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The Chinese Communist Party Should Fade Into History Peacefully, Avoiding Violence and Minimizing Social Unrest

Zheng Yefu, January 25, 2019

“Now it’s time to lay it bare: You can’t fool the Party into starting this journey, nor can you allow the calls for political reform that lack a clear final goal to numb the minds of the people.” 

I. Why Hasn’t Political Reform Happened?

In the late 1970s, China undertook a reform; the main elements were the restoration of the household production system in rural China [that allowed individual families to take control of their farming], opening up the private economy, and allowing farmers to go into the cities to find work. In the early 1990s, seeing that it was likely that this reform would run aground, Deng Xiaoping once again pushed a reform agenda, which was known as “reform of the economic system.”  As for corresponding political reform, Deng Xiaoping and the leaders that came after him all mentioned it in succession, and even said: “Without successful reform of the political system, reform of the economic system will be impossible to carry through to the end.” Subsequent history proved this argument.

It is precisely because political reform did not happen in China that “reform and opening up” fell far short of meeting people’s expectations, and the developments up to the present have led to a fear of further regression. Why did political reform always remain in the realm of words, with not even one step taken towards action? The truth is actually quite obvious, but unfortunately, it seems that it was never clearly pointed out.   

When referring to political reform in speeches, the above-mentioned leaders meant the following: first, the separation of Party and government and the separation of government and enterprise; second, decentralization of power, avoiding excessive concentration of power; third, improving the legal system; fourth, initiating social and political consultations.

Why did these leaders propose political reform? Because they realized that if rule of law is lacking and power is abused, then social and economic life cannot get on the right track.

But why, ultimately has political reform not been implemented? Because intuition has also told the Communist Party leaders that every component of political reform weakens the Party. First, the separation of Party and government, and the separation of government and enterprise, means that the Party is losing power to others, and that the Party will lose control of the administration of the state and the society and economy. Second, the soundness of the rule of law will, on the one hand, guarantee citizens’ rights and freedoms such as speech, association, assembly, and demonstration, and on the other hand, limit the sphere of action of the Party. The society will not be completely controlled by the ruling group as in the past. Third, once genuine political consultations are initiated, it’s possible the Communist Party’s views will fall into a disfavored position. In order to avoid such a situation, the Party leaders eventually created political consultations in form only, in which they had the final say. Fourth, in the competition with the Party’s internal and external opponents, the rulers are increasingly firmly convinced of this: in order to suppress and respond to the trend of social diversification, democratization, and liberalization, even internally the Party cannot practice democracy and must concentrate power.

Before the reform of the economic system, and afterwards too, it’s difficult to say that most of the Communist Party’s guiding principles and policies have been in the fundamental interests of the vast public. But ahead of us there is something that is in the common interest of both the broad Chinese public and the Party, and that is, the Communist Party should fade into history peacefully, avoiding violence and minimizing social unrest. I think that the one great thing the leaders of the Chinese Communist Party can do that would enter the annals of history is to honorably and with dignity lead the Party off the historical stage.

The mindset of preserving

power at all costs ruined the

souls

of those involved.

During its 70-year rule, the Party has brought too many disasters to the Chinese people. And as the Party has evolved up until now, its power structure as well as its ecology have predetermined that it can no longer deliver excellent leaders for Chinese society at all levels; it has almost completely lost its self-correcting mechanism. Its nature has already completely degenerated: for a long time it’s been a group that lacks belief; people join the Party to become officials, and they defend the Party to protect vested interests. The mindset of preserving power at all costs ruined the souls of those involved: hatred of different political views grows ever stronger, and the fear of a crisis has led to their own dysfunction.

The path to escape the shackles on their souls is to strive to melt the Party into the larger society.

However, to make the Party that has ruled Chinese society for 70 years end the one-party dictatorship by itself, there will be a long period of transition. During the transition period, the Party will necessarily be the one to guard social order. This transition period will allow other political forces to emerge, preparing to launch real and meaningful political consultations. Every school of thought and political faction can have its own ideas, but China’s blueprint for the future, and the path it will forge, can only be produced through negotiations involving many political groups.

Don’t we already have the “Chinese People’s Political Consultative Conference” (CPPCC)? It is difficult in this world to find a business like the CPPCC that squanders taxpayers’ money and is so hypocritical, contrived, pointless and boring, and deceptive. I’m speechless as how to describe it. If the rulers had courage and confidence, they should either disband the CPPCC and engage in a real one-party dictatorship; or give different political factions a platform for dialogue and engage in real political consultations.

Ending autocracy is in the interest of the Chinese people, but bloodshed and turmoil are not. A peaceful transition is in the interest of the Communist Party, because it is the only dignified path of retreat.

In sum, pursuing prosperity while fearing for its political security has resulted in the Party professing interest in something it fears for more than 30 years, and swaying to and fro, left and right, in the economic and ideological fields. However, in the past few years, the seesawing has come to a halt at the left side because the Party leaders realized that the private economy and the liberalization of thought bears a threatening and close relationship to the survival of the Party. In contrast to the increasingly stereotypical conduct of the power oligarchy, the call for political reform has not declined at all in society. Unfortunately, the latter has been weak at best. It’s been weak because everyone is scared; it’s been weak because those few in the know have stopped short of telling the whole truth. Chen Ziming (陈子明) said: We should promote democracy together with the Communist Party. Zhou Duo (周舵) advocated Party-led constitutional government.

Just exactly what will the position of the Communist Party be when democracy and constitutional government are realized in China? Now it’s time to lay it bare: You can’t fool the Party into starting this journey, nor can you allow the calls for political reform that lack a clear final goal to numb the minds of the people.

Zheng Yefu.

II. Rarely Seen Common Interest of the Party and the People

The core of the theory is “the Communist Party of China must always represent the fundamental interests of the overwhelming majority of the Chinese people.” Unfortunately, during most of its rule, the Party’s principles and policies have not represented the interests of the vast majority of the Chinese people. Property rights are the greatest manifestation of interests. In the rural areas, through the chain of land reform, mutual aid groups, cooperatives, and people’s communes, the land has changed from privately owned to state-owned. In the cities, private economy vanished following the public-private partnership movement. The benefits of the economic reforms of the 1980s proved that the above-mentioned two revolutions seriously violated the fundamental interests of the Chinese people, and suppressed their zeal for production. Otherwise, why would there have been a need for reform to begin with?

So after the reform, did the policies represent the interests of the vast majority of the people?  When land was nationalized, what did the government do?  Creating revenue by selling land. It sold lots at high prices to real estate developers. This is the first cause of excessive housing prices in China and a great portion of the population became slaves to their mortgages.  Isn’t it too tyrannical to say that a policy that enriches the state and impoverishes the people is in the fundamental interests of the overwhelming majority of the Chinese people?

For 60 years, from 1949 to today, only once did I see a time when most of the people in the ruling class had reform aspirations, and that was in 1978. Just once.

Has there ever been a policy of the Communist Party that has been in the fundamental interests of the Chinese people? Yes, but it really is rare; that was the reform of the economic system in the late 1980s. I stated the following view at a seminar in 2008: top-down reform is not common; it is a rare thing because the reform aspirations at the higher level and motivation to reform exist only in rare moments. For 60 years, from 1949 to today, only once did I see a time when most of the people in the ruling class had reform aspirations, and that was in 1978. Just once.

What was the motivation for the reforms in 1978? Because they were at a point at which they could either choose to reform, or see the Party demise. “If the Party falls, so does the nation” is the axiom so often repeated by the state propaganda machine. But there is no such thing as the demise of the country. The age of colonialism is all but in the past; China and its people no longer face the same threat of extermination. It’s the Party that is going down. Thanks to its dismal management of the country, there are so many people who can’t make ends meet. What happens if the Party falls? The Party will fade into history. Of course, they want to avoid that scenario, so reform was implemented.

We can credit Mao Zedong for creating this consensus among them: Mao, in his dogmatic ways since 1956, had drawn himself ever further apart from his colleagues. No one except for the bootlickers and careerists were inclined to support him. By the time of his death, he had driven upwards of 95 percent of the people within the Party into the ranks of a hidden opposition. The end of Mao led the other senior officials to jointly discuss how they should move away from Mao’s political line. I have yet to find a second dictator in history whose subordinates stood together in such unity after his death. It is extraordinary and rare: the Party elders were of one mind, working in concert to turn things around.   

