A Reformist Chinese Leader? Stop Fooling Yourself

A Reformist Chinese Leader? Stop Fooling Yourself

By Jeffrey WasserstromJuly 22, 201313 Comments

Pedestrians walk past a billboard displaying, from left, Chinese Communist Party leaders Mao Zedong, Deng Xiaoping, Jiang Zemin and Hu Jintao at an event celebrating the 90th anniversary of the Chinese Communist Party in Beijing

For those of us who have tracked Chinese political trends since the late 1970s when Deng Xiaoping came to power, reading the news about China these days can prove strangely disorienting. One week, we’ll be struck by a slew of stories, on everything from fast trains to record growth rates, which underscore how different China is than it was when Deng first launched his reforms. The next week, though, we’ll be struck just as powerfully by a sense of eerie familiarity. Headline after headline — about the intractability of corruption, the death of a watermelon vendor or a petitioner’s desperate attempt to draw attention to this plight by detonating an explosive device at a Beijing airport — seem just like those we came across a few years or even a couple of decades ago.Last week, things got especially strange because a big we’re-in-new-territory and a significant here-we-go-again China story hit simultaneously. In the former category, there was the release of new Pew Global Attitudes Project figures showing just how many people around the world are now convinced China is or soon will be the leading global superpower. Of the many stories that triggered déjà vu, one of the most significant told of Xu Zhiyong, a moderate campaigner for civil rights and the rule of law and whistle-blower on official corruption, who has been detained.

It’s worth remembering, where the Pew numbers are concerned, that when Deng took over a country, which was still reeling from the tumult of the decade-long Cultural Revolution (1966–76), not only did he make the need to modernize China his mantra, but many Americans wished him Godspeed. The main U.S. worry then was about a weak China unable to feed itself, and an unstable China that might prove a wild-card actor in global affairs. There was little thought that China could one day go head to head with America. There was also a lot of hope in the West that economic development in China would bring democracy in its wake, especially among those convinced Deng would prove a thoroughgoing, rather than just economic, reformer.

The Pew figures show just how much the ground has shifted. Four years ago, a third of the Americans surveyed (33%) were already saying they believed China already was or soon would be the world’s leading superpower, but now almost half claim to think so (47%). In Britain, meanwhile, the 2009 to 2013 numbers went from 49% to 66%.

The Xu story, by contrast, points to lack of change rather than transformation. Reports about his latest detention read almost word for word like those written when he was arrested a few years ago, when Hu Jintao rather than Xi Jinping was China’s President. Xu’s arrest, as well as that of other similar campaigners for reform, is now being widely interpreted as the latest in a series of signs that it was overly optimistic to think that Xi would be more liberal and tolerant of dissent than Hu. Commentators are also noting the irony of anticorruption activists being seized at a time when Xi is saying one of his top priorities is stemming corruption. A particularly dispiriting development followed Xu’s arrest, when the lawyer trying to get him freed, Liu Weiguo, was also seized.

It is not just the crackdown that is depressingly familiar, but also the references to dashed hopes about Xi. When Hu came to power, there was the same cycle of expressions of hope that he would prove more tolerant of dissent and more determined to rein in official corruption than his predecessor, Jiang Zemin, had been, followed soon by stories of that optimism proving unfounded.

The same thing happened, even more memorably, with Deng. Hopes for his potential to liberalize China were stronger than for either Hu or Xi, but then he dashed them definitively by backing the brutal June 4, 1989 massacre, which crushed a movement that began with students calling for an end to corrupt and nepotistic practices.

To historians of the pre-1949 period, like me, there is an added twist to this interplay between novelty and familiarity in recent headlines. Decades before Deng dreamed of leading a party that would take China out of a period of chaos, and modernize it, and raise its global stature by building up the economy, Nationalist Party leader Chiang Kai-shek had the same aspiration. Chiang too inspired hopes in some quarters that he would be both a great liberalizer and a great modernizer. And he too in turn did things that made many feel they had misread him, as he proved unwilling or unable to rein in corruption and nepotism within the National Party, seemed much readier to tinker with the economy than shift China from a single party to a multiparty state, and showed the same kind of intolerance to an earlier era’s dissidents that Xi is showing to civil-society activists now.

When I read the news on China, I think not just about how far the country has moved since Deng’s time but also since Chiang’s. And yet, while China is radically different in so many ways than it was in the Nationalist period (1927–49) or earlier in the current post-Mao era, Xu’s detention and increased doubts about Xi’s potential to move China forward politically remind me not only of things I’ve been reading in the press since the late 1970s, but also things I’ve encountered in the archives from three-quarters of a century ago.

Wasserstrom is the author of China in the 21st Century: What Everyone Needs to Know, an updated edition of which has just been published by Oxford University Press.

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Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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