Red China and Democracy

[ParkeNYU]

Question of the century: How can The People's Republic of China adopt democracy while ensuring national unity in perpetuity? Would an anti-secession law alone be sufficient? Without a solution, nothing will change (peacefully, that is).

 

As long as democracy includes the right to vote for independence, the Chinese Communist Party will never allow it. Therefore, any democratic development would have to ensure national unity as a prerequisite. The United States is thought of as a "democracy", but the U.S. still forcefully prevented the Confederate States of America from gaining independence because national unity was crucial to maintaining and expanding American power and influence both in North America and abroad.

 

Note: the term 'Red China', referring to The People's Republic of China, is not meant to be derisive; I've adopted it to contrast with 'Blue China', formally known as The Republic of China (the anachronistic term 'Free China' is a misnomer). This terminology is in keeping with my belief in 'Two Countries, One Nation'.

[Demonic_Duck]

China already has democracy, didn't you know? It's on all the “社会主义核心价值观” posters (second on a list of twelve, no less), so it must be true.

Edit: On a serious note:
1) The PRC already has an anti-secession law.
2) As far as I understand it, the main reason the CCP is opposed to true democracy is the possibility that the CCP would no longer be in power, so it's more about self-interest than national interest. We can all hope for more democratic reforms within the framework of one-party rule (although progress on that front is like pulling teeth), but without multi-party elections, it still won't look much like what we think of as "a democracy", or "a democratic country".

[Hofmann]

Addressed this in the context of maintaining economic growth in class not long ago. I'll dump my notes on an 8-year old article here. Edit: doesn't look right. Oh well.

 

Pei, Minxin (2006). “China: Can economic growth continue without political reform?” Strategic Asia 2006-2007: Trade, Interdependence, and Security.

 

The primary objective of this chapter is to address the question of whether China will continue to maintain rapid economic growth without undertaking democratic reforms.

 

Western decision makers' questions:

Will China democratize?

Can China continue its economic growth without democratic reforms?

 

• Pei argues that China's economic rise is unlikely to continue if it fails to purse the long-delayed political reforms.
  • That the Chinese Communist Party (CCP) has consistently resisted democratic reforms in the last three decades while delivering impressive economic growth does not necessarily indicate that the party will be able to successfully do so in the future.
  • On the contrary, the CCP's ability to delay introducing regime-changing political reforms has contributed to the accumulation of massive governance deficits and systemic risks; to the extent that these deficits and risks have real and substantial economic costs, China's economic prospects will suffer.
  • The most likely outcome is Scenario IV. Western policymakers are unprepared for this.
• Parts of his argument
• The Chinese economic miracle
  • reviews the history of rapid economic growth in post-Mao China, analyzes the main factors behind such growth, and then explains why massive socioeconomic modernization has not led to a democratic breakthrough in China.
• Political reform: A critical assessment
• a description of the economic and social consequences of lagging democratization.
• the various mechanisms through which the absence of political reform would likely become a drag on China's economic performance in the next ten to fifteen years.
• an analysis both of the prospects for political reform and of the policy implications of China's uncertain future.
• Autocracy and development: Why politics matter
• Conclusion: risk factors for future growth

 

The chinese economic miracle

• In less than 30 years, china has
  • increased per capita income by 1000 percent
  • More than doubled the urbanization rate
  • Changed from a negligible participant in the world economy to the third largest global trading partner.
• The chinese story mirrors that of other developmental states (i.e. japan, taiwan, south korea, singapore), but the correlation between authoritarian rule and rapid growth is insubstantial because of a selection bias.
• There is no relationship between regime type and growth performance (Wade, 1990 according to Pei).
• e.g. Indonesia Suharto regime
• Furthermore, the institutionalists say long-run economic growth can only be sustained by political and legal institutions that protect property rights and restrain the predatory appetite of the state.
• For now, China's case seems to defy orthodox theory.
• Compared to the former Soviet Bloc, china had more structural and institutional conditions, allowing gradual privatization of state-owned firms
• China was in close proximity to "dragon economies" and foreign ethnic chinese, such as from Hong Kong and Taiwan.
• Gradual reform was responsible for output expansion and minimization of transition costs.
• Reforming the countryside first ensured success at the most difficult stage.
• Decentralization offered incentives to local elites to promote economic growth
• Conservative macroeconomic management maintained stable environment.
• Embracing globalization expanded foreign trade
• Authoritarian system is more capable of mobilizing resources for rapid development. Authoritarian regimes have greater discretion and capacity to increase investment and build infrastructure.
• Authoritarian regimes suppressed labor costs, e.g. prohibiting independent labor unions
• Democratic reforms before economic reforms can cause an anti-regime revolution.
• Pei said the second one is most plausible. Although they can easily move resources, waste and corruption are likely. (e.g. $700 billion of non-performing loans in 2005). Also, accounting for personal welfare loss from living under authoritarian rule detracts from material gains.
• High savings rate. Some (Anderson, 2005 according to Pei) say that high savings rate and not the health of institutions determine long-run growth performance. Changing demographics is likely to reduce savings rates in the mid-2010s.
• migration of rural labor, from low-productivity sectors to modern sectors.
• Growing and dynamic private sector
• Spreading growth clusters, stimulating growth (and productivity) in agrarian provinces
• Globalization, with low labor costs, drives export growth.
• China has become a pivotal player in international finance because exchange rates and reserve policies can move interest and exchange rates around the world
• In the reform rea, many factors contributed to rapid gains
• How much did the government contribute to it?
• How much did authoritarian rule contribute to it?
• For the next decade (until 2016), China's most favorable economic factors include

