'Intelligent discontent is the mainspring of civilization.' -- Eugene V. Debs

Saturday, October 14, 2006

China: End of an Era? (Part 1) 

In 1978, China repudiated the egalitarian policies of the Gang of Four, and moved down the path of incorporating neoliberal market economics and deregulation into a repressive political system as a means of pursuing economic development. In 1992, Deng Xiaoping toured the Special Economic Zones of southern China, and declared to get rich is glorious, initiating a period of unprecedented entrepreneurial activity, corrupton and the creation and expansion of the manufacture of computer and electronics equipment that has persisted to this day.

The features of this system are so unique that there is no agreement on how to characterize it, although one favorite is High-tech feudalism with Chinese characteristics. But there are signs that this era has some to an end, much as, in it is own way, there are indications that neoconservatism has been globally repudiated. While the latter is visible, with the implications frequently discussed, the former is equally significant, and yet, as with many subjects related to China, goes unremarked, unless it has some tangential relationship to an event like the North Korean nuclear test.

Predictably, the initial signs were submerged within the confines of a political power struggle. Hu Jintao supplanted Jiang Zemin, the man who subsequently presided over Deng's Marxist-Leninist neoliberalism after his death, as Communist Party chief in 2002 and President in 2003. By July 2004, there were reports of conflict between the two men, with Jiang clinging to his control over the military to preserve his influence:

. . . the Hu-Jiang power struggle began earlier this year. In April, Premier Wen Jiabao, the incumbent president's ally and part of the one-year-old Hu-Wen administration, launched a series of macro-control policies to cool down the country's red-hot economy, to no avail in quarters such as real estate, steel and cement. Some measures encountered powerful resistance, overtly and covertly, by obstinate Jiang officials who preferred massive, showy, high-cost projects while the economy was still rising at an amazing speed. In the first quarter, China's gross domestic product grew at a rate of 9.7% and the investment in fixed assets surged by 43% to 879.9 billion yuan (US$106 billion); the rate in January and February was even higher at 53%.

. . . President Hu is expected to come up with new, pragmatic reform measures to "enhance the Chinese Communist Party's governance", which surely will compromise the vested interests of the pro-Jiang faction. Presumably, Jiang will not acquiesce to Hu's efforts.

In a few months, public attention will focus on Jiang to determine whether he will relinquish his current position as the country’s commander-in-chief in the party's upcoming plenum scheduled for this autumn.

Judging from his recent military promotions, most political pundits believe Jiang will not make the final but inevitable handover to Hu any time soon.

The pundits were proven wrong just over two months later:

BEIJING, Sept. 19 - China's president, Hu Jintao, replaced Jiang Zemin as the country's military chief and de facto top leader on Sunday, state media announced, completing the first orderly transfer of power in the history of China's Communist Party.

Mr. Hu, who became Communist Party chief in 2002 and president in 2003, now commands the state, the military and the ruling party. He will set both foreign and domestic policy in the world's most populous country, which now has the world's seventh-largest economy and is rapidly emerging as a great power.

The transition is a significant victory for Mr. Hu, a relatively unknown product of the Communist Party machine. He has solidified control of China's most powerful posts at a younger age - he is 61 - than any Chinese leader since Mao Zedong, and is now likely to be able govern relatively unimpeded by powerful elders.

Mr. Jiang's resignation, which surprised many party officials who expected the tenacious elder leader to cling to power for several more years, came after tensions between Mr. Jiang and Mr. Hu began to affect policy making in the one-party state, some officials and political analysts said.

Mr. Jiang, 78, may be suffering from health problems, several people informed about leadership debates said. But he appeared robust in recent public appearances and was widely described as determined to keep his job - and even expand his authority - until he submitted a letter of resignation this month.

The leadership transition was announced Sunday in a terse dispatch by the New China News Agency, followed by a 45-minute broadcast on China Central Television. Mr. Jiang and Mr. Hu appeared side by side, smiling, shaking hands and praising each other profusely in front of applauding members of the Central Committee of the Communist Party, which formally accepted Mr. Jiang's resignation and Mr. Hu's promotion at the conclusion of its four-day annual session.

