Power, corruption and lies.

January 8, 2007 6:58 AM

Power, corruption and lies.An article in which one Will Hutton discusses China's weakness.
posted by thirteenkiller (32 comments total)

Great Album.
posted by Skygazer at 7:13 AM on January 8, 2007 [2 favorites]

Zhu Houze, a former party propaganda chief - published a letter condemning the approach: "History demonstrates that only a totalitarian system needs news censorship, out of the delusion that it can keep the public locked in ignorance," they wrote. Far from ensuring stability, they continued, such media repression would "sow the seeds of disaster".

History also demonstrates that there are other ways to obtain a similar effect, under the guise of self-censoring, such as buying out media , leverage frequency licencing, punishing certain kind of speech with fines, suing people into financial trouble and silence , forcing newspapers/media to be runned by people who belong to corporation/unions of journalists....an apparently indipendant extention of whoever is in charge at any moment.

But if you can't shout their mouth, you can fill their head with crap
posted by elpapacito at 7:27 AM on January 8, 2007

China's own claim - that it is building a very particular economic model around what it describes as a socialist market economy - is dismissed as hogwash,

By whom? China seems to be be "building a very particular economic model" and they can call it what they like.
posted by three blind mice at 7:46 AM on January 8, 2007

Corruption has become part of the system's DNA, now threatening the integrity of the state.

Corruption has been part of Chinese culture since Confucianism, if not before. Corruption has been part of the system's DNA well before Maoism came around.

But to the credit of the Chinese government, they are attempting to do something about it. The key is whether the arrests are symbolic or intended to address the problem, and only time will tell which is the case.
posted by Blazecock Pileon at 8:00 AM on January 8, 2007 [1 favorite]

By whom? China seems to be be "building a very particular economic model" and they can call it what they like.

Yes, they can call it what they want, because the terms socialist and market ecomomy have no meaning, and if they do the chinese have no idea what they mean....
Bull, they want to call it a market economy so the West will feel more comfortable investing in their economy and they use socialist so people can ignore the differences as indicative of their commitment to socialism.

This article makes it clear that the state not only dominates the private sector the interfere with its capability to function and shackle the nation with corruption. I don't believe what is going on in China can be called a market economy if we are going to be intellecually honest about the meanings of those words , let alone socialist.
posted by Rubbstone at 8:01 AM on January 8, 2007

Exiled activist Wan Runnan (万润南) summing up a lengthy piece on why he doesn't expect the Party to lose its grip on power any time soon:

1. From the lessons of the former Soviet Russia and eastern Europe, the Communist Party is more firm and clear about suppressing the opposition;

2. After forming alliances, the Communist Party has established a relatively stable international environment;

3. The continuous economic development has provided adequate resources for improving their ability to govern;

4. Under the pretext of "we won't argue," the Communist Party has actually totally abandoned their former ideology;

5. The Communist Party has become a political party that represents wealthy people and the social elite. This newly created middle class is the foundation of stability in Chinese society today;

6. The confirmation of their model for power succession has eliminated the concerns about their ability to maintain government.

It is said that the existence of something includes two aspects: the existence of the spirit and the existence of the body. Then, in terms of spirit, the Communist Party no longer exists. It is finished because it has killed itself. In terms of body, it is still there but without a soul. They can now speak of "being based on people" and "eight honors and eight shames", but most of these spiritual resources can be readily found in the governing philosophy of various Chinese rulers in history. In the predictable future, I do not see any likelihood for a sudden collapse of the Chinese Communists.

--Why The Chinese Communists Are Not Doomed To Finish Yet
posted by Abiezer at 8:08 AM on January 8, 2007 [1 favorite]

Corruption has become part of the system's DNA, now threatening the integrity of the state.
Name a state in which corruption doesn't become part of the system.
posted by Thorzdad at 8:22 AM on January 8, 2007

The key is whether the arrests are symbolic or intended to address the problem, and only time will tell which is the case.

Anecdotally, I heard that Chen Xitong always complained that his fall from grace was politically motivated rather than a result of his corruption.
I'm not, of course, in any position to know, but the thought does strike you that it would be fairly hard to hold any kind of senior post in China, eschew all corruption, and actually get things done; certainly at the points in your career when you were at county or district levels of government. So you do wonder why some people's dirty linen is getting washed before others.
Of course, many high-profile cases like the recent troubles in Shanghai were ongoing and egregious corruption, so I wouldn't say the campaign is entirely insincere, but you sense that there is a point at which the party won't attack too hard at the risk of alienating its base and so undermining its own power.
posted by Abiezer at 8:41 AM on January 8, 2007

Thorzdad: the level of corruption the article tries to talk about is an order of magnitude beyond what most stable countries are capable of experiencing. Boss Tweed is small potatoes in comparison; it's like saying "everyone has bacteria in their digestive system" to someone who's dying of invasive bacterial necrosis.

