Are China’s growth prospects just as ethereal as these lanterns?

Social Contracts in Modern China

I originally crafted this essay, back in Spring 2013, as a response to the following question proposed by Project Firefly.

Are the governance challenges facing China’s leadership really that different from other countries?

I

China does not lend itself quite so readily to the field of Comparative Politics; it suffers from the Middle-Kingdom complex (a tongue-in-cheek reference to the literal meaning of China: Zhōngguó) which holds that China resides in a political vacuum and defies comparison. Any efforts to compare and contrast the Chinese experience would be akin to squaring the circle, or so the reasoning goes. While this might be true for the ancient Sinic civilization, political governance in contemporary China is hardly a distinctive and unprecedented process.

The governance challenge confronting the 7-member Politburo committee is a veritable cauldron, to say the least. They must stimulate and sustain the world`s second largest economy; quench the needs of 1/5th of the world`s population; monitor the cryptic conversations of 500 million internet users and potentially go into war against the world`s third biggest economy. Before any of this, they must clear up the brown smog cloaking up the skies of Beijing.

China must operate a 21st century economy with a 20th century political system

For the purposes of our discussion, we will analyze this paramount governance challenge along three dimensions — economic, social and political. On the economic front, the key issue is sustaining the juggernaut that has been the Chinese growth story. This would require escaping the middle-income trap and transforming the current export-led growth model into a domestic-demand based economy. Secondly, the Chinese society is undergoing a disillusionment of sorts amidst growing inequality in all spheres — rich-poor, urban-rural, agro-industrial, young-old and coastal-inland. This is further exacerbated by the growing culture of crass materialism and deteriorating environment. Finally, Beijing is grappling with its own set of political issues — internet censorship, growing social unrest, ubiquitous corruption in the CCP cadre, territorial sovereignty and souring foreign relations.

II

This laundry list of problems is far from new. All developing nations (including BRICS countries) have to tackle the same economic challenges as Beijing, namely sustainable development. Post-Socialist nations (including Russia) and oligarchy nations (such as Mexico) have to purge similar social evils, such as inequality and corruption, as China. Emerging superpowers of yesteryear (such as America & Germany) had to resolve identical foreign policy dilemmas and containment strategies as Beijing.

The Chinese Communist Party (CCP) sits at the nexus (party lingo: vanguard) of government, society, economy, media and culture.

However, none of these “usual suspects” face the entire gamut of issues confronting the new leadership in China. Hence, employing these comparators to understand the Chinese reality would be misguided. The above-mentioned comparators are inadequate, in that, they offer a one-dimensional analogy — either along social, economic or political lines. For instance, Washington of the 1900s did not carry the onus of managing the American economy; there were capitalist institutions in place to do so. The administrators in Mexico City do not have to incessantly monitor and censor the internet conversations of the masses; they do not fret over a genuine political revolution. Similarly, today`s New Delhi does not need to micro-manage the evolution of the Indian society; there are other social institutions to handle such issues.

The Chinese Communist Party (CCP), on the other hand, sits at the nexus (party lingo: vanguard) of government, society, economy, media and culture. The true essence of political governance in China lies in the delicate inter-dependency amongst the three dimensions. Hence, we need to venture beyond the above-mentioned countries and find other political systems that truly capture the multi-dimensional nature of the Chinese governance challenge. In the ensuing discussion, I propose two sets of comparators — that are both germane and instructive — to appreciate the kind of debates that might occur in the Great Hall of the People.

III

Both these analogies are variations of the vertical social contract — one signed between society and state. The populace effectively concedes its political rights in return for the promise of economic prosperity. If either side violates their end of the deal, social unrest ensues. The CCP must implement economic reforms in order to maintain social harmony and political stability. Conversely, sustainable economic growth rests firmly on social harmony and political stability. Rupture along any of these dimensions, threatens to exert a domino effect on the entire Chinese house of cards. As Ian Bremmer from the Eurasia Group puts it — “China must operate a 21st century economy with a 20th century political system”.

I must digress to add that economic prosperity as defined in the above contract does not refer to traditional indicators such as GDP (or GDP per capita), gini coefficient, unemployment rate or poverty line. It is best characterized by the phrase — Social & Economic Mobility — proxies of which include non-traditional statistics such as number of annual protests, public satisfaction surveys, percentage of SOEs (State Owned Enterprises) in the economy and Weibo hashtags.

