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Under Neo-Totalitarianism, There Is No ‘Civil Society’ in China

Mo Zhixu, February 4, 2018

 

“Rather, reform has been used as a kind of calibrating tool for the system to retain complete control in the political, economic, social, and cultural spheres.”

 

In 1981, Polish president Wojciech Jaruzelski ordered a crackdown on the growing Solidarity movement. Eight years later, under pressure of internal unrest as well as a cultural thaw in the Soviet Union, the Polish Communist government and Solidarity held roundtable talks. On June 4, 1989, free parliamentary elections were held in Poland and the Communists suffered a crushing defeat. Jaruzelski resigned in 1990 and Solidarity leader Lech Wałęsa took his place as president. Poland marked its transition to democracy without shedding a drop of blood.

Poland’s case is unique among the political transitions in the collapse of the Soviet and Eastern European communist bloc. Unlike the Soviet Union, where reform was led primarily by Communist Party bureaucrats and went through a chaotic implementation, or Czechoslovakia, where change came through the sudden mass demonstrations of the Velvet Revolution, Polish democracy emerged as a product of the state coming to an agreement with society.

In the view of political scientist Juan José Linz, this phenomenon has to do with Poland’s unique political and social structure. Unlike other Eastern European countries, Poland was not a  totalitarian system even though it was also a communist country.

After World War II, Poland did not experience agricultural collectivization. Land remained privately owned and private economy had had a significant percentage in agriculture — a strong contrast with events in other Soviet satellite states.

In addition, the traditional influence of the Catholic Church in Poland remained intact through decades of Communist government. In 1978, Karol Józef Wojtyła from the Krakow parish was selected to become Pope John Paul II of the Roman Catholic Church. As the history’s first Polish pope, his nationality played a major role in shaping the social movement in his homeland. Each of Pope John Paul II’s returns to Poland to celebrate Mass was tantamount to a large-scale social mobilization and at the same time a demonstration of the power of civil society.

A few years ago, my friends Jia Jia (贾葭), Murong Xuecun (慕容雪村) and Michael Anti (安替) met with former Polish President Wałęsa and inquired about his country’s experiences in the transition to democracy. To their surprise, Wałęsa stated bluntly, “My friends, the Polish transition can’t be a model for China. We were blessed to have a Polish Pope.” At a loss for words, Anti replied: “God bless Poland!”

The fact that Poland was not a totalitarian state left room for the growth of civil society. Because of it, organizations like Solidarity could arise in Poland and garner widespread support against the Communist regime.

Following China’s market reforms, Chinese citizens gained more personal, economic, social, and cultural autonomy. Mainland Chinese society seemed to have departed from the familiar dictatorial style, giving many hope that civil society would appear in China and form a local version of the Solidarity movement that would bring peaceful democratic change.

Until a few years ago, this prospect didn’t seem too far-fetched. Limited marketization did bring a handful factors favorable to the growth of civil society, such as the emergence of new social classes, market-oriented media outlets, the establishment of judicial institutions that have the appearance of rule of law, and the growing space for expression on internet. These developments resulted in the spread of the ideas of universal freedom and civil rights, the rise of rights defense activities, and the willingness of participation of the the emerging social classes. People were encouraged by these phenomenon and began to harbor an optimistic picture that the growth of civil society would be tolerated by the regime, that a healthy interaction would develop between the government and the civil society, and that China could thus transition toward democracy.

This optimistic vision was quickly shattered.

After some initial observation, the authorities tightened control over all of these rising social fields: the media and internet were brought under ever-stricter control; human rights defenders and NGOs also faced mounting pressure. Furthermore, the government has been strengthening its grip on the new social classes by establishing party cells in what it calls “the new economic organizations and the new social organizations.”

Some might think these measures are only a product of Chinese leaders’ regimented political mindset, and their optimistic vision is still viable as long as the leaders of the regime change their way of thinking.

But upon closer examination of contemporary China’s political and social structure, you will see that the problem lies not in the mindset of the leadership, but is deeply built into the system.

China’s reform toward marketization has also been called a marginal revolution. This revolution developed as agrarian land was contracted to households, individuals were allowed to create their own businesses, enterprises cropped up in towns and villages, and special economic zones were established in coastal cities. The authorities adjusted accordingly, fuelling the hope that such reforms would eventually make inroads to systemic change, or the most difficult “deep water of reform.”

But in practice, little change has been effected on the system. On the contrary, the reforms on the margins have been adapted to reinforce the system. Specifically, the Party, government, and military saw little substantial change; the Party retained control over the core economic departments, strengthening itself through financial avenues — a phenomenon reflected in the fact that the government has grown more in power and resources while the masses have been regressing. In terms of society and culture, the regime’s monopoly has remained strong but at the same time it has introduced some market elements to strengthen itself.

Thus, the economic progress achieved during the marginal reforms reinforced the regime’s financial capacity and allowed it to double down on its control over society. Contrary to what the optimists had envisioned, market reforms have not touched the root of the political system. Rather, reform has been used as a kind of calibrating tool for the system to retain complete control in the political, economic, social, and cultural spheres.

With the system still firmly in control, factors that optimists believed would herald social change never got off the ground, and the gains civil society made were lost. For example, reacting to the demands of the the new social class, market-oriented media outlets developed a liberal trend for a limited period, but because the industry is subject to Party monopoly, they have ultimately bent to the will of the political system. Faced with combined political and economic pressure, the fate of the internet was similar.

The limited market reform in mainland China didn’t relax the political system’s need for absolute control. It’s more apt to see China as a neo-totalitarian regime with characteristics of a market economy — it can by no means be called merely “authoritarian,” as some do. The neo-totalitarianism does afford the Chinese masses a certain degree of personal, economic, and cultural freedom as well as some social space. Yet that social space is tightly controlled by the state and given little potential for free growth.

In the face of the neo-totalitarian regime’s total control and persistent suppression, the prospect that a civil society born of social movements will usher in progressive political transformation seems increasingly distant and elusive. But history continues. In the 1980s, Poland’s non-totalitarian nature permitted democratic transition through state-society negotiation. Other Communist countries made the transition all the same, whether through peaceful mass demonstrations or violent regime change.

No matter the methods, when a totalitarian regime imposes absolute control over society and robs the people of their rights, it does so against popular support. Social progress may be hindered, but the people will continue to resist the system from within. When the window of opportunity presents itself, history will bring change — at once unpredictable yet in hindsight inevitable.

 

Mozhixu

Mo Zhixu (莫之许), pen name of Zhao Hui (赵晖), is a Chinese dissident intellectual and a frequent contributor of Chinese-language publications known for his incisive views of Chinese politics and opposition. He is the co-author of “China at the Tipping Point? Authoritarianism and Contestation” in the January, 2013, issue of Journal of Democracy. He currently lives in Guangzhou.

 

Chinese original  《莫之许:新极权下没有所谓公民社会》

 

 

 


Also by Mo Zhixu on China Change:

In Beijing, Who Is and Isn’t a ‘Low-end Person?’

Why Is Wu Gan ‘The Butcher’ So Important?

China’s Future: Unstable and Unsettled

The Glory and Suffering of Pu Zhiqiang

Crime and Punishment of China’s Rights Lawyers

The Coming Information Totalitarianism in China

 

 

 

Beijing Refugees and the New Displaced Class

Wu Qiang, December 3, 2017

 

Daxin_xinjiancun-south-gate

“Newly-Built Village” (新建村) in Daxin District. Photo: China Daily

 

On November 18, a fire killed 19 people in Jiugong township, in the Daxing District of Beijing. A few days later, the city government launched a mass clearance operation of “low-end people” around the city’s suburban belt. Within a week, probably more than 200,000 of the “migrant low-end population living in Beijing” was evicted from their rental homes or workplaces.

Videos uploaded to social media, and reports by both citizen and mainstream media journalists, show that people living in the migrant worker “shantytowns” — village enclaves within urban areas — have been told that they have only two or three days to disband. The restaurants and factories in these shantytowns face marauding thugs who roam around smashing doors and windows. Their homes are invaded in the middle of the night by uniformed police, or auxiliary police, who kick in their doors and enter without permission, forcing them to evacuate under the threat of violence. The videos show them cold and homeless on the streets of Beijing in the middle of the night. Some pack onto trains taking them back to their home villages, while others look for temporary accommodations in nearby Hebei Province. Some simply linger on Beijing’s streets, refugees within China’s own borders.

