Survey China: Good Things in Tiny Packages

Good things in tiny packages

Mar 23rd 2006
From The Economist print edition

A little democracy has to go a very long way

APJIN LIANGMING, the party chief of the booming Xinhe township on the coast of Zhejiang province, has something unusual to show a visiting foreign journalist: a detailed (by Chinese standards) budget report for his government. Many Chinese officials would worry about losing their job or even going to jail for this, but when your correspondent asks for a breakdown of its implementation, Mr Jin gets detailed monthly statements printed out.

Government budgets in China are usually treated as secrets, except for vague headline figures issued for public consumption. The annual state budget is a flimsy pamphlet that gives only a broad outline of spending priorities and commitments and says nothing about budgets for individual ministries. Deputies in the Communist-Party-controlled legislature pass it without amendment (the latest went through on March 14th).

It is a sad reflection on China's progress towards more open government that the bits of paper supplied by Mr Jin seem so exciting. Whereas economically China has surged ahead in the past few years, politically it remains almost as secretive, just as risk-averse, nearly as dictatorial and every bit as determined to crush any organised dissent as it was at the turn of the decade.

Gone are the days when foreign observers celebrated China's efforts to promote a semblance of village democracy in the 1990s. Many thought this might be the start of a gradual rise of democracy from the grassroots. But although a handful of townships (the first tier of government—village administrations formally do not count) have tried to introduce similar reforms, the central leadership has done little to encourage this. Last September the prime minister, Mr Wen, hinted that townships could have direct elections within a few years, but his statement was loaded with ambiguity.

Even for a government reluctant to reform, making the budgetary process more open to the public looks promising. Unlike direct elections at the township or higher levels, making government budgets more transparent would not require any constitutional change. It would be in keeping with the principle of open government to which China's new leaders have paid some lip service. It could help reduce some of the bureaucracy's prodigious waste. And making government budgets more open would go to the heart of the democratic process, giving the public a say in how public resources are deployed.

Mr Jin is not quite alone in his experiment with openness among the paddyfields, clothing factories and scrapyards of Xinhe (population 120,000). The province of Guangdong (population 83m), like Zhejiang one of China's wealthiest, has inched along the same path. In 2004 it handed deputies to the provincial legislature a budget report of over 500 pages. But it was marked “secret”, and they had only two days to study it before voting on it and handing it back.

Xinhe's budget reform, launched last year, is being promoted as a model by reform-minded Beijing academics and encouraged by moderately reformist party leaders in Zhejiang. But not even its neighbours are yet following suit, let alone the 43,000-odd other townships in China. “There are many leaders better than us,” laments Mr Jin. “But the problem is they don't have the courage.” Even his new-look budget report does not tell all. It provides no clues, for instance, to the complex web of extra-budgetary flows managed by every tier of government, including their dealings through government-owned companies. But it does usefully—and unusually—admit that the township is in debt to the tune of more than $6m.

While the world is watching
The budget experiment is unlikely to take off in a big way. Serious political reform is not currently on the party's agenda, and is unlikely to get any attention until after the Olympic Games, if then. Many observers see little hope of any significant movement until after 2012, when a new generation of leaders is due to take over. For now, President Hu and Mr Wen appear far more concerned with maintaining stability than with the long-term challenge of moving to a more pluralist system.

China's leaders are worried that international attention focused on China in the run-up to the games could encourage disaffected citizens to air their grievances. The Tiananmen Square protests in 1989 gathered steam when hundreds of foreign journalists poured into Beijing to report on the first summit meeting between China and the Soviet Union since the end of the cold war—and found themselves diverted by swelling crowds of demonstrators. The protesters calculated that the authorities, anxious not to tarnish China's image in front of the Soviet president, Mikhail Gorbachev, as well as the world's media, would leave them alone. They were partly right: China waited until the day after Mr Gorbachev left before declaring martial law. The media stayed on.

