CHINA: Strong now, a tested CCP could tumble

Analysis

China last faced a full-blown crisis in 1989, which resulted in the Tiananmen military crackdown, and retrenchment from the reform process. Reforms were re-launched by Deng Xiaoping in 1992 after the collapse of communism in Eastern Europe and in the Soviet Union. Since then, the Chinese Communist Party (CCP) has pushed ahead with reforms and delivered stability, order and rapid growth (see CHINA: Middle class activism will test Beijing - May 1, 2008; and see CHINA: Growth and currency appreciation will slow - April 23, 2008). The key question is whether this can be sustained over the long term.

Democracy. Post-1992 reforms have been not just about reinvigorating the economy but also about strengthening the capacity of the party and the state (amounting to almost the same, as China has retained the Leninist political system). They have succeeded, and done so without the introduction of liberal democracy.

The 'democracy' to which China is formally committed has a special meaning (see CHINA: Moves will take CCP towards 'party democracy' - January 8, 2008):

• The CCP advocates one where electoral outcomes are predictable and guaranteed to be 'correct'.
• The mechanism to achieve this is a Maoist version of democratic centralism known as 'from the masses and to the masses'. It requires the party to collect and collate ideas from 'the masses'; organise and add new input to produce a coherent set of ideas; and then take it back to the masses, educate and otherwise induce the masses to embrace it as their own.

The principle of 'from the masses and to the masses' was somewhat overlooked during Jiang Zemin's presidency (1993-2003). Current President Hu Jintao has revived it and used it as a key principle underpinning the promotion of a 'harmonious society'.

The chosen instrument for delivery remains the CCP. Under Hu, the party accelerated the process started under Jiang in broadening its membership base, promoting a new generation of leaders, reformulating its ideological content, appealing to nationalist impulses in society, and strengthening its organisational apparatus throughout the country (see CHINA: The party moves to increase its reach - October 13, 2006).

Supporting changes. This is reinforced by other changes designed to support rapid and sustainable growth as the basis for ensuring public support for the continuation of CCP rule. In return, the party devotes itself to:

• building a framework for political and social stability, including political institutionalisation and reduction of corruption;
• enhancing administrative capacity, particularly by promotion on the basis of merit so that the state can deliver real improvements in most people's living conditions;
• strengthening the state's capacity to reach out to the population and win over support;
• redressing where appropriate the neglect and abuse faced by the rural population; and
• promoting nationalism as the new ideology to secure the loyalty of the people (see SOUTH KOREA/CHINA: Nationalism intervenes in relations - September 22, 2008).

Institutionalisation. Progress in institutionalisation has helped make Chinese politics less volatile. It resulted in the peaceful and relatively uneventful transfer of power from Jiang's 'third generation' to Hu's 'fourth generation' leadership, in a break from the more disruptive transitions of the past. It has also led to the CCP increasingly governing through the enforcement of the law, rather than in spite of the law, as it regularly used to do.

Merit. An increasingly merit-based bureaucracy became a reality as technocrats replaced the revolutionary cadres to hold the top offices under Hu. They cannot justify their hold on power by their revolutionary pedigree and must, instead, do so by demonstrating competence and political skill. This has to some extent produced a genuine meritocracy based on expert knowledge in governance or other relevant fields, including the political astuteness required to operate effectively in a Leninist system.

However, this has not ended privileges or the relevance of family background. So-called 'princelings' -- descendents of leaders of the revolution -- remain a dominant force. Nevertheless, those who rose to the top, including Hu's heir apparent Xi Jinping, did so by using their privileged backgrounds to build up the necessary technical competence and political skills to gain advancement (see CHINA: High-flyer Xi faces Olympic hurdle - July 25, 2008). Thus, despite nepotism, the upper echelons of the CCP and government are filled by able individuals, adept at operating within the Leninist system.

Hu factor. CCP governance capacity has also been strengthened by Hu's personal qualities and approach. He is politically astute and decisive, but extremely cautious. From the experience of 1989, he learned that the CCP has to act decisively and in unity to reduce the risk that popular challenges will get out of control.

The swift and skilfully choreographed response to the Sichuan earthquake in May shows the top leadership was able to react quickly in defining the framework for responding to one of the biggest tests Hu had faced since coming to power (see CHINA: Crisis coverage gives leadership a boost - May 22, 2008). Hu seized the moment to strengthen the state and CCP capacity to reach out to the general population and win over their support. With the outbreak of the contamination of dairy products in recent weeks, once the New Zealand government had raised the issue with the central government, Beijing again acted quickly and decisively to contain the problem. The CCP exercised tight control over the media coverage of the milk scandal, as it did over the earthquake.

Experimentation. With greater self-confidence and increased competence, the CCP under Hu is allowing greater scope for experimentation in finding ways to enable China develop faster:

• Corporatist ideas are taken on board where they appear to work.
• A larger scope is allowed for civil society to operate as long as the CCP can keep it in line when and where required (see CHINA: GONGOs advance the CCP's aims - October 13, 2008).
• Reinvigoration of Maoist or highly modified Confucian ideas has also been adopted where the CCP believes these can enhance its ability to govern or to boost its moral authority.

While such changes are meant to pre-empt democratisation in the Western liberal sense, they incorporate changes that are commonly seen in democratisation. They include:

• expanding good governance practices;
• increasing accountability of officials;
• allowing for a greater scope for civil liberties and for political participation; and
• improving the administration of justice.

Such reforms have increased significantly the party's capacity to deal with new challenges, but they also need to be put in context:

• The Chinese government has not faced any real crisis since 1989. A significant and sustained slowdown in the economy could set off a groundswell of social unrest and dramatically increase political tension and even division at the top of the leadership.
• In the past decade or so the government has benefited from a 'China fever', distorting assessments of China's reality, but prompting foreign investment in China to fuel its rapid economic expansion and put it on a virtuous circle in economic development. When the economy loses momentum the China fever could end and investors may rethink their positions in China, and withdraw capital. Problems that China faces would then be magnified, the virtuous circle turning into a vicious one.