Thursday, October 24, 2013

Gearing Up for the 3rd Plenum of the Central Committee of the 18th Chinese Communist Party Congress

The third plenum of the Central Committee of the Chinese Communist Party has historically been a platform for announcing substantial reforms.

 ("The top of Beijing’s Great Hall of the People during the 18th Communist Party Congress on Nov. 13, 2012,"  From Dexter Roberts, "How China May Lose a Chance for Reform," Bloomberg Business Week, Oct. 11, 2013, Photograph by Feng Li/Getty Images)

"The CPC has a tradition of proposing key changes in third plenary sessions since 1978 when the third plenary session of the 11th CPC Central Committee decided to implement reform and opening up, ending decades of seclusion." ("Xinhua Insight: Why the CPC's third plenary session is important," Xinhua, August 30, 2013; also Ryan Ong, The Third Plenum of the 18th Chinese Communist Party Congress: A Primer, China Business Review, October ).

Since the 1990s, China has twice launched landmark policies to perfect its model of a socialist market economy. The third plenum of the 14th Central Committee in 1993 made the key decision to build a socialist market economy. A decade later, at the third plenum of the 16th Central Committee in 2003, party leaders agreed to improve and perfect it.
This year, we have reason to expect government leaders will take the next step. After building the basics of a socialist market economy, China must now turn its attention to its wider economic, political, cultural, social and ecological environment, and institute comprehensive, holistic reform for all. ("Why Xi's APEC Summit Remarks Are Being Misinterpreted," Caixin Online, Sept. 16, 2013).

The Chinese state information organs for some time have gone out of their way to suggest a planned progression, a scientific development, originating in the 3rd Plenum work of the Party since the beginning of the Deng Xiaoping era.
According to Professor Chang Xiuze of the Macroeconomic Research Institute of the National Development and Reform Commission, the third plenary sessions of the 11th, 12th, 14th and 16th CPC Central Committees all played a key role in China's structural economic reforms. They mark four stages of structural reform: the start-up stage, the implementation stage, construction of the framework of a socialist market economy, and full implementation of the socialist market economy. ("Milestones of reform: 30 years of 3rd Plenums," China,.org, Oct. 8, 2008).

This post considers some of the issues that may be the object of the upcoming 3rd Plenum, scheduled for early November, 2013.

"In a meeting on Tuesday, the Political Bureau of CPC Central Committee decided that the Third Plenary Session of the 18th CPC Central Committee will be held in November in Beijing to discuss major issues concerning comprehensive reform. . . . The meeting proposed innovation in theory, system, science, technology and culture with wholescale reform across the board." ("Why the CPC's third plenary session is important," People's Daily, August 31, 2013).

There is interest both within and outside of China on the scope and direction of reform. (e.g., Considering the Central Committee Politburo Meeting Pointing to the November 2013 Central Committee 3rd Plenum, Sept. 9, 2013). Some in the West are seeking evidence of reform in the state enterprise sector.  A recent article suggested the potential disappointment if the state enterprise sector were not an object of the reform agenda.
“No real reform agenda can be possible without meaningful reform of the state sector,” says Fred Hu, chairman of Primavera Capital Group, which focuses on Chinese investments. “It is the key to overall reform.” China’s approximately 100,000 state-owned and -controlled enterprises account for up to half of the country’s industrial output, according to Hu, the former Asia economist for Goldman Sachs (GS). These state companies get low-cost or even free land from the government, enjoy below-market interest rates from state-controlled banks, and in some cases have a monopoly on an entire industry and thus enormous pricing power. Sheng Hong, director of the Unirule Institute of Economics in Beijing, says the think tank’s research shows that since 2010 state companies’ monopolies in banking, oil, telecommunications, railways, and salt have cost the economy 1.9 trillion yuan ($311 billion) in lost growth.

