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Dilemmas of Reform in Jiang Zemin’s China, by Andrew J. Nathan, Zhaohui Hong, and Steven R. Smith (eds.)
2. Legitimacy Crisis, Political Economy, and the Fifteenth Party Congress
Designated as the “highest decisionmaking body,” the Congress of the Chinese Communist Party (CCP), which meets every five years, is always an important event and its pronouncements can indicate China’s direction. It also allows China watchers to probe into the behind-door politics in Zhongnanhai. The Fifteenth Congress of the CCP, held in September 1997, represents three “transitions.” First, it marks a generational transition as no Long March and Civil War revolutionaries were elected to the Central Committee at this Congress. 1 Second, the death of Deng Xiaoping in February 1997 brought the transition of political power into its final stage, which was settled at this party congress. The succession of power in China has never been easy or insignificant; a shift in leadership could bring about abrupt changes of policy. 2 The third transition is the transition from communism, a change presented as economic reform. In the past, reform has meant the transition from the state-planning economy to the market economy, while political liberalization and democratization were deliberately postponed. 3 Calls for comprehensive political reform and democratization, however, have never disappeared though they have often been suppressed. Just on the eve of the Fifteenth Congress, they arose again to challenge the will and the resolution of the government and party on this critical issue. 4
How did the Fifteenth Party Congress manage these transitions? Did the party congress map any guidelines for the future? Various interpretations have been presented in the English-speaking media. The pessimistic perspective concludes that this party congress failed “both politically and economically,” and that it was a “disappointment.” 5 Others see a bright picture in reading party chief Jiang Zemin’s report to the congress. The latter perspective regards the reform measures proposed by the general secretary of the CCP as “the boldest economic transition attempted by Beijing since the early 1980s,” as the New York Times commented in an editorial, although, at the same time, it realized that “Mr. Jiang and his party colleagues showed no parallel interest in political liberalization.” 6 Similarly, the Washington Post found that the policies Jiang embraced “go well beyond the market reforms identified with the late Deng Xiaoping and bear the stamp of capitalism at its rawest.” 7 One commentator said “Mr. Jiang’s speech was still a big step in the right direction. It constituted a remarkable acceptance of the realities of the modern world and the globalization process.” 8
This chapter offers political-economy analysis of the reform policies endorsed by the party congress, roughly defining “political economy” as the interrelationship between the political and the economic affairs of the state. 9 In terms of the generational transition, the Fifteenth Party Congress faced the problem of how to treat Deng’s legacy, which is a combination of economic liberalization and political suppression. Similarly, in the transition of power, Deng’s successor must be capable of convincing not only the party, but also the country and the world, that the new leadership is able to deal with the gap between the political and the economic realms. Finally, this political-economic relationship is certainly the most challenging aspect of the transition from communism. This transition in China differs from that in the former Soviet Union and other former communist countries in Eastern Europe where democratic revolutions and rapid economic marketizations occurred simultaneously; the Chinese communist regime sustains itself in liberalizing its economy.
How can the Chinese communist regime maintain its legitimacy in economic liberalization? According to the classification by Max Weber, there are three major types of legitimate domination. His theory states that
The validity of the claims to legitimacy may be based on: 1. Rational grounds—resting on a belief in the legality of enacted rules and the right of those elevated to authority under such rules to issue command (legal authority). 2. Traditional grounds—resting on an established belief in the sanctity of immemorial traditions and the legitimacy of those exercising authority under them (traditional authority); or finally. 3. Charismatic grounds—resting on devotion to the exceptional sanctity, heroism or exemplary character of an individual person, and of the normative patterns or order revealed or ordained by him (charismatic authority). 10
In addition to these three types, in Third World countries, legitimacy is often based on economic performance. 11
This chapter argues that the political legitimacy of the Chinese regime is shifting from the communist revolution and revolutionary ideology to the regime’s economic performance. The further transition of legitimacy from economic development to what Weber called “rational grounds” has not occurred, creating a crisis of legitimacy for the CCP’s party-state system. The Fifteenth Party Congress did more to create a paradox than to offer an answer to the problem of legitimacy. The party congress charismatized Deng and ideologized his legacy by “upholding the banner” of the so-called Deng Xiaoping Theory, in order to resist political reform and democratization. Yet, such reform could lead China to stability with rationalized authority. As always, the regime with the Dengist mentality sees political reform as dangerous to a stable political environment, which is regarded as a precondition to the expected economic performance. The party congress showed that the CCP is not capable of dealing with the two sides of the paradox at the same time. In terms of political restructuring, the party clearly understands the importance of authority and, accordingly, the importance of stability, state capacities, and the role of the government in socioeconomic transition, but the problem of legitimate authority was ignored.
To develop the above argument in detail, this chapter is divided into three sections corresponding to themes addressed at the party congress. First, the official claim of the congress making Deng Xiaoping Theory the “soul,” the “banner,” and “guiding ideology to action” of the CCP is examined. It will be interpreted as an effort to make Deng a new spokesman of communist ideology and a charismatic leader who laid down the basis for the current reform policies. This effort, however, is self-contradictory, because authentic Marxist ideology is anticapitalist, while it was Deng who led China toward capitalist development and it is his “theory,” if there is such a thing, that offers to stimulate China’s economic liberalization. Why does the CCP ignore this contradiction? The secret lies in its thirst for legitimacy: on the one hand, it needs an ideological weapon, which is traditionally powerful for mobilizing the Communist Party; on the other hand, the legitimacy of the current regime is becoming more and more dependent on its economic performance and, accordingly, its policies of promoting economic liberalization, which need to be defended by ideologizing Deng Xiaoping Theory, which is nothing more than a pragmatist doctrine stressing economic development.
The second section will focus on the policy of state-owned enterprise reform, which is widely thought to be the most important policy initiative of the congress. “Privatization,” it seems, will be introduced. Can the policy meet the challenges facing China in economic transition? Even though the reform of state-owned enterprises is not simply privatization in the Western meaning, it does seem to contradict traditional Marxism. But this reform, which has already been conducted for several years without full ideological justification, has encountered serious difficulties. Since the overall reform program began two decades ago, the “soft meat” of the economy has already been eaten and now it is the “hard bones” that are left for the next meal. Why did the party congress choose the strategy of “eating bones” in the economy rather than taking cautious but substantial measures to reform political institutions, which lag behind economic reform? The answer is that economic performance is so critical for the regime to sustain its legitimate authority that it has to take risks both in ideological contradiction and in an attempt to produce better economic achievements. Political reform, however, could be dangerous in terms of stimulating political instability and threatening the CCP’s power. Even though political reform could bear fruit, the fruit could be bitter to the CCP itself while benefiting the country as a whole.
