CHINAwatch

Democracy with Chinese characteristics?

As the festive season approaches, may I take this opportunity of wishing my readers a Merry Christmas and a Happy New Year.

The preparation of this Newsletter coincided with a short series of lectures which I undertook with the International MBA Centre at Lingnan (University) College, Guangzhou, which partners with the MIT Sloan program and is currently ranked No 8 in China.

During my stay at Lingnan, I partially attended an international law conference on campus with delegates from the University of Illinois and experts from Beijing University. Concepts of judiciary independence and public interest litigation were discussed.

A paper presented at the conference highlighted guidelines promulgated by the State Council in March 2004 to push for nation-wide efforts to govern by law. They include openness in and access to public information, the building of limited government, government accountability, and corporate governance.

Meanwhile, following a chemical spill disaster causing serious pollution of the Songhua River in Northeast China, the State Council approved on 2 December the resignation of Xie Zhenhua, head of the State Environmental Protection Administration (SEPA). This echoes the accountability discipline introduced during the 2003 SARS crisis leading to the dismissal of the Health Minister and the Mayor of Beijing.

A subsequent Nanfang Daily's editorial highlighted the launch of accountancy guidelines by various city governments including Chongqing and Shenzhen. According to the Shenzhen edict governing department heads, such accountability encompasses political as well as criminal responsibility. This is defined to include non-fulfillment or inappropriate fulfillment of laws and duties, lip-service to enforcements, policy failures, gross inefficiencies, unlawful acts, abuse of power, and public behaviour putting the relevant authority into disrepute.

One evening, I caught sight of a CCTV entertainment extravaganza featuring large-scale performances with an anti-corruption theme with emotive songs extolling the ethics required for government office.

These complement references in my earlier Newsletters to a 'Hyde Park Corner' styled public forum in Guangzhou on the adequacy of government food hygiene measures; the use by some progressive mayors of polls and internet feedback to monitor public opinions; the development of an accredited juror system; the institutionalization of a more rational research-based decision-making process; the emphasis on 'scientific management'; and the increasing emphasis of the Hu-Wen leadership on 'Government for the People'or 'People-based Governance', prompting a shift from emphasising sheer economic growth to giving priority to balanced development and the so-called 'Three Agrarian Issues'. Readers may wish to check back numbers in this column under Recent Posts.

The shift has already translated into the latest 11th Five Year Plan (2006 -10) and in fact has given substance to the third of Jiang Zemin's so-called 'Three Represents'.

Although the proof of the pudding is in the eating, these initiatives seemed to emphasise the resolve of a Party conscious of the challenges of eroding corruption and want of corporate governance to push ahead with self-renewal and reform to ensure that power matches with public responsibility.

Few China observers may interpret these developments as representing in any way the budding of democracy with Chinese characteristics. Many will ask 'Where is one man, one vote', often equating this formula to a more stable, liberal and enlightened government with the interests of the majority of the people at heart.

It is interesting to observe that many advocates of the Western formula may not necessarily wish to align themselves fully with some of the outcomes of 'democratic' elections, as in the case of Iran, Russia or even Singapore, where amongst other things, the power of the State in one form or another appears to be more pervasive for their comfort.

But history suggests that the power of the State may well be conducive to political stability and economic progress. In this context, China had been the world's largest economy in 17 out of the past 20 centuries, especially during the Tang, Song, Yuan and Ming Dynasties. China's relative economic importance started to decline perhaps only from the beginning of the Qing Dynasty. China's historical economic prosperity covered exceeding long periods by any standard during which strong State powers ensured a relatively stable environment for commerce and trade. Indeed, Marco Polo's observations revealed that 'as many as perhaps 5,000 vessels gathered around the ports' (in what is now the Bohai area) trading silver and gold from overseas with Chinese silk, textile, porcelain and iron manufacture.

It is impossible to fully understand the entire fabric of Chinese society and psyche without appreciating the traditional influence of Confucianism. Historically, Confucian teachings permeated the ruling elite through a long entrenched system of literary examinations leading to various levels of mandarin appointments. Such teachings extolled the virtues of benevolent government in the interests of the people and ascribed dynastic decline and fall to the loss or erosion of such virtues, which were equated to an abuse of 'the Mandate from Heaven'

Such 'Civil Service' entry examinations established an effective route through which people of truly humble beginnings could rise to becoming part of society' s ruling elite.

It is tempting to draw some broad-brush parallels with what the current Chinese leadership is trying to achieve through competitive public examination entry to a more professional civil service and their recently proclaimed 'People-based Governance'.