Although reform advocates say the playing field between the private sector and state-owned enterprises must be leveled, the political will to tackle these powerful interests may be lacking. A Communist Party “official may serve as a senior manager of a state enterprise. Then he may become the deputy party secretary of a province,” Sheng says. “So how can they reform themselves?” (Dexter Roberts, "How China May Lose a Chance for Reform," Bloomberg Business Week, Oct. 11, 2013).
Whatever the decision on SOE reform, there appears to be "wide consensus on the need for financial and monetary reform, smarter pricing, and taxation of raw resources, as well as more government spending on health, education, and social security, according to an Oct. 10 research note by economists Louis Kuijs and Tiffany Qiu at the Royal Bank of Scotland (RBS) in Hong Kong. " (Ibid).  Others suggest that specifics of what may be viewed as necessary economic and social reform are unlikely to emerge.  (David Keohane, "China's Plenum:  The Bloody Versus Boring Debate," FT Alphaville, Sept. 27, 2013).
(Jiang Xueqing and Zhai Qi, "Changing with the times," Global Times, July 4, 2010) (The Party School of the Central Committee of CPC in Beijing with the words "Seek truth from facts" inscribed in stone. Photo: courtesy of the Party School))

But what appears more likely is that the 3rd Plenum will bring the political work of the Chinese Communist Party into more prominence along with continued emphasis on economic development. See, e.g., "Why Xi's APEC Summit Remarks Are Being Misinterpreted," Caixin Online, October 16, 2013 ("Here is what Xi said. The government was drafting a "master plan for reform," clearly a reference to the blueprint to be unveiled at the plenum. He spoke of the "overall purpose of pushing forward reform in the economy, politics, culture, society, the environment and other fields, and adding new momentum for the economic development through reform."")).  At the same time, it may be that the Plenum will produce some reassurance to outside stakeholders about China's commitment to the economic vision central to Deng Xiaoping theory.  "Xi's speech was intended to reach business and economic leaders around the world. They have two main worries about China's economy. One, whether it is heading for a crash. Two, whether structural reform and the transformation of the growth model will proceed as planned. Xi directly addressed these concerns by assuring them of China's confidence in its prospects for continued growth and the government's unwavering commitment to carrying out reform." (Ibid). See, generally, Hu Angang, China in 2020: A New Type of Superpower (Washington DC, Brookings 2011).

I would expect that the Plenum will concentrate on six major areas:

1. Corruption. It is likely that in addition to more focus on shuanggui and related measures for state officials, that the CCP will institute incentive systems. For example it might be likely that the CCP will institute a system of rewards to officials who retire with a clean record.Much of the new architecture has already been unveiled.  (e.g., The Emerging Forms of Chinese Anti-Corruption Institutions).

2. Monitoring. It is likely that surveillance and monitoring of officials will increase. High on the list will be the application of income reporting systems. It is also likely that expense reports will be more carefully scrutinized. This is not a purely Chinese phenomenon.

3. Reform of the land transaction system. The countryside cooperative ownership land will be treated equally with state owned land in the market. It might be possible to see some action to curb land grabs by powerful or well connected officials that have caused great harm to the poor masses, especially the elderly.
4.  Civil action against government.  The CCP may support administrative lawsuits against government. This may also be expanded to allow class actions.  The object is in part to divert individuals form the petititon system that has caused some concern in government circles.  On the other hand, the emphasis on the peopl's authority to hold their officials to account for failing to follow the CCP line in the performance of their work is a positive development and in keeping with the principles of the mass line. 
5.  Acceleration and Deepening of the CCP's political work.  Key political principles will likely be further developed.  Among them are the "mass line" and "scientific development."  Expect that constitutionalism, rule of law, and the like will be recast within the these political lines and that such discussion will continue within the CCP but are likely to be more tightly controlled when discussion is attempted outside of CCP circles.  On the other hand, it is likely that the CCP may continue to tolerate civil society dialogue with an anti-corruption angle if targeted to government officials in their administrative work and not to CCP officials in the Party work. 
6. Planning for further reform.  The CCP will make sure that these reforms are not a one off affair.  They are likely to set up a reform time table for three stage reforms: The early stage is 2013-2014. The second stage is 2015-2017. 2018-2020 would be the last stage.