Finally, the discussion will turn to the Fifteenth Party Congress’s policy of political reform. The regime still pays more attention to stability than to a political system that can match and support the economy. The congress, however, did respond in its way to the calls for political reform and even to those for democratization. But it did so by offering lip service instead of substantial measures. By talking about “rule by law” and “socialist democracy,” the leadership managed to avoid critical issues like the reevaluation of the 1989 Tiananmen crackdown and democratization of the CCP’s own internal political life. With the rise of technocracy in the leadership, 12 the party congress took a technocratic approach rather than a political one.
Dengist Marxism or De-Marxism? De-ideologization Based on Re-ideologization
Deng, who dominated politics for almost two decades before his death in February 1997, was perhaps the only person who lacked ideological and theoretical concerns among the first-rank communist leaders: Lenin, Stalin, Mao, and others. Ironically, at the party congress held six months after his death, Deng was finally worshipped as a great theoretical contributor to Marxist-Leninist ideology. According to the official description by the CCP itself, the most distinctive characteristic of this congress was its ideological legitimization of the political legacy of Deng. In the first paragraph of his report to the congress on behalf of the Fourteenth Central Committee, General Secretary Jiang opened his three-hour speech with these words:
The theme of the congress is to hold high the great banner of Deng Xiaoping Theory for an all-round advancement of the cause of building socialism with Chinese characteristics into the 21st century. The issue of the banner is of the utmost importance. The banner represents our orientation and image. . . . After the death of Comrade Deng Xiaoping, it is all the more necessary for the whole Party to keep a high level of consciousness and staunchness on this issue. 13
Jiang’s speech devoted several pages to the “historical status and guiding significance” of Deng Xiaoping Theory, defining that theory with Marxism-Leninism and Mao Zedong Thought together as the “guiding ideology” of the party. Jiang compared Deng Xiaoping Theory with Mao Zedong Thought in this way:
The integration of Marxism-Leninism with China’s reality has experienced two historic leaps, resulting in two great theories. The result of the first leap was the theoretical principles concerning the revolution and construction in China. . . . Its principal founder being Mao Zedong, our Party has called it Mao Zedong Thought. The result of the second leap was the theory of building socialism with Chinese characteristics. Its principal founder being Deng Xiaoping, our Party has called it Deng Xiaoping Theory. 14
Accordingly, the party congress approved an amendment to the party constitution, adding Deng as one of the guides to action. Explaining this addition, the congress stated,
The Chinese Communists, with Comrade Deng Xiaoping as their chief representative, have reviewed the experience gained through their successes and failures since the founding of the People’s Republic, emancipated their minds, sought truth from facts, shifted the focus of the work of the whole Party to economic development, introduced reform and opened China to the outside world, thus ushering in a new period of development of the socialist course. They have gradually formulated the line, principles and policies for building socialism with Chinese characteristics, expounded the fundamental issues concerning how to build, consolidate and develop socialism in China and created Deng Xiaoping Theory. 15
It emphasized that this theory is “a product of the integration of the fundamental tenets of Marxism-Leninism with the practice in present-day China and the features of the times and is a continuation and development of Mao Zedong Thought under the new historical conditions.” 16
Making Deng Xiaoping Theory a guiding ideology was paralleled to defining Mao Zedong Thought as the “guiding ideology” at the Seventh Party Congress. The Fifteenth Congress defined Mao Thought as the “integration of the theory of Marxism-Leninism with the practice of the Chinese revolution” and the Deng Theory a “continuation and development of Mao Zedong Thought.” It explained that Deng’s theory “had been tested in practice for nearly 20 years during the reform and opening-up.” 17
Those statements cited above are enough to stimulate discussion: Why did the CCP make such great efforts to ideologize the ideas and policies of Deng? Do those statements make sense for the CCP, which is experiencing and even leading a capitalist revolution? The answer seems to be that when the CCP says, “Marxism-Leninism, Mao Zedong Thought, and Deng Xiaoping Theory constitute a unified scientific system,” it is trying to use traditional communist ideological weapons to defend projects of capitalistization. It may seem illogical, but it works against both the so-called Leftists and Rightists. In the claim that “in present-day China adhering to Deng Xiaoping Theory means genuinely adhering to Marxism-Leninism and Mao Zedong Thought; holding high the banner of Deng Xiaoping Theory means genuinely holding high the banner of Marxism-Leninism and Mao Zedong Thought,” one can find an ideological dilemma faced by Deng and Jiang as political leaders and by the CCP: de-ideologization based on ideologization, reforms rooted in dogmas.
Before Deng’s death, Jiang once signaled a left turn by resuming “talking politics,” 18 which seemed to signal a move away from the “central point” of the Dengist line of “putting emphasis on economic construction.” Also, in discussing the “twelve great relationships” in late 1995 in an effort to outline his own policy, 19 Jiang embraced Mao’s way of thinking, 20 while affirming his intention of keeping the balance between Deng’s policies and Deng’s Leftist critics. The latter, however, soon showed their opposition to the central authority endorsed by Deng, to Jiang himself as its “core,” and to the legitimate position of Jiang as the interpreter of Marxist-Leninist ideology. When a series of “ten-thousand-character letters” attacking the Dengist reforms were circulated among high-ranking officials in late 1996, they attracted attention both overseas and at home as a signal for a possible post-Deng debate over current policies. 21 These activities apparently threatened the position of Jiang as the “core” of the current leadership and accordingly as the highest authoritative spokesman for interpreting official ideology, forcing Jiang to make a slight right turn to distance himself from the Leftists. When China’s central television (CCTV) chose to broadcast a biographic documentary of Deng in early 1997, it seemed that Jiang had made up his mind to stand firmly with Deng. When Deng died in February, Jiang’s change was more obvious than before. In the official documents of mourning for Deng, both Jiang himself and the CCP (now that Jiang was the real leader of its organizations) praised the dead patriarch. 22
This can be read as a preface to Jiang’s report to the Fifteenth Party Congress. As the death of Deng in February 1997 and the Fifteenth Party Congress in September are among the most important events in recent Chinese domestic politics, montages could organize the two together like this: at the same place, the People’s Great Hall in Beijing, Jiang’s tearful face at Deng’s funeral turned into the same face at the party congress, but this time with a smile. Praising the dead leader brought Jiang a remarkable harvest. By making Deng Xiaoping Theory the “guiding ideology” of the CCP, Jiang ensured his position as the successor to Deng, both in terms of exercising political power as a leading figure among his comrades and of interpreting official ideology as the spokesman of the party.
