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UPDATED: March 23, 2015 NO. 13 MARCH 26, 2015
Commanding Confidence
Economic strength and bold leadership typify modern China
By Josef Gregory Mahoney

Prior to China's reform and opening up, there were often fierce debates between senior Chinese policymakers on whether a new policy or reform indicated that "politics was in command" or conversely, "economics." While these terms are politically archaic today, reflecting on them briefly can provide a useful rubric for parsing Premier Li Keqiang's comments related to economic concerns during his news conference following the recent "two sessions."

First, a brief explanation of these terms: prior to reform and opening up, which is frequently dated as beginning in 1978, many scholars argue that the dominant position in China was one of "politics in command." The term itself was prominent as a slogan during the "great leap" campaign in the late 1950s and resurfaced variously during the "cultural revolution (1966-76)." It conveyed, in short, the idea that a revolutionary Party should be one that subordinates economic policymaking to the needs and designs of revolutionary politics. In effect, one should not become too invested in a particular economic model or dependent upon returns therein, since the goal of revolutionary politics included transforming that model. As a matter of practice, this meant revolutionary political ideals and values were afforded a relatively privileged position by policymakers when pursuing economic development and reforms, and in this respect one can point to various policies that led too quickly in the late 1950s to collectivization and the "great leap," as well as the effects of subordinating economic goals to political ones during the "cultural revolution." But as China moved assertively beyond that era and into the reform and opening up period that began in the late 1970s, some scholars began to suggest that the rational kernel of Chinese political thinking had been turned right side up--that China had entered a new period of "economics in command." This assessment was linked fundamentally to the developments that emerged during the all-important Third Plenary Session of the 11th Central Committee of the Communist Party of China in December 1978, which reestablished another principle of Mao Zedong Thought that became a hallmark of Deng Xiaoping's reform and opening-up campaign--that "practice is the sole criterion for testing truth." As the prominent Western specialist on Chinese politics, Stuart R. Schram wrote, this "not only made good sense, [it was also] doctrinally sound."

But did this mean that economics was not in command? When addressing directly in 1984 while reflecting on the still-early years of reform and opening up, Schram and a few others assumed a middle position. Since then, however--following China's long run of incredible growth rates, its 10-plus years of WTO membership, its prominent and still-rising position in the global economy and related developments, in tandem with political emphases during the third and fourth generations of CPC leadership--the leading Western narratives about Chinese developments over the last 30-odd years have concluded that economics is in command, and that China's political and economic trajectory is one that must ultimately culminate in a position akin to those found in Western liberal democracies, e.g., the primacy of pragmatism over Marxism, the so-called "end of history" theory popularized in part by Francis Fukuyama following the disintegration of the Soviet Union, the idea that political legitimacy of the Party is now tied precariously to maintaining high growth rates, and so on.

Such thinking has always carried the sort of hubris common to Occidentalism, which has long been rooted in the sort of West-is-best thinking that emerged in Europe during the 18th century and subsequently afflicted humanity with nationalism, capitalism, imperialism and fascism, among other -isms, that confronted China specifically with various existential crises that ran, more or less, from the mid-19th century to certainly the mid-20th century and perhaps beyond. As I have argued elsewhere, a stronger case can be made that political legitimacy and stability in modern and contemporary China rests primarily on whether the government is assessed by a critical mass of its people as having served effectively enough as a responsible steward of the nation. While such an assessment would undoubtedly be influenced by economic performance--something that was well-known by the Chinese even during the Shang Dynasty more than 3,000 years ago when the concept of political and social harmony was understood as necessitating the production of enough grain to meet the people's needs--it was also understood then and now, to appropriate but twist a Western idiom, that "man does not live by bread alone." Indeed, the long-standing goal of reform and opening up has been to achieve the Chinese dream of building as comprehensively as possible a xiaokang society by 2020, i.e., a "moderately prosperous society," one that balances economic growth with other values that are frequently at odds with maintaining high growth rates, including promoting social equality, building the rule of law, and solving environmental problems.