But more important for the work of the Plenum will be its efforts to move the CCP's political work (in contradistinction to its now stable economic work) to the forefront--and to seek to make the CCP relevant. On the one hand, it appears clear that the CCP will assume a more political orientation to the production and management of media. See, 人民日报:新时期中国特色社会主义新闻事业的行动纲领——深入学习贯彻习近平同志在全国宣传思想工作会议上的重要讲话精神 杨振武, translated as Yang Zhenwu, Deeply Studying and Implementing the Spirit of Comrade Xi Jinping’s Important Speech at the national Propaganda and Ideology Work Conference in "People’s Daily: An Action Plan for the News Undertaking of Socialism with Chinese Characteristics in the New Period," China Copyright and Media, Oct. 16, 2013.
The important elaboration concerning news and propaganda in Comrade Xi Jinping’s important speech at the National Propaganda and Ideology Work Conference. . . . stresses persisting in the principle of the party managing the media without wavering, persisting in politicians running newspapers, running periodicals, running stations and running news web sites, persisting in having to conform to the requirements of the Party in what to persist in, what to oppose, what to say and what to do, becoming truly proficient, being reliable, and truly ensuring that “we remain firm after a thousand hits and ten thousand strikes, and withstand the winds coming from all directions.”. ("People’s Daily: An Action Plan for the News Undertaking of Socialism with Chinese Characteristics in the New Period," supra).
While it is not clear whether the development of civil society conversation on the Internet will be curtailed further, it appears that the CCP will more vigorously seek to manage opinion by participating more actively in Internet and other media based conversations.  More importantly, it suggests that press freedom will be managed, suggesting a repercussion of the "Southern Weekly Incident". (David Bandurski, “Inside the Southern Weekly Incident,” China Media Project, January 8, 2013). 

Both traditional media and mew media must explicitly implement the policies of unity, stability, encouragement and giving first place to positive propaganda. At the moment, online public opinion is receiving great attention, sometimes, broad disputes arise as well. As some forces add fuel to the flames, it frequently happens that online, the negative side is larger than the positive side, and the non-mainstream is larger than the mainstream. This is an unprecedented challenge and opportunity for our carrying forward the main melody and disseminating positive energy. News and propaganda must take on the heavy burden of expanding online mainstream ideology and public opinion, and improve the online public opinion ecology, it must dare to act and be good at acting. Traditional mainstream media must be good producers and providers of news content, they must speak early, dare to speak and be able to speak, they should not be “stevedores” and “megaphones” for online information, and must not be lead by the nose by some online information. Major news websites must innovate public opinion guidance methods, and provide accurate information as much as possible, clear up online rumours as quickly as possible, enrich online positive public opinion with as much “capacity” as possible, and strive to become an advanced battlefield for the communication of advanced Socialist culture, provide effective spaces for public cultural services and broad spaces to stimulate the healthy development of people’s lives. ("People’s Daily: An Action Plan for the News Undertaking of Socialism with Chinese Characteristics in the New Period," supra).

This move has been criticized.  See Ching Cheong, Xi Wages Ideological War Against Liberals, The Straits Times, Sept. 25, 2013.
The official media immediately echoed the call. In a series of articles, the People's Daily said that it was time to "show the sword" to critics. The Global Times, Red Flag, Qiushi and the Beijing Daily all chorused the same theme of "showing the sword" to liberal intellectuals.

Advocates of universal values, they claimed, were the "most dangerous enemies of the Chinese people", and cyberspace had become the most important battle ground between the CCP and its ideological foes.

