China Frees ‘Ravenous’ Capitalists, Rules by Seduction: Books

The cover jacket of the book "The Party: The Secret World of China's Communist Rulers." The book is the latest by Richard McGregor. Source: Penguin Group via Bloomberg

When in Rome, do as the Romans, though not necessarily as Silvio Berlusconi does. When in China, remember the Communist Party.

That’s the gist of Richard McGregor’s “The Party: The Secret World of China’s Communist Rulers,” a readable guide to how the country is governed.

The Chinese Communist Party continues to function pretty much on the old Soviet model, says McGregor, a former China bureau chief for the Financial Times. Transparency has increased since the days of Mao Zedong, though not by much.

The Politburo is selected rather than elected by the some 370 members of the CCP Central Committee, McGregor says. That’s as far as democracy goes. The Politburo chooses the party’s general secretary behind closed doors. In 2002, it tapped Hu Jintao, a technocrat who now usefully combines that role with serving as country’s president and military chief to boot.

Ministers are appointed to do the party’s bidding -- and to serve as scapegoats when things go wrong. The party enjoys no formal legal immunity; it simply operates beyond the law. How former President Bill Clinton would have enjoyed that perk. No wonder ambitious students are keen to become party members.

Economically, the CCP’s conversion to capitalism has produced a generation of entrepreneurs resembling “a ravenous school of fish,” as McGregor puts it. The party has ceased to be the dead hand of old, though the hand is hardly invisible.

Nissan Deal

The CCP keeps especially close tabs on foreign joint enterprises. Nissan Motor Co. executives negotiating a deal with Chinese car and truck producer Dongfeng were surprised to learn they would be required to pay the salary of a full-time party representative on the board, McGregor writes.

Chinese leaders are aware of the readiness of the West to overlook the party’s inglorious past.

“People suddenly think we’re lovable,” Lou Jiwei, head of China Investment Corp., the country’s $300 billion sovereign wealth fund, told foreigners avid for some of its money after the financial storm. The message that the Chinese are hearing from abroad is clear: Never mind how party control squares with human rights; just keep buying our debt.

The CCP’s backroom powers make it an inevitable source of corruption, and the low pay of party officials -- sometimes a mere $15,000 a year for quite senior folk -- presents an extra incentive to nest-feathering. Yet the closer party police get to the top, the less energetic they become. Sedulous investigations are reserved for top figures who fall from favor, like former Shanghai party boss Chen Liangyu: He was sentenced in 2008 to 18 years in prison for taking bribes and abusing his power.

Seduction vs. Repression

The country needs firm government, the CCP’s message goes, otherwise it would fall apart. Dissidents have a nasty time all right, though there can be no comparison with the mass killings of Mao’s regime.

“Seduction rather than repression” is the party’s preferred technique for handling those who challenge its power, says McGregor, who rightly challenges the Pollyanna notion that the rapidly expanding middle classes will press for multiparty rule. Yes, they want more freedom, but they already have more than they’ve ever known. For them the priority is to hold onto their own -- and the country’s -- economic gains.

We are left with the old question: If the Chinese Communist Party no longer aspires to world revolution and is maintaining stability in a country on which the stability of our own fragile financial system depends, just how urgent is regime change?

“China will destabilize the world not only if it fails but if it succeeds as well,” McGregor says.

A typically astute observation by the author of this sober, realistic book.

“The Party” is from Allen Lane (301 pages, 25 pounds).

(George Walden witnessed the Cultural Revolution as a U.K. diplomat in Beijing in 1966-69. A former Member of Parliament, he is the author of “China: A Wolf in the World?” and a critic for Muse, the arts and leisure section of Bloomberg News. The opinions expressed are his own.)

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