The cruel and violent actions of the government have sparked fury and protest on Chinese social media. Some officially-controlled media, those which still retain some compassion, have published articles that offer veiled criticism of the Beijing municipal government’s policy. Civil society groups in Beijing, which have been under sustained repression for the last five years, have summoned up extraordinary courage to organize protests and relief. Alumni of Renmin University of China, Beijing intellectuals, and labor groups in China have published open letters of protest, for example.

What is particularly noteworthy is that, apart from the small number of Christian organizations and labor NGOs that reached out to help, some Beijing residents volunteered and organized their own relief networks, providing emergency accommodations, food, and jobs to the displaced. Hundreds of volunteers rolled up their sleeves and got involved, showing that civil society in Beijing, despite being under tremendous political repression, is still resilient and courageous.

Consideration of Political Security Underlies the Fascist Expulsion Campaign

As far back as February 2014, during his first inspection of Beijing, Xi Jinping proposed the idea of “relieving Beijing of its non-capital city functions (“疏解北京的非首都功能”).” In 2015 the State Council passed the “Programme on the Beijing-Tianjin-Hebei Coordinated Development (《京津冀协同发展规划纲要》).” In the same year, Beijing passed the “Beijing Municipal Party Committee and People’s Government’s Opinions on the Implementation of the ‘Program on the Beijing-Tianjin-Hebei Coordinated Development (《中共北京市委北京市人民政府关于贯彻〈京津冀协同发展规划纲要〉的意见》)’” and, in 2017, “Beijing Municipal Overall Development Program (《北京市总体规划》).” This indicated that China’s top leaders had made up their minds that Beijing’s population would be capped at 23 million, and cleaning out “superfluous people” would be a key task for the next two Beijing administrations, in addition to the urgent target of Beijing returning to its so-called “capital city functions.” The officials determined that “demonstrable results” would be reached in 2017. Thus, just as winter 2017 arrived, a suspicious fire in a low-rent apartment building in Daxing District presented the perfect pretext. Beijing municipal authorities, using their executive organs in every district where migrant workers dwell and their shops and factories operate, struck. Using the excuse of “fire safety” and an environmental requirement to convert households from coal to gas (煤转气), they orchestrated a mass mobilization of personnel, bringing in construction equipment accompanied by uniformed officers, directly entering the villages and getting to work expelling residents. That is how the ongoing humanitarian tragedy in Beijing was created.

The mass clearance is occurring shortly after Cai Qi (蔡奇), an associate of Xi Jinping, ascended to the office of Beijing Party Secretary around the 19th Party Congress in October. To be sure, it has been common for local Party cadres to kick into radicalist governance as a means of accumulating political merit and showing their loyalty to the top. Similar things took place during the G20 in Hangzhou (杭州), with a massive urban redevelopment plan that came with restrictions on city operations and vehicles, or in Xiamen (厦门), prior to the BRICS summit, where city officials took up a scorched earth policy for stability maintenance. Officials in Lijiang, Yunnan (云南丽江), forcibly shut down guest houses when the occasion called for it, and Shenzhen (深圳) officials have suddenly banned electric-powered scooters.

But there is more to what’s happening in Beijing now, in addition to scoring political points and realizing the central government’s desire to turn Beijing into a show-case city like Pyongyang. Defining why Beijing is undergoing urban redevelopment in People’s Daily in August, Cai Qi stated clearly that “political security” is the number one security issue in Beijing and is part of the national security.  

 

Beijing expulsion_端传媒.png

Areas of mass clearance in Beijing. According to Beijing municipal government, by 2020, Beijing will reduce its population by two million. The mass expulsion of “low-end population” has only just begun. Credit: Initium Media

 

A New Displaced Class

The difference between the current actions and the “arrest and control” of public intellectuals, dissidents, and NGO workers during the 2011 “Jasmine Revolution” in Beijing, is that Cai Qi’s target this time is a massive group of people. These are the “new displaced class,” the main target of expulsion in Daxing District and now in virtually all districts of Beijing. This group includes clothing manufacturers, small factory owners, home renovation laborers, others in the service industry, individual business owners, Taobao store owners, and other small business enterprises and self-employed workers. They — along with the construction workers now holed up under tents on work sites, as well as the contract and lease workers (派遣工) now sleeping in factories — all constitute a massive, growing group, a new displaced class. Their common characteristic is the lack of a stable and long-term employment relationship. They also lack social security or real estate. Compared to the mainstream class in society, they live on the margins of China’s urban environment. Ten years ago, the main representative of this group was the “migrant worker” (农民工), but with the rapid growth of urbanization and movements of people — in particular the relentless expansion of temporary employment relationships, the collapse of the social security system and the shrinking rights of city residents — this group continues to grow. They have now spread to the so-called low-skilled computer programming (码农) and traditional industrial workers.

Guy Standing of the School of Oriental and African Studies at the University of London took note of this phenomenon in 2011. He discovered that the globalization of capital was creating a larger and larger displaced proletariat, from developing countries to the developed world. Their employment is unstable, their work hours are not set, their pay is not fixed, and their scale is massive — from the lowest-rung of work to traditional blue and white collar work. They include both “leased workers” in factory workshops and white collar working positions. They’ve become “The Precariat: The New Dangerous Class,” as Standing titled his book, a new source of social inequality and unease.

The first “displaced class” to arise in reform-era China were migrant workers and entrepreneurs who moved to cities. Today the faces of the displaced class have changed a little, but they’re all a part of the “new displaced class” in the backdrop of globalization. This is not an exclusively Chinese phenomenon, but it’s a trend that has deepened and expanded as China has globalized. This group has uncertain work, a lack of rights, informal contracts, no social security, unstable family environments, and exists outside the social mainstream. This description of the “precariat,” in fact, can be traced back to the Communist Manifesto of Karl Marx and Friedrich Engels 170 years ago.

The growing competition among the bourgeois, and the resulting commercial crises, make the wages of the workers ever more fluctuating. The unceasing improvement of machinery, ever more rapidly developing, makes their livelihood more and more precarious; the collisions between individual workmen and individual bourgeois take more and more the character of collisions between two classes.

The unstable work and compensation of the newly displaced are creating a new form of inequality and insecurity, and also new forms of marginalization that they are unable to overcome. They may end up the objects of resentment due to wave after wave of “evictions,” whether scorned by city residents, or the nation as a whole. Put another way, the reason they are helpless in the face of expulsion is not because they suffer the feeling of inferiority of the so-called lower class. Strictly speaking, they are different from the lowest class. But, it is their lack of security and civil rights that makes them helpless in the face of violence. This is why the danger of the newly displaced is different in the eyes of the authorities from the Jasmine Revolution in 2011 although the group is big, living in close spaces and has the appearance of potential political confrontation.   

 

IMG_1217

Police guard a street where residents and shop owners have been forcibly evicted within 24 hours of notice. Phone: online

 

Beijing: a City Gearing up for the ‘Beautiful Life’  

Daxing District is located in the new Beijing airport’s “economic zone” (临空经济区) and is crowded because of its economic opportunities. So the evictions have been the most violent there. These shantytowns burn coal through the winter and create pollution, leading to frequent fires. They also lack law enforcement. “Zhejiang village (浙江村)” in Dahongmen has a high concentration of clothing manufacturers, logistics companies, repair workshops and houses large numbers of the newly displaced class. But such areas also frequently turn into places with appalling Kowloon-Walled-City-style living conditions; they are seen as a cancer on the outskirts of the city; and they provoke the authorities “sense of security.” They have become a sacrificial offering to the “beautiful life (美好生活)” policy unrolled at the 19th Party Congress. The existence of this class is incompatible with the “beautiful life” designated by the powers that be.

In addition, as the rising middle class has grown, so have internet industries such as courier and online sales services, changing the traditional urban landscape. Streets are filled with couriers, delivery trucks, and countless shared bikes. The expansion and instability of the new middle class has itself impacted many traditionally high-salaried industries and groups, including computer programmers and financial workers. Their temporary accommodations and shared housing arrangements also go against the notion of a “beautiful life” envisioned by the authorities.