The chilling effect of Mr Xi's Aug 19 speech was felt immediately. The Global Times admitted that following the speech, several hundred microbloggers across the country were "administratively detained" for "spreading rumours" in cyberspace. (Ibid).
There is some merit to the criticism.  The Chinese Communist leadership must be careful to avoid undermining its own mass line by its efforts to bring political work back into the Party.  Instructions such as those in Document No. 9, widely criticized in the West (e.g., Stanley Lubman, Document No.9: The Party Attacks Western Democratic Ideals, Wall Street Journal, Aug. 27, 2013), suggest the problems of reform within China on a global stage. Document No. 9 identified seven perils for the CCP.  "The first was “Western constitutional democracy”; others included promoting “universal values” of human rights, Western-inspired notions of media independence and civic participation, ardently pro-market “neo-liberalism,” and “nihilist” criticisms of the party’s traumatic past." (Chris Buckley, China Takes Aim at Western Ideas, New York Times, Aug. 27, 2013).  From the CCP's perspective it correctly suggested that core poltical issues that go to the fundamental ordering of society ought to be reserved in the first instance to the CCP itself and that deviation would essentially undermine the leadership role of the CCP within the Chinese constitutional system.  Yet though it may be plausible to understand Document No. 9 and the instructions on the use of media in this light, it is also necessary to remind officials of two cautions also fundamental to the CCP lead system.  The first is that though there is peril on shifting the political work of the CCP to civil society, bringing these discussion within the CCP becomes more important.  Document No. 9 can be plausibly read not merely to warn against "seven perils" when engaged in outside the CCP, but also the perils the failure of the CCP itself to engage in the debates about these perils within the CCP itself. That discussion is important and necessary within the CCP itself. The second is that Document No. 9 would be implausibly read if it is used to suppress all conversation by civil society, especially that which goes to the performance of state organs in their administrative role. Separation of powers in China suggests that political authority is vested in the CCP but that administrative authority is exercised through the government (e.g., Backer, Larry Catá, Party, People, Government, and State: On Constitutional Values and the Legitimacy of the Chinese State-Party Rule of Law System, Boston University International Law Journal, Vol. 30, 2012). The CCP's mass line itself suggests the substantial and direct connection between the administrative organs of state and the people. The CCP can oversee the adequacy of the performance of the state's administrative organs with the vigorous participation of the people. The people, and civil society then would appear to be not just permitted but perhaps required for the task of ensuring the responsiveness of the administrative obligations of the state--obligations scientifically developed through the political work of the CCP but whose implementation and effectiveness is best monitored by the people who these state organs serve. To monitor the state organs is not to attack the CCP.  In that distinction may lie the way forward both for the CCP consistent with its own  line developed consistently since the 1970s.   

Still, it may be important to remember that the ideological turn is not merely directed outward; it is also directed inward with the object of reforming the CCP itself, and in so reforming, preserving the legitimacy of the CCP and its leadership role. See, e.g., China Exclusive: Book offers glimpse of CPC top decision-making body, Xinhua, Aug. 2, 2013.

In his book "China's Collective Leadership System" published by China Renmin University Press in July, Hu Angang, who is known for his role in advising CPC and state leaders on key issues, reveals the history and the inner working process of the Standing Committee of the Political Bureau of the CPC Central Committee, the Party's supreme decision-making body. . . . . 

Proposed by late Chairman Mao Zedong, the Standing Committee was established in 1956 as the core of the CPC Central Committee's leadership. However, it was seriously damaged and became ineffective during the Cultural Revolution (1966-1976), according to the book.

The collective leadership system was restored after the Cultural Revolution. The first plenary session of the 14th CPC Central Committee in 1992 conducted reforms related to the party and the state's leadership, making the Standing Committee the core of the country's collective leadership.

Hu concluded in his book that the system with Chinese characteristics has guaranteed a more united, more coordinated, more efficient and more unified collective leadership.

"This is exactly the reason why China has achieved such a huge success in the past decades," he says. (Ibid).
It is likely, then, that the structural framework of the Party and its political role in the division of authority between state administrative organizations and the CCP will be furthered articulated along the lines of a collective and deeply institutionalized model, one grounded in the fundamental anti-tyranny principle of fractured personal authority.  (e.g., Backer, Larry Catá, Towards a Robust Theory of the Chinese Constitutional State: Between Formalism and Legitimacy in Jiang Shigong's Constitutionalism (May 8, 2013), Penn State Law Research Paper No. 25-2013, revised version to be published in Modern China 40:-- (forthcoming).

But this division of authority will also likely produce a greater movement to bring political work back into the Party. Thus, at the same time that the CCP appears to seek to expand its outward political work among the population, it will also engage in more focused political work within the CCP itself.
According to an official statement obtained by Xinhua on Thursday, Party officials have vowed greater "courage and resolution" for criticism and self-criticism at intra-Party sessions attended by top officials.

Party officials at a number of government departments and state-run organizations pledged to conduct "active and healthy struggle of ideas" in a bid to spot and solve problems among officials in a frank manner, the statement says.

