Politics & Government in

China
Qiao Liang, PhD, Associate Professor
Hangzhou Dianzi University
Administrative Requirements

 Attend all classes and read all the assignments;

 Finish reading the articles;

 Final grades will be based on the written exam & in-class performance.
I can be reached for any questions at:
[email protected]
 Lecture 0: Introduction

10/31/2024
China at Crossroads and in strange times!
 Having teaching this course for more than a decade, I used to ask international
students, what makes you come to China to study (even for a short period time)? I
kinda get similar answers for years that Chinese economy is vital to the world
economy and it’s a big market.

 Yet, COVID-19 seems to have changed everything in addition to the rise of China and
the US “de-coupling”… China is more isolated than ever since its economic reform.

 It says foreign visitors to China drops about 90% in 2023 and China is facing an
economic hardship, the biggest since 1994… (An aging society with the lowest GDP
per capita…)

 The world’s fastest growing economy in 2023 is India, still, about 6%... A new low in
our times.

 So, what makes you come to China in 2024?

Central arguments 1

 Why domestic politics matters in China?

 On Chinese political system, leaderships, and the state’s role

in economic development;

 On state-society relationship, business-politics relationship,

and modernization-urbanization relationship;

 On political culture and ideology;

 On global politics and China’s role and challenges to it

Central arguments 2

 My earlier academic works focus on Chinese local politicians (the

CCP cadres) and their career moves. I learned that even seen as
an elitist group, they are ultimately very different from each
other.

 There have been three major schools of theories in

understanding local politics and cadres in contemporary China:

 1) the Marxist-Leninist approach

 2) the sociological approach (GDP growth, social issues,

population, etc.)

 3) the historical approach

Central arguments 3

 The first approach reveals part of the nature of the

Communist Party of China (aka CCP); but fails to
explain the incentives of the government (central and
local) under the market economy;

 The Weberian explanation of bureaucracy and social

theories remain to be the dominant school; but it fails
to take more independent variables into consideration
(land, capital, peasants, etc.)
Central arguments 4

 Historians from 1980s (but became popular in 2000s) started

rethinking Chinese history and its connection with
contemporary Chinese political system. They achieved
fruitful results (i.e. capital, elites, power structure, and
mostly, governance in China). i.e. Li Bozhong, Phillip
Huang, …

 However, this newer approach cannot exist alone without

the prior knowledge of 1st and 2nd.

 Fact: I have read more books since I got PhD and most of
them were histories! So history is important!
Central arguments 5

 My biggest questions (some I still don’t have answers):

 What are the fundamental changes of Chinese society but still with a
very large number of peasants and still struggling with problems in
agricultural economy? (They are of course the primary task of local
government in China)
Central arguments 6

 How to relax (or decrease) the deep tension and frustration that the
scale of Chinese economy and market is so massive, but without the
robustness of companies, enterprises or entrepreneurs? （i.e. Official
report reveals in 2015 that 60% private enterprises bankrupt in 5
years, and 85% dissolve in 10 years. )
Central arguments 7 (Final!)

 No longer a unified ideology rules the whole society and state, can a
stronger government (I mean strong itself) deliver good governance?
In particular, contemporary China needs sustained growth, as well as
the rule of law, anti-corruption, environmental protection, and
equality?
Modern China Timeline
Copied from http://faculty.washington.edu/stevehar/timeframe.html

 The period of modernizing reforms

 1840-1911: The late Qing Dynasty

 1862: Expansion of the treaty port system

 1868: Meiji Restoration（明治维新） in Japan

 1870s: The high point of "statecraft"

 1895: Japan defeats China, takes Taiwan

 1898: Emperor's reforms fail, conservatives take over

 1900: Boxer rebellion（义和团运动） brings foreign retribution

 1911-1949 The Republic of China

 1912-1916: Presidency of Yuan Shikai

 1916-27: Warlord Era

 1919: The May Fourth demonstration

 1921: Communist Party founded

 1927-37: Guomindang unifies part of China; capital at Nanjing

 1927: Communists defeated, retreat to the countryside

 1931: Japanese take Manchuria

 1935-36: The Long March

 *1937: Japanese invade North China

 1945: US atom bombs bring Japanese surrender

 *1945-49 Guomindang-Communist Civil War

 1949: Guomindang defeated, retreats to Taiwan

 The period of high socialism

 *1949: People's Republic founded

 *1947-52: Land reform

 *1954-56: Agriculture collectivized（农业集体化）

 1956: Industry socialized

 1957: Anti-Rightist campaign

 *1958: Great Leap Forward and People‘s Communes

（“大跃进”与人民公社）

 *1959-61: Famine（大饥荒）

 1962: Retreat from communal to collective production

 *1966-69: Great Proletarian Cultural Revolution

 *1966-76: The "Cultural Revolution Decade"

 1969-78: Youth to the countryside

 1972: Nixon visits Beijing

 *1976: Mao Zedong dies

 *1978: Official reform policy announced

 The period of Reform

 *1979-82: Dismantling（瓦解） of collective agricultural production

 *1979: Beginning of the Birth Planning Program

 1984: New constitution allows some freedom of religious practice

 1985: Urban private enterprise allowed

 *Late 1980s: collapse of restrictions on migration to cities

 *1989: Student movement, culminating in Tiananmen incident

 1993: China's Olympic bid fails

 1994: Recentralization of finances

 1990s: Rise of urban consumer society

 1990s: Nationalism replaces revolution as national goal

 1997-2003: Regime headed by General Secretary Jiang Zemin

 1998: Major floods bring turn toward environmental protection

 2001: China's Olympic bid succeeds

 2002-2012: Regime headed by General Secretary Hu Jintao

 *2008: Tibetan uprisings, earthquake, Olympics. What a year!

 2009: Uyghur uprisings

 2012- Regime headed by General Secretary Xi Jinping

2012-2024: China under Xi Jinping
 The greatest politics in China since the late 1970s has been trying out ways
of sustained economic growth.

