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No.043, March/April, 2005
Remaking the Chinese Leviathan: Market Transition and the Politics of Governance in China
By Dali L. Yang. Stanford, C.A.: Stanford University Press, 2004. 414 pp.
In Chinese
Leviathan is defined in Webster's dictionary as a sea monster, a whale or anything huge or very powerful. Such a definition can be applied to the vast geography of China, its massive problems related to corruption and smuggling, its colossal programs to bring the country into the 21st century, the world economy and the politics of governing a vast country with a huge population. The author single-handedly writes about all these problems, explaining how China has become what it is today: an economic power that has tried to master the rules of a market economy while maintaining its socialist ideals.
China started its march toward building a socialist market economy about two decades ago after its paramount leader Deng Xiaoping reversed decades of Communist rhetoric and declared that there is no shame in becoming rich. Deng did not expect that he would open the doors to capitalistic ventures, allowing many Chinese businessmen to become billionaires and as rich as their counterparts in the west. The road to progress since the early 1980s has been littered with crises and challenges, including the Tiananmen Square events in 1989, the fall of communism in Eastern Europe and the Soviet Union, the Asian financial crisis in 1997 and recently the SARS (or severe acute respiratory syndrome) crisis. While dealing with these crises, Beijing has instituted reforms of its administration and of the socialist state, partly to conform to demands of the World Trade Organization and to increase the efficiency and legitimacy of the state and maintain the communist party's leadership over the country. In the 15 years following Mao's death, the author says the government expanded simultaneously with the decentralization of resources and diffusion of power in the Chinese political system. More complex reforms dealt with finance, tax, banking systems, stock market and so on.
But the country was plagued by large-scale smuggling involving the military, the armed police force, and the government at all levels.
The author says China's reforms included lowering tariffs on imported goods, but smugglers and the networks that smuggled foreign cars made big profits by declaring automobile parts after they cut an automobile in half. In 1997, it was estimated that 153,700 motor vehicles worth 6 billion US dollars were smuggled or illegally imported into the country. China in the 1990s and during the Asian financial crisis kept its currency pegged to the US dollar, which provided a stable currency for smugglers.
Smuggling caused huge losses in customs duties and taxes, and harmed the state machinery. Corruption in China, as in other countries, is defined as the exchange of official power for private gain in violation of laws and regulations.
The media plays an important part in denouncing corruption and corrupted government officials. The Western press has called the attention of Chinese leaders to the "cancer of corruption." But because of the nature of corruption in China, the author says it was not possible to give an accurate measure on how deep it is in the Chinese society. The Central Discipline Inspection Commission said at one point that uncovered corruption cases rose from 10 percent in 1997 to 28 percent in 2001. The discovery of corruption cases has led many government officials to commit suicide or escape to other countries. The author warns that corruption is far from being eradicated because China introduced reform to combat corruption only recently and that it would take many more years to see results. Reforms on improving the government have also been introduced, which lead to the question of whether the country would one day become a democracy. The Chinese leadership carried out reform programs in order to keep the monopoly of power and it may succeed in doing so in the short or medium term. But for the reforms to succeed in improving efficiency, transparency and accountability throughout the country, China will need to expand liberty and democracy among the population, the author says.
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