For prior posts in this series, see Whither Xi? Whither CCP? Whither China?


Whither China post #6 – Question 4 - must China have democracy … or die?

the mantra – if p, then q

Democracy must come eventually.  Once China reaches middle income status, the huge middle class, 200 or 300 million strong, concerned about the future and kids and education and health care and the environment, will demand democracy.  Democracy may actually be on the arc of history.  Countries other than the oil states that have achieved high level GDP per person have developed some version of democracy – think Taiwan, South Korea, Japan, even Singapore. China is at middle income to upper middle income status now, the income range when the transition is supposed to take place, according to historical experience.  The next logical step for China is democracy. And without political reform, China will have (pick one or more) political revolt, growing crises of confidence, fissures within the Party. And without political reform and economic reform to further open the economy, future growth is in jeopardy.

This is an old argument. Kellee Tsai summarizes quite well in Capitalists without a Class.  First you have economic growth, perhaps at a very high rate.  A middle class develops, and some people are able to think about the future for themselves and their children.  At some point comes a transition. Barrington Moore developed the theme in 1966 - "no bourgeoisie, no democracy" - a bourgeoisie as a necessary condition for a democratic transition. At some point, this argument flipped to some version of, creation of a bourgeoisie is the sufficient condition for democracy.  Part of the argument is that capitalists, seeking to protect their interests, will demand political voice, and a democratic transition will result. 

The argument is made with some regularity by foreign and Chinese observers of the economy.  It takes on the feeling of a mantra for me - economic growth eventually demands democracy - if p, then q.  Those who pine for greater individual rights in China see democracy as both the catalyst of change and the end result.

As Seymour Martin Lipset put it, "All the various aspects of economic development — industrialization, urbanization, wealth and education — are so closely interrelated as to form one major factor which has the political correlate of democracy" (Lipset, The Encyclopedia of Democracy (4 vol. 1996,  page 41)

Larry Diamond and Juan Linz, who worked with Lipset in Democracy in Developing Countries: Latin America, argue that economic performance affects the development of democracy in at least three ways. First, they argue that economic growth is more important for democracy than any beginning level of socioeconomic development.  Certainly truth in that – one is reminded of  Benjamin Friedman, The Moral Consequences of Economic Growth - people are more open, generous, tolerant when the economy is growing, and democracy thrives when those values are salient.  Second, socioeconomic development generates social changes that can potentially facilitate democratization. Third, socioeconomic development promotes other changes, like organization of the middle class, which is conducive to democracy.   This constellation of changes is the core of modernization theory

For China, the implication is that once economic  growth has reached a middle-income level of GDP per person, democracy must then eventually come or economic growth – the remaining claim to legitimacy for CCP - will be imperiled.  Wu Jinglian, the eminent Chinese macroeconomist, says that reform toward democracy is in a race with revolution.  

I dissent. I am clear that democracy in China is a non-starter now and for any foreseeable future.  

This modernization argument has never been described clearly enough so I could accept it in the Chinese case. The general idea seems right – people with more money demand higher quality of life, and greater individual voice in determining the future. There is some justification for this thesis in other modernizing countries.  But what works in western culture or even in Japan and South Korea does not always apply in China.

As used, the modernization thesis has two phases – first is that economic change brings about conditions for democracy. One can see this argument working to some limited extent in China.  Many mass protests in China now are NIMBY-like concerns about pollution and site location of industry. I discuss this element of the modernization thesis below.

The second phase is that without some form of democracy, economic growth will slow or cease.   Well, how does that work?  To posit a decline in the rate of growth, or cessation of growth, without democracy seems bizarre. Big businesses, even large American businesses, have no problem working with undemocratic governments – they might even prefer it. Economic growth in China has been the greatest story ever told in the last forty years.  How will lack of democracy now kill that? I discuss that in the next post in this series, Whither China post #7 – Question 5 – Whither China's economic development with no democracy?

Within China, the intellectual push is not necessarily for democracy, if that means universal suffrage in voting for leaders, but for greater voice in policy.  The argument is that the current system, with its cronyism, corruption, and restrictions on information will at some point prove to be too limiting, and Chinese businesses will fall behind in competition with companies in more open societies.   This strikes me as an unnecessary and heroic leap. 


