World Social Forum, Tunis, March 2015

Resist, Build, Fight to win

Par Mis en ligne le 05 mars 2015

Intercoll

Resist, Build, Fight

Intercoll is a col­lec­tive com­po­sed of social move­ments, acti­vists and intel­lec­tuals invol­ved in daily and concrete struggles, wor­king to reno­vate cri­ti­cal thin­king on the nega­tive impact of global capi­ta­lism as well as deve­lo­ping eco­no­mic, social, poli­ti­cal and eco­lo­gi­cal alter­na­tives that allow popu­lar move­ments to ‘reinvent’ the world. Out of these tre­men­dous and dis­per­sed efforts, a new col­lec­tive intel­lec­tual emerges along the lines sug­ges­ted in ear­lier times by Gramsci and Bourdieu.

In the meanw­hile, power­ful net­works expand204ing their power are restruc­tu­ring through a global class war against the 99 % by all means inclu­ding the ‘end­less war’ ini­tia­ted by US impe­ria­lism and its subal­tern allies of the G7. Imperialism is also reen­gi­nee­ring its stra­te­gies to confront popu­lar upri­sings as well as ‘emer­ging’ coun­tries such as China and Brazil who are beco­ming major powers. In paral­lel, Europe is stag­na­ting although people are rising up through new forms of popu­lar conver­gences. Everywhere, elites are inca­pable of mana­ging the mul­tiples crises and moreo­ver, new chal­lenges like cli­mate changes, demo­cra­tic demands in the Arab world and elsew­here, while confron­ting peoples in their scramble for resources, par­ti­cu­larly in Africa, South America and Asia.

Nonetheless, popu­lar move­ments are figh­ting back, time and again by « inter­na­tio­na­li­zing the struggle » as our com­rades from Via Campesina say. Successes and advances are plenty, but also defeats and roll-backs. The gigan­tic battle of ideas goes on, as the neo­li­be­ral doxa conti­nues to domi­nate.

Intercoll locates itself in that context. The idea is not to have “ano­ther pro­ject” or to dupli­cate what is being done other­wise. The idea is through a cri­ti­cal usage of the vast reper­toire left to us by pre­cedent popu­lar move­ments and social struggles to deepen our unders­tan­ding of inter­na­tio­na­lism, to capi­ta­lize on the inter­sec­tions and dia­logues ini­tia­ted by the World Social Forum and the­re­fore to nou­rish the rich tapes­try of struggles and move­ments.

For fur­ther infor­ma­tion

voices@​voicescollective.​net

http://​www​.inter​coll​.net/​b​d​f​/​f​r​/​p​a​g​e​s​/​p​a​g​e​-​1​.html

The Intercoll pro­gram in the World Social Forum has been made pos­sible by the par­ti­ci­pa­tion and sup­port of seve­ral groups inclu­ding CEDETIM (Paris), Les Nouveaux Cahiers du socia­lisme, Collectif FSM20016 et Alternatives (Montreal) and the Hao Ran Foundation (Taipei). 

Alter China

(March 27)

Sixty years after revo­lu­tion, China has become a dri­ving force in today’s world of eco­no­mic power and at the same time, an intense site of social confron­ta­tions. Many debates are criss-cros­sing the society, the State, the Communist Party, as well as local net­works where a typi­cally Chinese ‘alter-glo­ba­li­za­tion’ is taking shape. Although lar­gely unk­nown and under-repor­ted, this move­ment is gro­wing through local expe­ri­men­ta­tions and resis­tances, and through a power­ful battle of the ideas. At the same time, China is joi­ning the world whe­reas soli­da­rity and prac­ti­cal exchanges are gro­wing along the lines of soli­da­rity and jus­tice.

Workshops

The big China debate Superpower or work­shop of the world, what is really defi­ning China ? What is « market socia­lism » ?
Struggles Working class struggles, rebel­lions pea­sants, urban social move­ments, envi­ron­men­tal mobi­li­za­tions : what is hapen­ning ? Who’s who ?
China and the world What is China doing in the Global south ? What is at stake with the loo­king confron­ta­tion with the USA in Asia-Pacific ? What about China’s pre­sence in Africa ?

Table of Contents

  • The Chinese Dilemma, Samir Amin
  • China rising, Dorothy Grace Guerrerro
  • China’s Rise Stalled?, Hung Ho-fung
  • Changing Models of China’s Policy Agenda Setting, Shaoguang Wang
  • China’s Environmental Crisis. Interview with Dale Wen

The Chinese Dilemma

Samir Amin[1]

The debates concer­ning the present and future of China—an “emer­ging” power—always leave me uncon­vin­ced. Some argue that China has chosen, once and for all, the “capi­ta­list road” and intends even to acce­le­rate its inte­gra­tion into contem­po­rary capi­ta­list glo­ba­li­za­tion. They are quite plea­sed with this and hope only that this “return to nor­ma­lity” (capi­ta­lism being the “end of his­tory”) is accom­pa­nied by deve­lop­ment towards Western-style demo­cracy (mul­tiple par­ties, elec­tions, human rights). They believe—or need to believe—in the pos­si­bi­lity that China shall by this means “catch up” in terms of per capita income to the opu­lent socie­ties of the West, even if gra­dually, which I do not believe is pos­sible. The Chinese right shares this point of view. Others deplore this in the name of the values of a “betrayed socia­lism.” Some asso­ciate them­selves with the domi­nant expres­sions of the prac­tice of China bashing in the West. Still others—those in power in Beijing—describe the chosen path as “Chinese-style socia­lism,” without being more pre­cise. However, one can dis­cern its cha­rac­te­ris­tics by rea­ding offi­cial texts clo­sely, par­ti­cu­larly the Five-Year Plans, which are pre­cise and taken quite seriously. In fact the ques­tion, “Is China capi­ta­list or socia­list?” is badly posed, too gene­ral and abs­tract for any res­ponse to make sense in terms of this abso­lute alter­na­tive. In fact, China has actually been fol­lo­wing an ori­gi­nal path since 1950, and per­haps even since the Taiping Revolution in the nine­teenth cen­tury.

Chinese State Capitalism

The first label that comes to mind to des­cribe Chinese rea­lity is state capi­ta­lism. Very well, but this label remains vague and super­fi­cial so long as the spe­ci­fic content is not ana­ly­zed. It is indeed capi­ta­lism in the sense that the rela­tion to which the wor­kers are sub­jec­ted by the autho­ri­ties who orga­nize pro­duc­tion is simi­lar to the one that cha­rac­te­rizes capi­ta­lism : sub­mis­sive and alie­na­ted labor, extrac­tion of sur­plus labor. Brutal forms of extreme exploi­ta­tion of wor­kers exist in China, e.g., in the coal mines or in the furious pace of the work­shops that employ women. This is scan­da­lous for a coun­try that claims to want to move for­ward on the road to socia­lism. Nevertheless, the esta­blish­ment of a state capi­ta­list regime is una­voi­dable, and will remain so eve­ryw­here. The deve­lo­ped capi­ta­list coun­tries them­selves will not be able to enter a socia­list path (which is not on the visible agenda today) without pas­sing through this first stage. It is the pre­li­mi­nary phase in the poten­tial com­mit­ment of any society to libe­ra­ting itself from his­to­ri­cal capi­ta­lism on the long route to socialism/​communism. Socialization and reor­ga­ni­za­tion of the eco­no­mic system at all levels, from the firm (the ele­men­tary unit) to the nation and the world, require a leng­thy struggle during an his­to­ri­cal time period that cannot be fore­shor­te­ned.

Chinese state capi­ta­lism was built to achieve three objec­tives :

  • Construct an inte­gra­ted and sove­reign modern indus­trial system ;
  • Manage the rela­tion of this system with rural petty pro­duc­tion ;
  • Control China’s inte­gra­tion into the world system, domi­na­ted by the gene­ra­li­zed mono­po­lies of the impe­ria­list triad (United States, Europe, Japan).

The pur­suit of these three prio­rity objec­tives is una­voi­dable. As a result it per­mits a pos­sible advance on the long route to socia­lism, but at the same time it streng­thens ten­den­cies to aban­don that pos­si­bi­lity in favor of pur­suing capi­ta­list deve­lop­ment pure and simple. It must be accep­ted that this conflict is both inevi­table and always present. The ques­tion then is this : Do China’s concrete choices favor one of the two paths ?

Chinese state capi­ta­lism requi­red, in its first phase (1954–1980), the natio­na­li­za­tion of all com­pa­nies (com­bi­ned with the natio­na­li­za­tion of agri­cul­tu­ral lands), both large and small alike. Then fol­lo­wed an ope­ning to pri­vate enter­prise, natio­nal and/​or foreign, and libe­ra­li­zed rural and urban petty pro­duc­tion (small com­pa­nies, trade, ser­vices). However, large basic indus­tries and the credit system esta­bli­shed during the Maoist period were not dena­tio­na­li­zed, even if the orga­ni­za­tio­nal forms of their inte­gra­tion into a “market” eco­nomy were modi­fied. This choice went hand in hand with the esta­blish­ment of means of control over pri­vate ini­tia­tive and poten­tial part­ner­ship with foreign capi­tal. It remains to be seen to what extent these means ful­fill their assi­gned func­tions or, on the contrary, if they have not become empty shells, col­lu­sion with pri­vate capi­tal (through “cor­rup­tion” of mana­ge­ment) having gained the upper hand.

Still, what Chinese state capi­ta­lism has achie­ved bet­ween 1950 and 2012 is quite simply ama­zing. It has, in fact, suc­cee­ded in buil­ding a sove­reign and inte­gra­ted modern pro­duc­tive system to the scale of this gigan­tic coun­try, which can only be com­pa­red with that of the United States. It has suc­cee­ded in lea­ving behind the tight tech­no­lo­gi­cal depen­dence of its ori­gins (impor­ta­tion of Soviet, then Western models) through the deve­lop­ment of its own capa­city to pro­duce tech­no­lo­gi­cal inven­tions. However, it has not (yet?) begun the reor­ga­ni­za­tion of labor from the pers­pec­tive of socia­li­za­tion of eco­no­mic mana­ge­ment. The Plan—and not the “opening”—has remai­ned the cen­tral means for imple­men­ting this sys­te­ma­tic construc­tion.

In the Maoist phase of this deve­lop­ment plan­ning, the Plan remai­ned impe­ra­tive in all details : nature and loca­tion of new esta­blish­ments, pro­duc­tion objec­tives, and prices. At that stage, no rea­so­nable alter­na­tive was pos­sible. I will men­tion here, without pur­suing it fur­ther, the inter­es­ting debate about the nature of the law of value that under­pin­ned plan­ning in this period. The very success—and not the failure—of this first phase requi­red an alte­ra­tion of the means for pur­suing an acce­le­ra­ted deve­lop­ment pro­ject. The “ope­ning” to pri­vate initiative—beginning in 1980, but above all from 1990—was neces­sary in order to avoid the stag­na­tion that was fatal to the USSR. Despite the fact that this ope­ning coin­ci­ded with the glo­ba­li­zed triumph of neo-liberalism—with all the nega­tive effects of this coin­ci­dence, to which I shall return—the choice of a “socia­lism of the market,” or better yet, a “socia­lism with the market,” as fun­da­men­tal for this second phase of acce­le­ra­ted deve­lop­ment is lar­gely jus­ti­fied, in my opi­nion.

The results of this choice are, once again, simply ama­zing. In a few decades, China has built a pro­duc­tive, indus­trial urba­ni­za­tion that brings toge­ther 600 mil­lion human beings, two-thirds of whom were urba­ni­zed over the last two decades (almost equal to Europe’s popu­la­tion!). This is due to the Plan and not to the market. China now has a truly sove­reign pro­duc­tive system. No other coun­try in the South (except for Korea and Taiwan) has suc­cee­ded in doing this. In India and Brazil there are only a few dis­pa­rate ele­ments of a sove­reign pro­ject of the same kind, nothing more.

The methods for desi­gning and imple­men­ting the Plan have been trans­for­med in these new condi­tions. The Plan remains impe­ra­tive for the huge infra­struc­ture invest­ments requi­red by the pro­ject : to house 400 mil­lion new urban inha­bi­tants in ade­quate condi­tions, and to build an unpa­ral­le­led net­work of high­ways, roads, rail­ways, dams, and elec­tric power plants ; to open up all or almost all of the Chinese coun­try­side ; and to trans­fer the center of gra­vity of deve­lop­ment from the coas­tal regions to the conti­nen­tal west. The Plan also remains imperative—at least in part—for the objec­tives and finan­cial resources of publi­cly owned enter­prises (state, pro­vinces, muni­ci­pa­li­ties). As for the rest, it points to pos­sible and pro­bable objec­tives for the expan­sion of small urban com­mo­dity pro­duc­tion as well as indus­trial and other pri­vate acti­vi­ties. These objec­tives are taken seriously and the poli­ti­cal-eco­no­mic resources requi­red for their rea­li­za­tion are spe­ci­fied. On the whole, the results are not too dif­ferent from the “plan­ned” pre­dic­tions.

Chinese state capi­ta­lism has inte­gra­ted into its deve­lop­ment pro­ject visible social (I am not saying “socia­list”) dimen­sions. These objec­tives were already present in the Maoist era : era­di­ca­tion of illi­te­racy, basic health care for eve­ryone, etc. In the first part of the post-Maoist phase (the 1990s), the ten­dency was undoub­tedly to neglect the pur­suit of these efforts. However, it should be noted that the social dimen­sion of the pro­ject has since won back its place and, in res­ponse to active and power­ful social move­ments, is expec­ted to make more head­way. The new urba­ni­za­tion has no paral­lel in any other coun­try of the South. There are cer­tainly “chic” quar­ters and others that are not at all opu­lent ; but there are no slums, which have conti­nued to expand eve­ryw­here else in the cities of the third world.

China and Capitalist Globalization

China ente­red glo­ba­li­za­tion in the 1990s by the path of the acce­le­ra­ted deve­lop­ment of manu­fac­tu­red exports pos­sible for its pro­duc­tive system, giving first prio­rity to exports whose rates of growth then sur­pas­sed those of the growth in GDP. The triumph of neo­li­be­ra­lism favo­red the suc­cess of this choice for fif­teen years (from 1990 to 2005). The pur­suit of this choice is ques­tio­nable not only because of its poli­ti­cal and social effects, but also because it is threa­te­ned by the implo­sion of neo­li­be­ral glo­ba­li­zed capi­ta­lism, which began in 2007. The Chinese govern­ment appears to be aware of this and very early began to attempt a cor­rec­tion by giving grea­ter impor­tance to the inter­nal market and to deve­lop­ment of wes­tern China.

To say, as one hears ad nau­seam, that China’s suc­cess should be attri­bu­ted to the aban­don­ment of Maoism (whose “fai­lure” was obvious), the ope­ning to the out­side, and the entry of foreign capi­tal is quite simply idio­tic. The Maoist construc­tion put in place the foun­da­tions without which the ope­ning would not have achie­ved its well-known suc­cess. A com­pa­ri­son with India, which has not made a com­pa­rable revo­lu­tion, demons­trates this. To say that China’s suc­cess is mainly (even “com­ple­tely”) attri­bu­table to the ini­tia­tives of foreign capi­tal is no less idio­tic. It is not mul­ti­na­tio­nal capi­tal that built the Chinese indus­trial system and achie­ved the objec­tives of urba­ni­za­tion and the construc­tion of infra­struc­ture. The suc­cess is 90 percent attri­bu­table to the sove­reign Chinese pro­ject. Certainly, the ope­ning to foreign capi­tal has ful­filled useful func­tions : it has increa­sed the import of modern tech­no­lo­gies. However, because of its part­ner­ship methods, China absor­bed these tech­no­lo­gies and has now mas­te­red their deve­lop­ment. There is nothing simi­lar elsew­here, even in India or Brazil, a for­tiori in Thailand, Malaysia, South Africa, and other places.

China’s inte­gra­tion into glo­ba­li­za­tion has remai­ned, moreo­ver, par­tial and control­led (or at least control­lable, if one wants to put it that way). China has remai­ned out­side of finan­cial glo­ba­li­za­tion. Its ban­king system is com­ple­tely natio­nal and focu­sed on the country’s inter­nal credit market. Management of the yuan is still a matter for China’s sove­reign deci­sion making. The yuan is not sub­ject to the vaga­ries of the flexible exchanges that finan­cial glo­ba­li­za­tion imposes. Beijing can say to Washington, “the yuan is our money and your pro­blem,” just like Washington said to the Europeans in 1971, “the dollar is our money and your pro­blem.” Moreover, China retains a large reserve for deploy­ment in its public credit system. The public debt is negli­gible com­pa­red with the rates of indeb­ted­ness (consi­de­red into­le­rable) in the United States, Europe, Japan, and many of the coun­tries in the South. China can thus increase the expan­sion of its public expen­di­tures without serious danger of infla­tion.

The attrac­tion of foreign capi­tal to China, from which it has bene­fit­ted, is not behind the suc­cess of its pro­ject. On the contrary, it is the suc­cess of the pro­ject that has made invest­ment in China attrac­tive for Western transnationals.The coun­tries of the South that opened their doors much wider than China and uncon­di­tio­nally accep­ted their sub­mis­sion to finan­cial glo­ba­li­za­tion have not become attrac­tive to the same degree. Transnational capi­tal is not attrac­ted to China to pillage the natu­ral resources of the coun­try, nor, without any trans­fer of tech­no­logy, to out­source and bene­fit from low wages for labor ; nor to seize the bene­fits from trai­ning and inte­gra­tion of off­sho­red units unre­la­ted to nonexistent natio­nal pro­duc­tive sys­tems, as in Morocco and Tunisia ; nor even to carry out a finan­cial raid and allow the impe­ria­list banks to dis­pos­sess the natio­nal savings, as was the case in Mexico, Argentina, and Southeast Asia. In China, by contrast, foreign invest­ments can cer­tainly bene­fit from low wages and make good pro­fits, on the condi­tion that their plans fit into China’s and allow tech­no­logy trans­fer. In sum, these are “normal” pro­fits, but more can be made if col­lu­sion with Chinese autho­ri­ties per­mits !

Emerging Power

No one doubts that China is an emer­ging power. One cur­rent idea is that China is only attemp­ting to reco­ver the place it had occu­pied for cen­tu­ries and lost only in the nine­teenth cen­tury. However, this idea—certainly cor­rect, and flat­te­ring, moreover—does not help us much in unders­tan­ding the nature of this emer­gence and its real pros­pects in the contem­po­rary world. Incidentally, those who pro­pa­gate this gene­ral and vague idea have no inter­est in consi­de­ring whe­ther China will emerge by ral­lying to the gene­ral prin­ciples of capi­ta­lism (which they think is pro­ba­bly neces­sary) or whe­ther it will take seriously its pro­ject of “socia­lism with Chinese cha­rac­te­ris­tics.” For my part, I argue that if China is indeed an emer­ging power, this is pre­ci­sely because it has not chosen the capi­ta­list path of deve­lop­ment pure and simple ; and that, as a conse­quence, if it deci­ded to follow that capi­ta­list path, the pro­ject of emer­gence itself would be in serious danger of fai­ling.