By identifying the undesirable class of floating proletarian migrants and analyzing the Beijing government’s policy to “cleanse and reduce the low-end population,” we are bringing the state of this “non-citizenship” to the attention of the public and the international community. In Beijing and the rest of the country, this new and growing class of floating migrants who are “long-term temporary workers” is quietly altering China’s social class structure and urban landscape. They lack basic civil rights and the right of free movement into cities. Their unstable labor relations — that is, the obstacles caused by the backwardness of Chinese labor conditions and social security net — inform their unstable lifestyle that in itself poses a challenge to the urban space. Matters of household registration (户籍) aside, it is possible that this group of people will be used as an excuse for future discrimination and stratification by the state. This kind of stratification no longer entails the classic distinction between the modes of education and residence that once formed the gulf between proletariat and bourgeoisie.

In practice, recent years have seen Beijing’s poor move away from the old city quarters to the suburban districts at an accelerating rate as they search for economical housing, engendering a localized kind of class stratification.

A Genuinely ‘Dangerous Class,’ Perhaps

Placing ourselves in the aftermath of the 19th Party Congress, the net result of the authorities’ utopian designs for “a beautiful life (美好生活)” and hardline radical governance is a new kind of internal colonialism. Walls to maintain financial stability and to spatially isolate the new displaced class are being erected so as to guarantee what Cai Qi (蔡奇) calls “political security.” It is a reversal of the continuous breaking of social barriers during the 30-some years of reforms and opening up.

At the Davos World Economic Forum at the beginning of the year, China projected itself as the greatest proponent of globalization. Its arbiters are clearly taking a page from the statecraft of Li Hongzhang (李鸿章), a general and a diplomat of the late Qing Dynasty, whose Huai Army employed a fortress tactic to overcome the Nian rebels. In the same vein, firewalls are being erected everywhere. The tactic is being elevated to overall strategy: not only has the concept of internet sovereignty received heavy promotion; the “One Belt, One Road” is threatening to divide Europe. Meanwhile, in the United Nations, China has started proactively undermining the universal concept of human rights.

In the future, as Slavoj Žižek said in 2012, “to be exploited for the sake of holding of a long-term job is becoming a kind of privilege.” In the future, perhaps the only people allowed to live and work in Beijing will be elites and members of the new privileged class who accumulate a sufficient score in the new “social accreditation system.” Maybe there will be no more need for the display of state violence in the streets, which would be superseded by symbolic, big-data violence. This would be enough to ignite the increasingly intense class and spatial conflicts between the new displaced class and the mainstream class, creating human rights crises over and over again.

More Beijing refugees will likely be produced as a result of internal colonialism. At the same time, this new displaced class, in the course of repeated expulsions, could in theory find their self-consciousness and engage in independent societal grouping—becoming a genuinely “dangerous class.”

 

 

Dr. Wu Qiang (吴强) holds a Ph.D. in political science from the University of Duisburg-Essen in Germany. He is a researcher of social movements and a freelance writer.

 


Also by Wu Qiang:

Liu Xiaobo: The Founder of China’s Political Opposition Movements, Wu Qiang, June 30, 2017.

 

 

 

 

Thousands of Migrant Workers in Beijing Forcibly Evicted, Resistance Mounted in at Least One Location

China Change, November 29, 2017

 

Picun, map

A map showing sites of forced eviction over the last few days. Credit: FT Chinese

 

On November 18, 2017, a huge fire broke out in Xinjian Village, Daxing County, in the Beijing suburbs, killing 19 people. Subsequently the Beijing municipal government launched a large-scale campaign known as “big investigation, big clean-up, and big rectification of hidden safety trouble,” issuing eviction orders that forced thousands of migrant workers to leave their residences in the freezing night. In official documents, they are referred to as the “low-end population.”

While the exact number is hard to estimate at this point, the eviction map suggests that the number is likely to be in tens of thousands.

Men, women, old and young migrant workers left Beijing in haste, dragging as many of their belongings as they could out of their shabby residences in villages outside of the Fifth Ring Road on the border of the city and leaving behind what they couldn’t carry. It was a mess, and many described the scene as a “disaster movie.” The majority of migrant workers who lived at the junction of the city and countryside worked in urban service industries, including construction workers, electricians, technical workers, security guards, express mail carriers, janitors, housemaids, nannies, restaurant owners, and street vendors. Their work guarantees the effective function of the city.

Many of them have lived and worked in Beijing for many years. Beijing has become their home. They have no other place they can call home or go back to anymore.

According to a blogger, a taxi driver reported that, in Malianwa, Haidian District (海淀区马连洼), he had seen three people hang themselves.

 

Picun welcomes you

Picun (皮村). Photo: Caixin

 

Located outside of the Fifth Ring Road in Chaoyang District, Beijing, Picun village (皮村) is a well-known area inhabited by migrant workers. As it is close to Capital Airport and there were plenty of employment opportunities, it had become a relatively large, and at its peak more than 30,000 migrant workers lived there.

Since 2002, a music teacher named Sun Heng (孙恒) and others founded a non-profit organization in Picun Village called “Home of Fellow Workers.” An elementary school, workers’ university, and a library were also opened. In April of this year, a story entitled “I Am Fan Yusu” based on the personal experience of and written by Ms. Fan Yusu, member of Picun Village Literary Group and a villager of Hubei Province who worked as a nanny, put Picun Village under an unprecedented spotlight (here and here).

Picun notice

Amazing how a piece of flimsy paper can send so many people out into misery. It speaks volumes about the cruelty and arrogance of the CCP regime.

On November 27, 2017, migrant workers in Picun Village received a notice that stated that they “must vacate before 6 p.m. on the same evening.”

As a migrant worker community with a certain degree of  maturity and some ability to organize, the local NGO notified the media and citizens from all walks of life to pay attention to the forced-demolition notice after it had been posted, resulting in the postponement of the forced demolition to what was believed to be Friday, December 1 .

A reporter from Agence France Presse said that on Tuesday two reporters from the Chinese online news outlet “The Paper,” who conducted interviews at Picun Village, were pepper sprayed. But on Monday, when an AFP crew filmed people posting eviction notice, the dozen or so police officers watched on without interference.

This means that the police force was strengthened on Tuesday and that they had received new orders.

In December of last year the authorities cracked down on the NGOs of Picun’s migrant workers, forcing “Home of Fellow Workers,” a local NGO, to close.

Dr. Xu Zhiyong, a founder of the New Citizens Movement who had recently been released from prison Tweeted: “It is just like in those days when we made visits to black jails. Dark forces are afraid of sunlight. So the best way to help those targeted by the government this time around is to go to the sites of eviction, document them, and post them online.”

Indeed a lot of videos have been posted over social media this week. China Change picked two of them for our readers:

 

‘We are also Chinese. Why treat us like this? ’

Nov. 24, Beijing.

A man: “In 2008, you were welcome in Beijing. But now in 2017, Beijing finds you disgusting and kicks you out. “

Beijing: “Low-end population: “We are also Chinese. Why treat us like this?”

A man: “We are not allowed to live here. I heard that in the past few days, there have been nightly checks at 8 p.m.”

In Beijing, there are more than 21 million permanent residents, of which more than 8 million are residents from outside of the city. Recent eviction campaigns have left the “low-end population” from outside of the city with no place to go.

Ms. Cheng: “What do we think? We are very worried. We are also Chinese. Why treat us like this? We are not foreigners. We are also Chinese. Even if you want us to move, to go back, that’s okay, but you need to give us a couple of days. They don’t give us even one day. Look, grocery stores and supermarkets, it’s empty everywhere. There is no place to buy food.”

Ms. Cheng: “If you don’t move out by the end of the month, they will cut off water and electricity. Actually, he (the landlord) has no choice either. He treats us okay. He said that the higher authorities tell you what to do, you have to do it. Now everyone is looking for housing, but it can’t be found. I looked for housing for a whole day yesterday, but I didn’t find anything. They don’t let you rent. They don’t rent to outsiders. Now the situation is simply that they don’t want outsiders to stay in Beijing.”

(Reporter): As long as you are an outsider, you are not allowed to rent?

