, in a people’s society officials can be criticized, but should also be praised, as long as all judgment is passed on the basis of dignity and equality. Indeed, China should not wait for wise monarchs and honest officials, instead citizens have a responsibility to show their appreciation and enthusiasm to the politicians with modern concepts that are here now.

Therefore, we give all our support to Premier Wen and hope that he realizes his aims – “To promote political reform with all one’s strength” and “to let equality and justice shine brighter than the sun.”

At the moment Wen might be the most powerless politician and some people might even rejoice when they see him besieged, but the majority of the Chinese people stand upright behind their hero – Wen Jiabao!

Comment

While it remains to be seen if Wen Jiabao is an idle talker, a true reformer or if he will turn out to be China’s highest ranking dissident, there surely are more eyes on him now when it comes to the political direction that China is going to take in the future. If the picture that Hu Xingdou draws of him is any indication, he does have the potential to become more than simply a politician/benevolent grandpa. As a hero, even an accidental one, he would not be so “powerless” anymore – just remember the chain of events that the death of the much revered reformer Hu Yaobang set in motion.

Zhang Wen: “The Freedom to Come and Go is Normal”

This is a post by Zhang Wen regarding problems of Party membership.

Translation

World media outlets converged their reports on 11 CCP spokespeople that came together on June 30th. Public opinion was key here, since this after all does represent the 89th anniversary of the creation of the Chinese Communist Party. After [more than] 60 years in power, the Party has come out and is subjecting itself to the supervision of the outside.

What we need to make clear before all this is that these Communist Party organizations don’t even make their telephone numbers public. Even if the media and the public wanted to ask a question or lodge a complain, they wouldn’t know where to start.

But I’m even more interested in is Deng Shengming, spokesperson for the Central Organization Department, responding to a CNN reporter:

CNN: How many Chinese Communist Party members really join the Party purely out of faith? How is the CCP dealing with the crisis of faith [in the Party]?

Deng Shengming: 99% of Party members are all from front lines of production, work and management: all are ordinary workers. They join the party because they support its platforms, have faith it its theories, identify with its purpose, and strive for modernization along with the Party.

Deng stated frankly that there exist Party members whose “motivations for entering the Party are not upright and proper.” There needs to be “a mechanism we can use to expel and deal with unqualified people in the Party.”

Deng Shengming touched on a sensitive topic: a mechanism for expelling Party members. It is well-known that, in general, foreign political parties freely allow members to come and go….

Of course, the CCP has always had ways of dealing with scum that violate Party discipline and the law of the land: first, a warning from inside the Party. Second, a serious warning from inside the Party. Third, a black mark from the Party. Fourth, a very big black mark from the Party. Fifth, probation. Finally, expulsion from the Party.

However, there are currently no measures used to punish “unacceptable Party members”, those who’s reasons for entering the Party aren’t pure, don’t have faith in Communism, and don’t, in fact, plan on serving the people. This is to say nothing of any mechanism to expel such people from the Party.

From this we can infer that quite a few of the nearly 78 million Party members are simply muddling along, not serious about their roles. It’s time to clean up this group of deadweights (or worse, corrupt Party members). They are a hidden weakness of the Party.

In addition to expelling these poor Party members, allowing those members who, for whatever reason, want to voluntarily leave the Party is the next step that needs to be considered.

In short, a healthy, open and confidence political party should have a broad and expansive heart, and should allow its members to undergo certain processes which allow them to freely come and go. A political party that forcefully limits the freedom of its members is not a normal political party.

‘State Capitalism’ and Murdoch’s retreat from China

Ian Bremmer, political scientist and president of the political risk consulting firm Eurasia Group, defines emerging market as ‘a country where politics matters at least as much as economics to the market.’ His new book, The End of the Free Market, singles out states such as China and Russia which practice ‘state capitalism’, a system in which governments use markets to create wealth that can be directed for political ends. The ultimate motive is not economic but political, i.e. ‘maximizing the state’s power and the leadership’s chances of survival.’

This week, Rupert Murdoch’s News Corp announced that it would sell a controlling stake in three Chinese TV channels to a fund backed by China’s state-owned Shanghai Media Group and China Development Bank. This marked a major retreat by the media giant from China after years of difficulties. As to why Mr Murdoch’s love affair with China ended, the Financial Times traced the answer to his speech in 1993 after taking over British Sky Broadcasting:

Advances in the technology of telecommunications have proved an unambiguous threat to totalitarian regimes everywhere. Fax machines enable dissidents to bypass state-controlled print media. Direct-dial telephony makes it difficult for a state to control interpersonal voice communications. And satellite broadcasting makes it possible for information-hungry residents of many closed societies to bypass state-controlled television channels.

