Liang Hui – March 2017

China is approaching its “Two Sessions” – Liang Hui, the meetings of the two parts of their Parliament – NPC and CPPCC. Some call this a rubber stamp process, depicting it as an annual time, when two handpicked sets of representatives come to Beijing to go through the motions and approve the decisions the leadership have already made.

But when you look at China’s remarkable progress since 1978, in fact since 1949, it requires a much more serious analysis than the familiar hostility towards something different.

The Western parliamentary systems are based upon fundamentally competing interests and ideologies competing for power and success in putting across their ideas. Elections every 4 or 5 years usually transfers power eventually between the two leading forces, or coalitions also play a part. The core of this was to resolve the battles between the workforces and the builders of the productive forces on how to civilise the nations and split the benefits of growth.

Social Democratic Parties compete with Conservative parties. As the traditional form of labour based production and services has been replaced by automation and transfer of labour intensive work to the developing world, so the distinctions have become blurred, and the thinking obscured by focus on excessive costs of Welfare States built for long past eras.

The Western systems tend to react to problems, and the Chinese system focuses on building the long term visions into reality.

The Western systems value freedom of speech and competing parties, the Chinese system – perhaps the Asian systems – value developing consensus and forward thinking.

They are different and come from very different histories and make up of their populations.

The Two Sessions in China are times when the recent past is summed up and the plans ahead are debated. Most of the work has been done in the months before the Two Sessions. It is the Two Sessions requiring these two processes to be delivered and debated that is important. It is not primarily a time to change and challenge but to require a thorough review and clear expression of the future. The Two Sessions produces a lot of new thinking, much of which is worked through and put in place before the sessions and some of which is put in place in the period ahead.

It is a very different way of running a country.

It has worked very well and we should approach these Sessions with that in mind.

What has been going on and is being played out? Essentially it is the change in the economy from low cost export led, based upon peasants as the largest class, to a managed market economy based much more on domestic consumption and changes in foreign policy to reflect that China will play a reformed role in the world, as it becomes a more major influence on the global economy and security. China is in the world and the world is in China.

China intends to grow to become an adequately prosperous nation where the wealth is spread across the nation, and the core needs of society are provided, but do not create dependency. Hard work and care for fellow citizens, especially the young, the old and the vulnerable, will always be a core of their society.

But growth will only continue till they reach a place of enough – probably about 61 years from now to coincide with the next new anniversary target of 100 years since 1978 plenum which changed China forever – and then innovation will be the driver to stay alongside the changing challenges of the world.

But growth is, in China, a means to an end not an end in itself, and so it will gradually reduce to a nominal level. Sustainability is also a key player for China and Sustainable Growth is already a key factor in all Chinese planning, and is the basis of the new economy which will complete its shape towards the middle of this century.

Reasonably shared gdp reaching a per capita of $10,000 is the target by 2021, the first target date, and the further growth and sharing is the target for 2049, the second target. By 2078 – the next target in my opinion being the 100th anniversary of the 1978 Plenum – China will be focused much more on the fair distribution of wealth.

So the two sessions are the custodians of the short term assessment and moves towards the next year or two. They work within the context of the Five and Ten year plans and the overall strategies emerging from the Leading Groups. The Leading Groups develop the policies and supervise their implementation for the Party.

It is the Party that is responsible for the development of the long term plans and the effective implementation of them. The Two Sessions reviews their success to date and their plans for the next year and beyond.

The Party will have a strategic review and make interim changes to its leading structures at the 5 year stage of the leadership put in place in 2012. Their review takes place in October of this year, and their decisions will be played out into shorter term changes in the next Two Sessions meetings in 2018. But at this Two Sessions we can detect the core of the issues being played out in October in the Party.

What are the issues?

How do you balance the market and management of it. How to provide sustainability. How to provide a welfare state that is sustainable and does not create dependency. How does China operate in the world. The role of the New Silk Roads in transforming China and its region. How to provide a sharing of the benefits of growth.

These issues throw up questions of managing stability and external relations.

A complex matrix.

But one which the Chinese have managed for more than 2000 years and for almost 40 years with great effect.

It is their system and they do not want us to adopt it. But we need to understand it.

So resist flicking through the papers from the Two sessions and see them in the context of a seed for the rest of this century.


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