The Chinese Communist Party and China’s Capitalist Revolution: The political impact of the market

Table of contents :
Book Cover
Title
Copyright
Contents
List of figures
List of tables
Preface
1 Introduction
2 Conceptual issues and the theoretical framework
3 The logic of organizational atrophy
4 The Party in the new social spaces
5 The Party in corporate governance
6 Community Party building
7 The Communist Party in a capitalist revolution
Notes
Selected Bibliography
Index

Citation preview

The Chinese Communist Party and China’s Capitalist Revolution

The Chinese Communist Party and China’s Capitalist Revolution examines issues of political change and development in China. The common perception of the same old communist regime in China poses a stark contrast to (and does not sit well with) the thoroughgoing socioeconomic transformation we have witnessed in the last 30 years. Indeed, there has not been much political reform in the sense of democratization, multiparty competition, freedom of speech and association but, as this book demonstrates, political development goes much deeper than these. Based on extensive empirical investigations of the impact of the market on the Chinese Communist Party (CCP), with a particular focus on its grassroots organizations, this book finds that the CCP is undergoing profound changes in a host of important areas. By analyzing the political impact of the market-driven socioeconomic transformation and the CCP’s adaptations to the new environment, the book takes stock of the nature and dynamics of political change underway in China. The author concludes that the CCP we knew no longer exists—it is evolving into something quite different. The transmutation of the ruling party of a rising super-power carries far-reaching implications for both China and the rest of the world. Lance L. P. Gore is a political scientist specializing in contemporary Chinese politics and international relations in the Asian-Pacific. He has held teaching and research positions at Beijing Normal University, China Central Academy of the Arts, National University of Singapore, Bowdoin College and Tufts University in the United States, and Murdoch University of Western Australia. He is currently resident research fellow at the East Asian Institute, National University of Singapore.

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58. Law, Wealth and Power in China Commercial law reforms in context Edited by John Garrick 59. Religion in Contemporary China Revitalization and innovation Edited by Adam Yuet Chau 60. Consumer-Citizens of China The role of foreign brands in the imagined future China Kelly Tian and Lily Dong 61. The Chinese Communist Party and China’s Capitalist Revolution The political impact of the market Lance L.P. Gore

54. Law, Policy and Practice on China’s periphery Selective adaptation and institutional capacity Pitman B. Potter

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The Chinese Communist Party and China’s Capitalist Revolution The political impact of the market

Lance L. P. Gore

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First published 2011 by Routledge 2 Park Square, Milton Park, Abingdon, Oxon OX14 4RN Simultaneously published in the USA and Canada by Routledge 270 Madison Ave, New York, NY 10016 Routledge is an imprint of the Taylor & Francis Group This edition published in the Taylor & Francis e-Library, 2011. To purchase your own copy of this or any of Taylor & Francis or Routledge’s collection of thousands of eBooks please go to www.eBookstore.tandf.co.uk.

© 2011 Lance L. P. Gore All rights reserved. No part of this book may be reprinted or reproduced or utilised in any form or by any electronic, mechanical, or other means, now known or hereafter invented, including photocopying and recording, or in any information storage or retrieval system, without permission in writing from the publishers. British Library Cataloguing in Publication Data A catalogue record for this book is available from the British Library Library of Congress Cataloging-in Publication Data Gore, Lance, 1958The Chinese Communist Party and China’s capitalist revolution : the political impact of the market / Lance L. P. Gore. p. cm. — (Routledge contemporary China series ; 61) 1. Zhongguo gong chan dang. 2. Capitalism—China. 3. China—Economic policy—2000- 4. China—Economic conditions—2000- I. Title. JQ1519.A5G67 2010 324.251’075—dc22 2010020382 ISBN 0-203-83895-5 Master e-book ISBN

ISBN 13: 978–0–415–58744–0 (hbk) ISBN 13: 978–0–203–83895–2 (ebk)

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To my parents, Weining, Adam, and Victoria who have sacrificed so much for so little

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Contents

List of figures List of tables Preface 1

Introduction

xiii xv xvii 1

Rationale of the book 2 Recent literature 10 Sources and methodology 12 Chapter outlines 15 2

Conceptual issues and the theoretical framework

17

The CCP as a political party 17 Political impact as institutional conflict 28 From adaptation to assimilation: a theoretical framework 33 3

The logic of organizational atrophy

35

The microinstitutional foundation of the CCP’s rule 35 Overall impact of the market 42 The atrophy of rural party organizations 46 Conclusions 55 4

The Party in the new social spaces

57

The Party in the mobile population 59 The Party and the new classes 63 Party building on college campuses 70 Conclusions 78

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xii The Chinese Communist Party and China’s Capitalist Revolution 5

The Party in corporate governance

80

The decline of the Party in industrial organizations 80 The Party in corporate governance 85 The Party in private businesses 93 Assessment 97 6

Community Party building

100

Transformation of the urban social landscape 100 A Party in disarray 105 Strategies of adaptation 112 Assessment 117 7

The Communist Party in a capitalist revolution

120

The political impact of the market 120 From adaptation to transformation 124 What is becoming of the CCP? 130 Conclusions and implications 135 Notes Selected Bibliography Index

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141 163 176

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List of figures

1.1 1.2 1.3 2.1 3.1 4.1 4.2 4.3 4.4 6.1 7.1 7.2

CCP membership growth (1921–2008) Party members as percentage of population Membership composition by the time period of joining the Party (2008) Peasants and workers in the CCP membership Structure of Party organizations CCP growth rate before 1949 Party growth rate since the CCP came to power Social composition of the Party membership (2008) College new students and graduates 1978–2008 Age distribution of Party members Social composition of 2008 new recruits Recruiting bias, 2008

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3 4 5 19 36 58 58 67 74 110 131 131

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List of tables

1.1 2.1 2.2 3.1 4.1 4.2 5.1 5.2 6.1 7.1

Growth of the Party in the reform era (1978–2008) Recruitment plans for the first, second, and third five-year plan periods The rate of Party coverage at the grassroots level Grassroots organizations of the Party in Chaoyang District, Beijing (2004) Indoctrination of Party activists, Anhui Province College students’ motives for joining the Party Decline of the enterprise Party in Beijing Decline of Party recruitment among workers in Chongqing municipality Political ecology: danwei and the community compared Size comparison of the ruling communist parties in the mid-1980s

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6 20 27 37 71 73 82 84 105 133

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Preface

The Chinese Communist Party (CCP) has been a perennial subject of fascination for me, that is, until I wrote this book. While I was busy with my other research projects, it was always burning at the back of my mind. This book is a small fruit cropped from a larger project on Chinese political sociology that had ballooned from a seed of fascination into a mammoth that refused to take shape. The original project was to examine the relationship between the self-proclaimed party of the proletariat and the various social classes that began to take shape during the time of reform-induced socioeconomic change over the past three decades. This focus is not accidental. The CCP waged a massive class warfare to wrestle power away from the then ruling KMT in 1949; hence, it is only appropriate to ask what kind of relationships the CCP is developing with the emerging classes today, now that it is the ruling party? This question is not just an academic curiosity but is also politically important. Answering it would enable us to understand what is becoming of the CCP in the context of China’s epochal transformation over the last thirty years and hence the political impact of this transformation. I remember an advice someone gave me many years ago: don’t research on anything that has happened within at least the last five years. Obviously I did not heed her advice—the fascination was too strong to resist. And here we go: I found myself struggling to pin down something amorphous and fast changing. The formation of classes in China is still going on and class structure is yet to ossify. For example, the so-called floating population (liudong renkou) is difficult to sort out and wrap up in class terms. I even began to doubt the utility of class as an analytic category in today’s China and decided instead to focus on the influence of the market on the Party, which is readily observable and logically straightforward. It reveals the forces that are driving the evolution of the Chinese Communist Party. It is not simply the fascination that drove me in this endeavor. The unexpectedly rapid ascendance of China as, according many estimates, a soonto-be superpower creates the urgency of understanding its ruling party. For despite the fact that the CCP is the largest (with a membership larger than the entire population of Iran) and one of the longest ruling parties in the

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xviii The Chinese Communist Party and China’s Capitalist Revolution world, people outside China (and many inside China too, as I found out to my dismay) generally know very little about China’s ruling party except that it is a “communist party.” Communist parties are a dying species—so we are told by conventional wisdom. However, the Chinese Communist Party is not easily dismissed because it has played a central role in China’s rise. I vividly remember a man I encountered in the summer of 2008 on the campus of Sichuan University, who was loudly singing praises of the Communist Party while walking on the street. I found out that he was a retired teacher and pressed him as to why he thought the Communist Party was good? He gave two reasons: one was policy—the Party’s policies in general seemed to invoke very positive responses from the people, despite the fact that the implementation has always been less than satisfactory to say the least; the other was the Party’s quick and massive response to the earthquake in northern Sichuan, which had killed at least 80,000 people a few months earlier. He, as I found out, was not a member of the CCP and he regretted that he had not been able to join when he was younger. Of course, under any circumstances, it is extraordinary or even surreal for an ordinary person to loudly praise the ruling party on the street (trust me, I wasn’t drunk that day and I’m sure this incident did not happen during the Cultural Revolution when such acts were compulsory daily rituals) and, as I will explain in this book, the CCP has been attentive toward cultivating a cordial relationship with the intellectuals who are indispensible to China’s drive to modernize. But still, the message is clear: the Chinese Communist Party is neither sidelined nor withering away. This is consistent with recent survey studies that the Communist Party is still legitimate among the people. We have to take the CCP seriously. But the research itself was exceedingly tedious and nerve-grinding only to be occasionally spiced up by conversations with party members and cadres, plus incidents such as the one mentioned earlier. I had to wade through voluminous Party documents, journal and newspaper articles, books, the speeches of Party leaders at various levels, operation manuals for Party organizations and Party recruitment, study guides for important Party documents, meeting minutes, news reports on the activities of Party leaders and so on, in search of useful information. These are filled with repetitive slogans, policy oneliners, party jargons, politically correct expressions, etc., and most of the articles and documents follow a predictable format. The monotony of working through them was psychologically depressing and the reader may detect its effect on me from the rather dry language (only occasionally though—I hope) in this book. Were it a consulting work, it would be fully justifiable to demand the doubling of my fees. As if responding to my complaint, Xi Jinping, a member of the Politburo Standing Committee, who is apparently slated for the next general secretary of the CCP (the top job in China), recently began to tackle the “language style” (wenfeng, 文风) problem that had caused me so much suffering. His concern of course is not just for stylistics—behind these nightmarish languages are deadwood thinking and ultimately the

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Preface

xix

tombstone of a political party. Nevertheless, for the welfare of future CCP researchers I wish him all the luck in the world. The journey through this book was lonely and often assiduous, partly because this is still a sparsely populated field and in some ways this is a ground-breaking research. I greatly appreciated the help, encouragement, suggestions, as well as criticisms that I received along the way. My first thanks goes to the numerous individuals, most of them ordinary citizens and members of the Chinese Communist Party, from all walks of life, with whom I came in contact during my many trips to China. They generously shared with me their mundane yet fascinating lives, their life’s struggles, and their perceptions and perspectives on the ruling party and Chinese politics as experienced daily by the common folks, although I do feel guilty for occasionally having to “trick” them into a discussion on party affairs. I do not cite them as anecdotal evidences in the book, but their experiences, insights, and ideas have undoubtedly helped shape the views and arguments of this book. Ideas for this book germinated during my stay as a visiting research fellow in the East Asian Institute (EAI) of the National University of Singapore in the summer of 2006, where I also put the final touches on the manuscript in the spring of 2010. As a unique China-watcher research institute with a vibrant multidisciplinary scholarly community (mostly “insiders” of China), the EAI provided an intellectually stimulating environment and made available to me its impressive resources on contemporary China. The constant stream of up-to-the-moment research and analyses of the developments in China it generated are the key factors that contributed to my audacity of taking on an unfolding event as the topic for a book project. The then director and current chairman, Professor Wang Gunwu, and then research director, Professor John Wong, not only graciously tolerated my initial fumbling for direction and anchor for this project but also provided timely encouragement. Their confidence in me is invaluable. The current director of the EAI, Yongnian Zheng, is one of the handful of scholars in the field of contemporary Chinese politics who have done substantial research on the Chinese Communist Party; he read the entire manuscript and provided valuable suggestions. Elizabeth Perry of Harvard University took an early interest in my project and offered timely encouragement that kept this project alive; she subsequently read the entire manuscript and provided valuable feedback. Bruce Dickson of George Washington University, a known expert on the Chinese Communist Party, whose works have inspired my project, also graciously took the time to read the manuscript and provided detailed comments and suggestions that saved me from some embarrassments. David Shambaugh, in his own blunt and direct way, offered critical insights, which forced me to define a sharper focus to improve the manuscript, as well as encouragement when he saw progress. I also thank the four anonymous reviewers of Routledge who were associated with the twice submissions of this project for

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xx The Chinese Communist Party and China’s Capitalist Revolution their perceptive comments and suggestions that gave me a better sense of direction; they somehow saw value in this project even as it was fuzzy in purpose and slow and agonizing in progression. This book would not have been possible without the several faculty research grants from Bowdoin College and a Freeman fellowship that funded my trips to China. Needless to say, I alone take full responsibility for whatever shortcomings that remain in the book. I’m afraid that this book has probably raised more questions than it has answered. It is my hope that it will play a role in stimulating more scholarly efforts at understanding the CCP, for a better understanding of where the CCP is now, where it is heading toward, and what makes it tick would go a long way in not only filling the still wide knowledge gap but also dispeling the misconceptions and outdated ideas about the Chinese Communist Party as well as in obtaining a better sense of the dynamics of political change in China. This in turn would reduce the uncertainties associated with the rise of China that are felt by so many around the globe. In that sense, this book is just a starter, and I hope it has started on the right note. (A helpful note for readers who are not familiar with Chinese names. Throughout the book the names of the Chinese authors writing in Chinese follow the Chinese custom of placing the surname in front of the given name. For example, in the name “Zhang Liaoshen”, “Zhang” is the family name while “Liaoshen” is the given name. Accordingly, the bibliography is divided into an English section and a Chinese section. The coma separating the surname and the given name is omitted in the Chinese section because the surname should be placed in front of the family name following the Chinese way. “Zhang Liaoshen” is listed alphabetically in the Chinese section by “Zhang” instead of “Liaoshen”. If Zhang Liaoshen writes in both English and Chinese, her name will be cited as “Liaoshen Zhang” for her English work and appears in the English bibliography as “Zhang, Liaoshen”. However, her name will be listed as “Zhang Liaoshen” for her Chinese writing in the Chinese bibliography—the same way as it appears in the body texts. Many writings in Chinese are cited only by their translated Englished titles; however, if the name of an author is in the Chinese order, then the cited work can be assumed to be in Chinese despite that the title appears only in English translation.)

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1

Introduction

What has the market done to the Chinese Communist Party? This is no idle question nor is it a simple one. It seems obvious that as a party bent to “build a harmonious society,” today’s Chinese Communist Party is a far cry from its Maoist incantation of class warfare and “continuous revolution.” But the question remains whether it is a change of policy or a change of identity. In fact, the far more frequently invoked question with regard to the Chinese Communist Party is: When will it collapse? Ever since the fall of communism in Eastern Europe 20 years ago, this question has resurfaced at every slight downturn of the economy or any sign of social unrest. Most China experts now would dismiss it as simplistic; yet it stubbornly persists. One reason stems from the common assumption that the free market is inherently incompatible with communism. A second and perhaps more important reason is the gap in our knowledge. While China’s three decades of rapid economic growth and its dramatic rise on the world stage since the turn of the century are familiar stories told around the globe, people outside China in general know very little about its ruling party. This gap in our knowledge is unsettling. It becomes misleading too when combined with the assumption mentioned earlier, thus creating the irony of waiting for the collapse of a regime so wildly successful.1 Nevertheless, the notion is deeply rooted that communism and the market do not belong together and that the wax of one must be matched by the wane of the other. The rise of the market is the fall of communism. Yet the two have coexisted in China for at least two decades.2 During that time, the market has not only flourished under communist rule but also helped to propel the longest economic boom in history at a near doubledigit growth rate.3 To achieve this feat, the communist system and the market must have been able to accommodate each other and, in this mutual accommodation, they have to be mutually modifying. We already know that the market has comprehensively eroded the planned economy and has led to its eventual demise.4 We also know that the market behaves somewhat differently in China under communist rule.5 We however know less about its effects on the communist polity. In particular, we know little about how it

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2

The Chinese Communist Party and China’s Capitalist Revolution

affects the Chinese Communist Party, which constitutes the backbone of the Chinese political system.

Rationale of the book Indeed, the Chinese Communist Party (referred to as “the Party” henceforward) has been an enigma ever since the beginning of China’s economic takeoff some 20 years ago.6 Never before has a market-based economic expansion of this magnitude been presided by a communist regime and not started from demolishing the foundation of the planned economy in which the state owned almost all means of production (i.e. business assets).7 Three decades of market-oriented reforms have made significant progress in getting the government out of businesses and refashioning the regulatory role of the state. This much however cannot be said of the Chinese Communist Party (CCP). As the largest and the longest ruling political party in the world, the CCP continues to extend its domination wherever it can. While the Chinese government seems to have “gone neoclassical” by gradually getting out of microeconomic management and by enhancing its regulatory role, the ruling CCP has resisted the trend. Either by default or by design, the Party has insisted on its organizational presence in all spaces of the Chinese society deemed politically significant, including business firms and nongovernmental organizations (NGOs). Marketization and integration into the capitalist world economy, culminating in China’s ascension to the World Trade Organization (WTO) in January 2001, have transformed almost every aspect of the lives of the Chinese people; their impact on the CCP, however, is less known and poorly understood. The CCP is fundamentally structured to run a planned economy in which the market was routinely suppressed as the rival mechanism of resource allocation to state planning. Once the Party embraces the “the role of the market as the basic mechanism of resources allocation,”8 it must deal with the political consequences brought about by marketization of the economy and by the social transformation that ensues. Given the fact that the market has taken over the bulk of resources allocation from state planning, we would expect the weakening or increasing marginalization of the communist party, which may conceivably lead to the collapse of its rule. Scanning the countries in Eastern Europe that practice market economy now, those former ruling communist parties that survived the fall from grace in the early 1990s are all marginalized if not transformed; it is even more so for the smaller communist parties in Western nations. In any case, it seems safe to say that a communist party is unlikely to flourish in a market economy. But the CCP is booming. At the end of 2008, the total membership of the CCP stood at yet another all time high—75.93 million,9 more than doubling from the 37 million in 1978 when the post-Mao reform era began. By any measure, the CCP is the largest political party in the world. In the past decade and a half, it has been growing at an average rate of 1.61 million

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Introduction

3

1921 1923 1925 1927 1929 1934 1936 1940 1947 1950 1953 1955 1957 1959 1962 1965 1969 1973 1976 1978 1981 1983 1987 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008

57 195 427 994 3,000 11,000 10,000 40,000 69,000 122,318 300,000 40,000 25,000 40,000 800,000 1,211,126 2,700,000 4,488,080 5,000,000 5,800,000 6,369,000 6,500,000 9,393,000 10,734,384 11,592,000 12,450,000 13,500,000 17,380,000 17,500,000 18,011,000 18,710,000 21,500,000 22,000,000 25,000,000 28,000,000 33,378,910 35,078,000 35,000,000 36,981,000 38,000,000 39,657,000 39,650,000 40,000,000 44,258,000 47,755,000 47,755,000 50,321,000 51,517,000 52,793,000 53,000,000 55,407,000 55,000,000 57,000,000 60,417,000 61,877,000 63,221,000 64,517,000 65,749,000 66,941,000 68,232,000 69,603,000 70,800,000 72,391,000 74,315,000 75,931,000

members (net) per year or 1.46 million if the outlier of 1997 (3.4 million) is taken out. Its membership is equivalent to the population of a major nation. Were it a nation, the CCP would have ranked the 17th most populous out of the 196 countries of the world in 2009, larger than Iran (74.2 million) and right behind Egypt (77.74 million).10 Figure 1.1 shows that the membership has skyrocketed since the CCP took power in 1949; it depicts a remarkable trend of expansion disrupted only occasionally by minor downward adjustments. The growth rate of the Party membership stabilized in recent years at around 2 percent per annum. In contrast, the annual population growth rate in the 1980s averaged 1.4 percent; it dropped to 1.2 percent in the 1990s and further to 0.6 percent since the turn of the century. As a result, the percentage of Party members in the total population climbed steadily. Figure 1.2 shows that it inched up from less than 0.9 percent in 1949 when the CCP came to power to 5.72 percent in 2008. The growth carries tremendous inertia to continue into the foreseeable future: if each of the 3.72 million grassroots organizations of the Party recruited only one new member per year, the net growth would well exceed

Figure 1.1 CCP membership growth (1921–2008). (Sources: COD, “National statistics of party organizations, party members, and cadre corps,” Dangjian [Party Building], July 2001, pp. 20–22. COD, Annual reports on party statistics, Renminribao [People’s Daily]. Li Lieman, “Retrospect and reflections on the 80 years of party membership development,” Dangjian yanjiu [Party Building Research], 2001, no. 4, pp. 27–29. Tang Zhengmang and Tang Jinpei, “Exploring the causes of the rapid expansion of party membership between the 4th and 5th party congresses,” Shanghai dangshi yu dangjian [Shanghai Party History and Party Building], 2004, no. 8, pp. 37–39. Wu Zhenhua, “Making sense of the three historical expansions of the composition of party membership,” Gazzet of Liaocheng University, Jinan, Shandong, 2002, no. 6, pp. 12–15. Wei Zhiyang, “Analysis and reflections on the structure of the party membership,” Dangzheng ganbu xueka [Journal of Party and Government Cadres], 2001, no. 6, pp. 22, 26–27.)

