Don't Break the Engagement

Elizabeth Economy

From Foreign Affairs, May/June 2004

Summary:  This election year may tempt both critics of the Bush administration and hard-liners within it to attack U.S. policy on China. That would be a mistake, however, for engaging Beijing has worked well. Economic growth in China has spurred political liberalization, legal reform, opening of the media, and popular activism. The Bush administration -- and those who aspire to replace it -- should not let electoral tactics jeopardize sound policy. With respect to China, that means staying the course.

Elizabeth Economy is C.V. Starr Senior Fellow and Director of Asia Studies at the Council on Foreign Relations and the author of The River Runs Black: The Environmental Challenge to China's Future.

State corruption is perceived as a particularly severe problem. A poll by the Chinese Academy of Social Sciences indicates that 60 percent of the 15,000 urban Chinese interviewed believe that economic reform has benefited the CCP and government officials the most -- and far more than the private sector. Another poll indicates that 80 percent of people in rural areas and 75 percent of city residents believe their local leader could be corrupted. Instead of rooting out illegal activities, officials have come to depend on them to fund local affairs: according to an official in the State Council (China's top government body), local government revenues increasingly derive from fines levied on criminals engaged in drug smuggling, prostitution, or gambling.

In response, thousands of retirees and unemployed workers from state-owned enterprises demonstrate each month against the corruption they believe has robbed them of promised compensation, retirement benefits, or medical insurance. Evictions and illegal land sales have prompted public suicides. The country's increasing -- and increasingly powerful -- middle class has been outspoken, too. Middle-class Chinese want effective legal institutions to protect their newfound assets, so they organize into independent associations (such as homeowners' groups) or run for political office to weigh in on decisions that affect their livelihoods.

These are voices that China's leaders know they can no longer ignore. (Private assets now exceed state assets by more than one trillion yuan, or $1.2 billion.) According to a recent poll, 30 percent of top CCP cadres believe that reforming the political system is the leadership's most urgent task. Yet political reform has been far from straightforward. It has seen many delays, reversals, and backlashes. Beijing has initiated some key reforms, but others have percolated from individual initiatives or small-scale government-sanctioned experiments (many of these changes had first been proposed by former Premier Zhao Ziyang as early as 1987). Some reforms have been announced and then withdrawn. In 2003, Shenzhen municipality boldly proposed to end the CCP's oversight of government functions, but the project was dropped when its chief supporter became vice-governor of a nearby province. Other reforms have taken years to materialize. A proposal to enshrine property rights in the constitution was first put forth in 1999, only to be defeated by opposition within the CCP and then passed, in March of this year, when a more hospitable political environment had developed. Every step forward seems to prompt a setback -- a crackdown on Internet freedom, a sweep of arrests of religious dissidents, or incidents of fraud or intimidation at local elections.

PARTY INVITATIONS

Nevertheless, political reform is resolutely moving forward, because China's leaders have come to understand that enhancing their legitimacy is a matter of survival. To give the people a greater stake in the political process, Hu and Wen are increasing transparency in government practices, broadening the CCP's membership base, and experimenting with electoral reform.

For the first time, last October, Hu allowed both that the agenda of the Politburo Standing Committee (the CCP's top leadership) be published and that a report on the Politburo's work be reviewed by the Central Committee (a wider group of top party officials). Local governments have undertaken their own experiments, too, inviting citizens to attend people's congresses (provincial assemblies) and opening more of their proceedings to the public. The city of Guangzhou recently launched a Web site with information about its activities, from personnel changes to urban planning and large-scale development projects, encouraging citizens to send comments and complaints directly to the mayor. It also passed path-breaking measures requiring disclosure of certain government records (much like the Freedom of Information Act in the United States). Such measures are now being considered at the national level.

The CCP has also sought to broaden its support base by varying its membership, in particular by welcoming entrepreneurs and successful businesspeople. A recent amendment to China's constitution acknowledges their important contribution and targets them for participation in the party. According to one estimate, 20 to 30 percent of China's private entrepreneurs are now CCP members. They are likely to have an important impact on issues such as the protection of property rights, reform of state-owned enterprises, and the highly controversial question of government oversight by the CCP. Some of them who also belong to provincial people's congresses or to the National People's Congress (China's national legislature) have already established their own private think tanks, staffed with social scientists and retired officials, to gather complaints and reform proposals from the general population. Other entrepreneurs have pushed political boundaries in different ways: Richard Chang, who heads the semiconductor powerhouse SMIC, founded his own church in Shanghai.

In time, however, the greatest force for political change will likely be electoral reform. Although it is not immediately clear how Hu's commitment to "ensure that the people can exercise democratic elections" will be put into practice, there are promising signs that it will materialize. There have been direct elections in villages for well over a decade, and other levels of government have experimented with various forms of representative democracy. Last year, in Peixian County in the province of Jiangsu, 70 local officials ran for a county magistrate post, enduring debates and public questioning in the process. The local people's congress made the final selection, but only after a public opinion poll had whittled the pool of candidates to three finalists.

Opening local elections to nonparty candidates also promises to have a significant long-term impact, by energizing the population at large. During the 2003-4 elections, nonparty members competed as "independents," in some cases even running formal campaigns with posters, leaflets, speaking engagements, and Web sites. Many were intellectuals or property owners who were eager to expand public participation in politics. As one Beijing-based candidate told a Western reporter, "I'm not interested in the elections. What I want is to use these elections to show people that they have the right [to stand], that they can do this without being sent to prison or getting in trouble." Although only a handful of independents were elected to district congresses, their active campaigning inspired the broader population: some cheered that for the first time China was having elections like those in the West that they had seen on television.