Hu's legacy - the good, bad and ugly

2012-09-20Asia Times

As the 10 years of Chinese President Hu Jintao's tenure are coming to a close, it is time to draw initial conclusions about what he did in this time. Debate over his legacy fiercely rages in China, and the debate is becoming even fiercer as freedom of expression in the country has grown, and thus criticism formerly impossible to express can now be made without major consequences.

Moreover, Hu stepped on many illustrious toes in recent months when he decided to demote Bo Xilai, formerly a political rising star and party secretary in the sprawling city of Chongqing. Thus, freedom plus a crowd of new enemies create a wonderful combination to taint Hu's political legacy.

Yet, it is true that in Hu's 10 years there have not been the kind of systemic changes we saw during the previous 10 years of Jiang Zemin as president, and more than 12 as Party general secretary. Then Jiang oversaw a dramatic reform of state-owned enterprises (SOEs), which became freer of the trappings of the state bureaucracy and more able to behave like normal companies. The very success of those reforms created the greater part of the legacy of Hu's time.

SOEs behaved like monopolies, squeezing private companies out of the market, and this trend was multiplied by policies implemented following the 2008 financial crisis. SOEs took the lion's share of the money that was liberally issued by state banks, inflated asset values, misused large amounts of cash, and drove private companies, which had been pulling China's fast growth for 30 years, almost out of the market.

The role and power of SOEs and private companies is the main issue that will be tackled in the Party Congress next October and by the new power structure.

However, before thinking of the future, let's look at what Hu achieved and did in his 10 years.

Taiwan: Since the Communists took power in 1949, ties have never been closer. Economic exchanges are so pervasive that the island might collapse without the economic support of the mainland. Most importantly, Ma Ying-jiu's reelection earlier this year as president of Taiwan offers the possibility to start political talks on reunification.

Zheng Bijian, Hu's former aide from the Central Party School, was in Taiwan last year for confidential talks on the issue. Actual talks could begin as early as next year. Hu has thus, de facto, managed to reunify with Taiwan, a feat that escaped even Mao, the leader who made China "stand up".

Political reforms: The issue of democracy has beleaguered the Party for decades. The Communist Party of China (CCP) was for democracy in the 1940s, when the Party felt it was weaker than the ruling nationalists of the Kuomintang and thought that elections could provide a good framework for the CCP's growth and survival. It changed its mind after it took power in 1949, but the issue of democracy never vanished.

It popped up during the Cultural Revolution, to incense the Red Guards' young and susceptible minds, and it resurfaced after Deng Xiaoping launched his reforms under the name of "the fourth modernization". This time it is Prime Minister Wen Jiabao who has been speaking of it. We still do not know what is or will be the content of future political reforms but certainly the road of democratization is open - also because in the long-term, reunification with Taiwan will happen only within the framework of a democratic China.

Freedom/democratization: Under Hu's tenure, China saw an Internet-information revolution that has created a space for public opinion in China different and distinct from what the Party may want, and it has seen a huge burst of freedom of expression and opinion.

Western history tells us that the existence of an exuberant debate conducted in a civil manner lays the groundwork for fostering democratization. Hu may not have fully planned for this, but certainly he followed the trend and didn't obstruct it. He tried to channel it. Thousands of government workers are "managing" the Internet, but they are not killing it. In this way, the party has come to realize that a modern "management" of public opinion can work better for the party than old-fashioned rigid control.

Therefore this new freedom of expression has actually bolstered, not undermined, Party rule: most people express views overall in favor of the government, although critical of this or that policy. The party, that is, is seen as the modernizer, the force guiding change - although channeling it - and thus increases its popularity.

Ideology: Hu's era was marked by two slogans: harmonious society (hexie shehui) and scientific development (kexue fazhan). They referred to the two separate ideological traditions making modern China. The first harked back to the Confucian tradition and de facto reneged on the idea of class struggle of the Cultural Revolution, arguing that rich and poor should find a way to live together without fighting each other.