 The era of President Xi (since 2012 with his third term started in 2023) has
been criticized by many as the rise of autocracy and state-controlled
economy.

 However, make no mistake that whoever the leader is WILL NOT change the
fact that Chinese economy is the most essential issue of all!!! Our average
income is low, our development level is behind, and our society is far from
having surplus or extra resources. Less than half of the Chinese make only
1,000RMB per month.

 The mindset of Chinese leadership may be different (choosing from

socialism/capitalism/market/planned, etc.), but the GOAL is to sustain the
economic growth by all means.

 This goal sets or resets all other policies (finance, diplomacy, BRI, Taiwan…)
 Broad challenges to the Chinese political
economy in 2024(1)
 1. Surpringly, Chinese economy did not bounce back when the Covid-
ban was lifted in late 2022 as most people expected.

 2. Small businesses suffered the most from the pandemic, yet, assests
of the middle-class were flushed away with knownly tens of
thousands of Chinese “RUN” to other parts of the world to make a
living.

 3. With interest rates stayed high (until September 2024) to save

state-owned banks and President Xi’s call to halt the real estate rush,
many Chinese households without sustained high income have been
greatly affected by the depression since 2023.

10/31/2024
(2)

 4. Investment of the government of China mainly focus on

infrastructure and industrial plants. Consumption, however, has not
been a primary choice for the government to boost the economy.

 5. Thus, with declining international orders and low domestic

demands, China’s GDP growth rate was 5.2% in 2023.

 6. National survey shows that in 2024, Chinese people mostly spend

money on Education (28.6%), Medical service (26.3%), Travel (25.4%),
Entertainment (20.5%), Large goods (17%) and Housing (15%). This
means most Chinese are not yet out of surviving pursuits of spending
but with little money on high-end consumptions.
(3)

 7. Under Presient Xi’s supervision, the government lifted ban on the

second child for couples in 2016. And the ban on the third child was
lifted in 2021.

 8. However, such acts have not reversed the most devastating trend
of decling population growth in Chinese history.
My opinion: Good or bad?

 1. Recent policies by the government in late 2024 reveal some new

trends to boost Chinese economy.

 2. A stablized relationship with the U.S. at least not until the next U.S.
President makes odd moves against China.

 3. A relaxed yet not entirely assuring sign that the government

encourages private capital to stay and even expand their business in
China.

 4. More pro-active policies to reduce poverty and provide more jobs

but the unemployment issue is becoming really unsettling. (Large
portion of my students show anxiety about their career future.)
Declining birth rates and marriage

 Yu Xie and colleagues in recent studies (2022-2024) show that:

 1. In industrial societies people get married out of romantic choices.

But today’s Chinese, esp. female, get married for resources and social
status. Female are more willing to marry if marriage brings more
wealth and status.

 2. Declined marriage among young Chinese is a sign for China’s

declined equality and narrowed chances to earn a better life.
[Compared to generations in 1980s to 1990s].

 3. Chinese are more willing to have (more) babies if they expect their
children have greater social mobility than themselves.
Lessons from the biggest aging society (2)

 4. So to speak, parents (esp. from low or middle income background)

expect their children to have better lives than themselves.

 If not, they are not willing to give birth to more children.

 Wealthy Chinese, on the other hand, show no change of child birth

willingness.

 5. I personally think fewer children and older population as challenges

and opportunities. They can be BAD AND GOOD.
(2)

 China’s growth in the past four decades show great momentum and
suprising records of improving people’s life quality.

 Judging by the declined birth rate and rise of the female social status,
China may not be UNIQUE in terms of reaching a developed society.
i.e. My student speeched on China’s future show a new but familiar
middle-classed massed society.

 Video: Shanghai halloween in 2023.

 President Xi and the Communist Party of China (CPC) must take all the
changes into their policy and strategy making processes.
Lecture 1: China and the World
Part 1: Great Changes in World
Politics
 Professor Samuel Huntington argues in his famous work in 1991 that
we have entered into the era of the Third Wave of Democratization,
where regime changes happen frequently as many older states failed
and new nations rise to the world politics.

 However, most Third Wave democracies tend to be “uncertain” and

under great “international influences”; therefore, to consolidate this
democracies have been problems…

 Now we are already more than a quarter century away from the
initiation of the Third Wave democratization, however, we still
frequently see the troubled states globally with many and many troubles.
 Good Aspirations:

“Economic development makes democracy possible; political

leadership makes it real.

… democracy is the least bad form of government for their

societies and for themselves.

Democracy will spread to the extent that those who exercise

power in the world and in individual countries want it to spread.”

Samuel P. Huntington (1991)

Here is what Polity Index says…
From 1995 to 2017, the world has become more complex…
Left: Polity index (last
updated: Sep.
2019)shows
That China is more
stable than many
Democracies; though
big problems are
Ruling legitimacy and
Security (I assume,
privacy?)
Where the strong suits
are
economy and safety.
 Keep in mind that both the good (growth
and safety) and the bad (legitimacy and
privacy) are among the biggest concerns of
the central and local governments in China.
 Under the current leadership,
the State has gained more
control over social life.

 i.e. Chinese President’s direct

commands on Alipay Group’s
IPO, Chinese children’s
extracurriculum trainings and
so on…
It was not peaceful after WWII, but got worse since the 911…
 Shown on the right, the linear
relationship between regime type
and income per capita became
less effective as we entered into
the 21st century…
 It was the more despotic
countries that were poorer, now it
is hard to tell…
Explanations?
 Overall, Huntington’s Third Wave thesis is a mixed bag…

 Classical political science debates focus on the nature of a

regime or a government; therefore, the transition plays a very
big role that once the transition to democracy has happened,
other positive changes are supposedly to come along.

 However, scholars in more recent studies argue that elites are

crucial in terms of a consolidated governmental system.
Failed leaderships and strong oppositions result in troubled
democracies (or dictatorships) (O’Donnell, Schmitter, …)
 i.e. failure of presidentialism (Linz 1978); oil regimes; …
2.