More recently, Chinese policymakers have encountered a number of emergent challenges including, increasingly: having to come to terms with bad debts that originated in part with efforts to contain fallout from the U.S.-driven global financial crisis in 2008; continuing and deepening a much needed and long overdue Party rectification campaign in the form of President Xi Jinping's signature anti-corruption drive; beginning to restructure and rebalance the Chinese economy in ways that initiate the difficult transition of moving from an export-led to domestic-consumption oriented economy; and resisting developing an unsustainable addiction to easy money policies and other forms of economic stimulus that stick more with the past than move toward the future. It is with these political and economic contexts, past and present, that we can better understand Premier Li Keqiang's press conference remarks, which tilted in the direction of discussing economic topics, but also touched on various other concerns and associated political challenges.

While much of what Premier Li said before, during and after the meeting dovetailed longstanding Party rhetoric with the new political discourses that have emerged from President Xi's ongoing efforts, perhaps the most powerful message from the news conference was not mentioned directly but should have been clearly obvious to viewers, namely, the premier's easy confidence and the extent to which he seemed to enjoy meeting the press and addressing difficult questions. Taken in tandem with the messages that were articulated, this confidence conveyed an enthusiasm for solving difficult problems and the conviction they would be solved. In light of the outstanding political challenges that Xi-Li team outlined with they took power two years ago, the premier's poise offers a positive sign that the central leadership is increasingly confident that it can fully handle what it has perceived as being the Party's greatest threat, i.e., the Party itself. Many have pointed positively to early returns from these efforts, indicating the Xi-Li team has aggressively confronted the Gordian knot of endemic corruption, entrenched special interests and factional divides that had muddled policymaking, stymied needed reforms, sapped economic performance and eroded public confidence.

These points are in line with the most striking quote from Premier Li's remarks. Although it has been widely reported it bears repeating here: "The government is reforming itself. Vested interests will be upset. This is not nail-clipping but taking a knife to one's own flesh. We are determined to keep going until the job is done." This comment, when added to Xi and the Party's top anti-graft official Wang Qishan's remarks elsewhere that the struggle for reform and against corruption will be, essentially, unending, has elicited a number of positive responses from unexpected sources. Foreign Policy's senior economic affairs editor, Daniel Altman, for example, gushed enthusiastically following Premier Li's statements throughout the "two sessions." Contrary to many other Western observers who have worried that ongoing reform efforts and the anti-corruption drive have made officials and businesses too hesitant to engage in the sometimes rough and tumble if not low down and dirty affairs of commerce and governance, Altman has argued that China is in a unique position to create and possibly sustain a perpetual culture of reform, the sort that would be impossible to achieve in Japan, the United States or Europe, which have become constrained by longstanding political and economic cultures, legal frameworks, entrenched special interests, and so on.

Altman's comments deserve serious consideration, especially when recalling that the key characteristic of modern China and indeed, the CPC, is the incredible capacity to innovate political and economic solutions to a broad range of problems, including many that were absolutely more difficult than those faced today. If we recall, in other words, that the dissolution of the Qing Dynasty (1644-1912) resulted substantially from its inability to reform itself, i.e., to change, while the hallmark of the Party's leadership has been its revolutionary capacity to change itself and the nation again and again, then we might begin to understand that Premier Li has argued, to refresh and earlier assessment, is not only logical, it's doctrinally sound. Of course, this does not mean that such promises can be guaranteed or that they will be easy to achieve, but these points were also underscored by many of participants in the "two sessions" part, especially by Premier Li himself.

Nevertheless, however difficult it might be to hit that growth target, Premier Li has insisted that a 7 percent annual growth rate is not only possible this year, it will be possible for years to come. One reason this might be the case, a reason that Altman neglected to mention, can be found in another remark that was best captured in a post-conference article from China Daily: "Refuting the claim that China has surpassed the United States as the world's largest economy through 'taking a free ride of the United States,' Li said China's average per-capita GDP is only ranked 80th in the world, and China still has 200 million people living under the World Bank's poverty line of $1.25 a day." As Premier Li then said directly, "China is still in every sense a developing country." This is a key point of differentiation between China and developed economies in Japan, the United States and Europe: In China, there remains both an incredible need and capacity for development and change. It is no longer a simple question of whether politics or economics is in command, but a synthesis of the two in the form of a Party that is recommitting itself confidently to leading China forward through the numerous contradictions and challenges associated with constructing a socialist market economy.

The author is Professor of Politics and Director of the International Graduate Program in Politics at East China Normal University

Copyedited by Kieran Pringle

Comments to zanjifang@bjreview.com

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