Showing posts with label Party. Show all posts
Showing posts with label Party. Show all posts

Friday, March 26, 2010

Ryan Pyle Blog: The Unwritten Rule

Hello.

For years there has been an unwritten rule or agreement between the Communist Party in China, and the subjects that they watch over. That rule has been that, the government will maintain breakneck GDP growth, to keep employment high and wages rising, and the average people will stay out of politics and political debate. In a sense, as Yang Yao says below, that the ruling body in Beijing as been tied to a performance based legitimacy, instead of a classical democratic based legitimacy.

Well, that's all fun; but the real question is how is power transfered? In a democracy we for new representatives and that takes place every 2-4 years. Power is handed over peacefully and in a way that is in line with a constitution which sets out these rules. Decisions may be close, or down to the wire, but power is always relinquished and the process moves as smoothly as it possibly could.

But what happens when Beijing's "Performance Based Legitimacy" comes to an end? What happens when China has GDP growth rates of only 2% a year, and unemployment rates of over 20% a year? What happens then? As the performance decreases the government will begin to lack a power base. What happens when the government loses the ability to generate growth? It's a scary scenario, but one that needs to be talked about today, instead of tomorrow.

When the gap between rich and poor, or city dwellers and rural peasants, becomes too great; will there be social instability? Might that lead to some kind of political upheaval? To be honest I have more questions than answers. But the thought of the Communist Party potentially losing control is frightening. While the government can be big, nasty and ineffective, at least they are fairly stable and predictable. What replaces them could be potentially much nastier.

Please give Yang Yao's piece a look below. Raises a lot of interesting questions.

Copyright © 2002-2010 by the Council on Foreign Relations, Inc.
_________________________________
The End of the Beijing Consensus

Can China's Model of Authoritarian Growth Survive?

Yang Yao
YANG YAO is Deputy Dean of the National School of Development and the Director of the China Center for Economic Research at Peking University.
Since China began undertaking economic reforms in 1978, its economy has grown at a rate of nearly ten percent a year, and its per-capita GDP is now twelve times greater than it was three decades ago. Many analysts attribute the country's economic success to its unconventional approach to economic policy -- a combination of mixed ownership, basic property rights, and heavy government intervention. Time magazine's former foreign editor, Joshua Cooper Ramo, has even given it a name: the Beijing consensus.

But, in fact, over the last 30 years, the Chinese economy has moved unmistakably toward the market doctrines of neoclassical economics, with an emphasis on prudent fiscal policy, economic openness, privatization, market liberalization, and the protection of private property. Beijing has been extremely cautious in maintaining a balanced budget and keeping inflation down. Purely redistributive programs have been kept to a minimum, and central government transfers have been primarily limited to infrastructure spending. The overall tax burden (measured by the ratio of tax revenue to GDP) is in the range of 20 to 25 percent. The country is the world's second-largest recipient of foreign direct investment, and domestically, more than 80 percent of its state-owned enterprises have been released to private hands or transformed into publicly listed companies. Since the Chinese Communist Party (CCP) lacks legitimacy in the classic democratic sense, it has been forced to seek performance-based legitimacy instead, by continuously improving the living standards of Chinese citizens. So far, this strategy has succeeded, but there are signs that it will not last because of the growing income inequality and the internal and external imbalances it has created.

The CCP's free-market policies have, predictably, led to major income disparities in China. The overall Gini coefficient -- a measure of economic inequality in which zero equals perfect equality and one absolute inequality -- reached 0.47 in 2008, the same level as in the United States. More disturbing, Chinese city dwellers are now earning three and a half times as much as their fellow citizens in the countryside, the highest urban-rural income gap in the world.

How, then, has the Chinese government been able to adopt the principles of neoclassical economics while still claiming Marxism as its ideological anchor? The answer is that China has for three decades been ruled by a disinterested government -- a detached, unbiased regime that takes a neutral stance when conflicts of interest arise among different social and political groups. This does not mean that Beijing has been devoid of self-interest. On the contrary, the state is often predatory toward citizens, but its predation is "identity-blind" in the sense that Beijing does not generally care about the social and political status of its chosen prey -- unlike many governments elsewhere that act to protect and enrich specific social or political groups. As a consequence, the Chinese government has been more likely than other authoritarian regimes to adopt growth-enhancing policies.

For the last 30 years, the CCP has intentionally adopted policies favoring specific groups or regions to promote reform and economic growth. It has helped that the disinterested CCP government was not permanently beholden to certain groups or regions. China's integration into the world economy is a case in point. At the end of the 1970s, the United States was eager to bring China into its camp as a buffer against Soviet hegemony, and China quickly grasped the opportunity. Yet that early adoption of an "open-door" policy gave rise to domestic resistance: special economic zones, such as Shenzhen, enjoyed an abundance of preferential treatments that other parts of the country envied. Moreover, the CCP's export-led growth model required that Beijing embrace an unbalanced development strategy that encouraged rapid growth on the country's east coast while neglecting the interior; today, nearly 90 percent of China's exports still come from the nine coastal provinces.

