Yawn.. Back to regular programming folks.
BEIJING — As China heads toward a once-a-decade change of its top leadership, its vaunted embrace a generation ago of markets and economic openness — which catapulted the country from isolated poverty to its place as a global export powerhouse — is also at a turning point.
After nearly a decade of President Hu Jintao’s focus on strengthening the state, a broad consensus of Chinese economists says the country is overdue for another big push to encourage private enterprise and to foster a shift toward a more consumer-driven economy. The challenge, they say, is turning back China’s domineering state sector.
But that seems increasingly unlikely. Publicly controlled enterprises have become increasingly lucrative, generating wealth and privileges for hundreds of thousands of Communist Party members and their families. And in a clear sign of its position, the government has moved to limit public debate on economic policy, shutting out voices for change. While political reform has always been a taboo topic in China, in economics, from the late 1970s to the early 2000s, almost anything went, with powerful voices backing strong measures that challenged the status quo. But now, despite the rise of social media, fewer prominent voices within China are able to make the case for a systemic overhaul that would prepare the nation for long-term prosperity on sturdier foundations.
“It’s not a good time to speak out for reforms, but it’s a good time to speak out against them,” said Li Shuguang, a professor at the China University of Politics and Law. “The government doesn’t encourage debate.”
Few people illustrate this conundrum better than Zhang Weiying, a 53-year-old Peking University professor who is probably the closest China has to an economic dissident.
A cause célèbre in Chinese economics circles, Mr. Zhang was fired a year and a half ago from his post as dean of the university’s Guanghua School of Management. Since then, he has been on an extended sabbatical, traveling widely and giving speeches on the country’s brewing economic troubles, among them slowing domestic growth and a collapse of financing for private enterprise.
The hitch is that much of his work is deliberately hard to access or is consigned to secondary publications.
Last year, he gave an hourlong video interview to the Web site Sina. Although the site belongs to a publicly traded company listed on Nasdaq, Sina works closely with the Chinese government. After a week on the site, the interview was deleted. A Sina spokesman, who refused to give his name, said the video was removed as part of regular site maintenance. Similar interviews from more mainstream experts, however, are still available.
Mr. Zhang’s address this year to the Yabuli China Entrepreneurs Forum seemed to have encountered a similar fate. The speech, which criticized the lack of market-oriented changes, cannot be found on most major Chinese newspaper sites, a sign of government disapproval of his views. Video of the speech is available only on overseas Web sites that are blocked in China
“He can’t appear in the big newspapers because he says things that you can’t say,” a senior editor at a major party-run newspaper said. “You can’t challenge the system like that.”
A slightly round, bespectacled man with a shock of white hair, Mr. Zhang does not look like a radical. But his pronouncements are acerbic, reflecting his support for neoclassical economics in the mold of Milton Friedman, the Nobel Prize-winning free-market advocate who taught at the University of Chicago for decades.
“Before 2003, the idea of reform was dominant,” Mr. Zhang said in an interview last month. “Now it’s much harder to make that case.”
Challenging the system, Mr. Zhang contends, has been the key to China’s economic success. Today, he says, that would mean reducing the party’s control over important sectors of the economy. Over the past decade, state companies have maintained and expanded control over industries like automobiles, aviation, chemicals, energy, information technology, machinery, metals, steel and telecommunications.
Mainstream criticism of this trend, however, is limited. A Propaganda Ministry directive this year explicitly banned the term “monopoly” to describe state-owned enterprises. Journalists say they regularly have articles kept from publication if they discuss the deadening effect of state control over so many industries.
This contrasts with the first two decades of China’s economic opening, when the overall trend was toward relaxing state control, and pro-market economists were household names.
Mr. Zhang was a big part of this early effort to move away from communist-style state planning. Working for the influential State Commission for Reforming the Economic System, he was most famous — as a 24-year-old — for writing a paper that led to the replacement of state-designated prices with market prices, one of the landmarks of the 1980s reforms.
After the 1989 Tiananmen Square massacre, the reform commission was downgraded, and market-oriented economists went on the defensive. Mr. Zhang went to Oxford to earn a Ph.D. with the Nobel Prize-winning economist James A. Mirrlees, but he returned to China just after Deng Xiaoping reignited economic reforms by taking on the Communist Party’s powerful left wing.
In 1994, Mr. Zhang co-founded the influential China Center for Economic Research at Peking University. In 1997, he moved to the university’s Guanghua management school and two years later was named dean.
His rise tracked a second era of economic liberalization. Mr. Deng brought in reformers like the now-retired President Jiang Zemin and Prime Minister Zhu Rongji to scale back state control, moves that eventually paid off with China joining the World Trade Organization in 2002.
But when they retired, replaced by Mr. Hu and Prime Minister Wen Jiabao, the atmosphere changed. Economic modernization was seen as causing social unrest, which rose steadily during the 2000s. In response, the country put in place a “stability maintenance” apparatus to tamp down criticism.
“Hu Jintao is more a follower of Mao Zedong,” said Mao Yushi, 83, a pro-reform economist who has been vilified during the past decade. “He doesn’t encourage too much discussion.”
Neither did Mr. Zhang’s university. “They began to speak of the need for a harmonious society,” Mr. Zhang said, referring to the watchword of the era of Mr. Hu and Mr. Wen. “Gradually people said you shouldn’t reform so much because you’re just causing trouble.”
Stymied in pursuing a more meritocratic approach at the university, Mr. Zhang began criticizing the government even more forcefully. Even though the economy was still roaring ahead, he began calling the 2000s a “lost decade.”
In late 2010, Mr. Zhang was relieved of his position and put on a two-year sabbatical. University officials declined to comment on his removal, but Chinese news media said at the time that it was because of his “radical” views.
His fate, he says, paralleled a growing belief within China’s leadership that it has little more to learn from the West, especially after the global financial crisis of 2008 and China’s success in riding it out. “We’re suddenly so important,” he says, with more than a touch of sarcasm in his voice. “Look at America. It has problems. We don’t have problems.”
Mr. Zhang acknowledges that he takes a purist’s approach to economic policy. Professor Li, at the China University of Politics and Law, agrees: “No politician could do as he says, but it’s important to have people speaking like that.”
Despite his setbacks, Mr. Zhang is convinced that his views will return to favor. The recent slowing of China’s economy shows that the country’s enormous stimulus package of 2008-9 was just a stopgap, he says. The expected incoming administration of Xi Jinping and Li Keqiang may not have articulated a way forward, but he says he believes the pendulum will inevitably swing back.“When we had reform, people thought we had problems,” he said. “But now that we don’t have it, they see we need it.”
The parallels between the Hu-Wen "Clique" and the UPA I and UPAII govts in India are uncanny. The UPA too didn't want any reforms when the going was great, reforms weren't "needed" , and look at the mess they have landed the country in. China too is headed exactly the same way, but with the size of the bubble they blew up, it is going to be painful.