Courcy’s Intelligence Brief

A combination of unusual circumstances is fuelling an increasingly fierce, but only partially visible, debate in China about the direction of reform.  These include the 14 January election in Taiwan, the 20th anniversary of the famous “southern tour” undertaken in 1992 by China’s late paramount leader Deng Xiaoping, and the Communist Party of China (CCP) leadership changes due this autumn.

The Taiwan election captured the imagination of the Chinese public despite concerted efforts by Beijing to play it down.  As even the Communist Party’s tabloid mouthpiece The Global Times admitted, unlike during the previous Taiwan election in 2008, it was not just mainland intellectuals who were engrossed by the 14 January poll, but ordinary mainland citizens as well.  Beijing may have been gratified that incumbent President Ma Ying-jeou defeated his pro-independence challenger Tsai Ing-wen, but that did little to dampen the debate about democracy.

Behind the rising public interest in democracy produced by the Taiwan election there is a wider struggle that is heating up in China ahead of the leadership succession due this autumn and which is centred on the direction of reform.  The tone of the debate has been set by a recent report from the prestigious Tsinghua University which argued that vested interests are blocking further progress in China, which was now stuck in a “transition trap”.

The report, released on 9 January, has clearly struck a nerve as reports covering it were removed from various websites, including that of the China Youth Daily.  The People’s Daily also removed from prominence its article covering the report by mid-day on 9 January, but it left it accessible via its “society” and “finance” pages.  Even more intriguingly, on 18 January the Communist Party posted the report to its “theory” page.

The report, which has clearly set off something of an internal power struggle, was authored by Professor Sun Liping, who was at one time an advisor to Xi Jinping, currently vice-president and the heir apparent to President Hu Jintao.  The report warns, in particular, about the malign influence of vested interests which are holding back further progress.  The report illustrates its point with a Chinese proverb, saying that “in the early days of reform ‘crossing the river by feeling the stones’ was a practical choice”.  However, it adds, now “the problem is that some people enjoy feeling the stones so much that they do not want to cross the river any more”.

The vested interests that are holding back reform were defined at a conference in Beijing on 8 January by Wang Yukai, a professor at the Chinese Academy of Governance, as being government officials, monopoly enterprises, resource industries, and the real estate sector.

The charge for renewed reform is being led by the province of Guangdong, whose provincial party chief, Wang Yang, is a protégé of President Hu Jintao.  Wang said on 4 January that reform had to focus on “breaking the constraints of the existing pattern of vested interests”.  Guangdong’s new governor Zhu Xiaodan told his first press briefing on 17 January: “The biggest obstacle to deepening the reforms is the pattern of vested interests.”

A former deputy editor-in-chief of the People’s Daily, Zhou Ruijin, marked the 20th anniversary of Deng’s 1992 tour of southern China, during which he restated his support for reform and opening up, with a 15 January article in Caijing magazine warning that China’s reform had “once again reached the most crucial moment” and that without “political reform” economic and social reforms could achieve little more.

The implication of all this, including the inconsistent attempts at censorship, is that the Tsinghua report has support at the highest level.  This conclusion is reinforced by comments made by Premier Wen Jiabao in Doha on 18 January, when he said: “I have repeatedly stressed reform, not just economic reform but also political reform, because it is most important for the government to maintain close links with the people, listen to their views and voices, and improve the work of government in order to develop the economy, improve people’s livelihoods, and bring them benefits.”

But that is still some way from saying that calls for renewed reform and the curtailing of vested interests will be implemented.  After all, even Wen’s pro-reform remarks have previously been censored by China’s official media.  And the official line on the Taiwan election, espoused by The Global Times, has not been encouraging to those who advocate genuine political reform.  It has been to emphasize the differences between Taiwan and the mainland, particularly with regard to scale. For the CCP mouthpiece, the suggestion that what is good for Taiwan can be good for the mainland is naive because “the systems designed for modern countries are not exactly suitable for gigantic countries like China”.  In an editorial on 17 January it went on to argue: “Because of its size, China risks being broken up. Therefore, maintaining national and social stability becomes an overarching mission for Chinese society which will influence every person.”

The argument, put by the CCP tabloid, is that “big China” provides many benefits to its citizens, but this is “not a free lunch”.  The editorial argued: “Its maintenance costs are in fact shared by every one of us.  It is not just defence spending and central government expenditure but also includes certain concessions of our community and collective rights for the benefit of national unity.”

The view of Tang Xuepeng, a senior editor with Guangzhou’s 21st Century Business Herald, is that it will take a serious internal crisis to provide the necessary momentum for renewed reform and for China to escape the “transition trap”.  JdeC.