Why Reform Eludes China

Inertia has become the name of the game.

Since John Winthrop’s “City on a Hill,” Americans have grown accustomed to our national leaders regularly extolling America’s exceptional greatness. Even while our current leadership seemingly careens from one crisis to the next, there is still much truth to the trope. Our unbroken series of elections and peaceful leadership transitions is something most Americans take for granted, but is in fact a remarkable achievement that has eluded the vast majority of nations. The importance of mature institutions in ensuring stable growth is nowhere more visibly on display now than in China, where their failings arguably pose the single greatest challenge for the ruling Communist Party.

With the successful completion of a second bloodless leadership transition, much was made recently about the growth of China’s political institutions. From the tumult of the Mao era, transitions have taken on the air of creaky predictability, but success in some areas only serve to highlight more glaring failures in others. In his swan song address to the 18th Party Congress, outgoing Chinese premier Wen Jiabao spoke (as he has many times before) about the ongoing need for Chinese political reform.

As Deng Xiaoping ushered in China’s storied economic reforms, so too must new leadership lead the way on political – or risk dire consequences. Reform of any kind, however, is never easy. For Deng, who was a hero of the Chinese revolution with unquestioned leadership legitimacy, economic reform was a constant struggle. For the last 15 years of his life, he battled reactionary adversaries who sought to undermine his efforts. It was only his force of will that nurtured the seed of modern China and laid the groundwork for the country we know today.

True political reform would likely prove an even tougher lift. Economic reform allowed its champions to become rich; political reform stands to make them obsolete. Today there is no Deng, and as the power of individual men has diminished, it has not been replaced with a commensurate level of authority from institutions. Change in China has historically always been the purview of powerful individuals, whether they are emperors in the imperial past, Nationalist warlords like Chiang Kai-Shek or Communist colossi like Mao and Deng. Today there are no such people in Chinese leadership and the institutions that guide lesser men in the west do not provide enough political cover in China.

Early his career, Cardinal Richelieu, French king Louis XIII’s celebrated first minister and one of the architects of “national interest” politics took the Capuchin monk, François Leclerc du Tremblay, as an advisor. The quiet and unassuming friar developed a close personal relationship with the Cardinal that ultimately resulted in Tremblay assuming the snarky moniker “Eminence Gris” (Grey Eminence) – so named for the grey friar’s cloak of a Capuchin. The friar’s sobriquet has entered the common lexicon to mean anyone influential who operates in secret behind official centers of power. Today, China’s weak institutions have bequeathed not one Eminence Gris, but dozens.

Last November, the New York Times ran a fascinating interactive graph showing the problem visually. The power of individual men in China shrinks with each new generation of leadership. Power, rather than being held in the offices those men hold, is devolved and dispersed among all of them. More and more retired party elders, each with individualistic interests and egos, now exert power from the sidelines. Xi Jinping, like Hu Jintao before him, must rule by consensus not just with the current Standing Committee, but with all members of previous Standing Committees lurking in the background. Barring a major crisis, the enormous inertia generated by keeping this circus of “little emperors” happy will likely stifle any top-directed political reform for the foreseeable future.

Deng Xiaoping is said to have privately called Mikhail Gorbachev an idiot. Gorbachev’s liberalization program of Glasnost, Deng argued, was foolhardy and dangerous without first completing a thorough economic restructuring. There was more than a little truth in the old man’s insight.

During the 1990s, millions of workers were laid off when Premier Zhu Rongji began the first restructuring of China’s moribund State Owned Enterprises. There is just no easy way to transition from a command economy to a market economy. The languid and grossly inefficient fabric of the Mao’s “iron ricebowl” social contract of guaranteed employment was shredded. The equality of poverty of China’s first thirty years was replaced with avarice and mammon. Where in more democratic countries, violent street protests and populist elected officials could derail painful reform; China’s tight lid on free expression ensured the completion of the reforms and the continuity of leadership.

Moral questions aside, China’s economic transition was smoother than most other post-Communist societies. The danger today is that China will not complete the equation that Deng envisioned. At what point will China be ready for political reform? Naturally, it is an impossible question, but increasingly the risk of premature political reform seems outweighed by the risks of belated reform. Increasingly, the Chinese wonder whether their leaders are stalling because China is not ready—or because the Communist Party is not ready.

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