Chapter Five: Part One
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Feeling the Stones as You Cross the River
The party-state is a relic of the past century, not a herald for the next. Since the events of May-June 1989 on Tienanmen Square, China’s party-state has entered an implicit pact with the population: a rough and tough politics carries on within its precincts, but people enjoy much greater freedom than before. The problem is that the communist dynasty can no longer give a satisfactory response to the fundamental political question: By what right do you rule?
Definitely, it can no longer answer with any credibility that it rules on behalf of workers and peasants. Yet the genie of market reforms is out of the bottle, and its twin, the genie of political reform or revolution, is struggling to escape. Either regime reformers lead the country through market-leninism to market-democracy,or economic policy becomes impaled on an untenable status quo. That is when the opportunity opens for revolution from below,with the regime cast in the role of the Romanian dictator Ceausescu and his wife, acclaimed one moment by the crowd, and killed the next.
Let us follow the political transformation path sketched in the previous chapter, noting some reasons why China’s leadership has been on the ideological defensive since 1989. We can then look at the dynamics of revolution from below, some of the regime’s key political features, and assess the path that China’s market-leninists have yet to tread.
Without such an assessment, corporate operations in China will be flying blind. The reason is simple: the essence of business is to have to deal with a future where risk and reward lie but about which we know little. This chapter will isolate some central features of what we know, and do not know about China in the coming years.
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