Reform is not a novel concept: going back to 1956, and even earlier. In the Ming and Qing dynasties (1368–1911), and all the way back in the Qin Dynasty (221–206 B.C.), household production system had been the model for agricultural production. Throughout history, there had been a private economy that existed to varying degrees in urban areas. Reform isn’t some sort of groundbreaking thing, it’s actually conservatism: look at what the ancients did and follow the path they took. It’s just that Mao Zedong introduced his utopian thinking that repudiated common sense. This thinking led to constant disagreement during the reform period despite the broad consensus; as a result, the general secretary [of the CCP] was replaced time and again. Today, that rare moment of consensus that once permeated the leadership is gone; they will not come to this kind of understanding again. What reason do we have to hope that any new top-down reforms can be sustainable?

III. Successful Transition Requires the Cooperation of Two Forces

No discussion regarding the end of the one-party dictatorship in Taiwan can do to omit Chiang Ching-kuo (蔣經國). At the same time, the Taiwanese themselves firmly deny the notion that the course of their history was shaped by one individual. They think that Chiang would not have made that choice if not for the perseverance of Taiwan’s democratic activism as well as the massive pressure that arose from the social diversity at the time. I am of the same opinion.  

The ruler is created by the ruled, and vice versa. Ruler and ruled sculpt one another, together creating a vicious circle. The ruler bears most of the responsibility, but his wantonness is also induced by the meekness and submissiveness of the Chinese themselves. They have spoiled the CCP too much. Only when we the vulnerable speak up can China escape this vicious cycle. If there is no pressure from outside [the political system], no demand for the independence of the press or tolerance of opposition parties, there can be no change: Even supposing the Party leader himself is willing to reform, he would encounter opposition from his colleagues — they would think that he has gone insane. It needs not be said that without external impetus, the idea of reform will never occur to them. If we don’t voice our opinions and exert pressure, we don’t deserve to see the dictatorship come to its end.

On the other hand, a wise leader is needed to bring a peaceful end to dictatorial Party rule. Otherwise, violence will be inevitable. It is hard to say if this sort of positive development has much probability of occurring, but at least there’s the possibility, since those in the upper echelons of power know the truth, better than anyone on the outside, that the Party can hardly change its ingrained habits. For the Party to voluntarily give up its power in a way that saves face would be a win-win outcome.

There’s a third “win” involved: I have always believed that politicians must possess ambition. For one’s name to be honored by history should be enough to satisfy the ambition of any politician. This is the best way out for the Chinese people, the Party, and the Party leader.  

Being the Party leader though, it’s really no easy task to take the Party on this path. The challenge comes not necessarily in the form of opposition from the outsiders, but the lack thereof, which is also a consequence brought about by the Party itself. As it doesn’t face any credible opposition, it has little reason to choose the path of ending its rule.

This is also the reason why I have decided to “poke through the paper window” and point at the truth hidden within. Let us gather and pool our efforts to take the single path that will lead to an amicable resolution. This opportunity will not last long.

IV. Blame Not He Who Speaks But the Wise Men Who Remain Silent

It is written in the Chinese constitution that the “socialist system is the basic system of the People’s Republic of China.” and that “the leadership of the Communist Party of China is the defining feature of socialism with Chinese characteristics.” Given that the central theme of this article goes against the words above, should I be considered a criminal for writing it? No, because it is an expression of opinion and not an action. There should be no such thing as a thought criminal in a civilized country.  

The Thirteenth People’s Congress convened in 2018 is instructive. There used to be a rule in the constitution limiting the number of presidential terms, and a motion to remove the term limit was proposed prior to the conference. Is it a crime to suggest a constitutional amendment to the presidential term limit? No. I am in favor of terms being limited, but I don’t think it’s wrong to suggest any amendment to the constitution. The characteristic of the law is that it is authoritative and inviolable under a specific setting, but it also progresses along with the course of history and as such is subject to revision. The process of revision is dependent on the ability of citizens to freely discuss and criticize the laws, so long as their criticism remains in the realm of speech and not action as this would be illegal.

Over the years I have scribbled millions of words. How could I forgive myself if I fail to write a few words on the one question that has been on my mind for so long, the question that concerns the future of our country?

While I write this primarily in my own self-defense, I also write them for the people who came before, or will come after, me. For a peaceful transition to become reality, China needs citizens who abide by the law. I am such a citizen. Everyone shares a collective responsibility for the welfare of the nation, as it’s said, and this is one of the reasons I wanted to write this article. A humbler reason is to allow myself some semblance of self-respect. Over the years I have scribbled millions of words. How could I forgive myself if I fail to write a few words on the one question that has been on my mind for so long, the question that concerns the future of our country?

In January 1948, three months after the CCP published the “Outline Land Law of China” (《中国土地法大纲》), late Chinese sociologist Fei Xiaotong (费孝通) wrote an article titled “Standards for a Moderately Prosperous Society Free of Hunger and Cold” (《黎民不饥不寒的小康水准》) to argue against violent land reform. He wrote: “History is not always reasonable, but in any historical setting there has always been a reasonable solution available. Whether history can develop along a reasonable course is dependent upon whether people can make rational choices. Those in the position of scholars have the responsibility to point out rational solutions, while it is up to the politician to bring it into history.”

I don’t believe we’ve reached the point where we can hold the politicians responsible for everything. This is because at present, the intellectuals have yet to fulfill their duty. Had they stayed true to their conscience and mustered the courage to speak their minds, China would not be in the state it is in today.

Drafted August 2018; finalized December 2018.

Zheng Yefu (郑也夫) was born in 1950 in Beijing. He was one of the 17 million “educated youths” sent down to the countryside, and served in the Heilongjiang Construction Corps. He is now a retired sociology professor from Peking University. The Chinese version of the article can be found here.


Related:

A Great Shift Unseen Over the Last Forty Years, Xiang Songzuo, December 28, 2018.

Bid Farewell to Reform and Opening Up –– On China’s Perilous Situation and Its Future Options, Zhang Xuezhong, translated by Andrea Worden, January 7, 2019.

An Interview With Xu Youyu: ‘The Worst Is Yet to Come’, China Change, October 31, 2018.

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Bid Farewell to Reform and Opening Up –– On China’s Perilous Situation and Its Future Options

Zhang Xuezhong, translated by Andrea Worden, January 7, 2019

Last week, Dr. Zhang Xuezhong (张雪忠), a law professor at East China University of Politics and Law in Shanghai, posted an article on WeChat titled “Bid Farewell to Reform and Opening Up –– On China’s Perilous Situation and Its Future Options” (《告别改革开放 –– 论当今中国的危局和前路》). The following is an excerpt from the article in which he dismisses the notion that Deng Xiaoping’s time was a better time, a time, many believe, the current leader Xi Jinping has digressed from and should return to. We should point out that, in 2013, Dr. Zhang was stripped of his teaching position at the university by the university’s communist party committee for his writings on constitutionalism, and he now works in an administrative office on campus. He also has been a practicing lawyer and has represented prominent human rights activists, Liu Ping and Guo Feixiong, among others. But in the last two or three years, the university has blocked his practice. In other words, the university has reduced the law professor and human rights lawyer to an office clerk. He should be grateful that he hasn’t been sent to Jiabiangou (夹边沟) to die, if you call that progress.  –– The Editors

The Place of Reform and Opening Up in the Course of Long-Term National Transition

From the Westernization Movement to the Reform Movement of 1898, and then to the Revolution of 1911, the idea of a republic–– antithetical to a monarchy––became the consensus of the Chinese elite. Since the Revolution of 1911 through the founding of the People’s Republic of China by the Chinese Communist Party (CCP) and afterwards, although the values ​​of freedom and democracy had not been well implemented, they were modern political principles and ideals such that no political force dared publicly deny, destroy or discard them. In September 1949, the new People’s Political Consultative Conference formulated the interim Common Program (共同纲领), which would both continue the legacy of the Revolution of 1911 and establish a new democratic system.