The second hinted at the Marxist tenet of scientific materialism and advocated the concept that development must proceed with proper research and planning. Most importantly, these ideas tried to provide China with the basis of a new ideological backbone that used traditional Confucianism and Marxism but also moved beyond them. These elements are important as in both Mao's and Deng's times, China almost lost its roots and morals, which were based on the values of the imperial system and the revolutionary period, and fell into an ethical void with no principles.

Thus Hu tried to rebuild Chinese ideals and morals on new foundations based on the old traditions. This effort is just beginning, but it has important consequences for China's economic development. In the economy, enterprises will have to obey the rules and take care of the weak. The country will have to support what works "scientifically" and practically, not just what is good for this or that leader. On the background of these achievements, Deng Yuwen published an essay in August, setting out 10 "grave problems": [1]

Grave Problem 1: No breakthroughs in economic restructuring and constructing a consumer-driven economy.

Though China's economy is now the world's second largest, it is both distorted in structure and of low quality. Vulnerable to fluctuations of the external economic environment, the current development model is an obstacle to long-term prosperity. China has to shift from the current model that overly stresses investment and exports and high-resource consumption to a high-tech, consumer-driven economy as well as solve the inner rebalancing problem of the economy.

However, restrained by vested interest groups including regional governments, little has been done in this regard. In particular, following the global financial crisis, priority shifted from reform and restructuring to merely maintaining growth.

Grave Problem 2: Failure to nurture and grow a middle class.

The history of modern states indicates that the middle class is the cornerstone of social stability and prosperity. But certain conditions need to be created to help a middle class grow: the middle class should be the mainstay of class structure, and the government needs to work to ensure the growth of the middle class through adjusting policies concerning income, housing and social security.

In the past decade, benefiting from the economic boom, the sheer number of middle class people in China increased. However, the growth rate lags far behind general economic growth rates, as a result of the lack of any mechanism to nurture the middle class. As regards income distribution, reform has stagnated, resulting in an ever-increasing gap between rich and poor. The road leading towards the middle class is becoming even bumpier for low-income households. High housing prices have eroded people's spending power, putting middle-class the living standards beyond their reach. Bearish stock markets have sucked in people's savings yet denied them the chance of getting returns on investment. These are just some areas where the government should have done better.

Grave Problem 3: The rural-urban gap has increased.

The residence permit system used to be the main tool used to rein in urban migration, in particular, the migration of farmers. In the past decade, despite increasing migration, the residence permit system remains tied to public services, and influences local government tax incomes and regional economic growth, therefore there is little incentive for reform.

Some small cities have loosened their controls, but barriers remain high, and migrant workers still have great difficulties adapting to cities and obtaining new urban identities. The delay of residence permit reform has also radicalized conflicts between the countryside and cities, exacerbated government land sales and worsened the situation of landless farmers. Farmers' interests are trampled on, and the traditional urban resident-farmer two-element structure has evolved into a triangular structure of urban workers, rural workers and farmers.

Grave Problem 4: Population policy lags behind reality.

The population is aging at an accelerated rate. Giving birth is a basic human right, but in the past decade the state has continued its rigid one-child policy, which not only contributes to the aging of the population and a depletion of the demographic dividend, but also affects the country's economic growth, retirement benefits, causing grievances to many families that have lost their only children, exacerbating the imbalanced sex ratio at birth, as well as other social problems. Birth-regulation policies trample on countless people's rights on a daily basis.

Grave Problem 5: The bureaucratization and profit-incentivization of educational and scientific research institutions shows no indication of being ameliorated and it continues to stifle creativity.

Education and scientific research is the foundation of a country. In the past decade, even though major progress has been made, quantity instead of quality is given priority. Few great scientists have emerged and original results are scarce. All these impair the realization of the goal of constructing an innovative country. The bureaucratization of the educational system has became more entrenched. The guiding philosophy of education is tilted more and more towards profit-generation, as universities and scientific research institutes alike are evaluated on the basis of the number of published papers, which has taken a toll on people's spirit and capacity of innovation.

Grave Problem 6: Environmental pollution continues to worsen.

