Select Committee on Foreign Affairs Minutes of Evidence


Written evidence submitted by Professor Jude Howell, Director, Centre for Civil Society, London School of Economics

KEY GOVERNANCE CHALLENGES IN CHINA

1.  INTRODUCTION

  1A.  China has enjoyed unprecedented rates of growth for well over two decades. It is now the fourth largest economy in the world, a significant trade partner for the USA and Europe, and the world's largest manufacturing workshop. To fuel its feverish expansion and the growing demand of consumers, Chinese producers have been hurriedly criss-crossing Africa, Latin America and the Pacific in search of minerals, energy, and land. The Chinese economic miracle presents on the one hand a model for development for ailing Sub-Saharan Africa countries and on the other hand a threat both to developing countries and increasingly nervous Western governments. Its economic rise has in turn been matched by a growing presence in global institutions and politics and, for the USA—particularly in relation to the Asia-Pacific—a disturbing modernisation and strengthening of its military capabilities.

  1B.  The fundamental restructuring of the economy coupled with the rapid rates of growth have in turn brought about significant changes in the structure of society, in the distribution of wealth, in values, attitudes, and expectations. The breakdown of rural-urban barriers to mobility, the changing nature of China's working class, the emergence of a new Chinese bourgeoisie and the rising inequalities across regions, generations and classes have considerably complicated the processes of governance. In this paper we outline some of the key governance challenges facing the Chinese Communist Party, their efforts to address these and the constraints they encounter in doing so. We also consider the implications of these for the future trajectory of Chinese politics.

2.  GOVERNANCE CHALLENGES, REFORMS AND CONSTRAINTS

  2A.  Whilst China's economic system has undergone fundamental change over the past quarter of a century, its political institutions such as the Chinese Communist Party, the state administration, the National People's Congress, the legal establishment, its mass organisations such as the All-China Federation of Trade Unions have varied considerably in their desire for and capacity to adapt and change. This in turn has affected their ability to deal with a range of complex governance challenges that have emerged in the process of reform. How the Chinese Party/state has dealt with these reveals not only some of the pathologies of the Leninist-state machinery but also some of the emerging ideas about the direction of institutional and political reform. We address here four closely related governance challenges, namely, legitimacy, social order, state administration and social welfare.

2B.   Legitimacy

  2Bi.  Throughout China's post-Liberation history political leaders have utilised ideology in their struggles for power both to discredit their opponents and to justify their right to rule. Mao's radical interpretation of Marxist-Leninism led to a new version of socialist ideology, namely Maoism, that gave peasants as well as workers a leading role in the process of revolutionary transformation. During the heady days of the Cultural Revolution contending political factions deployed the language of class struggle and Maoism in their efforts to gain control of the Party and assert their dominance over society. With the downfall of the Gang of Four in 1976 and the subsequent rise of the economic reformers centred around Deng Xiaoping, the mobilising force of socialist ideology began to wane. Credentials of "redness" gradually gave wave to the merits of expertise. The devastating experiences of certain social groups and individuals during the Cultural Revolution, and in particular, intellectuals, those with a so-called capitalist background, and those labelled as Rightists, coupled with a general fatigue with political campaigns, rallies, and meetings, rendered the interpretation and making of ideology increasingly a matter for Party members and dedicated political scientists and philosophers rather than the general public.

  2Bii.  In the reform period the Chinese Communist Party has nevertheless tried continuously to rework socialist ideology to reflect its goals of modernisation, the direction of economic reforms, and the changing fabric of society. In its most recent formulation the term "socialist market economy" is used to capture the momentous changes in the economy and the vision of the future. However the Party is unable to use any longer socialist ideology as a mobilising discourse to rally support for its policies. Though in international political engagements China uses its ideological armoury to position itself in relation to others, it cannot rely upon socialist ideology to legitimise its rule domestically. This is not only because of a general tiredness amongst the populace with political ideology, and amongst the younger generation an increasing sense of its irrelevance, but it is also because of the disjuncture between the content of ideology and reality. To illustrate, the persistence in maintaining that the working class and peasantry are a leading force in society clashes with the actual decline in the social and economic position of many workers and peasants in China. In his July 2001 speech Jiang Zemin's introduced the notion of the "Three Represents", which acknowledged the role of private entrepreneurs in China's economy and society and paved the way for the re-opening of Party membership to them. Whilst such a move may be strongly inspired by pragmatism and expediency, the idea of capitalists joining a communist party is an oxymoron.