The thesis that I sup­port implies rejec­ting the idea that peoples cannot leap over the neces­sary sequence of stages and that China must go through a capi­ta­list deve­lop­ment before the ques­tion of its pos­sible socia­list future is consi­de­red. The debate on this ques­tion bet­ween the dif­ferent cur­rents of his­to­ri­cal Marxism was never conclu­ded. Marx remai­ned hesi­tant on this ques­tion. We know that right after the first European attacks (the Opium Wars), he wrote : the next time that you send your armies to China they will be wel­co­med by a banner, “Attention, you are at the fron­tiers of the bour­geois Republic of China.” This is a magni­ficent intui­tion and shows confi­dence in the capa­city of the Chinese people to respond to the chal­lenge, but at the same time an error because in fact the banner read : “You are at the fron­tiers of the People’s Republic of China.” Yet we know that, concer­ning Russia, Marx did not reject the idea of skip­ping the capi­ta­list stage (see his cor­res­pon­dence with Vera Zasulich). Today, one might believe that the first Marx was right and that China is indeed on the route to capi­ta­list deve­lop­ment.

But Mao understood—better than Lenin—that the capi­ta­list path would lead to nothing and that the resur­rec­tion of China could only be the work of com­mu­nists. The Qing Emperors at the end of the nine­teenth cen­tury, fol­lo­wed by Sun Yat Sen and the Guomindang, had already plan­ned a Chinese resur­rec­tion in res­ponse to the chal­lenge from the West. However, they ima­gi­ned no other way than that of capi­ta­lism and did not have the intel­lec­tual whe­re­wi­thal to unders­tand what capi­ta­lism really is and why this path was closed to China, and to all the per­iphe­ries of the world capi­ta­list system for that matter. Mao, an inde­pendent Marxist spirit, unders­tood this. More than that, Mao unders­tood that this battle was not won in advance—by the 1949 victory—and that the conflict bet­ween com­mit­ment to the long route to socia­lism, the condi­tion for China’s renais­sance, and return to the capi­ta­list fold would occupy the entire visible future.

Personally, I have always shared Mao’s ana­ly­sis and I shall return to this sub­ject in some of my thoughts concer­ning the role of the Taiping Revolution (which I consi­der to be the dis­tant origin of Maoism), the 1911 revo­lu­tion in China, and other revo­lu­tions in the South at the begin­ning of the twen­tieth cen­tury, the debates at the begin­ning of the Bandung period and the ana­ly­sis of the impasses in which the so-called emergent coun­tries of the South com­mit­ted to the capi­ta­list path are stuck. All these consi­de­ra­tions are corol­la­ries of my cen­tral thesis concer­ning the pola­ri­za­tion (i.e., construc­tion of the center/​periphery contrast) imma­nent to the world deve­lop­ment of his­to­ri­cal capi­ta­lism. This pola­ri­za­tion eli­mi­nates the pos­si­bi­lity for a coun­try from the per­iphery to “catch up” within the context of capi­ta­lism. We must draw the conclu­sion : if “cat­ching up” with the opu­lent coun­tries is impos­sible, some­thing else must be done—it is called fol­lo­wing the socia­list path.

China has not fol­lo­wed a par­ti­cu­lar path just since 1980, but since 1950, although this path has passed through phases that are dif­ferent in many res­pects. China has deve­lo­ped a coherent, sove­reign pro­ject that is appro­priate for its own needs. This is cer­tainly not capi­ta­lism, whose logic requires that agri­cul­tu­ral land be trea­ted as a com­mo­dity. This pro­ject remains sove­reign inso­far as China remains out­side of contem­po­rary finan­cial glo­ba­li­za­tion.

The fact that the Chinese pro­ject is not capi­ta­list does not mean that it “is” socia­list, only that it makes it pos­sible to advance on the long road to socia­lism. Nevertheless, it is also still threa­te­ned with a drift that moves it off that road and ends up with a return, pure and simple, to capi­ta­lism.

China’s suc­cess­ful emer­gence is com­ple­tely the result of this sove­reign pro­ject. In this sense, China is the only authen­ti­cally emergent coun­try (along with Korea and Taiwan, about which we will say more later). None of the many other coun­tries to which the World Bank has awar­ded a cer­ti­fi­cate of emer­gence is really emergent because none of these coun­tries is per­sis­tently pur­suing a coherent sove­reign pro­ject. All sub­scribe to the fun­da­men­tal prin­ciples of capi­ta­lism pure and simple, even in poten­tial sec­tors of their state capi­ta­lism. All have accep­ted sub­mis­sion to contem­po­rary glo­ba­li­za­tion in all its dimen­sions, inclu­ding finan­cial. Russia and India are par­tial excep­tions to this last point, but not Brazil, South Africa, and others. Sometimes there are pieces of a “natio­nal indus­try policy,” but nothing com­pa­rable with the sys­te­ma­tic Chinese pro­ject of construc­ting a com­plete, inte­gra­ted, and sove­reign indus­trial system (nota­bly in the area of tech­no­lo­gi­cal exper­tise).

For these rea­sons all these other coun­tries, too qui­ckly cha­rac­te­ri­zed as emergent, remain vul­ne­rable in varying degrees, but always much more than China.For all these rea­sons, the appea­rances of emergence—respectable rates of growth, capa­ci­ties to export manu­fac­tu­red products—are always linked with the pro­cesses of pau­pe­ri­za­tion that impact the majo­rity of their popu­la­tions (par­ti­cu­larly the pea­san­try), which is not the case with China. Certainly the growth of inequa­lity is obvious eve­ryw­here, inclu­ding China ; but this obser­va­tion remains super­fi­cial and decep­tive. Inequality in the dis­tri­bu­tion of bene­fits from a model of growth that never­the­less excludes no one (and is even accom­pa­nied with a reduc­tion in pockets of poverty—this is the case in China) is one thing ; the inequa­lity connec­ted with a growth that bene­fits only a mino­rity (from 5 percent to 30 percent of the popu­la­tion, depen­ding on the case) while the fate of the others remains des­pe­rate is ano­ther thing. The prac­ti­tio­ners of China bashing are unaware—or pre­tend to be unaware—of this deci­sive dif­fe­rence. The inequa­lity that is appa­rent from the exis­tence of quar­ters with luxu­rious villas, on the one hand, and quar­ters with com­for­table hou­sing for the middle and wor­king classes, on the other, is not the same as the inequa­lity appa­rent from the jux­ta­po­si­tion of weal­thy quar­ters, middle-class hou­sing, and slums for the majo­rity.

The Gini coef­fi­cients are valuable for mea­su­ring the changes from one year to ano­ther in a system with a fixed struc­ture. However, in inter­na­tio­nal com­pa­ri­sons bet­ween sys­tems with dif­ferent struc­tures, they lose their mea­ning, like all other mea­sures of macroe­co­no­mic magni­tudes in natio­nal accounts. The emergent coun­tries (other than China) are indeed “emergent mar­kets,” open to pene­tra­tion by the mono­po­lies of the impe­ria­list triad. These mar­kets allow the latter to extract, to their bene­fit, a consi­de­rable part of the sur­plus value pro­du­ced in the coun­try in ques­tion. China is dif­ferent : it is an emergent nation in which the system makes pos­sible the reten­tion of the majo­rity of the sur­plus value pro­du­ced there.

Korea and Taiwan are the only two suc­cess­ful examples of an authen­tic emer­gence in and through capi­ta­lism. These two coun­tries owe this suc­cess to the geos­tra­te­gic rea­sons that led the United States to allow them to achieve what Washington pro­hi­bi­ted others from doing. The contrast bet­ween the sup­port of the United States to the state capi­ta­lism of these two coun­tries and the extre­mely violent oppo­si­tion to state capi­ta­lism in Nasser’s Egypt or Boumedienne’s Algeria is, on this account, quite illu­mi­na­ting.

Great Successes, New Challenges

Where does the Chinese right come from ? Certainly, the former com­pra­dor and bureau­cra­tic bour­geoi­sies of the Guomindang were exclu­ded from power. However, over the course of the war of libe­ra­tion, entire seg­ments of the middle classes, pro­fes­sio­nals, func­tio­na­ries, and indus­tria­lists, disap­poin­ted by the inef­fec­ti­ve­ness of the Guomindang in the face of Japanese aggres­sion, drew closer to the Communist Party, even joi­ning it. Many of them—but cer­tainly not all—remained natio­na­lists, and nothing more. Subsequently, begin­ning in 1990 with the ope­ning to pri­vate ini­tia­tive, a new, more power­ful, right made its appea­rance. It should not be redu­ced simply to “busi­ness­men” who have suc­cee­ded and made (some­times colos­sal) for­tunes, streng­the­ned by their clientele—including state and party offi­cials, who mix control with col­lu­sion, and even cor­rup­tion.

This suc­cess, as always, encou­rages sup­port for righ­tist ideas in the expan­ding edu­ca­ted middle classes. It is in this sense that the gro­wing inequality—even if it has nothing in common with inequa­lity cha­rac­te­ris­tic of other coun­tries in the South—is a major poli­ti­cal danger, the vehicle for the spread of righ­tist ideas, depo­li­ti­ci­za­tion, and naive illu­sions.

Here I shall make an addi­tio­nal obser­va­tion that I believe is impor­tant : petty pro­duc­tion, par­ti­cu­larly pea­sant, is not moti­va­ted by righ­tist ideas, like Lenin thought (that was accu­rate in Russian condi­tions). China’s situa­tion contrasts here with that of the ex-USSR. The Chinese pea­san­try, as a whole, is not reac­tio­nary because it is not defen­ding the prin­ciple of pri­vate pro­perty, in contrast with the Soviet pea­san­try, whom the com­mu­nists never suc­cee­ded in tur­ning away from sup­por­ting the kulaks in defense of pri­vate pro­perty. On the contrary, the Chinese pea­san­try of petty pro­du­cers (without being small pro­perty owners) is today a class that does not offer righ­tist solu­tions, but is part of the camp of forces agi­ta­ting for the adop­tion of the most cou­ra­geous social and eco­lo­gi­cal poli­cies. The power­ful move­ment of “reno­va­ting rural society” tes­ti­fies to this. The Chinese pea­san­try lar­gely stands in the lef­tist camp, with the wor­king class. The left has its orga­nic intel­lec­tuals and it exer­cises some influence on the state and party appa­ra­tuses.

The per­pe­tual conflict bet­ween the right and left in China has always been reflec­ted in the suc­ces­sive poli­ti­cal lines imple­men­ted by the state and party lea­der­ship. In the Maoist era, the lef­tist line did not pre­vail without a fight. Assessing the pro­gress of righ­tist ideas within the party and its lea­der­ship, a bit like the Soviet model, Mao unlea­shed the Cultural Revolution to fight it. “Bombard the Headquarters,” that is, the Party lea­der­ship, where the “new bour­geoi­sie” was for­ming. However, while the Cultural Revolution met Mao’s expec­ta­tions during the first two years of its exis­tence, it sub­se­quently devia­ted into anar­chy, linked to the loss of control by Mao and the left in the party over the sequence of events. This devia­tion led to the state and party taking things in hand again, which gave the right its oppor­tu­nity. Since then, the right has remai­ned a strong part of all lea­der­ship bodies. Yet the left is present on the ground, res­tric­ting the supreme lea­der­ship to com­pro­mises of the “center”—but is that center right or center left ?

To unders­tand the nature of chal­lenges facing China today, it is essen­tial to unders­tand that the conflict bet­ween China’s sove­reign pro­ject, such as it is, and North American impe­ria­lism and its subal­tern European and Japanese allies will increase in inten­sity to the extent that China conti­nues its suc­cess. There are seve­ral areas of conflict : China’s com­mand of modern tech­no­lo­gies, access to the planet’s resources, the streng­the­ning of China’s mili­tary capa­ci­ties, and pur­suit of the objec­tive of recons­truc­ting inter­na­tio­nal poli­tics on the basis of the sove­reign rights of peoples to choose their own poli­ti­cal and eco­no­mic system. Each of these objec­tives enters into direct conflict with the objec­tives pur­sued by the impe­ria­list triad.

The objec­tive of U.S. poli­ti­cal stra­tegy is mili­tary control of the planet, the only way that Washington can retain the advan­tages that give it hege­mony. This objec­tive is being pur­sued by means of the pre­ven­tive wars in the Middle East, and in this sense these wars are the pre­li­mi­nary to the pre­ven­tive (nuclear) war against China, cold-bloo­dedly envi­sa­ged by the North American esta­blish­ment as pos­si­bly neces­sary “before it is too late.” Fomenting hos­ti­lity to China is inse­pa­rable from this global stra­tegy, which is mani­fest in the sup­port shown for the sla­veow­ners of Tibet and Sinkiang, the rein­for­ce­ment of the U.S. naval pre­sence in the China Sea, and the uns­tin­ting encou­ra­ge­ment to Japan to build its mili­tary forces. The prac­ti­tio­ners of China bashing contri­bute to kee­ping this hos­ti­lity alive.

Simultaneously, Washington is devo­ted to mani­pu­la­ting the situa­tion by appea­sing the pos­sible ambi­tions of China and the other so-called emergent coun­tries through the crea­tion of the G20, which is inten­ded to give these coun­tries the illu­sion that their adhe­rence to libe­ral glo­ba­li­za­tion would serve their inter­ests. The G2 (United States/​China) is—in this vein—a trap that, in making China the accom­plice of the impe­ria­list adven­tures of the United States, could cause Beijing’s pea­ce­ful foreign policy to lose all its cre­di­bi­lity.

The only pos­sible effec­tive res­ponse to this stra­tegy must pro­ceed on two levels : (i) streng­then China’s mili­tary forces and equip them with the poten­tial for a deterrent res­ponse, and (ii) tena­ciously pursue the objec­tive of recons­truc­ting a poly­cen­tric inter­na­tio­nal poli­ti­cal system, res­pect­ful of all natio­nal sove­rei­gn­ties, and, to this effect, act to reha­bi­li­tate the United Nations, now mar­gi­na­li­zed by NATO. I empha­size the deci­sive impor­tance of the latter objec­tive, which entails the prio­rity of recons­truc­ting a “front of the South” (Bandung 2?) capable of sup­por­ting the inde­pendent ini­tia­tives of the peoples and states of the South. It implies, in turn, that China becomes aware that it does not have the means for the absurd pos­si­bi­lity of ali­gning with the pre­da­tory prac­tices of impe­ria­lism (pilla­ging the natu­ral resources of the planet), since it lacks a mili­tary power simi­lar to that of the United States, which in the last resort is the gua­ran­tee of suc­cess for impe­ria­list pro­jects. China, in contrast, has much to gain by deve­lo­ping its offer of sup­port for the indus­tria­li­za­tion of the coun­tries of the South, which the club of impe­ria­list “donors” is trying to make impos­sible. The lan­guage used by Chinese autho­ri­ties concer­ning inter­na­tio­nal ques­tions, restrai­ned in the extreme (which is unders­tan­dable), makes it dif­fi­cult to know to what extent the lea­ders of the coun­try are aware of the chal­lenges ana­ly­zed above. More seriously, this choice of words rein­forces naive illu­sions and depo­li­ti­ci­za­tion in public opi­nion.

The other part of the chal­lenge concerns the ques­tion of demo­cra­ti­zing the poli­ti­cal and social mana­ge­ment of the coun­try. Mao for­mu­la­ted and imple­men­ted a gene­ral prin­ciple for the poli­ti­cal mana­ge­ment of the new China that he sum­ma­ri­zed in these terms : rally the left, neu­tra­lize (I add : and not eli­mi­nate) the right, govern from the center left. In my opi­nion, this is the best way to conceive of an effec­tive manner for moving through suc­ces­sive advances, unders­tood and sup­por­ted by the great majo­rity. In this way, Mao gave a posi­tive content to the concept of demo­cra­ti­za­tion of society com­bi­ned with social pro­gress on the long road to socia­lism. He for­mu­la­ted the method for imple­men­ting this : “the mass line” (go down into the masses, learn their struggles, go back to the sum­mits of power). Lin Chun has ana­ly­zed with pre­ci­sion the method and the results that it makes pos­sible.

The ques­tion of demo­cra­ti­za­tion connec­ted with social progress—in contrast with a “demo­cracy” dis­con­nec­ted from social pro­gress (and even fre­quently connec­ted with social regression)—does not concern China alone, but all the world’s peoples. The methods that should be imple­men­ted for suc­cess cannot be sum­ma­ri­zed in a single for­mula, valid in all times and places. In any case, the for­mula offe­red by Western media propaganda—multiple par­ties and elections—should quite simply be rejec­ted. Moreover, this sort of “demo­cracy” turns into farce, even in the West, more so elsew­here. The “mass line” was the means for pro­du­cing consen­sus on suc­ces­sive, constantly pro­gres­sing, stra­te­gic objec­tives. This is in contrast with the “consen­sus” obtai­ned in Western coun­tries through media mani­pu­la­tion and the elec­to­ral farce, which is nothing more than ali­gn­ment with the requi­re­ments of capi­tal.

Yet today, how should China begin to recons­truct the equi­va­lent of a new mass line in new social condi­tions ? It will not be easy because the power of the lea­der­ship, which has moved mostly to the right in the Communist Party, bases the sta­bi­lity of its mana­ge­ment on depo­li­ti­ci­za­tion and the naive illu­sions that go along with that. The very suc­cess of the deve­lop­ment poli­cies streng­thens the spon­ta­neous ten­dency to move in this direc­tion. It is widely belie­ved in China, in the middle classes, that the royal road to cat­ching up with the way of life in the opu­lent coun­tries is now open, free of obs­tacles ; it is belie­ved that the states of the triad (United States, Europe, Japan) do not oppose that ; U.S. methods are even uncri­ti­cally admi­red ; etc. This is par­ti­cu­larly true for the urban middle classes, which are rapidly expan­ding and whose condi­tions of life are incre­di­bly impro­ved. The brain­wa­shing to which Chinese stu­dents are sub­ject in the United States, par­ti­cu­larly in the social sciences, com­bi­ned with a rejec­tion of the offi­cial uni­ma­gi­na­tive and tedious tea­ching of Marxism, have contri­bu­ted to nar­ro­wing the spaces for radi­cal cri­ti­cal debates.

The govern­ment in China is not insen­si­tive to the social ques­tion, not only because of the tra­di­tion of a dis­course foun­ded on Marxism, but also because the Chinese people, who lear­ned how to fight and conti­nue to do so, force the government’s hand. If, in the 1990s, this social dimen­sion had decli­ned before the imme­diate prio­ri­ties of spee­ding up growth, today the ten­dency is rever­sed. At the very moment when the social-demo­cra­tic conquests of social secu­rity are being eroded in the opu­lent West, poor China is imple­men­ting the expan­sion of social secu­rity in three dimensions—health, hou­sing, and pen­sions. China’s popu­lar hou­sing policy, vili­fied by the China bashing of the European right and left, would be envied, not only in India or Brazil, but equally in the dis­tres­sed areas of Paris, London, or Chicago !

Social secu­rity and the pen­sion system already cover 50 percent of the urban popu­la­tion (which has increa­sed, recall, from 200 to 600 mil­lion inha­bi­tants!) and the Plan (still car­ried out in China) anti­ci­pates increa­sing the cove­red popu­la­tion to 85 percent in the coming years. Let the jour­na­lists of China bashing give us com­pa­rable examples in the “coun­tries embar­ked on the demo­cra­tic path,” which they conti­nually praise. Nevertheless, the debate remains open on the methods for imple­men­ting the system. The left advo­cates the French system of dis­tri­bu­tion based on the prin­ciple of soli­da­rity bet­ween these wor­kers and dif­ferent generations—which pre­pares for the socia­lism to come—while the right, obviously, pre­fers the odious U.S. system of pen­sion funds, which divides wor­kers and trans­fers the risk from capi­tal to labor.