Is democracy even a theoretical possibility?

Let me cite just a little of the huge literature on democratic transitions, including the possibilities for China.

Guo Sujian and Gary Straddioto wrote about Prospects for Democratic Transition in China (Journal of Chinese Political Science,  23:1, 2017).   They listed many of the reasons for China to not democratize – including success of the economy, government stifling protest, the dominance of the state in all development, and dependence of capitalists on state sanction.  On the positive side for democratic transition, they still referred (in 2017) to village elections, intra-party elections, information coming in from outside China, and social media as reasons to think democracy just might take hold.   Significantly for their thesis however, they describe three stages of democratization – preconditions, transition, and consolidation.  Transition and consolidation are discussed in some detail. The most important –preconditions – is left undiscussed.  The devil is in those precondition details.

Minxin Pei has been predicting collapse of CCP for a long time, since his China's Trapped Transition book in 2006.  He makes both the political and economic argument, and sees democratic transition as the salvation.  Without transition, he argues, China will be stuck in political quagmire of corruption and cronyism and theft, and unable to achieve its economic potential.  I must admit, at that time I thought Pei was wrong.  I was deceived by the bright and shiny things that every foreigner sees in Shanghai, in Hangzhou, in Dalian, in Guangzhou and by the superficial movements toward openness in the Hu administration.  Now, more than ten years later, I see that Pei is at least partly correct in his analysis.

A year ago, David Frum interviewed Minxin Pei in the Atlantic China is Not a Garden-Variety Dictatorship.  In the interview, Pei says not only would the Chinese Communist Party never willingly liberalize, but rather than permit liberalization, the party would eventually smother China’s economic growth too -  “It is not your garden-variety dictatorship, but a successor to a totalitarian regime. It is both far more ruthless and determined to protect its power than an average dictatorship and far more capable of doing so.”   He sees the door to democratic reform as being about 90% closed at this point – what might have been possible in the Hu administration is now foreclosed by aggressive repression.  The transition to political freedom has always been just a myth – comforting when told to western business and political leaders, but never really in the cards.  Economic reform sufficient to keep growth high has taken place; and there is no concerted demand for political change.  Why, one might ask, and the superficial answer would be the same for both - the shoulder shrug answer foreigners hear often - "It's China."  The answer lies deep in Chinese culture.

Modernization theorists are not blind to tradition and culture as obstacles to economic growth.  Economic conditions are heavily determined by the cultural, social values present in the society.  (Lipset, Elites in Latin America. Oxford University Press, 1967, p. 3). So, too, for political change. There is nothing in Chinese history – save for a few halting movements in the Nationalist era – that suggests Chinese want democracy.  There are no independent political parties or civil society that opposes government.  

So which is it – does democracy have a future in China or not?  We should look at some preconditions for democracy first.


What are prerequisites for democracy?

Far too much of the discussion about democracy in China ignores the fundamental question of whether there is any possibility of democratic reforms - any institutions that support democratic ideals, or what Robert Dahl referred to as Polyarchy. Dahl provided seven - or eight - prerequisites for democracy.

Dahl's requirements for a democracy -

  1. Have preferences weighted equally in conduct of government
  2. Freedom of expression
  3. Right to vote
  4. Eligibility for public office
  5. Right of political leaders to compete for support and votes
  6. Alternative sources of information
  7. Free and fair elections
  8. Institutions for making government policies depend on votes and other expressions of preference

CCP is certainly not going to encourage any of these developments.  They have read Maslow. Pei is right about that.

Dahl noted that a competitive regime or polyarchy is unlikely to be maintained without a pluralistic social order, one in which there are competing centers of power. A centralized social order is conducive to a hegemonic regime.  China is a prime example of a centralized social order that actively inhibits a pluralistic social order. 

Civil society that can oppose government is now and always has been anathema in China.  Dahl further noted in Preface to Democratic Theory (1956) that an increase in citizen political involvement may not always be beneficial for polyarchy. An increase in the political participation of members of less educated classes, for example, could reduce the support for the basic norms of polyarchy, because members of those classes are more pre-disposed to be authoritarian-minded.   This is clearly part of the Chinese argument against rule by majority vote.   