There has been no improvement in environmental protection. "Coarse economic development" is often marked by the high environmental cost that one pays for economic growth. Over the past decade, large numbers of energy-intensive, highly polluting projects have been launched, leading to further damage of our shared homeland and further diminishing the quality of life. Welfare and life itself is threatened by pollution. In addition, conflicts and confrontations are becoming more frequent and more intense, putting the concept of creating an "ecological civilization" sorely to the test.

Grave Problem 7: The government has failed to establish a stable energy supply system.

China's current development model can only be sustained by large amounts of energy. China's per capita energy reserve is very low and its energy supply relies heavily on imports. As a result, if China can't maintain stable and diversified energy sources, it will be at mercy of other countries and its long-term plans will be compromised.

Over the past decade, though China has been actively seeking to expand its overseas markets and develop new energy technologies, it has failed to build either a stable energy supply network or the necessary military prowess to safeguard such a network, while the development of new energy technologies remains rudimentary.

Grave Problem 8: Moral lapses and the collapse of ideology. The government has failed to build an effective and convincing value system that can be accepted by the majority of its people.

If a society is unable to prevent moral standards from degenerating, and if its members are unrestrained by any moral principle and have no sense of shame and see nothing but profit as their goal in life, it will soon descend to the level of the jungle. In the past decade, while the economy has developed rapidly, the state of morality has declined. In a time when old moral standards have collapsed, and the ideology developed during the revolutionary era has become bankrupt, a modern moral system suitable for a new market economy and commercial civilization has failed to fill in the gap.

As a result, there are no guiding principles for the society. The damage done to the people's spirit and the effects of the crisis of faith are gradual and subtle. This trend has hardly been reversed in the past decade.

Grave Problem 9: "Firefighting" and "stability-maintenance" style diplomacy lacks vision, strategic thinking and specific measures.

The state has failed to take advantage of the opportunities that have come with the shift in the international order. China has landed itself in a passive position. In the past decade, even though China has gained in power when it comes to deciding international affairs and putting forth a set of principles and targets as regards the world order, the state has failed to transform this potential into deeds.

The reason is that China's diplomacy has only principles and goals, and lacks strategic planning and an agenda-setting capacity, or indeed the willpower to carry them out. In terms of diplomatic principles, the state is unable to adjust its diplomacy according to changes in the international situation and China's own strength. Instead it limits itself to the philosophy of Deng Xiaoping, of "hiding our capacities and biding our time". As a result of this, China's diplomacy has failed to reflect its increased clout, which is demonstrated by the use of "firefighting" and "stability-maintenance" style diplomacy in handling international affairs. This has worsened China's international situation and undermined the confidence of the Chinese people.

Grave Problem 10: Insufficient efforts in pushing political reform and promoting democracy.

There is a long way to go before the ideal of returning power to the people comes about. This is the biggest and the most challenging problem. From the experience of modernization in other countries it is evident that the problem can't be solved once for all. It should be done methodically and with caution. However, the state should at least make some gesture to show that the Party is sincere in its efforts to give people some hope, instead of dithering when faced with difficulties.

In the past decade, despite the Hu-Wen administration's emphasis on democracy, freedom, rule of the law and political reform, little progress has been made regarding democratization. In fact, the solution to all these problems lies with the reform of the political system, and how profound political reform will be. So the government should be courageous and take a bold step to realize China's political reform and democracy.

Deng Yuwen's 10 points above effectively state the program for the next government, and it can be implemented only by starting from the achievements of Hu's tenure. This has started with a strange and still unexplained event - the public disappearance for almost two weeks of the next president to be, Xi Jinping. No explanation for this was offered and we shall not try to offer one now.

The only thing perhaps to be said is that like its predecessors, the Chinese leadership will concentrate powers that in the United States, the world's first power, are for the most part divided between the president, legislature, supreme court, federal reserve, newspapers, and even business associations.

In China, a country with half-imperial Leninist seeds as well as the seeds of capitalism, for each of these powers, items, or interest groups a representative holds a place in the central political office, the Standing Committee of the Politburo, which is renewed every five years This time the appointment is even more important because it will set the direction for 10 years, two terms of congress, and the power should go to the new leadership.

