This is the first article of my ‘CCP Congress 2017’ series which will explains the rotational power succession and offers a systematic, precise and concise understanding of the governance in China.
Five new members enter into the Politburo Standing Committee. They are Li Zhanshu 栗戰書 (aged 67), Wang Yang 汪洋 (62), Wang Huning 王滬寧 (62), Zhao Leji 趙樂際 ( 60), and Han Zheng 韓正 (63).
Assuming the norms will work in 2022 as usual, only three of them can serve the second term but none of them can serve as many as three terms like Hu Jintao and Xi Jinping (one term as apprentice and two terms as state Chairman).
While many pundits will continue to spend time and effort on studying the so-called factional struggle, personal ambition, group infighting etc and making mistakes on guessing, I instead analyze the trends and institutions through which we can ascertain China’s impacts on international politics and world economy in future.
I begin from ideology. China’s Xinhua News reported on Oct 22, in the middle of the Party Congress, an interview with the Russian Communist Party leader Gennady Zyuganov. “My comrades and I have no doubts that China is able to achieve its ‘two centenary goals,’ said Zyuganov. “The ‘two centenary goals’ refer to building a moderately prosperous society … and building a modern socialist country … by the centenary of the People’s Republic of China, which was founded in 1949.”
To some advocates of Capitalism, ‘prosperous’ may sound incompatible with ‘socialist’. Many scholars, especially the Marxist intellectuals, have been looking for clues on what went wrong in the Soviet, socialist and communist countries in the 20th century. While you may find Terry Eagleton’s 2011 book “Why Marx was right” interesting, I would say the only realistic step to take is to have an in-depth understanding of the ‘Socialism with Chinese characteristics’ at work — the ‘means of production’.
It can be illustrated by a simple picture. In China, the energy, steel and shipping sectors are dominated by state-owned enterprises (SOEs). These SOEs are listed on local and oversea stock exchanges and there are minority shareholders including non-Chinese investors. However, the majority shareholders are the State Council which represents the state. In other words, it is still a form of public ownership of the means of production.
When the shipping rates (including the dry bulk cost) fell sharply after the sub-prime crisis, the carriers such as COSCO incurred huge losses but the energy and manufacturing sectors gained more profits from less transport costs. In China, it means transferring money from one pocket to another. When the coal and oil prices fell, the oil producers earn less but the steel producers and ship builders benefit from it, thus another pocket money transfers.
Whatever form it makes, the overall economy grows steadily when the means of production (“the instruments and the subject of labour” — Karl Marx, not the ‘factors of production’ as stipulated in Western economics) are owned and managed by the state.
An American Enterprise Institute economist estimated that “the public share of fixed investment in the first quarter of 2016 is near 60 per cent. Data from 2013 show the public sector still accounting for only 30 per cent of total firms but roughly 55 per cent of assets, 45 per cent of revenue and 40 per cent of profits.in 2016…”
I am not a Marxist, only have read the basics. However, given China’s success in surviving the global economic crises one after one, and growing steadily on one hand, and the wrong forecasts about the collapse of China’s economy based on Western economics on the other, I hold the point that Beijing may have been right in controlling the means of production to tune the economy. While the debt issue is being used by the ‘financial bears’ for short-selling excuse, I am cautiously optimistic with China’s economic strength and rooting out of poverty by 2020. The two centenary goals are within reach.
My next article will study the rotational succession mechanism.
Two books are good for reference:
Gao Yuning (2012), “China as the Workshop of the World”, London and New York: Routledge.
Huang Yiping and Yu Miaojie (2013), “China’s New Role in the World Economy”, London and New York: Routledge.
The opinions expressed are those of the author, and not necessarily those of China Daily Mail.