However, the concept of communist dictatorship that the CCP adhered to then and now, in principle, stands in fundamental contrast to the constitutional government of a liberal democracy. This means that the continuation of the CCP’s rule must be predicated on the elimination of the concepts of freedom, democracy, and the rule of law. Beginning in 1953, a series of political campaigns, such as the socialist transformation movement (社会主义改造) and the “washing” of intellectuals (i.e., thought reform) meant the gradual destruction of the new democratic system. The 1954 Constitution, based on the Common Program, was in force for three years and then abandoned.

This meant that the new democratic system was replaced by the Soviet-style system, and that the political legacy of the Revolution of 1911 was basically eradicated. During the 1957 Anti-Rightist Campaign, following the persecution of Zhang Bojun (章伯钧), Luo Longji (罗隆基), Chuan Anping (储安平) and others, liberal, democratic organized forces with clear political demands vanished completely from the mainland. Since then, although the ideals of freedom and democracy have hung on by a thread, they have survived and been passed on only in the form of personal thought.

Reform and opening up, which was launched after the end of the Cultural Revolution, is undoubtedly a denial of Maoism. It brought opportunities and space for a ravaged Chinese society to recover and recuperate. Compared with Maoism, reform and opening up is substantial progress, and objectively speaking, it brought about the emergence of civil society relative to governmental power.

However, reform and opening up as a political guideline and policy of the Chinese Communist regime, contrary to what Professor Xu Zhangrun (许章润) said, has never been about the transition to a better form of government (优良政体). In fact, it’s exactly the opposite. Reform and opening up, as a policy measure in response to actual circumstances, is aimed precisely at consolidating and continuing the CCP’s one-party dictatorial rule. Initially, reform and opening up relaxed restrictions on society, and the loosening of political oppression made people hope for a more civilized, democratic, and liberal political system. This is the social backdrop of the 1989 student movement. However, the suppression of the student movement by the CCP regime, headed by Deng, undoubtedly indicated to the world that reform and opening up never included in its agenda the gradual establishment of a liberal democracy.

Interestingly, pundits who are today still loudly extolling Deng Xiaoping are deliberately ignoring the most important political decision Deng made during his life–– that is, his decision to use military force to suppress the student movement. This suppression not only ended a patriotic student movement that focused on the pursuit of freedom and democracy, but also ruined the opportunity for a peaceful political transition in China.

In fact, judging from both official public pronouncements and the internal discussions of policy makers, in the past few decades, no CCP figure who has held real power has ever thought about establishing a good, modern political system in China. For CCP leaders, the supreme concern has always been keeping the CCP in power, meaning they must spare no cost to tenaciously defend a backward, premodern system of government. All policies carried out in the name of so-called “reform and opening up” must be based on the premise of defending, and even strengthening, the existing structure of power interests.

I have never denied that compared with the Mao Zedong era, the policies during the reform and opening up period–– and the results of those policies–– are certainly much better [in terms of economic growth and improvement in people’s livelihoods]. But I don’t agree that scholars and pundits should act like the official mouthpieces who invariably look at the path of reform and opening up over the past several decades from a vulgar, utilitarian perspective.

What Criteria Should Be Used to Judge 40 Years of Reform and Opening up?

We must use the discourse of rights and rules before we can fairly judge the gains and losses of reform and opening up.

Once we adopt the discourse of rights and rules, not only can we conduct a fair and convincing evaluation of the past reform and opening up, but we can also more clearly understand the current situation in China. We can even conceive of a clearer future for this country, one that is more reasonable and reliable. 

For example, we often see people, who, due to a crass utilitarian mentality, are deeply grateful to Deng Xiaoping for reinstating the college entrance examination (gaokao). However, if we use the discourse of rights, we can see that the resumption of the college entrance examination is both an improvement over the situation during the Cultural Revolution, and at the same time we can understand that it is a fundamental human right of modern society for people to be able to receive higher education when appropriate conditions are met. During the whole period of reform and opening up, not only has the allocation of resources for public institutions of higher learning been unequal and unfair, but also the government’s restrictions on private schools artificially deprives generations upon generations of opportunities for higher education, not to mention the long-term implementation of political brainwashing in the national education.

To take another example, during the period of reform and opening up, there was a limited right to have and protect private property, and the private economy. This is certainly an improvement compared with the preceding period. However, if we realize that personal property rights and business rights are basic human rights to begin with, we can see that during the period of reform and opening up, people’s property rights and business rights have not been adequately respected and protected by the government, and the violation of these rights by public authorities is extremely common and widespread.

As another example, compared with the absolutely unrestrained and comprehensive violation of human rights during the Cultural Revolution, the period of reform and opening up is, of course, much better. But at the same time we can also see that in the latter period, many freedoms, including the people’s right of freedom of speech, publishing, assembly and association, as well as the right to petition and the right to freedom of movement, have been strictly suppressed; and people have always been deprived of the right of political participation, and political persecution has been a common occurrence.

I think these few examples are sufficient to illustrate my point. In fact, once we begin to use the discourse of rights and rules, we not only can transcend the different subjective feelings held by different groups of people, but also objectively and fairly evaluate the reform and opening up policy. Moreover, we can clearly see how decades of reform and opening up have created the various crises and problems in China today.

In a nutshell, the root cause of these crises and problems is the dictatorial system in which a few people monopolize unconstrained power. In the process of reform and opening up over the past few decades, the problem of unfettered government power and unprotected individual rights not only has not been solved, but has also at times deteriorated. The policy priorities of different political leaders may have differed during this period, but they are completely consistent in terms of defending dictatorial power and suppressing individual liberties.

Arbitrary power can be wielded capriciously. When a few people monopolize unconstrained power, the power-holders can relax their control of society at a certain moment due to certain realistic needs, and they can also at a different moment, in response to different practical needs, strengthen their oppression of society. The reform and opening up path of the past few decades has always been based on a political system in which government power is not constrained and individual rights are not guaranteed.

Once we have seen this clearly, it is easy to understand that although there have been different policy priorities during different stages of these decades, the logic of political power behind them has been consistent. In the first stage of reform and opening up, the private economy was tolerated and encouraged to a greater extent, both to remedy the crisis of the national economic collapse caused by the Cultural Revolution, and because the size of the government at that time was still relatively small and the government’s absorption of social and economic resources was at a relatively low proportional level.

But unconstrained power must inevitably be rent seeking, and it is certain to be corrupt. The phenomenon of rent seeking by those in power has accompanied the entire course of reform and opening up, beginning with the dual pricing system (价格双轨制) in the early stage of the reform period. Once government power could be used for rent seeking and profiteering, not only did the power holders’ appetite become bigger and bigger, but it also led to more and more people using various kinds of paths to enter the government, and subsequently, the scale of the government swelled continuously and expanded without limit. Once such a trend reaches a certain critical point, the speed of social production and national economic growth will not be able to keep up with the increasing scale of government exploitation and consumption of social resources. By this time, all sectors of society, including private entrepreneurs, would find themselves in an increasingly difficult situation, with the exception of those who can use their power to extract wealth. We can even say that the various policies of squeezing and tightening in the later stages of the reform are a completely natural and logical result of the reform and opening up.

Leave Behind Reform and Opening up and Move Towards the Creation of a Modern Government

Under the reform and opening up policy, the government has never considered establishing rules for a constitutional government that would guarantee the basic rights of citizens. On the contrary, the suppression of individual liberty and the trampling of civil rights went hand in hand with economic growth. This model of economic growth inevitably led to problems such as a large gap between the rich and the poor, serious environmental damage, and the collapse of social governance. It can be said that the current government financial crisis and various social crises are the inevitable consequences of decades of reform and opening up. Those who have used 2012 as the dividing line and have portrayed the thirty-plus years before 2012 as a beautiful time, it is is incumbent upon them to search their hearts and ask themselves: Of all the social crises people have faced since 2012, which one of these did not already exist before 2012? Which one is not the result of decades of reform and opening up?