Further, for the CCP and its current leadership, Jiang being its core, this action of ideologization of Deng Theory was a rediscovery of traditional weapons to strengthen the party’s legitimacy. First, it again mobilized ideological resources, which are always significant for a communist revolutionary party but which had been dormant for a long time under the economic-centered approach of Deng himself. Second, it helped to charismatize Deng, expanding another resource for the authority of the CCP party-state, which also had been scarce since the death of Mao. As Franz Schurmann defines it in his now-classic study of Chinese communist politics, an ideology is a “systematic set of ideas with action consequences serving the purpose of creating and using organization.” 23 The strong organization of the CCP was created long ago, but now, just after and because of Deng’s reform, there was a question of how to use this organizational system. Deng’s strategy to decrease the importance of ideology had brought about “emancipation of the mind” and, accordingly, the weakening of control over the organization. Now Jiang has had to take the strategy of re-ideologization for reorganizing, mobilizing, and, ideally for him, revitalizing the party.
Re-ideologization, however, can be harmful to economic liberalization, which the party is taking on, and therefore the improvement in economic performance, which the party is seeking passionately. Ideologization, with emphasis on Deng Xiaoping Theory, thus became the choice to the Fifteenth Party Congress.
During the past twenty years, Dengist reform has already had serious negative effects, as well as more positive ones. Governmental corruption, the increasing gap between the rich and the poor, and uneven development of the East Coast areas and the inner regions are the most frequently mentioned and condemned. Those problems and the brutal crackdown on student demonstrations at Tiananmen Square in 1989 have made the legacy of Deng controversial. To ideologize this legacy is one way to eliminate obstacles for insisting on Deng’s line.
At the same time, the ideologization of Deng Xiaoping Theory further eliminates obstacles for Jiang. This sounds contradictory, but it is not. Franz Schurmann made a distinction between “pure ideology” and “practical ideology.” “Pure ideology,” according to Schurmann, “is a set of ideas designed to give the individual a unified and conscious world view.” In contrast, “practical ideology is a set of ideas designed to give the individual rational instruments for action.” He argues that “without pure ideology, the ideas of practical ideology have no legitimization. But without practical ideology an organization cannot transform its Weltanschauung into consistent action.” 24 Did Deng Theory become “pure” or “practical ideology” at the party congress? 25 Either way, Jiang enlarged his room for action in the future. Taking Deng Theory as “pure ideology,” the CCP could take a pragmatic perspective, leaving wide room for action. If it is “practical” ideology, practical Marxism in China would be Marxism “without Marx,” as predicted by some Western scholars. 26 China would have developed Dengist Marxism. Jiang felt the necessity of creating his own “practical ideology” instead of Deng Xiaoping Theory. He told the congress, “the task we are undertaking is a new one. Marx did not speak of it, our predecessors did not do it, and other socialist countries have not done it. We can only study as we act, to find our way through practice.” 27 This implies that Jiang and his comrades need to find a new way other than those developed by Marx, Lenin, Mao, and Deng. The function of Dengist Marxism, which could be read as De-Marxism, is to offer legitimacy to the CCP while resisting the fundamentalist criticism from the authentic perspective of communist ideology.
Better Economic Performance, for Whom? The Dilemma of SOE Reform
The CCP and its leadership understand that ideology, while not as powerful as it once was, is still useful in mobilizing legitimate resources. In fact, ideology can be harmful to good economic performance, which is the critical legitimate resource the regime rests on today. The party does not really want to use the virtues of capitalism to “save China,” but to use those virtues as the remedy to save the state-owned enterprises (SOEs), which have become an unbearable burden for the government, even while the economy generally has performed well over the past several years. It is reported that about 70 percent of more than 100,000 SOEs are losing money, and the losses have been growing steadily. 28
To remedy this, the CCP took a “bold step” at the party congress by introducing the “cooperative share holding system” for privatizing the SOEs. Only a year ago, the experts both overseas and at home expected that privatization of SOEs was ideologically unacceptable to the regime. 29 But scholars underestimated the CCP’s need to break out of the restriction of ideology for the sake of better economic performance. In late May 1997, Jiang delivered a speech at the Central Party School and, for the first time, approved privatizing the SOEs. 30 It was regarded as “extremely important” and as the so-called third wave of emancipation of the mind (“di san ci sixiang jiefang”). 31 The initiation of reforms and the open-door policy in the late 1970s were the first wave, and the south China tour of Deng in 1992 was the second. As Deng’s trip called for ending the debate over “socialism versus capitalism” (xing she xing zi), now the government thought that it already had the conclusion for the polemics over “public versus private” (xing gong xing si) ownership of properties, 32 indicating that the reformers achieved a triumph in adapting private ownership into the revisionist concept of “public ownership.” Through a complicated process of negotiating within the CCP itself and with other interest groups, Jiang’s report to the party congress confirmed the position presented in his Party School speech in a modest way. Local cadres commented, with some disappointment, that Jiang’s report to the party congress was not so “bold and open” as his speech to the Party School. 33 Still, Jiang announced in the report to the congress:
Public ownership can and should take diversified forms. All management methods and organizational forms that mirror the laws governing socialized production may be utilized boldly. We should strive to seek various forms for materializing public ownership that can greatly promote the growth of the productive forces. The joint stock system is a form of capital organization of modern enterprises, which is favorable for separating ownership from management and raising the efficiency of the operation of enterprises and capital. It can be used both under capitalism and socialism. We cannot say in general that the joint stock system is public or private. 34
In this way, Jiang redefined the nature of “public ownership” and “public sector.” As one Chinese economist put it, “The reform started with no intention of abolishing public ownership. But, it has been directed by a new doctrine which potentially conflicts with the conventional doctrine of public ownership.” 35 According to one vice-minister, the CCP “believes diversified ownership is the public sector’s way out.” China used to define public ownership as state and collective ownership. “Despite a projected decline in state ownership, collective ownership, rather than private investment, will continue to dominate China’s economy, maintaining socialist principles.” This official denied that China was going to privatize its economy, but, according to an official news weekly, the official compared China with Britain because “Britain is internationally renowned for its successful privatization drive during the 1980s and 1990s” and “analysts believe China and Britain have much in common.” 36