In this semi-imperial or semi-Leninist system, there is, however, a clear top and very bottom to the pyramid - although unlike in a capitalist system, there is no clear and transparent dialogue between the various powers. There is absence of a clear absolute leadership and also absence of rules for a dialogue between the different powers structures represented in the Standing Committee of the Politburo. The various semi-imperial or semi-Leninist or capitalist elements indicate that China is undergoing great institutional transformation.

So, beyond the confusion of names in circulation today, the most important element is what structural, administrative, and political reforms will come from the Congress.

This will be the true crux of the meeting, scheduled for mid-October. But in this, there will be no concrete advances. Of course, there is the important fact there will be "democratization", but no one knows the actual content of that democratization. The point is highly debated within the Party, where there is a consensus that the current system does not work and has to be changed, but disagreement about how to change it.

One faction, embodied by former Chongqing Party secretary Bo Xilai, wanted a kind of Maoist restoration. He called for the politburo in Beijing to have more power, and an economy that supported state enterprises over private ones. The growing role of private enterprises in China was regarded by this faction as the breaking point of the entire political system: private undertakings could affect national policy, as happens in capitalist countries.

But behind Bo's facade of communist ideology, there was an attempt to appropriate authority by a group of "red" aristocrats, who felt they were heirs to power in the country because of the simple fact that their parents had conquered it by force. Bo has now been ousted, but somehow his underlying idea remains, which might be ok provided it does not fuel and mix with ultranationalist elements. Moreover, the restoration movement was interpreting a popular desire to change the present system, reverting it to some form of old Maoist model. This has been stopped, yet even if the push for restoration does not work and there is still a clear desire to change and move towards more transparency.

Following this route, the current leadership must work delicately to keep the party united and steer it into the future. Those who favor a restoration of Maoism today accuse Deng Xiaoping, who was once sanctified, of ruining the country, and they have come to argue that without Deng's reforms, but with a continuation until today of Mao's regime , China would be more rich and powerful.

Adding to this debate, there is great uncertainty about future members of the Politburo Standing Committee (PSC). The first question regards the current president, Hu Jintao. It is not clear if he will vacate all of his positions or maintain the crucial title of chairman of the Central Military Commission, the ultimate guarantor of Chinese power. After the Congress of 2002, which brought Hu to power, the former president Jiang Zemin retained the leadership of the military for two years.

Hu, on the model of Jiang, could hold on to power for a couple of years - or maybe more, since in November Hu will be 70 years old, while Jiang retired completely at 78. However, rumors suggest that Hu could leave completely, which would mark a clean break with the past.

Regarding other members, there is still great confusion and conflicting theories. It seems likely that Xi will take over the presidency of the state, and Li Keqiang will be his number-two in the party. But it is not certain that Li will be the prime minister. He could get the presidency of the parliament, the NPC (National People's Congress). To learn the answer, we must wait until March 2013, the next plenary session of the NPC.

It also seems to be a consensus that the PSC will be reduced in number, from the current nine members to seven. But even on this there is no absolute certainty because every decision can be overturned up until the last moment.

Among the other five expected to be promoted, the news is strange and contradictory. There is talk that is damaging to some, and discussion of promoting Li Yuanchao, the current head of the party organization, but no one knows to what task.

The fate of Zhang Dejiang is uncertain. Zhang is at present party secretary in Chongqing, after being sent there to restore order after the purge of Bo Xilai; similarly for Wang Yang, secretary of the southern province of Guangdong, who had a rival political model to Bo's.

The major new element would be represented if the PSC admitted Hu Chunhua, born in 1963. Hu could be the president of China in 2022. No matter who manages to land directly on top, Hu is the future. Currently party secretary in Inner Mongolia, Hu lived in Tibet for "two hundred months".

His promotion and his career path indicate the current leadership thinks it is essential to focus on the issue of ethnic minorities and in particular of those in Tibet. This is the problem of the long-term future, the party seems to be saying.

1. The following is taken from the translation by Eric Mu, published on the website Danwei. The original was published in the Journal of the Party School, Study Times, and reprinted by the financial magazine Caijing (  (2012-09-20 Asia Times)


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