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The Chinese Communist Party and China’s Capitalist Revolution 7.00 6.00 5.00 4.00 3.00 2.00 1.00 1949

1956

1960

1964

1969

1973

1977

1978

1981

1983

1985

1987

1989

1991

1993

1995

1998

2002

2005

0.00 2008

Percentage of Population

4

Year

Figure 1.2 Party members as percentage of population. (Sources: Li Lieman “Retrospect and reflections on the 80 years of party membership development,” Dangjian yanjiu [Party Building Research], 2001, no. 4, pp. 27–29. COD’s annual statistic reports. Zhongguo Tongji Nianjian [State Statistics Bureau], Beijing.)

two million, and one of the main duties of the Party’s grassroots organizations specified in the party constitution is recruiting new members regularly. This robust growth in size is puzzling because it took place under two widely observed conditions of post-Mao China: first, the increasing pluralism of the Chinese society, mainly as a result of the market-oriented reforms that have diversified the property rights in the economy; second, the fading, almost into irrelevance, of the communist ideology not only in the general population but also among the Party members.11 Membershipwise the CCP is very much a product of the reform era. Figure 1.3 shows that at the end of 2008, members who joined the Party in the reform era (after October 1976) took the lion’s share of the total party membership—72.29 percent or 54.89 million. In comparison, the revolutionary generation (those who joined the Party before October 1, 1949, when the People’s Republic of China (PRC) was founded) had shrunk to less than 1 percent (0.97 percent or roughly 733,000) of the Party’s membership. Those who joined before the Cultural Revolution (1949–1965) made up 10.53 percent (8 million) and those during the Cultural Revolution (1966–1976) claimed the remaining 16.21 percent (10.31 million). In other words, the bulk of the Party members had their formative experiences of joining the Party under the influence of the market economy. Table 1.1 summarizes the chronicle data available to this author about the Party’s growth in the reform era. All these describe the same trend: the Party is growing steadily. Why do people with no faith in or little understanding of the communist ideology continue to flock to the communist party, even as their “organized dependency”12 on it has either significantly diminished or completely crumbled? What does it mean to be a party member today? What is the political dynamic underlying this robust growth in size? The investigation on these questions may shed valuable light on the political change in China.

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Introduction Before 1949 1%

In the reform era (1976–2008) 72%

5

Before the Cultural Revolution (1949–65) 11%

During the Cultural Revolution (1966–76) 16%

Figure 1.3 Membership composition by the time period of joining the Party (2008). (Source: COD, “Intra-party statistics communiqué, 2008,” People’s Daily, July 7, 2008.)

Kenneth Lieberthal once characterized China as simultaneously undergoing four master processes that are rapidly and permanently transforming the Chinese society: marketization, urbanization, globalization, and privatization.13 Although by and large these are manifestations of the same process of the “capitalist revolution”14 that has been transforming various parts of the world ever since the Industrial Revolution, the speed and magnitude of China’s transformation in the past three decades is unparalleled in history. However, on the flipside of the same coin is often the image of an unchanging CCP: a common perception of China is one of continued communist repression amidst epic socioeconomic transformation. In fact the so-called Beijing consensus that allegedly undergirds the rapid rise of China on the world stage is premised upon the preservation of the authoritarian political system,15 at the core of which is of course the communist party. The late Michel Oksenberg once observed that, despite the transformation China was experiencing—a transformation both initiated and presided by the CCP—the CCP was the least reformed institution in China.16 The commonly observed and widely studied effects of the CCP’s political conservatism amidst rapid socioeconomic transformation are the widespread decay and corruption in and around the Party,17 which in turn has led many to a different rendering of the same question: How long could the Party last?18 But of course the CCP, as the single ruling party with 3.72 million grassroots organizations (jichen zuzhi) extending to every corner of the Chinese society, cannot but be profoundly influenced by the socioeconomic transformation around it. It is true that there have not been significant changes in the part of the Party most visible to outside observers—the part that constitutes the state (hence party-state). At a more general level, there has not been much political change in the sense of democratization, multiparty competition, freedom of speech and association, etc., but these are not the only

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Total membership 75,931 74,153 72,391 70,800 69,603 68,232 66,355 65,749 64,517 63,221 61,000 60,417 57,000 55,000 55,407 53,000 52,793 51,517 50,321 47,755 47,755

Year

2008 December 2007 December 2006 December 2005 December 2004 December 2003 December 2002 June, 16th PC1 2001 2000 December 1999 1998 1997 November, 15th PC 1996 June 1995 June 1994 1993 (estimated) 1992 October, 14th PC 1991 1990 1988 July 1987 October, 13th PC

2.40 2.43 2.25 1.72 2.01 2.83 0.92 1.91 2.05 3.64 0.96 5.99 3.64 −0.73 4.54 0.39 2.48 2.38 5.37 0.00 7.90

Rate of growth (%) 5.718 5.623 5.500 5.419 5.354 5.280 5.165 5.015 5.090 5.009 4.889 4.887 4.657 4.541 4.506 4.303 4.506 4.448 4.286 4.301 4.209

Share of population (%) 2,807 2,782 2,635 2,470 2,419 2,335 — 2,196 2,068 2,189 2,268 2,359 2,348 2,197 1,869 1,757 1,762

Total new recruits

Table 1.1 Growth of the Party in the reform era (1978–2008) (unit: 1,000 persons)

19,449 19,506 19,073 17,670 17,380 16,023 15,128 14,447 13,954

Applicant pool

3,148 2,968 2,874

3,290

3,405

3,514

3,518

3,718 3,663 3,564 3,520 3,477 3,451 3,487

Base-level organizations

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36,981

1978

10.65 0.88 −0.02 4.36 2.76 3.842

3.968 3.880 3.900 3.889 3.850 2,440 2,380

Sources: COD, “National statistics of party organizations, party members, and cadre corps.” Dangjian [Party Building], July 2001, pp. 20–22. China Statistic Yearbook (1980—2009), State Statistic Bureau, Beijing. COD, Annual report on party statistics, Renminribao (People’s Daily). Li Lieman, “Retrospect and reflections on the 80 years of party membership development,” Dangjian yanjiu [Party Building Research], 2001, no. 4, pp. 27–29. Tang Zhengmang and Tang Jinpei, “Exploring the causes of the rapid expansion of party membership between the 4th and 5th party congresses.” Shanghai dangshi yu dangjian [Shanghai Party History and Party Building], 2004, no. 8, pp. 37–39. Wu Zhenhua, “Making sense of the three historical expansions of the composition of party membership.” Gazzet of Liaocheng University, Jinan, Shandong, 2002, no. 6, pp. 12–15. Wei Zhiyang, “Analysis and reflections on the structure of the party membership,” Dangzheng ganbu xueka [Journal of Party and Government Cadres], 2001, no. 6, pp. 22, 26–27.

PC: party congress.

1

The months indicate the time of the year the statistics were taken.

44,258 40,000 39,650 39,657 38,000

1985 September 1983 October 1982 September, 12th PC 1981 1980

8

The Chinese Communist Party and China’s Capitalist Revolution

significant political changes. This study steers away from the obsession with corruption and addresses political change in a more fundamental way: it looks at the ways in which marketization alters power and resources distribution and reshapes the political dynamic via the social changes it has brought about. It examines the relationships the Party is developing with the various classes and groups in China’s new social landscape and the impact of the new normative order and value reorientation spread by marketization on the ideological and organizational integrity of the Party. The Chinese communists are masters of organization building, and the Party derives its strength primarily from its organizational successes. In his seminal work four and a half decades ago, Franz Schurmann compared the CCP and the KMT (Kuomintang, the Nationalist Party now residing in Taiwan) and pointed out that in a social revolution such as China’s, between the destruction of the old social system and the establishment of a new social order, successful organizational effort is the key to keep things from falling apart, and in this regard the CCP outperformed and outmaneuvered the KMT. The communists recruited, from among the downtrodden peasant masses, the leaders to staff its extensive organizations, which channeled the energy of the masses to serve the purpose of the Party. In contrast, the KMT recruited from among the old social elite, a fact that rendered it incapable of carrying out the necessary social revolution to bring China into the modern era.19 With the return of market-based social stratification20 and a new social system taking shape, the CCP’s traditional rule by organizational monopoly is inevitably facing challenges from the spontaneous growth of market institutions and an emerging new class system. History seems to be repeating itself: this time around the CCP is the ruling party facing an epochal socioeconomic transformation and, as the ruling party struggling to maintain its rule, it has to recruit heavily from among the social elite who share the status quo with the Party.21 Party organizations now have to interact and compete with market institutions and the emerging social system in reordering Chinese politics and society. A general theme throughout this book is the compatibility between the market and the organizations of the Leninist party. To understand the challenges the CCP faces in a market environment, the book has investigated the nature and the specific manifestations of the problems of compatibility between the classic form of organizational existence of a Leninist party and the institutions of a capitalist market economy. The empirical investigations on this issue are driven by questions such as: How do the Party organizations in enterprises adjust to new environments created by market competition in which businesses must respond to market imperatives as a matter of survival? What is the place of the Party organizations in the corporate governance and what role, if any, can they perform to justify their existence in businesses? What is the impact of the value reorientation in society in the wake of marketization, and of the increasing social mobility (resulting from the expansion of the job market) upon the Party’s recruitment, its organizational

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9

integrity, and methods of operation? Are these compatibility problems surmountable within the basic framework of the Leninist party, or will their resolution necessitate a transformation of the CCP or its reincarnation as something quite different? With the market rising as an alternative—and frequently competing—ladder of upward social mobility, where does the loyalty of the Party members reside? Can the Party command a level of commitment from its members necessary to maintain its continued existence as a Leninist party without the monopoly of rewards in the society that it used to enjoy? The answers to these questions will determine whether the CCP is still the party we know and will provide us with some ideas on what is becoming of it. Implicit in this focus on the CCP is the broader issue of political change in China. The underlying assumption is that the knowledge gained about the changes in the ruling party and their causes should also shed light on China’s political prospects. The focus on the CCP as the vehicle to understand the broader process of political change is appropriate not only because the CCP is the single ruling party but also because it is uniquely situated between the state and the society. The Party not only has extensive organizations embedded in both state and society but also has been so far generally successful in its determined effort to maintain its organizational monopoly in the political arena. This means that it not only plays a pivotal role in the political process but also has much greater exposure to society than most other political parties—it is inevitably at the center of political change shaped by the socioeconomic transformation. Rather than assuming the Party as a static entity (hence avoiding the “when will the communist party collapse” question), this study zeroes in on the dynamic interactions between the Party and its changing environment as a way to discover the changes in the Party—changes that frequently go unnoticed or are underconceptualized but are nevertheless transforming the Party: its values and identity, its forms of organizational existence, its ways of exercising powers, its roles in and relationship with the society, and so on. It does so by delineating the impact of the market on the ruling party at its main interface with society—its grassroots organizations22 and by specifying the mechanisms through which the market exerts its influence. In sum, this book pursues change; it studies the complex effects on the CCP of China’s new social landscape shaped by the market and analyzes the evolution of the ruling CCP as indicative of the politically significant social changes, as the Party is simultaneously shaping and being shaped by these changes. It attempts to shed light on the political prospects of China through understanding the socially and economically driven evolution of the CCP. In particular, it seeks to understand the ways in which market forces affect the evolution of the CCP. And to the extent the CCP is being reshaped by the market, the market is reshaping Chinese politics and political prospects. The main argument (or hypothesis) to be examined in this book is: a market economy is fundamentally incompatible with the communist system, and a party ruling over a bustling, globalizing, and wildly successful market-driven economy cannot be a communist party as conventionally understood.

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10 The Chinese Communist Party and China’s Capitalist Revolution

Recent literature Perhaps because of its unique position in China’s meteoric rise on the world stage and its failure to collapse as widely expected after the fall of the communism in Eastern Europe, the CCP is the subject of renewed academic interest in recent years after almost two decades of neglect.23 From a wider perspective, the resumed CCP study is still in its preliminary stage, including this book. Explicitly or implicitly, the center of gravity of the recent literature is the survivability of the CCP and the prospect of democratization in China. Bruce Dickson’s comparison of the CCP and the Nationalist Party (the KMT) largely adopts a complex-organization approach to analyze the adaptability of the two Leninist parties and reaches the conclusion that the CCP is unlikely to make the democratic breakthrough undertaken by the KMT in Taiwan because of its organizational rigidity, elite strategies, lack of challengers in society, etc.24 He follows up this line of inquiry with two more in-depth studies of what is generally considered the antithesis of communism—the private sector and private entrepreneurs.25 Both books highlight the dynamic interactions as well as the symbiotic relationship between the CCP regime and China’s private sector. In Red Capitalists (2003), he traces the roots of many of China’s capitalists in the party-state and details the CCP’s extensive and elaborate effort to co-opt and incorporate private entrepreneurs into the political status quo. In Wealth into Power (2008), he describes how the capitalists convert their wealth into political influence in a process characterized by him as “crony communism.” The underlying message is clear: the “capitalist revolution” in China is unlikely to lead to democratization. On the sustainability of the Party, the distinct minority view is represented by Roderick MacFarquhar, who observed that several of the historical factors that contributed to the CCP’s stability no longer exist. For example, charismatic leaders such as Mao, who was able to hold the Party together even as he plunged it into the chaos of the Cultural Revolution, the disappearance of the ideological glue, and the decay of Party organizations, etc.,26 Minxin Pei,27 Dickson, and a few others also share this pessimism. The majority, however, concentrate on finding explanations for the durability puzzle; in other words, the survival of the Party is no longer in doubt, but why it does is. Some find explanations in the adaptive changes the CCP has been able to make. David Shambaugh’s 2008 book provides a general survey of the recent trends in the evolution of the CCP,28 in which he pays special attention to the lessons the CCP learned from the collapse of other communist regimes. Amidst the widespread organizational atrophy of the Party he highlights the Party’s ability to adapt in a capitalist market economy and its ideological framing of the adaptations. Andrew Nathan similarly attributes the regime’s resilience to a wide range of incremental reforms such as local elections, the institutionalization of the elite succession process, legal and mass media reforms, etc., which enhance its “level of acceptance”

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Introduction

11

to the people.29 Other scholars credit the continued strength of core communist institutions and the enduring influence of the Maoist legacy. Andrew Walder, for example, has noted that the basic organizational structure of the party-state remains remarkably stable despite decades of reforms.30 Fewsmith emphasizes the CCP’s tight grip on mass media and improved skills at swaying public opinion.31 In a recently released book, Yongnian Zheng argues that the deeply entrenched and elaborate personnel control exercised by the CCP explains why the CCP’s grip on power remains firmer than many in the West expect; the CCP according to him is playing the role of the “organizational emperor” that is deeply rooted in the political legacy of imperial China,32 Barry Naughton and Dali Yang similarly emphasize this nomenklatura system of personnel management.33 Force and repression, although seemingly forgotten from time to time, always loom as the backdrop. Flexibility and pragmatism have also featured prominently. A recent account of the CCP’s organizational ubiquity and prowess is provided by Richard McGregor, a journalist for the Financial Time (McGregor 2010). In a volume edited by Heilmann and Perry, the authors explore the strength and durability of the party-state in the Maoist legacy, in particular, the tradition of flexible and pragmatic policy-making. Dubbed by MacFarquhar as the “guerrilla policy style,” because it draws on the Maoist strategies in guerrilla warfare, this approach to policy-making gives considerable leeway to local initiatives, allows maximum tinkering, and therefore is particularly suited for adaptation to new situations and new environment. As Heilmann and Perry put it in their Introduction, much of the explanation for what the CCP has accomplished so far “lies in the creative adaptation of key elements of China’s revolutionary heritage.”34 This study is driven by neither the concern for democratization nor the puzzle of the CCP’s durability, although its findings may prove relevant to both. It is about the CCP itself and pursues what appears to be an openended question: What has the market done to the CCP? The book delineates the political impact of the market through in-depth analyses of the conditions of the Party in the major population groups that form China’s new social landscape and in key social spaces that are reshaped by marketization. The underlying assumption is that the answers to many other questions, including regime durability and the prospect for democratization, are at least in part derivative from what is happening to the CCP itself and that marketization as a global variable exerts the most fundamental influence on the evolution of the communist party. In other words, understanding what is happening to the CCP is a priori or a necessary (although by no means sufficient) condition to the understanding of many other political issues in China. Because of this focus on the market as a transformative force, the study does not directly deal with party organizations that constitute the state (i.e. the Party committees and the Party groups that control state power and run government bureaucracies) and the related topics such as elite politics and central–local relations. Instead, the emphasis of the book is on the

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12 The Chinese Communist Party and China’s Capitalist Revolution evolution of Party organizations at the grassroots level in the society and the economy; for here is the main interface of the Party with the market and the society—it is where Party organizations and Party members directly interact with the changing socioeconomic environment, and where the political impact of the market on the Party can be observed directly. Therefore, this study is narrower in scope but more focused on the CCP at the grassroots level than most of the studies cited above. The main purpose is to delineate the influence of the market, not to strive for an explanation of the party-state in its entirety. This approach has two main advantages. First, it requires an intense empirical focus on what actually transpires on the ground and, second, the CCP is no longer treated as a given, as it is so commonly. The Party is instead treated as a variable and it is in studying its variation (that is, its changes and the causality of these changes) that, it is hoped, the dynamics of political change can be revealed. Such an approach maximizes the freedom from all precepts that too often present obstacles to advancing our knowledge and understanding of Chinese politics. This freedom is especially important for the study of an enigma such as the CCP that appears to be blazing a new path and creating something never encountered by prior social scientific inquiries. Here open-mindedness is not only a virtue but also a necessity.