 China watchers have noticed that since Xi became the top leader, the
CCP has gained more control over China’s society, the economy, and
also, to CCP’s own political elites.

 It may be that the leadership issue has been taken into Xi’s
consideration to promote a strong state and eliminate political risks to
promote democracy or popular rise.

 The same situation took place in other parts of China, such as Hong
Kong, and Xinjiang, where state control is strengthened.

 Anti-corruption campaign, however, may also target those officials

who did not follow the leadership closely.
3.

 Against what Huntington and other pro-democracy scholars expected,

China’s economic growth has been utilized by the CCP to control the
society.

 But it does not mean general principles don’t apply to China’s future
social changes.

 Aspiration for a democratic society still exists... i.e. Car owners

Sectors of China’s key competitiveness in the world
 Companies or innovations, such as WeChat or Huawei, cannot achieve
its broad successes, if the government of China didn’t approve.
 What’s more, data privacy has not become a common concern
because of the government.
 Such data are also used in fields as in medical or AI, which gives China
an advance in global competitiveness.
 Others, such as Douyin or TikTok, viewed by the Chinese authority as
opportunities to promote China’s global images. And their popularity
is viewed as groundbreaking.

10/31/2024
The world economy is emerged to three main centers
of supply hubs: US, China, Germany.
https://statisticstimes.com/economy/china-vs-india-economy.php
https://magazine.wharton.upenn.edu/digital/3-reasons-india-isnt-the-next-china/
China has been built on infrastructure, investment and manufacturing;
India has barely scratched the surface on all three.
India began its economic reform in the early 1990s, more than a decade
after China. But in the last-quarter century, China has accelerated its
economy, while India’s has weakened comparatively. Why?

Chinese growth has been driven by some of the world’s highest

investment rates. This has in turn made possible both an infrastructure
revolution of new cities, high-speed rail lines, airports and ports, and
manufacturing muscle that has been the envy of the world. China has
been the world’s factory for 20 years. Its ability to quickly and efficiently
move what it produces domestically and around the world has been a
critical component in its growth miracle.
Conclusion

1. Compared to other BRICS economies, China still enjoys great

advantages in infrastructure, skilled labors, domestic market, and
innnovation. But the greatest of them all is a political system that
aims at promoting growth and deliver efficient development.
2. Covid-19 was viewed by this government as a success in putting the
pandemic under control and recovering the society back to its order;
but its limitation of personal freedom and small businesses is
responsible for the economic slowdown since early 2023.
3. Donald Trump’s presidency and the Covid pandemic had together
isolated China in the international world. The geopolitical advantage
China had in late 1970s (when the USSR was viewed as the greatest
threat of the US) no longer exists. This means the rise of China shall
take longer time and with a bumpier road ahead.

10/31/2024
Lecture 2.1
Global Challenges to China’s Rise
1.

 When I was growing up, it was the time when the Cold War had ended,
the birth of EU and introduction of Euro; China entered into WTO; and
much more optimistic views on integrations and globalization;

 However, younger generations at present do not view things the same

way, according to a 2016 NPR report, research finds that Americans in
their 20s hold very much similar views of the world with Americans
grew up during the Vietnamese War and the Civil Rights movements:
they are more self-centered and think more negatively on the outside
world.

 No such polls in China, but the results would not be strikingly different.
2.

 J.D. Vance (conservative advocate, author of the book,

Hillbilly Elegy) repeatedly claims before and after Donald
Trump’s electoral win in 2016 US Election that Americans
who voted for Trump were mostly those who feel politically
and socially “insecure” but culturally “disconnected.”

 Meanwhile, many of them are not poor (even though a large

amount of them are of Scottish/Irish decedents).

 Video: J.D. Vance’s speech on China in 2024

3. Populistic Rises
 Inside some stable
democracies, there
are vocal advocates
such as Steve
Bannon call for
overthrowing elite
politics (anti-
establishment) and
mobilizing populist
movements to
achieve radical
political goals.
 i.e. Bannon’s 2018
Oxford speech was
very explicit on
stopping China.
Viktor Orban of Hungary is now a new
favorite off the American Right.
Hungary under Orban is pictured by
rightwing media as an ideal society with
prosperous economy.
Orban gains immense popularity among conservative Americans because he is
anti-immigrant, and claims to be “nationalistic and Christian.”
It shows the rise of the so-called strongman politics in today’s world.
Livin’ in the new world
With an old soul
These rich men north of
Richmond
Lord knows they all just wanna
have total control
Wanna know what you think,
wanna know what you do
And they don’t think you know,
but I know that you do
‘Cause your dollar ain’t sh–
and it’s taxed to no end
‘ Cause of rich men north of
Richmond

I wish politicians would look

out for miners
And not just minors on an
island somewhere
Lord, we got folks in the street,
ain’t got nothin’ to eat
And the obese milkin’ welfare
What are the Lessons?
 As for the government of China, external changes in recent
decades have definitely alarmed the regime to be more
cautious and become more prepared;
 i.e. Financial crisis’ impact on RMB exchange rate; Arab Spring’s diffusion on China’s Internet
censorship.

 But some also argue that internal turmoil that took place
long before the early 21st Century has reshaped the
Communist Party of China’s way of political thinking (Nathan,
Walder…)
 i.e. Xi delivered an important speech in January 2019 (just before the Chinese New Year) at
the Central Party School for senior party officials calling to be “extremely cautious” on both
“grey rhinos” and “black swans”. (Protest in HK started in Jun. 2019 was the black swan
unwanted..and COVID19 in 2020…)
Part 2: Changes of Views

 More challenges than we

have ever expected
happening world wide

 Francis Fukuyama: from “End

of History” (1993) to
“Political Order” and
“accountability of a
government” (2010).

