ChinaFile

Is China’s Reform Era Over?

Renewed state controls in politics and the economy may unravel the consensus that’s kept China stable for decades.

TO GO WITH "CHINA-US-DEBT,FOCUS" BY BILL SAVADOVE
Pedestrians walk through the financial district of Shanghai on October 16, 2013.  A US debt default could spur China to diversify its multi-trillion-dollar foreign exchange reserves, the world's largest, analysts say, as China seeks to boost its voice in the global economy. AFP PHOTO / Peter PARKS        (Photo credit should read PETER PARKS/AFP/Getty Images)
TO GO WITH "CHINA-US-DEBT,FOCUS" BY BILL SAVADOVE Pedestrians walk through the financial district of Shanghai on October 16, 2013. A US debt default could spur China to diversify its multi-trillion-dollar foreign exchange reserves, the world's largest, analysts say, as China seeks to boost its voice in the global economy. AFP PHOTO / Peter PARKS (Photo credit should read PETER PARKS/AFP/Getty Images)

For more than three decades, China’s reforms and swift development has transformed the country from the inside out, establishing new political norms and turning the formerly poverty-stricken country into an economic powerhouse. But under Chinese President Xi Jinping, the world’s most populous nation seems to have turned a corner. In a recent essay in the Journal of Democracy, Fordham Law School professor Carl Minzner posits the idea that China may be entering a new era after reform. In this ChinaFile conversation, experts discuss the pressures, opportunities, and risks that may be converging to create a post-reform China.

Carl Minzner, professor of law at Fordham University:

Political stability, ideological openness, and rapid economic growth were the hallmarks of China’s reform era. But they are ending. China is entering a new era, the age after reform.

This is not entirely bad. For some in China, it may mean a chance to address such reform-era excesses as rampant ecological damage, stark social inequality, and a cultural heritage badly damaged in the rush to modernize. Yet there is also a dark side.

What kept China stable during the reform era can be summed up in a single word: institutionalization. The last two decades of the twentieth century saw the rise of an increasingly steady set of norms in China to govern state and society alike:

  • An increasingly norm-bound politics of elite succession;
  • A depoliticization of the bureaucracy, marked by the decline of factional purges and the rise of meritocratic norms;
  • Steady institutional differentiation, with top Chinese Communist Party (CCP) leaders handling more clearly defined portfolios and state-owned enterprises responding to market pressures;
  • The emergence of bottom-up “input” institutions — local elections, administrative-law channels, and a partly commercialized media airing popular grievances — that gave citizens a limited political voice and helped to boost state legitimacy;
  • New channels that helped to give the rising new economic elite a sense of being invested in both China’s future as well as in the existing party-state;
  • An ideological stance open enough to welcome a broad range of domestic social constituencies and foreign institutional innovations alike.

These all are now unwinding. Some — such as semicompetitive local elections or assertive domestic media outlets — quietly gave way over the past decade in the face of renewed state controls. Since current Chinese President Xi Jinping’s rise in 2012, other norms have been broken more dramatically.

The reasons for the unwinding are twofold. First, Beijing has systematically undercut its own bottom-up reforms. Over the past two decades, a regular pattern has developed. Individual leaders sponsor reforms to address latent governance problems. Doors open. Citizens start to use them to participate politically. Villagers begin to organize around semi-open elections. Public-interest lawyers explore new legal channels. Social media start to take shape as a forum in which citizens can air grievances. At that point, central party authorities get nervous. They see shades of 1989 and step in to put a lid on things. Reforms are smothered, activists detained. For precisely this reason, China has remained locked in a one-step-forward, one-step-backward dance since the 1990s, with the party regularly deinstitutionalizing everything outside its own walls.

Naturally, this is a problem for Chinese society. It robs social activists of the gradual evolutionary path toward becoming a moderate, institutionalized political force. But it is a problem for the rulers too. Absent any external checks, the semi-institutionalized nature of party rule since the 1990s has fused with the fastest accumulation of wealth in human history to produce vested political and economic interests that are both highly corrupt and deeply resistant to change — the Chinese analogue of the K Street lobbyist–U.S. Congress nexus, but without even the shadow of elections, judicial oversight, or a free press as checks.

Now put yourself in Xi’s shoes. You know that China faces deep economic and social challenges. You sense that the party itself has gone badly astray. Yet you lack any external institutions to rectify it. Nor is there an alternative political force — such as the organized opposition movements that emerged despite authoritarian rule in Taiwan and South Korea — that you might employ as a counterweight. (Not that you would even remotely entertain such a notion: The lessons of 1989 run too deep.) What would you do?

Here we come to the second reason for the shifts noted above. Xi appears to have concluded that his only path to a breakthrough requires him to tear up the existing rules — reversing many if not all of the partly institutionalized internal party norms that Andrew Nathan noted back in 2003. Hence Xi has opted for politicized anticorruption purges of rivals, centralization of power in his own hands, cultivation of a populist image, and an ideological turn toward nationalism and cultural identity. These are not mere transitory policies. For Xi, they are absolutely fundamental shifts necessary to address the crisis he sees facing China.