China's accession to the World Trade Organization in 2001 was also a calculated move. Before accession, it was widely believed that China would have to endure painful structural adjustment policies in many sectors in order to join the WTO. Even so, the central government actually accelerated negotiations with the organization's members. Despite the burdens it placed on the agriculture and retailing sectors, accession boosted China's exports, proving wrong those who worried about its effects. Between 2002 and 2007, Chinese exports grew by an annual rate of 29 percent, double the average rate during the 1990s.

China's astronomic growth has left it in a precarious situation, however. Other developing countries have suffered from the so-called middle-income trap -- a situation that often arises when a country's per-capita GDP reaches the range of $3,000 to $8,000, the economy stops growing, income inequality increases, and social conflicts erupt. China has entered this range, and the warning signs of a trap loom large.

In the last several years, government involvement in the economy has increased -- most notably with the current four-trillion-yuan ($586 billion) stimulus plan. Government investment helped China reach a GDP growth rate of nearly nine percent in 2009, which many applaud; but in the long run, it could suffocate the Chinese economy by reducing efficiency and crowding out more vibrant private investment.

The economy currently depends heavily on external demand, creating friction among major trading partners. Savings account for 52 percent of GDP, and consumption has dropped to a historic low. Whereas governments in most advanced democracies spend less than eight percent of government revenue on capital investment, this figure is close to 50 percent in China. And residential income as a share of national income is declining, making the average citizen feel poorer while the economy expands. As the Chinese people demand more than economic gains as their income increases, it will become increasingly difficult for the CCP to contain or discourage social discontent by administering the medicine of economic growth alone.

Despite its absolute power and recent track record of delivering economic growth, the CCP has still periodically faced resistance from citizens. The Tiananmen incident of April 5, 1976, the first spontaneous democratic movement in PRC history, the June 4 movement of 1989, and numerous subsequent protests proved that the Chinese people are quite willing to stage organized resistance when their needs are not met by the state. International monitoring of China's domestic affairs has also played an important role; now that it has emerged as a major global power, China is suddenly concerned about its legitimacy on the international stage.

The Chinese government generally tries to manage such popular discontent by providing various "pain relievers," including programs that quickly address early signs of unrest in the population, such as reemployment centers for unemployed workers, migration programs aimed at lowering regional disparities, and the recent "new countryside movement" to improve infrastructure, health care, and education in rural areas.

Those measures, however, may be too weak to discourage the emergence of powerful interest groups seeking to influence the government. Although private businesses have long recognized the importance of cultivating the government for larger profits, they are not alone. The government itself, its cronies, and state-controlled enterprises are quickly forming strong and exclusive interest groups. In a sense, local governments in China behave like corporations: unlike in advanced democracies, where one of the key mandates of the government is to redistribute income to improve the average citizen's welfare, local governments in China simply pursue economic gain.

More important, Beijing's ongoing efforts to promote GDP growth will inevitably result in infringements on people's economic and political rights. For example, arbitrary land acquisitions are still prevalent in some cities, the government closely monitors the Internet, labor unions are suppressed, and workers have to endure long hours and unsafe conditions. Chinese citizens will not remain silent in the face of these infringements, and their discontent will inevitably lead to periodic resistance. Before long, some form of explicit political transition that allows ordinary citizens to take part in the political process will be necessary.

The reforms carried out over the last 30 years have mostly been responses to imminent crises. Popular resistance and economic imbalances are now moving China toward another major crisis. Strong and privileged interest groups and commercialized local governments are blocking equal distribution of the benefits of economic growth throughout society, thereby rendering futile the CCP's strategy of trading economic growth for people's consent to its absolute rule.

An open and inclusive political process has generally checked the power of interest groups in advanced democracies such as the United States. Indeed, this is precisely the mandate of a disinterested government -- to balance the demands of different social groups. A more open Chinese government could still remain disinterested if the right democratic institutions were put in place to keep the most powerful groups at bay. But ultimately, there is no alternative to greater democratization if the CCP wishes to encourage economic growth and maintain social stability.

Copyright © 2002-2010 by the Council on Foreign Relations, Inc.
All rights reserved.
_________________________________

--
Ryan Pyle
Photographer
ryan@ryanpyle.com
Website: www.ryanpyle.com
Archive: http://archive.ryanpyle.com
_______________________________________

Monday, March 01, 2010

Ryan Pyle Blog: Ethics? What Ethics?

Hello.