 Globalization, is not all

positive, or not viewed by all
as being positive…
China rises sooner than most of us had guessed…
New in 2020s: Trump, Biden & Beyond

 The Covid-19 pandemic accelerated the anti-China sentiments from

the American conservatives, and pushed the Trump administration
further to take actions against China.
 i.e. Human rights, South China Sea, Taiwan, … these issues were not used to
take on China by the administration before.
 Even Chinese scholars consider these are “safe zone” in Sino-US dealings. But
the pandemic has changed the rules of game that even the Trump
administration (Sec. Pompeo in particular) continuously attacks China on
these issues.
 Again, Trump’s four years in the White House has made it an open
statement that to urge China is to save the US for its own
fundamental interests.
 These sentiments, the principles behind them that push for tough or
hawkish China policies will not change in the near future.
Trump, Biden & Beyond 2

 President Biden’s foreign strategies:

 More multilateral cooperation on urgent issues, such as climate change and
regional conflicts;
 More ambitious participation in rising economies and rapidly changing parts
of the developing world, such as Africa, India, Vietnam …
 Potentially an alliance to tackle or defend China’s rise led by the US and its
regional allies.
 Pull the US allies together by sharing with them more benefits, thus, they play
bigger roles in the competition between China and the US.
 On key technologies, the US shall not negotiate or tolerate China’s
advancements.
 Key U.S. military official says in 2024 that China is dominating AI’s military
practice and calls for the U.S. to take strong actions.
3.

 “When two competing entities have comparable powers that

include the power to destroy the other, the risks of a war to the death
are high unless both parties have extremely high trust that they won’t
be unacceptably harmed or killed by the other. ” Ray Dalio (2020)

 Hence, we may expect to see more hard policies from the US on

China but they may not necessarily look aggressive or hawkish…

 In other words, to contain China in the long run with more allies of
the US.
10/31/2024
10/31/2024
But statistics or numbers don’t always reflect ordinary people’s life changes,
either positive or negative. i.e. Chinese government has taken firm actions
to reduce inequality, and unemployment rate can be partial to reflect the
entire economy.
10/31/2024
Notes:
1. Bear in mind that BRICS is no G7 because its members
don’t always see eye to eye on a series of issues in world
economy and politics;
2. China needs allies, or close friends to counter the U.S.’s
pressure to stop China’s rise;
3. Clearly, such an ally is hard to find! And the R-U conflict
that has lasted for so long makes it even more difficult.
4. President Xi phrased it in 2020 that challenges and
opportunities “co-exist” for China. While I was at a 2023
seminar, experts admit that the opportunities are “not
clear” or “not in sight”, but the challenges are already
servere.
10/31/2024
10/31/2024
Q: A Better World Order with New
Powers?
 “It [China] has become more politically repressive at home and more
assertive in its neighbourhood. China deploys its economic muscle to ensure
that governments … temper their criticism of its domestic politics … The
government in Moscow, like that in Beijing, thinks that large countries are
entitled to establish spheres of influence in their vicinity … A number of
important emerging powers, such as Brazil, India and South Africa, though
democratic at home, make a point of not supporting democratic causes
internationally. “

 Charles Grant for New Statesman (Feb. 16, 2016)

2.

 British historian Timothy Garton Ash asserts that (in a 2010

TV interview):
 It is a world of giants (great powers), but a no-polar one;
 Europe = France + Germany;
 American political system is dysfunctional…
 English speaking powers cannot set the agenda any longer.
3.

Professor Ash also points out that:

-What Do the Chinese Want?
 Wealth and Power;
 The Leading Role in Asia;
 Recognition from the West.

So he concludes, China is an “authoritarian capitalism”.

[my interpretation: wealth, power and respect… ; but also

shows China‘s resentment of the past]
(i.e. The Queen revealed in May 2016 the stress of meeting Xi...)
China’s international image

 Recently, Pew Research Center claims that many countries hold

generally more negative views on China especially when Joe Biden
became the U.S. President. (June 30, 2021:
https://www.pewresearch.org/fact-tank/2021/06/30/chinas-
international-image-remains-broadly-negative-as-views-of-the-u-s-
rebound/)
 Click here to add the headline content

A widely cited survey conducted by PEW in 2020:

https://www.pewresearch.org/global/2020/10/06/
unfavorable-views-of-china-reach-historic-highs-
in-many-countries/

10/31/2024
Key points for CPC’s next five years:
1. Chinese economy (down to the
lowest growth in 40 years;
employment rate is now high; open-
up still??)
2. Common prosperity?? Close the
income gap or tax the rich more?
3. Big power politics, China, US, and
the Russia-Ukraine issue?
4. Rely on more international trade
or innovation by China itself?
5. Domestic stability
6. Taiwan
7. Personnel and leadership’s
generational change (But I personally
don’t think it’s a big deal since the
President stays).
We will talk about these next lecture.
A few more words on world politics’ impact on Chinese economy:
1. Deng Xiaoping started the Reform based on the judgment that a
world war was avoidable;
2. The US would not mind China’s rise and even help Chinese
economy and China’s integration;
3. Yet, after more than 45 years, the US and its elites no longer view
China as a peaceful trade partner but a rival with capabilities to
challenge it.
4. This worries the Chinese leader and he may make different
judgement, very differently from his predecessors.
Part 3 Challenges or Opportunities?
 Compared to a decade ago, the globalized world has been posing
more challenges to the CCP’s rule of China.

 First, citizens and governments are learning (from each other) at

the same time (Tarrow & Della Porta 2013);

 Second, it is more difficult to maintain the regime’s legitimacy

when its citizens are more educated (Shi, Geddes & Zaller,
Kennedy…).
2.

 Currently, China’s CCP regime still holds very high support (surveys shown
more than 80% or even higher…);

 President Xi Jinping has gained tremendous popular support since he took

the office by combating corruptions, inflation, environmental pollutions
and other highly concerned social issues…

 Still, it does not change the scholarly findings that more educated citizens
are the most dissatisfied with authoritarian regimes;

 And such high support is extremely costly to maintain, either financially or

socio-politically…

 At last, more and more social issues are on the way… [maybe an
awakened society] (Goldstone makes counter-argument to Fukuyama etc.
that 21st century is a century of contention and movements)
3.