Sources and methodology With an intensive empirical focus, the method of this study is necessarily more inductive than deductive, although the study does attempt to take advantage of some existing conceptual and theoretical tools. Important as they are, this book explores the issues of social change but does not provide a comprehensive and in-depth study of them; they are treated mainly as intervening variables. The subject of social change and its broader political implications have to be dealt with more adequately in a different project. The independent variable emphasized in this study is the market. The conditions of the ruling party (the dependent variable) in turn are indicative of the politically significant social changes that should shed light on the nature and dynamic of political change in China. The research for this book relied heavily on written or published primary sources in Chinese collected online as well as during my annual trips to China between 2004 and 2008. The CCP has a very comprehensive statistic reporting system by which it monitors the conditions of its party organizations and determines its recruitment policies and plans; occasionally it releases bits and pieces of the data collected by this system, but never systematically. Although it is possible to get hold of localized statistics, the aggregated data at the national level remain strictly classified. Each year the Central Organization Department (COD)35 selectively releases some national statistics around the Party’s anniversary (July 1), but the overall statistic profile of the CCP remains sketchy and fragmented. In recent years,

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Introduction

13

the Party, apparently in search of a new international image or perhaps even a new identity, has intensified its exchanges with political parties of other countries; the Central Party School has become increasingly active in the national news media and public policy debates; and the COD has since 2005 established a spokesman to signal a departure from its traditional secretive approach to party affairs. More statistics are expected to be made available in the coming years, but for the time being I have to work with piecing together the bits and pieces of data one can gather from various sources. This book also took advantage of the increasing availability of primary sources made available in part by the CCP’s new line of “open party affairs”36 and the CCP’s embracement of the Internet as a new vehicle of “party building,” which is itself one of the numerous ways the Party adapts to the information age. The Internet is a goldmine for researchers of the CCP outside China. There has been an explosive growth of websites devoted to party affairs, largely as a result of the determined efforts that General Secretary Jiang Zemin and his successor Hu Jintao have made since late 1990s in a long party-building drive dubbed by the CCP as “the New Grand Project” (xinde weida gongcheng).37 The CCP has embraced the Internet as a new vehicle of party building to deal with the logistic difficulties caused by the increasing mobility of party members and by the increasingly complex social structure and residential and work patterns in the population. The Internet has become increasingly indispensable in managing party affairs.38 Thousands of party-building websites (and some of them very well designed) have sprung up across the land. Most of them are hosted by the organization departments of the CCP’s local committees and other party organs such as the propaganda departments and the party schools, as well as by party committees inside all sizable organizations. Almost all of the organization departments of local Party committees at the county level and above and the Party committees (or their organization departments) of colleges, universities (even some high schools), research institutes, government bureaucracies, the quasi-governmental nonprofit organizations (shiye danwei), large stateowned business corporations,39 etc. maintain a party-building website. The complex situations and the new challenges the Party faces have spawned heated discussions and debates as well as numerous investigations on the conditions of the Party organizations at the grassroots level among party affairs workers (dangwu gongzuozhe) or operatives of the organization departments and the scholars or experts from the Party schools across the country. The Internet is a main outlet of these debates, discussions, and investigative reports. The official People’s Daily website has a special section on CCP news and, in additional to several clearing house websites for periodical and newspaper articles and book abstracts, there is also a feebased journal articles download site “Party and State InfoNet” (dangzheng xingxi wang) established in 2004 while I was field working in China. Extensive use is made of the database of journal and newspaper articles on party building in the Capital Library in Beijing.

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14 The Chinese Communist Party and China’s Capitalist Revolution In addition to propaganda, most of the party-building websites are also “service windows” that grassroots party organizations use to run party affairs or conduct routine party businesses such as notifications for upcoming meetings or events, the collection of party dues and keeping party members updated with the current affairs both at home and abroad. They are also sites where party members can download evaluation/self-evaluation forms and statistic reporting forms and reading materials for study sessions (Party members hold regular, mandated political study sessions). Recruiting plans, minutes of meetings, policy directives, recommendations of good behaviors and criticisms of bad ones, etc. are often posted on these sites, which also serve as the clearing house of Party documents, policies, rules and disciplines, investigative reports, news and briefings on on-going Party activities, speeches of local or central Party leaders. Many also offer online courses for party members and party activists (nonparty members groomed for recruitment into the Party). Many of those that would previously be classified as internal can now be found online.40 Sifting through these websites has yielded a wealth of primary materials and new knowledge of and insights into the daily routines of the Party organizations at the grassroots level, the problems and the challenges they face, and the sometimes very innovative ways of coping with changes by local Party organizations, Party affairs workers, and Party operatives. There is an explosive growth of academic and semiacademic journals and books in which one can often find fairly open discussions of Party affairs. Social science publications are not the top priority for the overloaded official censorship, presumably because they reach only a very small readership in China. The People’s University’s Center of Newspaper and Journal Article Services (baokan fuying zhongxing) compiles a monthly publication of newspaper and journal articles on the CCP gathered from around the country. More importantly, as the result of the increasing value placed on professionalism, academic and semiacademic publications are converging toward Western standards of scholarship as well as its obsession with data. The quality of data and conceptualization has improved noticeably every year. Overall, however, the Internet is the greatest source. By January 23, 2010, a total of 10,306 e-articles (including scanned articles) of various kinds were accumulated for this project, including 248 internal statistic forms and reports of the Party statistics (mostly local and danwei figures) from various sources, 128 recruitment plans from various locales and danwei, 409 CCP documents on or relevant to party building, and 174 investigative reports by organization department staffers and other Party researchers mainly from the Party schools, the Party’s policy and history research bodies, and colleges and universities. In addition, there are 74 recently (since the 1990s) published books and journals (excluding English ones) collected during many trips to China on party building or social change. The challenge in utilizing these sources is to find a way to make them suitable or even better substitutes for both national surveys and

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Introduction

15

in-depth case studies. Because the Party organizations exist across the country at all four levels of local public administrations, and in all sizable business and other organizations, the geographical and categorical distribution of the above sources is broadly spread out across the provinces, cities, counties and townships, and different sectors of society,41 making it possible to piece together a relatively reliable national picture of the organizational development of the CCP, the common issues and problems, as well as regional/local variations.

Chapter outlines A study, as it is in this case, of “what is in the making” requires an empirical focus. Empirically, the book tries to understand the impact of the market on the CCP by investigating the changes in the structure and the mode of operation of the grassroots organizations of the Party in businesses, rural villages, urban communities, college campuses, and so on; it tries to understand these changes in the context of the market-driven social transformation. Chapter 3 sets out with a sketch of the classic Chinese communist system as the benchmark from which changes occur; special attention is devoted to analyzing the erosion and disintegration of danwei (work unit, the building block of China’s communist system) in the reform era, and how this in turn sets-off monumental changes in other areas of the Chinese political economy. The chapter then proceeds to a case study of the Party’s organizational atrophy and its causes in the rural area, where the Party drew some 31 percent of its membership in 2008. Chapter 4 is an analysis of the conditions of the Party organizations in the new social spaces opened up by marketization. It studies “party building” (dangjian) as adaptations to changes in the middle-class professionals, among the ever increasing “mobile population” (not only of peasant migrant workers but also increasingly of migrating white-collar professionals), among private entrepreneurs and on college campuses. The main objective of both chapters is to highlight the forces exerted upon the Party’s grassroots organizations in these sectors and their actual impact on the evolution of the Party. Chapter 5 deals specifically with the compatibility problems between the organizations of the Leninist party and modern capitalist corporate governance. It describes the agonizing struggle of enterprise Party organizations to find a role in, and to adapt to, the fast-changing business environment, and to the deleterious impact of the implementation of the “modern enterprise system” (xiandai qiye zhidu, that is, the Western corporate governance) on Party organizations; it also examines the strategies of adaptation pursued by Party members and Party organizations and assesses the trend in the balance of power between Party organizations and business administration. Chapter 6 investigates the ways in which the changes in job and residential patterns (part and parcel of the market-driven social transformation) impact the Party’s grassroots organizations. The searchlight is directed toward the conditions of the Party in the

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16 The Chinese Communist Party and China’s Capitalist Revolution new urban communities (shequ), in an effort to understand the grassroots Party organizations’ struggle for survival, their adaptation to the new social landscape, and how these adaptations shape the evolution of Party organizations in these communities. Together these empirical chapters provide a relatively detailed and comprehensive picture of the conditions of the 3.72 million or so grassroots organizations of the CCP in various socioeconomic contexts, their strategic adaptations, the driving forces behind them, and the combined effect on the evolution of the Party. The final chapter summarizes the findings, assesses the CCP’s strategic responses to marketization, characterizes the evolution of the Party in the reform era, and draws some conclusions about political change in China and its prospects. A main challenge of this study, however, is conceptual and theoretical. The challenge stems from the unusual combination of the CCP as simultaneously a communist party in the Leninist tradition and a ruling party presiding over a capitalistic market economy that is also rapidly internationalizing. There is not a set of conceptual and theoretical tools readily available for our purpose. Chapter 2 prepares the conceptual and theoretical tools for the chapters to follow. It first defines and characterizes the CCP from a historical and comparative perspective, highlighting its unique position as a political organization embedded in both state and society, as well as its role in the state–market relations. It then moves to address the conceptual and theoretical issues of institutions and institutional change and finally to work out the theoretical framework of the book. In doing so the chapter borrows heavily from the toolbox of sociological institutionalism (or the new institutionalism in organization theory), in particular, its concept of “institutional principle”42 and theories about its diffusion. These in turn are extended to bear on the issue of institutional compatibility. The chapter also draws from the insights of neoclassic/rational choice institutionalism; in particular, its theory about institutional change and how is it related to changes in relative price and power distribution. However, the book approaches state– society relations in a more limited way: in the context of the Party’s organizational development or decay, especially the complications caused by the diffusion of the institutional principles of the market into the Party, for it is historically unprecedented for a Leninist party to insist on its organizational presence in the marketplace all the way down to the shop floor but, as the empirical chapters will show, the market and the Leninist party are by no means natural partners.

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2

Conceptual issues and the theoretical framework

As the single ruling party, the Chinese Communist Party (CCP), with a massive membership and extensive organizations permeating both the state and the society, occupies a pivotal role in any political change in China. The CCP itself however is not a constant—it is constantly evolving. Its evolution in the post-Mao era is shaped and to a large extent driven by the changes in the environment. Nothing is more revealing of the dynamic of political change than the everyday interactions between the CCP’s grassroots organizations and their socioeconomic environments. To analyze such interactions, more specifically the impact of the interactions upon Party members and organizations, are the subject of this book. This chapter first tries to provide some perspective on the nature and the unique position of the CCP, and then addresses some conceptual and theoretical issues to work out the theoretical framework for subsequent chapters.

The CCP as a political party The CCP is unique. Never before has a Leninist party attempted to preserve an organizational structure designed for a planned economy while pushing for marketization and embracing globalization.1 This section draws a profile of the CCP from a historical and comparative perspective and highlights its position in China’s state–society and state–market relations. Political parties and the idiosyncrasies of the CCP The political party is a relatively modern phenomenon; it originated in the parliamentary groups in the caucuses and other elite clustering centered on prominent figures in Western Europe in the eighteenth century. It used to recruit from the elite only and is hence labeled by Duverger “the cadre party.” Around the turn of the twentieth century, the elitist parties in the West evolved into open recruiting parties to fight electoral battles. Branches were invented to interconnect large numbers and geographically scattered party members—the mass party was born. Institution wise, the caucus is a gathering of notables; its members are chosen only because of their status and

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18 The Chinese Communist Party and China’s Capitalist Revolution influence. The branch on the other hand appeals to and involves the masses in politics.2 Between 1920 and 1930, a new type of political party came into being: the Leninist and Fascist/Nazi parties.3 As is with the mass parties, the Leninist and Fascist parties distinguish themselves with their innovative organizations: the democratic centralism and vertical integration of the Leninist party, the private militia and the concentric circles of core and periphery organizations of the Fascist/Nazi parties. Both feature a paramount leader and it was the strength of their organizations that enabled both to take control of the state. These parties share certain organizational characteristics with the mass parties such as branches, cells, and a formal machinery of recruitment that requires the signing of a pledge and payment of party dues, etc. However, unlike the mass parties, which in their contention for political power through the electoral politics always attempt to broaden their support base through aggressive recruitment, the Leninist and the Fascist parties practice restricted enrollment and recruit only from certain class or status groups of their choice. They hence carry inherently an elitist and authoritarian tendency in their organization structure and method of operation. Both also seek to be a “devotee party,” requiring not only ideological conformity of the new recruits but also actively trying to modify the thinking and the behavior of existing party members to enhance their loyalty and obedience. But unlike the Nazi party, which had its roots in a distinctive minority—the sinking aristocracy, the communist party claim affiliation with and recruit from the working masses. Both are elite parties in mass party form. Maurice Duverger once observed, “Parties are profoundly influenced by their origins.”4 The birth of the CCP was not a natural manifestation of class interests in the Chinese society then. Like many communist parties around the world, it is of a foreign origin—it was created by the Comintern5 as one of its country branches, and bankrolled by Stalin’s Soviet Union in the critical years of its early existence.6 It is modeled after the Bolshevik Party as a “vanguard party” that Lenin invented as the substitute for a weak proletariat in the Tsarist Russia. Tight organization and strict discipline are the hallmarks of a Leninist party. In reality, the “vanguards” (party members) do not necessarily come from the same class background. In fact, none of the twelve individuals attending the CCP’s founding conference on July 23–31, 1921 (including Mao himself), came from a working class background. The infant party had to go out of its way to recruit industrial workers to fulfill its claim as the “vanguard of the proletariat.”7 Like the Bolshevik Party of Lenin, the initial CCP started also as a conspiracy group, which had to move its founding conference from the French Concession in Shanghai to a tour boat on a lake in the neighboring Zhejiang Province to dodge the police. The founders of communist parties around the world typically do not come from a proletarian background either; they come together because of common or similar ideological convictions. In other words, the communist parties tend to start as a devotees’ party, claiming to be the party of a particular class but in fact is a self-contained organization that retains

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Conceptual issues and the theoretical framework 19

Workers

Peasants

1921

1922

1924

1926

1927

1928

1931

1934

1945

1949

1956

1964

1978

1987

1992

1997

2000

2003

2004

100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%

2008

the freedom to act independently from the interests of any particular class. It has its own interests, which it serves by drawing the strength from any class if necessary and feasible. It is, so to speak, an “organization party.” Obviously, today’s CCP cannot be accurately described as a devotee party because the official doctrine for all practical purposes has been reduced to mere formality in the Party’s daily operation and faded nearly to irrelevance for the majority of Party members and those who seek to join the Party.8 Neither is it the party of any particular class because it broadly targets in its recruitment the elite elements of all classes or social groups as we will see in later chapters. Historically though the CCP was associated with the Chinese peasantry in spite of its claim as the vanguard of the modern industrial workers. It used to draw the bulk of its members from the peasants. Figure 2.1 is the histogram of the shares of workers and peasants in the total Party membership. For example, in 1949, of the four and half million Party, members workers took only 2.5 percent while peasant Party members constituted nearly 60 percent. If those peasant youths serving in the military were added, peasant Party members would be well over 80 percent. Since then the share of the peasants steadily declined, to 31 percent in 2008. The number of working-class (i.e. the urban industrial workers) Party members climbed slowly since the Mao era to peak at 10.5 million in 1997 (roughly

Others

Figure 2.1 Peasants and workers in the CCP membership.9 (Sources: Party History Research Office of COD and the National Archives. “Zhongguo gongcandang zuzhi shiliao [Historical Documents of CCP Organizations], vol. 7(B), Beijing: Zhongguo dangshi chubanshe, 2000. Tang Zhengmang and Tang Jinpei, “Exploring the causes of the rapid expansion of party membership between the 4th and 5th party congresses.” Shanghai dangshi yu dangjian [Shanghai Party History and Party Building], 2004, no. 8, p. 38. COD “Suggestions on the admission of new party members,” Nov. 17, 1958 (available online at 人民网 [http://www.people.com.cn/]). Wu Zhenhua, “Making sense of the three historical expansions of the composition of party membership.” Gazzet of Liaocheng University, 2002, no. 6, p. 12. Luo Jianrong, “The three major changes in the social composition of the party in party history,” Zhibujianshe [Branch Building], 2002, no. 8, p. 8. COD, Annual reports on party statistics, Renminribao [People’s Daily].)

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20 The Chinese Communist Party and China’s Capitalist Revolution 17.4 percent of the total Party membership then and the highest since 1949) but dropped sharply to 9.7 percent in 2008 after the state-owned enterprise (SOE) reform in the late 1990s. That the CCP represents the interests of neither the proletariat nor the peasants is evidenced by the fact that the urban industrial workers are the biggest losers of the post-Mao reform policies and that the peasants are relegated to the status of second-class citizens almost as soon as the Party came to power and continue to be discriminated against today by state policy. Figure 2.1 also shows that at any time in the CCP’s history a significant portion of the membership came from people of other class backgrounds. This part also expanded rapidly since the middle of the 1950s, when the CCP embarked on industrialization to reach almost 60 percent of the total Party membership in 2008, significantly larger than the share of workers and peasants combined. A significant part of the “other” category in Figure 2.1 consists of the socalled intellectuals (zhishifenzi, a topic to be picked up in Chapter 4). Despite the claim in the Party Constitution that the CCP is the vanguard of the proletariat and its rule is based on “the alliance between the workers and the peasants”; the intellectuals are in fact of most value to the Party—they are the most valuable of China’s human resources, and it is not only true today but also true in certain periods of the Mao era. Table 2.1 is the Party’s recruitment plan for a period of 15 years (1953–1967) drawn by An Ziwen, the long-serving director of the Central Organization Department (COD). In this period the CCP was, unlike in the pre-1949 era when it was confined mainly in rural areas, in a position to recruit a large number of industrial workers to fulfill its claim of a proletarian party while promoting industrialization. Indeed the CCP tried to increase the workers share and reduce that of the peasants. However, the recruitment of intellectuals was also emphasized. According to the plan, peasant Party members would be reduced from 59.2 to 46.1 percent by the end of the third five-year plan Table 2.1 Recruitment plans for the first, second, and third five-year plan periods (unit: 10,000 persons) First 5-yr plan Second 5-yr plan Third 5-yr plan period (1953–1957) period (1958–1962) period (1963–1967)

Peasants Workers Intellectuals Military

Number

%

Number

%

Number

%

1,350

100

1,900

100

2,600

100

59.2 12.6 20.7 7.4

1,000 350 450 100

800 170 280 7.4

52.6 18.4 23.7 5.3

1,200 550 750 100

46.1 21.1 29.3 3.5

Source: Han Jingcai (ed.), An Ziwen zuzhigongzuo wenxuan [Selected Writings of An Ziwen on Organization Work]. Beijing: Zhongyang dangxiao chubanshe. 1988, pp. 110–111.

