Big news out of China

I’ve been traveling so I don’t know if the blogosphere has been talking about this:

This week’s spectacular firing of Bo Xilai, a Communist Party “princeling” long seen destined for a seat in the country’s all-powerful Standing Committee of the Politburo, has delighted the country’s liberals.

The rise and fall of the controversial (and now former) boss of the southwestern city of Chongqing has shed rare light on the rampant factionalism within China’s Communist Party, an organization that usually manages to appear united to outside eyes. Mr. Bo was seen as a standard bearer of the country’s leftists, who praised him from his anti-mafia campaigns and his efforts to resurrect socialist culture.

This is the biggest political news out of China since 1989.  (Which means it’s the biggest political news in the world.)  Terms like ‘leftist’ and ‘liberal’ have different meanings in China, but on balance he had the potential to do more harm that good, by turning back the clock.  Before his ouster he was viewed as a possible future leader of China.  It looks like the liberals have the upper hand right now.  This makes it considerably less likely that China will end up stuck in a middle income trap (which I never viewed as particularly likely.)

I’m traveling, so I won’t have much time to address comments for a few more days.


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12 Responses to “Big news out of China”

  1. Gravatar of adam adam
    19. March 2012 at 07:55

    I’m a bit surprised that this hasn’t been discussed more in the blogosphere.

    I see this as making it much less likely that political reforms will happen anytime soon. Bo Xilai was effectively “campaigning” for a top spot and establishing an independent base of support. Those in power didn’t like it, and quashed it.

    I don’t see why just because Bo Xilai was a leftist means that it helps avoid the middle income trap: he was pretty successful in Guangzhou, and fighting corruption as affectively as he seemed to feels pretty important to avoiding the trap.

    How does the lack of political reforms affect the middle income trap? I forget when Taiwan and Korea reformed.

  2. Gravatar of OneEyedMan OneEyedMan
    19. March 2012 at 08:05

    @Adam
    Taiwan had its first opposition party in 1986 and martial law ended in 87.

    Korea had election reforms in 87.

    @Scott
    I’m curious why don’t you think the middle income trap is likely for China. I don’t watch it as closely as you do but China’s primary distinguishing features from other poor countries are tyranny (financial and political) and size, and neither seem especially helpful for escaping the trap.

  3. Gravatar of Greg Ransom Greg Ransom
    19. March 2012 at 08:12

    “Liberal” in China pretty much means what it means in Continental Europe and what it means in political philosophy, i.e. what Hayek called “classical liberalism”. Right?

    China has a Hayek society and things like Hayek’s _The Constitution of Liberty_ were some of the first serious works in political economy published in China after the liberalization.

    So they’ve acquired their language from original sources (Hayek’s _The Constitution of Liberty_ has many traditional (pre-FDR) uses of the word “liberal”.)

  4. Gravatar of Robert Robert
    19. March 2012 at 08:28

    This and the recent Wukan uprising are definitely big news if you believe in the “Chongqing model vs. the Guangdong model” narrative of Chinese politics. Wukan (in Guangdong) had an uprising that was remedied with greater democracy. Then Bo Xilai (in Chongqing) has been trying to bring back a Maoist cult of personality while focusing on class struggle and comparatively more extreme nationalism.
    I’d be interested to know where the future leader, Xi Jinping, stood on these issues, since he’ll be running that country for the next 10 years… My guess is that the Guangdong model will continue to be favored. China must want to get its act together politically before Hong Kong (also in Guangdong province) is fully integrated into the mainland. Chinese twitter seems to have more liberal reformist tendencies. And as China’s middle class grows and gets richer, they will have to demand a greater stake in how their country is ruled and regulated…

  5. Gravatar of Robert Robert
    19. March 2012 at 08:53

    @adam
    Bo Xilai never fought corruption in Guangzhou. He and his former police chief (who recently tried to seek asylum in the US, because he thought Bo Xilai wanted him dead) were credited with breaking up gangs in Chongqing, but did it in a way that completely undermined the justice system in China.

  6. Gravatar of Patrick R. Sullivan Patrick R. Sullivan
    19. March 2012 at 10:43

    NIall Ferguson has another take;

    http://www.thedailybeast.com/newsweek/2012/03/18/niall-ferguson-on-china-s-great-leap-backward.html

    ———-quote———-
    Even more remarkable is the evidence of a growing nostalgia for the Cultural Revolution. During my last visit to China, I ate dinner at a themed restaurant where the waitresses dress up like Red Guards and the floorshow features propaganda songs from the period. Incredibly, just 200 yards away from the graves of Cultural Revolution victims in Chongqing, I saw a group of middle-aged women singing some of these songs, including “Chairman Mao Is the Sun That Never Sets.”

