Preliminary Draft - Not For Citation Keio University
December 13, 1999 International Symposium
China: The Fifty First Year
China’s Political System: Challenges of the Twenty first Century
by
Michel Oksenberg, Senior Fellow
Asia/Pacific Research Center, Stanford University
China’s route to modernity has been a tortuous one. Periods of economic growth and seeming hope for the future have been repeatedly disrupted by chaos and upheaval. Even during the fifty year history of the People’s Republic, periods of steady progress have been interrupted by such calamities as the Great Leap Forward, the Cultural Revolution, and the tragedy of June 4, 1989. To a considerable extent, these cataclysmic episodes were induced by the leaders, but in a more profound sense, they resulted from accumulated social grievances and system rigidities. China at century’s end still confronts the challenge it faced a hundred years ago: Can its leaders, drawing effectively upon the talents and wisdom of its diverse people, forge a durable political system that is not plagued by costly disruptions? Much progress has been made in this regard, but much remains to be done.
This paper seeks to identify the major political challenges that loom ahead. It grapples with these questions.What is the nature of the contemporary Chinese political system? How is it best characterized? How has the system changed in the past twenty years, in the Deng Xiaoping and post Deng eras? What factors have prompted the change? And what challenges must be met if the system is to evolve in the decades ahead in steady, peaceful, and evolutionary fashion rather than the inevitable change being marked by disruptions, widespread suffering and massive violence by either the state or the populace.
THE CURRENT CHINESE POLITICAL SYSTEM
China's current system defies encapsulation in a single short phrase. Such previous depictions as "totalitarianism," a “Leninist party state,” "fragmented authoritarianism," "soft authoritarianism" or “bureaucratic pluralism” miss the complexity of China's state structure on the eve of the twenty first century.
Rather, the Chinese political system is perhaps best conceived as an eclectic set of three types of institutions:
1) The core apparatus, primarily but not entirely Leninist or Soviet in origin, consisting of the fused Chinese Communist Party (CCP), the government, and the army at the national, provincial, prefectural, county, and township levels;
2) The linkage or intermediary institutions largely created in the past twenty years to manipulate, control, isolate, and exploit the outside world; and
3) The legal, semi-legal, and illegal organizations and associations that are arising in the social and economic space created by a market economy and the state's retreat from total control of society and culture.
The Core State Apparatus
The Principal Structural Features. The core apparatus is itself in the midst of considerable change, but it still reflects its Soviet or Leninist origins. Its principal attributes include these features:
1) Enormous power resides in the preeminent leader and the Standing Committee and Politburo of the CCP Central Committee (roughly twenty to thirty people) who basically are not accountable to any other agency and who are unbound by law;
2) The Party Committees and their Organization Departments at each level control appointments and dismissals of key Party, government and state owned enterprise officials at their level and one level below (the nomenclatura system);
3) The military apparatus is commanded by the Party Central Military Commission, which reports to the CCP Standing Committee; the CMC commands the armed services through the General Staff of the army, navy, air force, and rocket forces, the Logistics Department, and the Political Department; civilian control over the chain-of-command is weak;
4) The coercive apparatus at each level of the hierarchy -- the state security, public security, procuracy, and judicial agencies -- remains under the coordinated control of the CCP political-legal committee at that level;
5) The ownership of the means of production largely belongs to state bureaucracies and state-owned enterprises; while the private sector now accounts for an increasing percentage of total production, and individual savings constitute a substantial portion of bank deposits, a significant portion of the country's wealth still is in the possession of the state.
Ideology. Further, ideology remains a key ingredient of the system.[1] The ideology of the political elite is no longer limited to Marxism-Leninism - Mao Zedong thought (MLMT). To be sure, most leaders continue to adhere to many aspects of MLMT. For example, many leaders at the national and local levels remain committed to state ownership of the means of production and distrust the capitalist or bourgeois class. These beliefs affect and constrain public policy. During the post-Mao era, the ideology has been extended to include self-conscious nationalistic themes and infused with Confucian rhetoric. But the ideology involves an unquestioned and explicit commitment to modernization, industrialization, and urbanization. In effect, the line (luxian) is pursuit of socialist modernization and rapid economic growth; the orientation (fangzhen) or strategy in support of the objective is opening and reform (gaike kaifang); the policies (zhengce) are the pragmatic measures or tactics in pursuit of the strategy.
The vision of modernity is embodied in the urban and regional plans (chengshi guihua) produced in the various architectural design institutes and provided to local governments around the country. This vision is enriched by karaoke and television. When local officials are asked “What does modernity mean to you? How would you describe a modern society?” they answer, “Modernity can be seen in the scenes of cities and life portrayed in karaoke.” The vision is enforced in the criteria for evaluating the performance of localities and local officials and for judging progress toward being classified as a “comparatively well off” (xiaokang) township, village, or household. Embedded in the exuberant embrace of economic growth are unquestioned assumptions that material progress will produce a more happy, stable, and just society, that social stability (obtained if necessary through suppression of those who would challenge the system) is a prerequisite for economic growth, and that material progress and social stability must precede such other desirable objectives as democratization or environmental protection.