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Conceptual issues and the theoretical framework 21 (1967) but the share of workers would increase from 12.6 to 21.1 percent. In comparison, the percentage of intellectual Party members would be raised from 20.7 percent (already substantially above that of industrial workers) to 29.3 percent. The CCP’s recruitment in reality can be so instrumental as to be class blind. It always serves the Party’s objectives in a given time. The CCP has existed in both a market and a planned economy, which have affected its organizations very differently. In both eras, the relationship between the Party and the population is the inverse of the usual: usually political parties are the means to involve ordinary citizens in politics by promoting the preexisting interests of certain classes or groups, whereas in the case of the CCP (especially in the planned economy era) the Party shapes or even creates the interests of the people because of its monopolistic control of resources and opportunities in society. In the market economy era, this condition has been significantly diminished but the Party continues its practice of penetrating, organizing, mobilizing, shaping, and channeling the population. Party organizations are instrumental for the rulers instead of the instrument of the ruled. In the relationship between the Party and the social classes, the Party is the manipulator and controls the initiative. It can choose any class as its social base and claim as the vanguard to any or all classes (i.e. nation). The Party is, to borrow from Marx, “for itself” while class in China so far is “in itself.” The recruitment of a ruling party in a multiparty democracy is inclusive: it seeks to maximize the number of party members as dictated by electoral victory. In contrast, in an authoritarian political system the ruling party’s recruitment tends to be exclusive as long as there is no significant competition—recruiting is to determine whom to admit into the club of power and privilege. It can be argued that a ruling Leninist party tends to be a “party of personal interests”: individuals seek to join the party not because of conviction or with the goal of advancing the interests or ideals of the party, the class, or groups the party claim to represent; instead, the decision to join the party is based on individual interests, career considerations, or other objectives that confer personal gratification. Party organizations are designed not for aggregating and representing the interests of social groups but are themselves the basis of the interests of its members. The CCP has an ideological commitment to the people and the nation, but the institutional mechanisms to articulate and represent their interests are either nonexistent or poorly developed. For a Leninist party, representation, to the extent it is present, exists in the ideology, in the code of conduct for its members, and in party disciplines, and is promoted as such. It is hard to argue that the CCP of today does not strive to represent the interests of the Chinese people or the Chinese nation. It obviously does. However, this representation is essentially disconnected from the private interests of individual Party members, including cadres or even the top leaders. While the Party as a result has a tendency of evolving into a privileged class as history has shown, this alone does not preclude it from making sound public policy or implementing its visions for the nation as long as the leadership is cohesive, autonomous, and responsive

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22 The Chinese Communist Party and China’s Capitalist Revolution to popular sentiment. This disjuncture, the hallmark of an “organization party,” insulates the inner circle of policy elite from the popular vagaries both in and outside the Party and is the ultimate reason behind the long-observed paradox in China: that rampant corruption goes hand-in-hand with decent public policy that has helped to generate China’s three decades long economic boom and the equally impressive progresses made in social development. There is no denying that good public policy benefits the Party as a corporate entity, but it may or may not benefit individual party members or cadres. The CCP gains support by aligning its interests with those of the nation, the key groups in society such as the intelligentsia, the entrepreneurs, the professionals, and more generally the masses. It also attempts to co-opt the elite of all groups or classes and to extend its organizational network to every corner of the society in an effort to monopolize organized political expressions (i.e. to preempty or prevent the rise of other organized political forces). It represents the interests of the masses as it chooses to do so and can therefore easily turn against the people as demonstrated by the bloody Tiananmen crackdown. Its commitment to and active pursuit of economic development serve the broadest based interests, including its own corporate interests: the nation, the poor as well as the rich, and even other nations.10 For a long time, rapid economic development has muffled all discontent and will continue to do so as long as the rising tide continues to raise all boats. In Lenin’s original conception, a vanguard party is a small but tightly organized, highly disciplined conspiracy group made up by ideologically enlightened and firmly committed elite revolutionaries—such people have to be small in numbers under any conceivable circumstances. They claim to know better of the “real interests” of the working class than the workers, who therefore must trust them and follow their leadership. The adoption of the vanguard party in a country filled with peasants not only reoriented it toward agrarian issues but also forced it to expand into a massive party because of the need to work with the widely disperse peasant masses and, later on, to run a “planned economy.” The expansion is still being carried on today, more by inertia than by necessity. The ever more massive rank-and-file party members however have little say in party policy and party affairs because, following the same vanguard logic, the party leaders are more “advanced” than ordinary members. This idea of vanguard has shaped both the relationship with the people and the organizational dynamic of the Party. A vanguard party cannot draw its legitimacy from popular election because the “advanced” cannot be logically elected by the backward (the masses). The legitimacy of the Party used to stand on three legs: first, a quasireligious belief in its ideology meticulously cultivated among the people; second, the morally exemplary behavior of its members that inspire trust and respect from the masses—both of these have long deteriorated almost to the point of no recovery. The third, which the CCP increasingly relies upon, is its being responsive to society—the essence of the Maoist “mass line” is being responsive to the masses without

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Conceptual issues and the theoretical framework 23 losing control of initiatives. The Party must champion the cause of the nation and be responsive to the demands of the people if it does not want lose “the mandate of heaven.” On the other hand, it must also continue to insist on its “advanced nature” (xianjingxing) as a vanguard party because of an organizational imperative—it must continue to uphold an official ideology and demand morally exemplary (or “advanced”) behavior from its members to maintain the organizational integrity hinged on the authority of the Party’s top leadership, despite the disastrous failure on both accounts. To sum-up, the CCP is an elite-dominated mass party (mass in form, elite in essence), an organization party, a party of personal interests, and a party without a definitive social base. It is a vanguard party striving to gain legitimacy not by winning people’s votes but by winning their hearts. The CCP in China’s state–society relations Characteristic of China’s state–society relations is the complications brought by the fact that the ruling party’s organizational network spans both the state and the society. By itself it is not particularly unusual except for two things: first, the strictly hierarchical structure of the Party, which in theory allows the Party’s authority to extend from the top of the state all the way to the bottom of the society; second, the Party’s pursuit of a policy of organizational monopoly in the political arena. As emphasized above, unlike most political parties that have their distinctive social base, the CCP’s membership is now drawn from the full spectrum of the society purposefully. The traditional Chinese society was demolished by a prolonged social revolution11 from the Opium War (1841) onward, and by successive events of revolution in the twentieth century: the 1911 Revolution, the “May 4th Movement” of 1919, the decades long Communist Revolution that cumulated to the CCP’s triumph in 1949, the socialist restructuring (1953–1957), the Great Leap Forward (1958–1960), and the Cultural Revolution (1966– 1976). These epochal events had greatly simplified the class structure of the Chinese society. By the time Mao passed away, only three broad social categories were distinguishable: the peasants, the workers, and the cadres.12 None of them resulted from spontaneous social development in part because of the Party’s long-standing policy of restricting mobility across these categories. Throughout the history of the People’s Republic of China (PRC), the spontaneous development of the Chinese society has been retarded by the Party’s organizational penetration. The Party seeks control everywhere and anywhere almost by instinct, especially in the Mao era when “the single-pole leadership of the Party” (dang de yiyuanhua lingdao) was emphasized. The reform era has seen the retreat of the state from the society and the market out-grown the party-state. The return of the market has opened up some space for the revival of the spontaneous development of new classes and class relations. Unlike in the case of state–market relations (to be discussed in next section), in which the Party appears to have firmly committed

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24 The Chinese Communist Party and China’s Capitalist Revolution to a market economy, the CCP has yet to carefully think through its relationship with Chinese society—embracing all classes is merely a declaration of intent rather than a feasible policy, and it may well be politically impossible. The retreat of the state from society is initially a by-product of the regime’s reliance upon the market to promote economic development and manifests mainly as the widening of what the late Tsuo Tang referred to as the “zone of difference.” The Party continued to curtail the freedom of speech, suppress free association, and strive to shape public opinion; its effort to penetrate the society with Party organizations is unremitting and unrelenting, although its main objective here in the reform era is no longer ideological control but social stability. Marketization is creating new classes and a new class structure outside and independent of the Party organizations. When the Party relates to these new classes, it is on a completely different basis and hence the relationship is also very different from the ones the CCP has developed with the workers, peasants, etc. in the Mao era. In theory, the social forces that sprung from class divisions can readily find political expression within the Party—through Party members from different social backgrounds or classes and the Party organizations to which they are affiliated. Also in theory, the CCP can play a role mediating the relationship between state and society and among the emerging social classes, and such mediation can take place within the same organizational framework of the Party that spans both state and society. In reality, however, apart from the fact that the Party’s institutional mechanisms of representation are underdeveloped and ineffective, the Party elite have in the reform era also evolved material interests outside the Party in the marketplace; for example, a large chunk of China’s corporate sector is controlled by the so-called princelings.13 The interests within and the interests without (namely, power and wealth) can become so intertwined as to entrench into powerful political machines that exercise absolute domination in local areas.14 Because the CCP is not subject to the pressure of periodic electoral politics but is still in control of a vast amount of state assets, the political elite in the Party do not as yet need to be plugged into any power sources in society (i.e. “constituencies”) to stay on. On the contrary, social forces often need to tap into the strength of the party-state to advance or protect their interests. The still substantial state ownership also grants greater autonomy to the Chinese state from society and the party-state is still in a position to define or redefine national interests and to choose to promote or deemphasize the interests of a particular social group. Historically, as in the case of the workers and the peasants mentioned earlier, the Party has been able to pursue its own interests at the expense of any social class or even the nation. But that may soon change. With the deepening of the market-driven social transformation, representation will become a real issue. A pluralistic society that is by and large financially autonomous forces all political parties to take on the role of representation of at least some groups in society. All parties

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Conceptual issues and the theoretical framework 25 are “partial” or “partisan,” and even regarded by some as a “conspiracy against the nation.” (i.e. the “whole”)15 No single party has proven capable of representing all classes and interest groups in society. In a democratic system, the multiparty competitions for popular support in the electoral politics reduce the partiality of political parties—parts add up to the whole. The CCP, however, is attempting at single party representation of all in a nondemocratic political system. The Party’s “three represents,” i.e. the CCP “represents the advanced forces of production, the advanced Chinese culture and the overwhelming majority of the Chinese people,” is a thinly veiled attempt at identity change from a party of the proletariat to an “all people’s party” that represents all classes. This was attempted by Khrushchev for the Communist Party of the Soviet Union in the 1960s but failed miserably, because the party elite themselves had evolved into a privileged class that was too busy attending its own interests to represent the people. In addition, class representations also pose special challenges to a party that emphasizes discipline, consensus, and regards open factionalism as the ultimate sin in intra-party politics.16 The CCP has envisioned a role in the pluralizing society “to lead all and coordinate the interests of all” (统领 全局, 协调各方). It recognizes the divisions and conflicts of interests in society and is eager to play a role in mediating these interests to “build a harmonious society.” However, if it cannot develop the institutional mechanisms for effective representation of all and ensure that all are treated equally, the CCP will be in danger of degenerating into a party of the few, for the few, and by the few just like the Communist Party of the Soviet Union (CPSU), sowing the seeds of another social revolution. The Party and the market The term “party-state” is still appropriate today to describe the Chinese state: the Party is the state or, more precisely, the state is a combination of the Party and the government. Generally, the Party is the policy maker and the government the implementer. This duality exists at all levels of the state hierarchy. Hence, the Chinese “state” consists of two gigantic organizational hierarchies—the CCP and the government,17 with real power vested ultimately in the former. The duality exists not only between the Party and the government but also between the Party organizations and other types of administrations such as business administration. A defining characteristic of the CCP rule is its microlevel rule, which is largely a legacy of the planned economy. In the Mao era, the Party ran not only the national and local governments but also almost every organization in society—schools, factories, hospitals, police units, the military, etc. The power of the Party organizations at the microlevel is derived from their embeddedness in and control of the administration of these functional organizations. In contrast to the United States, where a party only has to “carry” the White House in the general election to become the ruling party, each

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26 The Chinese Communist Party and China’s Capitalist Revolution committee or branch committee of the CCP seeks to run an organization. For in the absence of campaigns and elections that are the main missions of political parties in a democracy, the CCP as a general purpose political organization has little else as meaningful to do than the running of the government and other organizations, which put its grassroots organizations in power. It is their domination of these organizations that gives the Party organizations power, prestige, and influence. Even today, when the Party’s grassroots organizations are badly eroded by market forces, the CCP’s rule is more totalitarian than most ruling parties. The complex relations between Party organizations, government bureaucracies, and other organizations in economy and society pose special challenges to the study of the CCP because of the conceptual and theoretical complications they bring. Introducing market relations into the equation has certainly brought in additional complications. Emerging from a planned economy, the market is liberating for the individual, for a market economy will not work without individual choice and entrepreneurship. In a market economy, the widening income gaps are almost inevitable: competition, which is the soul of a market economy, by definition generates winners and losers (in relative terms in general, but sometimes in absolute terms as well). Income, education, occupation, and lifestyle are the main criteria that people use to define classes but these are no longer controlled by the party as they were in the era of planned economy. Class divisions as a product of marketdriven social stratification are inevitable, and they inevitably create political problems for the Party as well. For market forces have altered the balance of power between state and society. While the Party organizations are still in firm control of the state machinery, in the marketplace the situation is quite different: they are being marginalized by the market as shown in Table 2.2. In the right column are the “rates of coverage” (fugailu) by Party organizations in selected areas of the society and the economy. For all the strategically important organizations, especially those related to public administration and concerning political power, the rates of Party coverage are all above 90 percent. In comparison, the lowest rates are found in market organizations (firms etc.) and the newly emerging sectors of the society (NGOs and NPOs, etc.) in the wake of marketization. To put it in another way, at least for the 77 percent of business enterprises that are not covered by Party organizations, the microrule of the Party no longer exists. While the partystate apparatuses continue to serve as an incubator of a relatively autonomous political elite, powerful business interests also began to seek political status—“wealth into power” as so aptly captured by Dickson’s book title. For complicated reasons, the CCP is still trying to expand its interface with the Chinese society by extending its organizational networks to the new social spaces created by the market and recruiting members from the new classes such as private entrepreneurs. The unintended effect, however, is the damage that widespread corruption has done to the image of the Party because of its extensive exposure to the society. Party members and

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Conceptual issues and the theoretical framework 27 Table 2.2 The rate of Party coverage at the grassroots level Total number of administrative units Townships and towns Communities (shequ)

34,324

Total number of Party organizations

Rate of coverage (%)

34,321

99.99

79,000

78,000

98.74

606,000

605,000

99.83

2,634,000

595,000

22.59

249,000

216,000

86.75

2,385,000

380,000

15.93

578,000

464,000

80.28

Colleges/universities

1,622

1,622

100.00

Research institutes

7,982

7,765

97.28

81,000

12,000

14.81

Villages Enterprises State-owned Private Nonprofit organizations1

NGOs

2

1

Shiye danwei

2

Minban feiqiye danwei

Source: COD. “Dangnei tongji gongbao [Communiqué of intra-party statistics].” Xinhua News Agency, July 1, 2009.

party organizations at the grassroots level are mirrors of the Party; they can reflect well or poorly on the Party. The 3.72 million strong grassroots organizations are supposed to be assets undergirding the strength of the Party, but their conditions are far from what the Party hopes for. Party members are now much more difficult to track, control, and discipline because of the anonymity of the marketplace in which people conduct most of their daily businesses and satisfy most of life’s needs. In addition, they now come from complicated social backgrounds and join the Party for diverse purposes, bringing from their social backgrounds different values, tastes, lifestyles, ideas, status, influence, as well as material interests. Instead of winning converts, the Party may well be amassing opportunists. It is taken advantage of by as much as it is making use of its members. Therefore, it is far from clear whether the expansion of the Party population and its grassroots organizations are assets or liabilities for the CCP. Finally, the entanglement of Party organizations in the administrative structures of the state and other organizations has placed limits on the rationalization of government and business bureaucracies, while marketization and globalization increasingly demanding rationalization. As long as the CCP continues to embrace market economy and globalization, the longterm consequence may well be the reverse: the “rationalization” of the Party, that is, Party organizations being assimilated in a process called “institutional isomorphism” (to be discussed later) into the public, business, and

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28 The Chinese Communist Party and China’s Capitalist Revolution other types of administrations, as well as the market institutions with which they are entangled.

Political impact as institutional conflict Bruce Dickson observed that, “the logic of the marketplace ran counter to traditional party building and party life.”18 The political impact of the market on the CCP typically manifests as the compatibility problems in institutional building, the solution for which may lead to either decay or evolution depending on the outcome. This section addresses key theoretical issues in institutions and institutional change and develops the conceptual and theoretical tools for studying the evolution of the CCP. Institutions and institutional change There have been numerous definitions of institution, the crudest of which is simply “rules.” More precisely, they are internested sets of rules governing specific issue areas of society. Institutions facilitate or sustain human interactions around a purpose and are what society is made of. Mainstream scholarship on institutions typically distinguishes two types of rules: formal and informal rules. Formal rules such as constitutions, laws, and regulations can be set up or changed overnight, but informal rules shade into or express as cultural habit that takes a long time to establish or to die out. They become part of the individual’s identity from which rule-following behavior flows naturally. The existence and entrenchment of informal rules that are consistent with and hence facilitate compliance to formal rules are indicative of the level of institutionalization. Formal rules on other hand are not good measurement of institutionalization. An institution is robust when its formal rules and informal culture are harmonized to have attained a high level of institutionalization. In contrast, if formal rules conflict with one another and informal rules are incoherent with or contradictory to formal rules, we have a case of either low level institutionalization (for new institutions) or institutional decay (for old institutions).19 This is a simple but effective analytical framework of institutional change but not without problems. Its main weakness comes from two sources. The first is its undifferentiated conceptualization of “informal rule”—it lumps many things together under this umbrella concept and generally treats it as passive or a dependent variable in institutional analysis. The second is the inadequate attention it pays to the role played by power—not only in creating but also in maintaining institutions or causing institutional change. The framework is also sterile in explaining how informal rules change. The concept of institution adopted in this study is broader and more differentiated than just rules. Institution is a multilevel phenomenon with its clearest manifestation as organizations. (In common English, the word “institution” is often used to denote an organization.) For instance, “school”