Whether those arguments are plausible or not, for the working class such a reform program holds a miserable prospect: under the proletarian dictatorship, many of the workers, theoretically the masters of the country, will be fired. To end the losses means cutting back on extra workers and trimming their costly cradle-to-grave benefits, known as the “iron rice bowl.” According to The Washington Post, about 30 percent of China’s 113 million industrial workers are no longer needed. 37 The New York Times has reported that “more than 100 million jobs are at stake in the state-owned businesses that will be up for sale.” “Workers at many companies are suddenly finding themselves obliged to buy shares if they want to keep their jobs, and once government support disappears they could be left with nothing if their factories collapse.” 38 A Hong Kong magazine estimated that roughly 30 million surplus industrial workers could lose their jobs and that those who remain can forget about receiving lifelong social benefits free of charge. 39 Also, the Chinese government labor forecasts admitted in May 1997 that, during the current five-year economic plan, those laid-off workers would have to compete with 72 million new job seekers and 40 million rural laborers flooding into the cities. 40
Successful SOE reform will inevitably create a challenge, particularly to what the regime desires most: political stability. Increased unemployment is already creating social unrest. Worker protests occurred while the party congress was pushing forward the reform of the money-losing SOEs, 41 even though President Jiang told them: “Workers should change their ideas about employment.” According to The Washington Post,
Protests (of unpaid workers) have spread throughout the country, and several more ominous incidents have involved workers who feel cheated by the government and left behind by China’s economic miracle—incidents that may portend what lies ahead as China continues restructuring state enterprises. 42
Meanwhile, the newly rich are rising in the socioeconomic skyline of “socialism.” Many of those who have gotten rich because of earlier reforms are now investing overseas, creating capital flight. 43 While capital inflows have grown dramatically over the past decade, a large portion of this capital has left the country in the form of capital flight. This is one of many financial problems facing China. When a nonmainstream economist criticized the current prosperity as the “banquet of the powerful,” she was warning that the gap between the rich and the poor is growing wider. 44 Although supporting liberalization and privatization of the economy, she concluded that further economic reform would lead to the pitfalls of early capitalism.
For the government, money is also a problem. As many have realized, the key elements in the changing approach to reform since 1992 have been the role of banks and credit, the restructuring of the pricing mechanism, and the ongoing development of an effective taxation system. 45 Premier Zhu Rongji revealed soon after the party congress that the connection between SOE reform and the financial situation was critical both for SOE reform itself and for the economy as a whole. At the Fifty-Sixth Meeting of the Development Committee of the World Bank and the International Monetary Fund in Hong Kong in late September 1997, while repeatedly stressing that “the focus of our present economic restructuring is the reform of State-owned enterprises,” Zhu added that “the reform of the financial system and the reform of the State-owned enterprises are of great significance to building a socialist market economy in China.” According to an official weekly, reform would focus on “strengthening the central bank’s currency regulation function and its financial supervisory system, increasing the autonomy of commercial banks, and improving market regulations, the legal system and management.” It cited Zhu’s comment that “our goal is to gradually institute an efficient and reliable modern financial system.” 46
This represents a slight move away from the focus on SOE reform. Zhu, who once successfully cooled China’s overheated economy, now faces the challenge of a possible financial crisis. As observers have noted, the economy shows some of the symptoms of those Asian economies that suffered financial crises—an oversupplied property market, a debt-ridden banking sector, a manufacturing base squeezed by overcapacity and rising fixed costs, and an economy generally hampered by corruption and cronyism. 47 So far China has avoided the serious financial crisis facing its neighbors. Foreign investment continues and much of that is invested for long-term return. The currency, renminbi, is not yet convertible on the capital account, and the exchange rate remains strictly government-controlled and defended by over $130 billion in foreign exchange reserves. But, since the monetary upheaval that shook Hong Kong in late October 1997, the Chinese government has worried about its own financial situation. 48 Further, the whole economic situation is not as bright as the government reports. 49
In interpreting the relationship between capitalist development and the communist state, scholars have observed that there is no conflict between the two. Instead, they have highlighted the role of the party-state in economic structural change.
It is the party-state which is setting the agenda and leading the way, both economically and socio-politically. A crucial part of that process is derived from the party-state’s general concentration of infrastructural power. In exercising that power the party-state must emphasize the interdependence of government and business, even as the party-state has moved from direct to indirect control and management. 50
The prominent role of the state in economic development and the close connection between government and business create a dilemma of political economy. Particularly in SOE reform, the state itself is the capitalist who confronts the interests of workers, not merely as the representative of the capitalists under typical capitalist arrangements, as Marxist political economy argues. Further, as urgent matters such as financial reform occupy the governmental agenda, the real suffering of the workers is often neglected. The socialist state becomes the agent of making profits, which implies a resource for its own legitimacy.
As one scholar commented, “When Mr. Jiang’s report to the congress made much of the fact that China was at ‘the primary stage of socialism,’ China was in reality admitting the virtues of its capitalism. . . . When shareholding is described as socialism, there is no limit to how capitalist China can become.” 51 Meanwhile capitalism is bringing suffering to the workers. The dominant virtue now is not to “save China,” but to “save” the Communist Party, which, as its congress demonstrated, is now dominated by the privileged groups who have benefited from economic liberalization without political constraints.
One Step Forward, Two Steps Back: Political Reform or Politics of Un-Reform?
