A party that’s far from over

New book reveals how China’s really governed

A party that’s far from over

Best red book of 2010?

China’s ruling party is cautious in outlining much of its history. For example, while historians have estimated that somewhere between 35 and 40 million people died in the Great Leap Forward, the Communist Party has a less specific way of characterising the loss of life. The world’s worst ever famine is described in official histories as ‘a difficult period lasting three years’.

The Party’s desire to control what Chinese know about their immediate past can run to bizarre lengths. When Casino Royale, the Bond movie, was released in China in early 2007, Dame Judi Dench – who plays M – had to re-record a single line of dialogue to enable the film’s Chinese release. In place of “Christ, I miss the Cold War”, China’s cinema-goers heard her say “God, I miss the old times”.

Such paranoia makes Richard McGregor’s book, The Party, all the more controversial. A former Beijing bureau chief for the Financial Times, McGregor acknowledges as much. “The Foreign Ministry in Beijing may not like this book,” he writes.

China’s political system is not well understood – in large part because the Party doesn’t really want it to be. But McGregor’s book acts as a roadmap of sorts, in trying to demystify how China is run.

Let’s start with the 370-person Central Committee – “a kind of enlarged board of directors for the Party,” says McGregor. At its heart is a Politburo of 27 members – “to set general policy direction for the economy and diplomacy”. But real power resides in the 9 person Politburo Standing Committee. The top position is held by the General Secretary of the Party, who McGregor points out also holds the somewhat less important title of ‘President of China’.

Pulling back the bamboo curtain further, McGregor describes the workings of the Central Party School, the Central Propaganda Department, and the Central Organisation Department – the triumvirate of institutions through which much of the leadership’s power is exercised. He details relations with the military, as well as the importance of the Central Military Commission (headed by Hu Jintao, who is likewise Party General Secretary and President).

One interesting revelation is the symbolism of the ‘red machine’, an encrypted phone that sits on the desk of the heads of China’s 50 biggest state-owned firms.

Each red machine has a four digit telephone number, which networks the captains of industry directly into the Party’s most senior decisionmakers. “Possession of a red machine means you have qualified for membership of the tight-knit club that runs the country,” writes McGregor, “a small group of about 300 people, mainly men, with responsibility for a fifth of humanity”.

Other chapters deal with areas like the growth of factions (such as the Shanghai Gang), the perennial problem of corruption and the inter-related theme of how the Party interacts with entrepreneurs. Throughout the book, McGregor peppers his analysis with his own experiences as a reporter in China. There are some thoughtful observations – such as his description of Mao’s portrait in Tiananmen Square exuding a “Mona Lisa-like ambivalence”.

There are also a host of illustrative anecdotes, particularly about business. One of the most interesting is the tale of Jiangsu Tieben Iron and Steel, its entrepreneur-owner Dai Guofang and the ambitious city officials of Changzhou. They were jealous of a steel mill project in a neighbouring city, and pushed for a plant of their own. But problematically, the central government was requiring that any steel projects needing more than $50 million of investment had to get Beijing’s approval. So the Changzhou officials split the project into 22 individual businesses and approved each locally – and then ordered local branches of the state banks to finance the $1.28 billion plant.

It didn’t end there. Beijing found out and was furious at such local disobedience. It chose to vent its ire on the entrepreneur Dai, who was dispatched for trial. “In the months and years that followed, the Tieben case unravelled in an embarrassing fashion that underlined the farce of the whole episode,” notes the author.

In 2006, Dai pleaded not guilty. And for the next three years the court – controlled by Changzhou’s local officials – refused to issue a verdict. “The absence of a verdict was a political statement on its own, a way for the city to express its displeasure at Beijing’s veto of a major local development,” McGregor comments. Dai was then given home detention before, finally, the court found him guilty last year on a very minor charge. “The court’s decision underlined the futility of Beijing’s campaign against the company,” reckons McGregor.

The Changzhou case is a telling one in providing a countervailing example of the limits of the Party leadership’s power. Clearly its writ runs deep and wide across China. And to understand how Beijing governs, you must also understand the Party’s organisational structures and philosophy for maintaining control. But likewise you need to be attuned to the Party’s more contradictory elements, and how these shape the application of power.

Overriding a directive, for example, might be local loyalties, a bureaucratic turf war, a longstanding relationships (guanxi) or even family ties. Discipline has also been shaken by the Party’s replacement of an originally socialist ideology with one that puts money on a pedestal.

Survival is the other key imperative. Forget any notion of a dinosaur species: so far, the Party has adapted to changing circumstances far more successfully than almost anyone would have predicted.

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