Xi, general secretary of the CPC Central Committee, participated in special sessions held in north China's Hebei Province between Sept. 23-25 for local officials to discuss their own problems." ("Party organs affirm "criticism" resolution after Xi's remarks," Xinhua, October 3, 2013; see also 各地学习贯彻习近平讲话精神 对标找差距 整改见行动-高层动态-新华网 ).
The focus on disciplining the CCP and its cadres, and strengthening its own institutional legitimacy has been bound up in the recently enhanced "mass line" (群众路线) campaigns that have been applied through Party democratic life meetings. ("CMC leaders participate in thematic meetings of democratic life in PLA major units," People's Daily, Oct. 18, 2013)
In China, the democratic life meeting was designed for Party members to exchange thoughts and provide a chance for criticism and self-criticism. It has a long history that goes back to the Party’s early days, and has become an important method for the CPC to optimize its members and promote inner-Party democracy. The CPC Central Committee released a regulation in 2005 regarding the democratic life meeting and required all county level and higher Party members to hold a meeting at least once a year. (Jiang Xueqing and Zhai Qi, "Changing with the times," Global Times, July 4, 2010).

To that end senior CCP officials have given "on-site instructions to investigate and reveal the problems of "four malpractices", namely, formalism, bureaucratism, hedonism and extravagance, according to the deployment and arrangement of the CPC Central Committee and the CMC to carry out CPC’s mass line education campaign." ("CMC leaders participate in thematic meetings of democratic life in PLA major units," People's Daily, Oct. 18, 2013).  What is clear is that the CCP will likely move to further develop its internal identity, cohesion and discipline, even as it moves to more effectively manage the political work of the state under its leadership.   The effect will be to increase inter-Party democracy while it more closely manages political discussion outside the Party.

The test of this policy will be seen in the way in which inter-Party democracy is implemented.  The mass line can be an effective tool for deepening democratic participation among Party cadres by providing a clear touchstone for the CCP's political work. (e.g., Considering the Central Committee Politburo Meeting Pointing to the November 2013 Central Committee 3rd Plenum; Keren Wang on "Laojiao (劳教) System, Constitution and the Mass Line of the Chinese Communist Party"). But the mass line remains effective only as a basis for the internally developed work of the CCP; it should avoid the prior error of criticism sessions of officials by the masses.  For that purpose, the elaboration of scientific development may provide a basis for moving the CCP's political work forward--that is, to refine the political evolution of the CCP's role in the political and economic life of the state.

Intra-Party democracy may also require substantially greater devotion to Party discipline, especially against corruption.  Part of that has been foreshadowed by the themes of the democratic life meetings--especially those that focus on the four malpractices described above. But the structures of intra-Party policing of corruption by  its cadres, even at the highest levels, will likely receive substantial attention.  (e.g., The Emerging Forms of Chinese Anti-Corruption Institutions; Backer, Larry Catá and Wang, Keren, State and Party in the Scientific Development of a Legitimate Rule of Law Constitutional System in China: The Example of Laojiao and Shuanggui (June 1, 2013). Conference: Rule of Law with Chinese Characteristics, Vol. 2013, p. 101, 2013).

Taken together, the object is to merge the political and economic agendas of state and party to produce a new "Chinese Dream."  (See, Backer, Larry Catá and Wang, Keren, 'What is China's Dream?' Hu Angang Imagines China in 2020 as the First Internationally Embedded Superpower (February 23, 2013). Consortium for Peace & Ethics Working Paper No. 2013-2).  And this Chinese dream is tied, again, to the developing idea of the mass line: a "demand that party members toe a "mass line" against extravagance." Cary Huang, Leading leftist academic mocked over 'Maoist' op-ed
South China Morning Post, July 20, 2013 ("In an op-ed published in the People's Daily overseas edition yesterday, Hu Angang, a leading member of the 'New Left', argued that the party's style of government was better because it was homegrown and "fits China's basic national conditions better". . . . Hu linked his ideas to two campaigns launched by President Xi Jinping - the promotion of a "Chinese dream" and his demand that party members toe a "mass line" against extravagance. "It is a Chinese dream, which is different from the American dream and European dream," Hu said. The people's society should have no confrontation between the government and the people, he wrote, an idea consistent with Xi's mass line..")).

Most importantly, perhaps, the 3rd Plenum may either reveal or resolve what appears to be a deepening divide among China's top intellectuals, both within and outside the CCP on the path to scientific development of China's political and economic systems. (Joseph Fewsmith, Debating Constitutional Government, China Leadership Monitor, Hoover Institute No. 42 (2013); Chris Buckley, “China Warns Officials Against ‘Dangerous’ Western Values,” New York Times, May 14, 2013). It may be hoped that scientific development will neither deviate into new left error grounded in cults of personality and the abandonment of rules based Marxism, or into new right internaitonalism that does not take into account China's special characteristics

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