Economic liberalization unavoidably produced political consequences, the main one of which has been the loss of power by the state. That is why commentators say, “Even when Jiang Zemin wins, he loses,” as Far Eastern Economic Review has put it. “In the run-up to the just-ended Fifteenth Party Congress, the Chinese president had been compared unfavorably with his predecessors for his ability to dictate the direction of both China and its ruling Communist Party. The irony is that if Mr. Jiang succeeds with his economic reforms, he and his successors will find themselves with even less power,” for Jiang and his allies “have drafted an unequivocal condemnation of June 4, 1989, laid down a roadmap to a democratic China.” 52 Western media urged Jiang to seize the chance, after Deng died, “to make policy decisions without nervously glancing over his shoulders,” and to lead China into a new era of reform and extend it to the political sphere as well. 53
Calls to reevaluate the June Fourth event in 1989, in which demonstrators for democracy in Beijing were attacked by the military with tanks and machine guns, did not come only from overseas. The painful topic almost made the agenda of the Fifteenth Party Congress. On the eve of the congress, some representatives to the congress were reported to have issued an open appeal to free from house arrest Zhao Ziyang, the former party chief who was ousted by the hard-liners because of his push for political reform and his sympathy with the 1989 democracy movement. 54 On September 15, 1997, the day the congress opened, Zhao himself reportedly sent an open letter to the central leadership and the congress, suggesting a reevaluation of the Tiananmen event. 55 Memories of Tiananmen, cautiously managed by the regime as irrelevant to current politics, thus again emerged onto the national agenda. Soon after the party congress, Jiang talked about “mistakes” when he answered a question about Tiananmen at Harvard University during his tour of the United States. This was regarded as a hint that he might be moving toward a different view of the crackdown, 56 even though the leadership, of which he is the core, refused to review the tragedy during the course of the congress.
Jiang also spoke sympathetically of democracy when he visited Washington. According to the American media, he told the Asia Society there that China would “expand democracy, improve the legal system, run the country according to law and build a socialist country under the law,” promising that his country would “further enlarge democracy.” Actually, Jiang was repeating his own words in the report to the Fifteenth Party Congress, where he used the term “democracy” or “democratic” thirty-one times in the section entitled “Reforming Political Structure and Strengthening Democracy and the Legal System.” Jiang announced that “it is our Party’s persistent goal to develop socialist democracy. Without democracy there would be no socialism or socialist modernization. The essence of socialist democracy is that the people are the masters of the country. All powers of the state belong to the people.” 57 “We will ensure that our people hold democratic elections, make policy decisions democratically, carry out democratic management and supervision, and enjoy extensive rights and freedoms under the law.” 58
The president’s speech sounded good for democratization and democracy, but this does not mean that the CCP now approves democratic reform. First, Jiang’s report did not suggest any substantive measures to restructure the authoritarian political system. Comparing this report with the report made by Zhao to the Thirteenth Party Congress, held ten years ago and at which political reform was a major theme, besides repeating some of Zhao’s words about the general meaning of democracy, Jiang also referred to several of Zhao’s proposals, including dividing power between the Communist Party, the state, and the economic and social entities, decentralizing administrative power from the national government to local governments and further to economic and social organizations, restricting the role of the CCP’s grass-roots organizations, conducting dialogues between the party-state and society, making the decisionmaking processes open to the people, and making trade unions independent of the party-state system. All of those were proposed to the Thirteenth Party Congress, and some of them were put into practice before 1989. In addition, the Thirteenth Congress introduced a series of concrete measures to reform elections, media reporting on state activities, and personnel management, stressing the bottom-up supervision of government officials. Zhao had also criticized the political system, pointing out that its shortcomings were rooted in the communist revolution and the campaigns for “socialist remaking.” 59 In Jiang’s report, however, slogans replaced measures, and generalities were sounded instead of concrete means of democratization. Jiang indeed emphasized many times that the party and the government “must” do something to improve “supervision” and “efficiency.” But, how could one force the powerful party-state system to do that without any institutional reform? There has been no answer to this question.
Instead, political suppression has been strengthened under “talking about political reform and democracy.” For example, the policy toward dissidents has not changed, as foreign reporters have observed. 60 Zhao, who was prime minister for ten years and who contributed to economic liberalization and development, is now under strict control, and has lost his previously limited freedom of privately meeting friends. 61 A correspondent for The New York Times concluded that
a central paradox of China today is that such strict political limitations coincide with a tremendous expansion of personal freedom in recent years. Economic growth has brought an ever-wider array of choices when it comes to a job, a place of residence or a spouse—all areas where the Communist Party authorities once wielded near-absolute control. 62
The U.S. State Department concluded in 1997, the year of the party congress, that open dissent in China had been crushed. 63
All of this once again shows that the central concern in the political domain is stability rather than change. But it is fair to say that the CCP has never tried to hide this. In his report to the Fifteenth Party Congress, Jiang stressed this point again:
In the primary stage of socialism, it is of the utmost importance to balance reform, development and stability and maintain a stable political environment and public order. Without stability, nothing could be achieved. We must uphold the leadership of the Party and the people’s democratic dictatorship. We should promote material progress and cultural and ethical progress, attaching equal importance to both. We must eliminate all factors jeopardizing stability, oppose bourgeois liberalization and guard against the infiltrating, subversive and splittist activities of international and domestic hostile forces. 64
If one asks how to achieve this desired stability, the CCP would give no other answer but to continue the methods practiced over the last nine years: to tighten control over media, dissidents, and any factors that would lead to social unrest. The post-Deng leadership did not abandon this authoritarian approach to stability, even though it talked about democracy.
Besides the issues of democratization and the reevaluation of the June Fourth incident, a more realistic question for the party congress was: Without political reform, how can the CCP obtain enough popular support for the painful economic reforms such as SOE reforms? The dilemma, a reflection of the legitimacy paradox, is that the CCP depends more than ever on economic performance to sustain its legitimacy, but the party has less legitimacy than ever for creating satisfying performance. In the East Asian miracle of economic development, the state has played an active and capable role for managing economic intervention in guiding development domestically and in managing economic relations externally. 65 This capacity is rooted in external political alliances, domestic authoritarian rule, and effective economic institutions. 66 China has been taking this path since the Deng era. Despite the possible conceptual challenges to these arguments posed by the East Asian financial crises, can the Chinese regime enjoy an alliance with the West? Does it have effective economic institutions? Besides domestic authoritarian rule, it seems that the regime lacks what it needs even for the purpose of better economic performance.
When Lenin discussed “one step forward, two steps back,” he used a subtitle to remind his comrades of “the crisis in our party.” 67 Without a substantive policy of political reform, the party congress really indicated that the CCP faced the crisis of dealing with the real problems of China, which include governmental corruption, unfair economic competition by the involvement of officials who are abusing their power, and the increasing gap between the rich and the poor. Any proposal short of political reform could not reduce the seriousness of the problems, but the CCP would not carry out such reform in order to maintain political stability. Taking this “technocratic, bureaucratic approach” to policymaking, rather than a “political approach” through which policies are shaped by economic and political demands from different sectors of society, expressed through such channels as elections, legislatures, political parties, and labor unions, 68 the party congress made the choice to not reform the political system to match the reformed economic system due to political reasons; the politics of unreform overwhelmed political reform.