IV

The first analogy employs single-party political systems including dictatorships and monarchs (such as the Arab-Spring nations and existing dictatorships such as DPRK). In these societies, the people have surrendered their political freedom (voluntarily or involuntarily) in exchange for greater economic prosperity or for the greater good (such as religion, political ideology & nationalism). The CCP party members governing rural, agricultural areas as well as the urban poor will more likely face these types of political predicaments. In other words, the CCP must substantiate its legitimacy by promising (or delivering) values such as economic prosperity, communism & nationalism to its rural and urban-poor constituents.

The second analogy employs East-Asian tiger economies such as Singapore, Taiwan & South Korea. In fact, the genius of Deng Xiaoping in implementing economic reform before political reform (as opposed to Gorbachev`s inverse model) was based on the success stories of these NIEs (Newly Industrialized Economies). Taiwan & South Korea, in particular, started out as one-party systems and transitioned into peaceful multi-party democracies. Following stellar economic growth, these societies value marginal political freedom more than marginal economic growth. CCP government officials in urban coastal areas would most probably face this strain of governance challenges — wherein the bourgeoisie will demand better quality of life, greater cultural freedom and political accountability, more so than economic prosperity.

V

Will China have its own Arab Spring or a June Democracy Movement? Thanks to Hu Jintao, who was instrumental in institutionalizing the CCP recruitment and management process, the answer is neither. Fortunately (or unfortunately) we will never see another Mao Zedong or a Deng Xiaoping. Instead, Beijing will be characterized by collective leadership. Even, Xi Jinping, the head of state, will wield a first-among-equals position. The Politburo and the CCP National Congress will increasingly reflect the dichotomy within the Chinese society — the elitist coalition led by the princelings (including Xi Jinping) will address the increasing calls for political accountability & quality of life among the bourgeoisie, while the populist coalition (including Li Keqiang) will address the economic challenges plaguing the rural communities.

One Party — Two Coalitions: Democracy with Chinese characteristics

Unlike the Democratic and Republican parties in the United States, these two factions believe in the same ideology and share the same end goals for the Chinese state. They merely represent the different interests and regions within the country, thereby lending a quasi-democratic bent to the totalitarian rule of the Communist regime. The two coalitions must honor both variations of the social contract mentioned above — the elitist coalition needs to address the mounting calls for political reform, while ensuring the existence and authority of the CCP; the populist coalition needs to address the redistribution challenge and work towards a more egalitarian society, in order to demonstrate its legitimacy.

VI

This kind of intra-party democracy, albeit in its infant stages, could lay the foundation for a Chinese style of democracy. Just as Deng Xiaoping developed a hybrid socialist market economy (Socialism with Chinese characteristics), the upcoming CCP leadership could promulgate a hybrid version of Democracy that better represents the people`s interests (Democracy with Chinese characteristics). The most pertinent revelation from this recent trend towards “One Party — Two Coalitions” model is that it proves that the Chinese leadership is cognizant and keenly aware of the public sentiment, opinions and morale.

The malleability and shrewdness of the Chinese Communist Party will enable the new leadership to tackle the governance challenges in a gradual and pragmatic fashion — “crossing the river by touching the stones”. We might never see multi-party elections in China; but neither will there be a socio-political revolution. The CCP will be able to cooptate any divergent factions successfully into its mould and thereby manage the three-pronged challenge in an even-handed manner.

The multi-dimensional nature of governance in China is one shared by all one-party systems. Whether the 21st Century belongs to China, hinges on the ability of the new leadership to learn from its peer group (Arab Spring nations & East Asian democracies) and interlace these lessons into the decision-making process. The recent developments in the structural organization of the CCP, coupled with the rhetoric of the new administration, offers cautious hope for a peaceful and stable China — one that can dexterously manage the convoluted web of social, economic and political problems. The governance challenges confronting China have always been commonplace, but their solutions have been unprecedented.

References:

1. James Fallows, Richard McGregor and Ian Bremmer (November 15, 2012). “Leadership in China”. The Charlie Rose Show. Retrieved from http://www.charlierose.com/view/interview/12657
2. Yukon Huang (March 7, 2012). “The Challenge for China’s New Leaders”. Carnegie Endowment. Retrieved from http://carnegieendowment.org/2012/03/07/challenge-for-china-s-new-leaders
3. Pei, Minxin. “Is China Trapped in Transition? Implications for Future Reforms” The Foundation for Law, Justice and Society, 2007. Retrieved from http://www.fljs.org/sites/www.fljs.org/files/publications/Pei_pb1%25231%2523.pdf
4. BBC Viewpoint (November 6, 2012). “The powerful factions among China’s rulers”. Retrieved from http://www.bbc.co.uk/news/world-asia-china-20203937
5. Zhao, Suisheng. “The China Model: Can It Replace the Western Model of Modernization?” Journal of Contemporary China 19, no. 65 (2010): 419–436.