China has none of the characteristics that are conducive to democratic governance. We are told that fear is the key sentiment basic to tyrannies - China does fear quite well and that is unlikely to change. A successful democratic transition requires that individuals, organizations, parties, be ready, willing, and able to step into the breach left by the old regime.  China has never tolerated organized opposition to rule, going back hundreds of years.  If some organization were able to seize power and begin a democratic transition, there would be no organizations or cultural traditions behind them for support. 

Chinese cultural concepts are obstacles to the “ethic of responsibility” that Max Weber identified as key to the notion of “politics as a vocation” (Lucian Pye, Political Science and the Crisis of Authoritarianism.  American Political Science Review  84:1 March, 1990, page 16).  Politics in China refers to politics within CCP, the jostling and bargaining for position and promotions, not (despite the repeated references in Party literature) to "serving the people."  Serving the people is auxiliary to serving the Party. 


Government for the people, not by the people

Having a large contingent of deferential and compliant citizens, particularly when reinforced with authoritarian terror, makes for a kind of stability that can last for generations.  That model worked in every previous Chinese dynasty.  The paternalistic role of government is widely accepted, and as long as CCP appears to be doing the best that can be done, it should have no fear.  It will retain the mandate of heaven, as Confucius pointed out. 

Confucian thought also does not draw distinctions between state and society, allowing no space for autonomous social groups – civil society.  While this is not a principle in Confucianism, it is used by CCP as justification for restrictions on assembly and group action critical of government.

Tu Weiming, the dean of new Confucian scholars, notes that “the Confucian scholar-official still functions in the psycho-cultural construct of East Asian societies.”  (cited in Sources of Regime Legitimacy in Confucian Societies, Chu Yun-han, Chang Yu-tzung, and Wu Wen-chin - Paper prepared for delivery at the Conference on “Confucianism, Democracy and Constitutionalism: Global and East Asian Perspectives” by the Institute for Advanced Studies in Humanities and Social Sciences & Center for East Asia Democratic Studies, National Taiwan University, June 14-15, 2013, Taipei, Taiwan.)  Tu also thinks that a democratic transition is necessary for China, though he is not making the economic argument and he is not an economist. 

Curiously, many Chinese would already consider their government to be democratic.  The understanding of democracy among many in China is that it is government for the people (rather than by the people) and as long as the government delivers appropriate services, it is considered “democratic.”   In this regard, it might do better for promoters of democracy in China to introduce dictionaries before treatises by Jefferson or deTocqueville.

If democracy were to come, it makes sense that it would be supported by the middle class and by business owners - those who want to plan for a future more than a planting season or two away. 

Min Tang, in The Political Behavior of the Chinese Middle Class tells us the Chinese middle class is not ready to be an agent for political change even if they give some voice to democratic ideals. Much of the middle class is CCP, for one, and many others are business owners who have been conveniently co-opted by the Party.  Why rock the boat?

Jia Chen in A Middle Class Without Democracy (Oxford University Press, 2013) makes the point clearly, based on extensive interviews with middle class and non-middle class Chinese –

The low level of the middle class’s democratic support correlates with two key categories of variables:  (1) the middle class’s ideational and institutional connections with the state … and (2) the middle class’s assessment of its own social and economic statuses under the current party-state system. (Chen, page 117)

In this regard, the social and institutional position of the middle class is similar to that of the literati in the dynasties, over centuries.  It is expected that people consider their own personal situation with respect to revolution, reform, or realignment.  Protests and rebellions in China never came from the literati, only from the peasants.  Lucian Pye titled his book on Chinese political cultures The Mandarin and the Cadre.  Who are the current middle class?  CCP members, government employees, company managers.  As I have noted elsewhere, the CCP is the bourgeoisie. 

