Pendulum swings the party's way
By Philip Bowring (IHT)
Updated: 2006-09-26 10:28
http://www.iht.com/articles/2006/09/25/opinion/edbowring.php
It is hard for liberals and democrats to accept, but there seems to an
inevitability about the reassertion in China of the political supremacy of the
Communist Party and the administrative dominance of the central authorities.
Prosperity and a growing property-owning middle class does not lead directly to
demands to broaden the political base, but to demands to preserve existing
achievements through emphasis on stability over speed.
It is almost 15
years since Deng Xiaoping, with his Southern Tour, restarted the economic
liberalization. But amazing economic progress has, unsurprisingly, not been
matched by institutional change.
The notion of property rights is still
uncertain. Party, state and commercial functions are still interwoven. The legal
system has only partly been detached from the political structure.
Under
these circumstances, it may be true that assertion of the authoritarian
tendencies at the heart of all Communist parties and all Chinese bureaucracies
is necessary to address the most serious problems now confronting China -
because the problems, taken one by one, can be seen as mirror images of China's
successes.
The devastation already caused by pollution, let alone that
still to come, is partly the result of the very growth that was seen as an end
in itself as well as a means of diverting popular aspirations from political to
economic goals. Many of the worst aspects of pollution, however, stem not from
growth per se but from the greed of local officials, whether profiting from
polluting factories or claiming credit for creating industries regardless of
collateral damage.
There has been a high environmental price for
decentralization and for the ability of those with political power to use it to
enrich themselves. Given the weakness of both the legal structure and the market
to address these issues, a reassertion of central authoritarianism will be
needed - in the same way as the centralizing Tokugawa era saved Japan from
environmental disaster by imposing massive wood-use controls and a reforestation
drive that survives to this day.
One can already see signs that Beijing
views tough central action as a reaffirmation of the party's national leadership
role. The environment may yet overtake Taiwan as a focus of national
aspirations.
What applies to pollution also applies to water resources,
which are being depleted at an alarming rate, particularly in northern China.
Realistic water pricing could address this, but even an authoritarian party
would balk at driving tens of millions of farmers out of business and into the
cities. Instead it will use central authority to build huge, economically
inefficient and environmentally dubious schemes to divert water to the north.
More logically, it may also use its power to focus urbanization on central and
southern regions where water if more plentiful. Either way, the water crisis
will enhance central power - or undermine the whole economy.
Another
major problem is income distribution. There are limits in almost every society
to how far this can go without creating political unrest.
In China, the
natural tendency of any developing economy to increased income gaps is made more
sensitive by the extent of official corruption stemming from partial reform of
enterprise ownership. But the party's response will probably be to slow rather
than speed up market-based reform.
There are many grounds for income
redistribution through the tax system - for state enterprises to pay more
dividends and the rich regions more taxes to fund central payments to improve
the abysmal standards of health, education and social welfare in poor regions
and rural areas generally. At the least, the center and the party have to be
seen to be doing more to redress the imbalances.
It is very likely that
more than a decade of rapid growth based heavily on exports and foreign
investment will soon come to an end. Years of growing US trade deficits and easy
money internationally are set to be reversed before long. Meanwhile, China will
meet resistance to aggressive exporting. Given the control that the state has
over the major state enterprises and almost all the banking system, a shift away
from external-led growth will place more pressure on the government to generate
growth. This will probably take the form of more spending on social goals and
infrastructure in the center and west and less investment in goods-producing
industries. It will be accompanied by tighter central bank control of
credit.
In short, the pendulum is starting to swing back after years of
exhilarating economic and social liberalization whose fervor owed much to
reaction against the memory of the Cultural Revolution. This swing will be far
less severe but it will not be comfortable, particularly for those who had come
to assume that the energy-releasing reforms of the past 15 years would continue
for the next decade or more.
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