接上，第二篇。

My view to 2010-2015 China

Abstract

CCP has been founded for 84 years, and PRC has been founded and governed by CCP for 66 years. CCP not only made great contribution to China’s development, but also it made many errors and troubles to China and Chinese people. Hence it’s hard to evaluate its wrongs and awards that this essay will focus on analyzing the political and economic situation of 2010-2015 China by comparing with 1949-1970 China. At last, this essay would try to attain a clear conclusion and forecast the future of modern China.

Politics

Political campaign

In 2012, before Xi Jinping becoming chairman of PRC, the arrestment of Bo Xilai was the biggest political event for China. Bo Xilai was the governor of Chongqing, who was also regarded as the main competitor of Xi Jinping. In 2013, Bo was accused corruption, breach of privilege and embezzlement and sent into the Qincheng prison. A series things happened are a little bit tricky—“At first, Bo’s subordinate, Wang Lijun asked for help in American consulate. And then, the dead of Neil Heywood which happened in 2011 was expose to public, Bo’s wife Bogu Kailai was suspected as murder. Finally, Bo lost his position in CCP and became a prisoner” (2013). These a series events are similar to Gao Gang incident and Liu Shaoqi incident. Gao is a competitor of chairman, who had some chance to become the successor of Mao Zedong. However, because the political campaign with Liu, another competitor, Gao was criticized corruption and luxury lifestyle in meeting, and finally chose to suicide in 1954. And Liu was regarded as a successor after Gao Gang incident and became the chairman of PRC (not CCP) in 1959. But in 1966, Cultural Revolution happened, Liu was criticized by Mao in common and persecuted as capitalist and rightist by Red guards in public, which made him out of all his political power. After three years, dead of cancer in Peking.

There are some similar points of the three incidents: (1) There all are crucial political campaign, Bo are in prison now, Gao suicided, Liu was persecuted and even attacked until he dead for three years. (2) Their families are involved in it. Bo’s wife are in prison because of murder. One of Bo’s son have not returned China from 2012. One of Liu’s chose to suiciding because endless attack in Cultural Revolution. One of Gao’s son also met attack in Cultural Revolution and was regarded as “the header of Anti-Socialism”. (3) When they are in power, complimentary of them are full in social media, however, after failing in politics, they were criticized by the whole society.

Maybe the political campaign in China is crucial and unstoppable whether it’s in 1949-1970 or in 2010-2015. China is a country which has over 2000 years history of feudalism, it’s hard to eradicate feudalism’s political philosophy—“Don’t cut grass roots, the spring breeze again” in decades. “Don’t cut grass roots, the spring breeze again” means after defeating your enemies, you should eradicate their own power which includes their closed subordinates, families, friends, allies or even who received their help before. Hence, in my view, in China’s political atmosphere, if and only if avoiding expanding political campaigns, don’t involve irrelevant people and others’ family and be kind to alsorans rather than assassinate or injure their body or imprison them, that feudalism could be root out in China.

Limited information

China has two The Great Walls, one is in north China, and another is in internet, called “Great Firewall of China”. After the founding of PRC, because of the strict control in culture, it is hard for people contact foreign music, movie, book and so on. In nowadays, thanks for the reform and opening-up policy, the information control was weakened. However in internet, Great Firewall of China appeared in 1997 in order to prevent people from logging in some websites like Youtude, Facebook and Google till now. Perhaps making Information Asymmetry is based on CCP’s situation, which reigns the whole country and none internal opposition parties. Hence CCP controls the discourse power so that banning potential threat is natural for party itself.

Furthermore, why CCP regards these social media as potential threat? In my mind, it is because the news and statistical figures made by CCP, sometimes are only for purposes which causing inexactitude. For in example, before Bo failed in politics, once opening Chongqing channel, screen is full of “what Bo did today”, which moulds him as a positive reformer one-side. Therefore, comparing with news from foreign media, it is easy to find the differences and errors. If many people contact the different sources, they will be confused, they will question, or even they will quarrel. These things are CCP unwilling to meet, it will lower down their prestige, cost more in remaining stability and lose people’s loyalty. However, the pay of lies is unavoidable.

And, another reason of “The Great Wall” is that officials always exaggerate their achievements and neglect the drawbacks or weaknesses in order to “encourage people to work harder in building society” (Spence, 2013) . For example, the unemployment rate announced by National Statistical Bureau is about 4% for half century even in financial crisis. However, in 2013, Premier Li Keqiang wrote article in <> admitting the unemployment rate is 5.1% in 2012 (Li, 2013), which is different from State Statistical Bureau. The afraid of comparing exaggerations and neglections with foreign media in the country, which would decrease government prestige and have negative effect to its regime, and the natural drawbacks of none opposition parties (or say, lacking external monitor) leads to the control of information.

Economy

Imbalance economic structure

The development of GDP decreased from 10.4% to 7.4% in last five years (National Statistical Bureau of China, 2014), although 7% is still a big figure, comparing with 12% in the first decade of 21st century, the magic of Chinese development is fading. Nowadays, the economic problems are similar to 1950s—huge different development in economic structure.

In 1950s, average growth rate of secondary industry is in high 18.7%, but primary industry is in low 3.8% (Spence, 2013). And in recent years, although the growth rate had a small gap between approximately 8% in service sector and approximately 7% in secondary industry, the contribution of service sector to development was up to 46% and in secondary industry was down to about 40% (National Statistical Bureau of China, 2014). Furthermore, with dramatic decreasing in input-out ratio, CCP still regards secondary industry especially large-scale industry as main driving force for economy, and invests trillions of yuan in it.

