Saturday, June 19, 2010

Book on the Chinese Communist Party

The Chinese Communist Party
The permanent party
An entertaining and insightful portrait of China’s secretive rulers

The Economist, Jun 17th 2010

The Party: The Secret World of China’s Communist Rulers
By Richard McGregor. Harper; 302 pages; $27.99.
Allen Lane; £25. Buy from,

ANY study of the Chinese Communist Party today will soon confront two jarring questions. The first is how a party responsible for such horrors—the Cultural Revolution of the 1960s, the death of some 35m-40m people in the worst-ever man-made famine from 1958-1960—has stayed in power without facing any serious threat, the 1989 Tiananmen protests aside. The second is why it still calls itself “communist”, when China today seems closer to the cut-throat capitalism of Victorian England than to any egalitarian dream.

The second question is easier. In 1979 Deng Xiaoping, the pragmatic founder of the new China, answered it in “four basic principles”, the most important being “the leading role of the Communist Party”. Richard McGregor’s masterful depiction of the party today cites a less pompous tautology, from Chen Yuan, the son of a Long March veteran and hero of central planning, who is himself a leading state-banker: “We are the Communist Party and we will decide what communism means.”

This willingness to jettison ideological baggage while clinging to Leninist first principles also helps answer the first question, about the party’s surprising durability. Flexibility has been essential as the party has both led and adapted to wrenching change since 1978. It has had, as Mao Zedong, a less pragmatic communist, might have put it, to “manage contradictions”. In the process, Chinese people have learnt to enjoy freedoms and prosperity unimaginable under Mao. The system, Mr McGregor rightly points out, still relies, ultimately, on terror. But no longer are party rule and terror absolutely synonymous.

Through anecdote and example, Mr McGregor, a longtime correspondent in China for the Financial Times, illuminates the most important of the contradictions and paradoxes. There is the obvious one, for example, between the demands of the market and party control. Mr McGregor describes one almost comical battlefield—the overseas stockmarket listings of Chinese state-controlled companies.

Wall Street bankers scratched their heads over how to describe the role of a firm’s party committee. John Thornton, a former boss of Goldman Sachs, describes an “eye-opening” lecture he received as a member of a Chinese board: the committee was responsible for six functions “and they were the ones that mattered.” Prospectuses tend to solve the conundrum by avoiding mention of the party’s role.

A more stomach-churning example of this contradiction was the discovery in 2008 by Sanlu, a dairy firm, that some of its products had been contaminated and were harming and killing children. Commercial logic, not to mention basic humanity, demanded an instant recall. But the boss’s first loyalty was to the party, which had demanded that bad news be suppressed so as not to spoil the atmosphere at that year’s Beijing Olympics.

Then there is the tension arising from the party’s dependence—shown most graphically in Beijing in 1989—on the army to keep it in power. This has led to booming army budgets, as the generals acquire high-tech kit. But this in turn leads them to think of themselves as professional soldiers defending China when their job is to serve the Communist Party. Tensions surface in the mysterious occasional harangues in the press against those calling (though not in public) for the “depoliticisation” and “nationalisation” of the armed forces.

Third, there is the paradox that China’s leaders recognise that the main threat to their authority is corruption, yet their power rests on a system that makes it almost inevitable. Indeed, as Mr McGregor puts it, corruption has become a sort of “transaction tax that distributes ill-gotten gains among the ruling class…It becomes the glue that keeps the system together.” No outside body is allowed to have authority over the party. An independent anti-corruption campaign, as Mr McGregor notes, “could bring the whole edifice tumbling down”.

This is part of what the author calls the “fundamental paradox”: “That a strong, all-powerful party makes for a weak government and compromised institutions.” This leaves it ill-equipped to cope with the next change, as China “rebalances” its economy to stimulate domestic consumption, provide a decent social-security net and “take on the vested interests now profiting from the distortions”.

Mr McGregor seems to think that the party’s record suggests it will find a way to manage this next transition, too. But he also notes that the triumphalism of China’s leaders in recent months seems “brittle”. Party rule has always made it hard to picture the future as very different from the present. But in China it usually is.

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