AP

Hu and Wen have their hands fullThe Olympics in 2008 are likely to attract more than 20,000 foreign media representatives, who will be accredited not by China but by the International Olympic Committee. It will be by far the biggest media event in the communist nation's history, testing its ability to accept critical scrutiny to the limit. China's strategy, it seems, will be to try to ensure that nothing untoward happens in the run-up to the event. It is keenly aware of unrest in other Olympic cities ahead of the games. Both Mexico City in 1968 and Seoul in 1988 saw large anti-government protests. Mexico's ended with a bloody crackdown.

But unlike the Mexican authorities, the Chinese ones appear to have mobilised broad support for the games. And unlike in Seoul, where public sentiment was still inflamed by a massacre of protesters in Kwangju eight years earlier, there is no particular rallying cause in China today. The 1989 killings in Beijing have become a distant memory. Although many Chinese citizens have grievances against officialdom, these would be hard to galvanise into an organised protest movement.

Opinion surveys suggest that despite frequent public protests in the countryside as well as in the cities, the central government still enjoys a considerable degree of support. Government becomes increasingly unpopular further down the hierarchy. Thus angry peasants direct their resentment at rural authorities rather than at the central leadership or the Communist Party. According to Tony Saich of Harvard University, a survey spanning the past three years shows that support for the central government has remained “extremely high”. This, he says, fits with a traditional Chinese view of government that “there's a good emperor there if only we can get through to him.” Thousands of people go to Beijing every year to ask the central government to redress local injustices. Their inevitable disappointment does not appear to dim their belief that it is local government, rather than the top leadership or the system itself, that is the problem.

But the authorities are still jittery. President Hu's assessment of threats to the party's rule appears to be much the same as that of his predecessors, despite the rapid rise in incomes in recent years. A resolution at the party meeting in 2004 at which Mr Hu consolidated his power after a lengthy co-regnum with his predecessor, Jiang Zemin, said there had been “no change in the strategic conspiracy of hostile forces to westernise and cause China to disintegrate”. The leadership has been particularly rattled by the “colour revolutions” against authoritarian governments in Georgia in 2003, Ukraine in 2004 and Kyrgyzstan in 2005.

The past few months have seen one of the most wide-ranging campaigns in recent years to stifle public criticism of the government. Outspoken newspapers have been closed or their editors sacked, pressure on non-governmental organisations has been stepped up and dissidents who have posted their views on the internet have been jailed. Initial expectations that Mr Hu might push political reform further than his cautious predecessor have all but evaporated. Mr Hu has also presided over one of the most intensive indoctrination campaigns among party officials in recent years.

In the run-up to the Olympics, even the glimmer of democracy only just tolerated at the grassroots level is making the government nervous. That may explain why Beijing's authorities have decided to hold the next round of elections for district-level legislatures in the city at the end of this year rather than in 2007, as the rules would also have allowed. The previous round of elections in 2003 saw the first political stirrings of the city's new middle class, with several independent candidates joining the campaign (and, unusually, being left to get on with it). Many of these were relatively prosperous home owners and lawyers with an interest in property rights. It seems that the government does not want such people campaigning too close to the Olympics.

Optimists argue that the leadership's conservatism is tactical and does not necessarily signify a rigid opposition to reform. New leaderships in China have a tendency to crack down as they consolidate their power. That is what Deng Xiaoping did in 1979 when he shut down Beijing's Democracy Wall and jailed many dissidents. Jiang Zemin relentlessly pursued Tiananmen Square activists after he (nominally) took over in 1989.

President Hu, for his part, has displayed a curious streak of respect for liberal leaders of the past. He allowed hundreds of people, including dissidents, to join a funeral service for a deposed party chief, Zhao Ziyang, in January 2005. And in November he organised a public commemoration of the 90th anniversary of the birth of the late Hu Yaobang, who was also ousted because of his reformist beliefs. But in the build-up to the party's 17th congress in late 2007, Mr Hu might be eager to display his toughness.