 For instance, according to a 2014 poll, among the people of China

surveyed,
 Those with primary education are the most satisfied (with overall life quality);
 Those with doctorate degrees are the least satisfied….

 Still, the central government is generally respected compared to its local counterparts in China.
4.

 Mark Harrison, an economist at University of Warwick, concludes:

“… rash political reforms are not the factor that decided why communism failed
in Russia. The collapse of Soviet rule came only after the gradual economic reform
initiatives that worked in China failed in Russia.

We must look somewhere else, therefore, to explain China's success.

I suggest that the answer must begin with China's capacity for continuous policy
reform. To break out of relative poverty and catch up with the world technological
leader, an economy must undergo continuous reform of its policies and institutions.
Continuous policy reform is fragile. ” (continues on the next page)
 “For China to maintain the continuity of policy reform over the
distance is beyond unlikely. At some point, some coalition of
interests is bound to form that will be strong enough to block it,
at least for a time. At that time China's oligarchy must be willing
to intervene on the side of movement, not stability. If not, the
China deal will come unstuck. ”

 [https://blogs.warwick.ac.uk/markharrison/entry/the_china_deal
/ June 29, 2012]
Part 4: China’s Rise & World Order
 Chu Yun-Han (lectures in 2015) argues that the rise of China
represents the trend of new world order, or changes to the existing
one:

 1) From G7 to G20, if the U.S. and Europe can decide, they wouldn’t
allow such participation in decision-makings;

 2) Economic power of the emerging markets will be more

significant;

 3） China’s rise (known as state capitalism) provides a new option

of developmental models, increasingly appealing to developing
nation-states.
2.

 4) the support for Asian Infrastructure Investment Bank is not

only a result of China’s economic success, but the non-Western
world’s rising nationalism.

 (In other words, these nations that are stronger want to become
someone other than the US or Europe)

 So I conclude, it is becoming a world where the US can’t manage

to be in charge; and others (esp. China and other emerging
powers) can’t wait to try.
Below: BYD taking a spotlight at 2023 Germany autoshow.
Germany, used to be cozy with China is now facing economic
downturn.

10/31/2024
Also, Huawei’s launch of the new phone in
summer 2023 resulted international debate
on if the US’s sanctions on Chinese tech
companies actually worked.

The government of China is now pushing

for domestic innovations, potentially a
move that also copes with its policies on
Taiwan.

10/31/2024
• I always tend to think China’s domestic governance is associated with
how the Chinese leadership view the outside world.
Such approaches in understanding China and the world remains nearly
the same since the 1800s. (Emperor Qianlong turned down trading
offers made by the British; and the Opium Wars enhanced many
Chinese’ views that the West was [or still is] invasive to China.)
Bruce Jones (Brookings, 2021): “The Western Pacific is becoming to
today what East Germany was to the Cold War; the front line of
tensions between the world’s leading military powers. Its deep waters
have replaced the European heartland as the fault line of geopolitical
tensions.”
High hopes for US-China cooperation in tackling climate change is
nearly gone when Biden sustains Trump administration’s China policy...
My Thoughts on Globalization

 1. The world has not become more equalized;

 2. The world has not become more peaceful or liberal;

 3. Domestic issues become internationalized.

Nation States and the Globe

 4. Instead of believing universal values, many others try to hold on to

traditional values.

 5. In China, the society but the government is becoming more

nationalistic.

 6. International cooperation is associated with international

intervention.
 An international academic conference I attended in October
2015 in Beijing, a well-known Chinese scholar argues that
contemporary China is being torn apart by two major crises:

 1) (Chinese) Man against the nature;

 2) The (Chinese) rich against the poor.

 i.e. Hurun Report reports Beijing is now the world’s billionaire capital; 5 Chinese cities make World’s Top
10: Beijing, Hong Kong, Shanghai, Shenzhen and Hangzhou. But Beijing’s monthly social security makes
RMB700 per household.

 It sounds provocative, but it might be one of the few consensus

between the Chinese leftists and the rightists so far…
Which Is the Unchanged?

 The Single-Party regime where the Center of the Communist

Party of China (a.k.a. CCP) is also the center of entire Chinese
politics;

 National and regional governing structures, where local Party

organization commands local administration and then the local
society and people;

 Yet, socially, and nationwide, rapid development with great

inequality.
 i.e. According to The Economist (2014/9/12), “emerging economies could expect to reach rich-world
income levels, on average, in just over 50 years. If China is left out, catch-up takes 115 years.” It
means the greatest acceleration comes from Chinese economy.
 However, inside China, life expectancy of the residents of Shanghai is almost 20 years longer than
that of Yunnan and Guizhou province.
 By 2015, more than 4 million Chinese households with assets of over USD$1 million.
 “It is true that the Chinese government spends lavishly on the security
apparatus to preserve social stability and resorts to harsh measures to put
down perceived threats to one-party rule. It is also true that the CCP is the
motor of political reform and it will not enact reform likely to lead to the party’s
demise. But the reform era has been characterized by an evolving three-
pronged approach to political governance that cannot be accurately captured
by labeling China a “bad” authoritarian regime similar in nature to, say,
dictatorships in North Korea and the Middle East. Since the model—democracy
at the bottom, experimentation in the middle, and meritocracy at the top—is
unique to China, we can call it the “China model.” The China model—referring
here to political governance rather than an approach to economic reform—is
both a reality and an ideal.”
 Daniel A. Bell, China Model (2015)
Conclusions

 The end of the Cold War and China’s reform were once considered
the only correct choice of China’s future for the state and the society.

 However, at the turn of the new century esp. with new threats and
uncertainties get seemingly more, the CCP started rethinking China’s
role in the world and domestic governance. In short, slowed GDP with
cautious domestic policies.
Conclusions

 But this is exactly what local government in China must deal

with: to create more growth, but to decrease all kinds of
risks.