It is even more tempting to ask what actually is the ultimate objective of the Western formula of democracy. One Man, One Vote is only one of the means but is the ultimate objective the well-being of the majority of the people?

Another consideration is whether the Western formula can or should be immediately transplanted regardless of the prevailing social and economic conditions of a society. The world is not without examples where votes are bought and traded and no better than self-seeking demagogues are elected into power as the uneducated majority do not fully grasp the implications of avowed policies.

China has suffered from long periods of turmoil in recent centuries. Its recently embraced market economy needs to grow exceedingly fast if only to generate sufficient resources and jobs to maintain stability for a population a fifth of mankind with a largely uneducated peasant majority and a per capita GDP (perhaps now up to US 1,200) still in the African league. There is an understandable fear that an immediate transplant of the West model will shackle China's growth for survival.

China's sheer size and increasing globalisation mean that its influence, both economic and geopolitical, is being felt beyond the traditional confines of Asia or specific products and markets. (Check my back number China is Everywhere, Everyday under Recent Posts in this column.)

Many countries, advanced as well as developing, have recently become much more focussed on China's overarching 'Rise'. As signified by his recent visit to China, President Bush seems to have refined his China policy from one of containment to constructive 'stakeholder' engagement. The Foreign Affairs Committee of the United Kingdom is conducting a public policy inquiry into East Asia with a specific PRC focus, covering regional and international dimensions. Developing countries in Asia, Africa and South America are beginning to realign their economic as well as geopolitical interests in the light of China's emergence as a more responsible and proactive player beyond its traditional regional theatre.

China's dramatic globalisation is bringing forth not only consequential disputes over trade, currency values, intellectual property rights, and market and energy access, but also sharpened attention to its internal governance, rule of law, human rights and freedoms, and the development of a civil society and indeed democracy, in line with modern international norms.

This and other articles under Publications and Chinawatch on my website will continue to explore and incorporate these interesting dimensions in the hope of contributing in a modest way to a deeper comprenhension of the unfolding and fast moving challenges and enigma of the China phenomenon.

Andrew K P Leung, SBS, FRSA

www.andrewleunginternationalconsultants.com

China Up Close

I was pleasantly surprised to see how modern and spacious the campus was at Sun Yat-Sen University (alternatively known as Zhongshan University), where I spent three weeks as a Visiting Professor for their International MBA programme as part of my China consultancy business.

Manicured lawns and tree-lined walkways flank well-equipped premises surrounding the bronze statue of Dr Sun Yat-sen with his motto of scholarly pursuits.

Not that the students in most of the leading universities in China need constant exhortation. Entry is fiercely competitive and the unfolding tangible promise of never-before opportunities, nationally and globally, puts the fire in everyone's belly and the sparkle in their eyes.

My early morning jog in the park witnessed eager youngsters studying their notes or reciting aloud their texts. Seemingly tireless postgraduate students cheerfully turned up in evening elective classes. Their independent thinking or command of English still leave a lot to be desired, but their enthusiasm is contagious.

I was particularly touched when I met at a reception three bright young girl undergraduates heading for Aarhus University in Denmark as exchange students for six months. They come from diverse parts of China and their trips are largely self-financed. This is only one small sample of many more of such overseas opportunities increasingly happening all over China.

During my stay, China's optimism and hope were impressively captured by a seamless launch of its Shenzhou VI second manned space mission, this time for a good five-day orbit, with landing after re-entry within a mile from the planned target. By any standards, it was a remarkable feat which earned China's rightful place in the world's top table for space technology.

The event might not have been widely given headline treatment in the UK. But China's 1.3 billion people saw, in China's first live TV broadcast throughout the nation for the duration of the space flight, how one of the astronauts appeared to wipe a tear from his eye as his daughter with his wife sang him 'Happy Birthday'. It was unlikely that any self-respecting Chinese did not feel a stirring of national pride in the bosom, if not a sudden wetness in the eyes.

Lest one's perspective is blunted by too much waxing lyrical, it is salutary that within the same three weeks, Premier Wen Jia-biao expounded on some of the daunting tasks lying ahead in the 11th Five-Year Plan (2006-10).

Virtually all of the challenging issues were flagged up in my preceding Newsletter 'China at a Crossroads' (check Recent Posts for back numbers) or my other articles under Publications on my website.

But is it significant that the nation's direction is focused systematically to addressing these issues.

Typical of China's official penchant for numerals, Premier Wen's exposition is condensed into 'Six Missions' and 'Five Relationships'.

The Six Missions are -

1. To tackle effectively the so-called 'Three Agrarian Issues' (Farmers. Villages, and Agriculture) through modernization, taxation reform, public services development, and income enhancement.

