reflections

Oct 20, 2014 | 23:57 GMT

5 mins read

China Continues to Wrestle With the Meaning of Reform

(Stratfor)
It can be difficult to separate the important from unimportant on any given day. Reflections mean to do exactly that — by thinking about what happened today, we can consider what might happen tomorrow.

China's Communist Party leaders convened their annual meeting of the Central Committee on Monday, with a focus on "comprehensively advancing the rule of law" as a core component of China's broader political reform process. The four-day session will garner only cursory attention from the Western media, since it is unlikely to produce substantive changes to China's judicial structure. Moreover, since most Western observers equate political reform with democratization, and since meaningful democratization is clearly not in the cards for China, questions of political reform tend to be overshadowed by the far more tangible and obviously relevant problem of economic change in the country. The plenum will not tell us the precise shape reforms to rule of law will take going forward, how far these reforms will go or what they will mean for the business environment in China. Nonetheless, it may offer clues about how President Xi Jinping's administration intends to cope with the potentially destabilizing effects of the immense social and economic change unfolding in China today.

In considering political reform in China, it is illuminating to revisit Samuel P. Huntington's 1968 book, Political Order in Changing Societies. The Harvard political scientist argues that the determining factor of a modern political system's longevity is not the "kind of government" — whether it is democratic or authoritarian — but "the degree of government," the strength, adaptability and coherence of its governing institutions. Huntington says the "primary problem of politics is the lag in the development of political institutions behind social and economic change." In other words, political order disintegrates when governments fail to evolve in tandem with the societies they govern, and political order persists when governing institutions effectively expand their reach and adapt themselves to meet the shifting needs of society and economy. Democracies can govern badly, while authoritarian regimes can, at least in theory, govern well.

When Huntington wrote of the "lag" between political development and social and economic change, he was referring primarily to the newly modernizing and industrializing post-colonial societies of the 1940s and 1950s. But he could just as easily be describing contemporary China. After all, in the three and a half decades since the death of Mao Zedong, China has witnessed an unprecedented social and economic transformation, both in scale and speed. In 1980, less than 20 percent of China's population lived in cities. Now, more than 54 percent of the population resides in cities, and in 15 years that figure will rise to as high as 70 percent, or more than 1 billion people. Likewise, since 2000, China's gross domestic product has grown eightfold, and its per capita gross domestic product has more than sextupled. China is a fundamentally different country, socially and economically, from the one that supreme leader Deng Xiaoping inherited from Mao, and that Deng left behind when he died in 1997. No matter of political reform and institutional building could have kept fully apace of the changes taking place in Chinese society over the past three decades.

Nonetheless, in key respects, the Communist Party and the Chinese government did keep pace. Throughout the 1990s and 2000s, as the country's economy grew, China's governing institutions evolved to manage that growth. Beijing managed to funnel the immense wealth generated by the boom into strategically important industries and into building and reinforcing state capacity. The government also evolved to adapt to — and in some cases to mitigate — the social consequences of that growth. Likewise, in the wake of the global financial crisis in 2008-2009, China's governing institutions showed themselves capable of maintaining economic stability, and therefore social and political order, albeit through means that in many ways exacerbated the mounting challenges and constraints Beijing faces now. Judged not on moral or normative grounds but merely on the grounds of resilience, China's political system has proved far more capable than many observers would have anticipated when Deng began his political and economic reforms in 1978, or when they faced their steepest test amid the Tiananmen crisis in 1989. That capability, and the resilience it underpinned, was the product of constant adaptation and political reform. 

Now China is changing once again, this time in ways that are qualitatively different from the social and economic changes of the 1990s and 2000s. The old pillars of the Chinese economy — low-cost exports and state-led investment into infrastructure and housing construction — have run their course. The new pillars — domestic consumption, high value-added manufacturing and services — have yet to emerge with sufficient scale or strength to offset the short-term consequences of the demise of the old. In the interim, slowing economic growth is sowing the seeds of social and economic dislocation on a scale not seen in China in decades, calling into question the foundations of political legitimacy — namely, the promise of employment and rising material prosperity — put in place under Deng and carried through until now. 

This is the backdrop against which Xi launched his anti-corruption campaign in early 2012, and against which China's Communist Party leaders have begun to promote rule of law reforms more strongly in recent months. If the anti-corruption campaign is fundamentally aimed at reviving public confidence in the central leaders' ability and vision — the right to the "Mandate of Heaven" historically claimed by Chinese leaders — then the focus on rule of law seeks to strengthen the effectiveness of China's governing institutions by outlining new, and in theory more stable and transparent, "rules" of operation.

Establishing and enforcing these rules will be critical in the months and years ahead, particularly as the central government struggles to implement fiscal and financial reforms likely to engender opposition at provincial and local levels of government or from China's powerful state-owned enterprises. But Xi also needs to restore bureaucratic officials' confidence and security in the wake of the anti-corruption campaign. This is because, in addition to boosting popular support for Xi and other top leaders, the push to stamp out corruption without clarifying the boundaries for the bureaucracy has had the adverse effect of leaving much of China's midlevel administrative machinery paralyzed with fear.

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