 Viewed by outsiders as being authoritarian, the CCP takes

all into its consideration of sustaining its rule by providing
more efficient governance. (i.e. trade war, HK protest, …
etc.)

 Local government and its governance become extremely

tricky.
Conclusions

 Notably, problems such as inequality, fiscal burdens, aging population,

industrial upgrades…they are more severe or significant at local level.

 Compare to democracies where people utilize votes to show their

anger or frustration, the Chinese system ultimately bans such acts.

 Hence, governing local China can be very different from governance

of elsewhere.
 Conclusions

• Notably, General Secretary Xi has been emphasizing

the “common prosperity” continously in his 19th and
20th CPC National Congress speeches.
• Thus, even though the final goals are yet to be
revealed, the party and the top leadership do wish to
work on closing income gaps in the future.
• However, in China’s own way, so-called Chinese
modernization.

10/31/2024
 Conclusion
President Xi did not consolidate his power
until 2015-2016.

Yet his anti-corruption campaign,

curbing housing prices, etc. have been
problems for decades.

China’s economic slip in post-COVID

maybe temporary, but it reflects many issues
we have been having. ESP. the bureaucracy’s
decision-making may not be effective.

End of
part 1
10/31/2024
 October 2024 Dr. Qiao Liang

Government and Politics

in China
Part Two
Thursday, October 31, 2024
Lecture 2
• Governing structure and institutions of the CPC (CCP).

• Historical understanding and practice of local government in China;

• Local governance in China under the Communist Par ty of China

(CCP);

• Local elites and government in the 21 s t centur y (under Xi).

2.1 Overview
• Main approaches are used in studying local
governance in China:
• 1) Marx-Leninist (still commonly used in
today’s Chinese college courses) (i.e.
contradictions of the Chinese society);
• 2) Weberian or modern sociological (i.e. Zhou
Xueguang, Zhou Feizhou, Feng Shizheng, etc.)
• 3) Economics, esp. economics of development
(i.e. Yifu Lin, Yao Yang, Liu Mingxin, etc.)
• 4) Historical approach (not the mainstream,
because the economists are the mainstream,
esp. when statistical methods and trainings
are more common in economic education in
China)
• i.e. Phillip Huang, R. Bin Wong, Li Bozhong,
Zhao Dingxin, etc.
• i.e. Zhao’s comparision of legitimacy; and
the fundamental difference between CPC and
Western parties was its nationalistic origin.
2.2 State and the economy in China

1. Bureaucracy was born reall early in

Chinese history as a great invention that
enhanced the state’s control of the
society.
2. Ancient Egypt, Mesopotamia, and the
Romans all may have similar settings of
government of the earliest forms, still,
the Chinese managed to use it to the
largest and the most efficient. (i.e. Only 8
days needed to deliver urgent info from
the most west fort to the capital city in
Hang Dynasty.)
3. Marxist “feudal society” theory is widely
used in China. Yet, China had a short
“feudal” stage, but a very long hisotry of
governance under a centralized
government.
 2.3 Debate on the state
1. Overall, the concept of a modern state is relatively
really new to China and Chinese scholars.
2. Previously, esp. Marxist approach views the state
as a nation-state (originated from Europe’s modern
history) with capitalist socio-economic structure;
but Chinese academics only in recent decades
argue that China has its own paths to become a
modern state. i.e. Zhao argues that nation-building
before capitalist reform took place centuries ago.
3. Xi’s 2023 speech emphasizes both Marxism and
Chinese heritage and traditional cultre. But such
speech would not happen years ago because China
would insist on its socialist system.
 2.4 Role of the state in China
• Noted here that either sociological or
economic approaches used by scholars
(Chinese or China watchers) are mainly
based on rational choice theor y.

• Their arguments are different but they

focus on resource, power, mobilization and
(social or economic) outcomes of Chinese
local economy.
2.5
• All research on contemporar y China is and must be empirical. That means scholars
don’t usually know where the countr y is heading to; but we tr y to understand where
the leader(s) want to lead.

• From late 1970s to Xi’s first 10 years as the top leader, developing Chinese economy
has been the central goal of the CPC. In his 20th National Congress speech in 2022,
however, both “development” and “security” were emphasized.

• As I repeatedly mention, the Trump Presidency has profound impact on the Chinese
leader.

• I studied to find out that before Deng Xiaoping’s reform, more than 90% of Chinese
economy relied on domestic trades. In 2021 when Xi emphasizes “Dual Circulation”
maybe we are about to see a strong Chinese economy that eventually stresses on
domestic consumption and trade.
2.6
• This shif t, in turn, will likely bring huge changes to China’s local governance and
economy. As East Chinese provinces rely on expor ting and international trade, maybe it
is about the time these provinces look to China’s West and domestic markets.

• But, I argue, in terms of social and political changes, Xi’s China is being competely
different from Mao’s China (domestic economy was in dominance) because China now
has a much younger and better educated, not to mention the huge size of it, middle
class.

• And Xi’s “common prosperity” campaign may even enhance it.

2.7 How does the state affect the Chinese
economy?
1. Ancient Chinese fought with alien nations and domestic warlords
constantly, therefore, profitable business were usually operated or
controlled by the authority. Private business owners did not aquire
their political equivlance whatsoever in the royal court.
2. The Communist Revolution and the followed “Socialist Reform”
ended in 1956 completely nationalized Chinese economy. Nearly all
sectors were public and state-owned. The state (and the CPC)
aquired superior position in Chinese daily life and employed nearly
every one.
3. In the late 1970s, Deng Xiaoping’s reform called for privaitizing public
sector and marketization. Yet, Deng or any leader after never
intended to weaken the core state-owned enterprises.
4. Only the less profitable S.O.E. were reformed to accept private
shareholders.
2.8 S.O.E.s in China