    Until last week, such nostalgia was being encouraged by the Chongqing Party Secretary Bo Xilai, who was hoping for promotion to the all-powerful Standing Committee of the Politburo. The strange thing is that in 1966, Bo and his family were imprisoned for five years, after which they were placed in a labor camp for a further five.

    China’s ’60s generation has every reason to remember the years of their youth with bitterness. That many of them feel something more like “Maostalgia” is just a little scary. But even scarier was the headline in the Financial Times on March 15: “Bo Xilai Purged.” Just like old times.
    ———-endquote———

  7. Gravatar of Robert Robert
    19. March 2012 at 12:02

    @Patrick R. Sullivan
    Maybe I’m in the minority, but I never find Niall Fergusion to be very insightful. I read The Ascent of Money and a few of his Newsweek articles and don’t think he seems to draw very thoughtful conclusions.
    Anyway, Bo Xilai was essentially demoted and not exactly sent to the countryside to be “educated” hard labor camp this time around. Given China’s political system he couldn’t have been “voted out of office” by the people of Chongqing, so if you think he is bad more liberal progression in China, this is the better outcome. If this tells us anything about the future of the CCP, it’s that they aren’t willing let this guy to continue to climb through the ranks… I’m gonna say that’s probably a good thing…

  8. Gravatar of Anon Anon
    19. March 2012 at 17:00

    Just picked this up off of Mankiw’s blog, and I’m really not sure there’s any reason to celebrate:

    “Bo Xilai, the brash Communist Party chief of China’s sprawling Chongqing municipality, has been removed from his post….The news, announced Thursday morning in a brief dispatch by the official Xinhua news agency, said that Vice Prime Minister Zhang Dejiang, a North Korean-educated economist, would replace him as Chongqing party secretary.”

    Well, he’s being switched out for an economist who was supposedly trained in North Korea. Oh boy.

    This is the original article:
    http://www.nytimes.com/2012/03/16/world/asia/bo-xilai-ousted-from-communist-party-post-in-china.html?_r=2&hp=&pagewanted=all

  9. Gravatar of Benjamin Cole Benjamin Cole
    19. March 2012 at 22:17

    I am fresh back from Thailand, and perhaps because of that I have some reservations about this one. Bo Xilai was a throwback, but he also was fighting corruption.

    In shorthand, i think nations need three basics to proper:

    1) Free-market orientation
    2) Market Monetarism
    3) Honest government and work-ethic culture

    Latin America always collapses as it lacks No. 3. The USA just about collapsed as we lacked No. 2. Japan lacks No. 2

    China? Moving in right directions, but iffy, and supposedly corruption is getting worse. Was Bo deep-sexed as he was fighting corruption?

    Final call: Read a column in the Bangkok Post by a guy named Crutchfield. A newsman, he wrote he had lived in Thailand for 40 years, and still did not understand its politics, and economic system. Where did the Redshirts and Yellowshirts come from, suddenly?

    I am reminded of Crutchfield, whenever I hear USA’ers making pronouncements about the Iraqis, or Afghanies, or Chinese. Sheesh, just understanding the USA is a full-time job, and we are often wrong.

    Who knows about Bo?

  10. Gravatar of Robert Robert
    20. March 2012 at 11:00

    Here’s an interesting piece from China Beat about reactions to Bo’s departure in Chongqing:
    http://www.thechinabeat.org/?p=4210

  11. Gravatar of ssumner ssumner
    21. March 2012 at 18:39

    Adam, My impression is that the crackdown on corruption was not sincere, but a political stunt.

    He was seen as a leader of the leftists. It’s true that this position might not have been sincere, but nevertheless he was their leader. He was also very charismatic, which is probably not good for China. I think this strengthens the liberals, and hence makes economic reforms and democracy more likely.

    BTW, He was in Chongqing, not Guangzhou.

    OneEyedMan, I’ve traveled a lot to China and a lot to Mexico. Mexico seems stuck in a middle income trap. China seems totally different from Mexico, in all sorts of ways.

    China has already done a huge amount of economic and political liberalization. If it stops now, it will fall into a middle income trap. But why expect it to stop now?

    Greg, That’s right.

    Robert, Good point about Wukan. The new leader (Xi) had a recent speech that strongly suggested he was unhappy with Bo.

    Patrick, I wouldn’t take the nostalgia for Mao too seriously. And I’m not sure why he’s upset with the “purge.”

    Robert, You and I seem to have similar views.

    Anon, Pay no attention to the North Korean education.

    Ben, I agree, but I don’t think he was fired for fighting corruption.

    I’ll respond to older comments tomorrow.

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