After 13 years, the Communist Party has decided to brush up their ethics code book. And why not, the country has changed significantly since 1997 and government officials need to be brought on board to the new expectations people have for them.

As the original article indicates, see below, Party members are to avoid: Money making deals, property speculation and lavish expenditure. They should not accept gifts or use their influence to help family members. So basically they are being asked to stop doing all the fun things that being a party member allow you to do in China. No more lavish weddings with rows upon rows of pimped out cars that 99% of regular Chinese folks could never afford. No more over the top funerals. No more, no more, no more. While stuff like this may seem obvious to you and I, many in the lower and middle ranks of government here will be taken aback by these new regulations. Yes, there is a different style of thinking in this country when it comes to governing; which seems ancient in so many ways.

If you think Wall Street has an image problem? Corrupting the financial system and hurting Main Street, driving up unemployment and walking away with record bonuses; well that doesn't even compare to the frustration directed by ordinary Chinese people at their government officials. With no vote, no media freedom, no freedom of speech and no freedom of association; there is absolutely no check on government power at any level. No front page New York Times story to shame officials in to resigning, no Wall Street Journal expose about officials stealing millions from State Owned Enterprises. If there is a story about corruption it has been explicitly ordained by the powers that be in Beijing; no one is caught by surprise.

While the Party uses it's own disciplinary committee to remove members and jail the occasional bad apple, it's generally seen as a joke. And the idea of an independent commission, or regulatory body, just doesn't fly in this part of the world. So publicly introducing a new ethics code book is a nice step by the Party, but sadly it won't change a thing, but it is not entirely the fault of individual officials; one might say that it's "the systems" fault and it needs a massive overhaul.

What I mean is that the biggest reason for the immense amount of corruption in China is that government officials are paid next to nothing for their service to the public. So they rely on cars, drivers, kickbacks, bribes and whatever else to make up the difference. And for years, since imperial China, this has been accepted practice. The problem is now that the economy is red hot and these kickbacks are often amounting to millions of US dollars; which just looks bad. Government officials wearing USD 30,000 luxury watches and children at private school in Switzerland are becoming the norm. The regular people, in this developing nation, are pretty feed-up.

The original story is below:

Copywrite: BBC News
Original Link: http://news.bbc.co.uk/2/hi/asia-pacific/8533410.stm
_________________________________
By Quentin Sommerville
BBC News, Beijing

In China, the Communist Party has issued a new 52-point ethics code, in an attempt to control growing corruption among officials.

The code bans members from property speculation, money-making deals, and lavish expenditure.

The last set of rules was issued 13 years ago.

Corruption has become an increasingly hot topic among the public - graft often tops the list of issues of most concern for ordinary Chinese citizens.

Party officials should work hard to serve the people and avoid accepting gifts or using their influence to benefit

family members, according to the new ethics code.

The guide bans lavish weddings and funerals, and overseas tours.

Officials should also stay out of profit-making deals, the code says. But few do.

Some of the most senior party officials in China have been on the take - property speculation has been particularly popular.

The richer the country gets the bigger the sums involved.

Spending lavish amounts on government buildings or flash cars is also banned.

In some provinces, party and government headquarters are indistinguishable from plush five star hotels.
The latest luxury sedans are often used to ferry around officials.

China's one-party system has struggled to deal with endemic corruption, much to the annoyance of the general public.
_________________________________

--
Ryan Pyle
Photographer
ryan@ryanpyle.com
Website: www.ryanpyle.com
Archive: http://archive.ryanpyle.com
_______________________________________

Thursday, October 01, 2009

Ryan Pyle Blog: China's 60th Birthday

Hello.

I don't often say it much, but I'm very proud and excited about what China's managed to accomplish in the last 60 years; given that the first 30 years (1949-1979) were a complete regression.

I've lived here in the Middle Kingdom for almost a decade, and I hope to live here for several more; and during that time I've seen a lot of change. Much of it for the better. But let's not forget that while the country has developed rapidly in the last thirty years it is still a far cry away from what the Communist Party said it might be in the late 1940s when they were trying to build a power base. Back in the days General Mao and his team like to throw around terms like a multi-party system, and an independent judiciary; and today in 2009 we are still far from those ideals.

But yes, economic growth has lifted many people out of poverty to the point where some don't care much about politics; much to the pleasure of Party leaders. But there are huge gaps in the system and they are becoming more difficult to close as each day passes. The Party's control over the judiciary and the economy has led to so much rampant corruption that much of China's business and political environment operates like a mafia of sorts.