...that being said, I don't think the article really proves the point. Merely listing a few instances of staggering corruption (where people were caught & punished) doesn't show that the corruption is catastrophic. It seems to me the article is saying "we only know of these cases, therefore the reality must be far worse" when the reverse could just as easily be true.
posted by aramaic at 8:48 AM on January 8, 2007

FWIW Morgan Stanley's analysts have no doubt that the Shanghai arrest was a political/economic maneouvre (economic because Chen Liangyu was refusing to obey the central party edicts to slow the economy). Some interesting commentary that touches on the arrests here, here and here.
posted by patricio at 9:19 AM on January 8, 2007

Interesting reads, patricio. Fits with some of the speculation about the removal of Qiu Xiaohua from the National Bureau of Statistics, too.
posted by Abiezer at 9:42 AM on January 8, 2007

Maybe Americans should fix up America a bit first instead of criticising other countries so much. Not that China's not eminently criticisable, only that Iraq proves what happens when the corrupted try fixing the corrupted. (As did, oh, Napoleonic Europe and the Warsaw Pact, off the time of my head; "Those who don't remember...")
posted by davy at 10:06 AM on January 8, 2007

People vastly overestimate the structural cost of corruption, IMO. There is corruption everywhere and the idea of getting rid of it is as insane as getting rid of drug use. And a "war on corruption" is about as good of an idea as a "war on drugs".

Rather, systems should be setup to avoid 'corrodibility' and the number of points where people can siphon money should be minimized.

That said, beyond a certain point corruption becomes too expensive, and renders the state unsustainable. Is a 16% corruption rate sustainable for China? I don't know.

I do think the U.S. corruption level has gone way up in the past few years, way beyond the sustainability point.
posted by delmoi at 10:10 AM on January 8, 2007

Oops, forgot a </b>
posted by delmoi at 10:14 AM on January 8, 2007

I don't believe what is going on in China can be called a market economy if we are going to be intellecually honest about the meanings of those words , let alone socialist.

Then you are misinformed about the definition of a "market economy" and "socialism." A socialist market economy would be one where the productive property (capital) is held by the public or state, but allocation decisions are made by market mechanisms. Socialist market economies have, in the past, included hierarchical corporate divisions of labor, just as the capitalist market economies do. The main difference between these economies lies within what class tends to emerge as the dominant, ruling elite.

Just because central planning was the allocation mechanism of the USSR's socialist economy doesn't mean that every socialist economy is wedded to central planning. In fact, I believe that is the nature of socialist "market reforms." If you'll recall, privatization--the transfer of capital from public to private hands-- came much later than market allocation, in the USSR/CIS's recent political economic transition.

As for China, i don't know much, but perhaps there's something to this author's theory of "Leninist corporatism." I suppose we'll have to buy the book, or wait till it hits the file sharing distribution network.

I think you are proving the author's point that "the temptation to see [China's] success as proof positive of your own prejudices is overwhelming."
posted by eustatic at 10:31 AM on January 8, 2007

I guess i should add that national economies, whether the govt calls itself capitalist or socialist or whatever, are usually of mixed ownership. so the utility of academic categories to describe the economies of actual nations seems limited, tho useful.
posted by eustatic at 10:47 AM on January 8, 2007

Here are a few pertinent links: A tetchy "debate" between Will Hutton and Meghnad Desai, China in Revolt, Rethinking ‘Capitalist Restoration’ in China and China, India Superpower? Not so Fast!

I have had for a while now, the vague fear that China is heading for a disastrous collapse, sometime around 2010. I recognize that the reasons for my foreboding aren't very good, and I hope my dread is unfounded, but following the situation there those famous line by Yeats spring all too easily to mind: "

Turning and turning in the widening gyre
The falcon cannot hear the falconer;
Things fall apart; the centre cannot hold;
Mere anarchy is loosed upon the world,
The blood-dimmed tide is loosed, and everywhere
The ceremony of innocence is drowned;
The best lack all convictions, while the worst
Are full of passionate intensity.


I'll end by noting that in my experience almost all Cassandras turn out to be wrong, and rightfully ignored.
posted by Kattullus at 11:07 AM on January 8, 2007

I have had for a while now, the vague fear that China is heading for a disastrous collapse

Personally, I'd worry less about the economic costs of corruption, and more about the Three Gorges Dam failing under load. If it collapses, everything standing between that water and the ocean is gone.

I haven't sat down to really look at the situation recently, but I'm more than a little nervous about it -- it's pretty easy to sneak in substandard concrete if you want to (just ask the Big Dig), the profit incentive to do so is huge, plenty of people have already gotten in trouble on that project, and the rush to accelerate cost recovery by accelerating the schedule (cf. filling in 6 years not 10) might have been a step too far.
posted by aramaic at 11:40 AM on January 8, 2007

aramaic: Oh great! Another thing to worry about in China, and I thought fervent nationalism, economic collapse, ethnic clashes, regime desperation, linguistic barriers and other such issues were plenty!

