radical development. I am sure that no one, including any of the Chinese leaders, is able to predict the future of China. But Fingleton was right in pointing out that all previous predictions of Chinese economic system’s demise have proved premature.
The second article is a six-page piece in The Economist (March 1–7, 2014), entitled “What’s gone wrong with democracy and how to revive it.” The article discusses how democracy in different parts of the world is going through a difficult time today. Democracy is in retreat, indeed. Outside the West, democracy often advances only to collapse. “Where autocrats have been driven out of office, their opponents have mostly failed to create viable democratic regimes. Even in established democracies in the West, flaws in the system have become worryingly visible and disillusion when politics is rife” (pp. 47–48). “Democracy has too often become associated with debt and dysfunction at home and overreach abroad” (p. 48). The argument that democracy is in crisis is widespread today. But what makes this article relevant to my discussion are the two following reasons that The Economist believes are behind today’s democratic crisis.
According to the magazine, the two main reasons are the financial crisis of the period 2007–2008 and the rise of China. The financial crisis exposed fundamental weaknesses in the West’s economic and political systems, thereby undermining the self-confidence that had been one of their assets. Many people became disillusioned with the workings of their economic and political systems — particularly when governments bailed out bankers with taxpayers’ money and then stood by impotently as financiers continued to pay themselves huge bonuses.
The 2008 financial crisis took place in the heart of Western democracies. It is not difficult to understand how this crisis has affected democracy. But why single out China? China is not a part of the democratic world. How did China affect democracy?
According to The Economist, the reason is simple; it is due to China’s economic rise. Here is an extract that I wish to quote at length here:
“The Chinese Communist Party has broken the democratic world’s monopoly on economic progress. China has been doubling living standards roughly every decade for the past 30 years. The Chinese elite argue that their model — tight control by the Communist Party, coupled with a relentless effort to recruit talented people into its upper ranks — is more efficient than democracy and less susceptible to gridlock. The political leadership changes every decade or so, and there is a constant supply of fresh talent as party cadres are promoted based on their ability to hit targets. China’s critics rightly condemn the government for controlling public opinion in all sorts of ways, from imprisoning dissidents to censoring Internet discussions. Yet, the regime’s obsession with control paradoxically means it pays close attention to public opinion. At the same time, China’s leaders have been able to tackle some of the big problems of state-building that can take decades to deal with in a democracy. In just two years, China has extended pension coverage to an extra 240 m rural dwellers, for example — far more than the total number of people covered by America’s public-pension system. … China offers an alternative model. Countries from Africa (Rwanda) to the Middle East (Dubai) to South-East Asia (Vietnam) are taking this advice seriously” (p. 49).
Moreover, I quote “as China’s influence has grown, America and Europe have lost their appeal as role models and their appetite for spreading democracy… Why should developing countries regard democracy as the ideal form of government when the American government cannot even pass a budget, let alone plan for the future? Why should autocrats listen to lectures on democracy from Europe, when the euro-elite sacks elected leaders who get in the way of fiscal orthodoxy?” (p. 51).
Therefore, the magazine’s conclusion is “China poses a far more credible threat than communism ever did to the idea that democracy is inherently superior and will eventually prevail.”
After reading these two thoughtful pieces, an immediate question came to my mind: despite such radical changes in the past three decades, why is China’s political system still there? According to Marx, economic changes must lead to political changes. If one believes Marx, then one must give an answer to this question.
Related to this question, we can also ask many other questions: How has the Chinese political system been able to survive? What is the nature of the Chinese political system? How does it function? How does it differentiate itself from other political systems? Is it in serious conflict with democracies in the West?
I have been thinking about these questions at least for two decades: “When will the Chinese Communist Party (CCP) collapse?” This was the question that was most frequently asked in the aftermath of the crackdown on the pro-democracy movement in 1989. I went to Princeton University for my Ph.D. program in 1990. Princeton gathered a group of Chinese dissidents who fled from China after the crackdown. There were frequent debates on the future of China. As a part of the pro-democracy movement, I was interested in their debates. There was a strong consensus among them that the CCP would not be able to live long, and it would soon collapse. The reason was simple: it cracked down on the pro-democracy movement and believed that democratization could be avoided.
Today, almost a quarter of a century after the pro-democracy movement, this continues to be the standard question people ask when they look at China. The rise of the Jasmine Revolution and the collapse of the regimes in the Middle East and North Africa in recent years rendered many to believe that the days of the CCP are numbered, and it could collapse in years, months, and even days. In recent years, the Bo Xilai affair, which was seen as a bitter power struggle within the regime, has reinforced this pessimism.
However, such a perception is far from the reality. The CCP continues to survive and expand. Today, it has become the largest political party in the world, with more than 80 million members. While it is legitimate to ask whether the CCP will collapse given the fact that the party is facing mounting problems, it is more important and meaningful to ask why it has survived and developed.
To understand the survivability of the CCP, one has to understand the CCP’s capability to learn, to adapt and to change. In other words, one has to look into how the CCP has innovated itself according to changing environments.
In this discussion, I want to focus on the political innovations. But before I get into that, I would like to dwell a little on China’s economic progress first. After three decades of what the late Deng Xiaoping called “socialism with poverty,” the CCP has finally understood, absorbed and is implementing the seven pillars of Western wisdom which have enabled the country to pursue wealth and power, including free market economies, science and technology, a culture of pragmatism and education. No one will deny that these factors are behind China’s remarkable record of economic growth. According to IMF statistics, in purchasing power parity (PPP) terms, China’s share of global GDP was less than 10% of that of the US (2.2% versus 25%). Despite this large starting gap, The Economist magazine has projected that China’s GDP will overtake the US by 2019. China’s GDP will then be $21.05 trillion while the US’s will be $20.96 trillion.
In recent years, policy makers and policy researchers inside China had debated if China will fall into the so-called “middle-income trap,” which essentially refers to an economic phenomenon where a country which attains a certain income level (due to given advantages) will become stuck at that level. The middle-income trap occurs when a country’s growth plateaus and eventually stagnates after reaching middle-income levels. The problem usually arises when developing economies find themselves stuck in the middle, with rising wages and declining cost competitiveness, unable to compete with advanced economies in high-skill innovations, or with low-income, low-wage economies in the cheap production of manufactured goods.
I am not going to discuss whether China will fall into this trap. My point is that the Chinese leadership is acutely aware of this possibility. China has shown many signs of this trap. But with this keen level of awareness, China has started to search for various strategies