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Conceptual issues and the theoretical framework 29 is an institution where people go for training and education to increase their human capital, whereas Wayland High School is an organization—it is an instance or concrete manifestation of the institution “school.” Organizations are usually formed for a purpose—certain interests are served by achieving the purpose of the organization. Rules are the second, somewhat more abstract component. An institution is a set of internested or elaborately structured rules. Wayland High School is an organization that embodies the rules that make up the institution of school—the rules regarding teachers’ and students’ behavior, discipline, division of labor, utilization of time, and so on. The degree of the specification of rules varies. Less wellspecified rules are often referred to as norms, customs, or informal rules and are closely associated with and sometimes indistinguishable from culture— both the organization culture and the culture of the society at large. Rules presuppose a power structure—otherwise they would not have been made or sustained. They also presuppose values, moral standards, explicit or implicit ideological/philosophical convictions, shared knowledge, or understanding of the situation. Often these presuppositions take the form of tacit assumptions shared by the people who abide by the rules that produce institutions.20 Therefore rules rely on habits as much as on enforcement for the maintenance or reproduction of institutions. The institution school, for example, values knowledge, discipline, problem-solving skills, respect for or deference to teacher, etc.; it is founded on the conviction that education improves people’s lives and is maintained by a power structure that shores up the authority of the teachers over students—that is why a 7-ft tall, stout student usually dares not to beat up or even show disrespect to a 5-ft short and physically weak teacher. These presuppositions— “the intangibles”—make up the third and the most abstract component of an institution. They inform the “informal rules” and at the same time are also part of the larger institutional environment wherein organizations are created, shaped, and maintained, like a nebula in which stars are formed. The same institutional environment can be subdivided into many organizational fields at a lower level of abstraction by adding sector-specific requirements,21 and the intangibles are variables that can also be configured in different ways. Changes in any one of the three components of institutions can cause changes in others to set off institutional change. All three are constantly evolving but not at the same pace, nor are they always in the same direction. Institutional decay typically occurs when the three are in conflict. Institutions may emerge over a long period of time from sustained interaction around an issue area such as stock exchange, banking, credit union, etc. They can also be created by power holders first as organizations that are gradually fitted with whistles and bells to become full-fledged institutions. The power distribution underpinning the creation of institutions benefits some people more than others. This implies that people enter into an institutional arrangement not as free choosing and voluntary agents depicted by

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30 The Chinese Communist Party and China’s Capitalist Revolution neoclassic or rational choice institutionalism. In this view the origin of institutions are inherently political.22 However, neoclassic institutionalism does offer many important conceptual tools. One is the idea of “relative price.” Institutional change often results from changes in the relative price of factors such as land, resources, cost of production, etc. For example, the sharp rise of the price of oil in recent years (or global warming) ushers in a host of industries based on green technology that used to be priced out of the market, and the reduced costs of communication and transformation give rise to institutions such as the multinational corporations, home-based businesses, and outsourcing. In this study, the concept of relative price is expanded, somewhat metaphorically, beyond economics to cover political choices based on comparative valuation. For example, increased costs of monitoring and supervising party members in a market economy induce changes in the organizational structure of the party; the opportunities opened up by the market depresses the value of party membership and therefore alters the relationship between party members and party organizations; and the availability of cheap Internet service spawns “online party branches” or “online party schools.” Changes in relative price typically cause changes in the distribution of power or the bargaining strength of the institutional participants, prompting renegotiation of the rules. Institutional change can also be caused by changes in the normative order: the introduction of new values or moral standard, new ideas, new knowledge, or new understanding of the situation. These typically cause institutional changes by altering the relative price to upset the balance of power underpinning institutional stability. For instance, increased value put on individual freedom may diminish a lucrative career with the party-state, and enhanced rights consciousness or sense of equality among party members may affect how the CCP is organized and run, or even lead to its democratization. Institutional isomorphism A certain configuration of the intangibles can produce a set of standards or guidelines by which institutional choices are made. Such a guideline is labeled “institutional principle” or “institutional logic.”23 It is the organizing principle of society that mass produces organizations from the same template. There are different institutional principles—the capitalist one and the communist one for example. Organizations in a planned economy are very different from those in a market economy in both structure and function and operate on very different assumptions. Within free market capitalism, there are also “cross-cultural” variations of institutional principles of second order because the values, norms, knowledge, understanding, or the assumptions upon which people interact with each other differ across cultures. American institutions in and outside the marketplace attest the values of individual autonomy and free choice. U.S. laws, regulations, practices, and

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Conceptual issues and the theoretical framework 31 customs all express belief on the correctness of individualism and autonomy. Homelessness is an accepted institution because of the conviction that people should be responsible for the consequences of their own behavior. Orru, Biggard, and Hamilton’s research on East Asian business organizations on the other hand reveals quite different institutional principles at work in constructing the corporation world of Japan, Taiwan, and Korea. “Japanese firms enact a communitarian logic, Korean firms a patrimonial logic, and Taiwanese firms a patrilineal logic.”24 Following this approach, the Chinese communist institutions can then be described as enacting a corporatist logic that accentuates the role and hence the authority of the party-state. An institutional environment is usually dominated by one institutional principle. The organizations created under it exhibit similar characteristics (in terms of structure and procedures). This tendency for organizations in the same institutional environment (or organization field) to become structurally similar is referred to in the sociology of organizations as “organizational isomorphism.”25 That organizations, such as business firms, become structurally similar facilitates their interactions, communications, and hence the transactions among them. It also indicates the diffusion of the underlying normative order carried by the institutional principle. The proliferation of an institution is often preceded and prepared for by the spreading of its underlying normative order that legitimizes it, although it could also occur the other way around. The diffusion of institutions as such is “institutional isomorphism.”26 Institutions (or their organizational manifestations) become alike through emulation and assimilation. The driving forces behind this process can be identified at different levels. DiMaggio and Powell single out the technical requirements in the organization field as laws, regulations, or market competition as the reasons for corporate structures around the globe becoming increasingly similar; Orru, Biggard, and Hamilton emphasize the cultural factors that give rise to the different types of capitalist organizations in East Asia. For example, the Chinese culture tends to produce networks of family businesses wherever in the world ethnic Chinese live, which is dubbed “network capitalism”;27 the Japanese culture and ideology tend to create large and diversified corporations that are characterized as “alliance capitalism.”28 In the political world, the same political philosophy and political culture produce remarkably similar political structures across all fifty states of the United States—even the buildings of the government are similar to those in Washington D.C. in many states. Similar institutional isomorphism can also be observed in the Chinese local governments—they are essentially replicas of the central government. Institutional compatibility Institutional compatibility problems arise when two or more institutional principles coexist and compete to guide the choice of institutions and organization

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32 The Chinese Communist Party and China’s Capitalist Revolution forms. Institutional conflict occurs when these institutional principles are incompatible, which could happen at any or all three levels of institutions. For example, in a market economy, materialism or material acquisition is the primary pursuit of life for most people; however, this works against the CCP’s long-standing value orientation developed from the material deprivation in the war time and the lean decades under Mao—working hard, living frugally, and sacrifice. It also leads to conflicts between self-seeking individualism and the denial of the individual in favor of the collective, the class, or the nation as exemplified by a long line of communist role models promoted by the CCP throughout the history of the PRC, even today. Marketization legitimizes material gains: “to get rich is glorious,” as Deng famously put. Market economy also values entrepreneurship and deemphasizes loyalty and obedience to the Party or to any parties—it pays to think afresh and take risks. China’s cultural icons have shifted from the model workers to maverick and even eccentric business tycoons and glamorous stars in entertainment and sports. In contrast to the suppressed capitalist class under Mao, successful businesspeople are admired at and aspired for. With this is also perhaps the cultural acceptance, to some extent, of inequality and the gap between the rich and the poor. Value conflicts are a main cause for the deterioration and atrophy of the Party organizations in the reform era, as we shall see in later chapters. At the rule or the institutional level, there are tensions between the human resources market and the CCP’s long-standing and ardently defended “principle of the Party controls cadres” (dangguan ganbu) and “the Party controls talents.” (dangguan rencai). By this policy, the Party attempts to exercise political control over influential people—the best and brightest of all walks of life, which the market routinely allocates as human resources. The two serve very different purposes and follow very different rules. At the organization level, the Party organizations, especially those in enterprises that operate in a fast-changing and highly competitive commercial environment, face challenges to the raison d’être of its existence. The Party organizations in enterprises are in an awkward position, struggling to find a role in the corporate governance structure (Chapter 4). The search for such a role has been the central thrust of party building in enterprises and, indeed, in all other areas outside the government in general. Party organizations at the grassroots level also have to deal with a large and increasing number of social organizations such as NGOs, NPOs, religious groups, public advocacy groups, trade or professional associations, etc., as well as by the revival of kinship organizations and secret societies. They operate on very different principles and values and compete with the Party organizations for loyalty and following. The Party must adjust to their existence despite that some of their beliefs and activities are diametrically opposed to the Party’s ideology and long-term interests. Problems of compatibility may not always end in the elimination of one by the other; they may also induce mutual accommodation through

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Conceptual issues and the theoretical framework 33 adaptive changes on both sides in accordance with their respective power and capability. The underlying distribution of power determines which institutional logic will prevail and what kind of mutual accommodation may be reached.

From adaptation to assimilation: a theoretical framework The explication in second section supplies us with the basic conceptual tools to be used in the empirical research in the following four chapters. These include the multitiered concepts of institutions, institutional or organizational principles, institutional diffusion or isomorphism, institutional compatibility and conflict, the role played by changes in relative price, in the distribution of power, and in the normative order of the institutional environment in initiating institutional change and shaping institutional evolution and so on. With these tools, we will construct a theoretical framework for the study of the political impact of the market on the CCP. That CCP fails to collapse as the ruling party and that China is basically a market-based economy now suggest that at least two institutional principles are at work simultaneously. Common sense tells us that these two are associated with quite different value orientations, world views, and cultural and philosophic assumptions. The market enacts an institutional principle of “fair deal”—exchange of equal values between equal (at the spot of exchange) and free-choosing individuals: the individual is entitled to decide whether to enter into a deal or not and is recognized for his or her own ontological status and rights (especially property rights).29 The CCP on the other hand enacts a corporatist logic that accentuates the role and hence the authority of the party-state that subjugates the individual. Introducing capitalist institutions into a communist system inevitably causes compatibility problems at all three levels of institutions. The two institutional principles are bound to clash and the outcome is determined by the underlying power distribution between market and state. The decision after Mao’s death to reintroduce the market is a political one. It came as a shift in state policy in the late 1970s, when the distribution of power still overwhelmingly favored the party-state. The initial impetus of institutional reforms came from the realm of ideas and ideology—from the “emancipation of the mind” (jiefang sixiang), to use the jargon of the Dengist reformers at the time. The state (or the winning coalition in the state) played a key role in overcoming the initial resistance to marketization.30 The subsequent diffusion of market relations, coupled with the opening up to the outside world, reenforced the state-initiated “mind emancipation” with rapid changes in people’s value orientation, knowledge about the world, and new understanding of their own situations, setting the stage for the transformation of the normative order in the institutional environment. The market is accepted and legitimized. The ensuing marketization gained momentum to change the relative price and the incentive and opportunity

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34 The Chinese Communist Party and China’s Capitalist Revolution cost structures in society, causing a shift in the balance of power between state and market as well as the between state and society. The CCP becomes increasingly a price taker. Within the Chinese borders, both central and local states still enjoy, albeit decreasingly so, some capabilities to bend the rules of the market and intervene in the marketplace. However, at both the global level where China defines its economic interests and the grassroots level where the market has quickly developed a broad-based constituency, market forces prevail. The Party increasingly has to play by market rules, which gradually become the dominant organizing principle in the economy and society. The diffusion of market institutions has an isomorphic effect in the Chinese communist institutions. It has eroded the basic communist institution—danwei, and dismantled the apparatuses of state planning. A market rationale is constraining the way the CCP operates. It forces changes and modifications to the structure, ideology, and operation of the Party’s grassroots organizations and how they relate to the masses. Party building (dangjian—the maintenance, repair, and rebuilding of the Party organizations and the control, indoctrination, and recruitment of the Party members) in the reform era is in essence to adapt the Party to the market environment. The Party’s grassroots organizations, which are at the forefront interacting with the market and the society, have to be assimilated into or made compatible with market institutions. They must harmonize their existence with the market environment. Thus, the political impact of the market is also reflected in the adaptive changes, failed or not, made by the communist regime. The subsequent chapters of this book will mainly delineate the impact of the market on the Party organizations and the Party members as institutional conflicts. To a lesser extent, they will also examine the CCP’s organizational responses as adaptations to the ways of the market. It will be shown that failure to adapt causes institutional decay or organizational atrophy while successful adaptations often lead to the Party being assimilated by market institutions. Regardless of the outcomes, they all have a transformative effect on the CCP.

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3

The logic of organizational atrophy

This chapter is the first of the four empirical chapters examining the influence of market forces on Party members and the Party’s grassroots organizations. The first section of this chapter delineates the microinstitutional foundation of the CCP’s rule in its classic formation. The second section surveys the overall impact of the market. The third section consists of a case study on the Party’s organizational atrophy in rural areas under the impact of market forces and market-driven social transformation. The final section summarizes the chapter.

The microinstitutional foundation of the CCP’s rule The ruling CCP is organized as a giant pyramid, with committees, branches, groups, and other types of Party cells both in and outside the government. Figure 3.1 shows that above the grassroots level (i.e. above the township level), the overall structure of the Party (the area on the right side above the horizontal line) closely parallels the structure of the government (the area on the left side above the horizontal line), with additional Party cells embedded in government bureaucracies (which justifies the term “party-state”). It is mentioned in Chapter 2 that the Party is the policy maker and the government the implementer, but Figure 3.1 also shows that it is in fact the 86,440 or so Party cells (groups, committees, etc.) deployed inside the government that play a leading role in implementing Party policies. The Party’s complete domination of the government is organizationally ensured. Grassroots organizations The main focus of this book however is the grassroots (or base-level) organizations of the Party that are at the interface of the market and the society. The Dictionary of Chinese Communist Party’s Organization Work compiled by the Central Organization Department (COD) defines grassroots organizations (jichenzuzhi) as “the base-level committees, general branch committees and branch committees set up by the Chinese Communist Party in enterprises, rural areas, bureaucracies (jiguan), schools, research institutes, streets,1 the companies of the People’s Liberation Army, and other

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36 The Chinese Communist Party and China’s Capitalist Revolution Party Groups inside Government Bureaucracies: 86,440 in total

State Council: 64

Party Committees: 3,225 in total

Central Committee: 1

Provincial Level Committees: 31 Provincial Level Governments: 1,377

Municipal/Prefecture Level Governments: 15,000

County Level Governments: 70,000

Municipal/Prefecture Level Committees: 401

County Level Committees: 2,792

Township Level Party Committees: 34,321

Village Level Party Committees: 605,000

Community Level Committees: 78,000

Organization-Level Party Organizations 1,072,000

Enterprise Party Organizations: 595,000

Party Organizations in Non-Profit Organizations: 465,000

Party Organizations in NGOs: 12,000

Figure 3.1 Structure of Party organizations. (Source: COD, “Intra-party statistics communiqué, 2008,” Renminribao July 7, 2008.)

base-level units … (they) are the ties and bridges between the Party/Party leadership and the masses, the fighting fortresses with which the Party leads Party members and the masses to build up socialist modernization, and the foundation of the entire work as well as the fighting power of the Party.”2 In the pecking order of the party-state hierarchy, they are all ranked at or below the township or street level—the horizontal line in Figure 3.1. The COD’s definition obviously still carries the watermark of the danwei era; for

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The logic of organizational atrophy 37 many grassroots Party organizations are no longer hosted by a “unit” as we will see later and therefore may or may not possess administrative power; they are all in direct interaction with the masses in society on a daily basis. The provision of the Party Constitution is that a base-level Party committee should be set up wherever there are 100 or more Party members, a general branch wherever there are at least 50 Party members, and a branch wherever there are a minimum of three members. Some larger branches (with up to 49 members) can be further divided into “Party small groups” (dangxiazu). According to the COD’s “Intra-party statistics communiqué, 2008,” the CCP had roughly 3,718,000 grassroots organizations3 (a 55,000 increase over the previous year), of which 179,000 were base-level committees, 229,000 general branches, and 3,310,000 branches. Table 3.1 is a representation of the CCP’s organizational deployment. It provides a detailed picture of the distribution of the Party’s members and organizations at the grassroots level in Chaoyang District, the largest of the five urban districts of the capital city and the heart of the CCP’s rule. “Party group” (dangzu) refers to Party cells residing in the leading bodies of government bureaucracies, the court and procuratorate, the legislature (the People’s Congress), the deliberative body People’s Consultative Conference, and other political, economic, and cultural entities. It usually consists of Party members who are top administrators or leaders of the body it Table 3.1 Grassroots organizations of the Party in Chaoyang District, Beijing (2004) Distribution by sector

Street system Rural system Party-state bureaucratic system Enterprise system Education system Political/legal system Propaganda, culture, healthcare, and athletics systems Private enterprises Other systems Total number

Number

Percentage

Organization

Member

1,196

52,880

35.6

54.6

819 242

19,704 6219

24.45 7.2

20.3 6.4

292 389 208 79

6120 5585 4448 965

8.7 11.6 6.2 2.4

6.3 5.8 4.6 1

136

1028 925 96,846

4.1

1.1 1 100%

3,357

Organization Member

100

Types of grassroots organizations of the Party: Party group (dangzu), 29; committee (dangwei), 239; work committee (gongwei), 26; general branch (zongzhi), 218; branch (zhibu), 2,845. Source: Organization Department of CCP, Chaoyang District Committee, “An investigation of grassroots party-building in Chaoyang District and Reflections,” Available at: http://www. chyzg.gov.cn/ (accessed June 16, 2004).