Thanks a lot, now I won't get a good night's sleep for the rest of the decade :)
posted by Kattullus at 11:51 AM on January 8, 2007

Isn't it in the West's best strategic interest for China to be hobbled by corruption and innefficiency, thus keeping them too busy to get more powerful and messing with our hegemony?
posted by Dizzy at 11:55 AM on January 8, 2007

There was a study that correlated increases in mentions of the word "recession" in mass media as a predictor of actual recession. I wonder if a similar study exists to correlate rises in references to Yeats' "The Second Coming" in the blogosphere (or just in MeFi) with the actual incidence of, um, whatever impending social catastrophe it evokes? Of course if it's apocalyptic and effectively world-ending, the total historical incidence for any given civilization at any given time is either zero or one, which is a poor sample base from which to draw any very interesting correlations.
posted by George_Spiggott at 11:59 AM on January 8, 2007

Isn't it in the West's best strategic interest for China to be hobbled by corruption and innefficiency, thus keeping them too busy to get more powerful and messing with our hegemony?

No, not really. We've got a lot of money invested over there.
posted by thirteenkiller at 12:06 PM on January 8, 2007

Dizzy: the US relies on the continuous growth of the Chinese economy to float the US economy. China buys US debt; if that stops happening, Bad Things happen. Maybe even Very Bad Things, depending on who you ask.
posted by aramaic at 12:10 PM on January 8, 2007

Yikes. Thank you for making that clear to me.
posted by Dizzy at 12:26 PM on January 8, 2007

aramic - that's questionable (but isn’t everything in economics?) Chinese ForEx reserves surpassed Japans record US$1.00 trillion. It's estimated that 70%, or US$700.00 Billion, is held in US dollar denominations. Most of that is invested in US T-Bills, Fannie Mae and Freddie Mac. This is due, in large part, to the RMB's 15-40% undervaluation (don't get me started on this). It's theorized that if the Chinese were to liquidate these assets there might be a 1-2 percent spike is US interest rates. Pretty painful but not world ending.

But remember - the PRC is as dependent on the US (if not more, we are their largest export market) as the US is on the PRC. Our relationship is at times rocky, but I'd argue that dialogue and mutual understanding could leave both in good positions...
posted by Dr.James.Orin.Incandenza at 12:42 PM on January 8, 2007

China: Still beating you at capitalism.
posted by Artw at 1:13 PM on January 8, 2007

Oh I agree: the US & China need each other, and not just for economic reasons. Indeed, the main reason I'm so worried about the Three Gorges Dam isn't the initial death toll (China has, after all, a history of staggering death tolls) but rather the potential follow-on effects for the global economy, and the poor political choices that might ensue.
posted by aramaic at 1:23 PM on January 8, 2007

Three Gorges... Well, other than structural deficiencies, there's always this too.
posted by Dr.James.Orin.Incandenza at 1:44 PM on January 8, 2007

They should change the respective names to Rich People's Republic of China and the Chinese Tyrannist Party and get it over with.
posted by davy at 4:09 PM on January 8, 2007

What amazes me is that even with this 'corruption tax' (not unlike the 'mob' tax in New York's garment and construction industries in the past), it is still cheaper for products to be built in China and shipped rather than producing them in the U.S.
posted by UseyurBrain at 4:41 PM on January 8, 2007

Thank you for this extremely interesting article and thread, thirteenkiller.

I worry about China's weak and opaque banking system and the apparent fact, emphasized in the article, that what banking system they have is not involved in all that many economic transactions:

Davin Mackenzie, managing director of iVentures, which is based in Beijing, says that almost no private company, however well run, wants to leave the opaque, informal world of guanxi personal relationships in which the main aim is to hide revenue, cash, and profits from potential political direction. The vast majority, he says, run themselves out of the "cash box in the back of the Mercedes".

If this is true, a high and rising tide of cash is floating all Chinese boats right now. What is the ultimate source and composition of this ocean of cash? It could be dollars from the US balance of payments deficits and from dollars being shed from prudently run currency reserves all over the world (displaced by Euros and Rubles{?}). If the economic tensions building up in China are released in the kind of catastrophic quake Hutton is forecasting, will an enormous volume of dollars suddenly flood back into currency markets all over the world? If so, it would seem likely to trigger the run on the dollar which is the nightmare scenario of so many economic analysts.
posted by jamjam at 2:21 PM on January 9, 2007

China and Russia have cast a double veto in the UN Security Council, to stop a US draft resolution calling for an end to human rights abuses in Burma.
posted by homunculus at 5:47 PM on January 12, 2007