Such congresses are mere rubber-stamp events held every five years to confirm party policy and name new leaders. The important part is the intense and secretive wrangling that precedes them. Mr Hu is limited to two five-year terms as president, and convention requires that he also step down as party chief in 2012, so it will be a big opportunity for him to begin installing his own successors. Likely front-runners for top positions include several provincial party bosses: Li Keqiang of Liaoning province in the north-east, Li Yuanchao of coastal Jiangsu province and Xi Jinping of Zhejiang, all of whom are as inscrutable as is Mr Hu.

If Mr Hu has anything interesting to say about how the party should change, the congress would be the forum at which to make it known. In the coming months, debate within the party over the way the congress should tackle such issues as political reform and better governance is likely to intensify. The approach of the Olympics will fuel that debate. A survey by a senior Chinese academic conducted about two years ago among nearly 600 provincial and lower-level party officials in one (unnamed) province found that 85% of the respondents wanted to speed up political reform and more than 60% were dissatisfied or very dissatisfied with the level of democracy in China.

One area of disagreement within the party is over the way that the hoped-for “harmonious society” should be brought about. When China acceded to the WTO in 2001, there was little public opposition to the principle of globalisation. But the past few years have seen an increasingly bitter divide among Chinese intellectuals (and party officials) over the merits of the Dickensian capitalism that China appears to have embraced. Growing inequalities of wealth and access to public services have prompted strident criticism of economic “neo-liberalism”.

Champions of a more caring, worker-friendly kind of capitalism are now dubbed the “new left”. One of their flagbearers, Wang Hui, the editor of a widely read and outspoken literary journal, Dushu, says workers should be allowed to have independent trade unions rather than impotent party-controlled ones. He fears the way SOEs are being privatised might create an oligarchy of a wealthy elite controlling the country's resources, as in Russia. Last year 105 new-left intellectuals submitted a letter to the leadership to protest against a government directive allowing domestic private investment in the state's hitherto jealously guarded preserves such as power, railways and telecommunications.

The leadership, with its populist bent, has shown a degree of sympathy. Partly in response to such criticisms (as well as concerns about worker unrest), it has tightened control over management buy-outs of state-owned enterprises. And it has recently put a new property law on ice. Supporters say the law is needed to reassure the private sector and the middle classes. “New left” critics say it fails to protect the “sanctity” of state property.

Turning green
Environmentalists will pitch into this debate too, encouraged by another of Mr Hu's slogans, calling for “scientific development”. China has pledged massive efforts to clean up Beijing's appalling pollution in time for the Olympics. Its best bet will be to order the temporary closure of polluting industries across a wide swathe of northern China in the run-up to the games, as well as introducing draconian traffic-control measures in Beijing. But some environmentalists are using the party's avowed interest in greenness to push for greater outside supervision of government activity in this area.

Even some officials at the State Environmental Protection Administration see the environmental cause as a low-risk way of encouraging greater public involvement in policymaking. “The government has realised that without environmental NGOs to help them and tell them promptly what is happening on the ground, there could be sudden social turbulence,” says Dai Qing, an environmental activist in Beijing. The government's tolerance has its limits, however: Ms Dai is under police surveillance.

Mr Hu doubtless wants to stop any such pressures from developing into a concerted political challenge. A year after the Olympics comes the 20th anniversary of the Tiananmen Square protests. The tumult and bloodshed of 1989 may no longer inspire passion among ordinary Beijing residents, but within the party Tiananmen is a still a sore point. Any fundamental political reform would have to begin with a reassessment of it, and neither Mr Hu nor any of his colleagues shows any sign of being ready for that.

Some liberals within the party worry privately that this reluctance to loosen its grip could make it increasingly vulnerable to unexpected shock—a sudden economic slowdown, a huge natural disaster or a health crisis such as bird flu. Such events could trigger both private and public questioning of the party's ability to rule that might shatter its unity and cause its rapid collapse. To avert such a fate, the party is turning to a time-honoured technique in times of domestic uncertainty: tapping the wellsprings of nationalism.