Page 2 of
2 China's
reformers hope for a
game-changer By Peter
Lee
Anecdotal support for this view was
provided by the blog post of another reformer, who
recounted his experience in a Chengdu restaurant:
At the next table some party and
government staff people were talking loudly, we
couldn't help overhearing. They were discussing
one of their friends: should he stay in the
first cadre section of the organization
department as the leader, or should he leave and
act as a bureau chief in a local jurisdiction?
They did a comparison: how much could he earn as
section chief, and how much could he earn as a
bureau chief? (The unit for their discussion was
millions of yuan). I asked myself, how far can
the country go with this kind of people? How far
can they go?
Possibly, Han's
provocative post was intended as a nudge in the
ribs encouraging Xi
Jinping and the new leadership to take advantage
of Chongqing's political embarrassment to go in
and make a bit of reformist hay, as in: Bo Xilai's
fall provides a golden chance for the central
government to clean house in Chongqing and put the
fear of Marx (or at least Beijing) in the hearts
of the local cadres.
It can certainly be
argued that impunity of the local party/government
regime from legal, administrative, and financial
accountability is at the heart of China's
inexorably unfolding crisis. With tax reform,
local governments were cut loose from the central
government and encouraged to make their own
financial way. Where they could, they did so by
throwing themselves wholeheartedly into the
business of real-estate development: expropriating
suburban lands at bargain-basement prices, then
reselling them to developers and speculators. When
the central government unleashed the Great
Stimulus of 2008-09, it was the local governments
and state-owned enterprises (SOEs) that took the
bank loans and plowed them into infrastructure and
real-estate investments, many of dubious
profitability.
Now the world and Chinese
economies are slowing, and the financial chickens
are coming home to roost. With international
demand slumping, the Chinese economy is overbuilt
and ill-equipped to receive another stimulus
without fueling waste and igniting inflation. The
real challenge - engineering a soft landing by
properly unwinding the indebtedness and ending the
addiction to overspending by local governments and
SOEs - require central-government levers that, as
yet, don't exist.
And the local
governments and SOEs have little incentive to
change a system in which they are the primary and
indispensable conduits for the government to
sluice money into the economy.
The
discomfiture of central-government leaders,
theorists and media can be seen in a spate of
articles calling urgently but rather vaguely for
reform. What is significant is that the call is
for political reform, in a recognition that
economic reform - or the neo-mercantilist version
of it embedded in the People's Republic of China -
does not provide clear solutions for the current
problems.
Global Times posted an op-ed
that looked as if it came from the Democratic
Underground:
[A] limited government is
dispensable. So far, China's reform is also a
process of transformation from an unlimited
government to a limited one. In other words, the
central government delegates power to local
authorities, and local governments give power to
the public.
The building of a limited
government does not lower government efficiency.
Instead, it helps address problems like the
abuse of power, corruption, and the lack of
credibility of many government departments.
Building a limited government actually
creates great potential for China's future
development. At the moment, China must
accelerate the establishment of a limited
government through constitutional means, so as
to ensure the success of its political reform.
In the future, China needs to expand
trials in local political reform throughout the
nation. Such reform should be gradually boosted
in a transparent, open and rational manner.
[5]
Under the attention-grabbing
headline "Reform or perish, journal warns
Communist Party", the South China Morning Post
reported that the leading CPP theoretical journal,
Qiushi, had published an essay on the eve of the
party congress pushing the reform imperative:
Headlined "Sparing no effort in
pushing ahead with reform and openness", the
long article said China was standing on a
historical threshold and "stagnation or turning
back would be a dead end".
It called on
the government to seize the moment to advance
comprehensive reform in all areas, and "actively
press ahead with restructuring of the political
system and develop socialist democracy".
[6]
No question that the leadership
sees itself beset by ugly problems without easy
solutions.
The status-quoers nibble around
the edges of the problem - bailing out banks,
cautiously deflating the real-estate bubble,
doling out subsidies to the disadvantaged, and
applying selective stimulus to industrial sectors
that can use the money effectively - and hope that
a global economic recovery will help China grow
out of its problems.
Reformers appear to
want something more: integrating local governments
and SOEs into a coherent system of market, legal
and public supervision that will reduce corruption
and increase economic efficiency and rationality.
In other words, democracy, rule of law, further
empowerment of free-market forces.
That
means taking confrontational, painful, and risky
steps to strip the dead hand of local governments
and SOEs from national civil and economic life.
That isn't easy.
To advance such a
politically difficult and costly agenda, the
reformers need a game changer, the existential
shock to the system that the Bo Xilai case
apparently did not provide to the CPP leadership.
Borrowing a concept from evolutionary
biology, the reformists could be said to
preoccupied with "catastrophism".
The idea
behind catastrophism is that change is not
necessarily smooth, incremental, and completely
driven by internal forces. To achieve radical
change, sometimes an external event - a
catastrophe like the asteroid that wiped out the
dinosaurs - is needed.
The reformist
literature is now a ceaseless search for dark
clouds in the local and international media:
evidence of looming catastrophe, harbingers like
reduced power generation, slowing economic growth,
capital flight, and collapsing industrial sectors.
It also seems to manifest itself as
Chicken-Littleism: heralding natural and man-made
tragedies inside China, such as earthquakes,
landslides, and exploding gas tankers, as damning
evidence of the current regime's moral and
political bankruptcy - especially if they involve
the death of children, and can accommodate a
blizzard of exclamation points, weeping and raging
emoticons, and bathetic harangues.
So far,
symbolic and limited calamities have failed to
crystallize a conviction as to the compelling need
for immediate and thoroughgoing reform, damn the
political cost, in the minds of the Chinese
leadership.
It remains to be seen whether
such a game-changing event will occur - or if such
an event can even be recognized in the restricted
mental landscape of the insulated, privileged, and
risk-averse Chinese national party cadre.
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