However, the acqui­si­tion of social bene­fits is insuf­fi­cient if it is not com­bi­ned with demo­cra­ti­za­tion of the poli­ti­cal mana­ge­ment of society, with its re-poli­ti­ci­za­tion by methods that streng­then the crea­tive inven­tion of forms for the socialist/​communist future.

Following the prin­ciples of a multi-party elec­to­ral system as advo­ca­ted ad nau­seam by Western media and the prac­ti­tio­ners of China bashing, and defen­ded by “dis­si­dents” pre­sen­ted as authen­tic “demo­crats,” does not meet the chal­lenge. On the contrary, the imple­men­ta­tion of these prin­ciples could only pro­duce in China, as all the expe­riences of the contem­po­rary world demons­trate (in Russia, Eastern Europe, the Arab world), the self-des­truc­tion of the pro­ject of emer­gence and social renais­sance, which is in fact the actual objec­tive of advo­ca­ting these prin­ciples, masked by an empty rhe­to­ric (“there is no other solu­tion than multi-party elec­tions”!). Yet it is not suf­fi­cient to coun­ter this bad solu­tion with a fall­back to the rigid posi­tion of defen­ding the pri­vi­lege of the “party,” itself scle­ro­tic and trans­for­med into an ins­ti­tu­tion devo­ted to recruit­ment of offi­cials for state admi­nis­tra­tion. Something new must be inven­ted.

The objec­tives of re-poli­ti­ci­za­tion and crea­tion of condi­tions favo­rable to the inven­tion of new res­ponses cannot be obtai­ned through “pro­pa­ganda” cam­pai­gns. They can only be pro­mo­ted through social, poli­ti­cal, and ideo­lo­gi­cal struggles. That implies the pre­li­mi­nary recog­ni­tion of the legi­ti­macy of these struggles and legis­la­tion based on the col­lec­tive rights of orga­ni­za­tion, expres­sion, and pro­po­sing legis­la­tive ini­tia­tives. That implies, in turn, that the party itself is invol­ved in these struggles ; in other words, rein­vents the Maoist for­mula of the mass line. Re-poli­ti­ci­za­tion makes no sense if it is not com­bi­ned with pro­ce­dures that encou­rage the gra­dual conquest of res­pon­si­bi­lity by wor­kers in the mana­ge­ment of their society at all levels—company, local, and natio­nal. A pro­gram of this sort does not exclude recog­ni­tion of the rights of the indi­vi­dual person. On the contrary, it sup­poses their ins­ti­tu­tio­na­li­za­tion. Its imple­men­ta­tion would make it pos­sible to reinvent new ways of using elec­tions to choose lea­ders.

Acknowledgements

This paper owes much to the debates orga­ni­zed in China (November–December 2012) by Lau Kin Chi (Linjang University, Hong Kong), in asso­cia­tion with the South West University of Chongqing (Wen Tiejun), Renmin and Xinhua Universities of Beijing (Dai Jinhua, Wang Hui), the CASS (Huang Ping) and to mee­tings with groups of acti­vists from the rural move­ment in the pro­vinces of Shanxi, Shaanxi, Hubei, Hunan and Chongqing. It also owes much to my rea­ding of the wri­tings of Wen Tiejun and Wang Hui.

China Rising : a new world order or an old order renewed ?

DOROTHY GRACE GUERRERO[2]

China’s remar­kable eco­no­mic per­for­mance over more than thirty five years and its trans­for­ma­tion into one of the world’s big­gest tra­ding powers, has led many to believe that it will be the suc­ces­sor to the US in global domi­nance. The stag­na­tion of the advan­ced capi­ta­list eco­no­mies and contrac­tion of the eco­no­mies in the Eurozone in recent years have streng­the­ned the notion that the world is at a tur­ning point in the balance of power bet­ween the advan­ced eco­no­mies of the North and the emer­ging eco­no­mies of the South such as China, India, Brazil and South Africa.

The new confi­gu­ra­tion of power has increa­sed the repre­sen­ta­tion of deve­lo­ping coun­tries in key and deci­sive pro­cesses in the United Nations, the World Trade Organisation and International Financial Institutions like the World Bank and International Monetary Bank, as well as in infor­mal but stra­te­gic sum­mits like the G20 group. Little atten­tion has been given, howe­ver, to the cen­tral issue for many peo­ple in the South, which is not just China’s rise or growth nor even the rela­tive state of demo­cracy there. The more impor­tant ques­tion is whe­ther China and the other new actors are offe­ring a new and better model of deve­lop­ment that could chart eco­no­mic and social pro­gress for other deve­lo­ping coun­tries ?

Already a gro­wing number of voices are poin­ting to China beco­ming a “sub-impe­ria­list” or a “new impe­ria­list” power that is conti­nuing the same or more intense prac­tices of exploi­ta­tion and extrac­tion of resources from poorer coun­tries to enable it to join the ranks of the world’s high income coun­tries. Given China’s extra­or­di­nary suc­cess as a new eco­no­mic power in the global eco­nomy, is China resus­citating a flag­ging and fai­ling capi­ta­list system ? Is it giving new energy to the same unsus­tai­nable and unjust para­digm that faci­li­tates the accu­mu­la­tion of wealth by a few while resul­ting in dis­pos­ses­sion and pau­pe­ri­sa­tion of the already mar­gi­na­li­sed and disem­po­we­red ?

It is cer­tainly the time to turn the spot­light on the impli­ca­tions for civil society of a global order in which China is an ever more domi­nant player. Various fore­casts pre­dict that China will soon sur­pass the US as the top global eco­no­mic power. Whether this will happen as early as 2016 as the IMF pre­dic­ted using pur­cha­sing power parity as basis of ana­ly­sis or by 2020 or by 2030 accor­ding to the World Bank, most “guess­ti­mates” agree that it will be ear­lier than pre­vious assess­ments.

China’s rise to the top does not of course mean that China will soon rule the world the way the US does. It is beset by huge chal­lenges and contra­dic­tions : limi­ted agri­cul­tu­ral land and water resources to meet the needs (and demands) of its mas­sive popu­la­tion and fuel its conti­nuing growth ; increa­sin­gly pol­lu­ted air and water ; wide­ning income dis­pa­ri­ties, espe­cially bet­ween urban and rural popu­la­tions ; the inevi­table col­lapse of unsus­tai­nable price controls on fuel and food ; and mas­sive cor­rup­tion are just some of the pro­blems that could raise people’s dis­content and upset the Communist Party’s control. There is also a gro­wing civil society that must be invol­ved in global move­ments for jus­tice. The fact that it makes up a seventh of the world’s popu­la­tion, and that its social and envi­ron­men­tal poli­cies will impact on eve­ryone glo­bally, means that unders­tan­ding China is more impor­tant than ever before.

To unders­tand China’s deve­lop­ment and its pro­jec­tion as a global power, it is impor­tant to both under­stand its his­tory and some of the core prin­ciples and objec­tives that drive Chinese gover­ning elites, both prior to 1949 and up to today.

Martin Jacques, author of When China Rules the World, argues that we need to unders­tand China as a “civi­li­za­tio­nal state” and not just through a Western-ori­gi­na­ted notion of a nation state. All over the world, the Chinese consi­der them­selves to be part of a single civi­li­sa­tion with strong values of ances­tor wor­ship, guanxi (unders­tan­ding of connec­tions or rela­tions), and Confucian culture and so on. Chinese unders­tan­ding of race and dif­fe­rence is impor­tant to consi­der in stu­dying how they per­ceive unity and iden­tity. There are also dif­ferent unders­tan­dings of demo­cracy, sta­te­hood and social rela­tion­ships. Combined with strong his­to­ri­cal les­sons brought about by expe­riences of foreign inter­ven­tions and inter­nal conflicts, the state has mana­ged to deve­lop a poli­ti­cal culture that bol­sters its legi­ti­macy in mana­ging the eco­nomy, poli­tics and society. This has allo­wed the state more free­dom to imple­ment poli­cies affec­ting public life (like mega-pro­jects from the ancient ChineseWall to present-day giant dams and high speed trains) as well as pri­vate life (one child policy, social wel­fare and sub­si­dies).

The government’s argu­ment that states’ sove­reign rights trump human rights and its conti­nuing refu­sal to follow Western style demo­cracy does not mean that uni­ver­sal norms such as human rights, labour and envi­ron­men­tal stan­dards should not apply to China or don’t make sense in China. The Chinese govern­ment still views human rights in stron­gly aspi­ra­tio­nal rather than legal terms by arguing for prio­rity to be placed on socio-eco­no­mic rights and the right to deve­lop­ment, and conti­nues to insist that human rights should be imple­men­ted accor­ding to a country’s natio­nal conditions.8 Recently, howe­ver, it did sign a wide range of human rights trea­ties and has also offi­cially accep­ted the uni­ver­sa­lity of human rights. Of course these inter­na­tio­nal moves are not always com­ple­men­ted by actions at home.

The more inter­esting deve­lop­ment, howe­ver, is the increa­sing number of voices in Chinese society that are begin­ning to ques­tion old notions of state power and prac­tices of govern­ment offi­cials. Many express their desires to live well, to live in a heal­thy envi­ron­ment and to live with dignity. In fact many are now orga­ni­sing them­selves and expres­sing their dis­sa­tis­fac­tion over the wor­se­ning state of the envi­ron­ment, air pol­lu­tion in cities, deplo­rable wor­king condi­tions and low wages, cor­rup­tion, sub­stan­dard qua­lity of food and other basic com­mo­di­ties and the ove­rall lack of par­ti­ci­pa­tion in deci­sion-making pro­cesses that directly affect their live­li­hood, access to, and mana­ge­ment of, resources.

China kept a chau­vi­nis­tic policy before 1978 and forei­gners who lived and visi­ted the coun­try often remar­ked that the Chinese had a Sinocentric view and gene­ral lack of trust to forei­gners. This atti­tude is shaped by what most Chinese explai­ned as the humi­lia­tion they expe­rien­ced with foreign domi­na­tion. It also can be traced fur­ther back to a time when the Chinese elite viewed them­selves to have the most advan­ced civilization—the name China (中国, Zhōngguó) means the land in the “middle of the uni­verse” —and consi­de­red China the cultu­ral center of the world. Mao Zedong called it Han chau­vi­nism ; the Hans are the domi­nant ethnic group in China. It is no longer a pre­valent notion among cur­rent offi­cials, never­the­less, the atti­tudes still linger to some extent today.

The post-revo­lu­tion period from 1949, saw huge trans­for­ma­tion of society brought about by the mobili­sation of mass move­ments under the direc­tion of a single party to deli­ver land reform from 1950 to 1953, mar­riage reform in 1952, col­lec­ti­vi­sa­tion of agri­cul­ture in 1953 and natio­na­li­sa­tion of pri­vate indus­try by 1955. Some of these reforms invol­ved ter­rible human costs, most nota­bly the famine caused by the Great Leap Forward (1958-61), which led to an esti­ma­ted 18-45 mil­lion deaths. At the same time, some of China’s pre-1979 poli­cies did lay the foun­da­tions for an eco­no­mic and indus­trial infra­struc­ture and social and edu­ca­tio­nal base.

Deng Xiaoping, the archi­tect of reform, des­cri­bed the Chinese approach as “cros­sing the river by tou­ching the stones”. This well-known meta­phor des­cribes the expe­ri­men­tal nature of the reform, whe­reby the Party looked for areas where posi­tive changes could be made, conti­nued if concrete results or suc­cess were achie­ved and if not, rever­sed step-by-step.

The government’s 11th and 12th Five Year Plans (2006-2010 and 2011-2015 res­pec­ti­vely) have focu­sed on qua­lity of growth, struc­tu­ral reforms to har­ness inno­va­tion and eco­no­mic effi­ciency, and social inclu­sion to over­come the rural-urban divide and the income inequa­lity gap. The goal has been to both intro­duce neces­sary reform and at the same time main­tain sta­bi­lity. This is no easy task as Yu Jianrong, a pro­minent and influen­tial scho­lar who heads the Rural Development Institute of the China Academy for Social Sciences (CASS), explains.

Given increa­sed conflicts of inter­ests bet­ween various actors in natio­nal and local govern­ments, various policy flaws ema­na­ting from dif­fe­rences bet­ween the clamor for reforms and the need to main­tain sta­bi­lity, the deve­lop­ment of infor­ma­tion tech­no­logy and the increa­sing conscious­ness of citi­zens about their rights, China’s poli­ti­cal fixa­tion with ‘sta­bi­lity at all costs’, Yu argues, breeds rigi­dity, dis­cou­rages flexi­bi­lity and inno­va­tion in respon­ding to emer­ging social pro­blems and, most impor­tantly, ham­pers the deve­lop­ment of more appro­priate ins­ti­tu­tio­nal res­ponses to social conflicts.

The Chinese regime’s deter­mi­na­tion to gua­ran­tee sta­bi­lity cer­tainly shapes their eco­no­mic poli­cies, par­ti­cu­larly their over­ri­ding mis­sion to both secure the supply of energy and other natu­ral resources that it needs for its manu­fac­tu­ring exports and to expand their market to conti­nue its growth. This relent­less drive for eco­no­mic growth has had impli­ca­tions inter­nally (par­ti­cu­larly social and envi­ron­men­tal) as well as exter­nally where China’s hunger for resources has led to conflicts with affec­ted com­mu­ni­ties.

Nevertheless, China’s lea­ders have been very care­ful to dis­tin­guish China’s rise from those of colo­nial and impe­rial nations. In their dis­course, they call their vision heping jueqi or the pea­ce­ful rise of China and present this as under­pin­ning their poli­cies on trade, deve­lop­ment assis­tance and coope­ra­tion. China argues that as a deve­lo­ping coun­try, it shares their status with other deve­lo­ping coun­tries and so por­trays its trade, invest­ment and deve­lop­ment rela­tions with other deve­lo­ping coun­tries as being forged in the spirit of South-South coope­ra­tion. It assures its Southern part­ners, on many occa­sions and in many sta­te­ments, that its rise should be seen as non-threa­te­ning because it also suf­fe­red from domi­na­tion from foreign powers and the­re­fore will not become a colo­ni­ser or domi­nant power to them. Chinese lea­ders repea­tedly express that China did not seek hege­mony before and will not seek hege­mony now and in the future.

Chinese offi­cials also point out that China is expan­ding its poli­ti­cal influence through an ins­ti­tu­tio­nal ap­proach, that is, by means of inter­na­tio­nal coope­ra­tion and inte­gra­tion into the inter­na­tio­nal com­mu­nity. In 2007, the Chinese Communist Party under Hu Jintao ins­ti­tu­tio­na­li­zed har­mo­nious world (hexie shijie) as its foreign policy, a coun­ter­part to the natio­nal policy dis­course of har­mo­nious society (hexie shehui).

China’s diplo­macy is pre­sen­ted as pushing for its core inter­ests of safe­guar­ding of sove­rei­gnty, secu­rity, and deve­lop­ment. These core inter­ests can be more use­fully detai­led as ensu­ring China’s poli­ti­cal sta­bility, namely, the sta­bi­lity of the CCP lea­der­ship and of the socia­list system ; second, sove­reign secu­rity, ter­ri­to­rial inte­grity, and natio­nal uni­fi­ca­tion ; and third, China’s eco­no­mic and social deve­lop­ment.

There are two opi­nions in the lea­der­ship on what is the best stra­tegy for uphol­ding such inter­ests. The first one is based on Deng Xiaoping’s tea­ching of tao guang yang hui, or kee­ping a low pro­file in inter­na­tio­nal affairs pro­mo­ted by pro­minent poli­ti­cal figures, such as Tang Jiaxuan, former foreign minis­ter, and General Xiong Guangkai, former deputy chief of staff of the People’s Liberation Army. They argue that since China remains a deve­lo­ping coun­try, it should concen­trate on eco­no­mic deve­lop­ment. The second is the natio­na­list one, which is pres­sing for a more “can-do” foreign policy since China is more power­ful now than before.

At the same time, China ada­mantly asserts the inte­grity of its ter­ri­to­rial sove­rei­gnty and does not allow any part­ner state to make offi­cial diplo­ma­tic rela­tion­ships with Taiwan, the Government of Tibet in Exile or East Turkistan (Xinjiang) Independence Movement groups. This asser­tion of China’s ter­ri­to­rial sover­eignty is also reflec­ted in its asser­tions of sove­rei­gnty over dis­pu­ted ter­ri­to­ries such as the Spratly Islands or indeed control of the South China Sea itself.

CHINA’s ECONOMIC GROWTH : CAUSES AND EFFECTS

China’s rise as a global power is lar­gely pre­di­ca­ted on its incre­dible eco­no­mic growth in the last three decades. Its embrace of “free market” eco­no­mic poli­cies is fre­quently cited as the main cause of this growth and is used to bol­ster the case for neo­li­be­ral glo­ba­li­sa­tion elsew­here. But the path China fol­lo­wed is dif­ferent, and at least on eco­no­mic grounds, more suc­cess­ful than the “shock the­rapy” fol­lo­wed by other for­merly com­mu­nist plan­ned eco­no­mies such as Russia.

China did not achieve such phe­no­me­nal growth simply by ope­ning up its eco­nomy. The first point to note is that China’s pre-1978 condi­tion whe­rein people already had access to land and uni­ver­sal health care and pri­mary edu­ca­tion, played an impor­tant role in the country’s rea­di­ness for eco­no­mic take-off in the 1980s. Indeed, social deve­lop­ment was a major com­ponent that helped China in its early phase of tran­si­tion to the market eco­nomy. Without com­pre­hen­sive land reform fol­lo­wed by the for­ma­tion of agri­cul­tu­ral co-ope­ra­tives and, later, people’s com­munes, the reform poli­cies after 1979 could not have been imple­men­ted suc­cess­fully. China’s indus­tria­li­sa­tion was aided by rural deve­lop­ment, safety nets enjoyed by rural fami­lies and wor­kers, and secu­rity of land tenure.

China was also extre­mely cau­tious and prag­ma­tic in how it opened up its eco­nomy. China’s reform pro­cess had four phases : First, gra­dual ope­ning to the global eco­nomy and policy refor­mu­la­tion (from 1978—1986). From 1979 to 1984, the Chinese govern­ment esta­bli­shed new regu­la­tions to permit joint ven­tures using foreign capi­tal and esta­bli­shed four Special Economic Zones (SEZs) in Shenzhen, Zhuhai, Shantou, and Xiamen. The com­mune system was dis­sol­ved and state-owned enter­prises were pri­va­ti­sed (or cor­po­ra­ti­sed) in 1984. In the second phase from 1986—1992, China deve­lo­ped “twenty two regu­la­tions”, which crea­ted a more bene­fi­cial envi­ron­ment for foreign inves­tors, whilst main­tai­ning consi­de­rable state control to maxi­mise bene­fits from this invest­ment.

China’s Rise Stalled ?

