China's Window for Democratic Reforms Narrowed

Progress rarely moves in a straight line. That immutable law of nature is borne out by China’s metamorphosis from an inhumane communist hellhole to a prospering economic giant.

The same law is governing its tricky but inevitable transition from one-party, crony-capitalism to a society with a transparent legal, economic and political system headed up by democratically elected leaders.

Since the start of Hu Jintao’s second five-year term as President in early 2008, Beijing’s bosses began loosening the most visible forms of social controls which had made it the prime target of western human rights criticism. There were many reasons for this liberalization.

By then Communist Party leadership had carefully built a system of crony capitalism that ensured that the lion’s share of the spoils of China’s economic growth would flow into their hands with minimal need for overtly corrupt practices that are vulnerable to popular scrutiny and disruption. A network of state-controlled oligopolies in key industries like banking, utilities, oil, transportation, construction and industrial machinery ensured that both control and profits stayed firmly in the hands of Beijing’s bosses and their provincial franchisees.

When a single party controls every bank and every large-scale industrial enterprise as well as every government agency, there’s little need even to collect income taxes. In fact, by 2011 the central government restructured the tax system so only about half of one percent of China’s population — those making at least $18,000 a year — must file tax returns. And the taxes they paid in 2011 amounted to only about $95 billion of the $1.65 trillion revenues collected by China’s central government — and will fall by about 8% for 2012 after the impact of the reform kicks in. The fewer the number of taxpayers who feel a sense of ownership toward the government, the less the need to address awkward questions.

Also, by turning about a million of the most loyal and trustworthy Communist party cadres not only into local administrators but also into corporate bosses lording over can’t-miss oligopolies, the top bosses in Beijing didn’t have to worry about revenue sources or the need to compete for control against disruptive rivals.

So by around 2008 the CCP had the levers of both economic and political power firmly in hand and could focus on prettifying the facets of society most visible to foreigners in time for the Beijing Summer Games. Controls were loosened on the content of TV broadcasts and the kinds of movies that could be shown in theaters. Propaganda messages were toned down. Activists who no longer posed real threats were released. Local governments were encouraged to coexist peacefully with churches as long as they didn’t flout China’s atheistic official culture. Controls over internet access were mostly unobtrusive despite occasional conflicts with foreign firms like Google over their unwillingness to turn over personal data on dissidents. The central government stopped trying to control the development of popular culture and left ordinary citizens alone. Censors and secret security forces focused on suppressing and making examples of well-known dissidents.

That heady trend toward liberalization came to a screeching halt in early 2011. One reason was the Jasmine Revolution spreading popular uprisings across the Middle East and North Africa. The other was the disruptive power of microblogs. Together they reawakened the kind of threat that Beijing’s bosses had stopped worrying about. Not only did they face the prospect of losing power in a violent uprising but, should a Jasmine Revolution take root, they could be held personally accountable for the executions of thousands of dissidents, perhaps even for the Tiananmen Square massacre of 1989. At that point it wasn’t simply a matter of seeking to preserve an ideology or a system of government, it was personal survival, protecting the wives and kids.

By the late summer of 2011 the central government lost no time reining in the microblogs and suppressing any hint of a popular uprising. They also quickly restored control over the content of TV broadcasts to ensure that the rural masses and the uneducated laborers who still make up about 75% of China’s population would remain a bulwark against sophisticated young urbanites who might entertain ideas gleaned from subversive western media. After all, Mao won China by marshaling the support of simple-minded rural masses while Chiang Kaishek lost by focusing on the cities.

But now Beijing’s bosses are faced with developments that present both severe challenges to preserving the current cozy economic and political structure as well as possible ways they can ease themselves away from the seat of power without endangering themselves or their families.

The most significant development may be the Wang Lijun scandal which erupted in late February and led to the ouster on March 15 of Bo Xilai as Communist Party boss of Chongqing, China’s biggest municipality. This development presents a dilemma for Beijing’s bosses. On the one hand the kinds of bribery and cronyism in which Bo participated is widespread among top Communist Party cadres. On the other hand, Bo can be used as a scapegoat for the evils of the current system, as Wen Jiabao has implied in a recent speech urging faster reforms.

Bo’s popularity was symptomatic of a backlash among many Chinese, especially those in the less developed regions who have not shared fully in the new prosperity created by the embrace of a capitalist economic model. They had become admirers of Bo Xilai’s “Chongqing model” of development which, if adopted nationally, would take China back to a more communistic society in which income inequality would be erased along with China’s feverishly crony-based capitalism. In fact, the backlash from the masses of Chinese who feel left out of the new prosperity pose a bigger threat to China’s stability than the relatively smaller number of young urbanites pressing for faster democratic reforms.

Last Friday central government censors shut down several leading “new left” websites like, and which advocate return to communist policies held up as ideals during Mao’s era. All of these sites have been ardent supporters of Bo Xilai, and had applauded the reforms he had begun in Chongqing as well as his widely publicized crackdown on organized crime and corruption, evils which the new left sees as having been wrought by China’s three-decade push toward capitalism.

But of course shutting down those sites isn’t enough. Just as China’s young intellectuals led the impoverished masses to rise up against its corrupt Qing Dynasty rulers, rural mobs angered by the feeling of having been cheated out of an equal share of the nation’s wealth are a force that can’t be suppressed so easily. But if their demands are acceded to, Beijing’s bosses would find themselves sitting atop an oppressive, suffocating regime like the ones that existed until recently in Myanmar and continues to exist in North Korea.

The only option left to them is to heed Wen Jiabao’s call to move more quickly toward democracy — the only system capable of meeting head-on the clamoring for communistic equality with a morally superior mandate. Myanmar’s military junta did just that, buying its members a transitional period in which the nation’s parliament transforms in a series of successive elections over years from one entirely appointed by the rulers — like today’s China — to one entirely elected by the people.

By voluntarily proposing for China the Myanmar model, or something like it, Beijing’s bosses can become elder statesmen and even national heroes instead of the targets of angry masses. The alternative is much less appealing, as the former rulers of Egypt, Tunisia and Lybia have learned. Recent events have drastically shrunken China’s window for making that transition gracefully.