Caixin
Sep 06, 2018 01:39 PM
OPINION

Zhou Qiren: If Reform Stalls, Chinese People Will Play by Their Own Rules

Reform is simply the systematic correction of errors. But there is a paradox in this: China’s planned system needs reform precisely because its ability to correct errors isn’t strong enough, causing it to accumulate many problems. But does our system’s ability to correct errors automatically get stronger once we declare our support for reform? In the process of implementing reform, another negative tendency emerges — once reform achieves some hard-earned progress and economic achievements, some voices start to say that China’s system is the world’s most miraculous system, and that it needs no further change.

Since reform is so difficult, can’t we simply stop reform? Can’t we simply announce that China has already succeeded in creating a new system, which will never need reform again? Whichever way you think about it, the answer is no, because half-finished reforms cause big problems.

To begin with, not continuing to push forward reforms in some areas, not continuing to reform the direction of the socialist market economy, and not promoting the political reform of socialist democracy and the rule of law would result in a chain reaction of many social contradictions exploding to the surface.

To use high-level official corruption as an example, the huge sums of money involved in these cases are in themselves upsetting. But even worse is the fact that these sums were not snatched in some bank robbery, but rather appear to be by-products of “normal work.” If exploiting authority can allow officials to amass such huge illegal gains, it’s impossible not to conclude that there are big loopholes in the current system of authority. Dealing only with corrupt officials without changing the system will simply allow these “lions” and “flies” to proliferate endlessly.

The current general trend of the Chinese economy is downward, from a high position. It’s easier to climb up a mountain than to climb down. Many contradictions in the Chinese economy were hidden during periods of high growth. But during a downturn, it’s harder to maintain balance. Many old problems remain unsolved and many more are emerging. Challenges are popping up one by one for China, forcing the country to make decisions fast.

Additionally, younger people, who make up the bulk of society, have a different frame of reference for assessing systems, policies, and their own environments, and also have higher expectations of what society should look like. To the generation that experienced the great famine of 1959-61, the people’s communes, and the Cultural Revolution, the changes in China since the start of reform and opening-up are undoubtedly massive improvements. However, those born in the 1980s and 1990s have always lived in a relatively more-open China, and have a better understanding of world events. They have opinions about how the world should be, and if these expectations are not met, they are unsatisfied.

The people who make up the bulk of society today are also the most active participants in China’s industrial structure, consumption, and cultural activities. What are their expectations and frames of reference? Do they have higher expectations for social justice and a modern civilization, and lower tolerance for the negative consequences of incomplete reform? China’s economy is already the world’s second-largest by size. But precisely because of this, people’s expectations of their own country have gotten higher than they were in the past. We should not rely on constantly comparing the present with past misery to maintain the people’s satisfaction.

A country with hope for the future is one in which each generation has higher expectations for their society than their predecessors had. This is why reform must match the expectations of the younger generations, which are currently becoming the most active part of the population. If reform is implemented too slowly and does not keep up with the hopes of younger people, disappointment could become widespread, and it will be difficult to motivate people to tackle and solve problems.

Also, the slow speed and inappropriateness of many existing reforms is creating legal gray areas. There are currently many situations in China where actual practice goes against what the law says. Many people are making their livings in this extralegal space.

Many who observe this situation criticize Chinese people for not having the habit of respecting the law. This is indeed a real issue. But in some situations, the real problem is that many of China’s laws and regulations are irrational. Let me give a small example. Mainland airlines tell passengers not to turn their phones on immediately after landing. And yet there are always many people who do exactly that. But when you’re on a Cathay Pacific or Cathay Dragon flight, this isn’t an issue — the moment these Hong Kong-run planes touch down, the crew informs passengers that they are, in fact, free to turn their phones on.

If there are no negative consequences to using phones on board a plane that has already landed, why don’t mainland airlines simply let their passengers do so? Likewise, there are currently many economic policies or laws that are very difficult to implement. People have no choice but to disobey the law in order to survive.

Why do so many cities have “black cars” (the Chinese term for illegal taxis)? This is frequently because the obstacles for becoming a “white car” (legal taxi) driver are too high, and the responsibilities too heavy. It’s common for illegal taxis to come to the rescue in places that are difficult for legal taxis to serve. Also, consider the houses illegally built on collective farmland, which legally shouldn’t exist, but which there is in fact a market for. Even in Beijing, which is “right under the emperor’s feet” — the seat of the central government — there are many extralegal properties. And how many “illegal” children were born despite long-outdated population-control policies? Many young people will tell you that they too came into this world only after their family paid a hefty fine. How would these people view our society? Debate is raging over how financial reforms can marketize the interest rate. But what model of interest rate hasn’t already been tried in real life? China’s extralegal world is a bustling, lively one.

Myopic reasoning is widespread in China — don’t touch this, don’t change that. But there is a bigger goal that appears to have been forgotten, which is to let the maximum number of actions by the maximum number of people be conducted within the framework of the law. In a fast-changing society, reform should increase systematization, and should also resolve the problem of extralegal behavior. Reform should try as much as possible to incorporate extralegal behavior that does no harm to individuals or society into the legal framework. Otherwise, many people would be forced to find alternative ways and avoid playing by the rules — the ultimate failure for any system.

Reform is difficult, by definition. Present circumstances have made it even harder. But delaying reform is not a solution. Reform not only has to race against corruption and defeat, it must also keep up with the aspirations of younger and younger generations. It must also be able to incorporate a large volume of extralegal activities into the official system. If China does not achieve these things, it will face major problems.

Zhou Qiren is a Caixin columnist and a professor at the Peking University National School of Development. This piece was translated and adapted from Zhou’s preface to his book “The Logic of Reform.”

Translated by Teng Jing Xuan (jingxuanteng@caixin.com)

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