A ‘Capitalist’ China Does Not Ensure a Democracy

President Bill Clinton’s decision to continue China’s “most-favored-nation” trade status, a favor enjoyed by virtually all nations, was more than a matter of economic expedien cy. Coming shortly after a bewil dered Secretary of State Warren M. Christopher was embarrassed in Beijing, the President’s apparently agonized decision was a reluctant but definitive recognition that the United States cannot significantly influence the domestic politics of China.

It is a lesson that should have been learned a half century ago. Had it been understood then, it might have prevented what proved to be a futile U.S. intervention in the civil war between Chiang Kai-shek’s Nationalists and Mao Tse-tung’s Communists, with unhappy consequences for both China and America.

But now that the lesson is better appreciated than it was before the recent (and probably final) MFN debate over China, it would be unwise to embrace the opposing view--that capitalist economic development will produce political democracy in China.

This was the argument, with many variations, offered by those who lobbied in favor of preserving China’s most-favored-nation status. Prominent among them, of course, were U.S. business interests--including Boeing, IBM and AT&T--that; profit handsomely (or anticipate doing so) from trade with and investment in China. “Economic engagement,” it is self-servingly maintained, is the best means to bring about the democratization of China.

Yet, it requires an extraordinary measure of gullibility to believe that foreign economic interests have any serious desire to promote democracy in China. Foreign capital is attracted to China, in large measure, because the country offers the services of a huge labor force that is disciplined, comparatively literate and, above all, inexpensive. In addition, the strong state guarantees “stability and order”--ensuring that the labor force remains obedient.

There is, understandably, little enthusiasm for any process of democratization that might, say, nurture the establishment of free trade unions for China’s huge and rapidly expanding industrial work force--now more than 200 million. On the matter of free workers’ unions, international capitalism and the Chinese Communist Party stand together on common economic ground. To this, the Communist Party, haunted since 1980 by “the Polish fear” of the rise of a Solidarity-type movement, adds political considerations.

But the political direction of the world’s most populous country--which can now claim the world’s third-largest economy, as well as the most rapidly growing one--will ultimately be determined not by foreign capitalism but rather by the workings of its own quasi-capitalist system. And here the prospects for some process of democratic evolution are less than promising--not least of all because the peculiar Chinese version of capitalism lacks an independent capitalist class, a consequence of its communist origins.

At the end of 1978, when Deng Xiaoping began dismantling the old Soviet-style “command economy” in favor of what is now called a “socialist market economy,” China had no entrepreneurial class. The Chinese bourgeoisie had largely been destroyed in the Communist Revolution of 1949, and what remained was gradually absorbed by the new state in the 1950s.

With the decision to pursue economic reform, a class of capitalist entrepreneurs thus had to be created to construct a market economy and permit that market to function. The task of creating a capitalist class, ironically, could be performed only by the communist state itself. And it was, of course, bureaucrats of the communist regime who were best positioned to take advantage of opportunities the new market mechanisms offered--and to heed Deng’s injunction to “get rich.”

It should not be surprising, then, that the new Chinese bourgeoisie (or rural and urban “entrepreneurial elites,” if one prefers) is not only a creature of the communist state and its policies but is actually largely composed of party-state officials (or ex-officials), their relatives and friends. While a portion of the bourgeoisie is “private”--not having sprung directly from the bureaucracy--they are, nonetheless, dependent on bureaucratic patronage for their existence and economic functioning.

This dependence is reinforced by the eagerness of the most successful private entrepreneurs to join the Communist Party, an organization whose principal qualifications for membership are now two: wealth and loyalty to the communist regime. It has been noted that China’s new capitalists are hostile to popular democratic elections, which they fear would be dominated by the country’s rural majority--a hostility and fear shared by the Chinese Communist Party.

It is unlikely that a democratic political role will be played by a Chinese bourgeoisie so dependent on the state--and indeed so much a part of the party-state bureaucracy. It is most improbable that a bourgeoisie whose economic fortunes are so dependent on the political fortunes of the communist state will mount a serious challenge to the authority of that state.

Over several generations, it is conceivable that China’s new entrepreneurs will shed their bureaucratic roots, evolve into a genuinely independent bourgeoisie and assert their interests (which may or may not be favorable to democracy) against the state. But for the time being, the members of China’s new capitalist classes--from rural party cadres turned petty entrepreneurs to the sons and daughters of powerful communist leaders wheeling and dealing in international finance and trade from high-rise offices in Shenzhen--appear more agents of the state than its antagonists. In fact, they are providing the bureaucracy with a lucrative economic base while providing the Communist Party with a new social base.

In playing this dual role, China’s capitalists contribute not to “pluralism,” as most Western observers reflexively assume, but to a further blurring of the line between state and society. The history of China’s new moneyed elites thus far provides little support for the currently fadish notion of an emergent “civil society” that strives to separate itself from the clutches of the state. Indeed, the new entrepreneurs, having largely sprung from the bureaucracy, are psychologically, as well as economically, dependent on the communist state--and rely on that state for political protection.

While the economic future of Chinese capitalism may be bright, there is little reason to expect it will be a politically democratic capitalism. Democratic promise in China today resides not in capitalism but rather in the illegal union and other organizing activities of those who seek protection from the workings of the capitalist market and from the communist state--the more than 100 million workers exploited in the burgeoning rural industrial sector, workers in state industries threatened with loss of job security and the peasants who are again the victims of rapacious officials.*