Eastern Oligarchs - English

Will China Survive Pretorianism?

By Stefano Casertano4.04.2012Global Policy

In China, a new power is slowly emerging: Rich oligarchs who test the state’s limits to control the economy from Beijing. And Western expats are only happy to get along with them.

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Foreign observers commenting on China are often accused of “ethno-centrism”: The judgment of foreign customs through a Western lens. It is argued that we from the West simply do not understand that democracy is not a universal value, and that a political system that we characterize as a “dictatorship” might resemble a “planned, coordinated economy” for others. According to this line of thought, it is not our job to criticize. Last year, “we were informed”:http://online.wsj.com/article/SB10001424052702303544604576430162195057084.html by a retired Microsoft COO in the “Wall Street Journal” that the Chinese do it better in any sense and meaning. In relation to freedom of speech, our view is that China has much work to do. But the Chinese wonder why we would not block pornography or anti-government propaganda to protect our youth and citizens. Or, of course, you can safely dismiss these words as personal travel notes after the COO’s trip “from Los Angeles to China to attend a corporate board-of-directors meeting in Shanghai, as well as customer and government visits there and in Beijing”. But in July of last year, “Time Magazine” also “informed us”:http://www.time.com/time/magazine/article/0,9171,2081833,00.html that Chinese income polarization, inequality and speculative bubbles were nothing to be scared of, as “none of these issues is incompatible with substantial expansion for years to come. Headline GDP numbers won’t tell the real story, even if that number is 8% or 9%. The growth rate in many cities is well above that, in the range of 15% to 20%, and that is what matters for the global system.” Yet one could say that if analysts in Europe and the US are biased towards a Western world view, expats in Shanghai may also resent another distorted view: The corrective glasses prescribed by the opticians of the Chinese Communist Party. Maybe it is not the expats’ fault, and maybe the commies’ tactics are not so deliberate, yet it is understandable that people living in a place that has managed to increase its economy by some 800 billion dollars per year may feel excited about it – especially if some chunk of this amount lands into their pockets. Beneath wealth and believing, one should avoid both the distortive glasses of Western conservatives as well as the tinted glasses of post-socialist PR. This is not to say that China is a model to condemn – there are many elements that could serve as inspirations to Europe and the United States. But China’s model has its limits, and they should be pointed out before it is too late, for them and for us. The point is that we have seen many of these expat stories before that praise other political and economic models. In the years before 1975, the Shah’s Iran was booming and Westerners praised the “authoritative” rule of the monarch. In 1977, even President Jimmy Carter “toasted with the Shah”:http://www.youtube.com/watch?v=DqrHQpRHwws calling his country as “island of stability in one of the most troubled areas of the world”. At the time, some 30.000 enthusiastic US expats had found a new home in Iran. The 1979 revolution brought to the surface that economic cannot always provide cover for political deficits. Similar stories (albeit on a smaller scale) unfolded from Africa to South America: In Brazil, Angola, Argentina, Libya, and recently Dubai. In all cases, enthusiastic expats praised the countries’ economic performance but had to pack and leave when political downturns impacted their dividends. Although “political determinism” is to be strictly avoided, it is not surprising that social structures collapse unless economic growth is accompanied by promoting structures of political representation. In some cases – like Iran – the authoritative grip on power had a direct impact on economic performance. Although some analysts believe that China’s tensions will lead to a new revolution (see the “classical” Chinese skeptic “Gordon Chang”:http://www.forbes.com/sites/gordonchang/2012/03/18/chinese-leader-cultural-revolution-coming-to-china/), a more conservative forecast would be that of “pretorianism”: Groups of power will engage in hard fights to control political posts and revenue sources, whether through the control of precious state infrastructure investment, through real estate plans, or – most dangerously – natural resources. It is recent news that a Chinese coal “robber baron” measured his love for his daughter by hosting a “11 million dollars wedding”:http://www.forbes.com/sites/russellflannery/2012/03/27/coal-miners-daughter-chinese-style-media-rips-rumored-11-mln-wedding/ – something hard to believe in our society, which does not believe in marriage anymore. The event can serve as evidence of the surge of a new generation of private rentiers – Chinese oligarchs whose precise origins are unknown. Of course, China is not Russia: the manufacturing sector is much more diversified and sound than the old-fashioned USSR system was in 1991. Nevertheless, the emergence of private oligarchs suggests that state-led policy planning may not be able to control the situation anymore. The infamous dismissal of Chongqing’s padrino “Bo Xilai”:http://www.nytimes.com/2012/03/27/world/asia/bo-xilais-china-crime-crackdown-adds-to-scandal.html?_r=2&partner=rss&emc=rss brought to mind some of the Soviet struggles for Kremlin successions: Bo was sacked just like Lavrentiy Beria had been by Khrushchev in the 1950s. But biased as we are, we may see Bo’s sacking differently: He was not an angel, we might say, but he had engaged in a centralized strategy to check other emerging powers – notably mafia-like organizations – that were shaking the province’s stability. Bo Xilai was Chongqing’s Putin, limiting the emergence of politically engaged oligarchs, just as Putin did with Yeltsin’s groupies in his first years in power. An “Italian expat recently declared”:http://www.linkiesta.it/blogs/bussola-cinese/giornalismo-italiano-e-cina-proprio-non-ci-siamo that this is all right, since party officials in China “lose their post even just for the suspicion that they are involved in some sort of scandal, with no conviction necessary”. Yes, a state of law is darn inefficient.

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