Sunday, December 27, 2009

Worst case scenarios and governance in China

While in China I asked a number of people the following question:

What is the worst case scenario for China in the next 10-20 years which has at least a 10 percent likelihood?

The respondents included professors, engineers and government officials. Interestingly, no one I asked mentioned social or environmental or economic collapse, or even conflict over Taiwan. More than one person did mention the possibility of trade conflict leading to runaway nationalistic response. But if that's the worst case scenario, I consider the future pretty bright.

One particularly insightful analysis from a Harvard-trained Tsinghua professor described the present Chinese system of governance as favoring stability and slow change. He noted that leaders, both at his university and within the central party, are elected by vote in a process involving numerous stakeholders. (The mechanics of this voting process, while apparently strict and rule-based, is kept secret from the general public. Exactly how this system evolved into being over the last 30 years was unknown even to our analyst, but it's easy to imagine that a system favoring stability would have been favored by people who clearly remember Mao and the cultural revolution.) The stakeholders represent a broad spectrum of interests, including those of retired former officials and, in the case of his university, prominent former professors and administrators. To avoid a veto from any particular interest group, leaders tend to favor consensus and to eschew extreme positions. Significant change can only occur after consensus emerges among a substantial majority of stakeholders.

An example of an emergent policy shift is the recent government emphasis on reducing inequality and helping the rural population: apparently there is now a broad consensus that things have gone too far. Just a few years ago news stories often noted that modest school fees prevented peasant children from completing their education. On this trip, I was told that such fees have, at least theoretically, been waived. (Someone who knows the real situation should please let me know, but at least that is what I was told while in China.)

A consensus-driven system will tend to allow rather obvious problems to get out of hand, at least for while. If addressing the problem requires a significant policy shift, then action has to wait until essentially everyone agrees on both the problem and the solution! It's plausible to me that this governance model is consistent with recent Chinese actions (or inaction) related to the urban-rural divide, pollution and the environment, and (gulp!) dollar reserve accumulation. Nothing happens for a long time, but then, suddenly, policies can shift radically. This sounds unwieldy, though grappling with obvious but difficult problems isn't exactly something that our own system has been good at recently -- see, for example, fiscal deficits, health care, financial regulation, income inequality, energy policy, etc., etc.

For related discussion, see Is there a China model?


Unknown said...

Hello Dr. Hsu,

Not related to your latest post, but I was wondering if a video link to Dr. Freeman Dyson's recent speech has been provided yet. Thanks.

gs said...

My impression is that America's founders were skeptical about populism and did not want political parties to develop. They intended, perhaps, not so much a democracy as a society mobile enough for able people to rise into the established governing elite.

Might this be the kind of set-up that the Chinese, in their own fashion, have in mind?

(What America's founders intended differed from what actually happened.)

Steve Hsu said...

Re: Dyson interview, the video isn't ready yet but you can find a transcript here:

Unknown said...

Steve, what do you mean "(fees) have been waived"? The national compulsory education covers the elementary school and middle school, summed nine years, the tuition fee is provided by the government, but students provide other spendings such as books, lodging. Some rich regions have extended compulsory education to high school, another 3 years. Then it's the university education, of course at students' own expense, may cause potential financial problem for poor background students. Universities provide scholarships which in general cover 1/3 students(but not much money), and the banks provide loan to students from poor family(but with very limited quota and strict guarantor requirement).
So, I think the real things related to education that cumber peasant children from their social ascent are the following: the fees of higher education, 10 to 20 thousand Yuan/year(average number, cost-of-living included) is high for most peasant families, especially in northern and western provinces. Some smart peasant children choose military and teachers' training colleges as they are free of charge. And the second one is the inferior elementary education in the rural, compare to the urban. Capable teachers always move to cities for better salary and chance, and the teaching in rural schools is often examination-oriented. No surprise, the disadvantages for peasant children go with all their young life, the good news is the urban population has increased to nearly 50%, and besides going to colleges, there are many other ways to have a happy life.
Personally, I think the big challenges for China in the next 10-30 year are the increasing rich-poor gap, and the government corruption(and the emerging collusion of politics and business). The former problem needs economic development, the latter needs political reformation. The Party seems to favor a route of gradual, controllable, experimental, economic-first-then-political, and elite politics. The gov will suppress any radical force, both ultra-right and ultra-left, and they will repulse some untrusted foreign-related organizations such as secret Christian churches and politically-oriented funds. Some dissenters make perturbations, but the bulk of the people clearly know what they want and operate their relation with the gov modestly.

Yan Shen said...

I'm just curious as to your thoughts regarding many of China's fundamental shortcomings, such as a disregard for basic rights such as freedom of speech, its lack of an independent judiciary, a relative absence of the rule of law, etc.

While I don't necessarily believe that given China's current level of economic development and its myriad of social issues, democracy would be the best system of governance, I am inclined to argue for a form of benevolent authoritarianism which also respects fundamental human rights. I know that India is often brought up as an example of democracy run afoul, give its low level of economic development and the many social issues which afflict the nation. For the sake of economic development, I'm willing to bite the bullet and accept a temporary form of authoritarian rule. Yet eventually in the future, once China becomes sufficiently developed, I would almost certainly demand a transition to some form of representative government.

Do you foresee China transitioning towards embracing universal notions of human rights anytime soon? Or is my notion of benevolent authoritarian regime utterly naive. I think many Chinese Americans are a bit complacent in criticizing the current environment in China.

Ian Smith said...

The US is an authoritarian government. Democracy is a myth. It always has been.

Yan Shen said...

And how exactly is America an authoritarian nation?

Ian Smith said...

First the US is not a nation. The US is merely a state, like all New World "sovereign political entities". China is a nation.

What does authoritarian mean?

In the US all power resides in those who contribute to political campaigns. Each party selects likable malleable people to run for office and do the bidding of campaign contributors.

There are only two parties. The Democrat Party is the party of Jewish money and to a limited extent unions. The Republican party is the party of gentile money.

The authority in the US is money. The US is totally corrupt.

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