Ms. Cheng: “Yes, yes, yes. Most people around me are being driven out. The lease has not expired yet, but they are told to move. Now people everywhere are trying to rent a place in Beijing, but no one can find a place. If you have lived at a place for three days, and they check your ID, and you’re found to be someone from outside of the city, they will tell you to leave.“

(Reporter): “Tell you to leave? Who tells you to leave?”

Ms. Cheng: “Just those city inspectors and neighborhood committee officials. They came here to check. “

(Reporter): “If people like you are told to leave, will they refund your rent?”

Woman in blue coat: “No, they won’t. We spent all our money building the house. I still owe someone more than 200,000 yuan ($30,000).  Where can I go? The only place I have is here until I die.”

 

 

The Youth of Picun Village

Hi everyone:

I am Xiao Hai (小海) from Poems and Songs of Laborers. A big fire has affected each and every one of us. Moving, relocation, and eviction have left us with no place to go. Whenever such major accidents happen, we see tremendous contrast between the confidence of those who post public notices and the distressed, panicked, helpless, and numb expressions on the faces of fellow workers who are busy moving out. I feel that we, who have existed in these narrow spaces, have kept our silence for too long. We too must make our voice heard. Where on earth can we go? Reality does not happen in grand offices or in conference rooms. Reality happens in crowded places, in the cold wind, in the streets!

Now, together with my fellow workers, I will read a poem called “Let’s Go, Children, with the North Wind of Beijing,” by Ms. Yu Xiuhua (余秀华):

Leave the sunshine to tomorrow
Leave it to the high-end people to glorify
Leave the happiness to tomorrow
Leave it to the high-end people
Leave the hope to tomorrow
Leave it to the high-end people

But let despair stay
The despair that is left to stay
Will be high-end despair

We have no place to go
But we are on the territory of the motherland
Wearing thin clothes in the cold
We are on the territory of the motherland
We own nothing at all

The motherland is all we have
The motherland in the Beijing accent
The motherland in dialects
The motherland in office buildings
The motherland in rental rooms
This motherland also belongs to them
To those who post the notices
To those who break the windows
To those who rob us when we are in a plight

Children, you must trust me
We live in a low place
But it is not low-end
You don’t attend aristocratic schools
But it is not low-end
Even though you are in rags
You are still not low-end

The low-end owns the narrow-mindedness of the low-end people
The kind-hearted have the tolerance of the kind-hearted people.

 

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Open Letter: Call for Investigation Into HNA Group’s Activities in the U.S. and Probable Links With Corruption at Top of Chinese Communist Party

China Human Rights Accountability Center, August 15, 2017

Updated on October 19, 2017

 

We are writing this open letter to express our deepest concerns about the highly suspicious activities of the HNA Group (HNA) in the United States, including the lack of transparency of its ownership, the unclear nature of its plan for charity work, and allegations of large-scale corruption. Based on the mandate of the Global Magnitsky Human Rights Accountability Act, other relevant laws, and in the service of public interest, we strongly urge Congress and relevant administrative agencies to investigate and uncover the true nature of the HNA Group, its asset sources, and intended uses in the United States.

Headquartered in the capital city of Hainan Province, an island off mainland China between the South China Sea and the Gulf of Tonkin, HNA Group started in 1992 as a state-owned enterprise doing business primarily in airlines and tourism. It was re-incorporated around 2000 and began expanding its assets rapidly and mysteriously.

In the last decade alone, the HNA Group transformed itself into the largest acquirer of foreign assets in the U.S. and one of the largest worldwide. The HNA Group is heavily funded by Chinese state-owned bank loans, which have enabled it to leverage into completely unrelated business sectors. With acquisitions, its rank in the Fortune Global 500 list climbed from No. 464 in 2015 to 170 in 2017, and is projected to reach the top 100 in 2018. It is reported that HNA Group’s current total assets exceed $150 billion.

HNA’s ultimate target is to be one of the 10 largest companies in the world, according to its CEO Adam Tan. HNA’s sprawling portfolio now includes Ingram Micro, Avalon, Deutsche Bank, and Hilton Worldwide, to name a few. Its transactions and activities involve former White House Communication Director Anthony Scaramucci and other high profile luminaries including George Soros, David Cameron, and Nicolas Sarkozy. However, HNA remains behind a heavy veil, despite its incomprehensible success. It failed to make any clarifications when various journalists repeatedly raised questions about its ownership structure or how it made its fortune.

We are writing this letter out of concern over what appears to be one of the most generous donations to a U.S. foundation in the history of philanthropy, and its potential connections to unprecedented massive corruption.

On January 31,2017, New York Times first reported that HNA’s largest single shareholder was Guan Jun (贯君), a mysterious man who is alleged to be tied to China’s anti-corruption czar  Wang Qishan. In June, the Financial Times also reported that Guan Jun purchased 29 percent of the company last year from Hong Kong-based businessman Bharat Bhise.  Neither HNA nor Bhise revealed how the stake changed hands up to this transaction.

Only after the Chinese and foreign media began to focus on HNA’s ownership did the company finally release an open letter on July 24 to its employees, associates, and consumers; but even then, it did not list Guan Jun as the largest shareholder. When probed about the disappearance of Guan Jun’s share by a reporter from China Business Network, HNA said Guan is a “private investor” who owned some of the company’s shares, which has now been donated to the Cihang Foundation in New York.

This was confirmed by another Financial Times interview with HNA’s chief executive Adam Tan, who told the British newspaper that a Chinese citizen had donated $18 billion of the ownership of HNA—29 percent of the shares of the HNA Group of China—to a private foundation based in New York: the Hainan Cihang Charity Foundation, the company’s charitable arm in the United States. According to HNA, 53 percent of the company is owned by Cihang foundations, including a 22.8 percent stake held by a sister charity in China. The foundation registered with the New York Department of State on December 7, 2016, and it is currently applying for federal tax-exempt status with the Internal Revenue Service. The foundation says it will support a number of efforts, including anti-poverty work. Suspiciously, its three initial directors are all top executives of HNA, as reported by Wall Street Journal.

To put the size of the donation in context, a single donation of $18 billion will make the New York Cihang second only to the Bill Gates Foundation, the largest private foundation in the world. Cihang foundations — the New York Cihang and Hainan Cihang — now hold tens of billions in total assets.

What was not explained, however, was how the donor Guan Jun, a man in his 30s, acquired such a large share of one of China’s biggest companies in the first place. According to Hong Kong corporate filings, Guan Jun’s registered residential address is a simple apartment in what New York Times reporters found was a dingy, trash-laden building in Beijing, while his business address was registered in the “Oriental Aphrodite Beauty Spa”, a street-side salon in a residential neighborhood in western Beijing. Both proved to be very dubious; Guan does not appear to be the owner or resident of those locations. When asked some of these questions by the Financial Times in a telephone call, his answer was “It is inconvenient to answer any of your questions.” In a YouTube video posted after this letter was first published, Guan Jun supposedly denied his connections with government officials, but never mentioned how and when he could possibly have amassed such a princely sum of wealth. Curiously, the source of the professionally produced video was not identified, and neither was the video acknowledged by HNA.

In the interview with the Financial Times, Tan made the surprising admission that Guan, and another shareholder, Bharat Bhise, had never really owned the shares, “but had just held the stake for us.” This claim is inconsistent with the HNA spokesperson’s statement. It remains to be examined how these shares were obtained from HNA, a former state-owned enterprise that had undergone government-managed privatization. HNA’s true relationship with Guan Jun also remains unsettled — HNA claims he does not work for the company, but according to media reports, he serves as co-chairman with the son of HNA’s Chairman Chen Feng in a peer-to-peer financing platform owned by HNA. Recent New York Times Reported that shares that Guan Jun held originated from companies affiliated with Chen Feng and his family.

Doubts about the company’s unclear ownership structure and allegations of corruption have recently caused Bank of America to decide not to do any business with the Chinese conglomerate. Meanwhile, the European Central Bank is reportedly investigating HNA’s nearly 10% stake in Deutsche Bank. Goldman Sachs, longtime partner of HNA, recently suspended its IPO work for a HNA unit on due diligence concerns.

On top of this, the New York Attorney General pointed out that the group had not registered in the state as a charity, as required by law, and asked it to do so within 20 days or explain why it has not done so. HNA argued that it was not required to register by Executive Law because it did not intend to raise funds from third party, after the first explanation that the foundation couldn’t register because it hadn’t yet received its federal 501(c)(3) status, a tax exemption of nonprofit organizations, which is pending.

