Illustration of silhouettes of people walking towards a yellow star in the centre
© Shonagh Rae

Since the People’s Republic of China was established 64 years ago, it has tried two different paths. For the first 30 years, Mao Zedong used totalitarian politics and a planned economy.

After that led nowhere, the country switched to so-called “socialism with Chinese characteristics” – a highly centralised political system under the leadership of the Communist Party of China with elements of public ownership and a market economy. It is now becoming clear that this is failing as well.

Three decades of economic reform have loosened the political system set up by Mao but they haven’t touched its roots. Most importantly, there are no checks and balances for administrative power. Power prevails over everything else and people who have it act as they please.

You can see this with the state-owned enterprises that China tried to make its foundation. These SOEs hand smaller profits to the state than the government invests in them, while their managers earn hundreds of times more than ordinary employees. They possess more than 60 per cent of national resources but contribute less than 3 per cent of GDP and no more than 20 per cent of jobs. They are, in fact, not owned by the state but by independent interest groups, some of which government officials have become a part of.

In reality the so-called socialist market economy has become a power market economy. Bureaucrats must approve what a company is allowed to do and which industries it can enter. They manage resources like capital and land. Their authority is not restrained by the law and is thus arbitrary. Those who receive approval from government officials get the opportunity to make a fortune. The more one’s power grows, the easier it is to get rich. But it’s difficult for those without power to gain wealth through honest work.

Power itself is traded as a scarce commodity. In China, power trades for money, power trades for power, and power trades for sex. This has permeated into every field of life including education, human resources and the law. In today’s China, if you want to achieve something, it doesn’t matter how talented you are but whether you are connected with people in power. Those in close relationships with government officials, such as their sons and daughters, secretaries, drivers and lovers, become power brokers.

Power and capital together monopolise social resources and wealth. As a result, there is no justice. The power market economy knows neither fair trade nor equal competition.

Power has become a black hole that attracts money and absorbs wealth. The corruption it causes is also becoming more serious. Cronies firmly protect their interests and bar social mobility. This has created a social psychology of “hating officials” and “hating the wealthy”. Unrest is growing.

Democracy offers the way out. We need popular sovereignty, a separation of powers, a system of constitutional review, an independent judiciary and a free press. We must subject the government’s authority to the Constitution of the People’s Republic of China and protect citizens’ individual rights. This can stop the corruption caused by power and eliminate the obstacles for improving the market economy.

Several years ago, Xi Jinping remarked that power should be granted by the people. Last year, he proposed to implement fully the constitution. He said that no organisation or individual shall prevail over it or the law and proposed to “lock power into a cage”. Those words gave hope to those who have long called for democracy, and constitutionalism became a hot topic this spring.

However, since the summer, there has been a wave of opposing voices.

One is Yang Xiaoqing, associate professor from Renmin University. She argued that constitutionalism is in conflict with the Communist party’s dictatorship and that it also clashes with public ownership and the highly centralised political system.

What she says is all too true. The gigantic interest groups created by the power market economy have benefited hugely from the current system and will fight to preserve it. As they control political and economic resources, they pose a formidable obstacle to change.

Moreover, there is no consensus within society around what to do next. Leftists, nationalists, populists, fascists and liberalists all want to transform China according to their own theories. Any transition from dictatorship to democracy is full of social risks. If it doesn’t go well, it could bring about constant chaos. The Chinese people’s concerns have been exacerbated by the Arab spring, which has demonstrated that change could lead to unrest rather than a new order.

China will need a long time to achieve constitutionalism and democracy – I guess another 30 years. But we should actively prepare: develop the private economy, withdraw the state from business, enthusiastically cultivate civil society and enhance the ruling groups’ consciousness of political reform. We must strive for a top-down, conscious and stable social transformation.

We cannot wait passively.

Yang Jisheng is deputy editor of the magazine Yanhuang Chunqiu and author of ‘Tombstone: The Untold Story of Mao’s Great Famine’

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