Wang Dan: foreign businesses are misjudging China

As Murdoch would have realized by now, in China, politics matters as much as economics, and the rules are very different from those found in a free market economy. Failure to recognize this would lead to costly mistakes. Wang Dan, a leader of the Chinese democracy movement, made three points regarding Murdoch’s misjudgements:

First, China’s opening is policy-directed. In other words, it is a limited opening. In particular, control over speech and press is the government’s bottom line. It is vital for an authoritarian regime to survive. The Chinese Communist Party (CCP) is very clear about that. In China, control over thinking reaches virtually every aspect of life. This includes such fields as entertainment, fitness and cosmetology where foreign capitals think that they can have a free hand. If the CCP detects anything that is not under its control, it will not hesitate to interfere. The recent ‘anti-vulgarity campaign’ is a good example. Under this logic, how can foreign capitals occupy a place in China’s media market? For all its efforts, News Corp’s two-decades-long venture in China ended in failure. This shows that without any political changes, China’s media market will be closed for foreigners.

Second, even if we don’t consider political factors, foreign businesses will still face strong competition from local interest groups. The private equity fund which acquires News Corp’s channels is backed by Chinese groups with strong financial and media background. In fields like infrastructure construction and finance, capitals, technologies and management are important. However, media is different. It requires cultural background, guanxi and familiarity with local conditions. On these, foreign companies cannot compete with local groups. In other words, ‘one with great power cannot defeat a local villain.’

Third, many foreign companies have misconceptions about China’s reform and opening. Seeing that China is becoming more market-oriented, they think that the country can be judged by the standards of a market economy. In fact, they fail to see other aspects of China which have changed very little. China’s emphasis on political stability has undermined the development of institutional guarantees. Changes in the general political environment, policies or even key leaders can have massive effects on the market. This is especially so for the media. Simply said, this is an uncertain market. I believe that Murdoch and News Corp must have the same feeling.

In many ways, China now seems to be more hostile toward western multinational corporations. This is a theme expanded upon in The Death of the China lobby? by Daniel W. Drezner in Foreign Policy. Many foreign businesses worry that, after three decades of strong economic growth, China believes that it can now afford to be less welcoming toward foreign investments. This is shown by China’s employment of policies of ignoring intellectual property rights, forced technology transfer and government procurement skewed towards domestic companies. On the other hand, by alienating western companies, China risks weakening the strong pro-China lobbies led by these corporations in Washington and Brussels.

He Qingling: western multinationals will eventually kowtow to China

However, He Qingling, a Chinese author and economist who is critical of the Chinese government, thinks that foreign businesses would eventually kowtow to the CCP because of their profit calculations. Below are a few extracts from her opinion piece in BBC Chinese:

Over the years, foreign businesses have made a lot of investments in China. Now is the time to ripe the profits. Take the examples of Google, Goldman Sachs and General Electric, the three representative US companies in IT, finance and industry. After the announced high-profile retreat from China, Google is now making efforts to get permission to operate in China, as it hurts too much to abandon a market it has nurtured for years. Goldman Sachs, which has long been appeasing the CCP, also keeps quiet on the accusation of its ‘sucking up money everywhere in China’ by the Chinese media. As for General Electric, although its CEO Jeffrey R. Immelt has recently criticized Chinese foreign policies, it is virtually impossible for it to retreat from China.

According to my years of observation, Beijing has mastered the way of dealing with foreign corporations. By employing a ‘divide and rule’ strategy and showing the cake of the Chinese market in front of them, foreign businesses will neither form an alliance in negotiating with China nor pull out from the country. As long as they can stay, the Chinese government does not need to worry that they will not lobby for it in their home countries.

China is a country which worships power to the extreme. There is no exception to any single group. In front of this power, domestic companies are like eggs against a giant stone. As the main force of the pro-China lobbies, multinational corporations are no more than iron-skinned eggs. Their difference with domestic groups is that, when they collide with the Chinese Dragon, they can still preserve the yolk, although their iron skin will inevitably be scarred.