Hung Ho-fung[3]

It was per­haps pre­dic­table that China’s ini­tial sharp rebound from the global finan­cial crisis would serve to entrench wides­pread per­cep­tions that the PRC repre­sents an alter­na­tive and, on some rea­dings, super­ior model of capi­ta­list deve­lop­ment [4]. Desperate pleas by Hillary Clinton and Tim Geithner for Beijing to conti­nue its pur­chase of US Treasuries in the imme­diate after­math of the 2008 melt­down seemed to confirm that China was indeed dis­pla­cing the US, the alle­ged culprit of the crisis, and beco­ming a new centre of the global eco­nomy. Yet the cele­bra­tions of China’s rise at the expense of the US evoked more skep­ti­cal res­ponses too. Michael Pettis’s pro­vo­ca­tive and well-infor­med new book, The Great Rebalancing, pre­sents a more cri­ti­cal view.

It contends that coun­tries that run a per­sistent trade sur­plus, like China, are at least as res­pon­sible for the global finan­cial crisis as those run­ning defi­cits, like the US. In his view, the out­come of the crisis will put an end to the ‘eco­no­mic miracles’ of the sur­plus coun­tries and may lead them into Japan-style lost decades. The only way out would require a pro­found reba­lan­cing of the sur­plus coun­tries’ eco­no­mies. I will argue that a third sce­na­rio could be deri­ved from the book’s ana­ly­sis, beyond Pettis’s alter­na­tives of a pro­lon­ged, dee­pe­ning crisis or smooth, coor­di­na­ted reba­lan­cing. But first let us exa­mine The Great Rebalancing’s account.

The Great Rebalancing

Pettis is a pro­fes­sor of finance at Peking University and a vete­ran Wall Street whee­ler-dealer spe­cia­li­zing in ‘emer­ging mar­kets’, ini­tially in Latin America. His first book, The Volatility Machine : Emerging Economies and the Threat of Financial Collapse, appea­red in 2001, and since then his contra­rian views have become well known through his widely cited blog, ‘China Financial Markets’. Drawing diverse theo­re­ti­cal insights from Keynes and, sur­pri­sin­gly, Hobson, Lenin and David Harvey, The Great Rebalancing is a sys­te­ma­tic ela­bo­ra­tion of Pettis’s diag­no­sis of the ori­gins of the finan­cial crisis and sug­ges­tions for its remedy. He sees the global trade and capi­tal-flow imba­lances under­lying the crisis as pri­ma­rily a conse­quence of the consump­tion-repres­sing growth model adop­ted by the sur­plus coun­tries, most nota­bly China and Germany.

The Great Rebalancing sets out the prin­ciples at stake, in the form of ‘accoun­ting iden­ti­ties’. Where consump­tion is repres­sed rela­tive to pro­duc­tion, the result is a rise in saving. If domes­tic savings exceed domes­tic invest­ment, then in an open eco­nomy the excess saving will flow abroad to other coun­tries, in the form of net capi­tal export.

China’s pur­chase of US Treasury bonds and Germany’s len­ding to Spain and Greece are examples of such exports. Similarly, for a coun­try that imports capi­tal from abroad, invest­ment will exceed saving. It fol­lows that the amount of net capi­tal out­flow or inflow will be equal to the dif­fe­rence bet­ween savings and invest­ment ; the dif­fe­rence will also be equal to the country’s trade balance. Therefore, an economy’s trade surplus/​deficit will be equal to that economy’s net capi­tal outflow/​inflow, which in turn is equal to its saving less invest­ment. As open eco­no­mies are linked to one ano­ther through trade and invest­ment, capi­tal export and trade sur­plus ori­gi­na­ting from one country’s under-consump­tion must be balan­ced by capi­tal imports, trade defi­cit and over-consump­tion in ano­ther coun­try. In other words, domes­tic imba­lances of tra­ding part­ners will mirror each other, gene­ra­ting global imba­lances.

Examining how these prin­ciples have ope­ra­ted in the concrete case of China’s domes­tic imba­lance, Pettis, like many other authors, finds that the prc’s model of repres­sed-consump­tion growth is not new, but is an exten­ded repli­ca­tion of the Japanese model. As Pettis empha­sizes throu­ghout the book, a country’s consump­tion levels and savings rate have nothing to do with its culture and the habits of its people : China’s high saving and low consump­tion are conse­quences of expli­cit poli­cies : wage repres­sion, an under­va­lued cur­rency and finan­cial repres­sion.

Since the 1990s, the vast supply of rural migrant labor, whose rights and access to ser­vices where they worked were denied under the hukou system, in addi­tion to what Pettis des­cribes as ‘govern­ment-spon­so­red unions that more often see things from the point of view of employers than from that of wor­kers’, ensu­red that wages grew much more slowly than pro­duc­ti­vity, hence repres­sing the growth of wor­kers’ income and consump­tion rela­tive to the growth of pro­duc­tion. At the same time, China’s cen­tral bank inter­ve­ned in the cur­rency market to prevent the yuan from appre­cia­ting along­side the growth of the trade sur­plus. The under­va­lued cur­rency bene­fi­ted expor­ters, but made domes­tic consump­tion more expen­sive ; the policy has the­re­fore ope­ra­ted as a hidden tax on hou­se­hold consu­mers, which is trans­fer­red to expor­ters. The low inter­est rates main­tai­ned by state banks for both depo­si­tors and bor­ro­wers have also consti­tu­ted a hidden tax on hou­se­holds : while ordi­nary depo­si­tors have had to put up with meagre or even nega­tive real inter­est rates, state enter­prises and govern­ment units could borrow at give-away rates to fuel the orgies of real-estate and infra­struc­tu­ral construc­tion. This again is tan­ta­mount to a sub­sidy to the state sector paid by finan­cially repres­sed depo­si­tors.

The “Model”

This model of deve­lop­ment brought about mira­cu­lous eco­no­mic growth rates, rapidly impro­ving infra­struc­ture and an inter­na­tio­nally com­pe­ti­tive manu­fac­tu­ring sector. Paradoxically, though the growth rate has attrac­ted high invest­ment, the finan­cial repres­sion invol­ved also pushes saving—here, mostly cor­po­rate and govern­ment rather than hou­se­hold saving—to an even higher level. As such, the excess saving of China has to be expor­ted over­seas in exchange for exter­nal demand for its manu­fac­tu­red pro­ducts. Given the size of the US market and the high liqui­dity of US assets, Treasury secu­ri­ties in par­ti­cu­lar, most of China’s excess saving ends up hea­ding to the US. To Pettis, the Chinese pur­chase of dollar assets is a trade policy, ‘aimed at gene­ra­ting trade sur­pluses and higher domes­tic employ­ment’.

For the American eco­nomy, such large-scale capi­tal imports are ‘usually harm­ful’, as the US has ‘no choice but to respond to the gro­wing net inflows [of capi­tal] with higher invest­ment, higher unem­ploy­ment, or higher consump­tion’. With capi­tal inflows pushing up the dollar, chea­pe­ning manu­fac­tu­red imports and pena­li­zing us manu­fac­tu­rers, ‘there was little incen­tive for American busi­nesses to borrow and expand pro­duc­tion domes­ti­cally’. Instead, the mas­sive inflows of capi­tal fuel­led the expan­ding real-estate bubble and debt-finan­ced consump­tion. Pettis concludes that the US consump­tion spree and trade defi­cit was caused by exces­sive foreign (Chinese) invest­ment in dollar assets that ‘force Americans to consume beyond their means’.

In his ana­ly­sis of the Eurozone crisis, Pettis sees the rela­tion bet­ween Germany, a sur­plus coun­try, and Spain and other ‘defi­cit coun­tries’, as remi­nis­cent of that bet­ween China and the us. In the 1990s, post-uni­fi­ca­tion Germany put into place ‘a number of poli­cies, agreed on by trade unions, busi­nesses and the govern­ment, aimed at constrai­ning wages and consump­tion and expan­ding pro­duc­tion, in order to regain com­pe­ti­ti­ve­ness and gene­rate jobs.’

These consump­tion-repres­sing poli­cies worked well. But excess saving has to be expor­ted, in exchange for ‘impor­ting’ exter­nal demand. In this ins­tance, the context inclu­ded the launch of the euro and increa­sing European inte­gra­tion. German capi­tal was expor­ted to per­iphe­ral Europe prin­ci­pally in the form of bank len­ding, but its harm­ful effects resem­bled China’s capi­tal exports to the US in the form of buying Treasury bonds. Taking Spain as his example, Pettis contends that German’s anti-consump­tion poli­cies eroded the pro­fi­ta­bi­lity of Spanish manu­fac­tu­ring and dis­cou­ra­ged pri­vate invest­ment in the tra­dable goods sector there, while at the same time Germany’s excess saving was being expor­ted to Spain on a mas­sive scale. The result was the expan­sion of a gigan­tic real-estate bubble in Spain.

Pettis reminds us that global imba­lances caused by under-consu­ming coun­tries which export sur­plus capi­tal to other eco­no­mies are not novel in the deve­lop­ment of capi­ta­lism. Drawing from the insights of Hobson and Lenin, he notes that in the late nine­teenth and early twen­tieth cen­tury, under-consump­tion in indus­tria­li­zed economies—where wor­kers’ demand was repres­sed since wealth and income were concen­tra­ted in the hands of the rich—created pres­sures for those coun­tries to export capi­tal to their formal or infor­mal colo­nies, which in turn star­ted to run trade defi­cits and be indeb­ted to the colo­ni­zing coun­tries. The main dif­fe­rence bet­ween then and now is that, in the early 1900s, capi­tal-expor­ting colo­ni­zers ‘mana­ged the colo­nial eco­no­mies and their tax sys­tems, and so they could ensure that all debts were repaid’. Global imba­lances could the­re­fore last longer in the age of impe­ria­lism, as ‘large cur­rent-account imba­lances could per­sist for as long as the colony had assets to trade [or to be expro­pria­ted]’.

What Pettis does not men­tion is that a cen­tury ago, when colo­ni­zed impor­ters of capi­tal were inva­ria­bly under­de­ve­lo­ped eco­no­mies, the impor­ted capi­tal mostly flowed into extrac­tive indus­tries ins­tead of finan­cial mar­kets. This kind of invest­ment did not gene­rate the type of vola­ti­lity that finan­cial invest­ment in today’s defi­cit coun­tries entails. On the other hand, this highly ter­ri­to­rial form of capi­tal export drove the impe­rial powers to vie aggres­si­vely with one ano­ther for colo­nial pos­ses­sions, inten­si­fying inter-impe­rial rivalry and trig­ge­ring the First World War.

Capital expor­ters today, like China and Germany, do not enjoy that sort of colo­nial control over impor­ters of their capi­tal, like the US and Spain, and much of it flows into finan­cial and real-estate acti­vi­ties. Imbalances under these condi­tions are less sus­tai­nable. Once the bubbles burst, or bor­ro­wing capa­bi­li­ties run out in the increa­sin­gly indeb­ted defi­cit coun­tries, consump­tion there will col­lapse. This is what has been hap­pe­ning in the US, Greece and Spain since 2008. When this hap­pens, trade-defi­cit coun­tries are forced to undergo pain­ful reba­lan­cing, which can be achie­ved through tax hikes on the rich and/​or poli­cies that restrain consump­tion and boost saving. Such reba­lan­cing efforts will be futile, howe­ver, if the sur­plus coun­tries conti­nue to repress consump­tion, export sur­plus savings and main­tain trade sur­pluses with the defi­cit coun­tries.

“Rebalancing”

It is mathe­ma­ti­cally impos­sible for the US and per­iphe­ral Europe to attain trade sur­pluses and repress consump­tion if no other coun­tries are shrin­king their sur­pluses and boos­ting consump­tion. In the global eco­nomy, someone’s sur­plus must be accom­pa­nied by another’s defi­cit. A true reba­lan­cing of the global eco­nomy is pos­sible only when the defi­cit coun­tries and sur­plus coun­tries reba­lance their domes­tic eco­no­mies simul­ta­neously through mir­ro­ring poli­cies.

America’s and Spain’s poli­cies to restrain consump­tion and boost saving have to be accom­pa­nied by poli­cies in China and Germany that boost consump­tion, reduce saving and reverse their trade balance. Pettis sug­gests that Germany should cut taxes and increase govern­ment spen­ding to deflate its savings and move towards a trade defi­cit, gene­ra­ting demand for the tra­dable goods sector in Spain and Greece. In that case, the latter’s reba­lan­cing poli­cies, which restrain consump­tion and invest­ment, would cause less unem­ploy­ment. If Germany is reluc­tant to reba­lance, then Spain’s and Greece’s adjust­ment may be so pain­ful that they will be forced to default on their debt or deva­lue their cur­rency by lea­ving the euro. Likewise, American reba­lan­cing has to be accom­pa­nied by China’s shif­ting in the oppo­site direc­tion, if it is to be effec­tive. The prc needs to boost domes­tic consump­tion and reduce its saving. As China’s under-consump­tion is mainly attri­bu­table to the squee­zing of hou­se­hold income to sub­si­dize export manu­fac­tu­rers and the state sector, boos­ting consump­tion will have to involve a ‘dis­tri­bu­tio­nal struggle’ in favour of the hou­se­hold sector.

China’s reba­lan­cing is not only cru­cial to the reba­lan­cing of the US and global eco­nomy, Pettis argues. It is also essen­tial in order to prevent a serious eco­no­mic crisis within the prc itself. The two engines of the Chinese miracle—investment and exports—are star­ting to crumble. China’s infra­struc­ture is beco­ming exces­sive, rela­tive to its stage of deve­lop­ment, and fal­ling returns on newly construc­ted infra­struc­ture are exhaus­ting the len­ding capa­bi­lity of the state sector, which is already over­loa­ded with pre-exis­ting loans. In the mean­time, US consump­tion is decli­ning and the conco­mi­tant poli­ti­cal pres­sure on Beijing to shrink its trade sur­plus mounts. With the invest­ment and export engines fal­te­ring at the same time, an increase in Chinese hou­se­hold income and consump­tion becomes all the more impor­tant.

Gaps

The Great Rebalancing should be cele­bra­ted for its cla­rity and conci­sion. It mounts a convin­cing chal­lenge to mains­tream mora­li­zing about the ori­gins of the global crisis, demons­tra­ting that the global imba­lances which under­lie it unfold through a pro­cess of uneven and com­bi­ned capi­ta­list deve­lop­ment, in which the US, China, Germany and per­iphe­ral Europe are inter­lin­ked parts. These merits not­withs­tan­ding, the ana­ly­sis has two major gaps. The first of these centres on the ori­gins of the imba­lances them­selves. If capi­tal inflows from sur­plus coun­tries are so harm­ful to defi­cit coun­tries, fuel­ling finan­cial and real-estate bubbles, then why do the latter keep let­ting the sur­plus capi­tal in ? Do the defi­cit coun­tries really have no choice but to accept pas­si­vely wha­te­ver the sur­plus coun­tries are expor­ting to them ?

Recall that the whole edi­fice of Pettis’s argu­ment is groun­ded on the accoun­ting iden­tity that a country’s trade sur­plus equals its net capi­tal export, as well as its saving less invest­ment ; yet as he states, this pre­mise only applies to an ‘open’ eco­nomy. It fol­lows that the ana­ly­sis of the mir­ro­ring imba­lances bet­ween sur­plus and defi­cit coun­tries would not have been valid had it not been for the com­ple­tion of global-market integration—the remo­val of nume­rous natio­nal controls.

Such inte­gra­tion is far from the natu­ral state of global capi­ta­lism. It is a result of the neo­li­be­ral pro­ject that Reagan and Thatcher star­ted in the 1980s as a remedy for the crisis of fal­ling profit rates across advan­ced capi­ta­list coun­tries in the 1970s. The crea­tion of the WTO in 1994, China’s acces­sion to it in 2001 and the launch of the euro in 2002, dee­pe­ning the inte­gra­tion of the European market, are major miles­tones of this pro­ject. The rise of a global inte­gra­ted market makes the flow of goods and money fea­sible on a much vaster scale. Deregulation of finan­cial mar­kets in the US and Europe helped to ready these coun­tries for the mas­sive absorp­tion of foreign capi­tal as fuel for spe­cu­la­tive acti­vi­ties. Viewed in this light, though high saving and the export-orien­ted model of growth in sur­plus coun­tries is directly res­pon­sible for the imba­lances in the defi­cit coun­tries and the global imba­lances at large, it was the neo­li­be­ral turn of the US and Europe in the 1980s that set the stage, enabling such growth models to work at all.

The second gap relates to the poten­tial out­comes of the cur­rent global crisis, seen here as entai­ling either pro­lon­ged stag­na­tion and ‘lost decades’, or coor­di­na­ted reba­lan­cing. Pettis is cer­tainly right to assert that reba­lan­cing within China, the big­gest sur­plus coun­try in the world today, would be very dif­fi­cult, given the ada­mant resis­tance of the bureau­cra­tic-capi­ta­list elite, who are the major bene­fi­cia­ries of the cur­rent model. What remains to be seen is whe­ther China, faced with the limits to its model of expor­ting sur­plus capi­tal to the US, yet resis­ting reba­lan­cing, might choose to shift to a more ‘clas­si­cal’ stra­tegy of capi­tal export—that is, to export capi­tal to under­de­ve­lo­ped coun­tries and invest mostly in extrac­tive indus­tries and infra­struc­ture there. Though the stock of China’s out­ward fdi flow so far amounts to less than 30 per cent of its hol­ding of US Treasuries (or 10 per cent, if we exclude flows into Hong Kong), accor­ding to the prc Ministry of Commerce it increa­sed dra­ma­ti­cally bet­ween 2002 and 2010, from $29.9bn to $317bn, or $118bn exclu­ding Hong Kong.

China’s out­ward fdi com­prises a lot of invest­ment in mining and infra­struc­ture in the global South. The reci­pients of Chinese capital—and that from other emer­ging sur­plus coun­tries, like Brazil and South Africa—also consti­tute expan­ding mar­kets for Chinese manu­fac­tu­red exports. China’s increa­sin­gly proac­tive eco­no­mic expan­sion in the deve­lo­ping world, Africa in par­ti­cu­lar, has pro­vo­ked heated debate. For example, on the eve of the brics Durban Summit in March 2013 Lamido Sanusi, Governor of Nigeria’s Central Bank, wrote in the Financial Times that China is just ano­ther colo­nial power in Africa.

China Reaching Out

To be sure, China’s rela­tions with the other deve­lo­ping coun­tries that absorb its exports of capi­tal and manu­fac­tu­red goods are far from the clas­si­cal colo­nial model of the early twen­tieth cen­tury. China has so far lacked the will and muscle to assert mili­tary and poli­ti­cal influence over the des­ti­na­tions of its capi­tal exports. But this seems to be star­ting to change, as China’s latest National Defence White Paper, ‘The Diversified Employment of China’s Armed Forces’, stated expli­citly that pro­tec­ting over­seas eco­no­mic inter­ests is now a core goal. With the gra­dual inte­gra­tion of China’s eco­nomy into the world eco­no­mic system, over­seas inter­ests have become an inte­gral com­ponent of China’s natio­nal inter­ests.