1. In light of the changing global landscape and the Fourth Industrial

Revolution, China is transitioning from an investment-driven export
economy to an innovation-driven economy reliant on domestic consumption.
2. The role of SOEs has become all the more important in these circumstances,
as they have traditionally assisted the government in reforms - even though
the new consumption-oriented economy requires a level of flexibility and
responsiveness that publicly owned bodies generally lack.
3. By 2019, China is home to 109 corporations listed on the Fortune Global 500
- but only 15% of those are privately owned. China’s SOEs are enormously
bulky and therefore lack flexibility when responding to market
demands.China is home to 109 corporations listed on the Fortune Global
500 - but only 15% of those are privately owned. China’s SOEs are
enormously bulky and therefore lack flexibility when responding to market
demands.
2.9 Further on SOEs

1. By conventional measures, China has 391,000 state-owned

enterprises (SOEs), but new analysis of state ownership among all 40
million registered firms in China finds that 363,000 firms are 100%
state-owned, 629,000 firms are 30% state-owned, and nearly
867,000 firms have at least some state ownership.
2. The total capital of firms with some level of state ownership has risen
to roughly 68% of total capital of all firms (40 million) in the economy
in 2017. The share owned by the central government has declined
while that of local governments has risen.
3. Mixed state and private ownership is associated with higher firm
growth, productivity, and profitability. Firms with closer equity ties to
China’s government tend to grow faster but are less profitable and
efficient than those with more distant equity ties.
2.8
1. The state capital invested by the central government has declined from
37% in 1999 to 31% in 2017, while that of provincial governments has
Source: https://sccei.fsi.stanford.edu/china-briefs/reassessing-role-
increased from 9% to 35% in the same period, both over total capital of
state-ownership-chinas-economy
the in-network firms.
2. Additionally, while central and local governments are investing in a
larger number of firms, the average holding in firms is declining. Taken
together, the evidence suggests that while keeping its stake in firms,
governments are moving more toward indirect control of firms with
state equity.
3. Firms with up to 10% central government ownership grow 48% faster in
size (measured by total assets) than private firms. With even more
central government ownership (10–30%), they grow 73% faster in size
than private firms. The same is true for firms with provincial level
ownership stakes, but less so for city level ownership stakes. While firms
with less than 50% ownership are more productive and profitable, firms
100% owned by the central government are less profitable.
 “[M]ixed state and private ownership, especially indirect government ownership, may combine the
advantages of government support and the efficiency of private firms”
Conclusion

1. State-own economy and enterprises have always played very

important part in Chinese economy since 1950s. Modernization,
industrialization and urbanization were achieved in China through
state-owned economy and enterprises.
2. Still, early reformist years S.O.E.s in China focused on controlling
pillar sections and providing essential support to the state and the
society.
3. Reviewing 2012 to present days, more and more SOEs in China, after
assets reorganizations and shareholding reforms, become more
competitive and they are pushing private ownerships to the side and
dominating the national economy, again but in a more agreesive
fashion.
4. Xi’s call for strong state in a way enhances the legitimacy of such act.
Conclusion

5. Privately-owned
 Source: firms' share of market capitalization among China's
https://www.piie.com/research/piie-charts/2024/chinas-
100 largest listed companies shrank from a peak of about 55 percent in
private-sector-has-lost-ground-state-sector-has-gained-share-among
mid-2021 to just 33 percent at the end of June 2024, a decline of more
than 40 percent in only three years. At the same time, the share of
state-owned enterprises, namely those majority owned by the Chinese
party-state, rose steadily from less than one-third to about 54 percent.
6. The authorities' stance since 2020, including regulatory tightening
and zero-COVID lockdowns, appear to have inflicted long-lasting
damage to China's private economy, the dynamism of which was a
defining feature of its economic miracle in the past four decades.
Nearly 20 months into China's COVID reopening, the private sector has
yet to bounce back, despite many pro-private business utterances and
gestures from China's leadership.
Rational Choice way 1
• Given the scale of Chinese economy from
1970s to early 2000s, it was available and
fairly predictable to adapt Western theories or
rational choice models to explain China’s
growth along with China’s local governance.
• i.e. Zhang Qi et al.(2004), suggested that local
government urges or intervenes less when
local villages are more dependent to their rule.
Rational choice 2
• (from previous slide) Therefore, central
government, local government, and local
people are interrelated with government’s
fiscal capability and local democratic level.
Village democracy (promoted by the central
govt) in China CANNOT be achieved if local
government feels it’s losing financial and
political control over the village.
• They suggest, central govt should fund local
govt more to achieve village democracy. This
is a very rational choice-based China study.
Rational Choice 3
• In widely cited study by Tao et. Al (2003),
they claim political effectiveness between
central, local govts and local villages can
be explained by using fiscal burdens local
governments have.
• More fiscal burdens (demanded by
central) result more repression local has
on the peasants.
Rational Choice 4
• Therefore, a “U-shape” correlation exists
between local fiscal burden and local
democracy in China.
• Richer villages have more democracy
because they can pay; the poorer villages
have democracy because they are rebellious!
• In a word, local politics is healthier if local
government can pay their bills on time.
Rational Choice 5
• Economists and sociologists in 2000s tended to study the
economic obstacles or clique politics that prevented village
democracy in China.

• The CCP has permitted “village autonomy” since 1982 but by

now it’s not considered as a national democratic campaign.

• Meanwhile, historical approach pointed out that village

autonomy has existed in China for centuries. It never was and
is not going to become a national democratic campaign.
My response
• Obviously rational choice proves to be ver y effective in explaining
local China back in 1990s to 2000s.
• Theories were ver y new and statistics were unique.
• But now I think they were effective in “small batches. “
• Millions of villages can have thousands of models.
My response
• In a word, China’s economy and development was much more
backward back then, and scholars were few.

• Chinese scholars were not “confident” to rethink Western theories.