If we expand our horizons a bit more broadly, it is easy to understand that China’s political moves in recent years to intensify the repression of civil society and reject Western influences are themselves the logical result of the reform an opening up. The West is the region in the world that first completed modernization, and the core of modernization is political modernization; that is, the democratic politics of national self-governance under the precondition of respecting and guaranteeing individual freedom. The so-called modern polity is exactly the polity of this liberal democracy.

The Sino-Western collision during the Qing Dynasty made the imperial court aware of its own fragility, and the “Westernization movement,” which aimed at self-strengthening by learning from the West, became an important policy measure. But for decision makers in power, this modernization-oriented learning process had to be severed from political modernization. That is to say, the purpose of limited study of the West was not to change the autocratic regime of the minority ruling the majority, but to preserve and consolidate this premodern regime. However, the Westernization of such facets as technology, management, education, and culture gradually created a partially modernized society, which, in turn, led to conflict between the society making big strides towards modernization and the unchanging, obstinate, premodern government.

However, their more likely choice was to forcefully interrupt the process of societal modernization in order to eliminate the threat to the authoritarian regime posed by society’s pursuit of modernization. It is not surprising that after many years of the Westernization Movement, the extremely xenophobic Boxer Movement followed closely behind.

To a certain degree, the post-Cultural Revolution reform and opening up can be regarded as a Westernization Movement under new conditions. The key point is for China to learn from the West––to introduce Western investment, technology, management and products–– but at the same time, resolutely exclude political modernization. This is precisely the reason why Deng Xiaoping’s “four modernizations” slogan at that time did not include political modernization. While adhering to reform and opening up, the government at the same time insisted that the polity uphold the four basic principles that enshrine the leadership of the Communist Party. This is similar in terms of outcome to the formulation “Chinese learning as substance, Western learning for application,” in the late Qing dynasty.

However, with the castration of political modernization from the development agenda, sooner or later there will be a conflict between a society with limited modernization and an authoritarian regime that rejects modernization. At that point, the rulers must make a fundamental decision: either initiate the process of political modernization or discontinue the process of societal modernization.

People lament that China at present is a country that lacks consensus and is highly torn. In fact, the rips that have emerged in various aspects of this country all stem from a fundamental tear: a tear between a society that is looking forward to comprehensive modernization and a premodern government that adheres to the structure of existing power interests. It can be said that China today is a country that is pulling itself apart in opposite directions.

However, this state of pulling itself apart in opposite directions cannot be sustained over the long term. Eventually, either the whole society will succumb to the backward regime and regress to the previous state of closure, depression and poverty; or the backward regime will conform to the demands of the comprehensive modernization of society and transform into a modern political system that is compatible with modern society. In a sense, our country has reached a critical moment: Is it moving forward or backward?

What the Chinese need most is not to look backwards, not to recall with nostalgia the so-called reform and opening up, but to move forward, to decisively bid farewell to reform and opening up, and to work hard to innovate the current premodern polity.


Related:

A Great Shift Unseen Over the Last Forty Years, Xiang Songzuo, December 28, 2018.

Support Our Work

cropped-China-Change-Logo.jpg

At China Change, a few dedicated staff bring you information about human rights, rule of law, and civil society in China. We want to help you understand aspects of China’s political landscape that are the most censored and least understood. We are a 501(c)(3) organization, and your contribution is tax-deductible. For offline donation, or donor receipt policy, check our “Become a Benefactor” page. Thank you.

A Great Shift Unseen Over the Last Forty Years

Xiang Songzuo, December 28, 2018

On Dec. 16, Prof. Xiang Songzuo (向松祚) of Renmin University School of Finance and former chief economist of China Agriculture Bank, gave a 25-minute speech during a CEO class at Renmin Business School that was apparently applauded by the audience but immediately censored over the Chinese internet. Singling out 2018 as the year when China comes to a large shift unprecedented over the past 40 years, the speech can be seen as a landscape survey of Chinese economy, and obliquely, also of politics. Just as Tsinghua law professor Xu Zhangrun’s (许章润) broadside “Imminent Fears, Immediate Hopes”, which was superbly translated and widely talked about among China watchers, Prof. Xiang’s speech is another rare burst of Chinese intellectuals’ discontent with the direction the country is taking under Xi Jinping. With this unauthorized translation of the speech, China Change wishes our readers a happy New Year! — The Editors

I want to share two characters with my fellow alumni here. I hope that everyone present, every entrepreneur here, can reflect together with me. These two characters are fan si (反思, reflect). What do we reflect on?

China’s economy has been going downward this year, as everyone knows. The year 2018 is an extraordinary year for us, with so many things taking place. But the main thing is the economic slowdown.

How bad are things? The number that China’s National Bureau of Statistics (NBS) gives is 6.5 percent, but just yesterday, a research group of an important institution released an internal report. Can you take a guess on the GDP growth rate that they came up with using the NBS data?

They used two measurements. Going by the first estimate, China’s GDP growth this year was about 1.67 percent. And according to the other calculation, the growth rate was negative.

Of course, my main point here is not about the accuracy of these calculations, or which one is more credible. But this year, there have been three issues regarding China that we either failed to consider, or about which we have made serious misjudgments.

First, the trade war between China and the U.S.. Did we make some inaccurate assessment? Did we underestimate the severity of the situation? Let’s recall some slogans from the mainstream media at the beginning of the year: “In the trade war between U.S. and China, the Americans are lifting rocks only to smash them on their own feet, China is sure to win.” “China will win the trade war without a doubt, be the battles big or small.”

What’s behind this kind of thinking? To this day, we keep suffering from a cognitive dissonance between our understanding of the Sino-U.S. trade war and the international reality. This calls for deep reflection.

Second, what was the cause for the economic downturn? Why did private enterprises suffer setbacks in 2018? Looking at the data, investment by private businesses has dropped substantially, so what made private business owners lose confidence? On November 1, the national leaders convened a high-profile economic conference, which some interpreted as a signal that the government wants to win back the confidence of private businesses as the economy worsens.

Since the beginning of the year, though, all kinds of ideological statements have been thrown around: statements like “private property will be eliminated,” “private ownership will eventually be abolished if not now,” “it’s time for the private enterprises to fade away,” or “all private companies should be turned over to their workers.” Then there was this high-profile study of Marx and the Communist Manifesto. Remember that line in the Communist Manifesto? Abolition of private property. What kind of signal do you think this sends to private entrepreneurs?

This is why we need to reflect on China’s economic downturn, the pressure on Chinese economy, and the trade war between the U.S. and China that is escalating with every passing day. We need to reflect on what we did wrong, on how to revive the economy as we walk into the future, and what steps we should take to ensure that China’s economy maintains its steady rate of growth.

Xiang Songzuo, 民营企业家.png

You might not agree with what I say, and please feel free to give your opinions. But I hope that you can think in a sober manner after we finish today’s seminar. Why do I say this? Because the problems that we face are our own doing, and there are a lot of them. But many of them have been addressed in superficial terms only.

At the symposium on the private sector, General Secretary Xi Jinping talked about six issues. Among them I am most concerned about the sixth: the protection of personal safety and property. Think about it. In a country with robust rule of law, where everyone is equal before the law, shouldn’t these basic rights be properly guaranteed for everyone, entrepreneurs and  commoners alike?

It has been four decades since the reform and opening up, yet the General Secretary still feels a need to specifically promote entrepreneurs’ rights to personal safety and the security of their property. This reflects the gravity of the issues facing the governance of Chinese society and state. In my view, China’s economy will face six internal challenges that deserve our serious consideration. Due to time constraints, I won’t be able to get through all of them.

In addition to this, there are three major external challenges. The first is the trade war, which is in fact no longer a trade war but rather a clash between two opposed value systems. It can be said with certainty that the Sino-U.S. relationship has come to a crossroads right now and faces significant historic challenges. What are we to do? To be honest, I don’t think we have really found much of a solution.

You are aware that Huawei’s CFO Meng Wanzhou was recently detained in Vancouver. In the past two days, mainstream media such as BBC and CNN have been reporting on how the U.S. is going at Huawei on all fronts. What this tells us is that this issue is not simply about trade or economics.

We used to speak of “China’s period of strategic opportunity for economic growth.” Does this period of strategic opportunity still exist? Personally, looking at the international situation, I think this period of strategic opportunity is fading quick.