Chu, Chang, and Wu make an interesting point in thinking of governance from an input-output perspective.  They say that western societies judge legitimacy based partly on the inputs to the political process – participation, transparency, rights protection.  In China, citizens are more concerned about the outputs of governance - along the lines of, doesn't matter who runs the government as long as the garbage is picked up and the trains run on time.  Widespread in China among those who know something of democracy is the fear of chaos and disruption that democratic processes would require.  Protests in Europe during the 2008 financial crisis, the Occupy movement, the Hong Kong Umbrella movement, guns and mayhem in the US, and the 2016 election results are confirmation enough for many Chinese.

Giving farmers and ordinary Chinese hope about a democratic future and its attendant rule of law would open floodgates of lawsuits, not to mention protests and unrest.  Elimination of exploitation of farmers and migrant workers would simultaneously eliminate the favored position of many real estate developers and local and provincial officials. Those vested interests cannot be forced to lose too much for fear of stirring unrest within the Party.

Theory and experience may both be insufficient to convince those vested in modernization theory - waiting for democracy, like waiting for Godot.  In practical political terms, if nothing else, there is no current model of democracy that would fit China.  Singapore is far too small, a citizenry with at least somewhat similar demands of governance.  Given Chinese history, neither Japan nor Taiwan are available as political models.  As for America, that once shining city on a hill –

Fukuyama on Confucianism and Democracy, Journal of Democracy, 6:2 -

… virtually no one in Asia today believes it likely that Asian societies will ultimately converge with the particular model of liberal democracy represented by the contemporary United States, or, indeed, that such a state of affairs is remotely desirable…. This attitudinal shift can be traced to two subsequent developments. The first was East Asia's spectacular economic growth, which many people attributed to the region's Confucian traditions. The second was a perceived decline in the American standard of living, measured not in terms of per-capita GDP, but rather in terms of growing crime, the breakdown of the family, a loss of civility, racial tensions, and illegal immigration--problems that showed no sign of abating. In the view of many Asians, individualism was far too rampant in American society and was leading to social chaos, with potentially devastating economic and political consequences.

Again, why would middle class Chinese want to be ruled by peasants?   The clincher for many Chinese was the anemic US government response to the 2008 financial crisis and failure to ward off illegality in prior years.  Inability of the democracy to first protect the population and then correct the problems convinced many Chinese that the US model is only a model of failure.  Chinese saw the tepid US government response to the Katrina hurricane, to the Maria hurricane in Puerto Rico, and definitely the tepid response to gun murder and mayhem in the US. After 2016, they saw a election of people too ignorant to govern. How does this government represent the people?


Can there be voice without democracy?

Part of the modernization thesis is that with economic growth the attendant middle class concerns about the future – pollution, education, pensions, dare I say, freedom to choose – will eventually bring demand for voice in governance.  The Chinese middle class will be the vanguard of democratization.

I think this is an error.  As noted, the Chinese middle class includes most or all CCP cadres.  They are vested in the system as it exists.  The CCP is the bourgeoisie.  They may want more voice in governance, but voting, not so much.   The middle class, and midlevels of CCP, will not foment disruption.  They will be happy to benefit from disruption at the top, and many midlevels would be implicated, for good or ill, in any future transition.  But they will be followers in this play, not the main actors.

There are many paths to modernization, and culture obviously affects the path.  There is nothing in Chinese history or culture – beyond some calls for democracy after the fall of Qing – that prepares Chinese to be ruled, as is said, by peasants.  Educated, paternalistic leadership is a deep norm in China.  CCP knows that, all Chinese know that. “Democracy” is a call from some Chinese intellectuals and seen as a requirement by many Party theoreticians for a modern economy to grow, but there is no way CCP can disassemble itself into multiple parties contesting in popular elections.   Singapore is not a model.  China will have to find another way to grow the economy.

Democracy as understood is more than voting in multiparty elections –we talk about freedom of expression, assembly, some elements of civil society.  All are expressions of human dignity.  Key to some greater openness in China is the concept of voice, the ability to express oneself politically, and, equally important, to feel that one is respected for one’s voice.

