Only One Voice - Beijing defies gravity in shielding the Party

THE Chinese Communist Party can easily survive another 10 years, but beyond that, it will need to give some voice to the people, says Willy Lam, author and China expert. The Party, he says, is holding the country together with high economic growth – and that cannot continue indefinitely . . .

DESPITE growing tensions, the Chinese Communist Party (CCP) can easily survive another 10 years. It has the ability to muddle through, says author and China expert, Willy Lam. Beyond the next decade, Lam is less certain, arguing that if there is still no change in China’s political and economic system, there could well be some form of revolution. “It is difficult to predict,” he admits.
The CCP has become more conservative since the Tiananmen Square incident in June 1989, he adds. “The imperative of self-preservation has become the over-riding political goal.”
From Jiang Zemin to the present President, Xi Jinping, the political ethos has been that there must only be one perennial ruling party, and that is the CCP.
“On the surface, Beijing and Shanghai look like any of the big Asian cities of today, but behind the facade there is only one centre of power — only one voice — that is the voice of the Party.” Lam says the CCP understandably is paranoid about incidents around the country.
(It is said that there were as many as 200,000 so-called mass incidents in rural China last year, triggered mostly by land and industrial disputes).
Lam told ATI that China is especially paranoid about the United States. “That is why you see the Chinese 2010 Nobel Prize winner, Liu Xiaobo, is still in jail. His wife, Lin Xia, who is totally unconnected, is under 24-hour house arrest and, in August Liu Hui, his brother-in-law, was arrested and imprisoned for 11 years.”
Lam says that Liu Hui was committed on a trumped up charge — the real reason was his support for his sister, Liu Xia.
He says paranoia about the US largely relates to Hong Kong. “China believes there could be what it terms a ‘conspiracy for peaceful evolution’ to subvert China by trying to introduce western democracy into China.
“They are really convinced that the US is trying to infiltrate to promote the Peaceful Evolution of China to change its authoritarian Communist State to a Western democracy. Hong Kong comes into the picture because it believes that the US provides financial and other support to pro-democracy groups in Hong Kong.”
Beijing is also uptight about Hong Kong because of fear that it could be used by foreign powers as a base of subversion against the Communist Party.
The Chinese Government knows that it is holding its country together with high economic growth, Lam says. “But China’s rapid growth truly defies the law of gravity. It defies the basic laws of economics. Nobody can work against the force of gravity forever.”
Lam, who has written books on Chinese leaders Zhao Ziyang, Deng Xiaoping and Jiang Zemin, is now embarking on his fifth, looking at the policies of current President Xi Jinping, whom he describes as “a conservative”.
The Chinese economy has been growing at an average rate of nine per cent since the late 1980s, Lam says, adding that the biggest beneficiaries of this dramatic growth are the 1,000 or so clans which he calls the ‘Red Aristocracy’. They are princelings who control China’s politics and the economy.
“There is no such thing as a level playing field in China. Corruption and inequality have worsened with every new decade.” The most “terrible thing”, he says, is the loss of moral standards. “People have become amoral — anything is okay as long as you get away with it.”
(Perhaps the single most egregious indictment of the ethics of Chinese business is the recurring contamination of baby milk formula.)
“But as long as the economic pie is growing, some of these problems can be buried because there is still a growing slice to be shared by the rest of the population.”
“If you are a member of the Red Aristocracy you become a billionaire, and if you are poor, there is still the trickling-down effect.”
Lam says life is still improving for the masses. Chinese authorities have pushed up minimum wages by 10 per cent a year over the past few years. Even though the masses are unhappy, they also know the risk remains too big to try to rebel against the system.
Lam points out that, usually, it is the disenfranchised middle class and professionals who are agents for change. But in China, 20 per cent of the population, considered the middle class, also benefits from the country’s economic growth, and are pro-establishment.
Besides, the control apparatus is strong and effective. Dissidents are behind bars and the Internet is under tight control. The system has been successful in co-opting both businessmen and college graduates.
“They may not be members of the CCP and may wish for a more democratic system, but they feel the system works and they have derived real benefits from it. So, for the time being at least, you will not see the middle class challenging the regime.” To maintain the status quo, Lam believes China will need minimum growth of seven per cent — but he has doubts that it can continue to maintain this growth rate forever.
“What will happen if growth falls to four or five per cent — which is a good performance for the US or Australia, but for China might be disastrous? You need also to remember that seven per cent in China is different to other countries. There is what is known as negative GDP in China,” he says.
“According to the World Bank, you should subtract three per cent from the growth rate for the damage to health, crops and the environment because of environmental degradation. So if the Government says it has achieved seven per cent growth, that is only part of the picture.” Lam says the rate of cancer and other illnesses, like respiratory disease, has been growing exponentially in China simply because tens of millions of workers are working in factories with dangerous chemicals.
Water from 70 per cent of rivers and reservoirs is polluted. These are long-term detrimental factors and will translate into extra medical costs and damage to agriculture.
Despite Government action, Lam believes environmental degradation has reached a point of no return. “The lakes and rivers are so polluted that you would need hundreds of billions of dollars to reverse. Luckily for China, it has the money, but for now, the Government is spending on infrastructure to provide employment and to prop up GDP.”
Environmental projects are not a priority because they do not produce many jobs. “Another part of the damage is on the climate. Eleven provinces north of the Yangtze are perennially dry, and desertification is spreading very fast.
“Everybody knows there is no rule of law. Government regulations are enforced in a capricious manner. The big companies spend all their money greasing the palms of tax collectors. Government officials charged with enforcing regulations can bend the rules.
“The end result is that, for anybody, and there is no exception, who has made US$2-US$3 million, the first thing to do is to immediately transfer 50 per cent of your assets overseas — because the law is capricious in China.
“Nobody in his right mind will leave all of their money in China because the next day your enemy, or anybody in Government, can use illegal methods to put you in jail.”
The Chinese are well aware of these serious problems and, where they can, are voting with their feet. “There is a big wave of migration to the West. Anybody who has the money has either migrated or at least sent their children overseas. They would be crazy to leave all their money in China.”
According to Bain & Co, assets owned by private individuals in China reached 112 trillion yuan (US$18 trillion) in 2012.  
China now has 315 billionaires – up from 64 a year ago, according to the Chinese magazine, the Hurun Report.
Lam claims that there are 1001 ways to shift money out of China, provided you are prepared to pay 10 per cent commission to those doing the money laundering.
This helps explain why the Chinese are buying up real estate around the world, including even in Japan, a country which incites strong nationalistic angst.