The Chinese Communist Party’s Biggest Obstacle Is the Chinese Communist Party

The success of China’s economic reforms depends on whether Beijing can truly let go

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Reuters

Chinese workers set up scaffolding to clean a statue of Mao Zedong for the upcoming Chinese National Day in the Chinese city of Chengdu on Sept. 24, 2013

A fascinating conundrum embroiled the top leaders of China’s Communist Party in response to the protests that escalated on Tiananmen Square in the summer of 1989. Could the country’s nascent free-market reform succeed without matching political freedom? Deng Xiaoping, the grandfather of Chinese reform, argued that political opening would undermine the economic progress China had made.

If the protests were not quelled, he warned (according to The Tiananmen Papers), “all our gains will evaporate, and China will take a historic step backward.”

Zhao Ziyang, the party general secretary, thought otherwise. Soon after the troubling events, he made the case that political and economic change were inseparable. “Political reform has to be a priority,” Zhao said, and if it wasn’t, “not only will economic problems get harder to handle, but all kinds of social and political problems will only get worse.”

We all know who won the debate. And still today, nearly a quarter century later, the decision taken by Deng in 1989 effectively holds. While the Chinese have a lot more freedom — to travel, communicate, study — than they did in the earlier decades of Communist rule, the mighty party reigns supreme, and the realms of political reform and economic liberalization remain more or less distinct.

(MORE: China’s Leaders Miss Chance to Make Economic History)

But the underlying issue has never really gone away. The party still believes that China can be increasingly innovative and competitive without the sort of political liberalization that many in the West would consider necessary to a modern economy. Based on the results so far — 30 years of nonstop growth and industrial expansion — it is easy to think Beijing might be right on this score. However, the more the Chinese economy advances, the more the needed reforms undercut the party’s ability to control the nation. Here, then, we find the central challenge to the future of China’s economy: Will the Communist Party be willing to implement reforms that force its own power to recede?

That question sits at the heart of China’s most recent slate of pledged reforms. A party plenum in early November promised a wide range of bold reforms, from an easing of the controversial one-child policy to the dismantling of some state monopolies. Many of the reforms are targeted directly at what many economists believe the economy needs most urgently — strengthening the financial sector, liberalizing prices and interest rates and improving the management of state-owned enterprises.

Now, though, we’ll have to see how much China’s leaders actually get done, and when. They conveniently left themselves a lot of room to maneuver, since they failed to promise any clear time frames.

Translating such a wide range of intensive reforms into reality would be a tough task under any circumstances. To introduce them, the party will need to take on politically powerful interests and reshape a corrupt and overbearing bureaucracy. The postplenum announcement “is but the first step in a long and arduous process,” noted IHS Global Insight’s China economist Brian Jackson. “Reforms across so many parts of China’s economic and regulatory systems will be challenging to implement, not only due to powerful vested interests that may oppose such changes, but also simply in determining the best feasible sequencing and speed.”

(MORE: China’s Great Firewall Won’t Be Touched by Beijing’s New Reforms)

But the real hurdle might be that unresolved tension between political and economic reform. The policies pledged at the plenum, if they are to work, inherently will bring a reduced role of the state. In order to have properly functioning banks, for instance, the government has to stay clear of lending decisions. For the private sector to flourish, state companies must be forced to compete fairly, and their management allowed to operate without political interference. Liberalizing prices and capital flows means policymakers will have to sit back and watch the market allocate resources. All of these steps are necessary for China to build its competitiveness and alleviate some of the economy’s most threatening problems — excess capacity and rising debt, dependence on investment, and a lack of rule of law. In other words, for China to advance, the party has to let go of the reins of control.

Will Beijing be willing? The indications are mixed. As part of the announced reforms, the government said it would relax the household-registration, or hukou, system to allow freer movement of people and labor, a clear sign that the party is loosening up the micromanagement of its populace for economic necessity.

On the other hand, China’s leaders are much more into big-bang announcements than big-bang reform, and the rollout of many of these new policies is expected to be slow. Officials have indicated that even the long overdue change of the one-child policy is not going to be rushed. Perhaps most importantly, the promise of a more liberal, market-oriented economy came paired with signs that President Xi Jinping may be tightening the party’s grip on the Internet and free expression. Xi is also setting up a new national security superagency that some analysts see as a method of further centralizing power.

So it appears that Xi is holding fast to the Deng approach — liberalizing the economy while keeping politics in lockdown. Perhaps he can strengthen and advance the economy while maintaining the political status quo. Or perhaps his reforms will fail because of an unwillingness to cede political authority to economic need. Which way this critical question turns will likely determine the future of China.

MORE: Why China Can’t Create Anything

15 comments
Andydood
Andydood

There is no Chinese talking about "Beijing consensus", only Western guys talking of that, because We Chinese really have no idea what really works. If there is anything like "Beijing consensus", it would be " I do not know, you try out yourselves" as Deng talked with a group of African leaders in last 80s. "Please do not look at us for any solution. We have no idea about any solution but try out. You have to try out what would really work for your own countries".