A Mobilization System. There is, in short, somewhat of a Great Leap mentality in China, and a continuance of a mobilizational apparatus facilitates its implementation. Campaigns are no longer called yundong; Deng Xiaoping proclaimed their end. But mobilization -- now labelled (dongyuan) -- still occurs, though in reduced scope, intensity, and number. But the “strike heard” campaigns against corruption, Jiang Zemin’s “three emphases” (san jiang), and the attack against the Falungong sect are examples of their persistence. Designating a specific objective as a central or important task, creating a headquarters or leadership small group to coordinate fulfillment of the objective, disseminating slogans and wall posters to publicize the effort, and setting quantitative targets to measure success are still part of the system.
The mobilization system includes several transmission organizations under control of the Party that are intended to strengthen the leaders’ reach into specific sectors of society, such as the Trade Union, the Youth League, and the Women’s Federation. These organizations still attempt to galvanize support for state policy and serve as a recruitment ground for Party membership and officials in the stable apparatus.
Some Qualifications
Diverse Origins. This portrayal of the core elements of the Chinese state needs immediate qualification and refinement. First of all, the core system is not entirely Leninist -Soviet in origin. Some aspects -- such as the mobilization system, the nature of Party-army relations, and the fusion of Party and government -- can also be traced to the Yan’an and guerrilla past. Other parts of the bureaucracy reflect a deeper imperial heritage, such as the revenue system, the method of classifying documents, and the influence of Chinese cosmology. Yet other parts of the institutional arrangements derive from the Republican - Guomintang era (such as the Chinese People’s Political Consultative Conference, the CCP’s United Front policy, and the nesting of the State Copyright Administration in the State Press and Publications and CCP propaganda system). And other agencies continue to bear the imprint of their Western and especially American origins, such as the Ministry of Public Health and the Ministry of Education. Nowhere are the diverse institutional origins of the core state apparatus more evident than in the state structures that implement policies toward the ethnic minorities. These organizations are an amalgam of Soviet, Republican era, and imperial practices. In short, the contemporary Chinese state never was simply a replica of a Leninist-Soviet system; from its founding, it has been an admixture of diverse institutions over which the CCP achieved an overwhelmingly dominant position and into which it inserted itself to varying degrees at varying times.
Recent Changes. Second and most important, this core apparatus has been undergoing considerable change itself. Important initiatives undertaken during the past twenty years include:
-- considerable administrative decentralization in both the personnel management and financial systems, though some reversal of these measures has occurred since the mid-1990’s;
-- creation of mechanisms to circumvent strictures against property rights and state ownership of the means of production;
-- formation of quasi-autonomous or government approved non-governmental organizations;
-- gradual spread of rule through promulgation of laws and regulations (falu and guiding) rather than issuance of unvetted personal edicts of rulers;
-- gradual introduction of a civil service system and a major effort to improve the quality of officialdom (younger, better education, and more professional);
-- professionalization of the military through reduction in size, improvement in equipment and training, and alteration of doctrine and missions;
-- increased reliance upon monetary and fiscal instruments for regulating the economy and decreased importance of the planning (ji-hua) agencies and mechanisms;
-- transformation of the banking system through creation of commercial banks (previously specialized development banks) and a central reserve bank;
-- indigenization of local elites at the county level and above in those areas which, until the early 1980’s still were dominated by officials from the regions in north China that where the Red Army recruited its personnel prior to its advance into the south and southwest regions of the country;
-- increased transparency to a previously opaque system;
-- reduction in the strength of the propaganda apparatus (for example, through expansion and commercialization of a substantial portion of the cultural market);
-- some diminution in the dominance of the public security apparatus and an enhancement of the judiciary within the political-legal system;
-- invigoration of the parliaments or assemblies at each level of the hierarchy;
-- introduction of fair and competitive elections of village assemblies and village government chiefs;
-- an altered policy process that involves more consultation with the affected agencies and some solicitation of expert advice;
-- a reduction in the grip that the work unit (danwei) has over its employees through its provision of services and its control over career mobility; the unit provides fewer services today and employees enjoy greater mobility.
This is an impressive list of governmental changes, but all of them are proceeding slowly and encountering difficulties and resistance. These considerable adjustments mean that the conventional wisdom in the West about the reform era -- that China has had economic reform without political reform -- is inaccurate. However, the changes have not yet brought about a system transformation; to repeat, at core, it is still a Soviet-Leninist state.
Regional Variation. Although the core state apparatus exhibits many shared characteristics throughout the country, especially with respect to the formal structure of the Party, there are subtle regional differences with respect, for example, to the dominance of the Party and its fusion with the government, the role of the military, the extent of ideological uniformity, and the vibrancy of the mobilization system. Moreover, there appears to be considerable variation in the extent to which the various structural changes have been implemented. Such factors as ethnic minority population, level of economic development, history of the locale (a revolutionary base area, for example), extent to a foreign presence, and local leader preferences have an affect upon both state structures and functions and the extent of reform.
