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China’s Politics in Rare Bloom

March 3, 2012

Today marks the opening of the National People’s Congress (NPC) which, along with the concurrent Chinese People’s Political Consultative Conference (CPPCC) — together known as “liang hui” or “two meetings” — constitutes China’s annual season of high political theater.  Since it’s the last such meeting before the big leadership change-over later this year, everyone will be reading the tea leaves with particular intensity over the coming week.  A couple things that already caught my attention:

1) He Guoqiang, #8 on the Politiburo Standing Committee in charge of internal party discipline, went out of his way to greet the Chongqing delegation to the NPC, including Bo Xilai and Mayor Huang Qifan.  He offered some rather weighty thoughts on the weather, observing that “the current climate in Chongqing is very different from that in Beijing” and “it is a period of seasonal transition,” concluding by telling the delegates to mind their own health.  Commenters on Weibo assume he wasn’t just talking about the weather, but sending a none-too-subtle political message to Bo and his crew.

Over the past few weeks, several readers have written to me asking my impressions of the Wang Lijun incident (where a vice mayor of Chongqing and top Bo lieutenant apparently sought refuge in the U.S. consulate in Chengdu last month).  I’ve been reluctant to say anything because there’s just so much we (the public) don’t know.  Why did Wang go to the consulate?  Did he give the U.S. any materials or information?  Is Wang the one in trouble, or is Bo himself under scrutiny?  What impact will it have on Bo’s political standing and aspirations?  It’s fun to speculate, and plenty of people have been doing just that, but I’ll be the first to admit I have no idea what the true answers are — and I’d feel foolish pretending that I do.

One thing I did find remarkable was how many Chinese academics came out, in the days immediately following the consulate incident, to declare Bo’s political career finished and the entire “Chongqing model” a failure.  As a critic of the Chongqing model, from a substantive point of view I thought this was jumping the gun a bit.  To some degree, the “model” (including the “red songs” campaigns) was purely a populist vehicle for Bo, but the focus on state-led development is a trend that has sunk far deeper roots in China following the global financial crisis.  More to the point, though, Chinese academics tend to be cautious — there’s no way they would come out so publicly against a senior Party leader (even a provincial one) without somebody more senior telling them it’s okay, that they’re protected.  What that tells me is that Bo Xilai — regardless of what really happened in Chengdu — has some powerful enemies who saw it as a means to go after him.  It also tells me that the behind-the-scenes struggles in this leadership transition may be a lot rougher (and for higher stakes) than we previously imagined.

2) Hu Shuli, editor of Caixin and one of China’s most influential financial journalists, published a must-read op-ed in Friday’s South China Morning Post.  In it, she argues that “the rise of State Capitalism is not a point of pride, but a reason for worry” — precisely the point made in my own posts on “Guo Jin Min Tui” and China’s need for new Southern Tour, as well as this important piece in The Economist. Here is Hu’s description of what is clearly her own point of view:

One group of scholars disagrees that state capitalism is the reason for China’s economic success. Instead, they say, the driving force was the market dynamics unleashed by over 30 years of rural reform, private-sector growth, the national policy to open up, and globalisation. To attribute the success to state-led capitalism would be to misunderstand the past and mislead decisions in future.

The timing of Hu’s op-ed with the opening of the NPC is no coincidence.  It’s a powerful articulation of a message that China’s leaders — as well as foreign admirers of China’s economic success — desperately need to hear.

3) Expat residents of Beijing like to joke how every period these days is a “sensitive period” for the government — but this just takes the cake.  The South China Morning Post reports that Beijing police have swooped in and barred a 22-year-old university student, Li Maizi, from leaving the city during the NPC.  Her crime against the State?  Organizing a series of protests, called the Occupy Men’s Toilet Movement, to complain about “the longer wait endured by women due to a skewed ratio of public toilet cubicles for men and women.” 

Inspired, of course, by the Occupy Wall Street Movement — reports of which, once hailed on Chinese TV, are now verboten out of concern they might give people ideas — the potty protests seem to have struck a chord.  According to the Post, women students have occupied male toilets in Guangzhou, Zhengzhou, and Beijing — which undoubtedly is the concern.  What terrifies the Party more than anything is any group that can organize people across multiple provinces (which is precisely what got the Falun Gong religious movement banned in 1999).  Localized protests are one thing, but if young women can occupy men’s toilets across the country, who knows where they’ll stop?  The Post notes that:

Her travel ban underscores a tightening of security in the capital for the two meetings.  China News Service reported that more than 700,000 security personnel have been mobilised for the two meetings and that vehicles from other cities have needed a special pass to enter Beijing since Wednesday.