A Marxist approach to the relationship between politics and the economy, which is the official approach, will certainly not endorse this choice. Marxist political economy criticizes the Western classical interpretation of the relationship between politics and the economy, which argues for the capacity of markets to regulate them and is identified with the policy of laissez-faire. “Their argument for market self-regulation treated the market system as a reality sui generis, connected to, but not a subsidiary organ of, the state.” 69 Marxist political economy, however, argues that the state is a part of the superstructure, the political shell of the means of production that is ultimately responsive to the economic base. 70 Advocates of political reform often cite this basic argument of Marxism to support their position. 71 The government, however, ignores this “basic principle” while still claiming to uphold the Marxist banner. As suggested earlier, Deng Xiaoping Theory is, at most, half-Marxist. It is Marxist in terms of stressing the role of the state in moving the economic transition forward, but it is obviously not Marxist when it separates politics from the economy and procrastinates on the reform of the former. When Jiang announced that the CCP would carry high the banner of Deng Xiaoping Theory, he carried on the legacy of Dengist Marxism or De-Marxism. In fact, he was even bolder than Deng in pushing forward economic privatization while postponing the political reform.
Conclusions
In a widely circulated joke in China, President Bill Clinton of the United States and his Russian and Chinese counterparts, Boris Yeltsin and Jiang Zemin, were each driving down a road. When they reached a crossroads, Clinton gave a turn-right signal and made a right turn; so did Yeltsin. But Jiang hesitated and asked his passenger, Deng, who was sitting beside the driver, which way to go. Deng answered: “Signal left, and turn right.”
The Fifteenth Party Congress did not resolve this duality of mentality and policies in the legacy of Deng; it only tried to legitimize it. The party congress, the first to be dominated by Jiang himself, served as a psychodrama for the CCP by attempting to integrate and streamline the duality by ideologizing the so-called Deng Xiaoping Theory. Ideally for the CCP leadership, this re-equipment with Dengist ideology could open a way to mobilize, again, the ideological resources for maintaining the party organization at work but not interrupting the CCP’s ongoing programs of “four modernizations.” Now with Deng enshrined in the temple of communism, the CCP could have a powerful defender for its current policy in the ideological battles against Stalinist fundamentalists.
Yet, there is a critical paradox in the work of congress. The paradox lies in the contradiction between the CCP’s efforts to reestablish its traditional resources for legitimate authority, namely, revolutionary ideology and leaders’ charisma, and its ad hoc resting of legitimacy on the regime’s achievements of better economic performance, which offers a new kind of substantive resource for the CCP to maintain political stability and to survive in power. Better economic performance requires the CCP to go beyond Marxist-Leninist ideology, but without political, ideological, and organizational equipment, the economy by its own cannot sustain the party’s political legitimacy. Fearing that political reform will bring instability to China and perhaps further cause the CCP to lose power, the party congress denied substantial political reform and only offered lip service to the increasing calls for democratization. According to Jiang, “To strengthen Party building ideologically, it is essential to unswervingly arm the entire Party with Deng Xiaoping Theory and give full play to the ideological and political strength of the Party.” 72 It is ideological and political strength, however, that the CCP lacks. The impressive performance of the economy offers the CCP a new base for political legitimacy, but it is not legitimacy itself. More than this, the economy also faces new challenges after twenty years of easygoing strategy; now the “hard bone” has appeared before the regime.
Gradual political reform could be the choice of the CCP, following the example set by its old rival, the Guomindang in Taiwan, or a kind of radical political change could happen, just as occurred in the last years of the Soviet Union, when legitimacy proved too weak to support the regime. But there is a third possibility, in which the regime could utilize economic performance as the carrot and, simultaneously, political suppression as the stick to maintain political stability as long as possible, postponing political reform and reducing the impact of ad hoc political change. The political problems would thus be deliberately avoided and transformed into socioeconomic problems for treatment and possible resolution. Surely strong economic performance can be helpful in reducing the many difficulties facing the communist regime, which range from domestic welfare to diplomacy. While politics and economics run in opposite directions, however, what can keep the country free from instability? As its last congress in this century has shown, the CCP is creating perplexities more than it is facing the future.
Endnotes
Note 1: Joseph Fewsmith, “Chinese Politics on the Eve of the 15th Party Congress,” in China Review 1997, ed. Maurice Brosseau, Kuan Hsin-chi, and Y. Y. Kueh (Hong Kong: The Chinese University Press, 1997), p. 4. Back.
Note 2: Valerie Bunce, Do New Leaders Make a Difference? Executive Succession and Public Policy Under Capitalism and Socialism (Princeton, NJ: Princeton University Press, 1981); Joseph W. Esherick and Elizabeth J. Perry, “Leadership Succession in the People’s Republic of China: ‘Crisis’ or Opportunity?” Studies in Comparative Communism 16, no. 3 (autumn 1983): 171–177; Lowell Dittmer, “Patterns of &Eactue;lite Strife and Succession in Chinese Politics,” The China Quarterly 123 (September 1990): 405–430. Back.
Note 3: For this feature of the transition from communism in China, see, for example, Susan Shirk, The Political Logic of Economic Reform in China (Berkeley: University of California Press, 1993); Minxin Pei, From Reform to Revolution: The Demise of Communism in China and the Soviet Union (Cambridge, MA: Harvard University Press, 1994). Back.
Note 4: Such calls for democratization from society are various, exemplified by an article by Shang Dewen, a professor of economics at Beijing University, which discusses the constitutional designs of the future democratic China. Although the foreign media agencies such as Voice of America (VOA) and the British Broadcasting Company (BBC) reported about his article, it has not been published within China. Also, some scholars with government backgrounds and even a few high-ranking officials commented that China needed political reform and democratization. For example, Liu Ji, a vice president of the Chinese Academy of Social Sciences and a policy adviser to President Jiang Zemin, stressed that the requirements for democracy from the people must be fulfilled, as recorded in The Hong Kong Economic Journal, September 1, 1997, p. 10. A senior economist, Wang Jue, a professor at the Central Party School, also realized that economic reform must be matched by political reform, according to a report in Hong Kong Economic Journal, August 16, 1997, p. 6. Back.
Note 5: Hugo Restall, “China’s Failed Party Congress,” Asian Wall Street Journal, September 23, 1997, p. 10. Back.