Linkage Organizations
Since 1978, the leaders have created numerous organizations to channel the activity of the outside world within the mainland. These “linkage,” “intermediary,” or “window” institutions include the four original special economic zones at Shenzhen, Zhuhai, Shantou, and Xiamen; the economic development zones in many cities (the most well known of which is Shanghai’s Pudong); the joint venture instrument; agencies especially designed for foreign cooperation (such as the China National Off-Shore Oil Company); the international trust and investment corporations (of which the best known is the China International Trust and Investment corporation or CITIC); the category of listings on the newly established Shenzhen and Shanghai Stock Exchanges in which foreigners are able to invest (the so-called “B” shares); and various agencies within ministries to facilitate cooperation with foreign counterpart agencies (such as divisions within the People’s Bank and the Ministries of Finances and Foreign Trade to deal with International Monetary Fund, the World Bank, and the World Trade Organization). Moreover, such organizations as the Bank of China, the China Travel Service, the civil aviation industry, and the Foreign Employment Services Corporation or FESCO (which supplies employees to foreign employers) have expanded rapidly to accommodate the foreign presence.
Another set of organization have been expanded or create to deal with Taiwan and the presence of Taiwan corporations and individuals on the mainland. Some of these are nested within the CCP United Front Department and others within the Ministry of Foreign Affairs and economic agencies. Presence of overseas Chinese has also grown enormously, with some of these exchange falling within the domain of the Overseas Chinese Commission and travel agencies aimed at ethnic Chinese in other countries.
Finally, Hong Kong and Macau are now part of the People’s Republic. Several organizations have been created on both sides to implement the Basic Law and the “one country two systems” policy. The Ministry of Foreign Affairs and the People’s Liberation Army now have an official presence in the Special Administrative Regions (SAR), while Hong Kong as a representative office in Beijing. The central government handles Hong Kong and Macau affairs through specially designated agencies of the State Council. The Hong Kong SAR and Guangdong governments have several joint committees, including one major co-ordinating committee. The Chinese Communist Party, as before 1997, maintains an underground apparatus that has as its external face the New China News Agency. Even more important are the tight web of economic linkages between the two SAR’s and the mainland. The Bank of China, CITIC, the China Overseas Shipping Company (COSCO), and the state owned tourist agencies are among the most noticeable of such organizations. Equally noteworthy, many provinces and even counties -- legally unable to open offices in Hong Kong -- have created trading companies or other devices to circumvent the law, and these subsidiaries have offices and pursue their government’s interests in the SAR. Meanwhile, literally hundreds of Hong Kong firms are active in the mainland, operating factories, developing real estate, and building owning and/or operating transportation and communication systems. The intertwining has resulted in thousands of PRC citizens working for mainland firms in Hong Kong, and tens of thousands of Hong Kong citizens residing and working throughout the mainland. And none of this is under the tight control of either government.
To varying degrees, these linkage or intermediary organizations are not well integrated into the core Party-state apparatus. They have been structured as intervening institutions so that the core will not be contaminated by the outside world. They perform a filtering function. They were initially designed to keep the non-mainland world somewhat at arms length. According to the design, the core party-state apparatus then is to use these window organizations to monitor, exploit, manipulate, and extract resources from the outside.
It is interesting to speculate about the intellectual origins of these institutions. Some, as already noted, existed before the 1978 opening to the outside world (such as FESCO). Others, such as the SEZ’s, owe their inspiration to Taiwan. Yet others, such as CNOOC, were designed through study of the way other countries handled similar issues. One wonders, however, whether the rapidity with which these intermediary agencies have proliferated is also due to the traditions of imperial China for handling barbarians who wished to reside within the realm. As John Fairbank noted in his explanation of the origins of the treaty ports in the 1800’s, China had a long tradition of creating zones within the empire where foreigners, whom the rulers considered unable to reach the high cultural level necessary to adhere to the Confucian norms of the state, were able to govern themselves. The Qing, as its predecessors, had its own version of “one country, two systems.” The core system was rooted in Confucian norms, which the Chinese were expected to obey. A second set of arrangements enabled barbarians to reside within the realm under constrained self-rule for the imperial system’s benefit.
Organizations In Society And The Economy
During the past twenty years, the core state has retreated from its once totalitarian penetration of the economy and society. A proto-market economy now exists, with many prices imperfectly reflecting supply and demand. Capital still is allocated through non-market forces. Local governments still intervene extensively in the economy. And well over half of the urban work force that has urban household registry (chengshi hukou) still depend upon state owned enterprises for their wages, unemployment benefits, or social security payments. As a result, it is inaccurate to assert that China now has a market economy. Nonetheless, especially in the 1990’s, there has been an explosion of individual entrepreneurs (geti hu) and privately owned enterprises (siying qiye). An estimated one hundred million urban migrants are “temporarily” residing in Chinese cities or other rural areas.[2] These migrants retain their rural household registry (nongcun hukou) and politically are not well incorporated into the area where they currently live.