Ci Jiwei describes these features of human dignity in his excellent Moral China in the Age of Reform. He makes two points pertinent to this post - that Chinese have no experience of freedom as a concept, as a way of justifying action, and are therefore unable to use freedom as a value in justifying action - "I did this because I wanted to" is hardly a Chinese phrase.  Ci refers to this as lack of moral freedom, the freedom to make judgements about right and wrong, good and bad, for oneself.  Second is that even though Chinese culture respects and expects enlightened, wise governance, Chinese are not stupid for expecting what is manifestly not achieved in Chinese rule today.  Fear makes a great contribution to harmony, at least on the surface, and that remains good enough for government work. Threats to oneself, one's spouse, parents, children, siblings, is usually enough to repress too many thoughts about dignity.  This is more salient for middle class Chinese, who have more to lose from protest and dissent.

If democracy as voting is not an option, is there no other way for an individual’s voice to be heard and respected?

Voice is feasible.  There are ways to provide greater voice without democracy.  The government does monitor social media and the internet very heavily, and even though offensive posts are quickly deleted, they can be counted and noted.  Simply the size of party membership – currently about 90 million, about 6% of the total population – offers a rather enormous sample for testing policy ideas.  Even if responses are less than completely trustworthy, over time, one can calibrate. 


Voice instead of democracy

Better, there are institutional changes that permit greater voice for the people without democracy.  Let me provide a couple of examples.  These come from the mass protests over land theft, pollution, factory construction, and corruption.  An oft quoted passage from the Chinese Academy of Governance noted that there were 180,000 incidents of mass protest in 2010.  Also here.  Few made the newspapers.  But these events can be large, and sometimes violent, with injuries and deaths.   By the time an issue has blown up to include violence, farmers and citizens have probably exhausted the xinfang “letters and calls” that is traditionally a part of citizen protest to higher authority.

All too often, higher level officials are left in the dark about bubbling dissension, and when the pot finally boils over, it is too late for soft discussion and easy fixes.  There may have been violence and injuries.  Higher level officials are not knowledgeable about the details, and forced to find a solution.  This puts higher officials on the spot, in a bad light, and makes the Party look bad.  At this point, there is no win-win solution.

The high level of local control, incomplete information sharing, lack of media attention, and inability to control development actors even in the face of protest are all at fault here.  There is no rule of law, and CCP is subject to the law only when it agrees to be.  What is needed is a way to call a halt to all proceedings in the face of significant protest.   At least in theory, such a fix is available.  I wrote about this in an article for the Zhejiang Province School of Administration, better known as Party School -Negotiating Harmony - Conflict and Governance in the New Age.  The institutional change would require the Organization Department or the Discipline Inspection Bureau (now the New Supervision Commission) to be empowered at the provincial level (since most protests are at the village or district level, far below) to call halt to all development, a stop work order in American municipal parlance, or a standstill agreement in business merger talks, until a solution can be found.  This would prevent a developer or factory owner from proceeding, and put protesters on somewhat of an even negotiating level as their opponents.

This would be a simple change and with attendant details would go a long way toward providing voice for Chinese citizens, even in the absence of democracy.  What has been lacking is the political will to undertake, and then enforce, such a change.

In real rather than theoretic terms, one of my Chinese government students is the head of the urban planning department in Shaoxing, a prosperous city adjacent to Hangzhou in Zhejiang.  As head of the planning department, she instituted a form of community review and input for new real estate development projects, and followed through on citizen comments with the developer.  She could only do this with the backing of the mayor and party leader, of course.  But the point is that voice for the people is feasible.

There are other ways of getting diverse views into government programs.  I would guess that no other government spends as much money on training for its employees.  Training is done locally in new methods and new ideas, as would be done in the US, but there is also cross provincial training, to get input from officials in other provinces.  Information flow, within the Party and from the street, is pretty good. It would be possible to empower local administrators in urban planning or construction to halt development over concerns about permits or impacts on the local population - that, however, is a bridge too far right now in China.

There are novel ways for higher level CCP cadres to get the buzz about local events. Foreign media, quoting mainlanders, is reviewed.  In one of my lunches at Zhejiang School of Administration (CCP “Party School”) the television in the dining hall was tuned to American TV – Fox News, no less.