Note 6: Cited from International Herald Tribune, September 20–21, 1997, p. 6. Back.
Note 7: Cited from International Herald Tribune, September 20, 1997, p. 8. Back.
Note 8: Reginald Dale, “Which Future for China: Threat or Positive Force?” International Herald Tribune, September 19, 1997, p. 13. Back.
Note 9: James A. Caporaso and David P. Levine, Theories of Political Economy (Cambridge: Cambridge University Press, 1992). Back.
Note 10: Max Weber, Economy and Society: An Outline of Interpretive Sociology, ed. Guenther Roth and Claus Wittich (Berkeley: University of California Press, 1978), vol. 1, p. 215. Back.
Note 11: This legitimacy based on economic performance can be defined as a kind of “legitimacy by results,” as discussed in W. Phillips Shively, Power and Choice (New York: McGraw-Hill, 1995, 4th ed.), p. 110. Back.
Note 12: For the rise of technocracy in the CCP leadership during the reform years, see Li Cheng and Lynn White, “Élite Transformation and Modern Change in Mainland China and Taiwan: Empirical Data and the Theory of Technocracy,” The China Quarterly 121 (March 1990): 1–35; Li Cheng and Lynn White, “The Thirteenth Central Committee of the Chinese Communist Party: From Mobilizers to Managers,” Asian Survey 28, no. 4 (April 1988): 371–399; Willy Wo-lap Lam, “Leadership Changes at the Fourteenth Party Congress,” in China Review 1993, ed. Joseph Cheng Yu-shek and Maurice Brosseau (Hong Kong: The Chinese University Press, 1993), pp. 2.1–2.50; David Shambaugh, “The CCP’s Fifteenth Congress: Technocrats in Command,” Issues & Studies 34, no. 1 (January 1998): 1–37. Back.
Note 13: Jiang Zemin, Gaoju Deng Xiaoping lilun weida qizhi, ba jianshe you Zhongguo tese de shehui zhuyi shiye quanmian tuixiang ershiyi shiji: zai Zhongguo Gongchandang di shiwu ci quanguo daibiao dahui shang de baogao [Hold High the Great Banner of Deng Xiaoping Theory for All-Around Advancement of the Cause of Building Socialism with Chinese Characteristics into the Twenty-First Century: Report Delivered at the Fifteenth National Congress of the Communist Party of China], English translation in Beijing Review, October 6–12, 1997, p. 10. The quotations from this document hereafter will be indicated as “Jiang’s report.” Back.
Note 15: Beijing Review, October 13–19, 1997, p. 18. Back.
Note 18: Jiang Zemin, “Lingdao ganbu bixu jiang zhengzhi” [“Leading Cadres Must Pay Attention to Politics”], excerpted from Jiang Zemin’s speech to the fifth plenum of the Fourteenth Central Committee, Xinhua, January 17, 1996. Back.
Note 19: Jiang Zemin, “Zhengque chuli shehui zhuyi xiandaihua jianshe zhong de ruogan zhongda guanxi” [“Correctly Managing Some Great Relationships in Socialist Modernization Construction”], Renmin ribao (People’s Daily), October 9, 1995, p. 1. Back.
Note 20: Mao Zedong discussed “ten great relationships” in 1956 to outline his policy for the socialist construction. See his “Lun shida guanxi” [“On the Ten Great Relationships”], in Mao Zedong xuanji [Selected Works of Mao Zedong] (Beijing: Renmin chubanshe, 1977), vol. 5, pp. 267–288. Back.
Note 21: The series of letters consist of four pieces. The first one, entitled “Yingxiang woguo guojia anquan de ruogan yinsu” [“Some Factors to Influence National Security of Our Country”], is the most influential as it was reportedly written by Deng Liqun, a former member of the CCP’s Central Secretariat and the former head of the Propaganda Department of the Central Committee, though he informally denied his authorship. For the background and the digests, see Ma Licheng and Ling Zhijun, Jiaofeng: Dangdai Zhongguo sanci sixiang jiefang shilu [Crossing Swords: The Chronicle of Three Mind Emancipations in Contemporary China] (Beijing: Jinri Zhongguo Chubanshe, 1998), pp. 227–423. Back.
Note 22: Renmin ribao, February 20, 1997. Back.
Note 23: Franz Schurmann, Ideology and Organization in Communist China (Berkeley: University of California Press, 1968, enlarged ed.), p. 18. Back.
Note 24: Ibid., pp. 22–23. Back.
Note 25: Schurmann distinguishes between “theory” and “thought,” and asserts that “for our conceptual terms of pure and practical ideology, the Chinese Communists use the words ‘theory’ and ‘thought’ respectively. Theory is pure ideology, and thought is practical ideology” (ibid., p. 23). But I think it is difficult to find evidence in Chinese politics for this conclusion. When the Fifteenth Party Congress uses the term “theory” to describe policies and ideas of Deng Xiaoping and still uses “thought” attached to Mao Zedong, it seems unreasonable to conclude that now the CCP regards Mao Zedong Thought as “practical ideology” but Deng Xiaoping Theory as the “pure” one. Back.
Note 26: Bill Brugger and David Kelly, Chinese Marxism in the Post-Mao Era (Stanford, CA: Stanford University Press, 1990), pp. 171–175. Back.
Note 27: Jiang’s report, p. 15. Back.
Note 28: Steven Mufson, “China’s Factory Cutbacks Feed Idled Workers’ Anger,” International Herald Tribune, September 12, 1997, p. 1. Back.
Note 29: See, for example, Joseph C. H. Chai and George Docwra, “Reform of Large and Medium State Industrial Enterprises: Corporatization and Restructure of State Ownership,” in China Review 1997, ed. Maurice Brosseau, Kuan Hsin-chi, and Y. Y. Kueh (Hong Kong: The Chinese University Press, 1997), pp. 161–180. Back.
Note 30: Jiang’s speech at the Central Party School on May 29, 1997, known as the “May 29 Speech.” See Renmin ribao, May 30, 1997, p. 1. Also, see Ren Huiwen, “Jiang Zemin wu erjiu jianghua wei gongkai de neirong” [“Unpublished Contents of Jiang Zemin’s May 29 Speech”], Hong Kong Economic Journal, June 20, 1997, p. 19. Back.
Note 31: Ren Huiwen, “Jiang Zemin tuidong Zhonggong disanci sixiang jiefang” [“Jiang Zemin Is Pushing Forward the CCP’s Third Wave of Emancipation of the Mind”], The Hong Kong Economic Journal, August 15, 1997, p. 19. Back.