The state has also retreated from its previous, intensive control of society and culture. Traditional marriage, death, and family rituals are being revived -- or at least a contemporary recreation of what is recalled as the traditional rituals, combined with a heavy dose of “modernity” ritual. A youth culture now exists in big cities and those areas where tens of thousands from the interior have flocked to work in joint venture and wholly owned subsidiaries. And a new and prosperous middle class now has disposable income that enables them to nurture communities where within limits, they can act upon their values.
The result is a proliferation of legal, semi-legal, and illegal organizations inhabiting the economic and social space that the state’s withdrawal has created. It would be wrong to conceive of these as the emergence of a “civil society.” The differences between the Chinese and the Eastern European conditions are too great to apply a term arising from the Czechoslovakian, Hungarian, and Polish experience of the 1970’s and 1980’s to the Chinese situation. But an important development is occurring, manifest in the reappearance of secret societies and criminal gangs; the formation of government approved interest groups such as environmental protection activists, associations of retired cadres, and individual entrepreneurs; the resurgence of both state licensed, state tolerated, and illegal religion organizations (especially Buddhism including Catholicism and Protestantism); the proliferation of professional associations with their own journals and annual national and provincial conventions; the expansion of groups based on hobbies and shared cultural and literary interests; and the reappearances of organization of urban migrants in a specific locale who hail from the same region (tong xiang hui) and are intended to protect their members and give them voice.
The spread of the Falungong sect in 1999 is perhaps the most dramatic example of developments in this sphere, but it is by no means the only one. Americans and Western Europeans exhibit interest in the formation of organizations that resonate western values, such as illegal trade unions, the underground Christian churches, and democratic political parties. Westerners are playing a role in fostering these associations. However, the linkages being established between mainland Han Buddhists, overseas Chinese, Japanese, and Korean Buddhists, and even Tibetan Buddhists are possibly even more significant. Traditionally, Chinese and Tibetan Buddhism had little to do with each other, but overseas Buddhists are financing the rebuilding and expansion of both Chinese and Tibetan Buddhist temples, and Han are apparently exhibiting increasing interest in Tibetan Buddhism. Those organizations with genuine indigenous roots enriched by a Chinese modernity -- secret societies, tongxiang hui, Buddhism, lineage associations, and professional agencies (which echo a long tradition of guilds) -- are likely to spread more rapidly, have greater appeal, and prove more difficult for the core state apparatus to control, precisely because they can not be dismissed as creatures of the outside world.
FACTORS PRODUCING CHANGE
In the 1980’s, in a series of writings, David Lampton, Kenneth Lieberthal, and I coined the phrase “fragmented authoritarianism” to capture the nature of the Chinese system. Many others helped us to elaborate this model. However, as the above portrayal of the current Chinese system suggests, “fragmented authoritarianism” no longer adequately captures the essence of the system. That model accurately depicted the core state apparatus for a period of time, but as the writings of Harry Harding, Susan Shirk, Barry Naughton, and Gordon White among others recognized, an intellectually satisfying depiction had to capture the forces producing change in the system. “Fragmented authoritarianism,” as “totalitarianism,” offered a detailed but static description of how the core state apparatus worked in the mid to late 1980’s and, to a considerable extent, still works. As a static model, however, it did not anticipate the changes of the 1990’s. Moreover, as the diverse writings of such as Elizabeth Perry, Vivinne Shue, Tianjian Shi, and Merle Goldman demonstrate, the revitalization of Chinese society requires the inclusion of state-society interactions into a comprehensive model of the Chinese system.
In short, one can not rest content with a description of the system. We must ask: what has prompted the system to evolve from that of the 1980’s to the late 1990’s? Four interrelated factors have been at work: idiosyncratic ad hoc responses of the top leaders to a series of structural challenges they have faced; the consequences of the opening to the outside world; the emergence of the proto-market economy; and the telecommunications and transportations that are sweeping China. These powerful factors are generating the evolution of the system but in an incoherent and uncoordinated fashion. Increasingly, the system has a disjointed, Rube Goldberg quality to it. The leaders appear to lack an overarching vision of the nation’s political future that guides their incremental responses to the institutional challenges that confront them. They do have a vague vision of a Chinese modernity made explicit, as noted earlier, in the grand architectural designs of Pudong, the rebuilt Changan and Wangfujing boulevards in Beijing, and the urban construction plans of county towns. Without a vision of China’s political future, the leaders are incapable of molding or guiding the nation’s political trajectory. They are the captives of the three forces that their earlier decisions unleashed: the opening to the outside world; the spread of a market economy; and the telecommunications and transportation transformation.
THE INSTITUTIONAL CHALLENGES AHEAD
This brief sketch of the Chinese political system and of the factors prompting its evolution pinpoints the challenges that China’s leaders and led face in the years ahead. Some of these challenges are endemic to any Leninist system. Others arise from the structural changes that have occurred since 1978. And yet others necessitate managing and channeling the forces that are propelling the system in new directions lest they overwhelm both leaders and led.