He may be right. Optimists can point to his efforts at fiscal and economic reform. They can cite his efforts to strengthen party disciplinary and legal systems as indications that he will build new political institutions on the ashes of the old. Perhaps Xi does indeed belong to that rarest of all rare breeds — the benevolent authoritarian emperor who presides wisely over the remodeling of China, while ruthlessly crushing dissent in the process.

Moreover, there are still several key reform-era norms that have not yet been breached. The ideological redefinition of China remains embryonic. Marxist dialectics still figure in CCP speeches even as Confucian quotations proliferate. And Chinese state television, unlike its Russian counterpart, continues to promote interethnic harmony rather than rank appeals to majority-group chauvinism. Most important, Xi has drawn a clear line at social mobilization. For all of his invocation of Mao-era symbolism, there has been no sign that he intends to resort to mass movements.

Yet China is now steadily cannibalizing its own prior political institutionalization. Observers such as David Shambaugh, who once pointed to such institutionalization as a source of stability for the party-state, are revising their evaluations of the system’s sustainability sharply downward. Others have begun to speculate openly whether reform-era policies limiting top party leaders to ten years in office might be next to go, with Xi perhaps trying to extend his rule well beyond 2022. Uncertainty hangs in the air. Chinese with the most to lose are diversifying against risk — placing their money in Vancouver real estate and their children in U.S. colleges, and maybe even seeking passports from one or another of the small Caribbean nations that is known to put citizenship up for sale.

The events of 1989 did not resolve the core question of China’s political future. Nor did they put it on hold indefinitely. Rather, they launched a cascading set of effects that have swept through China’s politics, economy, and society in the years since. The resulting reverberations have now begun to dislodge core elements of the institutional consensus that has governed China for decades.

Jeremy L. Wallace, associate professor of government at Cornell University:

A new normal is starting in Beijing. Minzner is right to highlight these changes; however, I am reluctant to go as far as declaring this transition “a new era” in Chinese politics. The changes taking place are not as dramatic as those separating reform era from the previous period with party ruler Mao Zedong at the helm. Instead, we are seeing a shift in the institutionalization of reform era politics, increasing centralization and returning to classical rhetoric. Beijing isn’t throwing out the rulebook, it’s simply changing the rules. Beijing is attempting to fix the system while also hedging against the chance that it may fail.

Mao believed in the power of chaos to transform society for the better. He also lurched from idea to idea and yanked China as he did so, leaving catastrophe and violence in his wake. China’s reform era leaders responded to such uncertainty with concrete pragmatism and numbers-based institutionalization. Local officials would be judged not on their ideological furor but by statistics, most famously GDP growth figures. The party-state’s rhetoric equated growth in the statistics with better lives for the Chinese people. And it worked for much of the 1980s, 1990s, and into the 2000s. More people had more money and things than ever, but investment and exports dominated growth more than consumption ever did. Only so many highways, ports, and high-speed rail lines could be built efficiently. The massive infrastructure expenditures and loans that kept China’s growth engine humming during the great recession of 2008-2009 piled empty airport on empty airport, spending money that would never make back a return. Something had to change; it’s in the nature of that change that I differ from Minzner.

Rather than Xi taking personal power and de-institutionalizing China, I see a unified party-state leadership in Beijing centralizing its ability to monitor local governments and bureaucracy. Throughout the reform era, central officials had limited vision into local conditions and relied on just a few statistical metrics to judge performance. This limited vision created opportunities for graft and corruption to fester, but with growth exploding party central failed to notice. Now anti-corruption activities are all the rage. But rather than the anti-corruption crusade being mostly about eliminating the personal rivals of Xi, I see it as empowering a party institution — the Central Commission for Disciplinary Inspection — to monitor the behavior of people inside the party-state’s bureaucracy. Increasing local inspection officials’ rank and independence looks like incorporating new gears into a system rather than cannibalizing the old one. Reducing corruption is thought to unlock more potential growth by cutting off the grabbing hands of local officials.

At the same time, the return of rhetoric echoing Confucius points to a hedge against the chance that growth will not return. Rather than justifying its rule on performance numbers, it attempts to justify continued one-party rule through moral uprightness. Outcomes may not be ideal, but the process by which rules are made and decisions undertaken is proper. Attacking corruption allows the party-state to assert the wisdom of its decisions and decision-making system. Invoking Chinese culture also burnishes the party’s nationalist credentials.

To be sure, the crackdowns on rights lawyers, Internet freedom, and international cooperation are serious and not to be ignored. China has possession of a capacity for violence that it can and does train on individuals and groups. For now, China’s new normal retains enough reform-era DNA to be both normal and new.

AFP/Getty Images

Jeremy Wallace is associate professor of government at Cornell University.
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