FT on China Crisis (of the communist party)

I wonder how long it will be before some copyright lawyer from Pearson smacks me in the kisser with a “t’pau” letter.

excerpts from “How long can the Communist party survive in China”

Jamil Anderlini

Financial Times magazine Sept 21/2 2013

Modernisation theory holds that authoritarian systems tend to democratise as incomes rise, that the creation of a large middle class hastens the process and that economic slowdown following a long period of rapid growth makes that transition more likely. Serious and worsening inequality coupled with high levels of corruption can add to the impetus for change.

All these factors now exist in China but some political theorists, including many at the Central Party School, argue that the country is culturally and politically exceptional and the wave of authoritarian collapse still surging through the Arab world will never reach Chinese shores. Others, including influential Chinese intellectuals, distinguished western sinologists and even liberal-minded senior party members, believe these are the final days of the Communist era and the party will be washed away if it does not launch serious political reform soon.

But [Shambaugh, director of the China Policy Programme at George Washington University] … changed his mind and now believes that the party is in a state of decline that echoes the dying days of Chinese dynasties throughout history.
The signs include a hollow state ideology that society does not believe in but ritualistically feigns compliance with, worsening corruption, failure to provide the public with adequate social welfare and a pervasive public sense of insecurity and frustration. Other signs include increasing social and ethnic unrest, elite factionalism, over-taxation with the proceeds mostly going into officials’ pockets, serious and worsening income inequality and no reliable rule of law.

Shambaugh says a powerful indicator of just how little faith exists in the system is the number of wealthy Chinese elites with offshore assets and property, offshore bank accounts and children studying in western universities.
“These individuals are ready to bolt at a moment’s notice, as soon as the political system is in its endgame – but they will remain in China in order to extract every last Renmimbi possible until that time,” he says. “Their hedging behaviour speaks volumes about the fragile stability of the party state in China today.”

“The party’s ideological foundation is really very hollow,” says Perry Link, a professor at the University of California Riverside and one of the most well-respected western experts on China. “People join the party these days to make connections and get ahead rather than for any kind of socialist ideals.”

“I cannot overemphasise enough the fact that the CCP [Chinese Community Party] leadership continues to live under the Soviet shadow – they are hyper-conscious of the reforms that Gorbachev undertook and absolutely refuse to go down that path,” says Shambaugh…

By most measures, Communist China now has one of the most unequal societies on earth, with most of the wealth concentrated in the hands of a small, politically connected elite. If the current slowdown were to morph into an economic crisis or trigger widespread unemployment, most analysts believe the government would quickly face some sort of popular uprising. “in the past two centuries, the last 30 yeas has been the only extended period without war, famine or mass persecution, a period in which everyone’s lives have been getting better and better,” says Mao Ushi, the 84-year old economist regarded as the godfather of modern Chinese macroeconomics. “The legitimacy of the regime comes mainly from the success of economic reform but the big problem is that expectations are now very high.”

Mao predicts China will face an “unavoidable” financial crisis in the next one to three years thanks to a huge build-up of bad debt and an enormous property bubble…

“The current Chinese system will definitely collapse at some point – it could be months, years or decades but when it collapses everyone will say of course it was bound to happen,” says Prof Link. “The question that really worries me is what will come next. The party has wiped out any group it doesn’t control or which doesn’t see the world like it does and there is nothing to take its place.”

[dictators LOVE vacuums – see the norms piece from this morning about states wiping out institutions]

“But even the party’s most ardent defenders concede that China’s leaders cannot rule indefinitely without addressing the demands for political inclusion from a growing middle-class that cares more about clean air, clean water, clean government and safe food than GDP growth rates.”


About dwighttowers

Below the surface...
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2 Responses to FT on China Crisis (of the communist party)

  1. Sarah Irving says:

    You’re getting your dodgy 80s pop references mixed up. T’Pau was China in Your Hand. China Crisis were a rather forgettable band in their own right.

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