The Vulnerabilities of the Core Leninist System
Succession. As many other authoritarian arrangements, Leninist systems have no institutionalized and orderly procedures for selecting the successor to their paramount leader. In many respects, this is the Achilles heel of the system. There is nothing in a Leninist system short of a coup to prevent the preeminent leader from remaining in power after his mental and physical capabilities have eroded. As the leader ages, the personal rivalries that the preeminent leader may have fostered in order to remain in power intensify; unbridled struggles among potential successors erupt, fed by personal ambition and fear. Paramount leaders inescapably attract flatterers and courtiers. As the leaders age, those who have risen with them -- their wives, children, and associates -- worry about their own fate after their chietans pass from the scene. They often seek to prevail upon their chief to remain in command, so that they can use the remaining time to enhance their own wealth and power. The leader's courteriers often foster a cult of personality to enhance their own stature within the bureaucratic system. Particularly in authoritarian systems, many leaders fall to the temptation to indulge their own whims and those of their subordinates. It is a rare leader who is able to retain a perspective upon himself in that heady environment and avoid a touch of megalomania. Deng Xiaoping was unusual in his recognition of the problem. He set a precedent in avoiding a cult or personality and of establishing a precedent of withdrawing from power.
As the new century dawns, the leaders of China face this age old dilemma. The 1999 ceremonies in Beijing at the Fiftieth Anniversary of the founding of the People's Republic provided ample reminders of the danger. The gathering of the top leaders to review the parade from atop the Gate of Heavenly Peace harkened back to Stalin and Brezhnev led celebrations in Moscow’s Red Square and the Mao era of the 1950's and the 1960's. As if to underscore the situation, the portrait of Jiang Zemin followed those of Mao and Deng during the parade. The top four leaders -- Jiang Zemin, Li Peng, Zhu Rongji, and Li Ruihuan -- are all over 70 years of age. When and how will their successors be selected? Do the current set of leaders command sufficient respect and authority to be able to anoint their successors and to make their selection stick after they pass from the scene? Even Deng faced severe opposition in the arrangement he made in the 1980's with Hu Yaobang and Zhao Ziyang; in fact, in 1986 and 1987, other Party elders put great pressure on him to overturn the arrangement that he had made. However, he and the other elders retained enough legitimacy within the Central Committee to impose another arrangement after the June 4, 1989 debacle, installing a collective leadership of people then in their early 60's, with Jiang as the first among equals. Since then, Jiang has increasingly sought to distinguish and separate himself from his other Standing Committee leaders.
At the Fourteenth Party Congress in 1992, an agreement apparently was reached to institutionalize succession procedures; central to the rules was the notion of term limits -- no more than two terms or ten years in office. But will all the rulers adhere to that agreement as their terms in office expire? Will Jiang be willing to step down at the Sixteenth Party Congress in 2002? If not, will the others also seek to remain in office and resist an effort for them to retire? Could the leaders divide over succession issues, as occurred in 1964-6, 1969-71, 1973-76, 1978-81, and 1986-89? In these instances, bureaucrats and the populace quickly detected signs of a divided leadership at the top. In complicated fashion, factionalism at the top on these previous occasions became linked to and exacerbated societal cleavages. Can such a sequence be avoided in the months and years immediately ahead? The evidence thus far is murky. Some signs point to an effort by Jiang to arrange for an orderly succession, possibly centering on Hu Jintao. But other signs point to opposition to Jiang's effort to mastermind the succession process. Some observers also discern the initial stages of a Jiang Zemin cult of personality and a desire by Jiang to remain an active political force after 2002. The Chinese system is clearly entering an important stage in its evolution as the current ageing leaders who have piloted the nation well during the past decade enter the final phase of their long careers.
The Role of the Party. According to Marxist Leninist ideology, the Chinese Communist Party claims to be an instrument of the proletariat class, and the leaders of the Party continue to assert a responsibility to discern and defend the interests of the proletariat. The Party was structured in order to carry out revolution, wage class struggle, run a state controlled economic system, and mobilize the population in pursuit of socialism. It unabashedly enforces a dictatorship. However, the revolution is over, the leaders have proclaimed an end to class struggle, the state is abandoning its command of the economy, and the pursuit of socialism has yielded to the pursuit of economic growth.
To recite the ideology that defines the Party’s purpose, in short, is to recall its irrelevance. Since 1989, the leaders and their intellectuals have not undertaken a serious effort to redefine the role of the Party in a market economy and in an increasingly diverse society. The Party and its leaders justify their right to rule on three pragmatic grounds: They have protected the sovereignty and territorial integrity of the country. They have maintained China's unity and domestic stability. And they have achieved rapid economic growth and a higher standard of living for the overwhelming portion of their people. But even these justifications are under challenge. Involvement in the international economy arguably intrudes on aspects of Chinese sovereignty. Taiwan's drift from the mainland challenges China's unity. Rising crime, social disorder, and corruption call into question the Party's ability to maintain stability. And the economic growth rate is slowing. In reality, as Jiang Zemin has explicitly acknowledged, the Party is an increasingly corrupt organization that dispenses patronage through the jobs that it controls and the access to power and resources that these jobs provide. It persists in using old methods to solve new problems. This is a sure prescription for obsolescence.