Security issues are increa­sin­gly pro­minent, invol­ving over­seas energy and resources, stra­te­gic sea lines of com­mu­ni­ca­tion, and Chinese natio­nals and legal per­sons over­seas. Should China manage to deve­lop its geo­po­li­ti­cal pre­va­lence in select parts of the global South, then Beijing might well be able to delay reba­lan­cing and sus­tain its high-saving, high-export model of deve­lop­ment by shif­ting from the US to the deve­lo­ping world as the major des­ti­na­tion of its sur­plus capi­tal and manu­fac­tu­red exports. Of course, China’s rise as a new impe­rial power is at most inci­pient. The two alter­na­tive sce­na­rios that Pettis contemplates—a smooth, coor­di­na­ted reba­lan­cing of the sur­plus and defi­cit coun­tries or a long, rocky lan­ding of China and Germany, fol­lo­wing in the foots­teps of Japan’s lost decades—are still much more plau­sible in the short run. In any event, the global crisis star­ting in 2008 is a tur­ning point in the deve­lop­ment of global capi­ta­lism. In the long run, whe­ther it will lead to a more balan­ced and sus­tai­nable world eco­no­mic order, a per­pe­tual global crisis, or a rene­wed par­ti­tion of the world by old and new impe­rial powers remains to be seen.

Changing Models of China’s Policy Agenda Setting[5]

Shaoguang Wang[6]

China’s poli­ti­cal system has under­gone pro­found changes and the­reby to chal­lenge a conven­tio­nal wisdom in the West that no poli­ti­cal reform has ever taken place in China. 

The Closed-Door Model

The closed-door model pre­vai­led in impe­rial China, when the people had no idea of poli­ti­cal par­ti­ci­pa­tion. In contem­po­rary China, moreo­ver, such a model of agenda set­ting has not yet alto­ge­ther disap­pea­red. A case in point was the price reform in 1988, which was a “touchy” issue at the time. When moving from a plan­ned to a market eco­nomy, China encoun­te­red enor­mous trouble in fully expo­sing its pri­cing mecha­nism to the supply and demand of the market, since the govern­ment had always control­led the pri­cing pro­cess in the past.

In the early 1980s, Deng Xiaoping warned that great cau­tion should be taken in price reform. From 1985 to 1987, as the consu­mer price index star­ted to rise in line with steady pro­gress of the price reform, China came to be faced with the most serious infla­tion that it had expe­rien­ced since the early 1950s. At the February 1988 mee­ting for ana­ly­zing the eco­no­mic situa­tion, the CCP Politburo rea­li­zed that prices had risen so fast that people could no longer endure it. The State Council then took some mea­sures to hold down prices, inclu­ding exer­ting control over govern­ment expen­di­tures and cut­ting down invest­ment in fixed assets. With these ini­tia­tives in place, the State Council then deci­ded to increase the pur­chase prices of some agri­cul­tu­ral pro­ducts and to replace the old prac­tice of price-fixing with open sub­si­dies to urban employees. Unexpectedly, the intro­duc­tion of these mea­sures set off panic pur­cha­sing all over China. In this situa­tion, it would have been wise to slow down the price reform, yet Deng Xiaoping insis­ted then that the reform should brook no delay. Against this back­drop, People’s Daily, the most influen­tial news­pa­per in China, publi­shed an edi­to­rial entit­led “Plough Ahead with Reform” on June 9. The author of this edi­to­rial was quite clear that the price reform would tem­po­ra­rily harm the inter­ests of a great number of people, but he seemed to be confi­dent of the people’s endu­rance.

The CCP Politburo, obviously affec­ted by such an opti­mis­tic view, dis­cus­sed and then appro­ved the Preliminary Program for Price and Salary Reform, which decla­red that the main objec­tive of the reform was to libe­ra­lize the prices of most com­mo­di­ties except for stra­te­gic com­mo­di­ties and labor ser­vices. On August 19, when the reform plan was pro­mul­ga­ted, there was ano­ther fit of nation­wide pur­cha­sing fever. In some places, people swar­med into banks and with­drew imma­ture depo­sits from their fixed accounts to get their hands on cash for a buying spree. During the price reform, the agenda was vir­tually set alone by the CCP Politburo through a series of inter­nal mee­tings. Once policy makers deter­mi­ned to speed up the price reform, they did not bother to seek the unders­tan­ding and sup­port of the public. They wish­fully hoped that people would cotton to the plan and willin­gly bear the loss caused by the ensuing infla­tion. As a result, the consu­mer price index rocke­ted all the way to 18.8 percent in 1988 and dis­content was soon conta­gious, which partly fore­sha­do­wed the poli­ti­cal crisis in 1989. Later, Deng Xiaoping took a good lesson from the expe­rience.

The Mobilization Model

The mobi­li­za­tion model is quite fami­liar to people in China. During Mao’s era, this model was applied in set­ting almost all major and stra­te­gic agen­das, ran­ging from the Land Reform, the Three-Anti and Five-Anti cam­pai­gns, the General Line for the Socialist Transition, the Great Leap Forward, the People’s Communes, and the Four Clear-ups Movement, all the way to the Cultural Revolution. In gene­ral, the mobi­li­za­tion model consists of five phases. In the first phase, “the move­ment is star­ted and ins­truc­tions issued” Instructions may take the form of either an offi­cial docu­ment from the CCP Central Committee or the State Council, or an edi­to­rial or commentator’s essay of the CCP-control­led People’s Daily.

During the Cultural Revolution, such ins­truc­tions often came as “Chairman Mao’s Latest Directives.” In the second phase, “the ins­truc­tions are dis­se­mi­na­ted to all levels in com­pany with an impo­sing pro­pa­ganda cam­paign” The dis­se­mi­na­tion is nor­mally arran­ged in a set order : Party mem­bers should know before non-Party indi­vi­duals ; cadres should know ahead of ordi­nary people. The pro­pa­ganda cam­paign is to ensure that eve­ryone in the coun­try knows about the rele­vant ins­truc­tions. Sometimes when speed is empha­si­zed, it is requi­red that the whole pro­cess of dis­se­mi­na­tion should be com­ple­ted within twenty-four hours. In the third phase, people are orga­ni­zed to “study the ins­truc­tions for deeper unders­tan­ding” Here “study” means to dis­cuss the offi­cial docu­ments, edi­to­rials, and com­men­ta­ries as well as sup­ple­men­tary rea­ding mate­rials. The objec­tive of stu­dying is to make sure that people get a clear, full unders­tan­ding of the essence of the CCP Central Committee’s ini­tia­tive, inclu­ding why the new agenda is set, what is the thrust of the new agenda, and what steps are to be taken to carry out the new agenda. The fourth phase involves “gras­ping typi­cal cases and sprea­ding the expe­rience gained at selec­ted units to the whole coun­try” “Typical cases” can be nega­tive as well as posi­tive.

Highlighted “typi­cal cases” are used to convince the public that the agenda is neces­sary, fea­sible, and super­ior. Finally, after all the above-men­tio­ned phases, the mobi­li­za­tion model seeks to form a consen­sus among people on how to ful­fill the agenda. The upside of this method is that it is much less costly than either coer­cion or exchange ; the down­side is that it cannot have an endu­ring effect. Since the reform and ope­ning up, the mobi­li­za­tion model has not been used as fre­quently as before, but it has not been com­ple­tely aban­do­ned either. For ins­tance, it played an impor­tant role in set­ting the agenda in the fol­lo­wing policy areas : intro­du­cing the one-child-per-couple policy (1980); ope­ning chan­nels for employ­ment in the pri­vate eco­nomy (1981); esta­bli­shing the hou­se­hold res­pon­si­bi­lity system in the coun­try­side (1982); laun­ching the “five emphases, four beau­ties, and three loves” cam­paign and the “clea­ring-up of ideo­lo­gi­cal pol­lu­tion” cam­paign (1983); spee­ding up the reform of the urban eco­nomy (1984); pushing for­ward the wage reform in state-owned enter­prises and stop­ping the prac­tice of eating from the same big rice-pot (1985); restruc­tu­ring the labor system through brea­king the “iron rice bowl” (1986); coun­te­rac­ting bour­geois libe­ra­li­za­tion (1987); step­ping up the restruc­tu­ring of the per­son­nel, income dis­tri­bu­tion, and social secu­rity sys­tems (1992); advan­cing the reform of the old-age pen­sion system of public enter­prises (1995); redu­cing staff for impro­ved effi­ciency and laying off or dis­per­sing redun­dant employees (1997); and intro­du­cing a nation­wide reform of the health insu­rance system in the urban sector (1998) (1978–2003). Mao’s was an era of great men, when most impor­tant poli­cies were made by Mao Zedong, Zhou Enlai, and other mem­bers of the highest lea­der­ship. But that does not mean there was no room for the inside access model. We may spot some spe­cial fea­tures of this model in the fol­lo­wing cases from the early 1950s to the early 1970s.

Case One. The Korean War broke out in June 1950. By early August, the People’s Army of the North had gained control of more than 90 percent of the Korean penin­sula. The socia­list bloc headed by the Soviet Union then took the opti­mis­tic view that Korea would be reu­ni­ted in next to no time. But Mao Zedong and other Chinese lea­ders remai­ned sober-minded. On August 23, after a tho­rough ana­ly­sis of infor­ma­tion recei­ved from all sides, Lei Yingfu and his col­leagues in the Operations Room of the General Staff came to the conclu­sion that the odds of American troops lan­ding at Inchon were great. If so, the supply lines of the North Korean army would be cut and its main forces would be open to attack from both the north and the south, and conse­quently the war situa­tion would change over­night. Furthermore, they pre­dic­ted that the American troops would most pro­ba­bly carry out their inva­sion at Inchon on September 15, 1950, a day of high tide. Mao Zedong began to deploy forces in anti­ci­pa­tion of the worst-case sce­na­rio (Lei, 1993). Lei’s pre­di­ca­tion, which turned out to be cor­rect, had a direct bea­ring on the stra­te­gic deci­sion making of the highest lea­ders at this cru­cial junc­ture.

Case Two. The mili­tary conflict bet­ween China and the Soviet Union in March 1969 trig­ge­red heated debate in China over its stra­tegy toward the Soviet Union. Some thought that the Soviets would shift their stra­te­gic center of gra­vity to the East and attack China, while others recko­ned that the Soviet Union would conti­nue to focus on the West, stri­ving for stra­te­gic advan­tage in Europe in com­pe­ti­tion with its main rival, the United States. What wor­ried the Chinese govern­ment most then was the pos­si­bi­lity that the Soviet Union and the United States would join forces against China. At the end of 1969, Wang Shu, then a staff repor­ter with the Xinhua News

Agency in West Germany, wrote an in-depth ana­ly­sis of the Soviet stra­te­gic pos­ture. With well-docu­men­ted facts and reliable sta­tis­ti­cal data, Wang argued that Europe was still what the Soviet Union and the United States really cove­ted, and the Soviets’ vital inter­ests still lay in Europe. As for the Sino–West German rela­tion­ship, Wang Shu sug­ges­ted that China should aban­don the old view that West Germany was a “mili­ta­ris­tic, revan­chist coun­try.” He belie­ved that paci­fism pre­vai­led in West Germany. With rapid eco­no­mic growth, West Germany was more and more eager to acquire a bigger share of the inter­na­tio­nal market. It would be mutually bene­fi­cial if China could improve its rela­tion­ship with West Germany.

More spe­ci­fi­cally, Wang Shu recom­men­ded that Chinese lea­ders should invite the lea­ders of West Germany’s main oppo­si­tion par­ties to China in the hope of put­ting pres­sure on the ruling party to boost rela­tions bet­ween the two coun­tries. Mao Zedong and Zhou Enlai expres­sed deep appre­cia­tion of Wang’s view after they read his reports on the European situa­tion, Soviet stra­tegy, and the rela­tions bet­ween China and West Germany. They sepa­ra­tely met with Wang Shu in late July 1972. China’s Ministry of Foreign Affairs cited him for com­men­da­tion in an inter­nal offi­cial dis­patch. Wang Shu’s report exer­ted a consi­de­rable influence on China’s highest lea­der­ship in their deci­sion on the country’s global stra­tegy. Subsequently, Sino–West German rela­tions deve­lo­ped spee­dily. The two coun­tries signed a com­mu­ni­qué on the esta­blish­ment of diplo­ma­tic rela­tions on September 29, 1972.

These cases high­light three cha­rac­te­ris­tics of the inside access model during Mao’s time. First, this model was lar­gely applied to issues rela­ted to natio­nal secu­rity. Second, pro­po­sals or advice for inter­nal refe­rence came mainly from mili­tary staff offi­cers or intel­li­gence agen­cies rather than research ins­ti­tutes. Third, most of the pro­po­sals were pro­ducts of indi­vi­dual “mas­ter­minds” rather than ins­ti­tu­tio­na­li­zed think tanks. At that time, the newly foun­ded People’s Republic was faced with a trea­che­rous and hazar­dous inter­na­tio­nal envi­ron­ment so that the prio­rity of China’s highest lea­der­ship was streng­the­ning and defen­ding the coun­try.

Clearly these three cha­rac­te­ris­tics were pro­ducts of the time. The inside access model was applied more fre­quently after the reform. The most impor­tant reason for this is that China had pro­foundly alte­red its stra­te­gic prio­ri­ties. If the pri­mary concern in Mao’s time was how to make the coun­try stand on its own feet, the issue of the utmost impor­tance in the reform era would be how to make China pros­per. It is no easy task to deve­lop a modern eco­nomy ; the pro­cess is so com­pli­ca­ted that no single indi­vi­dual is capable of engi­nee­ring it. The task requires a trans­for­ma­tion of the exis­ting sup­por­ting mecha­nism for deci­sion making, which, by coun­ting on indi­vi­dual mas­ter­minds for advice, could no longer satisfy the modern needs of deci­sion making. Against this back­ground, China put for­ward the slogan of “scien­ti­fic deci­sion making” at the outset of the reform. Soon after, clus­ters of think tanks began to emerge.

The Chinese Rural Development Research Group, formed in 1980, was one of the first think tanks in China. The group consis­ted of chil­dren of some high-ran­king offi­cials and well-known intel­lec­tuals. Their family ties enabled them to main­tain close connec­tions with the cen­tral lea­der­ship. With the sup­port of both the Research Section under the CCP Central Committee Secretariat and the Chinese Academy of Social Sciences, the mem­bers conduc­ted field inves­ti­ga­tions and sub­mit­ted their research reports directly to the cen­tral lea­ders, who used them as com­pre­hen­sive and sys­te­ma­tic firs­thand data for the Central Meeting of Rural Work in 1981.

Later, the group par­ti­ci­pa­ted in hel­ping the cen­tral govern­ment with draf­ting a series of “No. 1 docu­ments” on issues rela­ted to the coun­try­side and agri­cul­ture. Gradually, the research output of the group became very influen­tial in govern­men­tal policy making. Later, some group mem­bers ente­red govern­ment-run research ins­ti­tu­tions like the China Economic Reform Research Institute (CERRI). CERRI began to play an increa­sin­gly impor­tant role when the reform exten­ded toward urban and indus­trial areas. It remai­ned the most influen­tial think tank in China until1989. Typically, these think tanks publi­shed some inter­nal reports such as “brie­fings,” “refe­rence mate­rials,” and so on. The cir­cu­la­tion of their publi­ca­tions tended to be very small, yet such publi­ca­tions might go straight to the top lea­ders of the cen­tral govern­ment.

The cur­rent cen­tral lea­der­ship team came into office at the end of 2002. Compared to their pre­de­ces­sors, they seem to be more aware of the impor­tance of making poli­cies in a demo­cra­tic and scien­ti­fic way. An indi­ca­tion is that from December 26, 2002, to April 23, 2007, the new CCP Politburo held forty-one work­shops, ave­ra­ging one every forty days, invi­ting phi­lo­so­phers, natu­ral scien­tists, social scien­tists, and legal scho­lars to give them lec­tures. The new cen­tral lea­der­ship has never tired of empha­si­zing the impor­tance of buil­ding up and streng­the­ning think tanks and brain trusts, in the hope that, based on for­ward-loo­king and stra­te­gic research, they can pro­vide deci­sion makers at all levels of govern­ment with thought­ful policy advice. In res­ponse, the Chinese Academy of Sciences pro­mi­sed that, as the nation’s fore­most think tank in science and tech­no­logy, it would “bring its ini­tia­tive into full play so as to upgrade [its] capa­city of offe­ring advice for pivo­tal stra­te­gies concer­ning natio­nal deve­lop­ment” (Qi, 2004).

The Reach-Out Model

Generally spea­king, policy advi­sers prefer to influence deci­sion makers directly rather than in a roun­da­bout fashion. Unless it is as a last resort, they do not take issues to the public for help and risk offen­ding deci­sion makers. Why, then, do they occa­sio­nally take that step ? The most impor­tant reason per­haps is that they encoun­ter strong oppo­si­tion from within the esta­blish­ment and believe public opi­nion will surely be on their side.

The reach-out model is by no means common in China. Nevertheless, there is a recent example. China began market-orien­ted medi­cal reform in the 1990s. According to nation­wide sur­veys of medi­cal ser­vice in 1993, 1996, and 2003, medi­cal expen­di­tures of urban and rural resi­dents increa­sed stea­dily while the per­cen­tage of the popu­la­tion cove­red by health insu­rance shrank. In a dra­ma­tic way, the Severe Acute Respiratory Syndrome (SARS) crisis of 2003 revea­led the vul­ne­ra­bi­lity of China’s health-care system brought about by the market-orien­ted medi­cal reform and led people to reflect on the whole matter. However, some govern­men­tal offi­cials insis­ted that the country’s medi­cal system should be fur­ther mar­ke­ti­zed. In the spring of 2005 the China’s Medical System Reform Study Group, a pro­ject jointly spon­so­red by the Social Development Section of the Development Research Center under the State Council and the World Health Organization, publi­shed a series of reports that conclu­ded that China’s medi­cal reform “had not been suc­cess­ful,” if it was not a “colos­sal fai­lure.”

At first, the reports drew little atten­tion because they appea­red in an inter­nal jour­nal. In June 2005 the situa­tion took a sudden turn when Ge Yanfeng, deputy direc­tor of the Social Development Section of the Development Research Center under the State Council, dis­clo­sed the conclu­sion of the gene­ral report while being inter­vie­wed by news media. He argued that medi­cal reform in China must stick to two prin­ciples. First, the reform ought to ensure equity, that is, gua­ran­tee all people equal access to basic medi­cal ser­vices. Second, it should empha­size the cost-effec­ti­ve­ness of medi­cal invest­ment ; in other words, the health of the whole popu­la­tion should be impro­ved as much as pos­sible under the condi­tion of limi­ted public invest­ment in health care. In his view, it was impos­sible for the market-orien­ted medi­cal reform to achieve either goal. Almost at the same time, Liu Xinming, direc­tor of the Policy and Law Department of the Ministry of Health told Hospital Journal that “mar­ke­ti­za­tion should not be the direc­tion of China’s medi­cal reform”.

Their remarks arou­sed great exci­te­ment among the media and the mass public. At the time there was much dis­cus­sion in the media about medi­cal reform, while the public almost uni­ver­sally agreed with the judg­ment that “the medi­cal reform was a total fai­lure”. Although some libe­ral scho­lars insis­ted that the medi­cal reform should not be turned back and the Ministry of Health was conti­nually trying to avoid any com­ment on whe­ther the medi­cal reform was a suc­cess or a fai­lure, the Pandora’s box had been opened and the public would not accept any fur­ther reform mea­sures unless the govern­ment made big policy adjust­ments. Soon the­reaf­ter a new consen­sus seemed to have emer­ged : the govern­ment should gua­ran­tee basic care to eve­ryone in the coun­try. Now the govern­ment has pled­ged itself to intro­du­cing an urban health-care system cove­ring all resi­dents and to assis­ting all rural com­mu­ni­ties to res­tore the coope­ra­tive medi­cal system (CMS) before long. Apparently, in this case at least, the reach-out model per­for­med won­ders.