Andydood
Andydood

The key for Deng's success is that he honestly admitted that he did not know what could really work: Grope the stone while passing the river; Small lab like experiments and propagate the successful schemes. Freedom, whatever, is just another kind of  ideology like communism, believe that is the only way to go, which is actually limit the "freedom" for people to try out.  The key freedom Deng gave to Chinese people is that: "well, I do not, you go ahead and try what you think maybe work", which is obviously contradict to what  Western guys always say China has No freedom, no critical thinking and so doom to fail.  In last 80s, Chinese slogan was "Learn from Japan", well, then came Japanese economy sluggish; last 90s, Chinese slogan was "Learn from South Korea", well than came the IMF Crisis; in early last decade, Chinese slogan was "Follow the world standard", which was just another saying of Learn from USA and many Chinese believed that only USA knew the grand recipe for economy developments. but. well, then came the Financial crisis.  The good choice of China is this kind of "try out and adjust", with honestly admit that no one really knows what is really working, anything can only work for a while, there is no grand scheme working forever.  I still believe this is the key of critical thinking.

Read more: China's Obstacles to Reform | TIME.com http://world.time.com/2013/11/25/the-chinese-communist-partys-biggest-obstacle-is-the-chinese-communist-party/#ixzz2luIOeUzY

universal93
universal93

What  Communist Party or Chinese Communist party with all that polluting cities ?  

sungdnlw
sungdnlw

^^,im a university student,i read the comments and find you are too young too simply haahaha,china change need chinese not you…………^^

duduong
duduong

One can be skeptical of the Chinese Communist Party's prospects only on ideological grounds; based on factual evidence and actual track records, any rational forecast will have to be overwhelmingly positive.

It appears that I am the only non-ideologue here.

cman62
cman62

This week's piece on China's one-child policy is traditional Chinese Party propogranda. It discounts the millions of rural families who are "permitted" to have more than one child by failing to disclose the fact that these citizens are also considereed to be non-citizens; their children are not entitled to education- even private education; that these people aren't given goivernment papers that allow them to work; that the pollution is so bad that fertility is affected. You touch on the governments forced abortions and the "monitor of mestrual cycle" without disclosing that pregnent women are captured like animals on the streets, taken away and forced to have a an abortion- as late as 9th month- and then they are forced to pay for the abortion. TIME has the nerve to call this a "fine" and even cites the $330 billion collected. All any of us need do is to red the autobiographical work of Ma Jian in his newest book, "The Dark Road" to learn the truth about China. I'm tired of communists lying to me. I'm angry that Time has allowed The Family Planning Commision to lie to us on her pages.
David Seaman
Moravia, NY

jefforsythe9
jefforsythe9

If the blood-thirsty Chinese Communist Party ever loses its total control over its media, that will  be the day of its demise and the brutal CCP is fully aware of this fact. Since 1949, the CCP has murdered over fifty million of its own people and is now systematically annihilating the tens of millions of  innocent Falun Gong practitioners who live in Red China. This heinous attempted genocide is using torture, enslavement, organ harvesting and murder. One doctor, employed by the CCP, just confessed to removing the corneas from two thousand living human beings, leaving them blind. If these millions of human rights atrocities ever become public knowledge, the CCP will be finished. This is my understanding, thank you.

sunshinenuaa
sunshinenuaa

The political reforms are necessary for each emerging power like China, India and Brazil. It ensures the smooth development of own economy. Each reforming decision is easy to declare while tough to implement ,of course, tougher to implement it well. But Chinese people are confident enough to supervise CPC in its political and economic reforms. China is not such a closed society any more. Chinese guys have more democratic freedoms than ever before, for instance, it's not conceivable before to comment such a subtly critical article on a western Portal Website. That is an epitome of the political advances in China. Journey of reforms is tough and arduous, only confidence and trust can faciliate a smoother process. We trust CPC, more critically, we trust ourselves~

teviet
teviet

@duduong Not the only one!  Many Westerners view these situations through a single lens: freedom versus authoritarianism.  Others, though, see things through the lens of idealism versus pragmatism.

In China in the 1950s, idealism led to the Great Leap Forward and the starvation of tens of millions, before pragmatists led by DXP hauled them back from the abyss.  Then in the 1960s, idealism, spearheaded by a utopian youth movement, brought the Cultural Revolution and a lost generation, until once again DXP and the pragmatists returned to rebuild the economy.

Then after 15 years of stability and growth, the idealists returned to overturn the system, with promises of paradise.  The pragmatists can only have thought: "Oh no not this *again*."

jefforsythe9
jefforsythe9

@victor201219There are over fifty million Falun Gong practitioners in Mainland China from all walks of life, including Party members. We have our own website and we also are keeping tabs on as many acts of torture and murder that we can and also keeping a list of the people who are committing these atrocities. Western media and Governments do not allow us to know the truth because of corporate greed. One may go on line and read The Nine Commentaries and The Bloody Harvest for a clearer picture of how the cruel CCP operates. Falun Gong never asks for or accepts donations. We are trying to let the World know the truth concerning the heinous CCP because it is murdering us. One CCP doctor recently confessed to removing the corneas from two thousand living human beings.

thetrue112
thetrue112

@jefforsythe9 @victor201219 In the end who is lying, these facts before us, many Falun Gong's apprentice, disrupting social order. Endanger life. There are people who claim that Falun. Brutal killing of innocent people. These things are all Chinese people look at the heart again. You claiming apprentice killed. It was deserved. Do not know the truth in the face of Americans lie. Falun Gong era experienced people are aware of you so-called "Falun Gong" political apprenticeship and evil face.