More recently, in September, the Swiss Takeover Board (Übernahmekommission) requested HNA to explain its ownership structure. It is concerned that HNA is a “white glove” that holds wealth for the powerful.

Although Chinese citizens are effectively prohibited from asking questions about HNA and its business and political affiliations, there is little doubt that this conglomerate needed close ties with senior leaders of the Chinese Communist Party to achieve such spectacular growth.  There is no other possible explanation for how HNA could obtain a seemingly unlimited line of credit from all major state-owned financial institutions in China. Most Chinese people are prohibited from knowing the nature of the HNA transactions. Those who are aware of the hidden fact are outraged by such an abnormal transfer of assets — possibly a grand embezzlement of public wealth — but they are too afraid to protest or speak up because they fear the potential backlash from the individuals who genuinely control the HNA assets, who are likely connected to the very top of the communist regime.

For Congress and the administration, HNA’s unprecedented, massive corruption and dubious transfer of large assets to a U.S.-based “charity” should sound an alarm: Cihang foundations control over 53% of HNA, making Cihang a shell holding company of HNA, one of the top companies in the world, not a charity.

We suspect that HNA’s largest shareholder Guan Jun may have acquired his 29.5% share ownership by siphoning off public assets through government-manipulated privatizations, because public records provide no evidence that he purchased these shares fairly.

Consistent with Guan Jun’s murky identity, only very high level political privileges can explain why HNA was able to grow at a parabolic rate, fueled by bank lending and easy access to hard currency, despite China’s tight capital controls. HNA’s chairman of the board, Chen Feng was a former PLA officer, worked under Wang Qishan for a project of the now defunct China Agriculture Trust Investment Co., and has “been a delegate to three national congresses of the Chinese Communist Party since 2002, spanning the presidencies of Jiang Zemin, Hu Jintao and Xi Jinping”, as reported by Nikkei. HNA’s business took off when Wang Qishan became Hainan’s Party chief in 2002. In Chen Feng’s most recent public appearance, he accompanied Xi Jinping on Xi’s state visit to the U.K in 2015, where he was received by then-Prime Minister David Cameron on the same stage with Xi. HNA filed a lawsuit in New York in Augustus 2017, denying allegations that Wang Qishan or his nephew Yao Qing is the controlling shareholder of HNA Group, directly or indirectly. Public records found online show that Yao Qing has several transactions with HNA subsidiaries and affiliates.

HNA bypassed scrutiny while acting as a state sovereign investment company. On the other hand, given the opacity of the ownership and its special connections, we are concerned that it could very well be controlled by individuals and families connected with the top of the Chinese Communist Party (CCP), operating through a shadowy Guan Jun. Cihang will provide a shelter for CCP leaders’ families to retain their wealth, which they could only have obtained through corruption. Cihang may thus become a beachhead for the CCP to influence the U.S. government and public.

If this is the case, such an entity would be liable for examination per the Global Magnitsky Human Rights Accountability Act, passed in December 2016 (NDAA 2017, section 1261-1265) as the law aims at sanctioning officials or their senior associates who have committed “expropriation of private or public assets for personal gain, corruption related to government contracts or the extraction of natural resources, bribery, or the facilitation or transfer of the proceeds of corruption to foreign jurisdictions.”

Therefore, we ask the U.S. Congress and the administration to support the following:

  1. Conduct an independent investigation into all transactions and assets held by HNA and its U.S. -based business affiliates in connection with alleged corruption by CCP leaders;
  1. Conduct an independent investigation of the source of funding for HNA and Cihang’s U.S. operations in connection with alleged corruption by CCP leaders;
  1. Hold an open hearing through the U.S. Congress regarding the above investigations;
  1. Suspend approval of HNA’s application for the tax-exempt status until the completion of the above investigations;
  1. Suspend approval of all HNA’s business mergers and acquisitions in the United States until the completion of the above investigations;
  1. Audit HNA’s U.S.-based companies, NY Cihang Foundation, and Guan Jun’s donation and suspend their operations in the U.S. until the completion of the above investigations.

 

China Human Rights Accountability Center

Contact: Fengsuo Zhou, Email: zhou@h-china.org

 

The China Human Rights Accountability Center was formed in January 2017 by a network of Chinese activists, primarily based in the U.S., to promote and assist the implementation of the Global Magnitsky Human Rights Accountability Act.  

 

 


Relevant publications

Financial Times: HNA chief shrugs off regulatory and ownership concerns
https://www.ft.com/content/d9bc0760-70d0-11e7-aca6-c6bd07df1a3c

Financial Times: Who owns HNA, China’s most aggressive dealmaker?
https://www.ft.com/content/8acfe40e-410b-11e7-9d56-25f963e998b2

Financial Times: Goldman Sachs suspends HNA work on due diligence concerns
https://amp.ft.com/content/f2097f50-9308-11e7-a9e6-11d2f0ebb7f0

Financial Times: ECB probes HNA and Qatar Stakes in Deutsche Bank
https://www.ft.com/content/1e9ca0e2-6ba9-11e7-b9c7-15af748b60d0

Financial Times:Former HNA shareholder denies Beijing ties
https://www.ft.com/content/a481a5a0-915a-11e7-a9e6-11d2f0ebb7f0

New York Times: Behind an $18 Billion Donation to a New York Charity, a Shadowy Chinese Conglomerate
https://www.nytimes.com/2017/07/26/business/hna-group-billion-donation-new-york-charity.html

New York Times: HNA dealing with Scaramucci, first report of Guan Jun
https://mobile.nytimes.com/2017/01/31/us/anthony-scaramucci-business-white-house.html

New York Times:Mounting Questions About Who Controls HNA, a Top Chinese Conglomerate
https://www.nytimes.com/2017/08/24/business/dealbook/hna-ownership-disclosure.html?smid=tw-share

Regulatory filing of AID in Hong Kong, a HNA shell lists Guan Jun as shareholder
http://www.hkexnews.hk/listedco/listconews/GEM/2016/0330/GLN20160330275.pdf

Wall Street Journal: HNA has deepened the uncertainties around the New York foundation that is its biggest shareholder by changing its reason for not registering yet with the state.
https://www.wsj.com/articles/hnas-new-york-charity-wont-take-outside-money-for-now-1501893615

Bloomberg:Bank of America Halts Deals With HNA Amid Debt Concerns

https://www.bloomberg.com/news/articles/2017-07-19/bank-of-america-said-to-halt-deals-with-hna-amid-debt-concerns

Wall Street Journal: HNA’s Biggest Shareholder Doesn’t Really Exist Yet
https://www.wsj.com/articles/hnas-biggest-shareholder-doesnt-really-exist-yet-1501159085

Bloomberg: Don’t fly in the dark, HNA
https://www.bloomberg.com/gadfly/articles/2017-06-06/chinese-cash-magnet-hna-must-clear-the-murk-to-reach-its-goals

Bloomberg: HNA’s NYC Charity Owner Told by A.G. to Register With State
https://www.bloomberg.com/news/articles/2017-07-27/hna-s-nyc-nonprofit-owner-told-by-state-to-register-as-charity

Bloomberg:HNA is not going to raise funds in New York State
https://www.bloomberg.com/news/articles/2017-08-03/hna-s-foundation-pushes-back-on-n-y-attorney-general-s-request

HKEJ:The ties that bind: HNA’s Chen Feng and his rise to power
http://www.ejinsight.com/20170522-the-ties-that-bind-hna-s-chen-feng-and-his-rise-to-power/

Fortune: You’ve Never Heard of HNA Group. Here’s Why You Will
http://fortune.com/2017/07/24/fortune-global-500-hna-group-china/l

Global Magnitsky Human Rights Accountability Act
https://www.congress.gov/bill/114th-congress/senate-bill/284

Nikkei:Questions mount over HNA’s financial engineering
https://asia.nikkei.com/Features/Company-in-focus/Questions-mount-over-HNA-s-financial-engineering

