No. 176

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BO XILAI CASE DEMONSTRATES CHINA’S ANTI-DEMOCRATIC TIME-BOMB

Stone the Crows! The Chinese really know how to put on a show, as in trial. In the process, they demonstrate why the People’s Republic will never become the super-power Australian miners desire and the military deplore.

Sooner or later, economies underperform and freedom fails wherever politics is about insiders squabbling over the spoils. As the Crows claim, it’s happening in Iran now.[i] Without the discipline on government, delivered by democracy, the rule of law and a market economy, it will happen in China. Perhaps the Communist Party will gradually give up control but, if it doesn’t, authoritarian decay will kick in.

One-party regimes, however sophisticated, suffer from organisational ageing and decay. Leaders get progressively weaker (in terms of capabilities and ideological commitment); such regimes tend to attract careerists and opportunists who view their role in the regime from the perspective of an investor: they want to maximise their returns from their contribution to the regime’s maintenance and survival. The result is escalating corruption, deteriorating governance, and growing alienation of the masses.[ii]

An excellent example of this is occurring in a Chinese court in the matter of Bo Xilai v the Communist Party. For readers who have missed this staged play, the script features a political machine boss brought down by becoming too obviously greedy for the other operators to accept.

Mr Bo used to run Chonqing, a city of some 29 million people in the southwest, which he used as a powerbase to enrich and empower himself. As the son of an original mate of Mao Zedong, who survived a purge, Mr Bo was well placed for politburo power.[iii] He certainly knew how to play politics, presenting as a populist with an anti-corruption campaign and building a business base by encouraging investment.

The only problem was that he was also a standover man who built a fortune by imprisoning people and stealing their assets. Few were game to protest, and during a campaign ostensibly attacking organised crime Mr Bo locked up 8000 people.[iv] In the end, he and his wife Gu Kailai, who appears to have been equally bad and dangerous to know (plus possibly mad – poisoning business partner Neil Haywood was not exactly rational) went too far. Over a couple of years they were undone.[v] Less, mind you, by imprisoning, embezzling and assaulting people who had what they wanted than by losing a power struggle at the peak of the party.[vi]

Which, in the absence of elections that mean anything, is the way China’s rulers work out who gets what. As Rowan Callick explains, the Chinese Communist Party is heading back to the mad Maoist ways of purging factional foes and their families, using the losers “corruption” as a cover. In his just released Party Time – Who runs Communist China and how, Callick writes:

Although in an opaque system in which there is very little accountability for senior leaders, it is very difficult to define corruption, or to identify why one leader’s misstep is significantly more “corrupt” than another’s. Essentially it is about losing power tussles; it is about the dangers of over-reach.[vii]

And it ensures that China will never become an enduring free and prosperous society without fundamental change to the existing order. If the Crows know anything, it is that freedom and prosperity depend on the rule of law, a market economy and democracy and you can’t have any one of them without the other two.

While Mr Bo and his enemies run the show, ordinary people, even rich ones, do not have the right to choose those who govern, and those who run the show certainly are not subject to the rule of law. Nor does state control deliver anything approaching a market economy, which protects people’s property rights. Especially poor people’s. Hernando de Soto argues that governments without universal and transparent systems of registering and protecting title exclude most people from the national economy because they can only deal with those they can trust.[viii]

Ideology has nothing to do with this. Just as Iran is run by and for the clerisy in command, and their retainers in the Revolutionary Guards, so China is run for and by the Party.

Mr Bo appears a wrong ‘un indeed, but he is on trial for upsetting the party not breaking laws designed to protect the rights of ordinary people. A bloke was sent to the slammer for attempting to protect rights on Friday. In Beijing, Xu Zhiyong was arrested for organising a demonstration demanding constitutional rights for average citizens and more accountability by party officials. [ix]

And, while property rights were strengthened in 2010, the law only applies in cities. [x]

As to a free market, consider an AFR report this week, “Concern over the number of Australians ending up in Chinese prisons is so deep that the Australian government has issued a briefing paper warning people of the pitfalls of doing business in China and how they can best avoid business deals going awry.” [xi]

As the Crows caw, without the rule of law and a free market you can’t have democracy. And without democracy, nobody gets a trial the community can trust – not even Mr Bo.

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