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China's policy: closet capitalism

"You cannot talk about it, but you can do it."

Ding Xueliang, a professor at Hong Kong's University of Science and Technology

It's the new narrative of China's prosperity-minded leaders: inviting capitalists into the echelons of power and maybe even granting private property rights. But as one Shanghai businessman found, communist ideology isn't going away just yet.

This fall, the communist leadership plans to amend the constitution, drawing on the pro-capitalist ideology of recently retired party chief Jiang Zemin (江澤民), state-run media reported last week.

At the same time, businessman Lu Yuzhang is suing city bureaucrats for refusing to let him register his "Shanghai Capitalist Competition Capability Consulting Co, Ltd" as a private company.

"Capitalists and capitalism exist in China. That's a fact," said Lu, a recent college graduate. "The calling of capitalism is absolutely legal and in line with national benefits."

The city commercial bureau said in a statement that Lu's request violated regulations and was "not in the national interest," adding that it believed the title would mislead the public.

"Using the word `capitalist' is not in harmony with China's current social system and the requirements of constructing a `spiritual civilization,'" the statement said. Officials wouldn't comment further.

In Mao Zedong's (毛澤東) day, those with a profit motive were persecuted as enemies of the people -- "capitalist roaders." Private enterprise was taboo.

Today, evidence of the sway capitalism holds in this commercial center is abundant. Billboards of foreign multinationals dominate the neon skyline of the famed Bund, the turn-of-the-century row of majestic buildings fronting the Huangpu River in the heart of Shanghai.

Names of big property conglomerates -- foreign and domestic -- are emblazoned on massive skyscrapers that are rapidly replacing the city's old European-style housing.

At sidewalk level, the churn of private enterprise is evident in shop signs that barely keep up with the rapidly changing busi-nesses inside.

The capitalist class has re-emerged in reality, if not in name.

"Today's China is more capitalist than many capitalist societies," says Ding Xueliang, a professor of social science at Hong Kong's University of Science and Technology. ``You cannot talk about it, but you can do it.''

China's constitution does not yet guarantee private property rights. It says China is a "socialist state under the people's democratic dictatorship, led by the working class and based on the alliance of workers and peasants."

But news reports last week said the party's 356-member Central Committee will debate amendments to "promote economic and social development" at an annual meeting in October.

The reports gave no details, but experts said the changes might include a first-ever guarantee of property rights.

The same Communist Party that launched China on its pell-mell rush toward a market economy took power as a champion of the rural dispossessed and still clings to Marx and Mao.

For all the changes of the past 20 years, the legacy of the 1949 revolution still dominates in many areas -- even in the stock market, which is modeled on its Western capitalist counterparts but mainly serves as a fund-raising vehicle for state-run companies.

Entrepreneurs have been invited into party ranks, but only captains of state industry have been chosen for influential party positions.

And while there are plenty of Western-style talk shows, the domestic media are still entirely state-run. Newspapers habitually carry turgid front-page essays on Communist Party ideology, and criticism of top leaders remains taboo.

Revising the constitution is one small step of many aimed at helping the party catch up with the times.

"Everybody knows this is a capitalist system. It's raw capitalism. But nobody wants to confront the issue," says Laurence Brahm, a Beijing-based political economist and owner of a restaurant called The Red Capital Club.

Registering a "Communist Burger" fast-food outlet in Dallas, Texas, might not go over so well either, he notes.

The leadership is wary of loosening controls, Ding says.

"It will take a long time," he says, "for China to bring official ideology and culture in line with economic and social reality."
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