Teaching Comparative Government and Politics

Thursday, June 21, 2012

Don't talk about economics either

Political debates have never been open in China (see The Fifth Modernization and its author's fate). Now, it seems, economic debate is over too.

China Closes Window on Economic Debate, Protecting Dominance of State

As China heads toward a once-a-decade change of its top leadership, its vaunted embrace a generation ago of markets and economic openness — which catapulted the country from isolated poverty to its place as a global export powerhouse — is also at a turning point.

After nearly a decade of President Hu Jintao’s focus on strengthening the state, a broad consensus of Chinese economists says the country is overdue for another big push to encourage private enterprise and to foster a shift toward a more consumer-driven economy…

But that seems increasingly unlikely. Publicly controlled enterprises have become increasingly lucrative, generating wealth and privileges for hundreds of thousands of Communist Party members and their families. And in a clear sign of its position, the government has moved to limit public debate on economic policy, shutting out voices for change…

Zhang Weiying

Few people illustrate this conundrum better than Zhang Weiying, a 53-year-old Peking University professor who is probably the closest China has to an economic dissident.

A cause célèbre in Chinese economics circles, Mr. Zhang was fired a year and a half ago from his post as dean of the university’s Guanghua School of Management…

“Before 2003, the idea of reform was dominant,” Mr. Zhang said in an interview last month. “Now it’s much harder to make that case.”

Challenging the system, Mr. Zhang contends, has been the key to China’s economic success. Today, he says, that would mean reducing the party’s control over important sectors of the economy...

Mainstream criticism of this trend, however, is limited. A propaganda department directive this year explicitly banned the term “monopoly” to describe state-owned enterprises. Journalists say they regularly have articles kept from publication if they discuss the deadening effect of state control over so many industries.

This contrasts with the first two decades of China’s economic opening, when the overall trend was toward relaxing state control, and pro-market economists were household names.

In 1994, Mr. Zhang co-founded the influential China Center for Economic Research at Peking University. In 1997, he moved to the university’s Guanghua management school and two years later was named dean.

His rise tracked a second era of economic liberalization. Mr. Deng brought in reformers like the now-retired President Jiang Zemin and Prime Minister Zhu Rongji to scale back state control, moves that eventually paid off with China joining the World Trade Organization in 2002.

But when they retired, replaced by Mr. Hu and Prime Minister Wen Jiabao, the atmosphere changed. Economic modernization was seen as causing social unrest, which rose steadily during the 2000s. In response, the country put in place a “stability maintenance” apparatus to tamp down criticism…

“They began to speak of the need for a harmonious society,” Mr. Zhang said, referring to the watchword of the era of Mr. Hu and Mr. Wen. “Gradually people said you shouldn’t reform so much because you’re just causing trouble.”…

[There is] a growing belief within China’s leadership that it has little more to learn from the West, especially after the global financial crisis of 2008 and China’s success in riding it out. “We’re suddenly so important,” Mr. Zhang says, with more than a touch of sarcasm in his voice. “Look at America. It has problems. We don’t have problems.” …