The Outside Access Model

Even though the out­side access model is seldom prac­ti­ced in China, there have been never­the­less a couple of cases in point in recent years. The so-called three paral­lel rivers (the Jinsha, Nujiang, and Lancang) of Yunnan Province were put on the United Nations Educational, Scientific and Cultural Organization (UNESCO) World Heritage list as a natu­ral pro­perty on July 3, 2003. Less than a month later, the National Development and Reform Commission appro­ved a hydroe­lec­tric pro­ject on the Nu River (Nujiang), which met with imme­diate and strong oppo­si­tion from domes­tic envi­ron­men­tal orga­ni­za­tions. These orga­ni­za­tions mobi­li­zed the media in an effort to win over the public, and at the same time wrote let­ters to the lea­ders of the State Council, asking them to stop the pro­ject. In mid-February 2004 Premier Wen Jiabao remar­ked on a report sub­mit­ted to the State Council by the Development and Reform Commission that “as far as this giant hydroe­lec­tric pro­ject is concer­ned, more care­ful study is needed to make a ratio­nal deci­sion since the pro­ject has recei­ved great atten­tion from the public and there are still disa­gree­ments about its envi­ron­men­tal effects.” Wen’s com­ments tem­po­ra­rily halted the pro­ject.

In July 2005, when Wen went to ins­pect local work in Yunnan, a local offi­cial remin­ded him that the Nujiang hydroe­lec­tric pro­ject had been stop­ped for a long while, and that the local govern­ment, caught in the cross­fire, wanted the cen­tral govern­ment to make an imme­diate deci­sion. When he retur­ned to Beijing, Wen orde­red the Development and Reform Commission, the State Environmental Protection Administration, and the Ministry of Water Resources to “step up the inves­ti­ga­tion and research and bring for­ward your plans.” For fear that the pro­ject was to be res­tar­ted, sixty-one envi­ron­men­tal orga­ni­za­tions and ninety-nine indi­vi­dual acti­vists jointly wrote an open letter in September 2005 addres­sed to the State Council and the subor­di­nate minis­tries or com­mis­sions concer­ned. Meanwhile, those who backed the pro­ject also wrote to the cen­tral govern­ment, pushing for an imme­diate resump­tion of construc­tion hence began a seesaw battle bet­ween the two camps. The cen­tral govern­ment has not made a final deci­sion to date. This is a land­mark case in Chinese his­tory, sho­wing that the acti­vi­ties of civil orga­ni­za­tions and the let­ters sub­mit­ted to top deci­sion makers by citi­zens at long last can pro­duce enor­mous effect on the cen­tral govern­ment. As Chinese society becomes increa­sin­gly plu­ra­li­zed and open, people from all walks of life and with dif­ferent poli­ti­cal stances have become more willing to express their views and more for­ce­ful in doing so. It can be pre­dic­ted that the out­side access model will become one of the major models for China’s future agenda set­ting.

The Popular-Pressure Model

In the past, the first five models men­tio­ned above were com­monly obser­ved in China, while the popu­lar-pres­sure model was rarely applied. Although Chinese lea­ders began to call openly for “scien­ti­fic” and “demo­cra­tic” policy making in the mid-1980s, the more demo­cra­tic popu­lar-pres­sure model did not often come into view until the late 1990s. How do we account for the gro­wing pro­mi­nence of the popu­lar-pres­sure model ? To answer this ques­tion we have to explain where “popu­lar pres­sures” come from and why “popu­lar pres­sures” become increa­sin­gly conse­quen­tial in the policy agenda set­ting. Where do the pres­sures come from ? Although China’s eco­nomy has grown, on ave­rage, at 9 percent per year throu­ghout the last quar­ter of a cen­tury, the single-minded pur­suit of the highest pos­sible aggre­gate growth rate has resul­ted in a whole series of acute chal­lenges.

By the end of the 1990s, quite a few pro­blems had become alar­ming, inclu­ding the envi­ron­men­tal crisis, the wide­ning income gap (regio­nal gap, urban-rural gap, and gap among urban resi­dents, and gap among rural resi­dents), the lack of eco­no­mic and social secu­rity (high unem­ploy­ment rates, unaf­for­dable edu­ca­tion and medi­cal ser­vices, and frequent work­place acci­dents), and so on. Meanwhile, the society became more and more dif­fe­ren­tia­ted and pola­ri­zed. At the outset of the reform, when the coun­try was highly ega­li­ta­rian, people were willing to sacri­fice their indi­vi­dual short-term inter­ests for the sake of long-term social inter­ests, because they belie­ved that eve­ryone would bene­fit from the reform even­tually and could not ima­gine that the reform might one day turn into a zero-sum game. Then the overw­hel­ming majo­rity of the Chinese popu­la­tion embra­ced the reform who­le­hear­tedly. Now, people are more guar­ded, sus­pi­cious of every new reform mea­sure. Those who have suf­fe­red losses in one way or ano­ther in the early stages of the reform no longer sup­port new reform ini­tia­tives without hesi­ta­tion. These people have deep hatred for the abuse of power, cor­rupt offi­cials, and over­night ups­tarts and their extra­va­gant life­style, and contempt for glib tal­king scho­lars who try to make a pile out of the “reform.” Above all, most of them feel that China’s reform has gone astray lately and that it is time for China to change course by pur­suing more balan­ced and more coor­di­na­ted socioe­co­no­mic deve­lop­ment. This is the social pres­sure that the Chinese govern­ment is now facing. What makes popu­lar pres­sure for­ce­ful enough to change the policy agenda ? Four fac­tors appear to be cru­cial, namely, sta­ke­hol­der conscious­ness, the asso­cia­tio­nal revo­lu­tion, the chan­ging role of the mass media, and the rise of the inter­net.

Stakeholder Consciousness 

When a society is not highly dif­fe­ren­tia­ted, all inter­est groups remain “in them­selves,” with little awa­re­ness of “for them­selves.” They are thus unli­kely to exert pres­sure on policy makers in pur­suit of their own inter­ests. As society becomes highly dif­fe­ren­tia­ted, each inter­est group becomes more sen­si­tive to its own inter­ests, thus giving rise to a strong incen­tive for put­ting pres­sure on policy makers. Of course, it is one thing to have such incen­tives ; it is ano­ther to be able to exert real pres­sure. What counts here is a group’s mobi­li­za­tion abi­lity. Those that control poli­ti­cal and orga­ni­za­tio­nal resources no doubt pos­sess the grea­test mobi­li­za­tion abi­lity. The reo­rien­ta­tion of China’s regio­nal policy is a good example in this regard. A regio­nal gap already exis­ted in China before the mid-1980s, but the pro­blem was not severe. Later, as the government’s policy inten­tio­nally gave pre­fe­ren­tial treat­ment to the eas­tern part of the coun­try, the gap bet­ween China’s coas­tal areas and the inland pro­vinces soon wide­ned. In the early 1990s, scho­lars and policy resear­chers hea­tedly deba­ted the country’s regio­nal policy. The pre­valent view then was that there was no need to make a fuss over the regio­nal dis­pa­rity either because it had not wide­ned or because it was not yet very big. Even para­mount leader Deng Xiaoping (1992) insis­ted “we should not dampen the vita­lity of the deve­lo­ped areas at present.” He conten­ded that “the right time to raise and settle this pro­blem might be the end of this cen­tury,” “when our people are living a fairly com­for­table life.” But the under­de­ve­lo­ped regions did not have patience to wait any longer. Starting from the early 1990s, each year, at the annual mee­tings of the National People’s Congress, some repre­sen­ta­tives of the inland pro­vinces openly expres­sed their disap­pro­val of the government’s lop­si­ded regio­nal policy. In 1996, under the moun­ting pres­sure, the Fourth Session of the Eighth National People’s Congress passed the Ninth Five-Year Plan and the Long-Term Objectives for the Year 2010, both of which stres­sed the impor­tance of more balan­ced deve­lop­ment of regio­nal eco­no­mies and aimed to narrow the exis­ting dis­pa­ri­ties. Unfortunately, in prac­tice, not much real effort was made to achieve these goals in the years that fol­lo­wed. In the late 1990s, that pro­vo­ked more resent­ful com­plaint and more for­ce­ful cri­ti­cism of the regio­nal policy of the cen­tral govern­ment. Against this back­ground, in 1999 the cen­tral govern­ment finally deci­ded to launch the Go-West Program. The State Council soon set up the Leading Group for Western Development, which sym­bo­li­zed the offi­cial start of the Go-West Program. It was not long before the National People’s Congress depu­ties from the pro­vinces in Northeast China began to beg the cen­tral govern­ment to rein­vi­go­rate their local eco­nomy, as this part of China had become the nation’s “rust­belt” during the course of the eco­no­mic reform. In September 2003 the pro­ject of Revitalizing the Old Industrial Bases in Northeast China offi­cially became “a stra­te­gic deci­sion” of the cen­tral govern­ment.

Associational Revolution

The past two decades have wit­nes­sed an unpre­ce­den­ted asso­cia­tio­nal revo­lu­tion in China. By March 2007 there were over 190,000 asso­cia­tions of various types regis­te­red with govern­ment civil affairs depart­ments at the county level and above. However, those regis­te­red asso­cia­tions

account for only a small frac­tion of China’s asso­cia­tio­nal land­scape, as a large number of asso­cia­tions choose either to regis­ter as busi­ness orga­ni­za­tions or not to regis­ter at all.8 More impor­tant, accor­ding to Chinese law, for grass­roots orga­ni­za­tions below the county level (e.g., orga­ni­za­tions whose acti­vi­ties are mainly confi­ned to spe­ci­fic enter­prises, admi­nis­tra­tive units, schools, resi­den­tial com­mu­ni­ties, town­ships, or vil­lages), regis­tra­tion is not requi­red. If the unre­gis­te­red are inclu­ded, it is esti­ma­ted there are at least 500,000 asso­cia­tions ope­ra­ting in China. Most asso­cia­tions have no inter­est in public policy, but one type is hea­vily invol­ved in policy-rela­ted acti­vi­ties, namely, so-called advo­cacy groups, com­monly known as non­go­vern­men­tal orga­ni­za­tions (NGOs). Environmental groups are among the most active NGOs in China. Before the 1990s, there had been envi­ron­men­tal orga­ni­za­tions, but most were quasi-offi­cial, top-down aca­de­mic socie­ties of envi­ron­men­tal research. At that time, pol­lu­tion was not a grave pro­blem and did not trouble most people. Environmental orga­ni­za­tions devo­ted more effort to research than action or took no action at all. However, with the 1990s, China’s envi­ron­ment stea­dily dete­rio­ra­ted and people’s awa­re­ness of eco­lo­gi­cal issues heigh­te­ned. Consequently, the number of envi­ron­men­tal NGOs mul­ti­plied. In the new cen­tury, envi­ron­men­tal NGOs, espe­cially those made up of uni­ver­sity and col­lege stu­dents, mush­roo­med in every part of China. According to incom­plete sta­tis­tics, at present there are at least 2,000 envi­ron­men­tal NGOs in the nation. Most receive no finan­cial sup­port from the govern­ment at all ; for many, a signi­fi­cant pro­por­tion of funds comes from abroad. Those NGOs engage in envi­ron­men­tal edu­ca­tion, help the govern­ment to draw up envi­ron­men­tal pro­tec­tion plans, and work as envi­ron­men­tal consul­tants for some ins­ti­tu­tions. More impor­tant, they try by every pos­sible means to improve the envi­ron­ment, and to stop pro­jects, plans, or actions that may cause envi­ron­men­tal damage. By doing so, they put great pres­sure on the govern­ment.

Changing Role of the Mass Media

Environmental NGOs are not large in number but are quite influen­tial. One reason for their effec­ti­ve­ness is that many of them main­tain close ties with mass media and many of their orga­ni­zers are jour­na­lists by pro­fes­sion, both of which help amplify their voices and add to their weight. Apart from ser­ving as the “loud­spea­ker” for envi­ron­men­tal NGOs, Chinese media have in gene­ral been playing an increa­sin­gly active role in set­ting the public agenda, thus contri­bu­ting to policy adjust­ments in recent years. The media may affect agenda set­ting in three ways : they may select cer­tain issues for cove­rage while igno­ring others ; they may high­light some issues while down­playing others ; and they may prio­ri­tize the high­ligh­ted issues in a cer­tain order.

Here we are not tal­king about cove­rage for a short while by any par­ti­cu­lar news­pa­pers, maga­zines, tele­vi­sion net­works, radio sta­tions, or publi­shers. Rather, we mean cove­rage for an exten­ded period by a whole class of the public mass dis­tri­bu­tors of news and infor­ma­tion. Obviously, without media cove­rage the public would not know about some issues. For example, research has found that in China deadly coal mine acci­dents were more frequent and appal­ling in the 1980s, but they did not become a public issue. Since the mid-1990s, at the same time that the death rates from coal mine acci­dents have been stea­dily decli­ning, coal mine safety has become a focus of public atten­tion, because this issue has recei­ved not only exten­sive but also high­ligh­ted media cove­rage (Wang Shaoguang, 2006).

Normally there coexist seve­ral high­ligh­ted public issues within a rela­ti­vely long period ; thus the way the mass media prio­ri­tize these issues influences the public’s assess­ment of their rela­tive impor­tance. In recent years, the Chinese people have shown gro­wing concern about such issues as agri­cul­ture, the coun­try­side, far­mers, migrant wor­kers, the eco­lo­gi­cal envi­ron­ment, public health, health insu­rance, inequa­lity, and others. This can be lar­gely attri­bu­ted to the media’s exten­sive and high­ligh­ted cove­rage of them. In China, the mass media are sup­po­sed to serve as the Party’s “pro­pa­ganda machine”. Yet the Party’s mou­th­piece has been gai­ning more publi­city in recent years, faci­li­ta­ting inter­ac­tion bet­ween the govern­ment and people, because of great changes in both the quan­tity and the qua­lity of the media.

As far as quan­tity is concer­ned, com­pa­red with the early days of the reform, the number of radio sta­tions has tri­pled and the num­bers of tele­vi­sion sta­tions, news­pa­pers, and maga­zines have increa­sed ten­fold (National Bureau of Statistics, 2006 : 196). Chinese media have gone through an even more pro­found change in qua­lity. The mar­ke­ti­za­tion of media began in the 1980s and sped up in the 1990s. The govern­ment is still the owner of radio sta­tions, TV sta­tions, and some news­pa­pers and maga­zines in the legal sense. However, with little or no bud­ge­tary allo­ca­tion from the govern­ment, media orga­ni­za­tions have to sur­vive harsh com­pe­ti­tion on their own.

The ope­ra­tio­nal logic of media agen­cies alte­red once they become pri­ma­rily profit-driven enti­ties. They have to consi­der how to attract rea­ders, vie­wers, and lis­te­ners, and how to expand their com­mer­cial influence. Of course, as the mou­th­pieces of the cen­tral or local Party/​governments, some news­pa­pers and maga­zines are gran­ted only a limi­ted degree of free­dom. Their sur­vi­val stra­tegy is to create, under their ban­ners, sub­si­diary news­pa­pers and maga­zines that enjoy much more lati­tude. Examples include Global Times under People’s Daily, Oriental Outlook under the Xinhua News Agency, Xinmin Evening News and Bund Pictorial under the Shanghai Wenhui–Xinmin United Newspaper Group, and a host of others. Newspapers and maga­zines such as China Newsweek, Finance, Commercial Week, and China Industry and Business Daily, are not desi­gna­ted as organs of the Party and govern­ment to begin with ; they seem to be more auto­no­mous.

Perhaps ins­pi­red by these well-known publi­ca­tions, hun­dreds of regio­nal and local news­pa­pers and maga­zines (e.g., Southern China Times, Dahe Daily, etc.) have added new pages for inves­ti­ga­tive reports, news reviews, and com­men­ta­ries on public affairs, trying to expand the boun­da­ries of free­dom of expres­sion. Even radio and tele­vi­sion broad­cas­ting has begun to follow such examples. As com­pe­ti­tion is get­ting increa­sin­gly furious, media are eager to get close to common people and inquire into real life and search out the truth. Every now and then, they report sen­si­tive news events and com­ment on sen­si­tive public issues. By doing so, they pro­vide more and more space for various social groups to arti­cu­late their needs, demands, inter­ests, and policy pre­fe­rences, and help turn people’s concerns into public issues, thus contri­bu­ting to the country’s recent changes in policy, law, and ins­ti­tu­tions.

The Rise of the Internet

The com­pe­ti­tion the mass media faces comes not only from within the tra­di­tio­nal media, but also from such bur­geo­ning media as the inter­net, mobile phone short mes­sage ser­vice, and so on. In par­ti­cu­lar, the rapid growth of inter­net use has forced tra­di­tio­nal media to change their conven­tio­nal ways of dis­se­mi­na­ting news and infor­ma­tion and to pro­vide more room for dis­cus­sing public affairs. It has been less than fif­teen years since China was offi­cially connec­ted to the inter­net, yet “explo­sive” may be the proper word to des­cribe the growth of inter­net use in the coun­try. In early 1997, China had barely 620,000 inter­net users. By July 2007, the number had soared to 162 mil­lion, an astoun­ding leap by any stan­dard.

More to the point, the upsurge shows no signs of slo­wing down. Before 2000, there were vir­tually no net­work media in China since inter­net users num­be­red no more than 10 mil­lion. This situa­tion began to change in 2001, when China’s inter­net popu­la­tion rea­ched 25 mil­lion. In 2002, when the inter­net popu­la­tion excee­ded 45 mil­lion, public online dis­cus­sion increa­sed dra­ma­ti­cally. In 2003, when the inter­net popu­la­tion rose to 70 mil­lion, online public opi­nion flou­ri­shed. A series of cases, inclu­ding the por­no­gra­phic video case the Liu Yong case the Huang Jing case the BMW car case the case of a Japanese group who­ring in Zhuhai the Beijing-Shanghai high speed rail­way case and the Sun Zhigang case trig­ge­red wides­pread public debate in cybers­pace. No wonder that 2003 was deemed “the year of online public opi­nion”. Since then, the inter­net has become a pri­mary chan­nel for the public to send mes­sages, express ideas, and com­ment on public affairs, and vent their spleen. At present, online public opi­nion is exer­ting more and more influence on the public agenda set­ting.

Compared with tra­di­tio­nal media, the inter­net is cha­rac­te­ri­zed by four dis­tinc­tive fea­tures. Every person is a poten­tial infor­ma­tion pro­vi­der ; the number of poten­tial infor­ma­tion pro­vi­ders is in the mil­lions rather than in the hun­dreds or thou­sands ; infor­ma­tion flows in more than one direc­tion ; and infor­ma­tion can reach every corner of the earth ins­tan­ta­neously. As these fea­tures make it extre­mely dif­fi­cult to mani­pu­late infor­ma­tion dis­se­mi­na­tion, Chinese neti­zens now enjoy more free­dom of expres­sion than ever before and the­re­fore acquire more say in govern­men­tal acti­vi­ties.

