Thanks to David Cowhig for sending the following in to CDT:
I’ve just started reading “Reform of the Chinese Political System” by Zhou Tianyong and collaborators. He is the vice director of research at the Central Party School and the book has a foreword by Li Junru, vice president of the Central Party School. The book was published in September 2004 by the Zhonguo Shuli Shuidian Chubanshe.
The book covers the whole waterfront. The book goes into great detail on the problems of Chinese reform and presents views on the way forward. Problems of the Chinese system are discussed so bluntly that I wonder if this book were a popular book it would have been banned. But it is an academic book from a professor at the Party School so it is OK.
To give you an idea of the tone of this book [really intriguing tone, especially what is missing, — no ideology, we need to hold onto the Party for a few more decades for practical needs of economic development though. It is really hard to find quotes from wise, farseeing Party leaders in this book…] , here is my very breezy/informal summary of the first chapter.
Why not democracy now? China needs a gradual 30 – 60 year transition to full democracy so that economic reform will be smooth. Planned economy totalitarian states like the USSR and pre-reform China have all failed, only a very few left, like the DPRK. China is a form of the East Asia semi democratic, market economy with considerable market intervention. Comparable to Hong Kong, Taiwan, Singapore and Korea. Korea needed to be quite authoritarian to get its reforms through — why there were student demonstrators that wanted the ROK to copy the DPRK form of government and economy! So of course the ROK needed authoritarian government. [Note: don’t know if I would put the PRC in the same bag as Taiwan and Singapore, and even wouldn’t put Taiwan and Singapore in the same political bag. But interesting that Prof. Zhou and the Party School would…. also reading backwards all the repetitious arguments in the first chapter that democratic government is best but we are not ready for it yet, not ready for it yet, gives a feel that this kind of argument is coming up a lot at the Party School.End note] For a developing country, having a one party system is much less costly than a multi-party system. Sure, China’s performance during the first 30 years of the PRC was inferior to some capitalist countries, but the Chinese system did keep the various nationalities united. Since 1978, China has achieved much economic progress. As for now, two competing parties would create too much uncertainty for China’s economic development and run the risk of splitting the country up. So China should remain a one Party state for the time being.
The first period of 20 years was devoted to economic reform, the second twenty years following the Sixteenth Party Congress in 2002 is devoted to reforms to improve the market economy system and reform those aspects of the political system that impeded economic reform. Once the Chinese people are wealthier, have a better education/moral character (suzhi) and likewise government officials have a better education/moral character, the country more prosperous and stronger, then from about 2020 China can embark on thorough political reform to make China a much more democratic country.
Also the capital needed to carry out various reforms and the interference between various reforms — the order in which they need to be be done etc. [This discussion reminds me of Qin Hui’s comment in his 1998 book Issues and Ideology [Wenti yu Zhuyi]. To the effect that Hayek’s book “The Road to Serfdom” is well known and much appreciated in China. The problem is that although Hayek describes the road to serfdom very clearly but does show the way out. What China is looking for is the road out of serfdom. ]
p. 12 The Party needs to change is way of leading the country. The Party should exercise its rule through legal mechanisms and not just use the old method of the top leaders deciding everything and sending down the orders “baoban yi qie”. These principles should be accepted: operate according to law; respect the independence of the judiciary; party actions should be constrained by the Party charter, and disciplinary regulations, laws and regulations of the Party; the Party should manage the cadres; the Party should not make explicit interference with the legislative process; the Party should be aligned closely with the interests of the people “dangxing yu renminxing de gaodu jiehe yuance”.
On. P. 13 Zhou explains that China during the difficult process of transition allowed full press freedom before reform was complete, public opinion might become outraged and threaten social stability. However academic criticism of the government and the party is useful, so different standards should be applied to academic journals than are applied to news media.
P. 14 The 1994 tax reforms greatly weakened the ability of local government to collect revenues. Nonetheless, the burden of unfunded mandates kept growing. In 1992 local government had about 70% of total government tax revenues and expenditures. Now it has 40% of tax revenues but still 70% of expenditures. A very large increase in income from various fees and fines made up part of the difference but local government in China is typically heavily in debt. Since they get much of their revenue (1/3 – 1/2) from often arbitrary fees and fines, all off budget, local government has only soft “budget” constraints. This in turn favors the unending swelling of payrolls, to be paid for with more fees and fines.
P. 21 The chief mission of the Party organization in state enterprises should be to improve the company’s competitiveness and bring down the company’s operating costs.
The first chapter ends as it began (p. 25) Let’s wait another twenty years, when China will have built a foundation of strength and greater prosperity for its people, and let our descendants, according to the needs of their material culture and political culture, decide according to their political wisdom, what sort of socialist political system will give them greater satisfaction. [From my understanding of the book thus far, it seems like that means the Party has perhaps 20 years left on its lease, and we’ll just have to leave it to the future to decide whether it will be renewed or not. Could it really means what it seems to mean? I have rarely seen a book treating such sensitive matters with almost no ideological references (except briefly to Deng). Zhou is an economist. His argument is that we need to look at the cost of various reforms and for now concentrate on the areas of the political system that interfere with the growth of the economy. ]
—-
On p. 29 Zhou calls for greater democracy and adherence to law in the legislative process. Many laws are drafted by ministries and keep confidential so other interested parties cannot influence the draft and then given to the NPC with little prior information for passage. This lack of process results in laws that further the narrow interests of ministries while very often hurting the interests of Chinese private companies and private citizens. Zhou mentions the drafting and passage of the Land Law as a classic example of this — but doesn’t go into further detail.
At the start of chapter 2 pp. 52 – 54 Zhou states that Chinese government is extraordinarily inefficient since bureaucracies do not make proper budgets, do not face hard constraints since they make up shortfalls off budget with many fees and fines (1/3 – 1/2 of all government revenue) and literally eat up budgets with lots of free meals etc. for officials. The administrative cost of running government is 25% of budget in China vs. a typical international administrative overhead level of 10%. Zhou points out that the various government ministries are very poorly controlled by the central “power ministries” and so set their own priorities often times. He notes that areas which involve use of state property and resources such as road building and construction get overemphasis but other areas such as education and public health (China’s spending levels as a proportion of GDP is considerably lower than international averages, even in comparison to other developing countries.) Part of the answer, says Zhou, is to abolish the xiangzhen lowest level of government and turn some government functions to the private sector — some governent functions (giving permissions in many areas) really should be abolished since they are really a fee collecting mechanism for government and in fact hurt the economy.
p. 34 The Chinese government system is characterized by ministries and other government departments looking first of all after their own narrow interests and giving a very low priority to public goods. “Chinese officials spend as much public money on eating, drinking and publicly funded cars to build two Three Gorges dams each year.”
p. 44 Selection of personnel in government departments is often arbitrary leading to attachment of workers to particular leaders and so pervasive factionalism.
—–
Chapters address government finance, relations between central and local governments, reform of local government (ever swelling local government payrolls is a giant fiscal problem), how to judge the achievements of local city and county official leaders, developing NGOs, democratization of the legislative process and legal supervision that it is done according to law, land reform and China’s economic transition, improving the leadership of the Party of the State and of publicly-held (stock shares) enterprises controlled by the state.
A Chinese friend told me that Deng Xiaoping in his Collected Works somewhere wrote (around 1992) that China would have open democratic elections after about 30 years. Another Chinese friend confirmed the quotation with a citation but I can’t find it now. This book reminds me of that. I have always wondered about that quote.
Find the book here at dangdang.com.