The CCP is not in imminent danger of collapse, but the 1980's and 1990's have witnessed a severe erosion in the efficacy of its ideological appeals, a weakening of its authority over other institutions, and an atrophying of its core apparatus. Yet, as noted earlier, the CCP remains the most important organization in China. Through its control of key personnel appointments, its coercive capabilities, its eroding propaganda apparatus, its manipulation of patriotic and nationalistic appeals, and its command of the government and People's Liberation Army, the CCP provides the glue that holds the country together. The mainland's unity would be imperiled without the continued existence of the Party. By design, it has no substitute.
In short, China's leaders and the populace face a dilemma that is likely to intensify in the early decades of the twenty-first century. On the one hand, the CCP is indispensable; on the other hand, it requires reform if it is to remain attuned to the Chinese condition. Thus far, with the 1984-8 exception of Hu Yaobang and Zhao Ziyang acting with Deng Xiaoping's encouragement, China's leaders have been reluctant to embark upon a genuine reform of the CCP. Several factors explain their reluctance: deep and potentially polarizing differences among the leaders on the ultimate objectives, means and urgency of Party reform; fear that the results would lead to the same disaster as Mikhail Gorbachev's effort to transform the Communist Party of the Soviet Union; concern that the foreign powers and Taiwan would seek to use loosened Party control over the political system as an opportunity to overthrow it completely; a desire of the leaders to focus on what they know and have shown they can do best (economic development); and little overt indication that the population demands reform of the Party.
In essence, the leaders would seem to face five alternatives, each of which has attendant risks:
-- persist as the dominant, mobilizational institution of a fused party-government-military apparatus, with the risk of decay, irrelevance, and disruptive change;
-- return to totalitarian rule and class struggle, risking economic stagnation, international isolation, and domestic resistance;
-- change into a highly nationalistic and externally assertive party which would necessitate greater reliance upon the support of the military, thereby risking a coalition against China and an exposure of Chinese weakness in the international arena;
-- transform into an instrument explicitly responsible for guiding China's gradual political evolution in a democracy that reflects China's intellectual traditions, with the risk of social disorder and debilitating splits among the leaders during the difficult and protracted transition;
-- postpone choice, with the risk of purposelessness, drift, and inconsistent ad hoc responses to problems as they arise.
These strategic choices involve many concrete issues. For example, should the Party actively recruit and welcome into its midst members of the new entrepreneurial class, especially wealthy owners of private enterprises? Thus far, the Party has been quite ambivalent on this issue. At stake, of course, is whether the leaders believe the Party should continue to be an instrument of the proletariat or -- as in the Khrushchev era in the Soviet Union -- proclaim itself to be a party of the whole people. Many idealogues in the Party are reluctant to embrace the new classes. They attribute the CPSU's abandonment of socialism and collapse of the Soviet Union to the Party's loss of its identity as a vanguard of the proletariat. But if the CCP does not recruit energetically from the middle class, a bifurcation of political and economic elites will occur, with all of its deleterious consequences.
The relationship between the Party and government presents another huge dilemma for the leaders. In a sense, the fusion of the Party and government places excessive burdens upon the Party committees at each level of the hierarchy. The Party is so immersed in the day-to-day details of running the country that all grievances are directed against it. In 1987, the Thirteenth Party Congress raised the slogan of separating the Party from the government (dangzheng fenkai). This would have entailed abolishing the Party faction (dang-zu) within each government agency and abandoning the nomenklatura system. The Party would redefine its role to setting the broad parameters for the nation's development. It would seek to include and reconcile the diverse interests of the total society rather than to enforce the interests of a single sector as articulated by the leaders. Although Deng Xiaoping continued to say after the 1989 debacle that all the formulations (tifa) of the Thirteenth Party Congress remained valid, in fact the dangzheng fenkai tifa was not repeated during either the Fourteenth or Fifteenth Party Congress. But without separation of Party and government, can the rule of law be established when judges remain subordinate to Party committees? Can administrative decentralization be effective when its main result is to strengthen the authority of local Party committees over the local agents of central government bureaucracies?