Characterized by publi­city, open­ness, inter­ac­ti­vity, diver­sity, and ins­tan­ta­neity, net­work media have chan­ged the logic of the public agenda set­ting. In the era of tra­di­tio­nal media, the public agenda was set all in all by a small bunch of media agen­cies. The govern­ment had little trouble domi­na­ting agenda set­ting since control­ling these agen­cies was fairly easy. However, things are dif­ferent in the time of the public net­work : through inter­ac­tions, neti­zens are capable of tur­ning what they (rather than media agen­cies) deem impor­tant into part of the public agenda. For example, through dis­cus­sion in cybers­pace about a series of cases (inclu­ding the BMW car case, the Sun Zhigang case, migrant wor­kers deman­ding pay­ment of their sala­ries, unsuc­cess­ful medi­cal reform, Professor Lang Xianping’s cri­ti­cism of the state-owned enter­prises reform), online public opi­nion demons­tra­ted how power­ful it was in influen­cing public agenda set­ting. Netizens were outra­ged by those cases because all of them vio­la­ted the prin­ciple of equity and jus­tice that people che­ri­shed.

As the net has become an impor­tant chan­nel of public expres­sion, the highest lea­der­ship is paying more and more atten­tion to it. For ins­tance, both President Hu Jintao and Premier Wen Jiabao admit­ted that they had lear­ned from inter­net sources about public opi­nion during the out­break of SARS in 2003. The Fourth Plenary Session of the Sixteenth CCP Central Committee held in September 2004 deci­ded that “much atten­tion should be paid to the influence of some new media like the inter­net on public opi­nion.” The great concern of the high lea­der­ship with online public opi­nion indi­cates how influen­tial net­work media have become.

Of course, net­work media are by no means pitted against tra­di­tio­nal media. On the contrary, they are com­ple­men­tary. When an issue becomes the focus of neti­zens’ atten­tion, tra­di­tio­nal media will probe the issue and pro­vide in-depth reports. Likewise, reports by a tra­di­tio­nal media agency about an indi­vi­dual event may set off intense debate in online forums and rapidly ele­vate it to the public agenda. In most situa­tions, net­work media and tra­di­tio­nal media inter­act with each other. It is often dif­fi­cult to judge which is the ini­tia­tor. The Sun Zhigang case is a typi­cal example of such inter­ac­tion. On March 20, 2003, Sun Zhigang, a young man from Hubei Province, could not show his proper iden­ti­fi­ca­tion docu­ment and was beaten to death at the Guangzhou Detention Center. At the end of March, a media-major post­gra­duate student in Beijing expo­sed this case on an online forum, Peach Flower Port <www​.xici​.net/​b​2​80834>), main­tai­ned by a well-known BBS pro­vi­der, Xici Lane <www .xici​.net>).

Peach Flower Port is a cyber club where media pro­fes­sio­nals all over the coun­try often meet toge­ther. Learning of the case from this online forum, Chen Feng, a repor­ter with the Southern Metropolis News, and his cowor­kers deci­ded to inter­view Sun’s rela­tives and the autho­ri­ties concer­ned, the result of which was the Southern Metropolis News’s report of the case on April 25. Other papers soon reprin­ted the report. By this time, the number of China’s neti­zens had topped 70 mil­lion. With the help of the inter­net, the Sun Zhigang case became a hou­se­hold topic eve­ryw­here in the nation in no time and caused a strong res­ponse online (Chen, 2005). The furious public reac­tion to this case placed conti­nual and power­ful pres­sure on the govern­ment to do some­thing. Eventually, the State Council deci­ded, on June 20, to abro­gate the cus­tody and repa­tria­tion system alto­ge­ther. Had the inter­net not exis­ted, the case might have emer­ged and then faded out qui­ckly like pre­vious hap­pe­nings of the same kind.

To the best of our know­ledge, there was no pre­cedent in China nor elsew­here in the world for an inter­ac­tion bet­ween net­work media and tra­di­tio­nal media that resul­ted in such a quick nul­li­fi­ca­tion of an admi­nis­tra­tive system that had been in place for more than forty years. The Sun Zhigang case per­haps qua­li­fies as a “focu­sing event,” but it is somew­hat spe­cial. In most cases, it tends to take longer for public opi­nion to alter the public agenda and then to change the policy agenda. By com­pa­ring the issues put on the public agenda (inclu­ding the three agri­cul­tu­ral pro­blems, migrant wor­kers, hou­se­hold regis­tra­tion reform, com­pul­sory edu­ca­tion, public health, medi­cal secu­rity, etc.) and govern­ment policy adjust­ments in recent years, we may esta­blish a clear line of close connec­tions bet­ween the two. In almost all policy areas, public cri­ti­cism of the old poli­cies tends to appear three to five years ear­lier than policy adjust­ments. That the former contri­butes to the latter is beyond doubt.

At first, the public aimed its cri­ti­cism at some spe­ci­fic poli­cies. As debates went on, people came to rea­lize that the faults with those poli­cies could be traced back to the gene­ral policy orientation—“efficiency first”—adopted by the cen­tral govern­ment It was this mis­gui­ded policy orien­ta­tion that led local govern­ments to strive for high growth of GDP at any price. Hence, in recent years, the net­work and tra­di­tio­nal media often aired sharp cri­ti­cism of the “effi­ciency-first” prin­ciple. The cen­tral govern­ment was pres­su­red to respond. To cushion the cri­ti­cism, the Sixteenth National Congress of the CCP in 2002 tried to rein­ter­pret the expres­sion of “effi­ciency first, fair­ness valued (giving prio­rity to effi­ciency with due consi­de­ra­tion to equity)” and refor­mu­la­ted it as “more atten­tion should be paid to effi­ciency in pri­mary dis­tri­bu­tion, but to fair­ness in redis­tri­bu­tion”.

Yet, the wide­ning gap bet­ween rich and poor put people on alert : the pro­blem of unfair­ness in pri­mary dis­tri­bu­tion (for example, the income gap bet­ween bosses, mana­gers, and employees) also needs to be solved. Redistribution through taxa­tion and govern­ment expen­di­ture alone was barely enough to narrow the income gap. The expres­sion “effi­ciency first, fair­ness valued” was main­tai­ned, but sub­stan­tially modi­fied by the “huma­nist and scien­ti­fic view of deve­lop­ment” at the Third Session of the Sixteenth CCP Central Committee in October 2003. This catch phrase was finally rejec­ted by the Fourth Session of Sixteenth CCP Central Committee in September 2004.

Adopted by the Fifth Plenary Session of the Sixteenth CCP Central Committee at the end of 2005, “Suggestions of the CCP Central Committee on the Formulation of the Eleventh Five-Year Guidelines on National Economic and Social Development” seemed to have gone fur­ther, deman­ding that China should “pro­mote social equity and enable all the people to share the bene­fits of reform and social deve­lop­ment”. This is a his­to­ric leap from “no deve­lop­ment, no sur­vi­ving,” “allo­wing the early bird to catch the worm (encou­ra­ging some people to get rich first through honest labor and legal mana­ge­ment),” and GDP wor­ship, to “huma­nism,” “shared pros­pe­rity,” and “buil­ding a har­mo­nious socia­list society. “Without the public’s ques­tio­ning of the “reform,” without ani­ma­ted debate over public poli­cies among new and tra­di­tio­nal media, and without the strong public call for reo­rien­ting China’s reform, such a great trans­for­ma­tion in policy orien­ta­tion would be uni­ma­gi­nable.

Summary

The six models of policy agenda set­ting coexist in various degrees in China today. Compared with the Mao Zedong and Deng Xiaoping eras, the legacy of strong­man poli­tics has almost disap­pea­red. As the influence of policy resear­chers, experts, media, sta­ke­hol­ders, and ordi­nary citi­zens on agenda set­ting increases, the closed-door model and the mobi­li­za­tion model have become lar­gely obso­lete, the inside access model a normal prac­tice, the out­side access model and the reach-out model occa­sio­nally obser­ved, and the popu­lar-pres­sure model fre­quently used.

This study sug­gests that today the public is not an igno­red bys­tan­der but is seriously invol­ved in the agenda-set­ting pro­cess and that there is an impres­sive congruence bet­ween the prio­ri­ties of the public and the prio­ri­ties of the Chinese govern­ment. In the ruling party’s ter­mi­no­logy, agenda set­ting “is beco­ming a more and more scien­ti­fic and demo­cra­tic pro­cess”; or in Wen Jiabao’s words, agenda set­ting “empha­sizes solu­tions to major pro­blems, either rele­vant to the grand stra­tegy of the country’s social-eco­no­mic deve­lop­ment or of deep concern to the mass public” (Wen, 2006). Although the poli­ti­cal pro­cess in China has yet to become as scien­ti­fic and demo­cra­tic as desi­red, the logic of Chinese poli­tics has never­the­less been under­going fun­da­men­tal change. These pro­found changes in Chinese poli­tics cannot be pro­perly appre­cia­ted from the pee­phole of autho­ri­ta­ria­nism. Like a “dog-skin plas­ter” used by quack doc­tors in tra­di­tio­nal China, “autho­ri­ta­ria­nism,” a concept impor­ted from the West, has been ran­domly applied eve­ryw­here in the past cen­tury. Chinese poli­tics has always been so des­cri­bed, from the late Qing dynasty to Yuan Shikai, the war­lords, Chiang Kai-shek, Mao Zedong, Deng Xiaoping, Jiang Zemin, and now to Hu Jintao, irres­pec­tive of the earth-sha­king changes in bet­ween. The term is so absurd that it serves more as an ideo­lo­gi­cal curse than as an ins­tru­ment for aca­de­mic ana­ly­sis. It is the time for resear­chers to for­sake such non­sense once and for all.

China’s Environmental Crisis

Interview with Dale Wen[7]

How serious is the envi­ron­men­tal crisis in China ?

The envi­ron­men­tal crisis in China is dead serious. For example, the ground water table of the North China plain is drop­ping by 1.5 meters (5 feet) per year. This region pro­duces 40 percent of China’s grain. One cannot help won­de­ring about how China will be fed once the ground aqui­fer is deple­ted.

What in your view are the three most serious envi­ron­men­tal crises being faced by China at this point ?

Water pol­lu­tion and water scar­city ; soil pol­lu­tion, soil degra­da­tion and deser­ti­fi­ca­tion ; global war­ming and the coming energy crisis.

What in your view is the role of wes­tern TNCs in the cur­rent envi­ron­men­tal crisis ?

Taking advan­tage of lag­ging imple­men­ta­tion of envi­ron­men­tal laws in China, many wes­tern TNCs have relo­ca­ted their most pol­lu­ting fac­to­ries into the coun­try and have exa­cer­ba­ted or even crea­ted many envi­ron­men­tal pro­blems. For example, Pearl River Delta and Yangtze River Delta, the two Special Economic Zones where most TNC sub­si­dia­ries are loca­ted, have the most serious pro­blem of heavy metal and POPs (per­sistent orga­nic pol­lu­tants) pol­lu­tion.

Some people say that the pro­blem is capi­ta­lism ? Do you agree ?

Capitalism is cer­tainly a big contri­bu­tor that we have to address. But it is not the only factor-we should not forget that the former Soviet Union also had a dismal envi­ron­men­tal record. A cri­ti­cal view of deve­lop­men­ta­lism needs to be fos­te­red by pro­gres­sives to address the envi­ron­men­tal crisis.

Is the reso­lu­tion of the envi­ron­men­tal crisis dependent on demo­cra­ti­za­tion in China ?

Not neces­sa­rily. With the type of repre­sen­ta­tive demo­cracy that exists in wes­tern coun­tries, the rich and power­ful can always manage to exter­na­lize the envi­ron­men­tal cost to the poor and voi­ce­less-this is a major pro­blem of the US envi­ron­men­tal move­ment. The pre­valent « not in my backyard » approach often results in relo­ca­ting of pol­lu­tion and envi­ron­men­tal devas­ta­tion ins­tead of addres­sing the real pro­blems. So I do not think the US-style demo­cracy can help to solve the envi­ron­men­tal crisis in China. A true par­ti­ci­pa­tory demo­cracy may help-as eve­ryone will have a say, inclu­ding the vic­tims of eco­lo­gi­cal des­truc­tion. Social demo­cra­cies in nor­thern Europe work better than US model and are much closer to a true par­ti­ci­pa­tory demo­cracy, but they also have much less popu­la­tion and resource pres­sure than China, thus copying that model directly will not be an easy way out. China will have to deve­lop its own inclu­sive poli­ti­cal system accor­ding to its own his­tory and culture. The cur­rent lea­der­ship is empha­si­zing « the har­mo­nious society » and « sus­tai­nable deve­lop­ment ». While the details of these phrases still need to be spel­led out, I think it is a good start.

Western envi­ron­men­ta­lists cri­ti­cize Chinese for repro­du­cing Western life­styles that have a heavy impact on the envi­ron­ment ? What can you say about this ?

The cri­ti­cism is right on target, as the rapid adop­tion of Western life­styles by China’s elites is a sad rea­lity. But we should not forget why it is happening–the mains­tream West (inclu­ding the govern­ments, the media and even some NGOs) has fier­cely encou­ra­ged the middle class men­ta­lity and life­styles in China, as they think these are the basis for wes­tern type of demo­cracy. Western envi­ron­men­ta­lists would be more convin­cing to their Chinese audience if they also cri­ti­ci­zed the life­styles in their own coun­try and the influence of the West in sprea­ding such life­styles.

What does China’s « New Left » have to say about the envi­ron­ment ? Do they have a pro­gram of envi­ron­men­tal regu­la­tion ? What are the key points of this pro­gram ?

As China’s « New Left » refers to anyone who disa­grees with the neo­li­be­ral ortho­doxy, so they do not have a uni­fied voice about the envi­ron­ment yet. Some New Left scho­lars, like Wang Hui, Huang Ping and Wen Tiejun, have writ­ten exten­si­vely against deve­lop­men­ta­lism and are active par­ti­ci­pants in China’s emer­ging green move­ments. However, other New Left scho­lars assume that once the equa­lity pro­blems are addres­sed, the envi­ron­men­tal issues will be auto­ma­ti­cally solved. This is a posi­tion I disa­gree with. The com­bi­na­tion of green and red pers­pec­tives will be a chal­lenge for China’s New Left, as it is for many pro­gres­sives in other parts of the world.

China is the second big­gest emit­ter of green­house gases in the world. Should China be sub­jec­ted to man­da­tory limits for green­house gas emis­sions under a new Kyoto Protocol ?

I think that under a new Kyoto Protocol, green­house gas emis­sion quotas should be allo­ca­ted on an equal per capita basis, and all coun­tries should be sub­jec­ted to such man­da­tory limits under a cap-and-trade arran­ge­ment. While some may object that such a pro­gram reward over-popu­la­tion in the deve­lo­ping coun­tries, we should not forget that cur­rent quota allo­ca­tion accor­ding to pre­vious emis­sions rewards big emit­ters (i.e. deve­lo­ped coun­tries) who have crea­ted the global war­ming pro­blem at the first place. As a com­pro­mise, we can use cur­rent or 1990 popu­la­tion for quota set­ting, then an equal per capita quota system, which would dis­cou­rage both popu­la­tion growth and green­house gas emis­sion. Another issue is that in this age of trans­na­tio­nal cor­po­ra­tions, the boun­da­ries of nation states are blur­red. For example, if a forest in Indonesia is cut to supply Chinese fac­to­ries set up by US com­pa­nies, and the fini­shed goods are expor­ted to satisfy wes­tern consu­mers, who should be res­pon­sible for the GHG emis­sions in the pro­cess ? I think the end-consu­mers should bear most res­pon­si­bi­lity.

James Lovelock, the envi­ron­men­ta­list of Gaia fame, has advo­ca­ted adop­tion of nuclear energy as part of a stra­tegy to coun­ter global war­ming. Do you think nuclear might or should be part of China’s alter­na­tive energy pro­gram ?

I do not know enough about the pros and cons of nuclear energy to answer this ques­tion directly. But I think there are many proven, envi­ron­men­tal-friendly, cost-effec­tive and less-contro­ver­sial tech­no­lo­gies already avai­lable-inclu­ding energy effi­ciency, wind power, bio-gas diges­ter (using human/​animal wastes and agri­cul­tu­ral lef­to­vers), solar cooker, solar heater, etc. And China is the world leader in some of these tech­no­lo­gies (e.g., bio-gas diges­ter and solar heater). I hope all these proven and safe tech­no­lo­gies would be signi­fi­cant parts of China’s alter­na­tive energy pro­gram before we get dependent on nuclear energy.

What do you think about the envi­ron­men­tal move­ment in China ? How inde­pendent are the envi­ron­men­ta­lists from the govern­ment ? How effec­tive are they ?

The envi­ron­men­tal move­ment in China is gro­wing very fast. It has great poten­tial and faces a big chal­lenge at the same time. Most envi­ron­men­ta­lists are quite inde­pendent from the govern­ment, but they are not inde­pendent enough from their wes­tern fun­ders-finan­cially, and more impor­tantly, ideo­lo­gi­cally. In my opi­nion, this is the big bot­tle­neck that limits their effec­ti­ve­ness. They need to break out of their middle-class cocoon to reach the larger public.

Environmental orga­ni­zing was a trai­ning ground for demo­cracy in Eastern Europe in the eigh­ties. Do you think that might be the case in China as well ?

I do not know enough about the real situa­tion that exis­ted in Eastern Europe. From the limi­ted infor­ma­tion I have, envi­ron­men­ta­lists and their ideas were pivo­tal in brin­ging about change. But from what hap­pe­ned after­wards, I am not even sure whe­ther this was a change for the better. Since the 1990s, mate­ria­lism and consu­me­rism have swept across the land, and envi­ron­men­ta­lists have been mar­gi­na­li­zed. I have heard that some envi­ron­men­ta­lists there are quite bitter about this or even feel that they had been used in the eigh­ties-what they wanted was a more huma­ni­zed socia­lism ins­tead of the unche­cked capi­ta­lism of today. I cer­tainly DO NOT want to see all this replayed in China. As I men­tio­ned before, China needs to deve­lop its own inclu­sive poli­ti­cal model accor­ding to its own his­tory and culture.

What is your own alter­na­tive eco­lo­gi­cal and eco­no­mic path for China ?

Personally, I would like to see an alter­na­tive that com­bines social jus­tice and eco­lo­gi­cal sus­tai­na­bi­lity : some kind of eco­lo­gi­zed socia­lism, or eco­lo­gi­zed social demo­cra­tic system. Another impor­tant task for the pro­gres­sive left is to reclaim the spi­ri­tual and reli­gious sphere. This is a chal­lenge for all pro­gres­sives around the world. Those who are already enga­ged in the task, inclu­ding diverse inter­faith efforts in the west and libe­ra­tion theo­logy in Latin American, can be an ins­pi­ra­tion for many of us. As someone spi­ri­tual, but not reli­gious, I think tra­di­tio­nal left ideo­logy such as Marxism has empha­si­zed too much on mate­rial pro­duc­tion, and this has actually faci­li­ta­ted the pre­vai­ling deve­lop­men­ta­lism and consu­me­rism in the 20th cen­tury, and it has sur­ren­de­red the reli­gious and spi­ri­tual realm to the right. Secular mate­ria­lism is not the right thing to combat reli­gious fun­da­men­ta­lism, which is rising in the world. We need to culti­vate and pro­mote a heal­thy and tole­rant spi­ri­tual life to forge the way for­ward. As some Achuar Indians say, the pro­blem with the west is that people there get their dreams wrong. The indi­ge­nous peoples and many land-based peoples the deve­lo­ping coun­tries a still have a strong spi­ri­tual connec­tion with the land and envi­ron­ment, and we need to learn from them. For Chinese, we should reexa­mine and relearn some posi­tive aspects of our tra­di­tio­nal culture inclu­ding Confucianism, Daoism and Buddhism, as well as learn from the rest of the world.

