The focus on China is, not surprisingly, almost exclusively economic. Yet the endless debate on the renminbi’s valuation, on the country’s ability to shift to a new economic model and the potential for a property crash obscure a more fundamental issue.
Since the brutal crackdown on protesters in June 1989, the assumption has been that politics do not matter on the mainland. But the absence of political liberalisation may prove an Achilles heel as Chinese society becomes ever more fluid and its economy ever more complex.
This has long been highlighted in the west but this week the issue came to the fore in China itself with the publication of an open letter by a group of veteran reformers demanding the government dismantle its elaborate censorship apparatus and accelerate political reform.
The forecasts in the west in the 1990s that economic liberalisation in emerging countries was bound to bring political liberalisation have been disproved in China, though not across the Taiwan Strait. The mainland’s middle class has been co-opted into the system rather than playing the role of the bourgeoisie in 19th-century Europe, and probably has little desire to see hundreds of millions of poorer urban and rural residents getting the vote to press their own interests.
Still, setting aside moral and ethical arguments for democracy, there is a practical issue at stake and it has been brought to the fore by no lesser a figure than Wen Jiabao, China’s prime minister. In remarks at the end of August in the southern city of Shenzhen, the symbolic home of the Dengist revolution, Mr Wen said China needed to protect the democratic and legal rights of the people; mobilise citizens to manage state, economic, social and cultural affairs in accordance with the law; resolve the problems of a centralised power that lacks checks and balances; tackle corruption; and open channels for public monitoring and criticism of government.
The aim, he said, should be to build a fairer and more just society that upheld the rule of law while protecting the vulnerable and giving citizens a sense of security and confidence. “If we don’t push forward with reform, the only road ahead is perdition,” he concluded, quoting words Deng Xiaoping used against economic conservatives.
Reformers quickly rallied behind the prime minister. “Wait’s Over for Political Reform in China” proclaimed a headline in the magazine Caixin. But conservatives mustered equally quickly to defend the status quo. Hu Jintao, the country’s president and the party leader, sounded a characteristically conservative line when he visited Shenzhen soon afterwards. China, he said, “must persist with the road of political development with Chinese characteristics ... [and] advance the socialist political system’s self-improvement and development”.
Mr Wen repeated his analysis in an interview with CNN this month and, on Monday, pro-reform Communist party elders, including Li Rui, Mao Zedong’s former secretary, called for the end of restrictions on freedom of expression. But the general reaction of outside commentators was that the premier’s remarks were too out of line to carry much weight. Mr Wen is due to retire in early 2013 and some feel that he was making a play to be remembered as a would-be reformer. Others see it all as a spin operation to suggest that the leadership is more broad-minded than it really is.
The opacity of top-level Chinese politics makes it virtually impossible to tell where the truth lies, but Mr Wen was pointing to what may well be a major issue as he and Mr Hu prepare to hand over to their successors in 2012. Though China has modernised in many ways in their decades in power, it has also been constrained from evolving in others. Mr Wen’s remarks went to the heart of this unfinished business of making the party and state more accountable.
On the one hand, individual liberty has mushroomed. On the other, the imprisonment of the pro-democracy advocate Liu Xiaobo, this year’s Nobel Peace Prize laureate, for having organised the Charter 08 pro-democracy petition shows how relentlessly organised opposition will be crushed.
Though Mr Deng unleashed market forces, administrative decision-making and the size of the state skew the economy. Capital and resources are inefficiently allocated. Manufactured goods and food are traded in the market, but land, labour and capital markets are controlled. As Mr Hu preaches the need for a “harmonious society”, wealth disparities grow amid rising discontent at fortunes made by those with the right connections. The legal system is proclaimed as serving the people, but judges are told that their first priority is to strengthen the party, which has become a means to find jobs and income, rather than a cause to which people can rally.
Reform of the kind suggested by Mr Wen would create the context in which such matters could be addressed with a more accountable and responsive system that could adapt to the changing China. However, those who benefit from the present system and those who see its preservation as their mission have the upper hand. That may serve their purposes for the time being. But it could be a dangerous path in blocking the evolution China needs, particularly if the regime’s claim to deliver ever-increasing material well-being is hit by events such as a big drop in external demand, rising inflation or a food crisis. The loyalty of the people, as Mr Wen intimated, may then matter a great deal.
The writer is China director of the research service, Trusted Sources, and author of the Penguin History of Modern China