Vulnerabilities of the Linkage Organizations
The proliferation of linkage organizations and of laws and regulations dealing with them have created a hodgepodge of agencies with ill-defined, competing and overlapping jurisdictions. The jumble is more complex that the participants -- either foreigners or Chinese officials -- can handle. First of all, many of the laws and regulations are secret; foreigners are unable to inform themselves of the regulatory environment that they are expected to obey. Second, many of the laws and regulations are contradictory. Even worse, there is no supreme body short of the CCP Standing Committee and the government State Council that has the authority to reconcile the differences. Third, different foreign organizations are expected to adhere to different regulatory regimes. The size of the foreign investment is a critical factor; investments of different magnitudes must be approved by different levels of the system, with the largest investments requiring approval at the highest levels. Further, some provisions of some early JV's are grandfathered from subsequently enacted regulations. Taiwan firms are treated differently from firms of other origin. The regulatory regimes within SEZ's obviously differ from those in other areas of China, and various localities establish their own arrangements within the industrial parks they have established. As the default of the Guangdong International Trust and Investment Corporation (GITIC) revealed, the financial backing that such organizations enjoy is unclear.
In addition, the foreign presence has outgrown the vague vision that guided the formation of the window organizations. Despite their complexity, the linkages organizations have been more successful than even the most optimistic projections for them. However, instead of serving primarily as channels of control and manipulation, they have also become to a considerable extent channels through which foreigners can penetrate to the core of the system. They inadvertently serve as Trojan horses through which the outside world can influence the core state apparatus. Several factors produce this effect. First, the linkage organizations develop shared interests with their foreign partner. Indeed, the Chinese within the window organization deliberately use the foreigner as a conduit to higher levels in China, since frequently the foreigner has better access and influence in Beijing than lower ranking Chinese do. Second, Chinese in the linkage organizations frequently have extended and close association with foreigners; their values and aspiration inevitably change as a result. Third, the linkage organizations, while handicapped in some respects, enjoy privileges in China that are denied to domestic institutions. For example, while joint ventures do not automatically enjoy the same access to the domestic market as their indigenous competitors (for example in establishing service networks), they also are subject to a more favorable tax laws. As a result, some indigenous firms create subsidiaries in Hong Kong that then create JV's on the mainland. Such firms are treated as foreign rather than local firms and therefore enjoy the tax breaks accorded to foreign investors. The result is the partial transformation of a domestic firm into a foreign one. Fourth, many intermediary organizations have established a presence abroad not in order to invest their profits within the mainland as a foreign firm but in order to invest in Hong Kong or abroad, to improve access to foreign markets, and to obtain capital in Hong Kong and foreign financial markets. Examples include CITIC, CNOOC and the Bank of China. This requires abiding by foreign laws and regulations, thereby affecting such practices within China as accounting procedures, financial practices, management practices, and communication procedures and technologies. The portions of the core state apparatus with which these agencies deal, such as the Ministries of Finance and of Foreign Trade, the People's Bank, and the state petroleum industry must then adjust their practices. The dynamics that have been unleashed, of course, are the inescapable consequences of China's entry into the global economy.
Hong Kong. The structural challenges posed by the July 1, 1997 return of Hong Kong to PRC control merits special mention. The first two years under the "one country, two systems" formula have been largely successful. The reports from Hong Kong are, "So far, so good." But inevitably, any new constitutional arrangement involves a trial period; unforeseen institutional problems and challenges arise that necessitate some adjustments. So it is natural that the inadequacies in the Basic Law governing Hong Kong are beginning to surface. The challenge of reconciling Hong Kong's common law traditions with the mainland's quite different legal system remains quite great. Maintaining Hong Kong's institutional separateness from the mainland while attaining effective, integrated planning for the development of the entire Pearl River delta region is another challenge. Environmental protection, population migration, shipping facilities, and highway and rail transportation are four areas, for example, that require close cooperation between Guangdong and Hong Kong governments. The development of effective linkages between the two while preserving Hong Kong's autonomy will be an increasingly difficult challenge as the delta becomes a single megalopolis.
Within the Hong Kong system itself, moreover, certain structural problems are beginning to be evident. These primarily have to do with relations between the Legislative Council and the office of the Chief Executive. There is an inadequate institutional linkage between the two. Political parties in other systems provide the linkage between the executive and legislative branches of a democratic system. But in the Hong Kong system, the Chief Executive has no base of support on which he can count. Discussions with participants in both parts of the system reveal dissatisfaction with the current arrangement, which seems to drive the two into a somewhat adversarial positions.
This situation, which most participants and observers believe could be easily remedied, and the recent controversy over the right of abode for the mainland children of Hong Kong residents, have highlighted yet another flaw with the Basic Law. It is not easily amended. Changes must be approved by the National People's Congress in Beijing as well as by a majority of each of the three types of members of the Legislative Council: those elected in urban districts; those elected by professional constituencies; and those appointed by the council selected by Beijing. The cumbersomeness of this process encourages the SAR executive branch, when confronting a problem that the Basic Law did not envision or about which the Basic Law is ambiguous and that requires swift resolution through interpretation of the Basic Law, to turn to Beijing for resolution rather than seeking to amend the Basic Law itself.
Finally, within ten to fifteen years, the expansion of the number of LegCo members who are directly elected and the election of the Chief Executive will come to the fore as political issues in Hong Kong. If Hong Kong is to remain competitive as an international center of finance, commerce and transportation -- in comparison to such places as Singapore, Shanghai, and Tokyo -- these structural issues will have to be handled well. Beijing will have to display considerable sensitivity and flexibility in order for the "one country two system " formula to continue to work well and for Hong Kong to perform well its function as intermediary or window to the outside world.
