Jul 01, 2013 06:14 PM

Standing at the Crossroads

Not long ago, I raised the question of why, 35 years after China began to open up its political and economic system, the task of reform seems harder than ever. Why, in other words, is it so difficult to change a system? Wouldn't it be better to just proclaim that China has built a new system so reform is no longer needed?

After much deliberation, the answer is a clear 'no', because without true reform, even bigger trouble will be waiting.

First, reforms must be made in certain key areas, such as the orientation of a socialist market economy and progress in the functioning of a social democratic political system. Without tangible signs of advancement on these fronts, conflicts are bound to erupt.

Browsing the news in June, the following stories have made headlines: Liu Tienan, the deputy director of National Development and Reform Commission was accused of misdeeds and removed from office; Liu Zhijun, the former railway minister, is being tried on corruption charges; three major fires broke out in a four-day span in northeastern provinces, including one in a poultry factory that killed 120 people; and we witnessed the brutal display of an urban management agent, or chengguan officer, stomping on a man's head in public.

It is true that in a country as big as China there will always be bad news and bad people. Still, the news coverage reflects that woven into the social fabric of a rising China is a certain disturbing institutional disease.

Take the corruption cases as an example. The sums of bribes involved are astronomical. But even more crucial is that it all seems to be the by-product of these high officials' "normal work." The loopholes that allow for institutional abuse of power are unending.

As for the Jilin poultry factory fire, though economic development should support the free-market economy, private enterprises should also protect their workers' interests. Simply relying on the good conscience of private companies falls far short of protecting workers and citizens. It is fair to say that the government was absent in this tragic case. The question is: What mechanism can monitor whether the government is doing its job of overseeing the private sector?

The country's economic situation since 2012 is suddenly sinking from its pinnacle of the past decade. "It is easier to climb up than come down a hill," as the Chinese proverb goes. Conflicts can be kept hidden when times are good. The country's current situation does not allow us to "cross the river by feeling the stones," as Deng Xiaoping once said. When troubling issues remain unsettled, they can create even more problems.

Second, the younger generation is becoming the driving factor in society. Their evaluation of the system, policy and the surrounding environment is different than previous generations – and they also have higher expectations.

For example, for those who experienced the Great Famine of 1959-1961, the People's Communes and the Cultural Revolution, the changes and progress they have witnessed since reform and opening up started are huge. Yet, for those born in a relatively more open China in recent decades, much is now taken for granted. And if China does not reach their standard of an ideal state, they will not be satisfied.

A society with true hope is one where each generation has higher and higher expectations. Thus, reform ought to match the mainstream population's ideal. If improvements cannot keep up with young people's social expectations, problems will arise.

Finally, because institutional variables are changing too slowly or are absent, a parallel "extra-judicial" system is taking root. In many ways, the law says one thing while people actually practice something else. Many choose not to abide by the law because it is so unreasonable, while economic regulations are so impracticable that people end up going underground to survive.

The examples are all around: the proliferation of "black cabs" in Chinese cities to serve ordinary people who cannot afford legal ones, or the so-called "small-ownership properties," the houses built by villagers on collectively owned land and sold to the public without proper legal protection in rural or suburban areas. Also, how many families have second or third children lacking legal identities because of the outdated one-child policy?

The authorities seem to have forgotten that if nothing is to be challenged or reviewed, this will naturally lead to heterodoxy. In a fast-evolving society, reform should enhance institutional capacity and allow illegal behaviors that do little harm to others or the society to be put into the legal framework as much as possible.
China is standing before a critical crossroads, where reforms are as difficult as they are necessary. The more that progress is delayed, the harder it becomes. Not only are reforms up against the corruption of the system, but they are also racing against the rising expectations of the younger generation. If the authorities do not move fast enough, bigger troubles will surely be in store.

The author is the dean of the National School of Development at Peking University

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