On China and its Future

If you have the opportunity to be in Washington DC on November 27 and November 28, you should consider attending a very special event at George Mason University. The event is organized by the Mercatus Center (see here).

On Tuesday, the documentary The Gate of Heavenly Peace will be shown. It is about the pro-democracy protest in Tiananmen Square in Beijing in 1989. On Wednesday, Wang Dan will be giving a presentation about the future of China. Wang Dan was a leading figure in the Tiananmen Square demonstrations. Following the demonstrations, he was sentenced to seven years in Liaoning Prison for conspiring against the Chinese Communist Party. He is now seeking a PhD in history at Harvard University.

It is a great opportunity to hear a dissident talk about China’s political system and its reforms. Clearly, parts of China have been fast moving on the economic growth track in the past decade. It is especially the case of its special economic zones (such as Shenzhen, Zhuhai and Shantou). Since the 1980s, the country has opened up to capitalism in ways that have surprised most commentators. The important question is whether or not this is going to (a) lead to deep political changes and (b) lift all the boats.

Bruce Bueno de Mesquita made some very important points in an EconTalk podcast a few months ago. Economic changes have only occurred in some parts of China (this is reflected in the Economic Freedom of the World Report, which has troubles rating China because of its disparities). For the average Chinese worker, things have barely changed in the last twenty years (see The Economist on this issue). The rural population is still very poor. The Communist Party remains in control over the way things are done. It is impossible to be an entrepreneur or to own substantial assets without being a Party member. The press is still controlled, the judicial system isn’t independent, and the Party still decides who does what. The failure of the Tiananmen protests to lead to any political changes shows precisely that point.

Are things different 18 years later? I am not a specialist of the issue. However, it is not clear to me that China is on its way to more political freedom. Rising incomes in some part of China may lead to the development of a middle class that demands more political freedom. This is true. Another possible scenario is that the party, following Den Xiaoping’s views, has introduced enough market-oriented policies in the last 20 years to obtain more rents to continue buying out its “selectorate,” to use Mesquita’s terminology. China doesn’t have oil (unlike Russia or Venezuela for instance), but it has entrepreneurs that the Party has learned to control. In other words, the Party’s control is just as strong as it was 20 years ago, if not more.

A danger is that more political freedom may lead to bad democracy and thus may stifle economic reforms, which would be bad for the Chinese people. However, it is unclear how long economic reforms can last without having some form of liberal political system that limits the power of government. I am keen to hear what Dan Wang has to say on all this.

Comments

[Bill]

The notion that more political freedom may lead to "bad" democracy reminded me of the very lengthy process through which "good" democracy developed in Great Britain. I would guess that the signing of the Magna Carta could be described as the beginning of "bad" democracy.
I find the level of impatience with developing democratic institutions in other parts of the world more than a little amazing.

[air jordans]

Pigs are friends of human beings