2. To push for adjustment of economic structure and changes in the mode of economic growth through a new industrial paradigm aimed at quality, efficiency, economy, and environmental friendliness.

3. To promote coordinated development between regions, providing for the leading development of the East to drive the developments in the North East, the Central and the West, through proactive mutual cooperation, clearer strategic role definition, and more balanced development between big cities and small towns.

4. To enhance self innovation and technological education, through building an innovative system led by enterprise, market, and research/business partnership, better venture capital risk management, promoting professional services and international exchange and cooperation, and generally strengthening the nation through technology and manpower quality.

5. To deepen governmental reform, including governance, functional organization, anti-corruption, non-state sector development, financial and monetary reform, enhancing the structure of exports, balance between exports and imports, more effective use of FDI, and promoting outward investment.

6. To reinforce the building of a harmonious society, including people's democracy, the rule of law, equity and justice, and harmony with nature, highlighting the need for resolving the issues of employment, social protection, poverty relief, wealth distribution, education, medical and health, environment and safety.

The Five Relationships are between -

1. the internal market and the external market
2. free market and macroeconomic adjustment
3. the central and local governments
4. economic and social developments
5. reform, development and stability

It is too easy to dismiss the above as vacuous political jargons. I find it eye-opening to see how some of these guidelines (which have long been debated internally) have already been translated by a growing body of much younger, better trained, and proactively competitive leaders into detailed quantifiable action plans at the provincial and city levels. At the very least, China's known substantial progress on most fronts of its recent Five Year Plans would cast doubt on a facile interpretation of these guidelines.

It was also significant that, on 19 October, the State Council issued China's first-ever official 32,000-word White Paper on 'Building China's Democratic Political System'. It is a detailed public document addressing four main issues:

1. what political system and path of democracy a country chooses needs to be suited to its own special circumstances

2. China's socialist democracy has clear Chinese characteristics

3. The relationship between the leadership of the Chinese Communist Party and the rule of the people

4. The principles governing the building of China's Democratic Political System

While stressing the importance of progress, unity, harmony, and stability in creating a better Tomorrow, the Paper acknowledges that many critical problems remain to be resolved, including the imperfect democratic system, the insufficient realization of the Rule of the People in state, economic and social affairs, lapses in the rule of law, and the spread of bureaucratic corruption in various areas.

Apparently, the Paper boasts of 'Three Superlatives': it has taken the longest to prepare, has the biggest number of contributors, and is the lengthiest of its kind.

Regardless of the immediate impact of this White Paper, merely flagging up the issue of China's path towards its own system of democracy is timely at this stage of its overall development.

It also appears sensible that China, with its long and unique history and a population a fifth of mankind and its immensely diverse culture and levels of development, ought to choose its own road map for the future. Blindly copying Western development models may prove counter-productive, if not outright unsustainable.

Few visitors to China fail to be touched by its vitality and dynamism. Yet few would belittle the huge challenges it faces.

I was watching a Guangzhou TV program on China's rule of law. It reported on incidents in a northern province apparently circumventing guidelines from the central government on adequate compensation for compulsory redevelopment in the course of China's breakneck urbanization process. This tip of the iceberg underlines some of China's 'imperfections' which it has to tackle.

But at least this tip was allowed to be aired. Indeed, there are more and more societal issues and problems which are openly reported and debated in the media. I watched a live TV programme ('The City of the Ram' (Guangzhou) Forum') featuring a 'public hearing' on the adequacy of the city's regulatory measures against the sale of unlicensed meat. A lady Vice Mayor with health officials directly answered questions and comments from the public. The programme was almost a replica of Hong Kong's popular Victoria Park Forum, which in turn spawned from the Hyde Park Speaker's Corner.

The momentum of reform is very much in the air, including the critical financial sector. SAFE (the State Administration of Foreign Exchange) announced on 23 October that Mainland firms and individuals would be permitted to use assets and equities in domestic companies for capital injection into listing vehicles incorporated overseas. This is expected to facilitate the process of Chinese enterprises 'Going Out' to become global players.

Concurrently the National People's Congress approved probably the most significant reform of its company and securities laws. The reform removes the current cap of 50% of the assets of a domestic firm for its offshore capital investment. It allows individuals to register companies and explicitly legalizes derivative products. It also ushers in stricter rules on disclosure as well as liabilities of underwriters, brokerages and listed firms.

As I mingled with some of China's best and brightest on campus, I could not help feeling a surge of warmth and a lightness in my heart for China's continuous march towards its own future.

Andrew K P Leung, SBS, FRSA

www.andrewleunginternationalconsultants.com