China's Governance Crisis

Minxin Pei

From Foreign Affairs, September/October 2002

Article preview: first 500 of 4,738 words total.

Summary:  Predicting the outcome of China's upcoming leadership succession has become a popular parlor game in certain Washington circles. But a focus on power plays in Beijing misses the real story: China is facing a hidden crisis of governance. Whoever they are, the new leaders will have to deal with a failing state, an ailing party apparatus, and rising social tensions if they wish to sustain China's economic growth.

Minxin Pei, Senior Associate at the Carnegie Endowment for International Peace, is completing a book titled China's Trapped Transition: The Limits of Developmental Autocracy.

MORE THAN MUSICAL CHAIRS

Predicting the outcome of China's upcoming leadership succession has become a popular parlor game in certain Washington circles. The curiosity aroused by the transition is understandable, given the huge stakes involved for the world's largest country. If all goes well, the Chinese Communist Party (CCP) is scheduled to select a new and younger leadership at its Sixteenth Party Congress this fall. The incumbent CCP general secretary, 76-year-old Jiang Zemin, may step down and be replaced by China's Vice President Hu Jintao, who is 59. The all-powerful Politburo Standing Committee will see most of its members retire, as will the important Central Committee. In addition, Chinese Premier Zhu Rongji is to step down in March, and Li Peng, the leader of the National People's Congress (the country's legislature), may be heading for the exit as well.

In a country ruled largely by man, not law, succession creates rare opportunities for political intrigue and policy change. Thus, speculation is rife about the composition, internal rivalries, and policy implications of a post-Jiang leadership. The backgrounds of those expected to ascend to the top unfortunately reveal little. By and large, the majority of new faces are technocrats. Some have stellar resumes but thin records; other front-runners boast solid experience as provincial party bosses but carry little national clout.

In any case, conjectures about the immediate policy impact of the pending leadership change are an exercise in futility, because Jiang will likely wield considerable influence even after his semiretirement. A truly dominant new leader may not emerge in Beijing for another three to five years. And regardless of the drama that the succession process might provide, a single-minded focus on power plays in Beijing misses the real story: China is facing a hidden crisis of governance. This fact ought to preoccupy those who believe that much more is at stake in Beijing than a game of musical chairs.

The idea of an impending governance crisis in Beijing may sound unduly alarmist. To the outside world, China is a picture of dynamism and promise. Its potential market size, consistently high growth rates, and recent accession to the World Trade Organization have made the Middle Kingdom a top destination of foreign direct investment ($46 billion in 2001), and multinational corporations salivate at the thought of its future growth. But beneath this giddy image of progress and prosperity lies a different reality -- one that is concealed by the glitzy skylines of Shanghai, Beijing, and other coastal cities. The future of China, and the West's interests there, depends critically on how Beijing's new leaders deal with this somber reality.

DOT COMMUNISM AND ITS DISCONTENTS

China's current crisis results from fundamental contradictions in the reforms that it has pursued over the past two decades -- a period that has seen the amazing transformation of the communist regime from one that was infatuated with class struggle to one obsessed by growth rates. This "dot communism," characterized by the marriage of a Leninist party to bureaucratic ...

End of preview: first 500 of 4,738 words total.