Why HNA is on a buying binge?
https://www.xcnnews.com/rd/159722.html

Hainan Cihang registration at New York Department of State.
https://appext20.dos.ny.gov/corp_public/CORPSEARCH.ENTITY_INFORMATION?p_token=05E802F662B75268CF28BB101283266F719FCDDE5829066C371B474E3012B58C9173744907E7B39478A94A75F692D9BC&p_nameid=DAB0EBE0256869E8&p_corpid=94B8FB0CF3559FCA&p_captcha=12422&p_captcha_check=80F162C216CC3291&p_entity_name=%63%69%68%61%6E%67&p_name_type=%25&p_search_type=%43%4F%4E%54%41%49%4E%53&p_srch_results_page=0

Cihang’s tax filing, 2016
http://990s.foundationcenter.org/990pf_pdf_archive/820/820700090/820700090_201612_990PF.pdf

Video appearance of Guan Jun, HNA’s main shareholder.
https://m.youtube.com/watch?feature=youtu.be&v=bnoHGSOHBP

HNA lawsuit against Guo Wengui
https://iapps.courts.state.ny.us/fbem/DocumentDisplayServlet?documentId=7Cz6q9JwR_PLUS_eSqCV3ceGOGw==&system=prod

 

 

 

The Death and Life of Middle Class Politics in China

Observing Recent Events, Especially the Death of Lei Yang

By Wu Qiang, June 13, 2016

 

As public contention surrounding the death of Lei Yang’s continues to grow, something new is developing in China’s political scene: the middle class is speaking out and asserting its own demands, even as the rights defense movement continues to suffer a sustained crackdown.  

 

吴强 (2)

Dr. Wu Qiang (吴强)

Four recent deaths in China sparked widespread public attention. The first, on April 12, was the that of Wei Zexi (魏泽西), a university student in Shaanxi Province, who perished from a rare form of cancer after following recommendations for a hospital from China’s largest search engine, Baidu. It turned out that the facility was part of the so-called “Putian network,” a clique of corrupt businessmen with their origin in a township in Putian, Fujian Province, who peddled quack treatments. The incident exposed the unethical ties between Baidu and hospitals in China. Then on May 5, Chen Zhongwei (陈仲伟), a doctor in Guangzhou, was hacked to death by a patient in his own home. Two days later, the 29-year-old Beijing environmental worker Lei Yang (雷洋) died in police custody shortly after being apprehended on the street by plainclothes police. On May 10, the 36-year-old Zhengzhou resident (and Masters degree holder) Fan Huapei (范花培) was so enraged by the forced demolition of his property that he lashed out at, and killed, a local official—he was soon after shot to death by police.

All these deaths triggered protests of varying scale, with anger and discontent directed at a search engine company, the healthcare system, the military, and the police. Beneath it all is the deep sense of anxiety of the Chinese middle class, worrying about its personal safety, health, and livelihood. To this author, what’s notable is that fact that these events have sparked unprecedented and new forms of organization and protest, with China’s social elites taking the central role.  

The most representative instance is the protests that burst into public view following the death of Lei Yang. Lei graduated with a Masters degree from Beijing’s elite Renmin University of China in 2012. On his way to the airport to pick up relatives in the evening of May 7, he was arrested near his home by several plainclothes police officers. Soon after, he mysteriously died in their custody. Later, local police said that they had been carrying out an “anti-prostitution” crackdown, and thought that Lei Yang had just exited a brothel. They broadcast the testimony of an on-duty police officer, as well as a “prostitute,” on state television to back-up this story, and also claimed that all of the surveillance cameras in the vicinity had been damaged. The body-cameras on the police who interacted with Lei Yang were also broken, they said. And when it was found that even all recording on Lei Yang’s cellphone had also somehow been removed, they said they had nothing to do with it. The brutal acts of the police, their blatant coverup, and weak defense, infuriated Lei Yang’s friends and schoolmates.

On May 11, an open letter of protest signed by alumni of Renmin University’s class of 1988 (the year of entrance) quickly went viral. A string of open letters by other alumni classes soon appeared online, including a joint declaration by alumni of the class 1977 and 1978.

Directly and unequivocally, these letters questioned the Chinese police’s use of violence and abuse of power, and for the first time brought into the open the collective sense of deep unease and personal insecurity felt by China’s middle class—in particular the fear that even their own basic physical safety isn’t protected. They also called for an independent, transparent investigation into Lei’s death. The alumni of the Class of ‘88 described the death of Lei Yang as “the random, willful killing of an ordinary, urban, middle-class person.”

At the end of that letter appears one of the strongest remarks of the last decade: “The death of Lei Yang is not an accident, but a structural tragedy. We ask that the highest authorities conduct an independent and fair investigation into Lei’s death; we demand that the murderers be punished and that law enforcement be rectified and disciplined. We must have the most basic, dependable safety, civil rights, and urban order. Short of this, we, who are not too old to give up on the future, will not let the issue go. We won’t tolerate evil indefinitely.”

A week later, the protest brought two public responses by China’s paramount leader Xi Jinping, one of which demanded that the government treat China’s middle class properly, the other demanding that law enforcement be regulated.

These episodes do not really, in fact, sit neatly within the established paradigm for understanding Chinese politics: they rupture the superficial harmony and stability between the Chinese society and government, and demonstrate a transformative contention between old and new forces, furnishing observers with a new framework for understanding events. The situation parallels the philosophical-spiritual analysis laid out in the book “Event: A Philosophical Journey Through A Concept” by philosopher Slavoj Žižek, where he refers to the creation of a new political subject. China’s newly rising middle classes are, through their participation in these incidents and the solidarity that inheres in that participation, reconstituting their own subjectivity. In the context of three years of iron-fisted rule under Xi Jinping, this is without doubt an extraordinary challenge and shift.

It’s true that this series of incidents is still playing out, the outcome is still uncertain, and the public’s attention will likely to shift to new topics as they burst forth, but events like the death of Lei Yang may be moving China’s political tectonics, and may be the only path for pushing change in China’s stiff and ossified political system.

Behind these incidents is the display of the unprecedented power of China’s newly risen urbanized classes. They mobilize and stage protests via alumni groups on social media platforms, and unite two generations of China’s educated class — the 1980s generation and the  post-Tiananmen generation — in their demand for justice. This is a new form of Chinese politics, or put another way, the rise of a middle-class politics in China.

Even though these are small actions in the post-Tiananmen market reform period, they have already created many precedents: The first successful mobilization using alumni networks; the first cross-generational mobilization of alumni including both elites within the official system and social elites; the first instance in which an elite university has been involved in the expression of the collective fears and anger of the new middle class; and the first large-scale direct resistance to police order, which throws down a challenge to the core of power and authority in China: the police, and police violence.

Considering the large-scale self-organized protests across China in May against “reducing Gaokao admissions” that included self-immolation and expressions of extreme discontent with the current education system, we can safely declare that this is the first time since the Sun Zhigang incident in 2003 clearly signalling that China’s middle class is no longer rejecting political resistance. Because of Lei Yang’s death, the social capital formerly deployed in the reproduction of elite status (in this case alumni ties) was instead mobilized, politicized, and transformed into a new tool of middle class protest. Afterwards, participants felt a clearer sense of group identity, clearer political demands, and on the basis of their collective anxieties, used social media to further mobilize, eventually forming a protest coalition.

What’s even more significant about this is that the new form of middle class politics has arisen in the three years that the Xi Jinping regime has been dealing heavy, incessant blows to China’s civil society. This includes the Southern Weekend incident in the beginning of 2013, the “internet cleansing” campaign that shortly followed, the forcible shutdown of independent NGOs and then the arrest of NGO leaders, rights lawyers, women’s rights activists, and labor leaders, and in the strengthening demands in the ideological sphere for loyalty to Xi and the Communist Party, and rejection of Western values.

While the rights defense movement has spread like wildfire in China over the last decade, the middle class participants have been limited to rights lawyers, a small number of intellectuals, journalists operating at commercial media, and NGO workers. In the burgeoning middle class in China, these people represent a very small number. They advocate primarily for the rights and interests of those in society’s lower strata, as well as minority groups, using their professional capabilities to provide assistance, and supporting self-organized activities like “protests according to the law.” However, these “downwards from the middle” rights defense efforts  — which include the flourishing of NGOs, philanthropy aimed at helped those at the bottom of society, and limited “surround and watch” (围观)  protests, where activists congregate where events took place — have all slowly been receding in the last few years, as the Xi Jinping regime unfolds a campaign of targeted repression over fears of a “color revolution.” Institutionalizing suppression, the Law on the Management of the Activities of Overseas NGOs within Mainland China, which was promulgated on April 29, 2016, not only severed the ties between Chinese civil society and the international community, but also isolated the middle classes and their NGOs from the lower social strata.

