The Political Economy of China's Great Transformation

Xingyuan Feng, Christer Ljungwall, Sujian Guo

• Publisher: Taylor & Francis
• Year: 2016
• Print ISBN: 9781138944008
• eBook ISBN: 9781315530352
• Edition: 1
• Topic: Economics
• Subtopic: Business General
• Index: Economics

The Political Economy of China's Great Transformation consists of three parts: first, covering the current political transformation, providing a general political background for the socio-economic, fiscal and urban and rural transformation.

The book analyses the economic transformation and addresses the shortcomings of existing interpretations of the "Chinese Miracle" and develops a new multi-dimensional framework. In addition, it shows how the private sector has been developing and what a major role it is playing in pushing forward the overall economic development.

The book also focuses on the analysis of China's fiscal transformation. With the set of refined principles of fiscal federalism that the author has developed, it examines the problems of Chinese fiscal federalism in contrast to them. It further elaborates on topics such as the local government debt and explains why further reforms are necessary, making this book a very comprehensive read to understand China's progress.

Part I
Political transformation in China

1
Political development in contemporary China¹

During the Chinese Communist revolution, the Communist Party of China (CPC) followed Marxist and Leninist principles to create a “vanguard party,” modeled on the Leninist party in the former Soviet Union. After the Communist takeover, the Chinese Communist state was modeled on the former Soviet Union, which had a system known as a “Party–state.” The Party has been the center of power in Chinese politics, both in Mao’s China and in post-Mao China. The Party–state has been maintained and developed according to the so-called Four Cardinal Principles (四项基本原则) in post-Mao China: the adherence to Marxism-Leninism and Mao Zedong Thought, the leadership of the Communist Party of China, the socialist system, and the dictatorship of the proletariat.²

In the Chinese Party–state, the Party stands at the top of the power structure, where it assumes total representation of the nation and total guidance of national goals. The Party is recently defined as not only the vanguard of the working class but also the vanguard of the Chinese people, and the entire nation (Jiang, 2001). “In this way, the Party’s claims to political representation became, in a sense, more totalizing, and one may well ask whether or not this effort of inclusion was more or less totalitarian. Nevertheless, it was, arguably, more ‘Leninist’” (Mahoney, 2011). The Party commands, controls, integrates and completely intertwines all sectors of the state: the government (the executive branch), congress (the legislative branch), courts (the judiciary), the political consultative conference, the military, mass organizations and all other political organizations and institutions, from top to bottom. The Party–state therefore accurately captures the nature and function of China’s political reality.

The CPC is the Leninist vanguard party

The CPC has since its very birth been a Leninist party, proclaiming itself as the “vanguard of the proletariat and all working classes” and following the principle of “democratic centralism” according to Leninist principles. As a result the CPC leadership not only requires the whole party to be subject unconditionally to its leadership, but also requires the state, the military, society and individuals to be subject to the Party’s leadership and policy.

The post-Mao regime has continued to follow Bolshevik lines, or Maoist style, in its organization, though it has taken some measures to rationalize the organizational system and decision making. New policy rhetoric such as “cadre four modernization” (ganbu sihua干部四化)³ or the “Three Represents” (sange daibiao三个代表)⁴ in post-Mao China has, however, not really changed the organization of the political system. The current organization can be traced to the same origin as the Leninist or Maoist system in the following two respects:

1. The CPC under the post-Mao regime continues to claim that it is a “revolutionary vanguard” of the proletariat; an elitist party acting as the enlightened trustee of the working class, and acting on behalf of society. As Jiang Zemin declared, “our party is the Marxist-Leninist party standing in the forefront of the times and leading in the direction of the future. Our party will lead the people towards the full prosperity of the nation in the twenty-first century” (Dangjian, 1998). In a speech in 2001, “Uphold the Four Cardinal Principles,” Jiang describes the principle of Party leadership as follows: “Maintaining the leadership of the CPC means maintaining the political leadership of the CPC over major state policy and overall work. It means maintaining absolute leadership of the CPC over state apparatuses, including the army and other facets of the people’s democratic dictatorship.”⁵ The “vanguard” status of the CPC is the keystone of Party power and its ideological power, which little resembles political parties in Western democracies, or the elite single party in authoritarian regimes. The Three Represents is the most recent formulation of the Party’s vanguard status, which was announced at the 16th Party Congress in 2002. This concept stipulates that the Communist Party of China is representative of advanced social productive forces, advanced culture and the fundamental interests of the Chinese people of all ethnic groups. The total representation of the nation and total guidance of national goals are codified into the Constitution: “under the guidance of Marxism-Leninism, Mao Zedong Thought, Deng Xiaoping Theory and the important thought of ‘Three Represents’” (PRC Constitution 2004, Preamble).
2. The Party exercises the principle of “democratic centralism” (minzhu jizhongzhi民主集中制), which in fact has everything to do with centralized control and nothing to do with democracy. Party organizations, from the national level to the workplace, neighborhood or village level, are rigidly hierarchical. The whole Party must obey the Party Central Committee (PCC) and look to the PCC as the correct interpreter of ideology and the core leadership of political action. According to the principle of “democratic centralism,” the whole Party is ultimately subject to a paramount leader and a small group of the Politburo standing members. Discussion may be allowed, but Party leadership decisions are final and non-debatable. Dissent or even objective thinking is prima facie evidence of “bourgeois liberalism” that must be purged with “criticism and self-criticism,” if not expelled from the Party.

To maintain “vanguard” status, carry out the principle of “democratic centralism,” and accomplish its historical mission, the Party has to be kept in a constant rectification movement. The rectification movement has been the main vehicle for the post-Mao regime to re-establish ideological purity and organizational rule. The earliest rectification movement after the death of Mao was the purge of the followers of the “Gang of Four,” lasting for a number of years. This was followed by the 1984–1987 rectification movement which was carefully planned to be systematic, thorough and inclusive.

The main purpose of the rectification movement in early post-Mao China was to purge the “three kinds of people” who had benefited from the Cultural Revolution (that is, those who rose to prominent positions by following the Jiang Qing and Lin Biao “cliques,” those imbued with factionalism and those who engaged in “beating, smashing and looting”⁶), strengthen Party discipline, restore the Party tradition of the period before the Cultural Revolution, and attack “new unhealthy tendencies” and intra-Party factionalism (Young, 1990). In the earlier stages of the movement, the “liaison groups” were sent out by the Commission to supervise and coordinate rectification activities at lower levels. “Inspection groups” were often used later on to check on lower levels.⁷

Purges have been periodically conducted among Party cadres and Party members in “party construction” and “rectification” movements to ensure that “the party organization is pure” and to guarantee that “various leadership positions and functions are taken up by true Marxists.”⁸ The most extensive house-cleaning after the Cultural Revolution was the purges that were carried out after 1989. “Work teams” were stationed in almost all key central government organs and their subordinate mass organizations. All government functionaries, particularly Party members and cadres, were required to give a detailed account of their “involvement” in the event. An unprecedented Party membership “re-registration” campaign was launched in the first half of 1990. All Party members automatically lost their membership unless they were allowed to re-register after satisfying the authorities of their total devotion to the “Four Cardinal Principles.” The result of the purges was announced by the People’s Daily on May 30, 1991. The total number of CPC members had declined to 50.3 million. In 1990, 127,000 Party members were either expelled, or asked to leave the CPC. In addition, 166,000 Party members were subjected to internal Party discipline (Lam, 1995).