 

Political reform

• China's case has challenged the validity of "democratic evolution". While China's economic takeoff was beginning, the government was more tolerant of experiments with democratic reform. It is now less democratic than in the 1980's.
  • No more inner-party democracy or public discussion of political reform.
• This reverse relationship can be seen in the limits of the 3 most important institutional reforms implemented by the CCP since the 70's
• Strengthening the legislative branch
  • O'Brien (1990, according to Pei) found no evidence that the NPC and LPC became more competitive or responsive; instead only the CCP's hold thereon strengthened.
  • Tanner (The politics of lawmaking in post-Mao China, according to Pei) found that reforms have reduced control of the CCP by enhancing the political standing of the NPC, and making the NPC a strong political player in China's decision-making process. However, they only rejected bills proposed by the government 3 times in 28 years.
  • It is an improvement from laws directly from Mao, but Lubman (2000, according to Pei) finds the language of the laws too vague and designed to maximize flexibility of the government instead of limit it.
• Building a modern legal system
• The Chinese legal system lacks the independence necessary to function as  the guarantor of the rule of law.
  • Win-rates of plaintiffs have fallen. Courts have become less willing to rule against the government.
• The main reason why legal reform lost momentum was because it has not freed itself from the ruling CCP.
• The CCP has a special political and legal committee (政法委員會), whose candidates for presidents and vice presidents are nominated by the CCP.
• The CCP's desire to maintain political monopoly is incompatible with the nature of rule of law.
• Village elections have failed to empower the peasantry and to end the dominance of the CCP's cells in the villages (Oi and Rozelle, 2001, according to Pei).
• Some progress has been made.
  • Political entrepreneurship from reformers and innovation from villagers became law?
  • Villages elections have become an established political institution.
  • But the CCP can remove or appoint whomever it wants.
• The incentive for being politically open in the 1980's (economic reform) vanishes as the economy took off in the 1990's, enabling the CCP to strengthen its hold on power.
• Instituting semi-competitive elections in villages

 

Autocracy and development

• Economic growth is not the only measure of progress of a society. The quality of growth must be taken into account when evaluating a country's economic performance. Rapid economic growth had many costs
  • Environmental decay
  • Rising inequality
  • Rampant corruption
  • Underinvestment in public goods
• Therefore, when quality-adjusted growth is applied, China's case doesn't look so good.
• It is possible to trace many of these social ills to the CCP's strategies and policies adopted to maximize its chances of political survival. It is doubtful that an authoritarian developmental state can grow out of its flaws without undertaking political reforms.
• Constituency maintenance, inequality, and inefficiency
• With few other incentives, the survival of the regime necessitates policies favoring the key constituencies of the authoritarian developmental states, i.e. the elites.
• Crony-capitalism results, further entrenching the structures that produce inequality and injustice.
• The elitist autocracy would have to mitigate the effects of their policies on social injustice.
• Pro-elite societies harm growth because public frustrations with social injustice breeds political instability. The elites grow fearful of democratization, and the regime applies more repression.
• Efficiency is also harmed.
  • Enormous fiscal resources are devoted to provide the privileges the elites expect, e.g. 19% of total government spending in 2003.
  • The regime must protect the economic interests of the elites in their rent-seeking opportunities. In the Chinese case, SOEs. In 2003, median rate of return was 1.5%. 35% lose money and 1/6 have negative equity.
• The ruling elites are held accountable not by the people but by their superiors.
• The prioritization on economic growth reduces social investments such as education and health care. e.g. health care 1980's 36% government funded, 2000 15%.
• 2/3 of the population don't have health insurance and half don't seek medical attention when they become ill.
• Environmental degradation exacerbates the problem.
• How to reform the political incentive structure so that local elites need to respond to public needs is the most sensitive topic and is avoided.
• Corruption by the insiders of the regime is the weakness of an authoritarian developmental state.
• Authoritarian developmental states are always at risk of degenerating into authoritarian predatory states. Decentralization was not met with increased capacity to monitor local agents.
• This degenerative process is very advanced in China. Collusive corruption account for 30-60% of corruption cases.
• Battling corruption puts the regime at risk. Attempts at it are half-hearted: most corrupt officials face no serious punishment. In 2004, 170850 CCP members were found to have engaged in wrong-doing but only 4915 were prosecuted.
• Incentive structure and social deficits.
• Information asymmetry, monitoring of agents, corruption