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38 The Chinese Communist Party and China’s Capitalist Revolution resides in. “Work committee” (gongwei) is an ad hoc body set up by a higher level Party committee to be in charge of an issue (such as finance, state-owned enterprises, or Party affairs in government bureaucracies) or a regional public administration such as the street (jiedao) and the prefecture. Unlike the base-level committees, general branches, and branches, neither the Party group nor the work committee is elected by Party members; instead they are delegated by a higher level Party committee. Table 3.1 also shows that the CCP customarily categorizes its grassroots organizations into different “systems” (xitong). For example, the education system includes Party organizations in colleges, universities, primary, and secondary schools, etc.; the “political/legal system” (zhengfa xitong) covers Party organizations in the court, the procuratorate, the police, and so on; the “rural system” mainly includes township Party committees and village Party branches. The “party-state system” consists of base-level Party organizations inside the Party and government bureaucracies (dangzheng jiguan); and the “street system” (jiedao xitong) refers mainly to the street work committees, the community Party committees, branch committees, etc. As an urban district predominantly, Chaoyang District’s Party members and grassroots Party organizations are naturally concentrated in the “street system.” In the reform era, these grassroots organizations were under the direct impact of market-driven social transformation; their rapid changes, decay, or atrophy caused the party-state hierarchy to increasingly stand on shifting ground or in loose sand. Danwei as the “carrier” of party organizations As pointed out in Chapter 2, the CCP’s rule is characterized by microlevel domination or “microrule.” Each of the millions of organizations of the Party typically “runs” or plays a key role in the administration of a functional organization—a government bureaucracy or agency, a factory, a school, a hospital, a research institute, an administrative village (jianzhicun, which may or may not coincide with the natural village), and so on. Party organizations used to be the “leadership core”4 of all other organizations. The power and prestige of Party organizations are derived from their control over public, corporate, and nonprofit administrations. However, this situation has also led to the dependence of Party organizations on the administrative power of these other organizations, which are the “carriers” (zaiti, in the parlance of the Party researchers in China) of Party organizations. These “carrier organizations” actualize the rule of the Party, and their relative stability is the foundation of the rule of Party organizations. Every organization of the Party needs a “carrier” to exercise power and domination. Without controlling the administrations and resources of the “carrier” organizations, it would be difficult for Party organizations to attract new members and uphold the strict organizational hierarchy and discipline that is its trademark. It is especially true of the CCP today when value or an ideological consensus is no longer

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The logic of organizational atrophy 39 attainable in a pluralizing society. The cohesion of the Party can only be maintained by tangible rewards or the promise of such rewards to its members. Without the reward afforded by the administrative power and resource control of the carrier organizations (especially government bureaucracies), the Party lacks the leverage over its members and therefore cannot count on their loyalty. This is essentially the reason why the reform of separating the Party from the state has never been able to take hold.5 At the grassroots level, the carrier organizations are the familiar danwei (work unit). Danwei is a peculiar Chinese communist institution.6 Because of their embeddedness in the party-state hierarchy, a factory, a school, a hospital, a performing arts company, a museum, a retail store, a hotel, a government agency, a branch of the so-called mass organizations7 and, to a lesser extent, the rural production teams (shengcandui), etc. can all be called a danwei. They are the organizational manifestations of the institution danwei. Therefore, the word danwei can be used to denote both the institution and the concrete organization that manifests that institution. Danwei (literally “unit” but customarily translated as “work unit”) is the basic building block of the Chinese communist system. It was the durability or permanency of danwei in the prereform era that undergirded the stability of Party organizations at the grassroots level; and it is the erosion of danwei by market forces in the reform era that throws Party organizations off balance and into atrophy. What then are the basic characteristics of danwei that make them the ideal home for Party organizations? Most danwei were either created or incorporated by the party-state, allowing the latter to exercise unchallenged authoritative claims over them. As an institution, danwei inherited from the party-state a set of basic values, assumptions, norms, and organizing principles that made the organizations it generated remarkably similar in structure and processes. As organizations, all danwei were more or less functional extensions of the party-state. They were supposed to represent, through their leading cadres who either were party members or were appointed/endorsed by the Party, the interests, objectives, and policies of the party-state, and they allowed the authority of the Party to reach from the top of the government to the shop floor of a factory. The individual’s dependency on his or her work unit used to be total. Because of the Maoist suppression of both the market and civil society, the Chinese work unit took on an extensive array of social functions and was responsible for numerous aspects of the lives of its members. Each work unit aspired to provide as much welfare for its members in as many aspects of life as its resources permitted. It would typically provide some or all of the following services to its members: workplaces, schools, medical care facilities, dormitories, grocery stores, barbershops, sports and entertainment facilities, public baths, transportation, security service, cafeteria and dining halls, and even the employment of the younger generation of danwei members; all being either danwei-subsidized or with member-only access. It goes without saying that the level of provision differed widely

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40 The Chinese Communist Party and China’s Capitalist Revolution depending on the status and rank of a particular danwei in the party-state hierarchy, geographic locations, and the sectors of the economy—the resources they controlled. And because of very limited opportunities of cross-danwei mobility in the Mao period, the Chinese work unit had a tendency to become a self-contained miniature society—a community. This “organized dependency”8 of the individuals upon their danwei and through danwei upon the entire communist system was an effective leverage with which the Party (via its grassroots organizations embedded in danwei) exercised domination over the entire population. As representatives of the partystate, and as a result of the incorporation of social functions into the Chinese danwei, cadres heading the millions of danwei were usually obliged to be responsive to the social needs of the members of their work units, who in turn also habitually sought solutions to their problems through the partystate represented by the leaders of their own danwei. Some of the most important assumptions underlying the institution danwei are embodied in the concept of “membership,” which transcends the usual dichotomy—employee versus employer or labor versus capital—in a capitalist market economy. The Chinese term associated with the concept varies according to the context. In government bureaucracies, it is jiguan ganbu; in economic and nonprofit organizations (shiye danwei), it is zhigong; in schools, it is jiazhiyuangong; in the rural commune, it is sheyuan and so on. But all connote the inalienable rights as a member of danwei. In the prereform institutional context, membership in a work unit often carried a life tenure. Individuals were assigned to a work unit regardless of their preferences and often against their will. While exercising almost total control over its members, it was also very difficult for a danwei to disown an undesirable member because of his or her assumed rights commonly referred to as the “iron rice bowl.” The “organized dependence” of individuals on their work units was reciprocated by a work unit’s reliance on the set of members that happened to be pigeon holed in it for its normal operation.9 The masses (qunzhong) and the leaders (lingdao) were two basic components of the membership of a work unit. Just as the mass members could not vote the leaders out of office, neither could the leaders fire the mass members without all hell breaking loose. The two were bound by the underlying principles of socialism and a common claim to the same set of public property rights. They were stuck together for better or for worse. Given the fact that its leading cadres were normally appointed from above by external authorities, and that it covered so many aspects of the individual’s life, the institution danwei was structurally very capable of authoritarian repression and even personal domination by its leading cadres over the masses. However, the larger political and ideological environment (or the institutional environment) created by the populist leadership of Mao and the communal setting of danwei also generated informal rules or subcultures that might tame the extremes of such domination. An “equilibrium” of sort was attained not solely by brute but also by considerable

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The logic of organizational atrophy 41 reciprocity. The Party organizations nested comfortably inside each danwei enjoyed all the leverages that the danwei afforded them to control Party members and the masses alike. The danwei institution was essential in providing the stability and hence the organizational integrity of the CCP’s grassroots organizations. Diffusion of the party’s institutional principles We have seen earlier that the overall distribution of power was overwhelmingly in favor of the Party in the prereform era. From the height of its total domination, the CCP enjoys considerable freedom as an “organization party” in choosing its social base to advance its interests. The same is true in the balance of power between Party organizations and individual Party members. Historically, the CCP gained strength by championing the causes or interests of certain classes during its ascendance to power. It recruited the best and brightest among those classes to staff its organizations while attempting to mold the recruits according to the interests and ideals of the Party, subject them to Party disciplines, and require them to obey the Party unconditionally.10 Reflecting its origin as a “devotees’ party,” it has established a lengthy, elaborate, and individualized recruitment procedure11 both to block the untrustworthy and to indoctrinate those admitted into the Party. From the very beginning, a Party member is subjected to commanding authority and preponderance of the power of Party organizations.12 Party organizations are structured and geared to shore up the authority of those above and to atomize the ordinary Party members. This structural characteristic is the root cause why the rights of Party members are routinely ignored or violated, and why the “democratic centralism,” so much admired by Maurice Duverger and Samuel Huntington, has always regressed toward centralism but never toward democracy. On the basis of such power distribution, the institutional principles of the Party, caricatured in Chapter 2 as “enacting a corporatist logic that accentuates the role and hence the authority of the party-state,” had a profound isomorphic effect on other organizations in society. More specifically, these institutional principles include a transformative authoritarianism, a kind of socialist reciprocity (or “work unit socialism,” to use the term coined by Brantly Womack), a ranking mentality commonly referred to in China as guanbenweizhi (官本位制, roughly “the centrality of officialdom,” referring to the habitual rank ordering of everything with the hierarchy of the state as the yardstick), and the cultural values and ideological assumptions underneath. Danwei as described above is a typical product of these institutional principles; each work unit is not only an extension but also a miniature duplicate of the party-state from a template. The Party’s power in at least in part premised upon its monopoly of resources and opportunities. Marketization drains resources from Party

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42 The Chinese Communist Party and China’s Capitalist Revolution control, develops new resource base, and opens up new opportunities outside the organization grip of the Party. It is a process in which social forces are gradually gaining autonomy on a new economic basis. It is conceivable that these external interests have a pulling effect on Party members who may shift their identities away from their Party membership to their class base. Of direct bearing on our topic however is the disintegration of danwei—the melting away of the institutional foundation of the millions of the CCP’s grassroots organizations. As a consequence, party building in the reform era is characterized by a perennial search for new hosts for Party organizations with disappointing results so far. This raises the question of whether the CCP will able to continue its classic form of organizational existence and what will become of it. The next section will summarize the overall impact of the market, followed by an illustration of the disintegration of rural Party organizations under market forces in third section.

Overall impact of the market The impact of the market on the Chinese society is not only profound but also directly observable. Marketization has introduced into the Chinese society a set of new institutional principles that generate new value orientations, new beliefs, new attitudes, and new ideas, as well as organizations that are fundamentally at odds with the institutions that are pillars of the communist system, such as the nomenclature system, the residential system (hujizhi), the status system (i.e. artificial division of urban vs. rural status, cadre vs. worker status), and the danwei institution. The rules and underlying assumptions about social and political relations between the two are fundamentally different. Marketization also builds up new interests and resources outside the direct control of the party-state. A new order is emerging from within the old by eating away at the old, a gradual power shift is building up momentum, and a total transformation of the society is under way. For our purpose, however, we will focus on only the impact that affects Party organizations. In particular, we will concentrate on the impact of the disintegration of danwei—not to discount the changes in other institutions that are pillars of the communist system but to better illustrate the political impact of the market. Danwei melting away What the post-Mao reform has done politically is first and foremost the dismantling of the organized dependency. The individual can now have a career and a life outside the party-state control; he or she no longer needs to rely on the party-state for a job, a living quarter, for vital supplies such as food, clothing, healthcare, education services, and so on—he or she can satisfy these needs readily and relatively hassle-free from the market. Marketization has caused the unloading of many of the roles performed by

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The logic of organizational atrophy 43 danwei over to the market and the corresponding transfer of resources from within the danwei system to the open market. The result is either the disintegration of danwei or its transformation into market institutions. For example, a factory producing for the market ceases to be a danwei in the classic sense; it is transformed into a business. It is detached from the supply network of the party-state and must struggle for survival in the competitive marketplace. The concept of “membership” is no longer attainable in a market environment—firms often have to let go of their workers to cut costs. Either the disintegration or the transformation of danwei weakens the Party’s ability at social control, and thereby tips the balance of power between the state and society in the latter’s favor. Shifting interests base The shifting of interests follows the shift in the distribution of resources in society. Once individual Party members are able to derive a living from and have a career in the marketplace, a massive shift of Party members’ interests from within the Party to outside the Party is inevitable. The Party to the majority of its members has become one of the many factors to be considered in advancing their self-interests. This inevitably causes fundamental changes in the behavioral choices of Party members, who become opportunistic with regard to their relationship with the Party; for there are now opportunity costs associated with participating in Party activities or even following Party rules and disciplines. They now need to balance out their inside-the-Party interests with those outside the Party in their strategic calculus. The Party becomes “partial” for them. There are other political implications as well. The buildup of Party members’ interests outside the Party makes it possible in theory for Party members to form interest groups or aggregate into social classes. The emergence of class from among Party members poses real possibilities of class warfare within the Party, which may fundamentally change the political dynamic of intra-party politics. It may not only lead to the split of the Party but may also lead to one group or class dominating the Party at the expense of other groups or classes in the Party. Clashing social and institutional orders Value reorientation in China is, as is elsewhere, an inevitable consequence of the diffusion of market institutions. “Materialistic” and “practical” are words frequently used to describe the value orientation of the Chinese society in the Chinese social science literature. With the diffusion of the contractarian institutional principle of the market, there is also a rising consciousness of individuality, rights and rules, and “rightful resistance,” (see O’Brien and Li, 2006) as well as the rudimentary concept of social contract (thanks in part to the village elections now mandated by law), leading to widespread

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44 The Chinese Communist Party and China’s Capitalist Revolution but increasingly sophisticated protests against the perceived wrong doings of cadres and public authorities. It also begins to challenge the basic assumptions of the traditional benevolent authoritarianism in public administration. The rising conflicts and popular protests often reflect the clash of fundamental institutional principles distributed along the following fault lines: • • •

•

two competing reward systems: the market and the party-state, and the shifting balance of resource control between them; the contention over the relationship between the ruler and the ruled or the basis of legitimacy; the contrast between the Party’s propagated ideal as the vanguard and servant of the people and cadres of the Party blatantly betraying or belying such ideal through corruption; multiple organizational orders: that of the party-state, market, and reviving traditions (clan, religious, secret society, etc.), each driven by a different institutional logic.

The market principle of impersonal exchange of equal values tends to undermine the Party’s authority and organizational integrity. Market competition also changes the basic assumptions of social relationship. From the perspective of many Party researchers, the “motivation mechanism” of a market economy “seriously undermines the common ideal of communism, giving rise to self-centered motives in pursuit of money, individualism, freedom, anarchism, etc.”13 Wang Anshun, member of the Standing Committee of Shanghai Municipal Party Committee and director of the municipal Party Organization Department, summarized six challenges the base-level Party organizations faced, including the widening income gap that led to distrust among the masses on the nature and objectives of reform and modernization, the large organizational “vacuums” for the Party in foreign companies and in many private and joint venture firms, and renewed social stratification that brought difficulties for party building. He cited an example of the effect of class divisions on the Party: in one foreign-invested company the 16 Party members were divided into two Party cells—one for blue collar and one for white collar employees; the Party tried in vain to merge the two because of class resistance.14 The transformation of the microeconomic foundation of the CCP’s rule critically affects a Leninist party in a number of areas. First, the party-state is no longer a price setter, and with that its rule-making capability as an autonomous actor is weakened. In its stead, the market dictates the rules of the game on its own criteria and disciplines deviant players of all kinds, including cadres of state-owned enterprises (SOEs) and the government. Second, the loss of its monopoly of resources and rewards in society—the material foundation of the “organized dependency”—has caused a subtle but fundamental change in the relationship between the Party and its

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The logic of organizational atrophy 45 members. The Party has to compete with multiple sources of reward to attract a following. Third, as mentioned in the previous chapter, the CCP’s long-standing policy of “the Party controls cadres” and the newer dangguan rencai (the “Party controls talents”) are being threatened by the emerging human resources market, which is also internationalizing fast.15 Remaking the party Inevitably the increasing centrality of professionalism or the technical and technocratic competence and entrepreneurship—the essential ingredients of modernization—diminishes the importance of Party membership in an individual’s career success. In a market economy entrepreneurial spirit, professional skills and educational attainment, not necessarily Party membership, are the prerequisite for successful careers. It may well be true that those in possession of both have an edge over others; one can however be successful without being a Party member if he or she possesses the right skills, expertise, or experiences, but the reverse is no longer true. In the long feud between “red” and “expert,” the scale has decisively tilted in favor of the latter. For the “expert” is not only indispensable to the Party but also in demand in the market. Market forces are the real vanguard now. As the vanguard, however, the market has neither a sense of direction nor a teleological vision of history. Its open-endedness makes it a strange bedfellow with a Leninist party. As a result of such changes in “relative price,” the Party is being “diluted”: it is becoming less and less of a communist party by picking up more and more characteristics of the market-dominated institutional environment. The political and ideological standards of the Party are being replaced by those of the market—knowledge, know-how, skills, and expertise. Substituting professional competence or simply being successful for political and ideological standards is widespread in party recruiting. This recruiting practice characterizes “students according to grades, workers to skills, intellectuals to scholarship, peasants to wealth.”16 The Party researcher Ma Yiqi called it “primary-stage standard (of recruitment),”17 and identified two problems with it: 1) the bias toward the rich and successful and 2) lowered moral and ideological standards. Ma Bo reported that in recruiting private entrepreneurs some recruiters based their recruitment decision on “how much tax revenue they created, how large were their business assets, how many laid-off workers they hired, how many donations they made to social benefits, and even how famous they were.”18 The elitist tendencies in party building—the targeting of the well-educated, the talented, and the successful in recruiting and promotion—has profound implications for the ruling party. For in a market economy these people typically gain their status and influence not through loyalty to the Party but by their achievements in their professional work.19 To them the market has availed other channels of upward mobility. To get them in, the Party has to often lower its political

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46 The Chinese Communist Party and China’s Capitalist Revolution and ideological standards. Those strictly barred from the Party in the Mao era (such as capitalists) are now sought after in Party recruitment. The Party membership thus conferred is hence a diluted one. The CCP is being transformed by the market. With their power and resources’ control diminished, Party organizations are in a state of atrophy. The remainder of this chapter looks into the conditions of the Party organizations in rural areas as a case study of this atrophy.

The atrophy of rural party organizations Occupation-wise today’s peasants bear little resemblance to their predecessors in the Mao era; most of them are not full-time farmers. They are instead divided into several subclasses: commercial and subsistence farmers, peasant workers, getihu (petty business owner–operators), private business owners, rural administrators (rural cadres at both village and township levels), and rural intellectuals (teachers, agricultural technicians, etc.).20 The category “peasants” is a political artifact and a legacy from the Mao era discriminations. However, because other groups and the even the peasants themselves accepted it, the term acquires social and political significance—it is meaningful as well as useful in discussing social and political change. Peasant members still constituted the largest group in the Party: at the end of 2008, about 31 percent of CCP’s members were from the peasantry.21 However, the Party’s rural grassroots organizations are among the worst affected by the transformation China is undergoing. The following is the CCP’s self-assessment of its rural grassroots organizations: A significant number of the leading squads (lingdao banzhi, or leading teams of the Party branches of villages—author) of base-level organizations are functionally defected, especially in their ability to lead the peasant masses in developing socialist market economy and speeding up the pace of achieving the ‘moderately well-to-do’ level of living standards; there is a general shortage of young Party members and cadres in their primes. Along with the rapid development of the industrial and the tertiary sectors there have emerged a large number of new economic organizations of various types and increasing number of migrant Party members. The organizational setup, the forms and content of the work of base-level Party organizations are in urgent need of reform. In many rural areas the double-tiered management system22 is under-developed, and the collective economy is too weak to provide the peasant households with the necessary services, i.e. the Party lacking the material foundation to bond with the masses. In particular, some base-level Party organizations are feeble and listless; some even are paralyzed.23 This assessment highlights two key areas of the rural Party that has been impacted by the rural transformation: role adaptation and resource control.

