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China: Free market economists urge post-Olympics social and political reforms

Categories: East Asia, China, Development, Economics & Business, Governance, Human Rights, Ideas, Politics, Olympics

For its foreign visitors, the Olympics seemed to be an introduction to all that free market forces have done to China [1] since Opening Up and Reform [2] began following Mao's death (which was 32 years ago today, btw, and barely paid any attention).

What does that mean? It led Thomas Friedman to write [3] that American cities now look third world in comparison to some of the ones China has built

Zhang Danhong took it a step further and claimed that through its free market reforms the Communist Party of China has done more than any political force before it by providing [4] the Chinese people with the right to life, liberty and security of person.

Just as Zhang was getting fired [5] by Deutsche Welle for having spokensaid that in public, with worries of a global economic crisis growing, a high-profile forum was held in Beijing to discuss the direction China ought to take over the coming thirty years.

In attendance were the who's who in the Chinese free-market economics, political and academic circles: Jiang Ping [6], Mao Yushi [7], Qin Hui [8], Zhou Qiren [9], Fan Gang [10] and, having just several days prior been accused [11] by anti-CCP website Boxun of spying for the US, free market economist Wu Jinglian [12].

Also in attendance was diehard [13] free market economist Steven NS Cheung [14], who upped Zhang by proclaiming the current Chinese system the best one seen in human history.

On the weekend a summary of the ideas put forth at this forum was put online and has been getting posted around, bringing the forum discussion online. Flagship Bullog blogger ProState in Flames yesterday renamed [15] the piece ‘Steven Cheung: “China's system, #1 under heaven”‘ and netizens elsewhere [16] have been making similar snarky remarks. Namely, the anonymous piece appears to have been written by someone who was featured at the panel and refutes Cheung's claim, driving home the point that the priority now is for political and social reforms to catch up with economic reforms, starting with the growing rich-poor gap and the fight against corruption:

与会者一致承认,三十年来,中国各个领域的规则、制度发生了重大变化,举其大者如:私人产权获得一定程度保护,公有经济迅速缩小,私人企业逐渐发育以至于占据经济的半壁江山。这些制度变化释放出企业家的创造性,由此导致经济持续快速发展,私人财富与政府财政收入以较高速度增长。与会者提出了各种理论,来解释这一增长奇迹。

专程参加这次会议的华人经济学家张五常以这种增长为依据,断言这三十年来的中国经过摸索,已经形成了中国历史上、甚至人类历史上最好的制度。但是,在公开或者私下场合,所有大陆学者一致认为这个看法过于乐观。与会的经济学家都认为,目前的经济形势相当严峻,过去几年的高速经济增长未必能够持续。真正令人担心的是,其根源不完全是周期性因素,还有更深层次的结构性与制度性因素。

Forum participants unanimously admit that over the past 30 years, the rules and systems in every area of China have undergone enormous changes, the largest of which have been the solid degree of protection given to private property rights, the rapid reduction in the public economy, and that private enterprise has gradually developed to the point now of occupying half the country's economy. These changes in the system have unleashed entrepreneurs’ creativity, which in turn has led to continual rapid economic growth and high-speed increases in private wealth and government fiscal revenue. Participants put forth various theories to explain this growing miracle.

Having made a trip especially to attend this conference was ethnic Chinese economic expert Steven N.S. Cheung who asserted, based on this kind of growth, that after fumbling around for thirty years, China has already developed into the best system seen not just in Chinese history, but also in humankind's. However, both publicly and in private, all mainland scholars unanimously feel this view to be overly optimistic. Economists at the forum all feel that the current economic situation is quite severe, and that the high-speed economic growth seen over the past few years will not necessarily continue. What's most worrisome, however, are not just cyclical factors, but the deeper-level structural and systematic factors.

[…]

在“市场化三十年”论坛上,绝大多数学者都不再只是向后看,拿今天中国的富裕与三十年前的贫困相比而沾沾自喜;相反,更多的人向前看,思考中国还需要那些制度变革。学者们普遍相信,惟有通过进一步更为广泛而深刻的制度变革,才能够完善市场,进而使中国社会继续良性转型的进程。

学者们提出的策略包括,减少政府部门控制资源的权力;严格限定政府的职能范围,政府应当谨守自己的本分,不能充当公司,不能利用权力经营城市、经营土地;改革财政预算制度,给公众以更畅通的财政民主参与渠道。江平教授进一步提出,发展是硬道理、人权同样也是硬道理。总而言之,与会学者都同意吴敬琏的说法:必须坚定不移地推进政治改革,完善宪政的制度框架。

也就是说,中国要保持稳定增长就必须完善市场制度;要实现社会繁荣,就必须建立某种程度的普遍福利制度。但是,满足民众在物质方面的需求,却必须依靠合理的社会、政治制度。6月25日,中共中央总书记胡锦涛在中央党校讲话时指出,政治体制改革必须随着经济社会发展不断推进。

At the “Thirty Years of Marketization” forum, the vast majority of scholars are no longer only looking to the past and feeling smug in comparing today's well-off China with the poverty of thirty years ago; on the contrary, even more people are looking ahead, and considering just what sorts of system reforms it is that China now needs to undergo. Scholars commonly hold that only through stepped-up broader and deeper system reforms can market perfection be achieved, and from there seeing China's society continue on its course of transforming for the better.

The strategy that scholars put forth includes reducing the power government departments have to control resources, strictly curb the limits of the government's role, that the government ought to stick closely to its own role, that it cannot act in commercial functions or use its authority to engage in municipal or land business; that the government reform the fiscal budget system, that it give the public greater access channels for participation in fiscal governance. Professor Jiang Ping further stated that while development is top priority, so too are human rights. Overall, participants all agreed with Wu Jinglian's statement that political reforms must be implemented slowly and surely to perfect the framework of a constitutional system.

In other words, if China wants to ensure stable growth, it must perfect the market system; if it wants to realize social prosperity, it must establish some degree of a basic welfare system. However, fulfilling the public's material needs requires the support of a reasonable social and political system. As Chinese Communist Party Central Committee Secretary Hu Jintao pointed out during a June 25 speech at the Central Party School, political system reforms must follow the constant promotion of economic and social development.