It was just as the rights defense movement in China was being terminated by force that the string of incidents over the last month indicated a new phase of development: the political resistance of the Chinese middle class, using an entirely self-mobilized organizational model, has emerged as a player on the political scene. Importantly, they’ve begun to display an identity and set of demands that have already, at a certain level, exceeded what would be expected of a group that is tacitly reliant on the system (because they, as a class, are the petty bourgeois that has arisen from the coming together of the bureaucratic class and the market economy). They’re also building on the foundation laid by the rights defense movement over the past 10 years, and even that of the earlier 1989 movement, with a new process of internal class mobilization.

Compared with the rights defense movement’s attempt, from the outside, to mobilize the lower classes, China’s middle class possesses more robust resources for a movement — whether financially, ideationally, or rhetorically. As to whether they’ll be able to better use new media and technology and organizational forms, the extent of their convictions and willpower, and whether they’ll be able to stage still more protests and acts of defiance — all that, of course, will only be known as we observe the struggles that are sure to follow. The one thing that we can be sure of is that the string of incidents over the last month has established a new framework for political resistance in China, and moreover, has begun to change the self-awareness of the middle class.

That is, they’ve learnt that the bonds of the middle class traditionally used for maintaining class identity and social reproduction can also be transformed into a force for mobilization and resistance. It’s only the diehards in the rights defense movement, who arrogate to themselves the right to speak for the lower classes, and who’ve been suppressed by the authorities, who not only can’t imagine the changes that may result from this new politics, but who also persist in discounting the significance of the middle class and middle class politics.

As the size of the middle class increases, and the the pace of urbanization speeds up, the Chinese government’s basis of legitimacy is quickly turning into a question of whether it has the continued support of the middle class, and whether that middle class has sufficient household consumption. All that is happening at a time when the Chinese economy continues to decline, or faces a prolonged “L-shaped” period of stagnation. With all this in mind, we can safely predict that middle class political resistance is going to emerge as a major force in China. A political opposition may emerge out of the demand for equal rights to education, personal freedom, and civil rights, competing with the Communist Party for the role of middle class’ protector, thus influencing China’s political future.

 

Dr. Wu Qiang (吴强) holds a Ph.D. in political science from the University of Duisburg-Essen in Germany. He is a researcher of social movements and a freelance writer.


Related:

Minxin Pei: China’s Middle Class Is About to Demand Big Changes, May 26, 2016

Also by Wu Qiang on China Change:  

In the Wake of the Sino-American Summit, the Potential for a New Cold War, October, 2015.

Urban Grid Management and Police State in China: A Brief Overview, August, 2014.

 

原文 中產階級的死與生──雷洋案後維權運動的終結》. China Change translated an earlier version of the article.

 

 

 

China’s Future: Unstable and Unsettled

By Mo Zhixu, published: April 6, 2016

Authoritarian resilience has always been an illusion.  

 

Ten Years

Movie “Ten Years”

 

On March 6, 2015, the Wall Street Journal published a piece by George Washington University Professor David L. Shambaugh entitled “The Coming Chinese Crackup.” In it, he pointed to five indications that China’s political system is seriously falling apart—a view that attracted widespread attention for some time after its publication.

Ever since 1989, many have predicted the impending collapse of Chinese Communist rule. But there are two reasons why Shambaugh’s piece was so noteworthy. First, Shambaugh has enjoyed good personal relations with leading Party officials. His books have been published in Chinese translation, and state media have often quoted his views. In January 2015, the China Foreign Affairs University under the Ministry of Foreign Affairs named him second on a list of “America’s Most Influential China Experts.” Second, Shambaugh previously held a more positive assessment of the prospects for Chinese Communist rule. Like Columbia University Professor Andrew J. Nathan, Shambaugh was seen as one of the main proponents of the idea of “resilient authoritarianism.”

Over the past several years, these two leading American China experts have undergone a huge change in their evaluations of where China is headed. In January 2003, Nathan published an article entitled “Authoritarian Resilience” in the Journal of Democracy. In it, he wrote: “Under conditions that elsewhere have led to democratic transition, China has made a transition instead from totalitarianism to a classic authoritarian regime, and one that appears increasingly stable.” And in his 2007 book China’s Communist Party: Atrophy and Adaptation, Shambaugh argued that the Party had, through learning and adaptation, developed a capacity to overcome or contain many of its problems, including corruption.

Over the past several years, these two scholars have flipped their positions on the stability of Chinese authoritarianism. Shambaugh’s Wall Street Journal piece in 2015 was not only a re-evaluation of his personal views; it was also read as a signal that mainstream Western academics had begun to shift their views on the future of Chinese Communist rule. In that piece, Shambaugh wrote: “[Xi Jinping’s] despotism is severely stressing China’s system and society—and bringing it closer to a breaking point. . . . Its demise is likely to be protracted, messy and violent.”

In his most recent book, China’s Future (published in March 2016), David Shambaugh continues to echo the positions he raised one year earlier and explains in greater detail how he arrived at his conclusions. He writes that, if China continues on the path of rigid authoritarianism that it has followed since 2009, it will inevitably fall into the same middle-income trap that has snared the majority of developing economies. Chinese society will become increasingly unstable and unpredictable, and without political liberalization at some point something will cause a “sudden rupture.” This is obviously completely at odds with the earlier idea of a resilient authoritarianism with capacity for adaptation.

Before Shambaugh, Andrew Nathan wrote in 2009 in “Authoritarian Impermanence”: “The most likely form of transition for China remains the model of Tiananmen.” I’ve noticed that more and more political scientists have been expressing similar views. For example, in “The Twilight of Communist Party Rule in China,” published in the November 2015 issue of The American Interest, the Chinese-American political scientist Minxin Pei wrote: “The Communist Party’s post-Tiananmen survival strategy is exhausted, and its new strategy is likely accelerating the party’s demise.” Mainstream western scholars have indeed changed their views on the future prospects for Chinese Communist rule.

The Resilience Illusion

To a certain extent, it’s true that the Chinese Communist Party possesses a capacity to learn and adapt. Ever since Mao Zedong’s death, the Party has left behind the traditional planned economy and pursued a different model of development. This pragmatic effort isn’t without concrete goals. At first, the Party tried to learn from then-authoritarian regimes in Taiwan, South Korea, and Singapore, as well as from the East Asian authoritarian development model represented by the long-term one-party rule of the Liberal Democratic Party in Japan.

In 1989 the Party crushed the massive democracy movement, and in the same year Eastern Europe and the Soviet Union underwent tremendous political changes. Given the fates of these other Communist states, many were pessimistic about the prospects for the Chinese Communist Party’s regime. However, the Party never stopped its experimentation and efforts at adaptation. Spurred on by the collapse of Communist regimes in the Soviet Union and Eastern Europe and, after Deng Xiaoping’s landmark “Southern Tour,” the Party accelerated the pace of the market reforms and opening to the outside world that it had begun in the 1980s.

Contrary to many predictions, the Chinese Communist regime emerged from the assault undamaged. It successfully became part of the international economic order and achieved sustained economic growth. During this same period, there was a peaceful handover of power from Jiang Zemin to Hu Jintao. As China was experiencing miraculous economic growth, the government bureaucracy seemed to be growing more specialized and responsive to society’s demands, even if there was also more and more corruption. Although the same period witnessed the repression of the China Democracy Party, a dissident opposition party, and Falun Gong, economic growth brought performance legitimacy that increased the degree of support for the Party. With the arrival of autonomous cultural consumption and the Internet age, people began to feel that things had begun to loosen up. In sum, to many observers the Chinese Communist Party had effectively used adaptation to “re-consolidate itself.” As Andrew Nathan concluded in “Authoritarian Resilience”: “[China’s] particular authoritarian system . . . has proven resilient.”