Institutional Vulnerabilities in the Economic and Societal Spheres
As noted earlier, various legal, semi-legal and illegal formal organizations and informal associations have arisen within the proto-market economy and the society as the core state apparatus has retreated from its total penetration and control of the economy and society. As a result, an underground economy of uncertain size exists outside the current reach of the state. People, communications, material goods, and capital cross China's borders outside of state control. Tens of millions of recent urban migrants are not well incorporated into the state structures. And as the recent incident in which the Falungong sect used e-mail, fax, and cellular phones to mobilize thousands of its faithful for a demonstration outside the Zhongnanhai, the new telecommunications and information technologies enable non-state actors to undertake activities that the state presently can not easily monitor and control.
The leaders are obviously aware of the situation. Their instinct is to suppress the illegal organizations, but there are limits to their capacity to do so. One constraint is that many local officials do not comply with the directives to crack down. In the case of the Falungong, apparently some members of the military and the public security forces and their family members believe in the group's rituals. In other instances, such as criminal gangs that deal in narcotics or individual entrepreneurs and private enterprises that engage in piracy of intellectual property, bribery secures the protection of local officials. Further, local officials may simply tolerate and not report violations of laws restricting certain organized activities. Local officials are evaluated, in part, on their record in maintaining social order; an increase in reported crimes -- even if solved -- may prompt a negative rating in this category.
Repression is not the only response, however. Through various reforms, the leaders are also attempting to extend the reach of the state and to incorporate and give voice to potentially discontent elements in society. These measures include improving the methods for collecting taxes (to reduce the magnitude of the underground economy), expanding government at the township level, opening of channels through which aggrieved citizens can address complaints and seek remedies for state malfeasance, increasing the transparency of Party and government procedures, and as mentioned above, election of village government leaders, strengthening of parliamentary bodies, and greater state tolerance of approved non-governmental organizations.
While these measures are not trivial, they seem inadequate to the challenge at hand. Will the state be able to meet the yearnings of the populace to participate in the political decisions that affect their lives? Will the populace enjoy adequate means to articulate their interests? Will the state be able to regulate markets effectively, keep crime and corruption within bounds, and meet expectations for the provision of social services? The answer to these questions are presently unclear. The solution to such issues will require the extension of the state into the space its prior retreat has created but in a fashion that is under law and responds to popular demands rather than suppressing and controlling them.
An additional challenge that the leaders face is to regulate the interactions among the parts of their eclectic state: between the core apparatus and the organizations and associations in the economy and society; between the core apparatus and the linkage organizations; between the linkage organizations and the economic and societal associations. (These interactions are among the most interesting and ill understood developments in contemporary Chinese politics.) Thus far, the leaders have been slow in addressing these complex issues, with the result that the interactions mostly occur outside a regulatory framework.
CONCLUSION: RESPONDING TO THE FORCES
PRODUCING INSTITUTIONAL CHANGE
This paper has described the current Chinese state and identified its major vulnerabilities that merit attention if the system is to evolve without costly disruptions. We noted that the state can not be simply characterized as a Soviet or Leninist state, although the core apparatus still owes much to the Soviet legacy. The core apparatus has been the object of considerable change in the past twenty years. Further, two additional components have grown around this core: intermediary institutions to accommodate the growing presence of the outside world on the mainland; and formal and informal organizations, many of which are only semi-legal or illegal, that exist in the economy and society as a result of the state's transformation from a totalitarian to an authoritarian regime.
We also stressed that the evolution of the state has proceeded without an overarching design. Rather the leaders have responded in ad hoc fashion to three forces that are blowing across the land: the consequences of the opening to the outside world, the implications of fostering a proto-market economy; and the implications of the spread of telecommunications and information technologies.
This analysis prompts more questions than answers as one speculates about the future of the Chinese political system. How imperative is it for the leaders to remedy the various vulnerabilities of the current system? Can the system long persist even though it increasingly lacks coherence? Do the leaders and led require a vision or design to guide their institutional responses to the forces propelling them in new directions? It may indeed be possible for the Chinese leaders to cross the river stone by stone, to use one of their favorite metaphors not only in the economic realm (where the metaphor was first applied) but in the political realm as well. After all, many political systems have muddled forward, with their leaders making pragmatic and incremental institutional adjustments in order to solve problems as they arise. But we are inclined to believe that the three forces buffeting the Chinese system are of such a magnitude that incremental and ad hoc responses are not adequate. Rather, an underlying consensus must be forged as to the ultimate political objective and the strategy for getting there. Otherwise, there is a danger that the centrifugal forces acting upon China could ultimately prevail. The lessons of the Soviet Union and Indonesia stand as stark warnings about the fate of authoritarian political systems whose leaders postpone the challenge of coherent political reform on the assumption that heavy reliance upon their coercive apparatus will enable them to avoid difficult choices.