Current Situation and Future of China’ s Reform
Author： Source： Date：2017-04-17
Yongnian Zheng, director of East Asia Institute at the National University of Singapore, joined the Public Lecture Series on the morning of April 17th. The 18th National Congress of the CPC ushered in a new phase of Comprehensively Deepening Reform and breakthroughs have been visible in critical areas in the past five years. However, many tasks on the reform agenda remain to be fully implemented and challenges against the reform have intensified. Mr. Zheng shared with us his insights into China’s reform in the past few years and elaborated on the current situation and expectations of the approaching 19th National Congress of the CPC.
Zheng painted the picture of the sequence democratization and the construction of state institution: 1) state institutions established prior to democratization; 2) state institutions established after democratization; and 3) state institutions that were already rooted prior to democratization and shift gears after democratization for better or for worse. He exemplified the formation of modern education policy in France during Napoleon and the widely appreciated welfare policy initiated by Bismark, indicating that most fundamental state institutions are built prior to democratization. In addition, Zheng differentiated the formation and development of welfare policies in most European countries and those in East Asia, particularly Japan and the four Asian Tigers. What we see today to be the modern and well-developed welfare policy in Western Europe resulted from violent political reforms; whereas Japan and the four Asian Tigers walked into 90s with relatively full-fledged welfare policies peacefully. Zheng attributed this difference to the presence of a dominant group of middle class in the East Asian countries. Therefore he points out that there is a sequence in development where economic development usually comes first, followed by reforms and developments in social structure, and eventually political development.
Zheng walked the audience through major changes after the 18th National Congress of CPC to have a better grasp of the current situation of reforms in China. The 18th National Congress of CPC was held in the context of a China that has gone through remarkable economic reforms and development while with non-negligible political burdens. The anti-graft campaign and the re-concentration of power at the top level are the two major positive changes, according to Zheng. The anti-graft campaign has been just in time to save China, or the CPC, from falling prey to the vicious and meaningless competitions among political oligarchs such as Zhou Yongkang, Ling Jihua or Xu Caihou. In contrast to the positive views that some scholars hold that Ukraine is in the process of democratization, Zheng believes that Ukrainian society is further torn apart by the domestic political oligarchs, one siding with the West and the other with Russia. Similarly, the Party Secretary, President and Prime Minister lack coordination under the Vietnamese system which is inclined to regress to oligarchy. Secondly, Zheng believes that the concentration of power as reflected in the formation of the four steering groups was rather necessary, given the political landscape during Hu Jintao’s presidency. There were nine members in the standing committee of CPC, each of whom has one vote, yielding to a situation of decentralization but without proper and effective coordination. In other word, it became unclear who shoulders the political responsibility. Zheng called it a “system of enfeoffment at the top level”. Therefore, it was essential to concentrate power at the 18th National Congress of CPC. Besides concentration of power, the operation of the four steering groups, announcing plans, briefings and reports of each meeting, delivers a more transparent message to the public and is prone to be institutionalized in the future. Moreover, Zheng pointed out that society-wide consensus is lacking in political reform, and thus the emphasis on Rule by Law upon the 18th National Congress of CPC seems to be the most appropriate solution to China’s reform.
Then why does the anti-graft campaign cease to attract public attention and the public become increasingly discontent with the current situation, or the stagnation of reform? Zheng identified two primary reasons to the public discontent. In the first place, natural contradictions lie between sustained economic development and a corrupted government. On one hand, economic development cannot be sustained with a corrupted government; On the other hand, anti-corruption campaign inevitably hinders the economic development. Secondly, economic slowdown plays an important role in generating public discontent. Consequently, how to make downward-going economy smooth and stable is crucial. Zheng indicated that there are four pillars to Chinese economy –local governments, SOEs, private sectors and foreign investors. With the launch of the anti-graft campaign, lazy politics prevails across local governments and SOEs. The insufficient legislation in the protection of private property and a seemingly shift of ideology render it difficult for private enterprises and foreign investors to contribute to the country’s sustained economic development. It is significant for the CPC to figure out a new way to tackle the government-corporate relationship properly and to make full use of the role of entrepreneurs in the national economic development.
According to Zheng, the 18th National Congress anchored on disciplining the party through anti-graft campaign; the 19th National Congress would focus on the effective separation of power and economic development. Zheng pinpointed the importance of the presence of middle class in pulling the society together. 70% to 75% of U.S. population in 2008 was made up of middle class while the number decreased to less than 50% today. Zheng believed that the shrink of middle class contributed to the fragmentation of the American society. Therefore it is critical for the Chinese government to dive into the reform of a series of social policies from healthcare, housing to education. Anti-graft campaign does not end in enforcing punishments against corrupted officials but also includes reforms in the system of public servants, administrative system and so on. Moreover, Zheng expected that upon the 19th National Congress, the anti-graft campaign would be institutionalized. The advances in institutions are of great importance to every state. Zheng concluded by illustrating his faith and high expectations in Chinese economy and the 19th National Congress of CPC.