  2Biii.  Given the declining potency of socialist ideology as well as its increasingly contradictory elements, the Chinese Communist Party has to rely on other means for justifying its rule and filling this ideological vacuum. In moments of perceived external threat the Chinese government has played on nationalist sentiments to rally support, as illustrated in the protests following the NATO bombing of the Chinese embassy in Yugoslavia or the recent demonstrations against Japan. Recourse to nationalism has been episodic rather than a recurrent theme in everyday political life. However, it has considerable appeal both domestically and amongst China's recent diaspora and can be readily mobilised to demonstrate China's disapproval of specific external events or relations.

  2Biv.  Legitimacy is of course a complicated concept. Given the weak resonance amongst the Chinese populace of socialist ideology and the episodic nature of nationalism, the Chinese government relies also on two key capacities to justify its rule. These are first, its capacity to create and maintain an environment in which growth and prosperity can flourish; and second, its capacity to maintain social order. China's astounding economic performance over the last two decades is an important source of legitimacy for the government. There is then the risk that any decline in economic performance, and/or any serious negative consequences of say WTO entry will backfire on the legitimacy of the government. How the government manages the economy in adverse conditions will thus be crucial to the validity of its claims to rule. Related to this is the maintenance of social order, which as we will see below has become increasingly worrisome for top Chinese leaders.

2C.   Social order

  2Ci.  The idea of chaos or disorder (luan) is a powerful concept used by Chinese leaders to express caution about and to resist any attempts at unwelcome change. It evokes memories and accounts of periods of disorder in China's history, the most recent major period being the Cultural Revolution. Maintaining social stability is thus a key concern of China's reformers. The rapid restructuring of the economy since 1978, and in particular the decollectivisation of agriculture, the expansion of the private sector, greater global economic integration, and the relaxation of barriers to rural/urban mobility has led to changes in the nature of society. The social composition of the working class has diversified, with rural migrants now forming the mainstay of employees in foreign companies and many domestic exporting factories. The closure of state-owned enterprises has created a new phenomenon of laid-off workers and expanded the army of the unemployed. The growth in the domestic private sector, especially since 1992, has cultivated a new stratum of entrepreneurs. Managers, technical experts and graduates working in foreign businesses are part of a new emerging middle class. At the same time the reform process has exacerbated certain inequalities such as regional disparities between coastal and inland areas, and created new forms of vulnerability and deprivation as seen in China's urban poor.

  2Cii.  Dissatisfaction with the growing income disparities across generations and between different social groups has fuelled an ever-rising number of protests across China. Pensioners who have not received their pensions, former state enterprise workers who have been laid-off, migrant workers who have not been paid their wages or been subject to abusive managerial practices, farmers who have not been adequately compensated for their land, urban-dwellers whose houses have been demolished to make way for new roads and office-blocks; all have voiced their grievances through various kinds of actions such as street protests, blockades, storming of government buildings, strikes, petitions, writing letters, and court cases. Over the past two decades letters and complaints and petitions received by courts at all levels have risen almost 500 times. In 2004 alone over 3.76 million people took part in 74,000 protests. In 2005 the number of protests rose to 87,000. Given the restraints on reporting, these figures are likely to be underestimates.

  2Ciii.  In addition to these grievances that relate to the rapid processes of change, the Chinese government has also to deal with ongoing ethnic unrest, particularly in the provinces of Xinjiang and Tibet. It recently signed an agreement with the Shanghai Cooperation Organisation and the Commonwealth of Independent States to work together against the "terrorist" activities of groups seeking a united Turkestan. Also worrying for Chinese leaders are any perceived attempts to mobilise a political challenge to its rule, recent examples being Falun Gong, the 1989 Democracy Movement, and the short-lived rise of the Democracy Party in 1998. The Chinese government has responded to these forms of social unrest by using its coercive and repressive powers to quell any challenge to its political authority and by deploying a range of measures for other forms of social protest such as resolving matters through the courts, higher-level intervention to appease, negotiate and resolve, detaining the leaders of protests and so on.

  2Civ.  These manifestations of social unrest highlight not only growing awareness of rights and the rule of law, but also the inadequacies of existing institutional mechanisms for mediating interests. In the pre-reform period the Chinese Communist Party relied upon its mass organisations, and in particular the All-China Women's Federation, the All-China Federation of Trade Unions and the Communist Youth League, as channels for the dissemination of Party policy downwards to respectively women, workers and youth, and the reflection of their interests back upwards. With the changes in the fabric of society and economy in the reform period, these institutions have struggled hard to adapt to the changing needs of their constituencies and have varied in their degree to innovate, restructure and adapt. At the same time new forms of more autonomous organisation have mushroomed in the more relaxed ideological climate of the reform period, both supplementing and implicitly challenging the authority of these Leninist institutions of interest intermediation. However the restrictive regulatory framework governing social organisations continues to be a key barrier to the flourishing of this realm of non-governmental organisation and therefore to the open, public expression of grievances and interests. To the extent that the Chinese government attempts to contain the realm of autonomous organisation and activity, the more likely it is that grievances become expressed through social protest and issues of social order abound.