More impor tantly, given China’s stage of development, many
issues were ignored (i.e. social movements, environment, demand
for democracy…)
My response
• Villages and peasantr y life remain to be one of the
most important social issues in China even for now.
Large population, absolute backwardness, inequality,
demand for socio-political changes.
• Justin Y.F. Lin and his colleagues (authors I mentioned
above) made precious effort to bring the topic back
to Chinese social science. (Lin’s advisor was the
expert)
• However, I think the economists “enlarge” the
connection between govt’s fiscal burden and
peasantr y life. (i.e. They conclude all village
contention comes from fiscal burden)
• This was because rational choice initially introduced
to China, and historians had not stepped into the
field.
• In my word, until 2010s, China study was not
“Chinese” yet.
 My response
• Qian & Xu (1992 and many other
versions) made breakout in their
study. Why China’s economic
reform was more successful when
the Socialist Bloc failed? They
argue governance structure of
China was different from other
socialist system.

• Others were more centralized,

more resource driven, more
politically loyal, and … smaller
but industrialized.
My response
• But China had none of these. Chinese local
governments had little resource and power
and had to rely on upper level authority.
• But this structure was not centralized
enough to limit the growth of market. Local
govt had large amount of freedom because
whatever they do they won’t harm the
central!
• Qian & Xu called this scattered
decentralization “M-shaped” local
governance.
• (You are told to report to many authorities,
but no one was really in charge… So you
can decide…)
My response
• Qian & Xu argue, the economic reform in China was
de-nationalize, instead of privatizing. SOEs were
granted freedom but still governed or advised by
local authorities.
• This was a ver y low cost reform compared to the U-
shaped Socialist Bloc that adapted real privatization.
Or even, Shock Therapy…
• Starting from here, Qian Yingyi’s research greatly
inspired economists and political scientists in study
local governance in China based on China’s own
experiences and trajectories.
• My words: local authorities (townships or even
villages) were promised nothing, had nothing to start
with. But in turn, even if they fail, the state had ver y
little to lose…
• Qian says, China’s reform hence is ver y stable &
predictable.
1. However, in 2023, Professor Xu
Chenggang has become a very vocal
opposing figure of China’s current
economic policy toward private
economy;
2. He argues, in multiple occasions, that
China’s reform was originated from
Lenin’s old policy of utilizing private
sector to develop socialist economy;
thus, decentralization is the key.
3. But the reason Chinese economy slows
down so much in 2023 is because of the
policies that ignore, even undermine the
private sector.
1. Understanding the political drivers of Beijing’s
increasingly restrictive economic regulations is
essential, especially if they result in protracted
economic decline. China’s government estimates that
private industry contributes more than 50 percent of tax
revenue, over 60 percent of GDP, above 80 percent of
urban employment (Xinhua, June 29, 2022).
2. At the 20th National Congress of the Chinese
Communist Party in October 2022, a policy was
presented which stipulated "optimizing the
development environment for private enterprises,
protecting the property rights of private enterprises and
the rights and interests of entrepreneurs in accordance
with the law, and promoting the development and
strengthening of the private economy.” The "Opinions
of the Party Central and State Council on Promoting the
Development and Growth of the Private Economy,"
which contain specific policies for this purpose, were
released on July 19, 2023.
Source:https://www.rieti.go.jp/en/china/23091101.html
 However, it is perhaps China’s macroeconomy
Conclusion 1
that provides the best roadmap to the future
1. The balance and the relationship between weight of the private sector in the medium term.
China’s state and the private sector has As Michael Pettis has noted, if Beijing continues
always been a very delicate issue. to target a GDP growth rate that substantially
2. Wealthy Chinese have never given up exceeds the real, underlying growth rate of the
hopes to be recognized or become a part of economy, “China has no choice but to expand the
the state-affiliated organizations. role of the government in the economy and to
3. Too boost China’s GDP is to support the reduce the role of the market in allocating
private sector, Xi would agree. resources.” A longstanding but failed series of
4. Yet, is it an end or a means, toward a policy attempts to rebalance income to ordinary
prosperous China, is the question. households and drive domestic consumption
underlines the difficult of avoiding this outcome.
5. But the Chinese economy has suffered
The interventions into the private sector and state
without a strong private market. investments in private firms discussed above only
6. And SOEs are no longer providing jobs exacerbate such a structural challenge.
and benefits to the people. They are also Edward Cunningham
changed. https://www.hks.harvard.edu/faculty-
research/policy-topics/international-relations-
security/what-future-chinas-private-sector
Conclusion 2
• President Xi has not made transforming China’s countryside a central
goal of his first 10 years of 2 terms.
• This could be: 1) younger populations are moving to China’s bigger
cities and central towns; 2) Xi concentrates on restoring the ecological
balance, esp. the rural China, therefore, development of the countryside
must be away from industrialization; 3) Xi focuses on strengthening the
state-own economy and makes it more internationally competitive, thus,
small-scaled economies in rural China are left with little space.
Lecture 3
China’s Domestic Political
Systems
Thursday, October 31, 2024
Thursday, October 31, 2024
Thursday, October 31, 2024
Thursday, October 31, 2024
Thursday, October 31, 2024
China’s armed forces was re-organized from 2016 by centralizing the
ultimate control.
Formerly 4 main branches of the Central departments were divided into
15 smaller functional units.
Under Xi’s leadership, PLA’s motto is Fight and Win.
Legitimacy
Debate:
✓Traditional Chinese rulers
relied on the mandate that
was a divine claim;

✓Mar xism gives the CCP a

revolutionar y legitimacy;

✓But now the CCP relies on

the performance
legitimacy by GDP and
other economic
achievements
 Sources of
legitimacy
• Zhao (2009) states that
traditional Chinese state
adopted the Mandate of
Heaven to stustain its rules.
• It was divine but simpler.
• The CPC, however, can’t stick
to its or thodox Mar xist claims,
because of its utopian nature.

Thursday, October 31, 2024

 • (Continued) when the party
leaders switched to the
economic promises as its
ruling legimacy, it was
easier to practice; esp.
when China’s GDP grew
higher each year;
• But the growth is extremly
difficult to sustain for the
long run and people will
ask for more (than just
growth).
Thursday, October 31, 2024