Zhang Wen: “China is Sick”

The following is a translation of this piece by Zhang Wen:

Translation

In recent times, catastrophes of both the natural world and the human world have been piling up. For me this is rather perplexing.

Rain water has always been plentiful in Southeast China, so this once in a lifetime drought in and of itself is a little bit unthinkable. In the face of this great drought, what’s even more bizarre is the indifference in the government and in popular opinion. Government emphasis and rescue efforts didn’t start until the middle of this month, and those outside of the southeast have expressed “none of my concern” attitude. My own media outlet didn’t begin full-length pieces on the situation until recently.

Similar to this phenomenon is the indifference to the life of the murdered children in Nanping [a city in northern Fujian province -Ed]. Judging from the current reports, the murderer Zheng Minsheng [who allegedly murdered eight school children] was a failure at life without stable work, and a failure in love as well. He therefore went out to take vengeance on the evils of society. What is impossible to understand, as well as impossible to forgive, is that he chose people weaker still than himself – elementary school victims. These innocent, immature human beings were completed unrelated and harmless to Zheng Minsheng.

There is only one thing to say: China is sick!

The rhythm of life is getting faster, stress and pressure are building up, and the future is unclear. This has caused more or less everyone in society to become infected with a psychological disorder. People are worried about themselves and their own families, all the while gradually losing compassion towards others. When you can’t even take care of yourself, how can you have excess emotional energy to attend to others?

For years, a one-sided emphasis on economic development has led millions on a single-minded quest for wealth and caused the nation the soar, but it has also buried a terrible sickness: the law of the jungle has entered into people’s hearts. The weak are food for the strong, and fairness and justice are in short supply.

Social classes are dividing and dissolving into opposition. People’s relationships are mostly based on acquiring [personal] benefits and people no longer believe in traditions of mutual help and friendship. In fact, laughing at the poor while hating the rich has become the tone of mainstream society.

The economic successes of the last 30 years are hard to deny, but that people’s moral quality has degenerated is equally hard to deny. The ideas of Confucius, Mencius and Zhuangzi have been damaged almost beyond repair. Slogans like “Putting people first” and “a harmonious society” need to become reality, but the coming is slow.

To destroy is easy, to build is difficult. China is currently in a void. Popular expectations are outpacing changes in [society’s] system, and in their confusion people have no faith to comfort them.

Those foreigners that are unfamiliar with China exclaim, “China is rising!” China’s government is immensely smug as well, ambitiously carving up the world and expanding its own influence. Disobedient foreign companies are kicked out of the country before the government can be happy.

But clear-headed Chinese can only sigh helplessly [at the current situation]: what kind of monstrosity is this [China]! That China is “rising” is a fact, but it isn’t healthy, with ailments both numerous and gravely serious. The people’s lives are currently so-so: not happy, to say nothing of dignified. (Wen Jiabao’s words are genuine and heartfelt, but an old ailment is not easy to cure).

China is sick. Where is the deft hand, where is the magic wand that can stir life in dead wood?

Discussion

Amidst his admittedly cynical take on things, Zhang Wen brings up an interesting but (sometimes) overlooked point. China is developing, but towards what? The idea of a “rising China” is familiar to anyone reading this and it has even entered into popular media discourse in Western countries, but it is interesting to see how often the words “development” or “modern” (发展 and 现代) get thrown around both in the media, academia and in casual conversation without any clear concensus of what that precisely means beyond a rising per capita income. Development apparently just means “this road that we’re on.”

Even 50 years ago, Mao’s wish for China was to “surpass Britain and catch up to America.” In the context of a “rising China”, comparisons and contrasts between China and the United States are common. Calculating if, when and how China’s GDP will overtake that of the United States has almost become a parlor game among economists and commentators. But is the United States “developed” because it has a high GDP, or does it have a high GDP because it is developed? Another view might hold that the United States (and other developed countries) are developed because they have rule of law, transparent government and clean environments. Zhang Wen might argue that the populace needs a certain minimum moral fiber before a country can be considered developed. (Of course, you could also argue that the United States is not developed because it lacks these very things in the desired quantities).

What does it mean for China to “develop”? What could, or should, it mean? Is GDP or PPP the best tool for measuring China’s progress? Are alternative measures of development like the Human Development Index useful for China (or any country for that matter), or are these not “hard” enough? Supposing we had a magic wand to dispense gifts to various places in the world, what combination of traits might we bestow on China before it went from “developing” to “developed”?