2D.   State administration

  2Di.  In the wake of the Cultural Revolution one of the key goals of the reformers was to modernise the state administration, and in particular, to recruit "experts" rather than "reds" into its machinery. Over the course of the next decade Deng's followers gradually eased out any "leftist" opposition, poorly educated or incompetent administrators at all levels by appointing reform-minded leaders to key positions and changing the entry and promotion requirements for state bureaucrats. To this end it called for a younger and more educated administration, lowered the retirement age, and introduced civil service exams. However, there are stark differences in the capacity of the administration across regions, with levels of competence and technical expertise tending to decline at lower levels and in poorer regions.

  2Dii.  In China the state administration and the Party are closely fused systems. Most leadership positions in the state bureaucracy are held by Party members and promotion is contingent upon approval from the relevant Party committee. Though there have been attempts to separate the Party from the government, the two systems do not function independently, not least because the Party has considerable interest in retaining control over the administration. Corruption in the administration thus also creates a problem for the Party, as corrupt leaders are also likely to be Party members. The Party has continuously sought to reduce pervasive corruption by strengthening disciplinary processes within the Party, by investigating cases of corruption and using the law courts to prosecute deviant officials. In 2005, 115,000 Chinese Communist Party members were punished for bribery, influence peddling and other offences. The opportunities for corruption created by government involvement in business contracts, coupled with tight controls over the media and the limited spaces for public monitoring, continue to thwart the Party's attempts to clean up their act.

  2Diii.  Aware of growing public distrust and dissatisfaction with government officials, particularly at lower levels, and the endemic problem of corruption, the Party has sought to improve the accountability of government officials in various ways such as through responsibility contracts and at lower levels through elections to leadership positions. Though village leaders are not officially part of the state administration, they play a key role in disseminating and implementing Party policies. For example, they are required to raise taxes and grains from farmers, to ensure the implementation of the Family Planning Policy, and organise contributions in the form of labour to any local infrastructural schemes. In the early 1980s it was already apparent that there was a growing problem of order in the country side. In some villages village committees had virtually collapsed; in others the possibilities of pursuing alternative paths to wealth creation rendered the positions of village leadership less desirable; and in others village committees were staffed by old, or incompetent, or corrupt leaders.

  2Div.  The gradual introduction of competitive village elections across China from the 1980s onwards was part of an attempt by the Party to re-establish order in the rural areas, to enhance the accountability of leaders and thereby to strengthen the base of the Party. In particular by encouraging young, popular and competent candidates to stand for election, the Party hoped that villagers would vote to oust corrupt, unpopular and incompetent leaders, who brought the work of the Party into disrepute. The village elections established mechanisms for greater transparency such as the public display of accounts and for greater accountability such as reporting back to villagers at annual village assemblies. Competitive village committee elections in turn led to the introduction of elections for village Party branch leaders in some areas and to the experimental extension of the idea to township level. In urban areas competitive elections for leadership positions in communities and neighbourhood committees have also taken off. Though the Party has promoted competitive elections at lower levels, it remains resistant to extending these up the hierarchy and to the idea of party-based elections.


2E.   Social welfare

   2Ei.  The idea of a benevolent ruler has been a key ingredient of state legitimacy in China's long history. Faced with the enormous ruptures in society over the past two decades, and in particular the widening disparities across different regions and social groups, it is important for central Party leaders to pay attention to protecting the vulnerable and less advantaged. In this vein it is of note that in the last three years some senior leaders have called for a shift away from a singular focus on growth towards a more balanced approach to development. However, in attempting to address issues of inequality and vulnerability, which are increasingly a source of discontent, the Chinese Communist Party faces considerable institutional challenges.

  2Eii.  With the diversification of ownership forms and the restructuring of state enterprises the social and welfare functions of work units (danwei) have been gradually whittled away. In the pre-reform era the work unit in urban areas often provided to varying degrees child-care facilities, housing, entertainment, access to medical care and pensions. In order to increase productivity and remain competitive, enterprises have gradually shed these responsibilities. Similarly in rural areas the disbanding of communes contributed also to the breakdown of child-care provision, of access to and the provision of medical care (which in any case was limited), and the weakening of support systems for the elderly, disabled and vulnerable.