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The logic of organizational atrophy 47 Although it may not be true for every village, a decline or atrophy of grassroots Party organizations in rural areas is nevertheless the general trend. Five main causes can be identified. Changing “relative price” The depreciation of Party organizations and membership is a quintessential part of the change in relative price (broadly construed) set off by marketization. It happens in a number of ways. In the “get-rich” frenzy that has seized the entire country and as a result of the isomorphic effect of the market environment, both higher Party authorities and the villagers tend to evaluate village Party organizations by their ability to create income opportunities and to develop the township or village economy.24 Under such expectations from both above and below, the skills and aptitude required of Party secretaries are fundamentally different from those demanded in the Mao era. The inability to make the transition is widely reported of village Party secretaries. Wang Guozhong, a Party researcher, claimed that, “a crisis of skills is the fundamental reason why some rural Party organizations are marginalized.”25 Another Party researcher Wu Xinyong wrote, “(Rural) cadres now have to do their work in different manner.… However many of them do not yet know how to do it. They are caught in a situation in which the old ways no longer work but new methods are yet to be learned.”26 It is business rather than political skills that are valued now. Grassroots Party leaders who cannot deliver tangible benefits will not be respected. It is true that there are large numbers of villages and townships that have prospered on their township and village enterprises (TVEs), the entrepreneurship of their cadres or other business wizards, and by capitalizing the opportunities that came their way. The Chinese have an interesting term for prosperous villages and townships: “talent economy.” However, the availability of talents is usually left to chance. The massive privatization of TVEs in the late 1990s came as a second demolition of the village commons that undermined the authority of the village Party. The first occurred in the early 1980s when the rural communes were dismantled, and the collective assets such as land, farm machinery, draft animals, and the village-owned enterprises (shedui qiye), etc. were divided among peasant households. This shook the material foundation of the power and authority of village Party organizations. Farming and the related decision power are now back in the hand of the peasant household, rendering the village cadres irrelevant in many of the basic economic activities of the villagers. The Party researcher Zhao Li observed, “One major challenge is that peasants no longer depend on village cadres.” A research report of the Jiangxi Provincial Party School on party building in the Xunwu countryside put it this way, “the relative independence of peasant households also renders the Party redundant in some ways.” The fact that village cadres and their families generally benefited more than the ordinary peasant households from the two rounds of

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48 The Chinese Communist Party and China’s Capitalist Revolution privatization of collective assets also contributed to the decline of the rural Party because the cadres became much more attentive to their own family farms or businesses than to Party affairs. This negligence has been identified as one of the reasons for the atrophy of rural Party organizations as well as for the recruitment draught in the villages.27 Study after study by Party researchers has concluded that a strong collective economic base is the prerequisite of the power and efficacy of village Party organizations.28 The CCP’s lengthy quote cited earlier indicates that the Party Center (dangzhongyang) has also adopted the same view. In the context of a market economy where microeconomic decision power is in the hand of the peasant households, the main leverage left to the village Party is what material benefits can they provide to the villagers. This in turn requires a strong collective sector in the village economy. Some village Party branches still enjoy power and prestige because of their flourishing collective enterprises but most are not as lucky. Another aspect of the devaluation of the village Party also pertains to the decline of the collective economic base—meager compensation for village cadres, especially the Party secretary. For a peasant youth, the decision to join the Party is usually associated with the possibility of becoming a village cadre. Nowadays being a village cadre is no longer as attractive to rural youth as it used to be.29 On the one hand is the availability of other opportunities in a market economy and on the other hand is the poor compensation for village cadres in general, especially after the “tax-for-fees” reform in the late 1990s and the abolishment of the agricultural tax in 2005.30 Yet at the same time, the tasks assigned to rural cadres from above have become increasingly more difficult to carry out. Village cadres are under great pressure from above with difficult assignments such as population control, collecting fees and levies, and fulfilling the planned procurement of farm products such as grains, cotton, pork, etc. They also have to deal with the endless inspection tours by supervisors and the terrifying “one-vote negation.”31 The increasing geographic mobility and complexity of the residential and occupational patterns of villagers also add to the difficulties and costs of the traditional style of rural public administration at both the village and the township levels. Peasant protests, rebellions, or riots have also become increasingly common. The implementation of elections of the village council also depresses the value of Party membership in rural areas. Villagers now have at least in theory an alternative route to power in the village without being a Party member. In a survey reported by Party researchers Liu Yongzhe and Huang Min after an investigation of 17 townships in six counties in Hubei Province in 2001, it was found that 51.4 percent of the newly elected village heads and 64.9 percent members of village councilors were not Party members; and 50.2 percent of the original village council cadres, including some Party secretaries and members of the village Party branch committees who also sat on village councils, were voted out of office.32 The rural Party establishment

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The logic of organizational atrophy 49 of course intervened extensively in village elections to have Party members or Party-favored candidates elected and, more recently, the Party encouraged village Party secretaries to run for chairman of the village council (village head). Research has shown that the Party was so far fairly successful in keeping village elections under control. The point here is that these elections in theory opened up the possibility for non-party members to gain the power of public office and the rural cadres of the Party now could no longer afford to ignore the sentiment of the villagers. This alters the dynamic of village politics and has broad implications for political change in rural areas. “Vitality drains” and the “old party secretary syndrome” The second major impact on the village Party by the socioeconomic transformation of the Chinese countryside is the deprivation suffered by the village communities from the massive exodus of their young and their best and brightest. The young, better educated, and more talented villagers are leaving in droves to pursue nonfarming opportunities in cities and the coastal belt. As mentioned previously, the fast-changing market economy demands different skills and styles of leadership, which can only be fulfilled by younger, more energetic, better educated, and entrepreneurial people with broader experiences than what the village life can provide. But it is exactly these people that are at the forefront of labor migration.33 The result is a massive bleeding of the rural human resources, which also dries up the candidate pool of Party staffing and recruitment.34 The poorer a locale (which means more limited local opportunities), the more serious the bleeding is. In many areas of the major labor exporting provinces (such as Jiangxi, Hubei, Anhui, and Henan) the countryside is virtually abandoned to the old, the sick, and women and children, and in some areas large quantities of farm land were left untilled because of labor shortage.35 As described by Yuan Maqing, a Party researcher, In today’s countryside young people are seldom seen; one could only see the aged, and sick and the weak. Villages are empty and silent. Those responsible for farming are predominantly of the ages between 50 to 60 and will not be able to carry on a few years from now; shortage of successors of rural administrators and community leaders poses a serious problem for party-building and rural public administration.36 Some villages could not find suitable Party secretaries for a long time and some had to deal with the shortage by rotation among whoever was left of the Party members in the village—usually the elderly, the sick, and the incompetent. These people usually joined the Party during the Mao era when Party recruitment followed totally different standards. As a result, they tended to be the conservative type—reliable policy implementers but utterly incapable of leading in economic development.

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50 The Chinese Communist Party and China’s Capitalist Revolution Coexisting with the vitality drain is the widely reported “old Party secretary syndrome.”37 It refers to the phenomenon of one person serving as the village Party secretary forever. These old village Party secretaries rose to prominence because of their political skills. They usually have cozy relationships with township cadres, who, for the convenience of policy implementation, often prefer the same person to be the village Party secretary. In contrast to the popularly elected heads of the village councils, in most places village Party secretaries are still de facto appointees of the township Party leaders, although by the stipulation of the Party Constitution they ought to be elected by Party members in the village. Compared to the village head, the village Party secretary is generally more responsive to the township than to the villagers. Because there is no term limit in the Party Constitution, they can stay on for decades to build up their power base in the village and even become little despots. They not only strangle intra-party democracy at the village level but also pose a serious threat to the villagers’ self-governance. In the area of Party recruitment, the most often reported effect of “the old secretary syndrome” is their blocking the way of the younger and more talented people from joining the Party for fear of being deposed or displaced. It is especially true in poorer villages where there are few other opportunities. These old Party secretaries usually have no marketable skills or business talent and cannot make it anywhere else.38 Jealously guarding whatever meager benefits vested in their positions is their only option. The combined effect of vitality drain and the “jealous old Party secretary syndrome” is the gradual hollowing out of the village Party—aging on the one hand and the lack of successors on the other. These plus the nonparticipation in village Party affairs by the ordinary (i.e. noncadre) Party members seal the doom for many village Party branches. The rise of rivals As part of the power shift in the countryside set in motion by marketoriented reforms, the dismantling of the commune and the spread of market institutions have considerably eroded the organizational grip of the CCP in rural areas, opening up the space for other organizations to emerge. They typically bring new value orientations and new institutions or organization principles to the society. Some of them are the resurrections of the traditional organizations and others are brand new institutions. They feed not only on the corpse of the rural Party organizations and the sense of vulnerability among peasant households that now have to fend for themselves but also on a general spiritual longing for something to believe in and for someone to rely on for protection or advancing their interests.39 Among the traditional forces, the first and foremost is the revival of kinship organizations in village politics. Kinship organizations, such as the Council of Elders, not only capitalized on kinship affinity or loyalty in a way the Party organization cannot but also provided for the many

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The logic of organizational atrophy 51 practical needs of members such as security, business networking (finance, information, business leads, etc.), and conflict mediation. In contrast to the lofty but empty talk about “building socialist spiritual civilization,” kinship organizations in some places held various colorful activities such as dragon boat racing, celebrations of traditional festivals, ancestor worshiping, and other traditional rituals.40 In the early years of the twentyfirst century, a renaissance of the Chinese traditional culture was in full swing. It was promoted in part by the government. The central government mobilized considerable resources to build hundreds of “Confucius Institutes” around the world; some local governments played a major role in reviving many traditional festivals and pompous but elaborate rituals performed at occasions such as the change of the season, harvesting, or start of irrigation. At the village level, clan forces are usually behind the resurrection of many old customs and rules governing village life; the village Party is often marginalized. The rise of kinship organizations inevitably challenged the authority of the village Party branch. The colonization of the village Party (and sometimes the village council as well) by kinship or religious organizations happens from time to time in many rural areas. The “tribalization,” as it is called in China, of the village Party is a widespread phenomenon. In contrast to other nations where rapid industrialization is usually accompanied by rapid urbanization that uproots the traditional village communities with massive rural–urban migration, the Maoist rural communes not only stemmed such migration but also, ironically, helped to preserve the original village communities on which China’s traditional rural order was based. Once the Maoist straitjacket was removed, these kinship or surname-based village communities again serve as the foundation for the return of kinship organizations and the partial resurrection of the traditional social order. And their social and historical roots are much deeper than the communist institutions grafted onto the land. The small episode encountered by Tony Saich in Sichuan in 1992 illustrates well the colonization of communist institutions by traditional forces. The road he was traveling on in West China was blocked by a traditional “superstitious” ritual being performed by a group of peasants. Saich was puzzled and could not help but ask one of the participants how could the Party allow such an event? The peasant to whom he addressed this question felt equally puzzled, because the ritual was headed by the local Party secretary.41 “Clan Party branch” is an extensively discussed topic on national media, in scholarly works as well as in intra-party discourses. Tribalization of the village Party takes place typically in two ways: first, the position of village Party secretary has become semihereditary: it is passed on only within the family of the incumbent. Second, Party recruiting happens only within the recruiter’s own clan. A Party researcher describes the motivation as “the Party secretary wants to preserve a line—he wants to have his legacy preserved and himself continues to be respected and taken

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52 The Chinese Communist Party and China’s Capitalist Revolution care of after retirement.” The traditional patrimony is thus reintroduced into the village Party, which has become “the Zhang family party” or “the Li clan secretary.” Zhang Huaqiang, a “sent-down” cadre (xiafang ganbu), described the tribalization of the Party in the village he was staying as: “one third of the Party members are from the same family; adding their relatives, over 50 percent of Party members are in the clan network, guaranteeing the family a majority vote.” The dominant family took extraordinary care not to upset the balance of power in the village—they either recruited from their own clan or did not recruit at all. Zhang remarked that “there was no way to shake up the village Party from within.”42 Yu Jianrong, a researcher from the Chinese Academy of Social Sciences, mentioned one interesting campaign slogan he saw during his field research of the rural society, “gaohao xuanju, zhengxing Liushi” [Do a good job in the election (so as to) rejuvenate the Liu clan]. He found that voting on surname basis was common.43 Another Party researcher Zhang Wenbiao reported an announcement of a village Party branch: “With the approval of the Council of Elders, a branch Party members’ meeting will be held tomorrow.” He went on to describe the power distribution between the village Party and the kinship organization: compared to the difficulties in collecting tax and fees (by village cadres), the Council of Elders could easily raise funds from villagers for projects such as building ancestral shrines, compiling clan history or family trees, or conducting rituals of ancestor worshiping; “all these latently strengthen the centrifugal tendencies among peasants away from the Party. Conflicts in the village are now mediated effectively by the Council of Elders.”44 The impact of religious organizations is similarly ground shaking, although religious organizations are usually more inclusive than kinship organizations or secret societies. In a large scale investigation of the spread of religions in the coastal regions of Fujian Province, Lin Shenggeng and Zhang Nuofu found that eastern Fujian tended to be dominated by Christianity while southern Fujian by folk religions. All of the 15 villages investigated in east Fujian had churches, some with as many as six. In the south, each of the 23 villages investigated had two to three temples on average, some as many as 23. In east Fujian, on average there were two to three Christian converts in each household; some villages were 100 percent Christian. Lin and Zhang also noted that age, education, and gender of the priests had undergone significant changes in recent years: they were younger, some attended theological schools, and many used to be village cadres. Male and female priests were equal in numbers, whereas it used to be predominantly male. In the south, most of the abbots were former cadres who returned to their native villages after retirement. The researchers describe the ceremony of July 7 (lunar calendar) each year as “spectacular and lavish in spending” in contrast to the meager funding for Partysponsored activities. “Church facilities are magnificent while those of

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The logic of organizational atrophy 53 village Party and administration shabby.”45 According to the Party Center, in 2007, 100,000 village Party branches nationwide had no facilities for Party activities.46 Priests visit homes, help to cure diseases, relieve the poor, etc., while Party members “have abandoned political and ideological work. People are drawn to the former while shunning the latter.” And in some places Party policy and government assignments have to rely on religious organizations for implementation. Churches even funded the bonuses of cadres because the village Party lacked the money. As Party researchers, Lin and Zhang identify from the CCP’s perspective the threats to rural Party organizations posed by religious organizations as follows: 1) they (religious organizations) resist the Party’s leadership and disrupt production, life, and social stability; 2) they interrupt public administration and the construction of socialist spiritual civilization; 3) they corrupt the ideological integrity of Party members and undermine base-level governance, especially when retired cadres (even some active township cadres are involved) who enjoy great prestige among the masses take the lead in religious organizations; some Party members withdraw from the Party in order to join the church. Like many others, Lin and Zhang also come to the conclusion that the weakness of village Party organizations stem from a weak collective economy: “We believe strengthening village-level collective economy is one of the fundamental countermeasures to the influence of religion and folk beliefs.”47 Of course, the anecdotal evidence discussed above cannot be used to generalize all rural China, but the forces behind these phenomena are real and widespread, albeit with varying degrees in their impact on rural society and rural Party organizations. Organizational misfit The Party document quoted at the beginning of this section put it emphatically: “The organizational setup, the forms and content of the work of base-level Party organizations are in urgent need of reform.” The Party researcher Deng Hongxue highlighted four main difficulties in rural baselevel Party affairs work: 1) it’s difficult to pick the right Party secretary; 2) it’s difficult to conduct Party activities; 3) it’s difficult to effectively manage and educate Party members; 4) it’s difficult for Party members to be a role model as desired by the Party.48 He identifies “the fundamental cause of the four difficulties” as the misfit between the traditional, village-based Party organizational setup and the changed conditions of Party members. Once again, the market—market forces operating across the existing administrative divisions along business linkages—plays a key role; the urban–rural integration in the suburbs causes total strangers to congregate and settle in the original village communities, which are consequently being transformed. The village communities today, to the extent they still exist,

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54 The Chinese Communist Party and China’s Capitalist Revolution are much more diverse and complex in their population mixes. It has to be harder to pick a Party secretary who will satisfy the different interests in the village, as well as the Party superiors in the township. Increasing mobility makes it harder to track down the Party members and perhaps even harder to find a time for Party meetings that will fit in everyone’s schedule. And, as discussed earlier, the Party’s traditional ideal of a role model is in fundamental ways incompatible with a profit-driven market ethos. In addition, there is a generation gap between those who grew up in a market environment and the older Party members still in power. The two groups have little common language because of the differences in education, mindset, life experiences, etc., and because they live very different lives, following very different daily routines. According to Duverger, the party branch was invented to capture the opportunities of the workplace and hence is embedded in it. In the Mao era, the village by and large met the criteria as a workplace but it is no longer the case now: the occupational diversity and mobility divide Party members in different workplaces and roles that fragment the village community. Another Party researcher Li Yuzhi sums up the “basic contradiction” of rural party building as the “contradiction between the localized Party organizations and the mobility of Party members.” Apparently, rural Party cadres also shared the same view. In a survey of 204 leading cadres of village councils, village Party secretaries, and TVE managers in a less developed county, 75 percent believed that the current setup of base-level Party organization could not keep up with new situation.49 This organizational misfit renders many base-level Party organizations ineffective or irrelevant, contributing to a general decay of the village-level Party organizations. The new village politics In addition to the resurrection of many old traditions, two recent developments have helped to change the dynamic of village politics. The first is the near irrelevance of village Party organizations to the daily undertakings of peasant households that we have discussed earlier. The other is the general implementation of popular elections of the village council, especially the head of the council (commonly referred to as “village head”). By law, anyone over 18 who lives in the administrative village can run for the village head regardless of Party membership, and many non-Party member villagers do get elected. For example, in 2001, of the 5,570 village heads of Taizhou (Zhejiang Province), only 3,313 were Party members (2001 figure).50 Predictably the village council emerges as a new power center in rivalry with the village Party branch, challenging the power and legitimacy of the latter. In a survey of 246 township cadres (the patrons of village Party secretaries), 153 distrusted village self-governance, expressing their fear that the popular election of the village head may be manipulated by “bad elements” in the

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The logic of organizational atrophy 55 village and that the Party’s will would not be carried out by the elected village councils. They complained that, Some village heads used the votes they drew as the yardstick to measure the village Party branch. Some refuse to take orders from the township claiming that they had popular mandate. Others think that the Party secretary is elected by a few (i.e., by village Party members—author) while the head of the village council by the whole village and hence is more representative.”51 These views have put considerable constraints on the village Party branch. A recent trend, especially in the prosperous coastal regions, is that the wellto-do or the rich in the villages have become politically active: more and more of them are running for offices in the village council, often aided by their substantial financial resources.52 This adds to the ideological difficulties of the CCP as to its class base in rural areas. Many noncadre Party members in the village have become dormant— they no longer participate in village Party affairs. Either they are excluded from the decision-making or they are too absorbed in their own family businesses. As a result, the village Party has often become a one-man show—the village Party secretary is the only public face of the Party. Cao Ruguo, a Party researcher, lamented the “lack of self-consciousness as Party members” among ordinary (noncadre) rural Party members, who were “disgruntled” with the Party and attached little value to their Party member status; many have converted to religions or are engaged in “superstitions.” These Party dropouts are nicknamed “the two-dime Party member” because the only difference between them and the peasant masses is that they pay the monthly Party due of 0.2 yuan (less than three U.S. cents in the official exchange rate of July 2007), and many fail to pay on time or at all. Some Party members refused to pay taxes or interests on loans they borrowed and some “stirred up the peasants to demand outrageous compensation for land use by the state.” Some Party cadre members also played a role in the reemergence of clan forces, conducting Party recruitment, cadre appointment, etc. all by lineage or family name. The well-to-do Party members are often self-absorbed in their own businesses, are no more likely to help others than ordinary peasants.53 The rural Party has largely melted back into the social background.

Conclusions The atrophy of the Party’s grassroots organizations is mainly a result of a social transformation driven by market forces. The rise of the market is transforming the institutional environment, replacing the basic organizing principle of society and altering the distribution of power between the state and society. With the disintegration of danwei and other institutions of the

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56 The Chinese Communist Party and China’s Capitalist Revolution planned economy, the old institutional foundation of Party organizations crumbles; their atrophy is hence inevitable. The decline of the Party in rural areas is not just in numbers: it also results from the draining of human resources from rural areas into other sectors of the economy. This “drain of prime” plus the revival of some traditional institutions (such as kinship and religious organizations) have caused the deterioration of the CCP’s organizational infrastructure in rural areas—so serious in some places that fresh college graduates have to be ploughed back to strengthen the rural administration and help to facilitate the rural transformation.54 Therefore marketization has a profound impact on the rural Party in every aspect of its existence. It has unleashed a multitude of forces that are pulling apart the Party’s grassroots organizations. The two waves of quasiprivatizations—first the dismantling of the rural commune and then the privatization of the TVEs—have deprived the village Party the material foundation of its power and trigger a precipitous decline of its status in the rural society. The rural–urban migration and the diversification of the rural economy have by far the greatest impact on rural Party organizations. These are structural forces that will continue to transform the rural political and social landscape until China completes its industrialization. The rural Party is also facing stiff competition from the revitalized kinship, religious, and even criminal organizations. Village elections have introduced a new dynamic into village politics that tends to deplete the legitimacy and authority of the village Party. Recently, the CCP has responded to the rural decay in general and the decay of its grassroots organizations in particular with measures such as reducing rural taxation, subsidizing the “construction of a new countryside,” and plowing back fresh college graduates into rural areas to serve as village cadres. These are sound public policies. However, the Party so far has no real answer to the rise of kinship and religious organizations that threaten to dominate the countryside.

