Pallavi Aiyar | The Hindu | April 25, 2006
http://www.hindu.com/2006/04/25/stories/2006042505010900.htm
FOR THE first time in over a decade, both the Chinese intelligentsia
and political establishment are embroiled in an intense ideological
debate about socialism and capitalism, which for long seemed to be
buried by consecutive years of rocketing economic growth.
Substantial inequalities, vanishing provisions for education and
health care, and rampant corruption have combined to create
disenchantment across sections of Chinese society, giving resonance
to the voices of critics of China's economic reform, who represent a
resurgent "New Left."
The strength of these socialist-leaning thinkers was evident when
during the country's annual meeting of its parliament, the National
People's Congress (NPC) in March, critiques by them forced the
Government to delay the approval of a draft law intended to protect
property rights. The critics charged that the new law gave too much
weight to the protection of private property. The most widely cited
opposition came from a jurisprudence professor at Beijing
University, Gong Xiantian, who has been campaigning against the
draft law for the last year or so, charging that it offered equal
protection to a "rich man's car and a beggar man's stick." The fact
that the law does not state that socialist property is "inviolable"
has also come in for particular criticism.
The proposed law had taken eight years to prepare and was intended
to codify the protection of private property that was enshrined in
the constitution two years ago. Its rejection is just one symptom of
the deeper underlying debate about the future direction of China's
economic policies.
In the span of 25 years, China has gone from being one of the
world's most equal, albeit poor societies, to becoming the fourth
largest economy in the world with considerable rich-poor imbalances.
China's gini index a commonly used statistical measure of
inequality where 0 represents perfect equality and 100 perfect
inequality figure of 44.7 is worse even than India's 32.5,
according to the UNDP's 2005 Human Development Report.
Property that used to be taken away from the rich for redistribution
to the poor is today routinely taken away from farmers and given to
real estate developers. According to the Ministry of Public
Security, in 2005 there were a total of 87,000 mass protests across
the country, expressing public anger against official corruption,
illegal land seizures, and unpaid wages and pensions. The number of
such protests has seen a significant increase over the last decade.
China's New Left thinkers have used this background to give force to
their criticisms. "Our primary aim is to deconstruct the illusion of
neo-liberalism in China," says Wang Hui, a leading leftist
intellectual and Professor of Humanities at Beijing's Qinghua
University. Worker's rights, rural reform, health and education, and
re-orientation of the government's SOE (state-owned enterprise)
reform process are the primary foci of the New Left agenda. It is
their belief that the current direction of economic liberalisation
in China has led to a nexus between party bigwigs and business
interests who have plundered the nation's assets under the cover of
privatisation. "Today we are no longer an isolated group of
intellectuals. We have become a broad-based movement with real
support from the people which gives us clout," says Professor Wang.
Indeed, both the rhetoric and policies of China's current leadership
duo, Hu Jintao and Wen Jiabao, appear to mesh to an extent with
those of the New Left. The leadership has thus made tackling income
inequalities between China's rich urban and poor rural areas the
centrepiece of its new five-year plan. Since taking office in 2003,
Mr. Hu has also tried to establish his left-oriented credentials by
extolling Marxism and encouraging research to make the country's
official socialist ideology more relevant to the current era.
Moreover, he has tried to distance himself from his predecessor
Jiang Zemin, who invited private businessmen to join the Communist
Party, negotiated China's accession to the WTO, and stepped up the
privatisation of SOEs.
In the 1990s, first under Deng Xiaoping, who called economic
development "hard truth," and later Jiang Zemin, ideological
discussion about the direction of change was sublimated. During that
time, China laid off over 20 million workers from SOEs in a huge
wave of closures, mergers and privatisations that halved their
number since the mid-1990s.
It is only after Mr. Hu came to power that leftist opposition to
China's reforms has increased. Now, leading proponents of the New
Left including Liu Guoguang, a former vice-director of the Chinese
Academy of Social Sciences, and Hong Kong-based economist Lang
Xianping, charge that privatisation of SOEs through management
buyouts are nothing but asset stripping. As with the property law,
the New Left's criticisms seem to have had an influence on the
decision to suspend the practice of management buyouts, taken in
2005. Whether or not China's resurgent ideological debate will
derail the country's economic growth is another subject for debate.
On the one hand, in a speech to the NPC in March, Mr. Hu declared
that China must "unshakably persist with economic reforms."
However, some scholars are worried. "My concern is that the pre-
eminence given to the income gap issue these days might hijack the
reform agenda, which remains incomplete," says Professor Feng Lu of
Beijing University's China Centre for Economic Research. He cites a
Chinese adage: "If you want to walk a 100 kilometres and have
completed 90 of these, you still have 50 per cent of the distance to
go." "The last 10 per cent in many ways is the hardest," says
Professor Feng citing unfinished business on the reform agenda from
SOE privatisation in key sectors to financial sector reform. He
shares New Left concerns regarding the need to improve education and
health care services but where he differs is in his belief that
simply injecting large amounts of cash from the Centre will not
solve the problem.
China's Government has recently announced that it will spend a total
of 339.7 billion yuan (about $42.4 billion) in rural areas in a bid
to ensure a more equitable distribution of the fruits of the
country's economic successes and create what has been called "the
new socialist countryside." "There is a belief that the crisis in
health care and education comes from their having been left to
market forces. But this is nonsense. Both remain more or less
monopolies of the government and what we really need is an expanded
role for the market in these areas," Professor Feng says.
China's economic boom shows scant signs of slowing down. Mr. Hu
recently announced that China's GDP grew by 10.2 per cent in the
first quarter of this year. Financial sector reform is proceeding,
if slowly. Many local governments are predicting double-digit growth
in their own five-year plans. But the time when reform could proceed
apace without opposition seems to have passed. China today is
witnessing an ideological debate that many had dismissed as no
longer relevant. It has instead proved to be not only relevant but
potentially the key to deciding the shape of the country's future.
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