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Wednesday, July 26, 2006

Power, Not Socialism

More on the interaction of politics, economics, and power in China:

Power not socialism is today’s Chinese ideology, by Richard McGregor, Commentary, Financial Times: ...[I]t is a commonly heard refrain among business leaders breezing through Beijing ... that China’s communists are really deal-hungry capitalists in disguise, but just cannot say so. It is not for nothing that the Communist party is only half- jokingly labelled the world’s biggest chamber of commerce.

In China itself, however, ideological debates in various guises are alive and kicking and play a pivotal role in policymaking. Chinese and foreigners ignore them at their peril.

The clearest sign that ideology is back came with the demise of the property law earlier this year, shelved after a campaign against it by a law professor at Peking University. The law aimed to entrench legal protection of private property rights, but Gong Xiantian whipped up a storm by arguing it would only protect the rights of the rich and succeeded in pushing it off the legislative agenda.

That Professor Gong’s argument won the day is astounding. After all, the Chinese who have made the most money from property in the past decade did so by throwing ordinary citizens out of their homes in collusion with local governments. For individuals in China, by contrast, the ability to buy a home has been tremendously empowering. With the protection of the law and independent courts, the property market would enrich both them and the country.

The key to Prof Gong’s victory was that he was able to frame the debate in a code that still packs a punch in Chinese politics. The bill, he said, would undermine China as a socialist state. Or to use the code, the measure was “surnamed capitalist, not surnamed socialist”, a turn of phrase not heard since the early 1990s, when the late Deng Xiaoping was fighting a rearguard action in defence of market reforms.

Deng said it did not matter what a reform was “surnamed”, as long as it worked. For the conservative left, however, to label a measure as “surnamed capitalist” was akin to attaching the mark of death to it. The phrase has been given a new twist in recent months in an intensifying debate about foreign purchases of Chinese companies. The ideologues are applying a new litmus test for such deals – whether an industry is “surnamed Chinese or surnamed foreign”.

The result has been a slew of delays in purchases of local companies in industries as diverse as construction equipment, meat packing and industrial bearings, which have taken on a strategic quality in the hands of the anti-foreign forces. ...

Deng’s clever formulation of “socialism with Chinese characteristics” gave policymakers the fig-leaf they needed two decades ago to introduce market reforms in a single-party state. The economy has flourished ... but, in the meantime, the gap between the fiction of the party’s rhetoric (“China is a socialist country”) and the reality of everyday life has grown ever greater. The party has no choice but to defend the fiction, because it represents the political status quo. ...

The party remains a nimble beast. A few years ago, it noticed the explosive growth of the private sector. So the party began inviting entrepreneurs to officially join its ranks and establishing cells inside private companies to ensure they did not incubate an alternative political force. It is impossible to know how this conflict between single-party rule and growing private interests in China will be resolved. But no one should doubt the resolve of the party to maintain its grip...

    Posted by on Wednesday, July 26, 2006 at 12:09 AM in China, Economics, Politics | Permalink  TrackBack (0)  Comments (5)

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