Xiang Songzuo, online.jpg

Let’s think about what “international period of strategic opportunity” means. It means that in the past, international regulations have been favorable to us; we had open access to technology, capital, talent, and markets. Because of the imminent changes we face on the domestic and international fronts, I have titled today’s speech “the great shift unseen over the last forty years.” (四十年未有之大变局)

Have we really given the problems due consideration? Of course the short-term problem we are looking at is economic decline; the preponderance of data demonstrating this point needs no introduction here. Data concerning performance in November hasn’t been released, but you can extrapolate based on the October figures: there’s been a decline across virtually all sectors, from consumption in retail, autos, or real estate. Just look at China’s exports. Who can say that the trade war didn’t impact China and that China is sure to win the war no matter how big it is? Why don’t the people who were saying this kind of thing in April and May stand by their words now?

Why did we made such mistakes in assessing the international circumstances?

Look at these numbers. That China faces a long-term economic downturn is not a problem by itself. But you may have noticed that the consumption and the service sectors now make up 78.5 percent of GDP. Going by the government’s logic, this should be a good thing, since it means the economic transition to a consumption economy has been successful: we used to rely on investment and export, now we rely on consumption and the service sector. This sounds reasonable, but think about it: in a country like China, as investment slows dramatically, how can we maintain economic stability by solely relying on consumption?

The fact that consumption and services comprise 78.5 percent of GDP may be good news to some extent, but is far eclipsed by the negative implications. Take a look at investment. More importantly, can consumption alone support faster economic growth?

In the four decades following the economic reform, we have undergone five phases of consumption. The first was to solve the food problem, the second was the “New Big Three” [新三大件, short for refrigerator, color TV, and washing machine], the third was the consumption of information, the fourth was automobiles, and fifth was real estate.

But these five waves have essentially all come to an end. Car sales have dropped sharply and real estate spending is also substantially decreasing, so we are facing serious problems. This is the crux of the six stabilities called for by the Politburo [stable employment, stable finance, stable foreign trade, stable foreign investment, stable investment and stable expectations], or as some internet users have joked, the six “tender kisses” [吻, kiss, is a homophone for 稳, stability].

Now, let me give you three more “kisses”: stable reserves, stable exchange rates, and stable housing prices.

It should be fairly obvious that these stabilities are difficult to achieve. For now it looks that “stable foreign investment” and “stable foreign exchange rates” shouldn’t be a problem. Foreign investment is basically stable. But how can you stabilize investment, exports, real estate market, and employment? The reason that I want to share the word “reflect” with everyone today is that we need to reflect on why this happened, and on how to find an appropriate solution.

As economy slows, financial risk escalates and shadow banking shrinks rapidly. Some say that the president of China’s central bank has come out to apologize, saying that their prior policy was not well thought out, lacked coordination, and wasn’t properly implemented, that these, coupled with the effects of overbearing regulations, caused credit to recede. This is certainly an important reason, but it’s not the fundamental issue.

We can see that the direct financing market, whether the bonds or stock market, has been cut in half in 2018 and that many companies have defaulted. Total debt due to default has exceeded 100 billion RMB ($14.5 billion) for the first three quarters.

According to data provided by the government, the corporate debt default could exceed 120 billion RMB, and many businesses have gone bankrupt. As Cao Dewang (曹德旺) put it, companies are collapsing in droves; not even state-owned enterprises are spared this phenomenon. Bohai Steel, once listed in the Fortune Global 500, was 192 billion RMB in debt when it bankrupted; the real number could be as high as 280 billion RMB.

Local debt is a big problem in China’s financial market. As for the actual number, the National Audit Office claims it to be about 17.8 trillion RMB, while He Keng (贺铿), vice director of National People’s Congress Financial and Economic Affairs Committee, thinks it’s over 40 trillion RMB. Worse yet, not one local government intends to pay back its debts.

So this is the larger context. Then there’s also the stock market crash. My friend Mr. Jin Yanshi  (金岩石) will share with you shortly his thoughts about an impending stock market rebound, but in my opinion, it’s far from forthcoming. You can look at the history: only the Wall Street Crash of 1929 can compare to the steep decline that the Chinese stock has experienced this year. Many stocks are down 80 or even 90 percent.

So here’s a problem that we need to think about today: we know China’s stock market is feeling the pain, but what exactly is hurting?

Some people blame the securities regulators, Chairman Liu (刘主席), or this and that, but I think they are going after the wrong people. The problem lies in regulatory policy, which I fear may be lacking. The absence of comprehensive stock regulation might be an important issue, but it’s not the crucial one.

Look at our profit structure. To put it plainly, China’s listed companies don’t really make money. Then who has taken the few profits made by China’s more than 3,000 listed companies? Two-thirds have been taken by the banking sector and real estate. The profits earned by 1,444 listed companies on the SME board and growth enterprise board are not even equal to one and half times the profit of the Industrial and Commercial Bank of China. How can this kind of stock market become a bull market?

When we buy stocks, we are buying the profits of the company, not hype and rumors. I recently read a report comparing the profits of China’s listed companies with those in the U.S. There are many U.S. public companies with tens of billions dollars in profits. How many Chinese tech and manufacturing companies are there that have accomplished this? There is only one, but it’s not listed, and you all know which one that is. [Xiang is referring to Huawei, the Chinese tech company.] What does this tell us? As Yale professor Robert Shiller said: stock market performance may not work as a barometer of the economy in the short run, but it does for sure in the long run.

So I think that the terrible stock performance only demonstrates one thing, which is that the real economy in China is in quite a mess. Where is the stock market rebound? I think it’s obvious that investor confidence has yet to recover.

A number of policies came out on October 19 and 20, and Vice Premier Liu He (刘鹤) personally gave a speech to pledge results, but what of it now? The SSE Index fell to 2600 points by last Friday, and just stayed there, barely alive. When is the market rebound coming? Real estate is not showing much cause for optimism right now, but I won’t go into details for lack of time. You can take a picture of the data for your reference.

That’s why China wants to fight the three tough battles. China’s economic decline indicates that there is a major issue with the focus on expansion and growth:  It has deviated from the fundamental and moved to speculation. These are the words of former chief of China’s central bank, Zhou Xiaochuan (周小川).

What are our current financial risks? They are hidden, complex, acute, contagious, and malevolent. Structural imbalance are massive, and violations of law and regulations are rampant. There are black swans to prevent, and gray rhinos to stop. A reporter once asked Zhou, “Where are the black swans? Which ones?” Zhou smiled and did not answer.

The black swans are right next to you. The P2P lending, blockchain, Coin Circle, aren’t all these black swans? But you can’t see them. As for the gray rhinos, they can charge at any time. The biggest of them is real estate.

We have rampant speculations everywhere, in too many aspects. In short, it’s arbitrage.

During the national finance work conference last year, the General Secretary and the Premier strongly criticized the Chinese financial sector with a pile of literary-sounding polemics, saying that they were entertaining themselves without the slightest consideration for reality, and that the financial sector was in chaos and was a horrible sight to behold.

Apart from this financial arbitrage, what do most businesses do with their money? Forty percent of it goes to the stock market, speculation, and buying stocks of financial companies, but not investment into primary business. Then can this be considered a good situation for listed businesses? You can say goodbye to the equity pledges, game over. As an economist, I am opposed to the government bailing out the market. If stock pledges collapse, let it be: what’s the point in bailing them out? What are you doing using stock pledges for other purposes anyway? What did you do with the loans you get from stock pledges?

I’m acquainted with many bosses of listed companies. Frankly speaking, a large part of their equity pledge funds did not go into their primary business, but used on speculation. They have many tricks. They buy financial products; they buy housing. The government said listed companies have spent 1-2 trillions on speculative real estate. Basically China’s economy is all built on speculation, and everything is over leveraged.

Starting in 2009, China embarked on this path of no return. The leverage ratio has soared sharply. Our current leverage ratio is three times that of the United States and twice that of Japan. The debt ratio of non-financial companies is the highest in the world, not to mention real estate.

Having shared all this data with you, shouldn’t we be arriving at a conclusion now?