 

Conclusion

• Few authoritarian regimes willingly reform themselves out of existence unless the alternative is imminent demise. The CCP will not reform without first experiencing a shock. At this rate, growth will slow due to
  • Persistent economic inefficiency
    • Resulting in low returns on invested capital and fragile financial system saddled with impaired assets.
    • The current savings rate cannot be maintained forever. Retirees will increase.
  • Rising systemic risks
  • Rising inequality limits domestic consumption and increases instability.
  • Environmental degradation costs China 8% of GDP (The World Bank, 1997).
  • An uneducated, unhealthy population is unproductive and vulnerable.
  • The ability of the CCP to overcome its challenges depends on whether it can stop and revers political decay.
    • Unlikely as it is itself the cause.
  • A corrupt officialdom habitually conceals information, covers up mistakes, and takes half-assed actions against threats to public welfare.
  • The spread of corruption will fragment the CCP's authority.
  • Thus Liberal Dream and Authoritarian Nightmare is ruled out. That leaves Frail Giant (I assume at the end of its reign) or Weak Democracy (finally).
  • The west does not expect this.
  • Accelerated political decay
• For the global economy, an economically faltering China has serious consequences.
• Its relationships with Latin American, African, and other Asian countries will erode.
• The West will become disappointed with China, taking away the investment that kept China afloat.
• Beijing totally would blame the West for conspiring against the Chinese economy.
• While China would cease to be a traditional security threat, the US would suffer economically.

[wumaoge]

You've asked this question assuming democracy is the highest level of politics, which is not.

Democracy is nothing more than a politics marketplace, where the market is the people. This is totally wrong to associate "democracy" with "freedom" which are two independent concepts.

The right to vote isn't freedom, it may give an illusion of freedom to the masses and that's perfect for controlling the people.

 

The real question is "Why would the People's Republic of China adopt democracy and what benefits could the people get from it?"

 

Two very interesting videos about democracy and China:

Eric X. Li: A tale of two political systems

Dambisa Moyo: Is China the new idol for emerging economies?

[ParkeNYU]

Wumaoge, you might be tempted to assume that I am pro-democracy, but in fact I am neither pro-democracy nor do I necessarily believe that democracy is the best fit for the PRC. While I welcome everyone to contribute to this thread, my initial question was posed primarily to those who assume that democracy is naturally the right path for the PRC (and for every society). I agree that democracy is not the highest level of politics, and I believe that humanity has yet to discover what is. I do not believe in unfettered freedom, however, but rather liberty.

 

Hofmann, thank you for all your excellent pieces of information regarding the feasibility of democracy in the PRC as it relates to economic growth.

 

Perhaps the next questions are: If the PRC miraculously became a full-fledged democracy overnight, how would the people vote? Would they know for whom to vote? Do they even have passionate disagreements with the way that the country is currently run? Is there anything specific that the majority would like to change? Would most people simply not care as long as they can carry on with their lives as usual?

 

Personally, I believe that there are some issues best voted on by the general public, and other issues to which the average citizen is simply unqualified to contribute. We must fear both the tyranny of the few and the tyranny of the majority.

[gato]

Democracy is too abstract. There many different types of democracies with many variations. The US and UK, for example, have vast number of differences already. The French system is even more different.

You might want to make the discussion more concrete by focusing on a few specific components of democracy.

For example, should the Chinese government stop controlling the press and the media? Should all TV shows and movies be subject to government approval before they can be shown publicly?

[Demonic_Duck]

Yes to the first question and no to the second.

 

Is anyone seriously going to argue against that?

