Sun, Oct 21, 2012 - Page 8 News List

Reform is dead, long live stability

By Wang Dan 王丹

All eyes are on China’s upcoming 18th National Congress of the Chinese Communist Party (CCP). Of course, the anticipation is in part due to the fact that this event will see the transfer of power to the next generation of leaders within the CCP, but there is another reason too. That is, China’s political and economic development has, after almost 35 years, reached a turning point, and has once more come under scrutiny. In other words, the 18th National Congress is an opportunity for the CCP and the world to take stock of where China is today, and where it is going. And there is no better way to start this process than by looking back over the past few decades of China’s reform and its process of opening up to the world.

Looking back over this period, there is a certain amount of consensus on one point: Efforts at reform have died.

First, when reforms began in 1978, the initial idea was to create wealth for the few and then to gradually extend it to others in the form of communal prosperity. At the same time, the government went about restructuring the economy by reforming state-owned enterprises and the system of ownership, setting the foundations for China’s stable economic growth. There were also attempts to separate party and administrative functions, to change how the governing party ran the country in order to further consolidate the CCP’s rule. In effect, the goal of the reforms was to achieve a complete transformation of society.

Today, however, these so-called economic reforms have descended into a process in which powerful cliques and interest groups divide up state-owned assets between themselves. Yes, the economy as a whole is growing, but the manner in which the wealth created by this growth is distributed is causing serious social inequality. The dream of communal prosperity has been replaced by the reality of a burgeoning poverty gap, and modifications in the system of ownership have simply facilitated more opportunities for rent-seeking, for officials to create new regulations to manufacture conditions that will benefit themselves.

We have now reached a point where rampant economic development has left political reform in the dust. The governing party has an increasingly weaker, not stronger, claim to legitimacy.

Over the past 35 years, the country — or rather the vested interests building monopolies in the name of the country — has become stronger, but the reforms have failed to achieve the intended effects, and but rather have achieved precisely the opposite. The reforms, as they were originally intended, are dead in the water.

Second, these reforms were only possible initially because of the cooperation and mutual trust between the state and the people, and through the initiative of the inhabitants of Xiaogang Village (小崗村) in Anhui Province. In 1978, these farmers risked their lives by dividing up their communal farmland, in defiance of the law, into individual family plots in order to increase production. Had the provincial government not offered their tacit approval of the villagers’ actions, the rural household contract responsibility system reform would never have happened.

In 1984, during a military parade, a group of Peking University students unfurled a banner, meant for the eyes of Chinese leader Deng Xiaoping (鄧小平), that read “Hello Xiaoping,” suggesting the public’s support of the reforms.

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