“The swallows come back every three years.” [This is a reference to the three years of RMB growth between 2005 and 2008.] Now they are back again. The economic decline has created a lot of pressure, so now the government brings back its old set of tricks: relaxed currency regulations, aggressive monetary policies, relaxed financial policies, and aggressive capital financing policy.

But now I want to ask a question. Everyone in the audience is an alumnae of Renda business school and capable of thinking independently, so give it some thought: Will these policies work? Can they solve China’s fundamental problems? It’s not that our currency regulation this year was not relaxed enough—we released 400 billion yuan in liquidity, 2.3 trillion yuan in hedging or medium-term lending facilities. 2.3 trillion times the money multiplier is about a dozen or so trillion.

Three monetary policy “arrows” have been fired, also known as “Bank Chief Yi’s three arrows.” The first is loans, the second is issuing debts, the third is to solve the problem of stock pledges. Even more mind-blowing was the “125 Target.” [Guo Shuqing (郭树清), CCP committee secretary of the People’s Bank of China and chairman of the China Banking and Insurance Regulatory Commission, said in November that banks’ lending to private companies need to meet the “125 Target,” which means that in new corporate loans, the big banks should issue no less than one-third of the loans to private firms, medium and small banks should issue no less than two-third of the loans to private firms, and in three years the goal is for banks to lend no less than 50 percent of its loans to private enterprises among their loans to new companies.]

We recently went to the Pearl River Delta and some other regions to conduct field research, and locals told us that the local officials invited the bank chiefs over to meetings and told them which banks to turn to for loans. What is this nonsense?

So we need to reflect on our current problems: can these policies of ours solve the deeper issues?

As for the debt-for-equity swap, the capital market has issued many policies but I don’t see any of them will really be useful. It’s been another two months since October 19, have they been effective? So we have to ask ourselves: What has really gone wrong with our economy?

My own reflection has reached its conclusion: The problem with the Chinese economy is no longer speed or quantity, but quality.

The official report of the 19th Party Congress is an excellent report. So is the report of the Third Plenum of the 18th Party Congress. All of these major decisions were beautifully written and made all the right points. Sadly, they have not been followed through. The structural problems we face as a country, the “Six Big Imbalances,” are not sufficiently addressed. Think about it, entrepreneurs and alumni of Renda business school in the audience, can any radical credit policy or monetary easing solve these problems?

Moreover, these credit and monetary policies can only make short-term adjustments that are incapable of fundamentally solving the “imbalances” I mentioned earlier. We are still trapped within the box of the old policy and the old way of thinking. The key to whether transformation will be successful is the vitality of private enterprises—that is, whether policy can stimulate corporate innovation.

We have been making a game of credit and monetary tools for so many years. Isn’t this the reason we are saddled with so many troubles today? Speculation has driven housing prices sky-high.

The problems that private business actually faces are not difficulties in financing. What is it then? They are afraid of unstable policy and the government not keeping its word.

The leader of the State Council said it clearly in a meeting of the Standing Committee: in China, the government is what can be least trusted. Therefore, in order to solve the debt problem, first, the government has to pay back debts it owes businesses, the state-owned enterprises have to pay back debts they owe private enterprises, and large private enterprises have to pay back debts they owe smaller ones. The three costs keep going up [production cost, transnational cost, and systematic cost], therefore tax cut and fee reduction is the primary appeal.

My basic assessment of the overall issue is that these short-term monetary credit schemes are wholly incapable of solving the problem. For the Chinese economy to continue growing in a truly stable fashion, and extricate itself from its present quagmire, it must implement the following three essential reforms: tax system, reform in the political structure, and reform in state governance.

How to reduce taxes and fees? The structure of the government must be streamlined by cutting large numbers of staff. Personnel must be let go and expenditures have to drop, which means that structural reforms have to be carried out.

Professor Zhou Qiren (周其仁) of Peking University is someone I respect and admire deeply. All these years, he has been saying: what is China’s biggest problem? The costs of societal administration are too high.

Then there are the matters of governmental  reform and reforms in the structure of state governance. Of course, there’s also reform of academia and research.

I hear that the day after tomorrow, there’s going to be a grand conference to mark the 40th anniversary of the “reform and opening up.” I sincerely hope that we’ll hear something about further deepening of reforms at that conference. Let’s wait and see if any real progress can be made on these reforms.

If this doesn’t happen, let me conclude on these words: the Chinese economy is going to be in for long-term and very difficult times.

More information about Prof. Xiang Songzuo can be found here


Related:

Economics Professor Expelled for ‘Politically Harmful’ Expressions, Including Estimate of Staggering Cost to Maintain the Communist Party Apparatus, China Change, August 21, 2018.

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At China Change, a few dedicated staff bring you information about human rights, rule of law, and civil society in China. We want to help you understand aspects of China’s political landscape that are the most censored and least understood. We are a 501(c)(3) organization, and your contribution is tax-deductible. For offline donation, or donor receipt policy, check our “Become a Benefactor” page. Thank you.

The Ideological Continuum Between Deng Xiaoping and Xi Jinping

Hu Ping, November 19, 2018

 

Recently, there have been two hot topics in China: the Sino-U.S. trade war and the commemoration of the 40th anniversary of China’s Reform and Opening up.

We have noticed that many people in the system have written articles or made speeches enthusiastically praising Deng Xiaoping while covertly and in some cases even openly criticizing Xi Jinping. They believe that in bringing back lifelong leadership terms and the cult of personality, abandoning Deng’s policy of “hiding one’s capabilities and biding one’s time” (韬光养晦) and promoting state-owned businesses over private firms, Xi Jinping has significantly deviated from Deng Xiaoping’s reform and opening up.

For this year’s May 4th anniversary, Fan Liqin (樊立勤), a Peking University alumnus and an old friend of Deng Xiaoping’s eldest son Deng Pufang (邓朴方), posted a 24-page big-character poster in the Campus Triangle at Peking University calling Xi Jinping out for “going against the tide.” On July 24th, Xu Zhangrun (许章润), a law professor at Tsinghua University, published an article titled “Our Fear and Expectation,” which explicitly demanded restoration of presidential term limits and even the vindication of the June 4th Incident.

Also, some economic scholars criticized the boastful propaganda of “Awesome, my country!” that was launched a while ago, saying it invited the U.S. to begin the trade war and caused serious difficulty for the Chinese economy — with this they implied that the leadership was to blame. In the past six months, more people in the system are choosing to support Deng’s policy over that of Xi. Such phenomena has been quite rare during the six years since Xi Jinping took office.

Not long ago, on Sept. 16, Deng Pufang said at a conference of the Disabled Persons’ Federation that: “We must persevere in seeking truth from facts, keeping clear-minded, knowing our actual ability without being boastful or self-deprecating. We should adhere to our national conditions and plan all work based on the reality of being in the primary stage of socialism.” Anyone who is even remotely keyed in can immediately see who Deng is referring to.

Interestingly, U.S. Vice President Mike Pence expressed similar views promoting Deng and opposing Xi in his Oct. 4 speech given at the Hudson Institute. Pence criticized Xi Jinping several times without naming him directly. For example, he mentioned that “China’s top leader” had visited the China Global Television Network (CTGN) headquarters and said that “the media run by the Party and the government are propaganda fronts and must have the Party as their surname.”

Pence said that when the United States decided to develop extensive economic relations with China, they had hoped that Beijing would allow its people to move toward greater freedom. At one point, Beijing did make slow progress toward giving greater respect for human rights. However, in recent years, China has turned sharply in the direction of controlling and oppressing its own people.

Hu Ping, Deng Xi, 1The vice president noted that now, “while Beijing still pays lip service to ‘reform and opening up,’ Deng Xiaoping’s famous policy now rings hollow.” Pence hopes that Chinese leaders will change course and “return to the spirit of reform and opening up” when relations between the two countries began decades ago.

Slovenian scholar Slavoj Žižek recently published an article titled “Will our future be Chinese ‘capitalist socialism?’” in which he mentions an anecdote told many years ago by a Chinese scholar who knew Deng Xiaoping’s daughter. “When Deng was dying, an acolyte who visited him asked him what he thought his greatest act was, expecting the usual answer that he will mention his economic opening that brought such development to China. To their surprise, he answered: ‘No, it was that, when the leadership decided to open up the economy, I resisted the temptation to go all the way and open up also the political life to multi-party democracy.’”