It also reports, on a far less humorous note, that “Several protesters were beaten up at the Ministry of Health on Thursday when police tried to disperse about 150 people affected by HIV/Aids who were petitioning for better treatment and compensation.”

UPDATE: For those who are interested, here is an AFP article that quotes me about some of the political maneuvering taking place in the lead-up to China’s leadership transition, including the immediate fall-out from the Wang Lijun incident.

14 Comments leave one →
  1. March 4, 2012 12:19 am

    Reblogged this on Blog of TheAcademicPortal.com.

  2. Hua Qiao permalink
    March 4, 2012 6:28 am

    The western hotel that I am staying at told me, in response to my question about a blank tv screen, that security police have eliminated western tv stations from being shown in public areas (lounges, bars, etc) during the liang hui. I can still get CNN, BBC, etc in my room, just nothing on the tvs in the public areas.

  3. Hua Qiao permalink
    March 4, 2012 7:03 am

    Regarding Ms.Hu’s SCMP column, she makes a point of the stickiness of institutions. A good example is the asset management companies (Cinda, Huarong, etc), which were set up in the late 1990s to deal with the problem loans generated by the big state owned banks, They had a specific purpose: to try to collect the loans and liquidate the assets efficiently and effectively. Yet today, all four of the companies not only remain in existence but they have “diversified” into all manner of businesses such as real estate, leasing, funds management. What should have been self liquidating businesses instead morphed into ongoing concerns. Meanwhile, the 10 year bonds that the banks took back in exchange for selling their loans in 1999 were rolled over (extended and not paid) in 2009.

    • March 7, 2012 6:22 am

      I wonder what are the consequences of constantly rolling over debt that know one really has hard data on?? Or does the chinese tax payer just get stuck with a raw deal…

      • Hua Qiao permalink
        March 7, 2012 3:32 pm

        Here’s a good (scathing) article on the Chinese AMGs…

        http://seekingalpha.com/article/125105-really-bad-banks-chinas-asset-management-companies

        I also notice that Cinda today announced that it is getting 10 billion in a capital injection from the National Social Security Fund, UBS, Standard Chartered,and Citic Capital and ha the hope of doing an IPO. That is one prospectus I would like to take a look at. I hope that UBS and Stand Chart know what they are doing. Sweat equity perhaps?

    • Aulnay-souBois permalink
      March 13, 2012 3:59 am

      It you run one of the AMCs and earns a fee for managing your massive loads of POS assets, are you going to be in a rush to move them off of your book?

  4. Dean Jackson permalink
    March 6, 2012 5:16 am

    If you have not seen it, the FT has a major piece today: secrets of the succession war about Bo and what has been happening in that province. It clearly states the war on crime was directed at businessmen who were not criminals.

  5. George H permalink
    March 6, 2012 9:33 am

    Patrick,

    China just lowered its growth target for this year. The safe bet is the final target will be higher, without a doubt as the bottom line is the controlling stake of the country wants to make a (huge) profit.

    But just curious if you somehow think this reflects an increasing confidence among some Chinese leaders that it can tolerate a growth rate of less than 8% without triggering social instability.

  6. March 7, 2012 6:15 am

    China’s moving away from state capitalism is good news for sure, I think too many people were quick to jump on the state led development band wagon after the 2008 global recession. However, starting last year we have been seeing the negative effects of the development model creep up in the form of corruption, quality control, over-investment and hidden debt.

    Love the inside look on chinese politics. It will be an interesting year.

  7. March 11, 2012 8:12 pm

    if i have more icone for Taiwan..thank you

  8. Aulnay-souBois permalink
    March 13, 2012 4:06 am

    Hu Shuli’s piece and the recently released Worldbank survey represent but one camp of thoughts. Unfortunately (or fortunately perhaps in some sense), there are all sorts of people voicing their view, from ultra left guys like wyzxsx.com to pragmatic nationalists to liberals. Politics almost never follows even the most obvious economic dynamics.

Trackbacks

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