Note 32: “Shiwuda hou fei guoyou jingji jiang guoda, Li Junru zhi tupo xing gong xing si kunhuo” [“The Non-State Economy Will Be Enlarged After the Fifteenth Party Congress, and Li Junru Pointed Out That It Would Make a Breakthrough over the Perplexity Around Public or Private Ownership”], Hong Kong Economic Journal, August 14, 1997, p. 9. Back.
Note 33: Interview with Chinese governmental officials from Shandong Province, September 14, 1997, Hong Kong. Back.
Note 34: Jiang’s report, p. 19. Back.
Note 35: Weiying Zhang, “Decision Rights, Residual Claim and Performance: A Theory of How the Chinese State Enterprise Reform Works,” China Economic Review 8, no. 1 (spring 1997): 67. Back.
Note 36: Beijing Review, October 20–26, 1997, p. 6. Back.
Note 37: Mufson, “China’s Factory Cutbacks.” Back.
Note 38: Seth Faison, “Dismay in China Firms as Privatization Looms.” Cited from International Herald & Tribune, October 6, 1997, p. 13. Back.
Note 39: Far Eastern Economic Review, October 16, 1997, p. 62. Back.
Note 41: Mufson, “China’s Factory Cutbacks”; Faison, “Dismay in China Firms as Privatization Looms.” Back.
Note 42: Mufson, “China’s Factory Cutbacks.” Back.
Note 43: Frank R. Gunter, “Capital Flight from the People’s Republic of China: 1984–1994,” China Economic Review 7, no. 1 (spring 1996): 77–96. Back.
Note 44: He Qinglian, Zhongguo de xianjing [China’s Perplexities] (Hong Kong: The Mirror Books, 1997), p. 79. Back.
Note 45: Kate Hannan, “Reforming China’s State Enterprises, 1984–93,” Journal of Communist Studies and Transition Politics 11, no. 1 (March 1995): 33–55. Back.
Note 46: Beijing Review, October 13–19, 1997, p. 5. Back.
Note 47: James Harding, “Asian Markets Contagion May Unnerve China,” Financial Times, October 27, 1997, p. 6.Back.
Note 48: Ibid.; and Steven Mufson, “Asian Financial Chaos Shakes Beijing,” International Herald Tribune, October 24, 1997, p. 18. Back.
Note 49: Peter Hannam, “China’s Economic Dynamo Begins to Run Out of System,” International Herald Tribune, November 15–16, 1997, p. 18. Back.
Note 50: David S. G. Goodman, “Collectives and Connectives, Capitalism and Corporatism: Structural Change in China,” Journal of Communist Studies and Transition Politics 11, no. 1 (March 1995): 32. Back.
Note 51: Gerald Segal, “Notice How Being Firm with Beijing Helps China to Change,” International Herald Tribune, October 22, 1997, p. 8. Back.
Note 52: Far Eastern Economic Review, October 2, 1997, p. 5. Back.
Note 53: “America and China,” International Herald Tribune, August 20, 1997, p. 8; and “Jiang’s Chance,” International Herald Tribune, October 25–26, 1997, p. 8. Back.
Note 54: Reuters’ report from Beijing, see International Herald Tribune, September 11, 1997, p. 4. Back.
Note 55: Zhao’s letter was widely reported in Hong Kong media. See, for example, The Apple Daily, September 17, 1997. Back.
Note 56: John Pomfret and Lena H. Sun, “Jiang Links ‘Mistakes’ and Tiananmen,” International Herald Tribune, November 3, 1997, pp. 1 and 4. Back.
Note 57: Jiang’s report, p. 24. Back.
Note 58: Brian Knowlton, “Jiang Vows More Democracy,” International Herald Tribune, October 31, 1997, pp. 1 and 4. Back.
Note 59: Zhao Ziyang, “Yanzhe you Zhongguo tese de shehui zhuyi daolu qianjin: zai Zhongguo Gongchan Dang di shisan ci quanguo daibiao dahui shang de baogao” [“Advancing Along with the Road of Socialism with Chinese Characteristics: Report to the 13th National Congress of the Chinese Communist Party”], in Zhongguo Gongchan Dang di shisan ci quanguo daibiao dahui wenjian huibian [Documents of the 13th National Congress of the CCP] (Beijing: Renmin chubanshe, 1987), pp. 34–49. Back.
Note 60: Seth Faison, “China’s ‘Time for Silence’ Drags On,” International Herald Tribune, November 20, 1997, pp. 1 and 6. Back.
Note 61: Hong Kong Economic Journal, September 29, 1997. Back.
Note 62: Faison, “China’s ‘Time for Silence’ Drags On.” Back.
Note 63: International Herald Tribune, October 25–26, 1997, p. 8. Back.
Note 64: Jiang’s report, p. 17. Back.
Note 65: Frederic C. Deyo (ed.), The Political Economy of the New Asian Industrialism (Ithaca: Cornell University Press, 1987); Robert Wade, Governing the Market: Economic Theory and the Role of Government in East Asian Industrialization (Princeton, NJ: Princeton University Press, 1990); Gary Gereffi and Donald L. Wyman (eds.), Manufacturing Miracles: Paths of Industrialization in Latin America and East Asia (Princeton, NJ: Princeton University Press, 1990). Back.
Note 66: Deyo, The Political Economy. Back.
Note 67: See Robert C. Tucker, ed., The Lenin Anthology (New York: W. W. Norton, 1975). Back.
Note 68: David Collier, ed., The New Authoritarianism in Latin America (Princeton, NJ: Princeton University Press, 1979), p. 4. Back.
Note 69: Caporaso and Levine, Theories of Political Economy, p. 3. Back.
Note 70: For original and systematic statements of Marxist political economy, see, for example, Robert C. Tucker, ed., The Marx-Engels Reader (New York: W. W. Norton, 1978, 2nd ed.). Also, see Caporaso and Levine, Theories of Political Economy, chapter 3. Back.
Note 71: Interviews: Beijing, April 1997; Shenzhen, October 1997; and Hong Kong, throughout 1997. Also, the conclusion is based on the opinions expressed from Chinese audiences in the call-in programs of the Voice of America, in which the author participated many times in 1997 to discuss China’s political reform. Back.
Note 72: Jiang’s report, p. 31. Back.
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