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http://www.gatestoneinstitute.org/4769/what-china-sees

Democratic evolution in China was being seriously considered. The failures of U.S. support for democracy in Afghanistan, Iraq, Egypt and Libya gave new food for thought to those opposed to democracy. Lastly, the United States did not strongly oppose the anti-democratic coup d’état that overthrew a democratically elected government in Thailand.

On the other hand, Russia — dominated by Vladimir Putin, a new autocrat determined to stifle democracy in Russia — provided a new model.

The whole of Eastern Europe and most of Latin America, formerly in the clutches of dictatorships, are now efficient democracies. This seems to indicate that while democracy cannot be parachuted into a country, there is a broader, longer-term global trend toward democracy and that its growth depends on local conditions.

As economic development needed careful planning, political reforms need even greater planning. The question remains: is China preparing for these political reforms?

The current difficult situation and predicament in Hong Kong is not just about what is happening now or has been happening for the past decade in the territory, but also calls into question the future and overall political direction of China.

Protesters occupy Harcourt Road, Hong Kong on September 29, 2014, in front of Admiralty Centre and the Central Government Offices. (Image source: Wikimedia Commons)

Over the past 35 years of reforms, China proved to be very good at economic reform and long-term planning. However political reforms, which have nevertheless been going on in the country, have not proceeded at the same speed and with the same long-term planning as changes in the economy. This has many and complex causes; here without too much elaboration we can make a simple list: the structure of the party ruling the country; the ability of the liberalizing economy to convince all of the benefits of private enterprises by “corrupting” many of the concrete benefits of private enterprise in the market; the role of the World Bank and other international institutions in offering guidance and assistance to China in the process of opening up.

Yet perhaps one of the most important reasons for moving on economic reforms while slowing down the political agenda was the effective political exchange that took place after the 1989 Tiananmen protests. Then the party basically allowed entrepreneurial young people to develop their businesses in exchange for their non-interference in the political realm. That is, the state would not meddle (too much) in private business, for instance allowing de facto tax evasion, and in return private businessmen would not nose around in politics.

This exchange allowed private business to develop enormously (the success of Jack Ma, the chairman of Alibaba, comes from here) and granting central politics the freedom to proceed with its own agenda, deprived of interference from society and business, something supposedly “plaguing” Western politics.

The compromise is still working in China, where the central government is now committed to pushing back against large State-Owned Enterprises (SOEs) that gained undue power in the wake of the 2008 financial crisis by abusing the large financial stimulus package launched against a severe economic downturn. This push against SOEs should make room for more efficient and enterprising private companies, of which Jack Ma is the idol and the model. Mr. Ma hails from Zhejiang, the province where President Xi Jinping was party secretary until almost right before his promotion to Beijing.

A similar exchange of understandings apparently worked in Hong Kong, where common people seemed not too concerned with political rights as long as they could improve their lives and have a shot at becoming rich.

This arrangement seems to have stopped working in Hong Kong: the local tycoons have been monopolizing the resources and opportunities and are blocking the path for the rise of the middle class. Since the 1980s, the Hong Kong tycoons formed the pillar of Beijing’s interests in the territory. Now they are a liability because many of the complaints of the demonstrators are actually also against them and the benefits they extract from Beijing for themselves but not for the territory.

In return for political support in Hong Kong, the tycoons received special opportunities in China in the 1990s. However, a decade later, after the smooth transition of Hong Kong to the Beijing rule, their role was no longer so important. A new class of Mainland entrepreneurs, both private and in the then just reformed SOEs, had started rising and the tycoons’ opportunities in China grew smaller. For this reason, the Hong Kong businessmen started to diversify and not concentrate so much on China. Now, they do not provide stability in Hong Kong, and by monopolizing resources they are objectively part of the problem, not the solution.

The same pattern could possibly occur in the future in China (see Appendix below: “China’s Inevitables: Death, taxes — and democracy”). Everything should be clear about what to do then and about what to think, but possibly it is not. In China, leaders are not sure about the overall political direction of the world, and they have their reasons.

In Beijing, future global political trends are not so apparent. Before the 2008 financial crisis, China’s political elite thought that economically, the American system was the role model to follow; about half of the political elite also thought that politically, China should follow America in its democratic system. The Central Party School and the China’s Academy of Social Sciences (the two main think tanks of the country and the party) conducted many studies on democracy and democratic systems both in Asia and in the world. The elite had not developed a consensus on the future political direction of the country, but democratic evolution was being seriously considered. The financial crisis, however, proved that the American financial system had big flaws, and therefore could not readily be applied to China. If the financial system (which had almost fully convinced the Chinese) proved wrong, then the American political system and its democracy were even more suspect.

Moreover, the failures of U.S. support for democracy in Afghanistan, Iraq, Egypt, and Libya gave new food for thought to the opposition to democracy in the Chinese elite. Lastly, the political crisis in Thailand gave new ammunition to anti-democratic thinkers. Here, for its own considerations, the United States did not strongly oppose the anti-democratic coup d’état that overthrew a democratically elected government. The pragmatic Chinese leaders had plenty of evidence to conclude that the democratic system and cries for democracy were simple political tools to be used at convenient times against American enemies and for American interests. On the other hand, Russia—dominated by Vladimir Putin, a new autocrat who wants to stifle democracy in Russia—provided a new model for effectively challenging American ambitions and advancing national agendas.

These elements, however, may only partly apply to Hong Kong. Whereas in the short term, democracy has proven a system difficult to transplant and to foster, in the long term one can see clearly that there is a greater trend toward democracy around the world. Over a span of thirty years, a greater number of countries have adopted democratic systems. The whole of Eastern Europe and most of Latin America, formerly in the clutches of dictatorships, are now efficient democracies. Even Putin, though more authoritarian than the disastrous Yeltsin, is far more liberal than his Soviet predecessors.

This seems to indicate that while democracy cannot be parachuted into a country, there is a broader, long-term global trend toward democracy and that its growth depends on local conditions. Lastly in the Middle East and Central Asia, different political and cultural traditions are at play, hindering the full-fledged development of stable democratic institutions. But these political and cultural traditions are not working in east Asia, where South Korea or Taiwan have become efficient and steady democracies in the past 20 years, and, for instance, Indonesia and the Philippines are moving to a similar path.

In this sense, there is little doubt that Hong Kong is ready to become a mature democracy. However, full-fledged democracy in Hong Kong would have immediate massive implications for the political evolution of China. Yet large and substantive political reforms in China would have a gigantic impact on the world, possibly even greater than the already enormous impact of China’s growth in recent decades on the global economy. Therefore, the failures of democracy in the Middle East should spur caution in wishing for full-fledged democracy in Hong Kong and in China.

That is not to say that China should not become democratic, or that the Chinese do not deserve to be free—quite on the contrary, it means that as economic development needed careful planning, political reforms need even greater planning. The question is: is China preparing for these political reforms? If it does not prepare, the pressure for democracy and freedom at some point could become huge and irresistible while the political system and elite are still unprepared for the change. The clash of pressures from below and lack of readiness from above, plus the eternal power struggle tormenting the party elite, could prove an explosive mix.

The present events in Hong Kong were fully foreseeable. Years ago, there were studies forecasting that Hong Kong could press for democratic reforms in the future Similarly, one can see that the demands for democratic reforms, quite tame now in China, could become very strong in a decade or two. These, just like rushing waters, could become positive energy for the growth of China and the world, if the country prepares for it; conversely, like water, long-term historic trends can be disruptive if not properly prepared and channeled.