  2Eiii.  In the meantime the Chinese government has attempted to establish new systems of social security and social welfare such as unemployment benefit systems, medical insurance and pension schemes, concentrating its efforts in urban areas. Aware that it is unable to provide universal systems of welfare provision, it has also increasingly looked towards communities and social organisations to play a role. Cities such as Shanghai have experimented with the establishment of community centres that take on the functions of welfare provision. The government has encouraged the formation of charities and associations such as the China Charities Federation, the Shanghai Cancer Recovery Club or the Centre for Women's Law Studies and Legal Services, which set out to meet the needs of particular vulnerable groups. In order to address issues of poverty in rural areas it established a Poverty Alleviation Office, channelled funds to poor counties, and encouraged international development agencies to fund projects.

  2Eiv.  However the institutional architecture for the provision of social welfare and security remains fragmented and piecemeal. As long as adequate systems for addressing poverty and vulnerability are not in place, then any claims to be acting as a benevolent ruler sound increasingly hollow, and undermine the legitimacy of the Party. Though Party leaders encourage non-governmental organisations to take on the delivery of social welfare services, there is a reluctance to create a more conducive regulatory and financial environment for their activities, such as providing tax breaks or easing the registration requirements for social organisations. This is not least because the Party also fears that yielding more space to non-governmental actors might rebound and undermine its power and authority. In other words it may be prepared to tolerate an expanded and more active civil society, but only so long as this serves the purposes of social welfare and stability, a tension that is indeed not peculiar to China.

3.  CHINA'S FUTURE TRAJECTORY?

  3A.  A country of China's size and complexity inevitably faces enormous governance challenges. In this paper for reasons of space we have alluded to but some of the key governance issues; others might have included the changing role of the National People's Congress, the rule of law, elite politics, the control of international crime, the role of the military, religion and human rights. From the perspective of the UK two key related issues are whether China will remain stable and whether, and in what direction, it will reform politically. In politics it is always difficult to predict with any accuracy what might happen next. The fall of the Berlin Wall, the tanks rolling into Tiananmen Square in 1989 and the events of 9/11 are all testimony to that. There is always the unexpected, the contingent, the unimaginable.

  3B.  However it is likely that China will remain stable over the next decade. The Chinese Communist Party is unlikely to want to jeopardise the country's staggering economic growth, its ascendancy in the global economy, and its growing significance in international institutions. Secessionist struggles on its Western borders and political developments in Taiwan will be the key worries for Chinese leaders in terms of their external relations. The high degree of decentralisation in China will continue to be a source of tension between central and local governments but China is not on the point of breaking up. Nevertheless the Chinese Communist Party will have to work hard at maintaining the country's stability. Crucial here will be its ability to address the growing regional and income disparities, to establish effective institutions for the mediation of interests, to strengthen its own legitimacy, to develop adequate systems for protecting the poor and vulnerable, and to relax its control over the spaces for non-governmental action and for open public debate.

  3C.  In the run-up to the 16th Party Congress in 2002 some Chinese intellectuals discussed openly the need for, and indeed inevitability of, political reform. Further economic reform would only happen if there was also political reform. China's new generation of leaders remain quiet and cautious for the moment about introducing political reform. The emphasis over the next decade will likely be on enhancing the accountability of Party and government leaders at all levels, of opening up somewhat debate over public policy, albeit it in limited way, and of managing the tension between encouraging and restraining civil society so as to address social welfare issues. The idea of China becoming a multi-party state engaging in competitive elections is remote. However, it is likely to liberalise politically, not least because with the internet, opportunities for travel, the return of internationally trained graduates, and the increasing exposure of China to the world, the demand for a more open regime will become harder to resist. The trend towards political liberalisation will, however, be punctuated by periods of coercion and repression as the Chinese Communist Party struggles to manage dissent. The recent statement by 13 retired senior officials and academics calling for greater openness was an unusual response to government efforts to crack down on the media, and in particular, to the closure of the liberal publication, Bing Dian (Freezing Point) in January 2006. Such high-level intervention coupled with mounting grassroots protests suggest that recourse to coercive measures by the Chinese Communist Party so as to stymie debate will not go unchallenged. In brief, China will remain authoritarian but the boundaries of that authoritarianism will be increasingly contested.

Professor Jude Howell

Centre for Civil Society

London School of Economics

6 March 2006





 
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