Beginning in 1996, the leaders in Yantai in Shandong Province began a citizen evaluation system for government performance, widely replicated in other cities, including Beijing and Guangzhou and Wenzhou.  Municipal departments ask for, receive, and evaluate citizen opinions on government performance.   The Yantai experiment appears to be a successful, if limited, experiment with voice.

In addition to openness in administrative matters, there are public officials willing to experiment.   In Shaoxing, a communications model has been used to defuse conflict between a real estate developer and neighborhood residents.   This model used intervention by the urban planning authorities to pro-actively address concerns, rather than ignoring them or waiting for conflict to reach a higher level of intensity (Zhou Xiaofang, 2008, unpublished, and personal communication).     

The voice of the people can be heard.   But that requires flexibility from CCP, and in the next five years, perhaps decade or two, that seems less likely and will be muffled in any case.  Democracy will not emerge from the wreckage of the Xi administration. 


United we stand, divided we fall

In the analysis of “what went wrong” in the Soviet Union leading to the collapse of communism, one outstanding feature has been imprinted on the collective minds of Chinese policy-makers.  That is – in addition to Xi’s complaint about no one in the Soviet Communist Party being man enough to stand up to resist perestroika – that the Soviet Communist Party was divided.  It was split into factions, and there was disagreement, substantial disagreement, at the very top.  The fracture lasted for years, and precipitated the end.  Into that gap rushed would-be oligarchs and claimers of state assets and party members who suddenly decided to become capitalists.  Then the party fell.

Loyalty and unity at the top are understood at the highest levels of Party theoreticians as absolutely fundamental to survival.  The USSR is the example of failing to demand loyalty at the top.  So, for Mr. Xi, strong Party factions are a threat to survival. 

When Xi is no longer seen as effective – by death or infirmity or some great crisis – the factions, old and perhaps new, will emerge.  What shape will those take?  Eastern wealthy provinces v. all the rest?  North and south, reflecting concerns over water and economic development?  The princeling faction will look pretty old in the tooth by 2027 or 2032.  A fifty-year old provincial governor in 2027 will have been born in 1977, right at the beginning of opening up and reform.  It would have been his grandfather who was on the Long March – perhaps even his great-grandfather.  Xi appears to want no interest groups and loyalty groups, a la Zhou Yongkang, so we can expect formation of those interest groups while Xi is powerful to be minimal, or at least, under the radar. 

There will still be a Youth League, and there will still be leaders who have spent time in Shanghai and Zhejiang.  Can the old factions re-emerge?  They seem not necessarily based on any geographic or economic or cultural differences, only personal ties.  CCP is all about cementing personal relationships.  Depending on how autocratic Xi wishes to be in the next decade, could there be an anti-Xi faction that will want to purge all those with too much loyalty to Xi?  Even a decade from now, there will still be many senior officials with no historical ties to Xi or his close cronies.  Though Xi is a princeling, he did not come up through one of the traditional factions and some of his ministers and advisors had to abandon their own prior loyalties to declare loyalty to Xi who must be obeyed.  How might they fare when Xi is no more?

It is instructive to see CCP in China as an occupying elite force, not unlike the literati and emperor’s court in dynastic times.  The occupation could have a light touch, extracting some but not too much, a la the Mancur Olson stationary bandit model.  Mr. Xi has strengthened the hand of the occupying force, via controls on information and assembly and speech and taxes on farmers.  The occupation has been stable for a long time – this is part of the authoritarian resilience model that was reasonable, and now fragile.  Smoldering resentment and anger in the population is being pushed down too hard, and many CCP members are unhappy as well.  Minxin Pei said that CCP is resilient on the tactical level , but not the strategic level.   Mr. Xi did not create strategic inflexibility in CCP, but his public repression and arbitrary internal fear exacerbates this dangerous time for CCP.

The most dangerous time for CCP will come at the end of Xi.  It could well be the defining moment for Shambaugh’s “coming collapse.”  It could well be the trap that better defines Pei's Trapped Transition. 


