And now proof, if any was needed: All is not well with China and its secretive regime

Sol W. Sanders [See Archive

Authoritarian governments are paranoid, but just because they are, as the saying goes, doesn’t mean they aren’t threatened. The Chinese regime is no exception. We currently see a demonstration in shadowy but slashing decisive action by a normally ultracautious regime to purge a leading member.

This political drama results from China’s pursuit of an alternative strategy from its original Soviet mentor: attempting modernization by integration into the world economy rather than pursuit of autarchy. But it has come with a growing threat and fear of accompanying outside influences. Counter intuitively, however, it has been fear of internal implosion that has taken a higher priority.

Chinese leadership obsessed over the Romanian Ceausescu regime’s sudden demise in December 1989 — especially after it aped China by throwing over its former Soviet model even down to producing Bucharest’s own “cultural revolution”.

Bo Xilai, the former party chief of Chongqing, was a threat to a leadership that values consensus and secrecy over popularity. /Nelson Ching/Bloomberg News

The ruling Ceausescu couple’s fall demonstrated internal competition inside the Communist elite rather than popular revolution could destroy quickly a supposedly monolithic regime.

A generation later the threat is still manifest. It will be years, if ever, before we know all the current Party scandal’s intricacies. That’s despite a continuing and from Beijing’s point of view, dangerous, explosion of internet information and disinformation. But critical elements are known: Bo Xilai, a “princeling”, son of one of the Nine Immortals of the Chinese Communist Party’s legendary golden coming of age, and a rising Party figure, has been summarily expunged. Bo’s spectacular rise as a successful executive with ostensible anti-corruption credentials was accompanied by flamboyant use of Maoist propaganda and advocacy of The Great Helmsman’s repression to meet dissension.

That increasing social friction has arisen, again contradictorily, as much from Chinese success in becoming a major cog in the closely linked world industrial economy. For at the same time economic integration lifted living standards of tens of millions — if still a minority of the 1.3 billion Chinese — it created sudden new appetites and vast regional and class disparities, including intensifying dysfunctional local governance.

Inordinate waste, which eventually brought down the Soviets as much as any other single weakness, also has characterized rapid Chinese economic progress. No market processes have weeded out failed enterprise. Huge Soviet-style inefficient government behemoths, top-down planning and controls, unrestricted land and water use, stultifying pollution and unparalleled corruption have accompanied extraordinary rapid gross domestic product increases pumped by exploited labor, foreign investment and transferred technology, and manipulation of subsidies.

But vainglorious expansion of infrastructure and unlimited growth in markets for low-wage manufacturing for the U.S., European and Japanese markets, the two motors of Chinese success, are slowing dramatically. Further credit for building unlimited, unused capital threatens the whole system. Abroad, the U.S. and the eurozone’s crippling financial crises trim markets for Chinese imports. Growing competition limits transfers of intellectual property from the West, legal and stolen. Other lower-wage and/or more efficient producers from Vietnam to the U.S. have begun to compete more fiercely at a time when Chinese costs are rising.

The crisis of how to deal with this changed economic situation — including lower rates of growth less accommodating to slowing but still rapidly expanding population — now faces a new generation of Party leadership scheduled to take over this fall. Bo’s jockeying for a role in that new team produced his — at least temporary — political demise. But as with any player in the Party’s power monopoly, his tentacles led in all directions — from a chief gofer’s attempt to escape assassination through [refused] American sanctuary to a toll of foreign as well as Chinese “business” partners.

Accusations of corruption, however legitimate, are largely a political weapon, however much publicly outgoing Prime Minister Wen Jiabao now implores political reform. Nor however realistic, Wen’s warning that continued inaction could lead to the kind of fratricidal battles and chaos characterizing the Mao era, is there hope the current regime’s basic characteristics could be changed quickly — if at all.

China has no past democratic cultural grassroots, however fragile, on which to grow such as those which helped the former eastern European nations stagger back toward liberal societies after liberation from Russian Occupation. Neither the Hong Kong takeover, ironically with its colonial marginal freedoms now at risk, nor Taiwan’s successful democratic experiment which amalgamation with Beijing probably would destroy, provide an alternative template acceptable to the masters of Mainland one party rule.

The China model will probably survive this immediate crisis, but the threat and its unpredictable outcome await — and grows.

Sol W. Sanders, ([email protected]), writes the ‘Follow the Money’ column for The Washington Times on the convergence of international politics, business and economics. He is also a contributing editor for and