You are unique in that you are an expa­triate Chinese that never­the­less cares about the future of China a lot and holds pro­gres­sive views that is cri­ti­cal of both the Chinese govern­ment and the US. Are there other people like you here in the US ? What would you advise other Chinese expa­triates ? And do you think the Chinese govern­ment will listen to you ?

There are other people like me here in the US, but we are cer­tainly a small mino­rity. For other Chinese expa­triates, my advice is : « The US is not the whole world, and the middle class people we nor­mally inter­act with is only a small part of the world popu­la­tion-it even does not represent the majo­rity of those who grow and pick our food in US. So get in touch with rea­lity, get more infor­med, do not take your middle class expe­rience in US for gran­ted and try to impose that on China. » I do not know if the Chinese govern­ment will listen to me, but I hope that it will judge my ideas accor­ding to their content ins­tead of my expa­triate status. More impor­tantly, I hope the govern­ment will listen to the grass­roots people more. One pro­blem in the reform era is that the govern­ment has lis­te­ned to the elites (tech­no­crats, intel­lec­tuals, expa­triates, foreign experts, etc.) too much and has gotten dis­con­nec­ted from the majo­rity of wor­king people. There have been some posi­tive indi­ca­tions in the last two years that the govern­ment is respon­ding more to people’s need. I hope this trend will conti­nue.

How confi­dent are you that China will change course before it is too late ?

It is not only China that has to change course, but other coun­tries as well. Some pro­blems, like global war­ming, seem so severe that even our best efforts may only miti­gate them in the near future. Any solu­tion will require long and hard work, and this holds for China as well. These pro­blems have been known for some time without being ade­qua­tely addres­sed, but it is better late than never, and we should all hope and work for the best.

Worker protests in China

China Labour Bulletin

February 2014

From the begin­ning of June 2011 to the end of December 2013, China Labour Bulletin recor­ded 470 strikes and pro­tests by fac­tory wor­kers across the coun­try. This repre­sen­ted 40 percent of the 1,171 total number worker pro­tests recor­ded across all sec­tors during that period. As expec­ted, the bulk of the China’s fac­tory pro­tests occur­red in the manu­fac­tu­ring heart­land of Guangdong, and espe­cially in the Pearl River Delta area. There were 267 inci­dents in Guangdong, some 57 percent of the total. Factory pro­tests were also concen­tra­ted in the coas­tal pro­vinces of Jiangsu, Zhejiang, Shandong and Fujian with 40, 35, 19 and 16 inci­dents res­pec­ti­vely. Despite the relo­ca­tion of many fac­to­ries to inland pro­vinces such as Henan and Sichuan, there is little evi­dence that the pat­tern of labour unrest seen in the coas­tal pro­vinces is being repli­ca­ted inland just yet. CLB recor­ded just eight inci­dents in Henan and six in Sichuan. Moreover, seve­ral of these inci­dents were rela­ted to the restruc­tu­ring of state-owned enter­prises rather than the issues nor­mally seen in pri­va­tely and foreign-owned fac­to­ries in the coas­tal regions. However, it is impor­tant to note that Guangdong might be over-repre­sen­ted in this data­set partly because of the fre­quency and inten­sity of tra­di­tio­nal media cove­rage of labour dis­putes in the pro­vince as well as the fami­lia­rity and exper­tise of wor­kers in Guangdong with social media, which has allo­wed their dis­putes to gain the kind of atten­tion pro­tests in other pro­vinces may not receive.

The main demands of stri­king fac­tory wor­kers

The most common demands of wor­kers during these pro­tests were clearly rela­ted to the eco­no­mic pro­blems in the manu­fac­tu­ring sector dis­cus­sed in Chapter One. Demands for com­pen­sa­tion (fol­lo­wing mer­gers and relo­ca­tions), wage arrears and pay increases, for example, accoun­ted for about three-quar­ters of all the demands recor­ded on the strike map, while many other demands were rela­ted to the cost-cut­ting mea­sures adop­ted by fac­tory mana­gers, such as the reduc­tion of bene­fits, sub­si­dies and allo­wances and the non-pay­ment of over­time. One of the most notable aspects of the com­pen­sa­tion demands made by wor­kers in this period was that, in many cases, they asked for a higher rate of com­pen­sa­tion than that man­da­ted by the Labour Contract Law, which states that employees who are laid off should be com­pen­sa­ted one month’s salary for every year of ser­vice. If employees deci­ded not to move with the com­pany to a new loca­tion they would often demand the “market rate” for lay-off com­pen­sa­tion, which could be double the legally man­da­ted rate or even higher. Moreover, even if they were not lea­ving the com­pany, wor­kers some­times still deman­ded com­pen­sa­tion for moving to new pre­mises, a change of busi­ness owner­ship or simply as a bul­wark against pos­sible future lay-offs or changes in pay and condi­tions. Although wages for fac­tory wor­kers have increa­sed by around 50 percent on ave­rage since mid-2010, it is clear that for many pro­duc­tion line wor­kers, wages are still far too low. CLB recor­ded 121 demands for pay increases from fac­tory wor­kers in this period, many ear­ning not much more than the local mini­mum wage. In most cities in China, the mini­mum wage is only about a quar­ter to a third of the ave­rage wage in that city. Under China’s cur­rent Five-Year-Plan (2011-15), the mini­mum wage is set to increase at an ave­rage rate of 13 percent a year and even­tually reach 40 percent of the ave­rage wage in each region. However, the latest job data shows that pay increases in the manu­fac­tu­ring sector are actually slip­ping fur­ther behind those in higher paid sec­tors such as finance and tech­no­logy. Another impor­tant factor in the pay dis­putes logged by CLB is the wage dis­pa­rity among ordi­nary wor­kers, senior staff and mana­gers. Largely because of their own low pay levels, pro­duc­tion line wor­kers are acu­tely sen­si­ti­sed to any move that might increase the already sub­stan­tial gap among them, senior employees and mana­ge­ments.

Organizing and social media

As in pre­vious years, the majo­rity (57 percent) of strikes and pro­tests had bet­ween 100 and 1,000 par­ti­ci­pants. This appears to be the opti­mal range for orga­ni­zing strikes : If there are fewer than 100 par­ti­ci­pants, wor­kers can be more easily pres­su­red by mana­ge­ment and or govern­ment offi­cials to return to work. Strikes with more than 1,000 wor­kers on the other hand can be more dif­fi­cult to orga­nize and sus­tain. However, some 19 percent of the pro­tests by fac­tory wor­kers did have more than 1,000 par­ti­ci­pants, inclu­ding some with up to 8,000 wor­kers.

The abi­lity of wor­kers to orga­nize strikes and pro­tests, espe­cially at larger fac­to­ries, was enhan­ced consi­de­ra­bly during this period by the rapid deve­lop­ment of social media and mes­sa­ging plat­forms such Weibo and WeChat, and the wides­pread avai­la­bi­lity of cheap, no-brand smart phones, which often func­tion just as well as more expen­sive iPhones and Samsung models..Sina Weibo had about 600 mil­lion regis­te­red users at the end of September 2013, although the number of active users was only about ten percent of that. The majo­rity of fac­tory wor­kers may not be very active on Weibo and WeChat but they can at least use these tools to keep in touch with their col­leagues and stay up to date with the latest deve­lop­ments in the strike or dis­pute at their fac­tory. Workers who are active have proven them­selves highly adept at using mobile social media tools to not just to orga­nize pro­tests but ensure that they come to the atten­tion of the public, the tra­di­tio­nal media and local govern­ment offi­cials.

Protecting worker repre­sen­ta­tives

The ques­tion of how to pro­tect worker repre­sen­ta­tives from mana­ge­ment repri­sals was one the key issues for fac­tory wor­kers during this period. Although many strikes and pro­tests were at least par­tially suc­cess­ful, in that the bosses made some conces­sions or went some way to mee­ting the wor­kers’ demands, employers could just as easily a take tough stand against wor­kers during the dis­pute or more com­monly reta­liate against the strike lea­ders once the employees had retur­ned to work. It is impor­tant to note here that although it is not ille­gal to go on strike in China, the right to strike is not pro­tec­ted under the Constitution and employers can often use the pro­vi­sions of the Labour Contract Law to dis­miss strike lea­ders. For example, Article 39, Paragraph 2 of the Labour Contract Law sti­pu­lates that employers can ter­mi­nate the labour contracts of those who seriously vio­late com­pany regu­la­tions.

Outside the fac­tory

Although pro­tests by fac­tory wor­kers tend to get the most atten­tion both inside China and inter­na­tio­nally, the majo­rity of worker pro­tests still occur out­side the fac­tory, most nota­bly in trans­port, construc­tion, retail, edu­ca­tion and other ser­vices. While these pro­tests do bear some simi­la­ri­ties to those by fac­tory wor­kers, they also have their own dis­tinct causes and cha­rac­te­ris­tics. China Labour Bulletin recor­ded 306 strikes and pro­tests by trans­port wor­kers bet­ween June 2011 and the end of December 2013. Around 60 percent of those inci­dents invol­ved taxi dri­vers.

Teachers

Teachers in well-esta­bli­shed govern­ment schools in major cities can earn a rea­so­nable salary and do not have to worry too much about wage arrears. However they often have to work long hours and super­vise stu­dents’ extracur­ri­cu­lar acti­vi­ties with no over­time pay­ment. The situa­tion in many smal­ler, less eco­no­mi­cally deve­lo­ped towns can be a lot worse. Teachers are often poorly paid, espe­cially when com­pa­red with civil ser­vants and other public employees with the same expe­rience and qua­li­fi­ca­tions, and can go seve­ral months without being paid at all. Many tea­chers are reluc­tant to strike in order to resolve their grie­vances because of the impact such action would have on their stu­dents. However, the lack of an effec­tive tea­chers’ union and the absence of any effec­tive chan­nels of com­mu­ni­ca­tion bet­ween tea­chers, school admi­nis­tra­tors and govern­ment offi­cials often means strike action is the only way tea­chers can get their voices heard. CLB recor­ded 69 tea­chers’ strikes in the period cove­red by this report, two thirds of which inclu­ded demands for higher pay and or the pay­ment of wage arrears

The evo­lu­tion of labour rights groups in Guangdong

Non-govern­men­tal orga­ni­sa­tions (NGOs) that pro­mote and defend wor­kers’ rights have become a key part of China’s bur­geo­ning civil society, par­ti­cu­larly in the south-eas­tern coas­tal pro­vinces where migrant wor­kers are hea­vily concen­tra­ted. Labour NGOs have tra­di­tio­nally offe­red cama­ra­de­rie and prac­ti­cal sup­port to migrant wor­kers, in a sense, pro­vi­ding them with a home away from home. Their main work effort revol­ved around legal sup­port for wor­kers whose rights had been vio­la­ted and/​or who had been inju­red at work. Through lec­tures, work­shops and publi­ca­tions, labour NGOs pro­vi­ded migrant wor­kers with infor­ma­tion about their rights under the law, occu­pa­tio­nal health and safety, job search tech­niques, tips for urban living and health issues for women wor­kers etc. When resources allo­wed, some orga­ni­sa­tions also pro­vi­ded wor­kers with simple voca­tio­nal skills trai­ning. An impor­tant ele­ment of their work was orga­ni­zing cultu­ral and recrea­tio­nal acti­vi­ties that helped bring wor­kers from dif­ferent regions of China and dif­ferent fac­to­ries closer toge­ther – not just in the same room but towards a common end. While this approach may have been appro­priate in the 2000s, the deve­lop­ment of the wor­kers’ move­ment in China over the last few years has meant that labour groups have had to adapt in order to keep pace with the new col­lec­tive demands of wor­kers. Encouragingly, seve­ral labour NGOs in Guangdong are now moving away from the tra­di­tio­nal approach of just hel­ping indi­vi­dual wor­kers towards a more col­lec­tive focus, pro­vi­ding wor­kers with stra­te­gic advice on col­lec­tive bar­gai­ning and main­tai­ning soli­da­rity in the face of mana­ge­ment hos­ti­lity.

The emer­gence of a new wor­king class in China

During the era of state-plan­ned eco­nomy, China’s wor­kers were por­trayed as the “lea­ding class” and “mas­ters in their own house.” However, such depic­tions had more to do with poli­ti­cal ideo­logy than eco­no­mic rea­lity. The rela­ti­vely small number of wor­kers in China’s cities gene­rally did have stable jobs and reliable bene­fits but these were essen­tially gifts bes­to­wed by the state and the threat of with­hol­ding such gifts was enough to control the wor­kers. Today, after 35 years of eco­no­mic reform, the pic­ture is very dif­ferent. No one would dare to pre­tend that wor­kers are China’s “lea­ding class:” That posi­tion has been usur­ped by big busi­ness and cor­rupt govern­ment offi­cials. However, China does now have a strong and increa­sin­gly active wor­king class, one that cannot so easily be control­led by the state. Spearheaded by young men and women from the coun­try­side, who under the old system would not have even been clas­si­fied as wor­kers, China’s new wor­king class is not at all inter­es­ted in poli­ti­cal rhe­to­ric, it is focu­sed ins­tead on basic social and eco­no­mic rights ; ear­ning a living wage, crea­ting a safe work envi­ron­ment and being trea­ted with dignity and res­pect by the employer.

All too often, howe­ver, wor­kers are confron­ted with autho­ri­ta­rian and exploi­ta­tive mana­ge­ments who deny them even these basic entit­le­ments. The lack of an effec­tive trade union, and the absence of any per­ma­nent mecha­nism for col­lec­tive bar­gai­ning in the work­place, leaves wor­kers with no option but to go on strike, work to rule, or stage pro­tests and demons­tra­tions in order to get their voices heard. However, it is pre­ci­sely these col­lec­tive actions that help foster a grea­ter sense of unity and soli­da­rity among the wor­kers, and in turn change both the way wor­kers see them­selves and the way mana­ge­ment sees them. Younger wor­kers in par­ti­cu­lar no longer see them­selves as mere iso­la­ted indi­vi­duals, stran­gers in the city who have no choice but to keep their heads down and earn a little money before retur­ning home. Rather, they see them­selves as a col­lec­tive force, a part of the city where they work and not apart from it. Workers know that by coming toge­ther and staying united they can put much more pres­sure on their employer not only to make conces­sions on their spe­ci­fic demands but more impor­tantly to see their employees less as sub­jects to be dic­ta­ted to and more as a dis­tinct inter­est group that has to be res­pec­ted.

Importantly, China’s new wor­king class is increa­sin­gly enga­ging with civil society. Labour rights groups have played a vital role in gui­ding wor­kers through their dis­putes with their employers, dis­cus­sing what col­lec­tive bar­gai­ning stra­te­gies to employ, how to respond to set­backs, and how to main­tain soli­da­rity and sup­port their repre­sen­ta­tives. Labour rights groups are at the fore­front of the deve­lop­ment of col­lec­tive bar­gai­ning in China, both on the ground and in dis­se­mi­na­ting the results and les­sons lear­ned to a wider audience. The rapid deve­lop­ment of social media in China over the last three years has given wor­kers and civil society orga­ni­sa­tions a much broa­der voice. Workers are sha­king off the image of poor, exploi­ted indi­vi­duals and emer­ging as an active, dyna­mic and uni­fied group capable of taking action to help itself. And in so doing they are gai­ning more sup­port from ordi­nary mem­bers of the public who can iden­tify with their struggle.

The Chinese govern­ment struggles to respond

When the new lea­der­ship of the Chinese Communist Party took over at the end of 2012, it inhe­ri­ted a crisis of legi­ti­macy. The eco­nomy was slo­wing down, the gap bet­ween the rich and the poor was gro­wing at an alar­ming rate and cor­rup­tion among govern­ment offi­cials was at an all-time high. General Secretary Xi Jinping and his col­leagues knew they had to move the eco­nomy on to a more stable and sus­tai­nable foo­ting, cra­ck­down on the worse excesses of cor­rupt offi­cials and find some way of allo­wing ordi­nary people to share in the bene­fits of China’s much vaun­ted “eco­no­mic miracle.” The Party and govern­ment have in the past attemp­ted to boost domes­tic consump­tion in China by rai­sing the mini­mum wage but this has been lar­gely inef­fec­tive because most adjust­ments only keep up with the cost of living. Moreover the govern­ment-man­da­ted mini­mum wage can actually limit the pay increases wor­kers might other­wise get because employers see it as the state-set basic wage to pay all low-level employees. Just about the only way wor­kers can get a real pay rise is by going on strike and deman­ding more. As a result, local autho­ri­ties often end up get­ting drag­ged into dis­putes that could and should be resol­ved by talks bet­ween labour and mana­ge­ment. This is a role local autho­ri­ties are sin­gu­larly ill-equip­ped to handle. They lack the staf­fing, the exper­tise, as well as the finan­cial resources to suc­cess­fully inter­vene or mediate every time wor­kers strike. Sometimes the autho­ri­ties try conci­lia­tion and urge labour and mana­ge­ment to come to an accom­mo­da­tion, on other occa­sions they adopt a hard-line approach and detain worker acti­vists. But wha­te­ver atti­tude they take, nothing really seems to change. Government offi­cials increa­sing reco­gnise that run­ning around trying to put out fires is not a long term solu­tion to the pro­blems ende­mic in the work­place. Many offi­cials unders­tand the need for a mecha­nism to resolve labour dis­putes in-house and the need for the offi­cial trade union to play a far more proac­tive and pro-worker role in the dis­putes. Thus far, howe­ver, attempts to rouse the All-China Federation of Trade Unions from its slum­ber have had little impact. Even when Xi Jinping sum­mo­ned the new lea­ders of the ACFTU to Party head­quar­ters in Zhongnanhai and told them face-to-face that China’s wor­kers deser­ved better, the ACFTU respon­ded with its usual jargon, pla­ti­tudes and archaic rhe­to­ric while basi­cally igno­ring the issue at hand. It was not that the ACFTU was defying the Party but simply that it did not know how else to respond.

[1] Extract from an article publi­shed by Monthly Review,, Volume 64, Issue 10, March 2013.

[2] From Shifting Power, Critical Perspectives on Emerging Countries, TransNational Institute, 2014.

[3] Published in New Left Review 81, May-June 2013

[4] Michael Pettis, The Great Rebalancing : Trade, Conflict, and the Perilous Road Ahead for the World Economy, Princeton University Press : Princeton 2013

[5] Extract from an article publi­shed in Modern China Volume 34 Number 1January 2008 ; 34 ; 56

[6] Wang Shaoguang (PhD in Political Science from Cornell University in 1990) is a chair pro­fes­sor in the Department of Government and Public Administration at the Chinese University of Hong Kong, a Changjiang Professor in the School of Public Policy and Management at Tsinghua University, and the chief editor of The China Review, an inter­dis­ci­pli­nary jour­nal on grea­ter China.

[7] Interview conduc­ted by Walden Bello, Focus on the Global South, < http://​focus​web​.org/​n​o​d​e​/1097 >. Born and raised in China, Dale obtai­ned her PhD from the California Institute of Technology. Currently an asso­ciate of the International Forum on Globalization (IFG), she worked in Silicon Valley’s high tech indus­try before moving to non-profit work. She tra­vels fre­quently to China, where she main­tains close ties with China’s emer­ging civil society.

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