What’s more, to many observers, the Chinese Communist Party’s resilience gave it the potential to become, through further transformation, even more open and develop into a semi-democratic or freer single-party regime. Shambaugh wrote that the Party could take steps to govern in a more active and dynamic way and adopt a more open stance toward reforming its leadership and governance. Such steps would include further privatization of the economy, especially privatization of large state-owned enterprises, as well as liberalizing the land market. It would also include further development of rule of law in order to promote economic growth and innovation.

In this view, political transformation would take the form of party-building measures centered around the “Three Represents” policy, enabling members of the newly emerging social class like private entrepreneurs, technical professionals, and managers to become part of the political system and even join the party. This would not merely change the Party’s methods and style of governing, but also change its composition and direction. To a certain degree, this is similar to how, in the 1970s after losing its seat at the United Nations, the Kuomintang embarked on a new strategy of “Taiwanization.”

Within China, many people also believed that the Party could achieve the “transition from a revolutionary party to a governing party” through opening and proactive reform. Market reforms and opening up to the world would inevitably bring growth of the private economy and a newly emerging middle class, and it would also lead to the growth of social organizations, including NGOs. Eventually, pushed forward by these new social forces, a transformed Party would, together with these social forces, carry out a gradual, interactive, and stable transformation of all society, including transformation of the political system.

Ironically, however, these observations and predictions lost their interpretive power almost as soon as they were put forward.

First, those anticipated reforms never took place. In the economy, the 1990s policy of retaining ownership of large state-owned enterprises and selling off underperforming ones was replaced by a policy of building up bigger and stronger state-owned companies. Not only was there no further privatization of the state sector; we actually saw a resurgence of the state sector and a retreat of the private sector.

There was a similar phenomenon in terms of rule of law. Instead of moving in the direction of more emphasis on rights, rules, and limits on government power, statist tendencies re-emerged in the form of the so-called “Three Supremes” (in which judges were told to consider the supremacy of the Party’s cause, the people’s interest, and the constitution and law in deciding cases). Even more disappointing is that, after the transfer of power from Jiang Zemin to Hu Jintao, the “Three Represents” policy that had inspired so much hope quickly ceased to get much attention and was relegated to a kind of ornamental existence.

Second, even those things that were seen to be the basis of authoritarian resilience turned out to be not as stable as they had seemed. The Bo Xilai affair demonstrated that struggles at the highest levels of power have not disappeared as a result of fixed terms of office. Since the 18th Party Congress, Xi Jinping’s strong anti-corruption campaign has not only firmly established his own personal authority, but also to a certain degree weakened the system of collective leadership and destroyed the consensus within the bureaucracy that economic growth could be a source of both political legitimacy and personal gain. At the institutional level, the post-1989 unity among elites that was so crucial to the regime’s survival and the bureaucratic driving force based on performance legitimacy both quickly became things of the past.

Perhaps one ought also to consider the shocking way that China’s leaders handled the 2015 stock market crisis. Once they were treated as mythical beings, but in the end they were shown to be just as mediocre as the bureaucrats responsible for the Japanese economy. These Chinese officials who had once been considered to be increasingly specialized and in possession of unrivaled capabilities were quickly exposed as “emperors in new clothes.” This shows that the core ideas of authoritarian resilience—meritocratic selection of a group of officials whose capacity for learning and adaptation makes them responsive to society’s demands and able to promote economic development—is most likely a myth, and China’s past economic miracle was little more than being in the right place at the right time.

Ultimately, the resilience of authoritarianism would have to be based upon an ability to attract emerging social classes. But with the quiet demise of the “Three Represents” policy, the Chinese Communist Party has increasingly come to base the continued survival of its regime on the suppression of new social groups. Even if the political system can successfully achieve relative security in the short term, it will have driven these emerging social groups to grow increasingly alienated from the regime.

In his controversial 2015 op-ed, David Shambaugh put forward “five telling indications of the regime’s vulnerability.” The first is that “China’s economic elites have one foot out the door, and they are ready to flee en mass if the system really begins to crumble.” In fact, it’s not only China’s economic elites: immigration has become quite a common subject of discussion among China’s middle class, and more and more of them are beginning to take action. Even more unsettling is the increasingly heavy repression of China’s emerging social groups, with the crackdown on online expression, rights lawyers, NGOs, and religious groups growing in both scale and intensity.

Only a few years separated the appearance of Andrew Nathan’s article, “Authoritarian Resilience,” and his subsequent admission that “the most likely form of transition for China remains the model of Tiananmen.” In 2015, Shambaugh told the New York Times: “in the middle of 2009, after Zeng [Qinghong] had retired, [the Party’s direction] abruptly shifted.” It had been only two years since the publication of his book, The Chinese Communist Party: Atrophy and Adaptation. However, the strengthening of the Party’s stability apparatus after the Beijing Olympics and the increasing repression since the 18th Party Congress all demonstrate that, set against the earlier economic miracle, any resilience that China’s authoritarian system may have had now appears to have been illusory.

What Will the Future Really Bring?

How did the illusion of authoritarian resilience disappear so quickly? No doubt this is a question shared by quite a few outside observers and thinkers inside China, with each one of them likely to put forward a different answer. But in my view, there are a few fundamental reasons why the illusion of authoritarian resilience faded so suddenly.

First, the basic factors accounting for the continued survival (or authoritarian resilience) of the post-Tiananmen regime—things like elite cohesion, performance legitimacy, absorption of emerging elites, a foreign policy of “concealing one’s strengths and biding one’s time”—were all probably responses to the crisis of 1989. For example, elite cohesion was to a great degree spurred on by the sense of crisis brought on by the June Fourth crackdown and the collapsing regimes in the Soviet Union and Eastern Europe. Sensing themselves to be “all in the same boat,” these elites found temporary common cause and for a while obeyed the rules regarding fixed terms of office and collective leadership. However, this sense of crisis was bound to fade over time. In other words, these may have been short-term phenomena from the very beginning, rather than systemic phenomena.

Other things like a pragmatic foreign policy, emphasis on economic development, or co-optation of new social elites can all be explained similarly. If the basic factors accounting for the continued survival (or authoritarian resilience) of the post-Tiananmen regime were reactions to the June Fourth crackdown, then you can’t ignore the fact that the June Fourth crackdown was carried out in order to maintain dictatorship, prevent liberalization, and “refuse to give in even a bit” (“一步都不能退”). This means that so-called authoritarian resilience was, from the beginning, always bounded by the goals of maintaining dictatorship and denying liberalization. The further reforms that so many observers hoped for and the gradual transformation that some Chinese still await were in fact never under consideration by the Chinese Communist regime.

A political system with maintaining dictatorship as its goal achieved incredible economic results, and it led people to believe in the illusion of resilience. However, under the accelerating slowdown of the Chinese economy, the demands of the emerging society will increase and, under internal and external pressures like rampant corruption, quickly reveal the regime’s more repressive side. In his new book, David Shambaugh continues to believe that the “political system is the key” and that the Party can return China to the path of political reform, gradually increase political openness and change without losing control or power and thereby rescue itself from the brink of collapse.

Based on the logic of my brief analysis above, however, the basic factors accounting for the continued survival (or authoritarian resilience) of the post-Tiananmen regime from the beginning ruled out any political liberalization. So there will be never be any political reform. On the contrary, the Chinese Communist regime depends on maintaining the status quo of dictatorship. Looking toward the future, the far more likely prospect for China is a protracted and “highly unstable and unsettled” decline that Shambaugh predicted.

 

Mozhixu

Mo Zhixu (莫之许), pen name of Zhao Hui (赵晖), is a Beijing-based Chinese dissident intellectual and a frequent contributor of Chinese-language publications known for his incisive views of Chinese politics and opposition. He is the co-author of “China at the Tipping Point? Authoritarianism and Contestation” in the January, 2013, issue of Journal of Democracy.

 

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Related:

Miner Protests in the Northeast and the End of China’s Economic Boom, by Wu Qiang, March 17, 2016.

In the Wake of the Sino-American Summit, the Potential for a New Cold War, by Wu Qiang, October 12, 2015.

 

Alos by Mo Zhixu on China Change:

The Glory and Suffering of Pu Zhiqiang

Crime and Punishment of China’s Rights Lawyers

The Coming Information Totalitarianism in China

 

莫之許《中國未來:不穩定和充滿混亂》, translated by China Change.