We can’t confirm whether Deng Xiaoping actually said this before his death, but it would be in keeping with his legacy. In the 1980s, the Chinese Communist Party, the Soviet Communist Party, and many other communist parties in Eastern European countries were pushing for economic reforms. However, while the Soviet Union and Eastern Europe moved away from dictatorship, the CCP held onto and even reinforced the Party’s authoritarian rule.

Deng Xiaoping played the most crucial role in guiding China to embark on a path different from these other communist countries. He differed from the communist leaders of the Soviet Union and Eastern Europe in that he promoted economic reforms while rejecting political openness.

Within the CCP, the forces demanding political openness were once strong and it was unclear whether the CCP would be able to maintain its authoritarian leadership. The reform of the communist countries, even if confined to the economic sector at the beginning, was symbolic of digging their own graves. Because the communist countries’ economic reforms were essentially equal to altering socialism and restoring capitalism, it effectively became a self-denial of the communist revolution and with it the communist dictatorship.

Hu Ping, Deng Xi, 2In the past, the only “magic weapon” for the Communist Party to suppress freedom and democracy was to accuse others as “bourgeoisie” and “taking the capitalist road;” but once the Communist Party itself consciously and openly took the capitalist road and became the bourgeois class, what other excuse would it then have to insist on communist dictatorship? In this way, even if they did not actively choose to change the system, then tens of thousands of people would do it for them — by demanding the end of one-party dictatorship and the implementation of liberal democratic reform. To paraphrase American scholar Adam Przeworski, the leadership couldn’t convince themselves to pull the trigger.

This is how the Soviet Union and Eastern Europe embarked on the path of peaceful democratic reform. How did Deng Xiaoping resist calls for political openness coming from both outside and within the CCP? The answer is the June 4th Massacre.

As I said earlier, China’s reform is not one but two reforms. June 4th, 1989, was a turning point. Deng Xiaoping ruthlessly suppressed China’s democratic forces and led Chinese reforms in the wrong direction.

There is no essential difference between the Xi Jinping route and the Deng Xiaoping route. Xi Jinping’s actions are basically an extension of Deng Xiaoping’s political line, but he has deviated from it by bringing the pernicious elements inherent to Deng’s policy to extremity. In this regard, it is something of a positive sign that there are people in the system who oppose the Xi route in the name of returning to the Deng route and promoting Deng. The Xi route is indeed worse than the Deng route.

Furthermore, if Xi’s policies are stopped and he loses power, things will not simply return to the era of Deng Xiaoping, Jiang Zemin, and Hu Jintao. When Hua Guofeng (华国锋) arrested Jiang Qing and the other Cultural Revolutionaries, China didn’t just return to the pre-Cultural Revolution period; instead, a strong impetus brought China into a new era of Reform and Opening up. Similarly, if anti-Xi forces within the CCP strike down the Xi route in the name of returning to the Deng route, then the resulting political momentum would surely break through and beyond the boundaries set by Deng Xiaoping.

The June 4th Massacre was not just a brutal event, but an atrocity by many measures. Only by clearly recognizing this truth can we understand the nature of “Chinese characteristics” and the “Chinese model,” and what it means for the future of humankind if such “characteristics” and such a “model” are allowed to triumph.

 

 

Hu Ping (胡平) was one of the most respected and prolific dissent intellectuals living in New York. He edited Beijing Spring (《北京之春》), “a monthly Chinese-language magazine dedicated to the promotion of human rights, democracy and social justice in China” for more than two decades before retirement. This article combines two recent articles (here and here) by Hu Ping, and edits were made for clarity and fluency with the author’s authorization.

 


Also by Hu Ping:

How the Tiananmen Massacre Changed China, and the World, June 2, 2015. (This is one of the most read essays on this site.)

Related:

Reconsidering Deng Xiaoping the Reformer: What Did He Really Reform? Li Xuewen, February 21, 2017.

For Over 36 Years, Grassroots Elections in China Have Made No Progress – An Interview With Hu Ping, November 1, 2016.

 

 

Support Our Work

cropped-China-Change-Logo.jpg

At China Change, a few dedicated staff bring you information about human rights, rule of law, and civil society in China. We want to help you understand aspects of China’s political landscape that are the most censored and least understood. We are a 501(c)(3) organization, and your contribution is tax-deductible. For offline donation, or donor receipt policy, check our “Become a Benefactor” page. Thank you.

 

Xu Zhangrun’s China: ‘Licking Carbuncles and Sucking Abscesses’

China Change, August 1, 2018

 

Xu Zhangrun

 

 

On July 24, Unirule (天则), the liberal, beleaguered economic think tank in Beijing, published a 10,000-character essay by the Tsinghua University legal scholar Xu Zhangrun (许章润) which has lit up the Chinese internet at a time when the voice of Chinese intellectuals has been dying out.

The text, deploying all the rhetorical potency of literary Chinese — even in its length, the ‘Ten Thousand Word Petition’ having a specific valence in Chinese political history — has captured the zeitgeist of revolt against the China that Party leader Xi Jinping is busy constructing. Since being republished on the website of the Hong Kong-based Initium Media, the article has been widely shared and reflected upon by intellectuals and scholars inside and outside the country.

Initium wrote in a tweet that “this text carries out a systematic critique of the retrograde tendencies in Chinese social and political life, in particular since the end of 2017. It explicitly points out and warns against the danger of the return to totalitarianism, and calls for a stop to the cult of personality and the resumption of term limits on the post of the state chairman. The piece has become one of the few direct criticisms of contemporary ills in China among the intellectual class.”

Below we offer an outline, followed by a small selection of picant excerpts from the essay, aimed at giving readers a flavor of the whole. China Change understands that Geremie Barmé will be publishing a full translation of the essay on the website of The Wairarapa Academy of New Sinology (http://chinaheritage.net/) in due course.

Xu Zhangrun’s essay, titled ‘Our Dread Now, and Our Hopes’ (我们当下的恐惧与期待), is composed of four parts: ‘Four Bottom Lines,’ ‘Eight Forms of Anxiety,’ ‘Eight Hopes,’ and ‘The Interim.’

The four ‘bottom lines’ — i.e. the fundamental assumptions on which CCP rule has been based for the last 40 years — that Xu identifies as having been breached are:

  1. The maintenance of basic social order and a clear direction for the country

“The cessation of successive ‘political movements,’ the end to ‘no protection from law or heaven,’ as well as the constant ‘strike hard’ coercive rectification campaigns, the prevention of social anomie, the safeguarding of social order, and attempt to realize social harmony, have all significantly contributed to the basic living conditions of regular people, and has for 40 years been the bottom line for the legitimacy of the current political system…”

  1. Allowing limited private property rights and tolerance of citizens’ pursuit of wealth

Xu writes that economic reform allowed unprecedented growth, and that this has been a key element in the citizenry’s tolerance of continued Party rule.

  1. Limited tolerance of personal freedoms

Xu writes that for more than the last decade, mere sprouts of civil society have been crushed through political campaigns, thus severely stunting the development of civic consciousness and a real understanding of politics among the public. Chinese people are encouraged to “amuse themselves to death” while getting rich without scruples, Xu says.

  1. Political term limits

Here Xu is directly targeting Xi Jinping’s abolition of term limits for the post of state chairman, effected at the most recent meeting of the National People’s Congress in March.

Xu writes: “For thirty years, the essence of the matter is that — despite salient increases in social pluralization and political tolerance — the entire political system has seen no substantial or meaningful progress or change. In its bones it’s that same set of banal and brutal ideas about political struggle and dictatorship, topped off with the disgraceful avarice of kleptocrats who consume the country’s patrimony.”

In light of this, he says, the Chinese people had some minimal comfort that the constitution contained basic rules limiting the tenure of Party leader to two terms, and the system observed some adherence to constitutional norms.

The abolition of term limits “is like scrapping 30 years of political reform with one flick of the pen.”