Some signs of cracks in the armor

If democracy is not an option, what are other things a unified CCP cannot live with?  The most important is dissension – not disagreement, of which there can be a great deal within higher levels and in universities and institutes.  David Shambaugh reminded us of seven policy factions,  not organized, but reflecting different paths for Chinese relations with the world.  These policy views can and do compete.   But policy dissension among leaders that becomes personal or threatens established fiefdoms, as was in evidence in the Bo Xilai and Zhou Yongkang cases, cannot be tolerated.  That is what led to the fall of the USSR.

Ongoing dissension in any of these are flashing red lights for senior officials -

-independence for any of the restive areas – Taiwan, Hong Kong, Xinjiang, Tibet – too much loss of face for CCP, and Chinese nationalism would blowback at a CCP that did not protect borders

-rule of law – One can call it rule of law, or rule by law, or rule according to law, or law with Chinese characteristics.  Any change that removes courts from direct supervision by CCP.  Otherwise, chaos threatens.

-“constitutionalism” – defined as making CCP subject to the constitution that CCP wrote and continually revises for China.  CCP created the China that now exists; why would they give up that control?  Protesters who simply want CCP to follow the Chinese constitution are regularly rounded up and tossed in jail.  See The Ideology of Occupation and Understanding the Chinese Constitution, the New Citizens Movement, and Document No. 9

-tolerance for independent political parties or civil society – civil society, defined as non-CCP organizations able to present alternatives to government policies, programs, or projects.  Organized protest or even meeting is variously defined as “causing trouble,” “violating state secrets,” creating a disturbance.”  This requires citizens to evoke the Chinese equivalent of “We have no king but Caesar” – we have no ruler but CCP; and now, no king but Xi.   

This last is where Mr. Xi will have the most problems.  For CCP and for Chinese citizens, his job is to persuade, but he has chosen to use threats and force.  This only breeds resistance.  Chinese political advice and western psychology and classical decision making all told him that "my way or the highway" is a bridge to nowhere.

Mr. Xi has not learned the lessons from Sunzi, Janis and Mann, or Watzlawick, Weakland, and Frisch (see post #5 in this series - Does Xi have a plan … or even a solution?   He is right to be fearful of factional splits and interest group politics, and he is aware of increased modernization of China, with attendant problems.   He is right about Party fragility in the face of pressures to open up so the economy can keep growing. 

His solutions are precisely wrong.  It is “more of the same” – harder crackdowns on speech and the internet, on association.  It is creation of the social credit score and facial recognition monitoring of all Chinese at railway stations and airports.  It is demands for demonstrations of cadre loyalty to Mr. Xi alone.  It is movement toward totalitarianism. Speeches by Mr. Xi, and those of senior officials, express more and more worry about risk to the nation.  Simon Rabinowitz of the Economist counted mentions of the word risk in NPC annual work reports in the Xi era, describing it as the paranoid style in Chinese politics.  Up to 2014, there were four mentions of risk in the annual report.  By 2019, risk was mentioned twenty-four times. 

In April of this year (2019) Qiushi (Speaking Truth) the theoretical flagship publication of CCP, published an article by Xi which lays out the path forward for CCP and exhorting cadres to adhere to that path.  A Sogou translation is here.  The article is from a Xi speech given more than six years ago, in January of 2013.  It is not clear why Qiushi is printing this now. The writing is of a piece of Chinese political verbiage – verbose and repetitious and expressing fear of straying from the path, lest the evil forces of capitalism and democracy destroy China and CCP.  This is not new.  But this is not writing that is full of confidence about the path ahead; nor is the timing of this publication indicative of a self-assured CCP.   This is not writing that Hu Jintao felt necessary a decade ago. 

There is paranoia and there is real worry about real problems.  For CCP, it is bit of both.  The manifestation is the harshness of the crackdowns internally to CCP and externally among the people in China.  This is no longer the light touch of occupation by the elite.  Elite reactions are the increased pressure to move money out, to move children out, to move families out, to have green cards and assets in the US or England or Australia or New Zealand.  A rather large number of my CCP students have approached me about buying property in the US. This is cadres creating a “Plan B” for escape.  This is Chinese scientists and engineers and writers and artists doing the same.  Writing in 2012, long before the stock market crash and the anticorruption campaign, Wang and Zeng noted that according to an internal Organization Department document, of 8,370 senior executives in 120 SOE, 6,370 had foreign passports or family living overseas.  Not a vote of confidence in one’s Party. 