 

I don't think either of those questions are about democracy per se, though. They're more about freedom of information.

[ParkeNYU]

As Demonic_Duck said, censorship isn't necessarily related to democracy. Plenty of things are censored in "democratic" U.S.A. that are not censored in the E.U. and vice versa. However, they are good questions to ask so I'll give my two cents:

 

I don't believe in media censorship, but if anyone is proven guilty of a treasonous act that poses a tangible, imminent threat to the government (such acts could be inspired by anti-government propaganda), then I believe that this person should be granted the choice between death and exile (am I not generous?). Also, if the media is proven to knowingly publicise information that is both false and damaging, they should have their right to free speech suspended.

[gato]

Freedom of the press shouldn't be controversial, but it is still something the CCP won't permit.

Control of the press obviously makes one-party rule easier, so most one-party governments also try to control the press. You see that in many non-Communist non-democratic countries, as well, like Singapore, Saudi Arabia, and Iran.

[ParkeNYU]

Fortunately for freedom, the internet is a beast that cannot be tamed, not even by the Chinese Communist Party. All of my friends from the mainland use proxies without a second thought, and laugh at the idea of getting punished for visiting banned websites. I don't think the rules are very strictly enforced unless you make a huge commotion.

[gato]

Unfortunately people like your friends constitute only a tiny minority. The vast majority of Chinese don't know how to use proxies and have no interest in learning how to.

[ParkeNYU]

I can't imagine that they care as much about internet censorship then. I'm sure most mainlanders simply don't feel a need to visit banned websites.

[imron]

I can't imagine that they care as much about internet censorship then

Most people don't.  Many are even supportive of the government's efforts.

[tooironic]

At the risk of sounding flippant, why do you assume that democracy is suitable for China? The way you word your post makes it sound like it is almost inevitable.

 

And why is the premise of your post more valid than, say, How can The United Sates of America adopt a single-party socialist state while ensuring national unity in perpetuity?

 

I recognise I'm not contributing much to this post, but I always find it a little strange why Westerners tend to assume that no government is legitimate, and by extension that no one people can be truly happy, without democracy. Surely this argument needs to be tested first before we start talking about idealistic hypotheticals?

[Shelley]

Apart from starting a lively debate, i don't know why this question even needed to be asked.

[Angelina]

You should talk to politicians. 

[Wang7]

ParkeNYU:

 

We live in an oligarchic world. The idea of 'democracy' is just an imaginary egalitarian concept of government. It does not exist. 

[ParkeNYU]

tooironic, I would like to reiterate my above post to clarify your misunderstanding, and I quote:

 

"...you might be tempted to assume that I am pro-democracy, but in fact I am neither pro-democracy nor do I necessarily believe that democracy is the best fit for the PRC. While I welcome everyone to contribute to this thread, my initial question was posed primarily to those who assume that democracy is naturally the right path for the PRC (and for every society). I agree that democracy is not the highest level of politics, and I believe that humanity has yet to discover what is."

 

imron, that makes sense, and it's a shame that many people assume it is because mainlanders are 'brainwashed' or 'don't know any better'. By virtue of living in society, we are all 'brainwashed' in some ways; it's all relative. I'm tired of [strawman]'You don't cherish western democracy and capitalism? You must be uneducated and brainwashed'[/strawman].

 

Wang7, I agree.

 

Angelina, politicians only care about their incomes. I should probably talk to political scientists and revolutionaries instead.

 

Shelley, the question was primarily posed to challenge the blind supporters of Democracy in the PRC, the ROC, and their (disputed) territories (those people who assume that democracy and capitalism are the only morally acceptable options because their minds are polluted with Occidental colonial influence).

[studychinese]

What happens when you combine 'democracy' with 'low information voters'?

Africa and the Middle East gives me excellent examples. Democracy does not sound like a good idea in a place like China where polls have shown that a majority of people want a war with a certain neighbouring country, etc.

[ParkeNYU]

What happens when you combine 'democracy' with 'low information voters'?

 

Uneducated, ill-informed, and overall poor decisions, I'd say.

 

Africa and the Middle East gives me excellent examples. Democracy does not sound like a good idea in a place like China where polls have shown that a majority of people want a war with a certain neighbouring country, etc.

 

Yes and no. I agree that this might be the case for Africa and the Middle East, but I don't believe that the average mainland Chinese citizen wants a war with anyone. Instead, I think that the average mainland Chinese citizen wouldn't necessarily feel a passionate need to vote for any particular cause, and thus democracy wouldn't really change much for the current generation.