THIRTEEN YEARS OF JIANG ZEMIN

The likely exit of the CCP General Secretary Jiang Zemin at this 16th Party Congress will mark the first paramount Chinese leader in PRC history to leave his post without top-level internal political turmoil. His “Three Represents”–self-proclaimed to be the grand theoretical paradigm that would keep the CCP up to date–is actually so feeble that it has been very nearly ignored within China, even within the Communist Party. After thirteen years of ruling China, the uncharismatic leader Jiang Zemin has left little impression on the world as to either his character or his vision for the country.

The People’s Republic of China has been undergoing reform for twenty-four out of its fifty-three years, yet its current leader has yet to set forth the final destiny of such a reform with the grand vision one expects or hopes from a leader. Jiang’s predecessor Deng, who initiated the reforms, had a plausible reason for not articulating the purpose of the reform: Deng had to undo Mao’s socialist autarchy while keeping Mao’s dogmatic ideological construct intact. Jiang has faced no such obstacle.

ANYTHING IS POSSIBLE, NOTHING IS SURE
There is a benefit to being ambiguous as economic policy departs from rigid socialist principles. “Crossing the river by feeling the stones” was the tactic early reformers used. The merit of such an approach was that, in terms of changing the old economic system, “anything was possible.” Yet as time goes on, the downside of “anything is possible” has become more obvious: That is, “nothing is sure.”

It is hard to estimate the exact cost of this uncertainty to China and its people. Nevertheless, it is real and present. Many of the sector reforms stagnate because they must maintain the old ways based on conditions that no longer exist. Most noticeably, in the rural areas, land reforms could not move beyond the barrier that the “socialist state” was supposed to own 100 percent of all lands. Furthermore, rural residence registration continues to tie millions of rural laborers to overpopulated lands. That populace–70 percent of China’s total population–has no social security or welfare protection. The government has been “conducting research” since 1986 without a solution. In the meanwhile, the “collective welfare” system established in the 1950s continues to erode.

Similarly, in urban reforms, because the nature of the institutional shifts is unclear, social welfare reforms have wandered aimlessly. They are now in total disarray. What the government currently owes in welfare to urban employees alone is estimated to be RMB2-3 trillion (US$250-375 billion). [1] The Workers Retirement Fund, only four years old, has already created a total deficit of RMB200 billion (US$25 billion), counting twenty-five of thirty provincial funds. [2] Many experts are calling for basic principles and objectives for social security to be established at the “constitutional level.”

China’s private sector economy has enjoyed tremendous growth over the past thirteen years. At the same time, however, private firms have long maintained an awkward relationship with the “socialist state with Chinese character.” Red tape and discriminatory practices against private firms are extensive, from finance to taxation. Of the 1,216 companies listed in China’s stock exchanges, only eighty-two are privately owned; the remainder are state-owned enterprises (SOEs) that list only a minority of their shares. [3]

Under Jiang’s rule, making practical choices as they come up, the Communist Party has become an all-powerful authoritarian entity that responds to market forces. Despite its commitment to the WTO, China under CCP leadership is still far from committed to a free market economy, and not just in name. For example, as long as it is profitable, rent-seeking for SOEs is not only permissible, but exactly what the SOE reform intended in its commitment to “strengthen state property.” Director of the State Economic and Trade Commission Li Rongrong was quite pleased recently to announce that, from 1989 to 2001, total SOE revenue grew from RMB1.1 to 4.4 trillion. This annual 12.25 percent growth far exceeds the corresponding 9.3 percent GDP growth. [4] There is no evidence that the SOEs have become so reformed that they are more efficient. Instead, high prices and bad services have become a “way of life” for Chinese consumers. From Hong Kong, a telephone call is typically three times more expensive to Beijing as one to New York. Similarly, Chinese domestic airfare is, in terms of dollars per mile, one of the most expensive in the world. Again, the situation evidently arises from the ambivalent goal of the SOE reforms: Are they truly meant to commit SOEs to free market competition, or to tactically reconstruct SOEs so they can respond to market forces selectively?

THE TRADE OFF
Recent Chinese history suggests that, in the absence of checks and balances, greater visionaries may be capable of creating even greater atrocities. Under Mao, there were an estimated 50 million “unnatural deaths” during several of his grand social campaigns, designed according to his visions. Deng Xiaoping ruthlessly crushed the people’s demands for greater freedom and democracy, both in 1979 and 1989, according to his vision for maintaining absolute power for the CCP. So, not being a grand visionary may, after all, not necessarily be such a bad thing.

Truth be told, Jiang’s biggest contribution to China as a leader might prove to have come from what he could not do. That is, he was unable to reverse the direction of economic reforms in line with Deng Xiaoping’s vision, and instead learned to accept it. Not that he hadn’t tried: With the support of Chen Yun (a powerful member of the old guard who had consistently resisted Deng’s vision for reform), from 1989 to 1992, he brought about a short-lived reversal of economic reforms that were to collapse, and quickly, after Deng’s now-famous “southern tour” of 1992. Hardly anyone blamed Jiang for the reversal: He was, after all, still a newcomer to Beijing. Deng and the rest of the old guard were still grasping for supreme power as they contested each other’s visions for the country’s future. Nevertheless, having to be coerced by Deng Xiaoping in 1992 to accept continued economic reforms left an unforgettable imprint on the image of Jiang as a visionary leader.

As continued economic reforms gave rise to growth and prosperity, Jiang appears to have learned his lesson. There is little doubt that he helped to make the final decision for China to join the WTO, despite heated and open domestic opposition.

In apparent wholesale acceptance of Deng’s vision, including a conservative stand on political reform, Jiang has shown a determination to trade off the Chinese people’s freedom, rights and dignity for “political stability.” His decision to crack down on the seemingly benign meditation group Falun Gong is not only unwise but blatantly cruel. The resulting unnecessary suffering only serves as a reminder of the destructive capacity of an authoritarian system.

It is beyond doubt that after thirteen years of Jiang’s rule, there is less political freedom in China now than there was in the late 1980s. Political reform has suffered a major setback. Some may ask why this is still important when China has achieved such a high level of economic growth without it. The answer (even in entirely economic terms) is that without political reform, the CCP would always be in control of the markets, defeating the purpose of the economic reforms established by the spirit of the WTO with which China intends to comply. Political reform is the very process that Chinese leaders must undergo to set the final destination of China’s reforms. Unfortunately, it is one process Jiang has consistently managed to avoid.

It is believed that in the imminent 16th Congress, political reform will be mentioned, as it was in the 15th. In doing so, General Secretary Jiang will be trying to convince the nearly 1.3 billion people of China that he is still doing his job. But his actions have spoken louder than his words.

NOTES

1. China Economic Daily, Development Research Center of the State Council, August 13, 2002.

2. Lin Zhifen. “Regional Differences of Chinese Social Security,” Development Research Center of the State Council, September 20, 2002.

3. “Private firms in China–Set them free,” The Economist, October 10, 2002.

4. Li Rongrong. “SOE’s Reform Obtained Important Results,” China Economic Daily, October 15, 2002.

Baopu Liu–a specialist in Chinese politics and foreign affairs, and a Beijing native–writes political commentary for major publications in Hong Kong and the United States.