Taking steel industry as an example, from 2012 to 2014, the price of steel per ton dropped from over 3500 yuan per ton to lower 1800 yuan per ton, and the debt ratio of the whole steel industry is about 70% (Wu, 2015). The situation is too bad and needed adjustment, isn’t it? However, in the first two quarters in 2015, government still invested 200 billion yuan in steel industry (Ruan, 2015)! Dramatic dropping about 50% in steel price is showing that the steel is overcapacity, and keeping investment seems not a sensible enough idea to deal with it. Besides, high 70% debt rate shows the steel companies should focus more on its financial situation rather than expanding capacity blindly.

Who leads investing? Government, or say, CCP. In 1950s, it’s reasonable for keeping grain price in an extreme level in order to transform China from agriculture into industry time. But in nowadays, replaced agriculture by service, replaced draggle primary industry by fast-growing tertiary industry, replaced traditional sector by rising sector, why CCP still invest in secondary industry rather than focusing more on service sector? Is it because of the effect of Stalin model? Is it because of CCP’s wrong policies? Is it because of lobby from steel industry? Too many questions and confusions are in it that getting an obvious answer is harder than babel. In my mind, ignoring the various external and internal reasons, the main reason is that Communists Parties are the unions of workers. If CCP pays less attention to industry and workers, the root of Party would be shaken so that CCP has to invest a certain level in industry to maintain the employment of worker and social satiability.

To be concluded, the investment can attain satiability in short run and the Bof middle income trap. Based on CCP’s own situation, how to balance the satiability and opportunity can effect a lot in decades.

Reforming economic structure

Because of the rise in service sector and overcapacity in industry, although CCP tries to stabilize the society, depending more on service sector and less on industry is inevitable. Which means too many labors would be laid off for industrial transformation just like the widespread layoffs of State-owned Enterprise Reform in 1990s.

Premier Li introduced “Public Entrepreneurship and Innovation” in 2014 (Li, The record of Public Entrepreneurship and Innovation, 2014) in order to deal with coming widespread layoffs and deepen reformation. Is it similar to Army Reform in 1950-1960 and The Great Leap Forward in 1957-1959? The main logic is the same: encouraging mass to overcome troubles with country whether they are experts in the field or not. Sometimes these measures would have positive impact, like Army Reform, decreasing budgetary expenditure from 41.53% in 1950 to 8.30% in 1960 (Spence, 2013). And, the veterans assisted a lot for local economy. But in The Great Leap Forward, for pointing out enthusiasm excessively and neglecting limited condition, which led to low efficiency, huge destroy to local environment, lack of grain and exaggeration. Hence the key to Public Entrepreneurship and Innovation is whether government can lead the trend consciously and avoid fickleness.

Unfortunately, fickleness has appeared. P2P is booming now, the amount of P2P platform was up to 3000 in Oct.30th.2015. At the same time, over one third of P2P platform went into financial troubles because of huge bad debt (Wang, 2015). Besides, over one hundred P2P companies bankrupted in 2014, more and more companies came into the field although their majors are real estate, software, retailing, which are less related to finance. Obviously, the bubble has appeared, different kinds of companies are betting in P2P in order to gain high profit in the future and ignoring their major works. Let’s think about it, finance companies provide energy for the real economy, assuming half of real economy companies do the job of finance companies, what will happen? Every companies both are lenders and borrowers, they are in the high interest rate illusion, hence they all will drop from heaven into hell when bubble bombing.

So, CCP should take actions to prevent the bubble of Public Entrepreneurship and Innovation, if not, what happened after The Great Leap Forward? Great Chinese Famine. People all felt happy in 1957-1959, but in 1960-1962, enormous of them suffered starvation because of illusion bombed.

Conclusion

2015, is far from 45 years to 1970 and 66 years to 1949, but the same situations and mistakes is happening again and again at now. There must be something wrong in political atmosphere and economy, or even the philosophy of Chinese. In the above analysis. China and Chinese need to improve in the following areas. Political campaign needs to be more humanistic. Society could be more exoteric. Government should be more dispassionate and rational.

And, people should be more critical.

Just as Mr.Bo Yang said in <>, “Chinese are not used to admit faults, however, having thousands of reasons to cover their faults. As an old saying goes, ‘Criticizing at home’, criticizing who? Others!” (Bo, 1985). Lacking of self-criticize and used to blame others could be the reasons of same mistakes happened again and again. Hence, why not try to do more self-examination to improve ourselves?

Reference

(2013). Wall Street Journal.
BoYang. (1985). The Ugly Chinaman. Taiwan: Linbai Press.

LiKeqiang. (2013). China will deliver continuous development information to the world. Financial Times.

LiKeqiang. (2014.12.29). The record of Public Entrepreneurship and Innovation. URL: Chinese Government: http://www.gov.cn/xinwen/2014-12/29/content_2798382.htm

National Statistical Bureau of China. (2014). China Statistical Year Book. Peking: China Statistics Press.

RuanXiaoqin. (2015.8.5). Futures. URL: China common stock: http://news.cnstock.com/industry/sid_spqh/201508/3519311.htm

Spence, J. D. (2013). THE SEARCH FOR MODERN CHINA. NORTON.

WangPan. (2015.11.09). The bubble of P2P. URL: Tencent Technology: http://tech.qq.com/original/tmtdecode/t1001.html

WuJinglian. (2015.1.1.). Driving Chinese economy by investment is unreasonable. (QuLili, Interview)