Mr. Jiang's offer to retire, which was first reported by The New York Times earlier this month, was given no advance publicity in state media. China Central Television read the text of Mr. Jiang's resignation letter on its evening broadcast, emphasizing that his resignation was voluntary. The letter was dated Sept. 1.

. . . Even by the strict standards of secrecy within the party, the decision about Mr. Jiang's fate was closely held. For a vast majority of the 70 million party members, not to mention the general public, there had been no indication that he was planning to retire, and his abrupt departure seems likely to increase the sense that the most important personnel decisions are made without broad consultation.

Inside baseball for sinophiles? Not quite, as the macroeconomic policy disagreement implied a more fundamental divergence between the two men. Jiang has promoted a controversial doctrine entitled The Three Represents:

The formal statement of the theory is:

Reviewing the course of struggle and the basic experience over the past 80 years and looking ahead to the arduous tasks and bright future in the new century, our Party should continue to stand in the forefront of the times and lead the people in marching toward victory. In a word, the Party must always represent the requirements of the development of China's advanced productive forces, the orientation of the development of China's advanced culture, and the fundamental interests of the overwhelming majority of the people in China.

The . . theory . . legitimizes the inclusion of capitalists and private entrepreneurs within the Communist Party, and as a result has been the subject of quiet but heated opposition within the party. . .

. . . Although open criticism of the Theory of the Three Represents is taboo, there have been reports of private unease at this theory from within the Communist Party of China for a number of reasons. Many dislike the focus of the theory on the advanced social productive forces, meaning businessmen, since it ignores the widening social gap between the rich and poor.

And Hu is clearly one of the many. As reported by the official Xinhua news agency last May:

The Political Bureau of the Central Committee of the Communist Party of China (CPC) met here Friday to look at ways to more fairly distribute incomes in society.

Chinese President Hu Jintao presided over the meeting.

A news release from the meeting said that China should uphold and improve the system in which distribution according to work is dominant and coexists with other modes of distribution.

The release said future reforms should concentrate on increasing incomes of poorer people, expanding the moderate-income population, effectively taxing high-income earners and banning illegal income.

What has provoked such a change in attitude? Perhaps, it is, as described here previously, that the populace is on the verge on open revolt. Here's one example from July 2005:

Social tensions in China are taking on an increasingly explosive form. A riot by 10,000 people triggered by a car accident in the city of Chizhou in Anhui province is the latest case to be reported. Around 3 p.m. on June 26, a Toyota sedan hit a teenage student as he was riding a bike. As the student and driver began to argue, three men emerged from the car and along with the driver began to beat up the student.

A group of taxi drivers tried to help the injured student, insisting on compensation from the driver, who is the owner of a local private hospital. In response, the driver ordered his thugs to attack the taxi drivers with knives. He openly boasted that, even if someone was killed, he would get away with the crime by paying a bribe of 300,000 yuan ($US36,000).

Police arrived on the scene but only escorted the driver and his thugs away. Onlookers were left stunned and angry. Many were outraged at the arrogance of the driver and the indifference of the police to ordinary working people. The incident reinforced their daily experience of the contempt of the newly rich and officialdom towards the lives of the poor.Word of the incident soon spread to the working class suburbs of the city and by 6 p.m. thousands of people surrounded the local police station. They demanded the police hand over the driver and his thugs, who at that stage had not been charged with any offence, and then flipped over, smashed and torched the Toyota sedan and three police cars.

Firefighters who arrived on the scene quickly fled when confronted by the angry crowd. Police stepped in but were beaten back by the protesters hurling rocks and firecrackers. Power was cut off to the police station, windows broken and firecrackers were thrown inside. The protesters looted a nearby supermarket, partly owned by the Toyota driver. Around midnight, the provincial police chief arrived along with 700 paramilitary police officers in full riot gear and dispersed the protest.

Power was cut off to the police station? Clearly, something had to be done, and one of the responses was that May 2006 meeting of the Political Bureau of the Central Committee to look at ways to more fairly distribute incomes in society, a meeting considered so important that Hu himself presided. But that was only the beginning. For the rest of the story, please return for Part 2.

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