Zheng painted the picture of the sequence democratization and the construction of state institution: 1) state institutions established prior to democratization; 2) state institutions established after democratization; and 3) state institutions that were already rooted prior to democratization and shift gears after democratization for better or for worse. He exemplified the formation of modern education policy in France during Napoleon and the widely appreciated welfare policy initiated by Bismark, indicating that most fundamental state institutions are built prior to democratization. In addition, Zheng differentiated the formation and development of welfare policies in most European countries and those in East Asia, particularly Japan and the four Asian Tigers. What we see today to be the modern and well-developed welfare policy in Western Europe resulted from violent political reforms; whereas Japan and the four Asian Tigers walked into 90s with relatively full-fledged welfare policies peacefully. Zheng attributed this difference to the presence of a dominant group of middle class in the East Asian countries. Therefore he points out that there is a sequence in development where economic development usually comes first, followed by reforms and developments in social structure, and eventually political development.
Zheng walked the audience through major changes after the 18th National Congress of CPC to have a better grasp of the current situation of reforms in China. The 18th National Congress of CPC was held in the context of a China that has gone through remarkable economic reforms and development while with non-negligible political burdens. The anti-graft campaign and the re-concentration of power at the top level are the two major positive changes, according to Zheng. The anti-graft campaign has been just in time to save China, or the CPC, from falling prey to the vicious and meaningless competitions among political oligarchs such as Zhou Yongkang, Ling Jihua or Xu Caihou. In contrast to the positive views that some scholars hold that Ukraine is in the process of democratization, Zheng believes that Ukrainian society is further torn apart by the domestic political oligarchs, one siding with the West and the other with Russia. Similarly, the Party Secretary, President and Prime Minister lack coordination under the Vietnamese system which is inclined to regress to oligarchy. Secondly, Zheng believes that the concentration of power as reflected in the formation of the four steering groups was rather necessary, given the political landscape during Hu Jintao’s presidency. There were nine members in the standing committee of CPC, each of whom has one vote, yielding to a situation of decentralization but without proper and effective coordination. In other word, it became unclear who shoulders the political responsibility. Zheng called it a “system of enfeoffment at the top level”. Therefore, it was essential to concentrate power at the 18th National Congress of CPC. Besides concentration of power, the operation of the four steering groups, announcing plans, briefings and reports of each meeting, delivers a more transparent message to the public and is prone to be institutionalized in the future. Moreover, Zheng pointed out that society-wide consensus is lacking in political reform, and thus the emphasis on Rule by Law upon the 18th National Congress of CPC seems to be the most appropriate solution to China’s reform.
Then why does the anti-graft campaign cease to attract public attention and the public become increasingly discontent with the current situation, or the stagnation of reform? Zheng identified two primary reasons to the public discontent. In the first place, natural contradictions lie between sustained economic development and a corrupted government. On one hand, economic development cannot be sustained with a corrupted government; On the other hand, anti-corruption campaign inevitably hinders the economic development. Secondly, economic slowdown plays an important role in generating public discontent. Consequently, how to make downward-going economy smooth and stable is crucial. Zheng indicated that there are four pillars to Chinese economy –local governments, SOEs, private sectors and foreign investors. With the launch of the anti-graft campaign, lazy politics prevails across local governments and SOEs. The insufficient legislation in the protection of private property and a seemingly shift of ideology render it difficult for private enterprises and foreign investors to contribute to the country’s sustained economic development. It is significant for the CPC to figure out a new way to tackle the government-corporate relationship properly and to make full use of the role of entrepreneurs in the national economic development.
According to Zheng, the 18th National Congress anchored on disciplining the party through anti-graft campaign; the 19th National Congress would focus on the effective separation of power and economic development. Zheng pinpointed the importance of the presence of middle class in pulling the society together. 70% to 75% of U.S. population in 2008 was made up of middle class while the number decreased to less than 50% today. Zheng believed that the shrink of middle class contributed to the fragmentation of the American society. Therefore it is critical for the Chinese government to dive into the reform of a series of social policies from healthcare, housing to education. Anti-graft campaign does not end in enforcing punishments against corrupted officials but also includes reforms in the system of public servants, administrative system and so on. Moreover, Zheng expected that upon the 19th National Congress, the anti-graft campaign would be institutionalized. The advances in institutions are of great importance to every state. Zheng concluded by illustrating his faith and high expectations in Chinese economy and the 19th National Congress of CPC.
