Opinion & Commentary
Democracy for the few
China’s transformation from the backward, autocratic economy of just three decades ago is probably the most spectacular and rapid in history.
It is inevitable that this extraordinary economic development will have dramatic consequences for Chinese society and politics. Most important are the rise of the middle classes and the institutionalisation of social, economic, and ultimately political systems that reflect the greater standards of accountability, transparency, and rule of law needed for the successful operation of free markets.
Many say that these developments serve as the drivers of political liberalisation and democratisation. This argument, that free-market reforms and rising prosperity will inevitably and imminently bring democracy to China, is a mainstay of Western engagement with the country.
A common mistake is to assume that while China’s economy and society is rapidly changing, its authoritarian political institutions remain static.
In fact, its institutions are rapidly adapting to a newer social and economic environment. Those too quick to proclaim democracy on the horizon in China have underestimated the determination, capacity, and resourcefulness of the regime in its efforts to remain in power.
Many in the West believed that economic liberalisation and decentralisation in China would lead to the growth of a middle class whose economic power allowed it a degree of independence from the regime. Instead, the government continues to control and dispense a dominant share of the most valued economic, professional, and intellectual opportunities.
Moreover, given the decentralisation of power and functions that occurred in the 1980s and 1990s, much more power lies in the hands of lower-level officials than it ever did. For example, local officials receive about 75 per cent of the country’s tax revenues, with the central government receiving only 25 per cent.
Likewise, local authorities initiate or oversee around 70 per cent of government spending. Local officials and managers, not central ones, make the majority of lending decisions by state-owned banks. This actually makes it harder, not easier, to displace the power of state officials since such power is much more dispersed and entrenched throughout society.
Those who receive access to the economic, professional and career opportunities offered by local state officials in large part constitute the contented middle classes emerging in China today. In this way, the middle classes are largely co-opted rather than independent.
The changes in CCP membership over almost thirty years tell us a great deal about how the Party itself is adapting. In 1978, workers and peasants accounted for over two – thirds of the CCP’s thirty – seven million members. In 2005, workers and peasants accounted for only 29 per cent of seventy million members, while 23 per cent were professionals and 30 per cent were college students.
One study published in 2008 reported that 34 per cent of private entrepreneurs are now members of the CCP, up from 19 per cent in 2000.
The Party is not just moving as China moves, it is taking a lead in defining and representing the new China through its membership. That the middle classes – from the private and public sectors alike – have little appetite for democratic reform is easily explained: they have much to gain from the current political status quo and potentially much to lose should it change.
One researcher, Eva Bellin, observes that state-led development breeds a dependence on the state in capital and labour, and tends to exacerbate inequality. Within one generation, China has gone from being the most equal to the least equal society in Asia. Its Gini coefficient (a measurement of income inequality, for which zero represents complete equality) is now 0.47, up from 0.16 in the 1970s.
There are between fifty million and two hundred million middle-class people (depending on what definition you use), but around one billion people who have missed out on the benefits of economic liberalisation.
Much of China’s progress actually occurred from the late 1970s to the mid-1980s. Going by the World Bank’s definition of poverty, 80 per cent of people emerging from it in China did so up to the mid-1980s. Since then, of China’s one billion poor, about four hundred million have seen their disposable incomes stagnate or decline.
Any political change towards democratisation would invariably see a redistribution of income, rights, and rewards away from China’s ‘privileged’ classes. It could even lead to a change in trajectory away from China’s hybrid free-market system – from which the middle class has benefited – towards a more socialist one involving widespread redistribution.
In this scenario, as long as the authoritarian setup can continue to deliver them rising prosperity (no matter how unbalanced), why would the middle classes want political reforms that could lead to their own dispossession?
Democracy premised on some measure of majority rule, is difficult to achieve when there is a large, impoverished majority and a small, powerful minority. China’s authoritarian leaders have ensured that the middle classes’ future is tied to the Party’s.
Democratic rhetoric
The central leadership is clearly aware of the positive and legitimising rhetoric of ‘democracy.’ Speeches by China’s leaders frequently mention ‘democracy’ as a goal. But they refer not so much to building a democratic ‘system’ as to building a responsive Party.
Examining China’s economic structure and activity shows the state remains in control of a significant portion of China’s resources and still dominates all of the country’s most important sectors. As a result, it remains the principal dispenser of economic, social, and professional opportunities. The Chinese system is best characterised as ‘state corporatism,’ ‘socialist corporatism,’ or ‘China Inc.’ as some have termed it.
We have to face up to the prospect that many developments in China since the beginnings of reforms in 1978 – and especially the developments since 1989 – have actually enhanced the CCP’s ability to remain in power.
Particularly, those in the rising classes who want influence and power can only achieve it through the Party, guaranteeing their loyalty to it for the time being.
In this sense, institutions are being built to keep the CCP in power rather than to serve as the future platform for democratisation.
Two years ago, one of China's leading intellectuals – and a respected, well-connected insider – Yu Keping, created a sensation by publishing an article, 'Democracy is a good thing', in a journal closely linked to the CCP. He wrote:
"Among all the political systems that have been invented and implemented, democracy is the one with the least number of flaws. That is to say, relatively speaking, democracy is the best political system for mankind."
And his definition of ‘democracy’ does not merely serve the Party:
"Under conditions of democratic rule, officials must be elected by the citizens and they must gain the endorsement and support of the majority of people; their powers will be curtailed by the citizens; they cannot do whatever they want; they
have to sit down across from the people and negotiate."
Yet his article ends with the plausible exhortation that China must still do democracy its own way and not "import an overseas political model".
But doing democracy one’s own way is not the same as not doing it at all. Besides having much to gain, we have no choice but to continue to engage with China in the hope that continued economic reforms and rising prosperity there will eventually lead to political reform. But we should reject the blind and deterministic logic that a rising China will inevitably become a democratic one. Even if Bill Clinton is right that the CCP is on the wrong side of history, so far it is doing a good job of defying it.
Dr John Lee is a visiting fellow at the Centre for Independent Studies. His book Will China Fail? The Limits and Contradictions of Market Socialism was released by CIS last year.
