Published on political affairs pa, by Thomas Riggins, Sept. 15, 2010.
… Johnson says one big misunderstanding about China, and it is a BIG one, is that China “has been privatizing the economy.” There is a stock market to be sure and many shares have been sold to investors around the world but “almost all Chinese companies of any size and importance remain in government hands.” This is a socialist sine qua non I would think.
This fact is relatively unknown to outside investors due to “ignorant or unethical Western investment banks and lawyers.” It seems that ultimate decision making in all really important Chinese companies is made by the Organization Department of the CPC and the NOT the board of directors of the company– i.e., the party remains “in control of all personnel decisions.” CEOs and directors thus dance to the tune of the party.
What about smaller companies, those not belonging to the commanding heights of the economy? Here too “government control still remains pervasive” if less direct. What Johnson means is that “the manager is often a former official or close to Party circles.” Johnson is wrong to call this “government control” since even he admits “that these companies are run as the manager sees fit.” What he really means is that there is a climate of shared values and aspirations between middle management and the party.
The party also has control of the government as the party, through the medium of “leading small groups” of experts and senior party leaders that have been set up to advise each of the ministries. These groups exist from the top “down to the grass roots.” Westerners object to this system, especially in the legal system because judges are not independent and merely “translate court decisions made by Communist Party legal affairs committees into rulings.” This objection is based on the Western notion that the only free and democratic organization of government has to be based on bourgeois notions of democracy and any other notions of democracy, especially socialist or people’s democracy is bogus. This overlooks the fact that most bourgeois democracies are themselves bogus.
While many Western “experts” on China write off the CPC in the long term, Johnson shares the view that “the West has consistently underestimated the Party’s ability to adapt and thus might be excessively negative about its future.”
Johnson has some criticisms of his own but they seem to be motivated by his WSJ background. He thinks China needs more reform efforts and while he says “reforms haven’t quite ground to a halt” nevertheless the state sector is making a comeback because the CPC has a policy “of recentralizing control.” But this is what you would expect a socialist state to do … (full text).