China’s Tricky Predicament: Playing Doctor and Patient at the Same Time

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Bryan Lee's picture

China’s Tricky Predicament: Playing Doctor and Patient at the Same Time

There is a Chinese adage that says: The rising tides of the Yangtze River drive the stagnant waves ahead. It underpins the perennial hope for each new generation to outdo the older ones. However, in China’s transition to its fifth generation of leadership, it seemed like the old waves were ushering the new tides instead. The succession of Hu Jintao by Xi Jinping as the new leader of the Chinese Communist Party (CCP) was largely ceremonial and there was never really much doubt about it. While Xi’s ascent to the top was uncontroversial, it was ironic how the lack of controversy had provided a stark contrast to China’s highly controversial political system. Moreover, the contrast was especially striking as the National Congress was held only 13 days after Bo Xilai’s expulsion from the parliament on 26 October 2012. This contrast inevitably leads us to question: Is this an elaborate subterfuge of the challenges in governance that the new leadership is facing within the CCP or is the transition of power really as smooth-sailing as it seems? In my opinion, I would choose to believe the former and in further pursuance, I will seek to define and uncover the key governance challenges the new leadership is facing and whether these challenges are unique to China.

Essentially, good governance and its challenges encompass two main facets, namely economics and politics. The economics of good governance lie mainly in wise policy-making and its disciplined execution, while the politics would refer to the providence of a stable political environment with the mandate of improving social welfare. With an average annualized increase in Gross Domestic Product (GDP) per capita of 9.9% over the last decade , the Chinese government has been impressive based on its economic results. However, the economy is only a single yardstick and it does not imply that good governance is primarily attributable for the stellar economic performance. In fact, other evidence suggests that the government is actually culpable of corruption. From 2000 to 2011, there were massive and illegitimate capital outflows, amounting up to US$3.79 trillion, moving out of China. Coincidentally, the 70 wealthiest members of the CCP saw their net worth increase by more than US$11.5 billion in 2011, raising their overall net worth to a staggering US$89.8 billion. This increment would definitely be impossible if their net worth were based mainly from the contributions of their salaries. Hence, this is a clear sign of political corruption within the government and this is the key challenge the new leadership must tackle.

In the backdrop of the Bo saga, China’s political renewal was centred heavily around the theme of corruption. This was not exactly in tandem with the global dynamics that were affecting most countries. If we were to look at the recent elections of countries that are similar with China in terms of demographics and economic development, they were mostly concerned about the economy. The presidential election of the United States was largely focused on the fiscal cliff and the candidates were more interested in attacking each other’s plans for managing the economy. In Russia, Putin’s re-election stemmed mainly from the citizens’ confidence in his first presidency, where he was successful in overseeing an average economic growth of 7% in nominal GDP from 1999 to 2008. Even if we were to compare India, a country that is ranked 94 in the Corruption Perception Index as compared to China’s ranking of 80, the Indian electorate were not as fixated as the Chinese about reducing corruption when they elected Pranab Mukherjee as President. They were more interested about Mukherjee’s past economic achievements as the Finance Minister. He was deemed as the “Finance Minister of the Year” in 2010 by The Banker, a leading financial publication.

While corruption has never been a unique governance challenge to China or other countries, it is rare to see such a strong political determination coming from a new leader to crack down the vices of corruption. This is indeed a risky move for any career politicians, especially upon a new appointment. Thus, the strong crackdown on corruption begets the question: Why is this happening uniquely in China and not in other corruption-laden countries as well?

According to Evrenk (2011), it is not in the Nash equilibrium for both a corrupt or upright politician to implement any reformative strategies when corruption has been widespread in the long run. Assuming that Xi is indeed an upright politician, he would actually be eliminating his own competitive advantage as a virtuous official in a corrupted government if he were to be successful. Eventually, this would level the playing field such that most officials become non-corrupt and there is greater competition among the politicians to maximize their legal rents. Ultimately, this will reduce the long-term appeal of Xi as the top man in China, albeit receiving short-term recognition for the concerted efforts of his leadership against corruption. However, as China has been mired in a political corruption trap, where the politics is dictated by a small group of tenured party leaders, Xi’s crackdown on corruption could actually be seen as a consolidation of power under his new leadership. This is largely due to the hierarchical electoral system in China, where only the People’s Congresses are directly elected by the citizens and the national legislature is indirectly elected by the higher levels of the People’s Congresses. This means that Xi can actually weed out his opposition within the current government by using corruption as a means to an end. Hence, he can build up the command of his new leadership, which is always important when one assumes power in political office. Otherwise, the new leaders will always be deemed as the shadows of their predecessors, given that they were not voted in directly by the Chinese populace.

As such, tackling corruption is the key challenge that is peculiarly associated with the new Chinese leadership as a result of their electoral system. This is not the case in Russia, where President Putin was still voted directly by the citizens, despite many allegations of fraud during his election. While India has a relatively similar electoral structure to China, where the President is elected by the members of the federal and state legislatures, it does not exactly face the same challenges in governance as China. While corruption is rifer in India, the political will to alleviate corruption comes mainly from its institutional systems, rather than the government itself. This is due to a stronger civil society present in the democratic rule of India, as compared to the socialist system of China. According to institutional theories, institutional systems that flourished after the establishment of the state provide significant influence that can affect social behaviour greatly. These institutions are moulded out of the cultural system that is embedded within the rationality of the society. For example, the maturation of the parliamentary system in India was a result of the deep-rooted beliefs in democracy by the Indian populace. These beliefs can be traced back to the time of Mahatma Gandhi, where he championed the sovereignty of India through his convictions in non-violence and civil rights. This became rooted as a distinct culture of India’s civil society, which in turn shaped democratic institutions that continue to influence the society’s behaviours towards being pro-democracy. Hence, this is why there are so many social activists in India, such as Anna Hazare, who are continually bent on fighting against corruption. In the case of Hazare, he was even inspired by Gandhi to “fast-unto-death”, in order to protest against the government’s inaction in passing an anti-graft legislation, the Lokpal Bill. In China, such protests are not condoned and the fight against corruption lies almost squarely on the shoulders of the government’s conscience.

In conclusion, while corruption is a common challenge for many governments, it has been given much more priority by the new Chinese leadership, as compared to other countries of similar stature and predicament. Due to the inherent flaws of the Chinese’s autocratic reign, corruption has become a structural problem, such that the new and anti-corruption leadership is paradoxically its by-product. Hence, this has given rise to a tricky challenge for the new Chinese government, whereby they are both the doctor and patient in the same treatment room. Thankfully, among the more developed economies, this problem seems to be particular only to China for now.

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