CCP members have also regained expertise at the ancient Chinese art of feigned compliance with rules from above, as Lucian Pye described in The Mandarin and the Cadre.  Feigned compliance  is absolute agreement with the leader in voice and print, and at the same time work slowdown or waiting patiently for either direct orders or precision in details of plans until directed from above.  It can be simply ignoring the leader when feasible.   When the leadership is mercurial, why take any initiative at all?

The sheer speed of development since 1978 created great opportunities for corruption, theft of state assets.  Governance was unable to keep up with the pace of change.  And a cultural feature, less important in a slower-changing age, became a critical component of Chinese imbalance and impropriety in development – the inability to ask questions.   “Meiyou wenti – no questions – is the default response when anyone with authority – political leader, doctor, even teacher – is asked for explanation or clarification.  To ask is impertinent in a society that has great respect for leaders, particularly political leaders.  To not be able to ask is a death knell for openness, and license for abuse of power.  Xi cannot change the culture and what it allows. 


The middle income trap and legitimacy

I wrote about the middle income trap here.  The argument is that many developing countries grow quickly for some years, until they get to a middle income GDP-per-person status among the nations of the world.  Will middle-income status encourage democracy?

A refresher - in 2011, the World Bank defined as middle-income those countries as having per capita gross national income of US$1,026 to $12,475.  At that point in the trap theory, their growth slows, and the countries find it impossible to move to higher income status. Such is the middle-income trap. Generally speaking, only the Asian Tigers – South Korea, Taiwan, Singapore, Japan – have been able to move past middle income status to high income status.   There is substantial fear among Chinese macroeconomists that China will find itself in the same position of being trapped.  China has reached upper middle income status, with a GDP per person of about $8,000 to $9,000.

Reasons for a country being stuck in the trap include a rise in worker wages, from farm to factory, and then inadequate education to take workers to the next step; at middle income status, greater competition with other countries for export of goods; and, perhaps most important, failure of the economy to transition from institutions that supported early growth to institutions necessary to more sophisticated growth.  Rules for trade in goods are different than rules for trade in services.  A stock market requires some transparency and trust that is not necessary for trade in textiles.  A country that gets stuck with untrustworthy institutions is having a political or government failure.

In the case of China, stock markets and other financial markets are doing fine, thank you, even with less transparency and honesty than would seem acceptable in the west.  In any case, markets in services - finance, banking, real estate, insurance, logistics, advertising and marketing - seem not to be promoting democratic change.  Markets can be resilient under many forms of government.

Cheng Li reminds us that Chinese people can be resilient, too, but one should not confuse people's  resilience with CCP resilience. Many middle class Chinese live lives virtually indistinguishable from those of middle class Americans, and politics is of secondary concern.  Family and the future are paramount.  For reference, see my An Evening in Middle Class Life

But Li says that CCP resilience is at an end, and a political transition must soon take place.  In his The End of the CCP's Resilient Authoritarianism? A Tripartite Assessment of Shifting Power in China, Li argues that CCP must itself abandon the notion of “authoritarian resilience” (this was written in 2012, just as Xi was coming into power) and embrace a democratic transition with intraparty elections, judicial independence, and free media.  This view was echoed by Wang Changjiang, chairman of party building at Central Party School in Beijing. Otherwise, CCP will lose its mandate to govern as more and more middle class demands swamp CCP ability to respond. 

But if CCP has lost its mandate, lost its moral authority, lost legitimacy to govern among many Chinese, it remains that the middle class and the Chinese elite are tied to the system as it exists, for continuing revenues and benefits.   This is part of the China trap.  For many CCP families, it is a story of - almost literally - to divorce from CCP, or stay together with CCP for the sake of the kids.  The Plan B is usually to send the kid and money out of China for education and investment.  A green card for someone is optional, but preferred.  Current US law still allows for immediate relatives to join a green card holder in the US.  Exit, rather than voice, will be the preferred alternative in China.


Next: Whither China post #7 – Question 5 – Whither China's economic development with no democracy?