Xu’s then enumerates the eight fears of the Chinese everyman:

  1. Fear for the safety of personal assets
  2. The rise of ‘politics in command’ and the abandonment of economic development as the basis of national policy
  3. The reemergence of class struggle
  4. Shutting China off from the world once more, getting into a stalemate with the United States (and the West more generally), yet warmer ties with North Korea and other ‘evil regimes’
  5. Excessive foreign aid, leading Chinese to have to tighten their own belts
  6. Increased repression and thought reform of intellectuals
  7. Becoming trapped in a new armed race, war, and new cold war
  8. The end of opening up and reform and the comprehensive return of totalitarian politics

A sample translation by China Change of some of these fears follows.

  1. Asset Dread. Can the wealth accumulated over decades, no matter how much it is, be guaranteed safe? Can one’s current livelihood be maintained? Will the property rights proclaimed in the law be guaranteed? Or will it be that because you wrong some individual who really holds power (including the director of the Village Committee), your company is driven to bankruptcy and your family is out on the street? This and so many other questions have, in the last few years, with the passage of time become far more indeterminate, and people up and down the line are in a state of constant panic. The first ones under attack are those who already gathered their treasure during the tidal wave of reform and opening up; and the response of the rich is mass emigration…
  1. Class Struggle Once More. The official media and managers of ideology once again raising class struggle in recent years has everyone panicked. The direction of the current administration over these years has led people to doubt as to whether we’re going to see yet another round of Stalin-Maoist class struggle campaigns… In the first place, writing protections of private property and human rights into the constitution, accompanied with the custom of abdication of Party rulership after two terms, created hopes that China was slowly and gradually heading in the direction of a normal country, meaning that we no longer need to deploy the ‘struggle’ rhetoric — but the actions of the last few years seem to be going in completely the opposite direction, and everyone is naturally scared witless.
  1. The Totalitarian Revival. Though this phrase ‘reform’ has already been besmirched to some degree, and in the end tyrannical governance continues while hiding under its name, in the discourse of contemporary China, locating ourselves in the midst of a yet-to-be-completed grand transformation, with just one final push needed, is still better and more stable than a regression into volatile revolution and extremist leftist politics. Reform spinning its wheels, and perhaps even going backwards rather than forward, has already been going on longer than just these last few years, extending far beyond one term of office. Given this tendency, whether or not ‘reform and opening up’ has reached its end and totalitarianism will return is yet unknown; but at this very moment the entire Chinese people have no greater fear…

The remainder of the essay is dedicated to Xu’s eight hopes — all of them going to the heart of the CCP’s system of rule and control:

  1. Stop wasting money abroad
  2. Stop wasting money on ‘sportsground diplomacy’
  3. Abolish the privilege system for retired high-ranking cadres
  4. Abolish the system of Special Needs Provisioning (the enclosed system of food and other supplies for Party officials)
  5. Legislation forcing disclosure of official assets
  6. Immediately put a stop to the cult of personality around Xi Jinping
  7. A return to term limits on the post of state chairman
  8. Overturn the political verdict on June 4

Geremie Barmé provided translations of items three, four, and six on China Heritage, which are reproduced below.

  1. The Party Nobility: Elite privileges for retired high-level cadres should be eliminated. The system of the present ‘dynasty’ 國朝 allows for the state to provide inclusive retirement-to-grave care for high-level cadres according to a standard that is far and away above that allowed to the average citizen. These cadres retain the privileges they enjoyed during their careers, including health care and access to luxury resorts for rest and holidays. Everyone is aware of the extraordinary burden and financial cost this places on the people; the details are never released for fear of sparking public outrage. This system continues the kinds of prerogative given to the Imperial Zhu Family Lineage during the Ming dynasty [founded by Zhu Yuanzhang in 1368CE] and the emoluments permitted to the families of the Eight Banners [exclusive Manchu military and administrative groups that contributed to the founding and rule of the Qing dynasty in 1644; the privileges continued until the end of the dynasty in January 1912]. This is not merely a betrayal of the self-advertised ‘revolutionary spirit’ [of the Communist Party], it is also in breach of modern standards of civic life. What’s all that talk of ‘the remnants of feudalism’? This is a perfect example of it! People are outraged but powerless to do anything about it; it is one of the main reasons people hold the system itself in utter contempt. On one side of the hospital, Commoners face the challenge of gaining admission for treatment, while everyone knows grand suites are reserved on the other side for the care of high-level cadres. People despise you for it. Every iota of this bottled up anger may, at some unexpected moment, explode with thunderous fury.
  1. Special Needs Provisioning: Eliminate the system of Special Needs Provisioning. Starting in Yan’an some seventy years ago, this system continued unimpeded even during times of mass famine and deprivation. It continues even now as the Countless Masses are ever increasingly concerned about [the quality of and access to] dairy products for their babies and the hygiene and safety of their everyday foodstuffs. The Special Needs Provisioning system allows the high-level Party nobility access to a vast range of speciality products beyond the dreams of the average person. Apart from a few totalitarian polities, there is no other country that does this like China. The luxury afforded these people is only outdone by the shamelessness of their indulgence. Of course, inequalities exist in all societies and disparities in ability and wealth are natural, but they are a result not due to the fact that the ideal playing field imagined by our citizens does not include a level starting point; that doesn’t even take into account the outrage of allowing a small group of Party grandees to be continuously supplied from the coffers of the state. As long as this system and ‘No 34’ [originally ‘Number 34 Provisions Store’ in Beijing, a restricted-access shop established as deprivations created by the socialist planned economy became more acute and Party privileges more jealously guarded; the term later came to indicate regulations covering special access to necessities and luxury goods for the nomenklatura] remain unchecked, real food safety in China will never be realised; no side will really be assured of its long-term security.
  1. The New Personality Cult: An emergency brake must be applied to the Personality Cult. Who would have thought that, after four decades of the Open Door and Reform, our Sacred Land would once more witness a Personality Cult? The Party media is going to great lengths to create a new Idol, and in the process it is offering up to the world an image of China as Modern Totalitarianism. Portraits of the Leader are hoisted on high throughout the Land, as though possessed of some Spiritual Mana. This only adds to all the absurdity. And then, on top of that, the speeches of That Official, formerly things that were merely to be recorded by secretaries in a pro forma bureaucratic manner, are now carefully collected in finely bound editions, printed in vast quantities and handed out free throughout the world. The profligate waste of paper alone is enough to make you shake your head in disbelief. All of this reflects the low IQ of the Concerned Official and his craving for fame. More importantly, we need to ask how a vast country like China, one that was previously so ruinously served by a Personality Cult, simply has no resistance to this new cult, and this includes those droves of ‘Theoreticians’ and ‘Researchers’. In fact, they are outdoing themselves with their sickeningly slavish behaviour. It’s as though hundreds of millions of Chinese are oblivious; people tolerate the New Cult and allow it unfettered freedom; they are powerless in the face of all those arse-kissing bureaucrats [literally “those who would lick carbuncles and suck abscesses” as rendered by Donald Clarke]. It goes to show that China’s Enlightenment is far from over. Every generation must champion rationalism in public affairs painstakingly making a way to the future. Moreover, the New Cult is evidence that China faces a long struggle before it can claim to be a modern, secular and rational nation-state.

 

It’s clear that Xu has little faith in Xi Jinping. “You are touted for being a can-do man,” he wrote. “We’d be very happy if you could do one of the eight. If you could do three or four, we’d be convinced of your ability. If you do all of them, well then, the whole world will rejoice.”

Speech is dangerous, and Professor Xu Zhangrun knows it. But he seems to be at a point where if he doesn’t let out his thoughts, they’ll turn into kidney stones and kill him. He ended the essay with great relief: “I’m done talking; I leave my own life and death to destiny, the rise and fall of the nation to Heaven.”

That’s how disproportionately significant a matter it is for a Chinese intellectual to speak his mind in 2018 — a circumstance we find breathtaking.

Xu is currently on an academic tour in Japan, according to a news source. There is no word yet on what awaits him when he returns to China.

 

 

 


Related:

As China’s Woes Mount, Xi Jinping Faces Rare Rebuke at Home, the New York Times, July 31, 2018.