The birthday celebrations today in Beijing, and throughout the country, will offer a lot of military pomp and party propaganda, but that is not what I think about when I envision China and its future. I think about China's young entrepreneurial class; who have migrated to the big cities and started up their own businesses, and in stark contrast to that I fear for the the 700 million agricultural class that the dynamic growth as passed over; what will their futures hold? As an aside, it has always been the small entrepreneurs in this country that have made the business and working environment the stuff of miracles. And it should be the governments responsibility to maintain that fair business environment for years to come. Let's hope the party leaders understand their role.

Focusing back on economic growth, clearly there are mis-steps and not all if fair and transparent; but we're only one generation removed from Chairman Mao and his Cultural Revolution. I know that is no longer an excuse, but many of those in power at the moment have been strongly influenced by that period of history, and it still affects governance and accountability throughout the ranks. Developing from a third world country to a first world country takes a significant amount time, especially when leaders in power have had a largely patriotic educational foundation. Once the next few rounds of county level and provincial level government officials are bettered educated and a bit more "worldly", meaning simply thinking beyond their individual county fiefdoms, issues regarding personal freedoms and rule of law may indeed make headway; but I won't hold my breath.

If the government doesn't take steps to ease in more choice and personal freedoms, it is my opinion, that the Party will have missed a glorious opportunity to progress and develop in a way in which the global community can better respect and look up to. Much work needs to be done. No time can be wasted.

When I decided to move to China in 2001 I thought I was moving to a virtual backwater. A remote part of the world where I could learn photography on my own and document a country that I found fascinating and challenging. Just eight years later I'm amazed at how rewarding my personal and professional journey has been and how comfortable my home town of Shanghai has become. Progress for "most" is happening; but development and growth is a messy business and not for the faint of heart.

Even with all it's problems and headaches of running a country with 1.3 billion people; perhaps now is a good time to give a bit of praise to the government for actually keeping this country together from 1949 to 2009; as the country's journey to reach this point has been far from easy. Ruling with an iron fist or not, I can drive on a four-lane expressway from Shanghai to Kashgar and jump on a plane to just about any remote corner of the country I choose. Sure there are people, minority groups and counties that have been left behind, but with such brutal breakneck growth people are bound to be left out and be plenty pissed off about it.

Can China develop in a more sustainable manner? Include more people in the spoils and focus on cleaning up the environment? What about bringing about proper regulation and an independent rule of law? How about making a whole hearted effort to stop corruption, even throughout the inner party circles in Beijing?

So it is now that I raise my glass in a very guarded and unsure manner, here is looking at the next 60 years. Will we always have just "one party"? Will State Owned Enterprises still dictate policy and protectionism? Will the little person ever get a voice? Will the fist be removed from the puckered cheeks of the country's media? In 2069, will I still be blogging and living in Shanghai at the tender age of 91?

There are many challenges ahead. But there have been many successes behind us. I'm proud to live in China, and honored to have a chance to be documenting this country's rise. Peaceful or not, I'm here. Sustainable or not, I'll be trying to understand the who, the how and the why.

Onwards and upwards; and hopefully in a more equal and transparent way.

PS. Ai Weiwei, a Chinese painter, artist, architect and photographer recently wrote and essay for TIME magazine about China at 60yrs. Ai Weiwei's father was a famous poet who was exiled to Xinjiang and spent most of his life being harassed. Ai Weiwei's essay offers a much more personal perspective to China's development and growth. His essay is a very interesting read. You can find his essay HERE.

--
Ryan Pyle
Photographer
ryan@ryanpyle.com
Website: www.ryanpyle.com
Archive: http://archive.ryanpyle.com
_______________________________________

Tuesday, March 03, 2009

Ryan Pyle Blog: Choosing the Next Party Leader

Hello,

Having lived abroad for so many years, nearing a 1/3 of my life now, I have grown fond of the BBC World News Service. I listen to the radio broadcasting as well as watch the 24 hour television news programing.

So in being such an avid consumer of the BBC I've come to know the correspondents covering China. While I haven't met any of the correspondents in person, I don't get out much, I have begun to appreciate James Reynolds and his blogging efforts.

A lot of news agencies are making their journalists, reporters, and presenters keep blogs. And while they vary in quality and content, James' blog offers a lot of interesting insight in to not only China as a whole but in to the political life in Beijing. I think James has been based in China for 3 or 4 years now and his observations are well worth a visit to his BLOG.

My purpose for introducing James' blog is that a recent entry of his caught my eye. It provided a lot of insight in to the world of politics in China. The blog in question was written a few weeks back and it tackled the interesting question of who China's next president might be and how that process comes about, adding to the blog was an aside about the difficulties in interviewing people in the military.

Be sure to stop by and check out the blog on China's Next Top Leader at James Reynolds BLOG.Enjoy.

--
Ryan Pyle
Photographer
ryan@ryanpyle.com
Website: www.ryanpyle.com
Archive: http://archive.ryanpyle.com
_______________________________________