Colombo, August 24: To the outside world, China is a monolith, a dictatorship brooking new opposition whether in word or deed. It is acknowledged as an economic power and a technological giant which has also successfully eradicated mass poverty in a short span of time. But it is still portrayed as an undesirable and unstainable model that developing countries in Asia, Africa and Latin America ought to be wary about.
However, according to economist Prof. Pranab K. Bardhan of the University of California, Berkeley, many of the good and bad features of the Chinese system of governance are found in countries designated as democracies.
Efficiency and goal-orientation are common to China and the Western democracies. But at the same time, China and the democracies share flaws like corruption, and the nexus between politicians and civil servants and businessmen and civil servants, Bardhan says in his 2020 paper in China Economic Review.
China Devolves Power
On the positive side, China gives substantial financial powers to its bottom-tier territorial-administrative units though, on the whole, it is a centralized authoritarian state. Chinese Bottom-tier territorial units are allowed to grow their economies independently and their civil servants are given opportunities to promote economic development and revenue generation. These skills come in handy when they move up the ladder to the provincial level and beyond, though in the higher echelons, links with political (Communist party) leaders become critical, Bardhan says.
It is a fact that the majority of the bureaucratic staff in China are members of the Communist party, but ideological qualification is certainly not the sole criterion for recruitment to or promotion in the civil service. In fact, the Chinese bureaucracy is a meritocracy, Bardhan affirms. avers. In fact, China has a long history of recruitment through examinations.
At least at the lower levels of the territorial administrative structure (say at the district and town levels) civil servants are assessed on the basis of their contribution to increasing the local GDP and revenue collection. This is helped by the financial devolution system in China.
“Sub-provincial levels of government spend more than half of total government budgetary expenditure, compared to about 3% in India. Local governments can raise taxes and invite investments, “ Bardhan says.
“In comparison with other developing countries, the Chinese local government is much more involved in local business development, not just in public services delivery. A few years back, when the private automaker, Zhejiang Geely Holding Group, bought up the Swedish car company Volvo in a widely publicized move, much of the money was actually provided by the local municipal government—something unthinkable, for example, in India,” he adds.
Quid Pro Quo Transactions
A 2019 study by T. Chen, J.K. Kung (Busting the “princelings”: The campaign against corruption in China’s primary land market) study examined over a million land transactions between 2004 and 2016 and found that provincial party officials had sold government land to firms linked with politburo members at a 60% discount. The discount-giving officials got rewarded with promotions. The larger the discount, the greater the chance of promotion, the study found. Here Bardhan draws attention to the fact that quid pro quo transactions between government officials and party functionaries and businessmen are facets of administration in democracies too.
Ill-gotten wealth is stashed away overseas, something that is common in Western-style democracies too. Susan Lawrence and Michael Martin, authors of Understanding China’s Political System, produced by the Congressional Research Service in 2013, refer to a 2011 report released by China’s Central Bank which estimated that from the mid-1990s to 2008, corrupt officials who fled overseas took with them US$ 120 billion in stolen funds.
“In a 2012 report, Global Financial Integrity, a Washington DC-based research and advocacy organization, estimated that total illicit financial flows out of China in the decade from 2001 through 2010 amounted to US$ 2.74 trillion, with US$ 420 billion leaving China illicitly in 2010 alone.”
“Transparency International ranks China 80 th. on its Corruption Perceptions Index, with the top ranking countries being the least corrupt. China ranks just below Sri Lanka and above Serbia. The United States is ranked 19 th.” Lawrence and Martin say.
In China, there is a frequent interchanging of positions between executives in public sector companies and the party’s Central Committee. Some of China’s richest private businessmen are members of the National People’s Congress and the People’s Political Consultative Conference, an important advisory body. The average net worth of the richest 70 members of the National People’s Congress is several times that for the richest 70 members of the US Congress. In this sense, China is more of a plutocracy than the US!
After he took over as Communist Party General Secretary in November 2012, Xi Jinping identified corruption and bribery in the party as “pressing problems.” He pledged to “work with all comrades in the party, to make sure the party supervises its own conduct and enforces strict discipline.” However, critics point out that the party’s insistence on supervising its own conduct, rather than accepting supervision from outside, has only enabled corruption to flourish.
Lawrence and Martin quote a 2012 article, in which the Vice President of China’s Supreme Court rued the fact that for officials across China, economic development is “the first imperative,” and preserving stability is “the first responsibility,” whereas ruling lawfully is a “second or third” tier consideration. Civil society groups have long lobbied for a greater role in monitoring enforcement of rules and regulations, but the Communist party continues to resist, fearing empowering groups outside its control.
Lack of Free Media
What China lacks in contrast to democracies, is an open system that encourages a free-spirit, critical and creative thinking. The absence of a free media suppresses reporting of corruption and maladministration. The stress is on conformity and not creativity. In the absence of free reporting, the authorities tend to panic when a flaw is finally and accidentally discovered. The state then resorts to extreme and even draconian measures as it did after it discovered the existence of the corona virus.
China has debated democratic reforms but the basic tenet has been that the supreme power of the party cannot be bartered away for anything including democracy. Lawrence and Martin quote what National Peoples’ Congress chairman Wu Banguuo said in March 2011 to illustrate this. Wu said that China’s leaders had made a solemn declaration that China will not employ a system of multiple parties holding office in rotation. Wu also ruled out the separation of executive, legislative, and judicial powers, and any adoption of a bicameral or federal system. China would risk an “abyss of internal disorder” if it deviated from the “correct political orientation,” Wu warned.
However, despite the corruption and other imperfections such as the lack of Western-style democracy, the Chinese bureaucracy is generally committed to excellence. According to Bardhan, officials who had worked from the bottom rungs in the districts and below, tend to be competent because they had been promoted from the lower to the higher level for showing results in terms of GDP growth and revenue collection. There is a balance between performance and political loyalty in the Chinese administrative system, Bardhan says.