During these purges the emphasis had been on restoring the Party’s past values and practices and on using “tradition” to address current problems. Jiang Zemin urged the Party–state cadres to uphold the ultimate ideal and firm faith in communism, strengthen the “party nature,” resist various temptations, and try to be exemplary models in upholding and developing the Party’s fine tradition and style.⁹ “Party style” (Dangfeng) refers to a combination of all the prescribed political norms and relationships crucial to the Party’s operations and the maintenance of organizational coherence and obedience. The various elements of Party style were first fully articulated in the early 1940s, and it is this articulation that is regarded as establishing Party “tradition.” If a tradition is to have any current political relevance, then it implies continuity of application. Emphasis on “Party style” suggests a continued insistence on the Party’s vanguard character and on the qualitative difference between the CPC and other types of political organizations. The notion of “Party style” demands commitment to Party goals as the basis for members’ political actions and relationships (Young, 1990). However, this emphasis on Party “traditions” is not considered to conflict with the “shift in focus” on economic modernization. Instead, it is considered crucial for the Party’s survival during economic marketization and liberalization to offset the threat posed to organizational discipline and ideological purity.

The Party controls every sector of the state and central-local governments

The CPC Party–state continues its commitment to the same ideology – Marxism-Leninism-Maoist Thought, with the same ultimate goal and the same fundamental principles of the Leninist Party–state, despite some changes and modifications in post-Mao China.

As in the Leninist “Party–state,” the Communist Party is the center of the power in China, or “a state within a state.” All the key policy decisions since 1949 have been made outside the government, but have been entirely monopolized by the Party. The Party defines its function as that of making all the crucial decisions, which the government must carry out. The existence of Party leading groups in units of the state organ ensures the structural dominance of the Party. Members of Party standing committees at various levels are in charge of one or several governmental functions and operations. As in Western states China has political institutions, for example, three branches of the government, but they are organized differently. If we simply look at the three branches of government (executive, legislative and judiciary) and their relationships, we will lose sight of the most important features of the Leninist Party–state. In the politics of the People’s Republic of China, we must look at the power relationships among the three big tightly interlocked xitongs or systems (系统), called “party – state – military” (党政军), under the direct leadership of the Party Politburo standing committee members, and many sub-xitongs headed by high-ranking Party officials.

In both horizontal and vertical power relationships, the Party is the center of the power structure, and controls every level of government through an array of Party organizations from top to bottom. As China is a highly centralized unitary system, a provincial or local government is subject to the “dual leadership” (双重领导) of both higher-level Party organizations and the local Party organization. The Leninist Party–state emphasizes centralism as its organizational principle, and applies it to the organization of state institutions. Each administrative level in the power hierarchy is responsible for overseeing the work carried out by lower levels of the administrative strata. Although provincial and local governments are given more autonomy in economic policy making, they are subservient to their superiors at higher levels of administration, and ultimately to the central government. At each level of administration below the central-level government, there are two important political figures, out of which both are Party members and ranking Party officials. One is the Party Secretary of the Party committee who is “first-hand figure” (第一把手) and acts like a policy maker, while the other is “second-hand figure” (第二把手) in the Party committee, and serves as the head of the government to carry out the Party’s policy and administrative work. The Party Secretary is always ranked above the head of the government. Both figures are actually appointed by the higher-level Party committees, but are in theory elected by the people or by the people’s congresses.

In summary, the Party is the center of power while the function of government is to implement the Party’s political guidelines and policies. The Party’s guidelines and policies set national goals, justify the means to achieve them, and provide the basis for government policies. It is the Party’s congress that sets guidelines, not the NPC and people’s congresses. As a Chinese American scholar put it, “if the latter are the bones and flesh of Chinese body politics, the Party is undoubtedly its brain, its nerve center and its sinews. The Party commands, controls and integrates all other political organizations and institutions in China. The Party-state, or ‘partocracy,’ accurately captures China’s political reality” (Ming, 2002). The Party–state structure and the relationships of various political institutions demonstrate the following key features:

1. Party/state/military are combined and intertwined, with four parallel and highly interlocked structural arrangements: parallel positions of Party leaders and state officials, parallel structures of Party organization and state institutions, Party ideology bein...

Table of contents

• Cover Page
• Half Title page
• Series page
• Title Page
• Copyright Page
• Contents
• Figures
• Tables
• Foreword
• Preface
• Part I Political transformation in China
• Part II Economic transformation in China
• Part III Fiscal transformation in China
• Index