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4

The Party in the new social spaces

To understand the continuous expansion of the Party in terms of size, one must not forget the context that the CCP is the single ruling party. Despite the corrosive effects of the market, the Party still has control (although no longer monopolistic) of substantial resources in addition to monopolizing political power. Recall from Figure 1.1 that the takeoff of the Party’s membership did not happen until right before the CCP seized national power in 1949. The figure also shows that marketization in the reform era does not seem to have disrupted the overall growth trend. This point also appears to be borne out by a comparison of the growth rates before and after 1949. Figure 4.1 depicts the wild swings in the growth of the CCP before it came to power, showing both positive and negative growth spurs. Figure 4.2 plots the growth rate of the Party membership since the CCP came to power. Note that the volatility declined sharply after 1949. More noteworthy for our purpose is that, after the ups and downs in the Mao era (presumably caused by the political turmoil under Mao’s stewardship), the growth rate of the Party is stabilized in the reform era (to around two percent per year), especially since the middle of the 1990s. We have already seen from Figure 2.1 that neither the peasants nor the workers are the main source of Party expansion since the middle of 1950s. From the previous chapter, we have a good idea why peasants are not the main source of new party recruits, and the next chapter will go into further details why urban industrial workers (the proletariat) are not the main source either. This chapter, however, will examine the main sources as well as the dynamic of the expansion of the CCP in the reform era. We will take a look at how the CCP fares in the new social spaces created by marketization. Specifically, we will look at party building in the mobile population, among the new classes and on campuses of colleges and universities. Our objective remains the same: to understand the forces at work impacting the grassroots organizations of the ruling Chinese Communist Party and gain insights on the dynamic of political change.

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58 The Chinese Communist Party and China’s Capitalist Revolution 700% 600% 500% 400% 300% 200% 100% 0% 1949 1947 1945 1944 1942 1940 1937 1936 1935 1934 1930 1929 1928 1927 1926 1925 1923 1922

–100% –200%

Figure 4.1 CCP growth rate before 1949. (Sources: COD, “National statistics of party organizations, party members, and cadre corps,” Dangjian [Party Building], July 2001, pp. 20–22. China Statistic Yearbook, (1980–2009), State Statistic Bureau, Beijing. COD’s annual reports on Party statistics, Renminribao [People’s Daily]. Li Lieman, “Retrospect and reflections on the 80 years of party membership development,” Dangjian Yanjiu (Party-Building Research), no. 4, 2001, pp. 27–29. Tang Zhengmang and Tang Jinpei, “Exploring the causes of the rapid expansion of party membership between the 4th and 5th party congresses,” Shanghai Dangshi Yu Dangjian [Shanghai Party History and Party Building], no. 8, 2004, pp. 37–39. Wu Zhenhua, “Making sense of the three historical expansions of the composition of party membership,” Gazzet of Liaocheng University, Jinan, Shandong, no. 6, 2002, pp. 12–15. Wei Zhiyang “Analysis and reflections on the structure of the party membership,” Dangzheng Ganbu Xueka, no. 6, 2001, pp. 22–22, 26–27.)

140% 120% 100% 80% 60% 40% 20%

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1953

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1969

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1978

1981

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–20%

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Figure 4.2 Party growth rate since the CCP came to power (Sources: same as Figure 4.1.)

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The Party in the new social spaces 59

The Party in the mobile population Chapter 3 has explicated the logic by which the steady expansion of the market and the diffusion of market relations erode the basic building block of the communist system—the work unit (danwei). A main social consequence of the disintegration or transformation of danwei is the release of the millions of individuals entrapped in it as free agents of the market. One aggregate effect is the burgeing of the so-called mobile or floating population (liudong renkou). The Party members among the mobile population tend to be danwei-less and therefore largely outside the supervision of the traditional danwei-based Party organizations. The mobile Party members The Chinese government defines the “mobile population” as consisting of people who are away from their primary residence for at least three months per year and those with no real affliations with any danwei.1 It includes not only the peasant workers but increasingly also the highly trained and highly educated professionals of urban origins, certain business people such as getihu (the self-employed), retirees, the unemployed, as well as college graduates still on job hunt. There are much more Party members in the nonpeasant mobile population than among peasant workers. The retired and the unemployed usually have lost their attachment to any danwei and retreated to society while the upward mobile tend to flock into the rapidly expanding private sector where the organization infrastructure of the Communist Party is either sparse or nonexistent. In either case, joining the Party is a remote secondary consideration in the minds of the mobile population.2 Largely because of the lack of the organizational infrastructure, Party recruitment has been minimum among the mobile population. The CCP has more pressing issues at hand, and the first and formost is to seek out and herd the widely dispersed existing Party members in the mobile population back to the Party. Party statistics shows that by March 19, 2007, there were 2.2 million known Party members in the mobile population nationwide— about 3.3 percent of the total.3 While more detailed national data on mobile Party members is unavailable, local reports are revealing and informative of this particular group. According to a report in the People’s Daily on November 23, 2007, there were 161,000 or so mobile Party members in Hubei Province, including 6,826 from outside the province.4 In Liaoning Province there were, according to local Party statistics, 120,000 “floating” Party members in the first half of 1995, about 4.33 percent of the total Party members in the province then. The further break down of the figure indicates that 7,532 of them came from outside the province, while 3,361 left the province to pursue opportunities elsewhere. Most, however, were “afloat” within the province. And the number of floating Party members was increasing at the rate

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60 The Chinese Communist Party and China’s Capitalist Revolution 26.45 percent since 1985. The majority (57.2 percent) were of urban origin and employed; those from rural areas accounted for 26.6 percent. In terms of the length of their sojourns, the majority (57.3 percent) was within one year, 33.5 percent were between one and five years and only 8.3 percent were away from hometown over five years.5 In the nation’s capital city, Beijing, the recorded mobile Party members increased from 62,072 in July,6 1994, to 10,737 at the end of 1997. Although only 0.9 percent of the city’s total Party members, this group grew at an annual average of 52.6 percent between 1992 and 1997. The overwhelming majority—92.6 percent or 9,938—were professionals—technical or managerial experts, etc.; only 799 were getihu scattered in the 71 large retail markets around the city, and most of them (439) were from outside Beijing. The Party members who were professionals tended to be younger, better educated, and with considerable work experiences. According to the municipal Organization Department, 90 percent of them were under 45 and 45.7 percent between the ages of 26 and 35. Those with at least some tertiary education accounted for 82.4 percent, 55.3 percent higher than the mean of all Party members in the capital city. They were mostly employed in the private sector, especially foreign capital or joint venture businesses.7 The problems of mobile Party members It must be pointed out that the above figures cover only the Party members registered with or known to Party authorities. It is quite possible that these were only a small portion of the Party members living anonymously among the “floating population.” Even those known Party members were generally reluctant to transfer their “organizational relations” (zuzhi guanxi) to be formally affiliated with the Party organizations where they relocated themselves. Their mobility and anonymity determine that a head count relies heavily on the self-reporting of these Party members. Reluctance to do so is widely reported as due to several factors. The first is value reorientation induced by the market environment they must navigate. Making money through seeking better jobs and other opportunities or starting their own businesses are the primary objective of their migration; living in anonymity among strangers afford them more freedom and less constraints from the Party. They do not have to strive to be a role model and make the sacrifice expected of Party members.8 The Organization Department of the Work Committee of Jiangxi Provincial Party Organs (jiguan gongwei) in its investigative report titled “In building a socialist market economy we must strengthen the education of mobile party members,” thus describes the situation: Some mobile Party members are influenced by the negative aspects of a market economy and have embraced money-worshiping, consumerism (xiangle zhuyi) and nassicism; their sense of being a Party member is weakened. … they believe in the omni-potency of money, which they use

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The Party in the new social spaces 61 in bribary to gain assess to what they want, seriously tarnishing the image of the communist party member.9 These Party members “equate themselves as ordninary citizens … and consider Party member as only an honorary title; they believe Party member status is irrelevant in business activities, which require only business skills.”10 Some intentionally hide their Party member status from the Party so as to dodge the supervision and discipline of the Party; others want to hide their income so that they do not lose the unemployment benefit they are receiving from their hometown.11 Anectodal evidence also suggests that some Party members under report their income to avoid paying higher Party dues, which is set at three percent of the salary of Party members. Many fail to pay their Party dues or do not pay on time.12 A second reason that mobile Party members prefer to remain in obscurity is the uncertainty inherent in the job market. These Party members frequently change jobs and relocate accordingly; they do not see the point of connecting to Party organizations where they only consider themselves transcient.13 Apparently this reluctance goes both ways. The mobile Party members do not always want to reveal their status; neither do local Party organizations (where they are relocated) want to take over the burden of managing them. “Many Party members find themselves in a situation that (the Party organizations of) the place where they reside are unwilling to adopt them, (Party organizations of) their origin find it too hard to manage them, and (the Party organizations of) their current workplaces are unable to regulate them.”14 Mobile Party members are widely scattered, following very different daily schedules and seldom cross paths with each other in daily life. It is difficult to find a time when Party members can come together to engage in mandated Party activities (组织生活), even if they are all willing to meet. And even if they were able to meet, they would have little common language and interests, coming from diverse backgrounds and following different career paths. Hence party building among the mobile population presents one of the toughest challenges to the CCP’s organizational integrity as a Leninist party. First, the Party must get an idea of the number and whereabouts of its mobile members, and to do so it must find ways to draw them out of obscurity. Second, it must find appropriate organizational forms to reorganize them into Party cells and make sure these cells can endure. Similar to but more difficult than elsewhere, the CCP’s party-building efforts concentrate on searching for relatively stable organization carriers and overcoming the daunting logistic difficulties. Inevitably, political fiat is used to rein in these scattered Party members. For example, to seek out Party members hidden among the mobile population, the Central Organization Department (COD), jointly with the Ministry of Public Security (the police), issued a directive in early January of 2008, requiring the police all over the country to register the Party member status of the people applying for temporary resident

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62 The Chinese Communist Party and China’s Capitalist Revolution permits and to do so restrospectively on all current permit holders by the end of June.15 Before this some local Party authorities had already taken similar measures. For example, the Party authorities in Shijiazhuang of Hebei Province required the city’s Industrial and Commercial Administration to check on the Party member status of those applying for business licenses.16 In Jinan, Shandong Province, both the police and the Family Planning Agency were used to track down underground Party members.17 The CCP’s search for new institutional carriers of the Party’s grassroots organizations in a market economy appears to have concentrated on three areas: the communities (shequ) that are rapidly changing the urban social landscape of China (Chapter 6 will present a more indepth discussion), trade associations (such as chambers of commerce, the All China Association of Industries and Commerce, the Association of Private Entrepreneurs, the Association of the Self-employed, and so on), and the geographic proximity of the workplaces. For example, the Party committee of the Shenzhen Chamber of Commerce was instrumental in seeking out the Party members in its member businesses and organized them into eight base-level Party committees, 16 general branches, and 182 branches, with a total membership of 7,600. It also dug up 430 Party members scattered in 300 other businesses and organized them into 11 united Party branches (lianhe zhibu), that is, branches formed with members from different workplaces in close geographic proximity (usually because there are not enough Party members in one place). The Party committee of Yandu County, Jiangsu Province, revamped Party organizations by industries because Party members in the same line of business interact with each other more often. It, for example, helped to establish Party cells among the Party members from the county doing businesses in wholesale markets around the country—among vegetable dealers, building materials dealers, and the newly emerged ship-savaging industry, the transportation industry, and so on. Such institutional innovations suggest a number of things with regard to the direction the CCP is evolving. First, the Party still seeks to plug its grassroots organizations into some kind of administrative power—it is not yet ready to completely give up on its microlevel rule. Second, with the fluidity of the marketplace, the chances of it being successful are very small. The rebuilt organizations described above are no longer danwei or even workplace based. It is obviously the case with Party “joint branches” whose members are from different companies in close proximity and is also true with market intermediaries such as chambers of commerce. These hosting organizations lack both the fiat of danwei to reign in or discipline the Party members and the material or career benefits that danwei may offer to its members. Party organizations like these are no longer in power—they are associations of sort, with a much lower level of commitment from its members. Third, as a result of the loss of clout when danwei is gone, a fundamentally new approach to the management of Party members is taking shape: the Party begins to rely on incentives to regulate the behavior of Party members.

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The Party in the new social spaces 63 It attempts to lure mobile Party members back or to reactivate them by availing itself to meet Party members’ real life needs. It is often propagated in the Party research literature in China that, in addition to the convenience to conduct Party activities, Party cells formed along business lines also facilitated exchange of business information and establishing business connections. During my field trips to China, I frequently saw job ads that gave priority to Party-member applicants. The new party-building approach also capitalizes on other pressing needs of Party members on the road, including emotional and sometimes financial support, as well as the information and advises badly needed by new comers in any place. The Party Committee of Shenzhen Chamber of Commerce thus describes the state of mind of the mobile Party members: they came mainly from the state sector and now that they are on their own, they are “at a loss, nostalgic, waiting and wandering and even demoralized.” Poverty relief and assistance in job hunting are good incentives to have mobile Party members reconnected to the Party, and these have become important components of the CCP’s programs of party building among the mobile population.18 “Party member service stations” were being established around the country. On February 13, 2007, the COD established the first national hotlines to provide consulting services for mobile Party members and by the end of April, they were reported to have handled 131,000 calls from mobile Party members. Local Party authorities immediately followed suit and by September, 8,031 local consulting service lines were established.19 Finally, in terms of value orientation, this “Party member-first” approach represents a major departure from the Party’s traditional ideals or role models for its members, which requires Party members to “sacrifice first; enjoyment last” (chihuzaiqian, xianglezaihou). It is an impact of the market that is reshaping the Party ideologically and its significance for the CCP’s evolution can hardly be overestimated.

The Party and the new classes A direct social consequence of marketization is the emergence of new classes and, with the increasing level of development and hence complexity of the economy, the expansion of the middle class. The CCP, however, lumps the middle class together with other classes born from marketization as “the new social strata.” The new social strata The buzz word in recent years in the intra-party discourse on the changing society and its impact on the Party is the emergence of the “new social strata” (xinshehuijiechen). The term is a euphemism for the inconvenient truth about China’s sizable private sector and the rising influence of the people in it. According to the official definition given by General Secretary Jiang Zemin in his political report to the Party’s 16th Congress in 2002,

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64 The Chinese Communist Party and China’s Capitalist Revolution the new social strata include the following six categories: the entrepreneurs and technicians of “people-run” (i.e. private) science and technology firms (or hitech firms), the managerial and technological personnel employed by foreign companies, the self-employed (getihu), the private business owners, the practitioners in the market and social intermediary organizations (such as law or accounting firms, charities, trade associations, etc.), and the freelance professionals. The CCP’s Central United Front Department (CUFD) estimated the number of these groups at around 50 million in 2007; by adding all the people working in businesses and other organizations controlled by them, the total size of China’s private sector was approximately 150 million strong or 34 percent of the total employed work force (zaigang zhigong) in the industrial and service sectors.20 These people were “broadly distributed in the ‘new economic organizations’ (i.e. private businesses) and the ‘new social organizations’ (e.g. NGOs, NPOs, etc.)”; they were in control of 10 trillion yuan capital assets (China’s GDP was 25 trillion yuan for 2007) and held more than half of the nation’s patents; they also contributed directly or indirectly to about one-third of the state’s tax revenues and were responsible for more than half of the new jobs created each year.21 The CUFD further identified the eight characteristics of the new social strata: 1) most of them are from the backgrounds of workers, peasants, and intellectuals; 2) a significant part of them are intellectuals; 3) they are mainly concentrated in nonpublic (i.e. private) sectors; 4) they include most of the high income people in the country; 5) their work and status are unstable; 6) their political participation is on the rise; 7) the overwhelming majority of them are not Party members; and 8) their size continues to expand. According to the COD’s “Intra-party statistics communiqué 2008,” there were 3.58 million Party members in China’s private sector at the end of 2008, of which 1.64 million were ordinary employees and 1.95 million occupied managerial or technological positions. These figures put Party members at only 2.39 percent of the people in the private sector, compared to the 5.72 percent in the general population. In 2008, 126,000 new Party members were recruited from the entire private sector, accounting for only 4.49 percent of the total new recruits that year.22 Several observations may be drawn from the above estimate. First, the private sector is very important for the ruling party. Second, the presence of the CCP, either in members or in organizations, is very weak in the private sector.23 Third, party building in the private sector has encountered tremendous difficulties, so much so that the Party finds it necessary to change tact. The traditional way, namely recruiting Party members from and building Party organizations among them so as to extend direct control over them, would not be the main approach the CCP uses to deal with these groups. Instead, the Party would rely on social organizations, communities, the Internet, and public events to relate to these people indirectly.24 The CUFD was devising an “evaluation system” to monitor the developments of the

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The Party in the new social spaces 65 new social strata. It was also “selecting and training” suitable individuals from them to serve as non-Party representatives of these groups to participate in the policy and political processes.25 Apparently, the CCP realized that the diversity and complexity of the Chinese society could not be adequately dealt with by the ruling party alone; it must resurrect the united front tactics it so successfully employed during the fight against the KMT before 1949. The Party and the capitalists Ironic as it seems, one-third of China’s new capitalists—the “red capitalists” as Dickson labels them—are communist party members, in comparison to only 5.72 percent in the general population. This is unusual and may well be a one-time phenomenon because the bulk of the Party members among the capitalists were already Party members before they became private entrepreneurs—many of them were SOE cadres who became owner– managers when these SOEs were privatized en masse at the turn of the century.26 In terms of political impact, our attention should also be drawn to another development at the same time—the growing property relations and elite exchange between private businesses (including enterprises with substantial state ownership) and the party-state cadres. The capitalists and the cadres not only collude, legally or illegally, but often share the same roots in their education and family background, their economic foundation, or their financial interests. Political participation by private entrepreneurs is on the rise.27 The Party often recruits influential business elite into the Party or co-opts them into other parts of the political establishment such as the People’s Congress, the People’s Political Consultative Conference, or the All China Association of Industries and Commerce. As the ruling party, the CCP is naturally drawn to people with status and influence—China’s new capitalists fit the bill. The Party and the middle class Unlike the industrial workers and to a lesser degree the rural peasants, the middle class is diverse in their careers and professions and more autonomous as individuals. In the West, the middle class usually acts as a political force only when they vote in blocks. Other than that, they rarely engage in class-wise collective actions. Their diversity, autonomy, and dispersion present considerable difficulties for the operation of a Leninist party in their midst while their political apathy or conservatism, although cannot be taken for granted, helps with social stability. On balance, the CCP is in favor of the expansion of the middle class. In the political dictionary of the CCP, however, the term “middle class” is still nonexistent, despite the temptation to use the term among some Party researchers. “Middle class” is perhaps too bourgeois sounding. The officially

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66 The Chinese Communist Party and China’s Capitalist Revolution sanctioned term is “the middle strata” or “middle-income strata.” For instance, General Secretary Hu Jintao’s political report to the 17th Party Congress called for “the expansion of the middle-income strata.” Historically, however, what comes closest to the conventional “middle class” in the CCP-dominated political discourse is the term “intellectuals” (zhishifenzi) in a broad, albeit unconventional, usage.28 The official definition of “intellectual” is elastic and often changes with time and occasions. It generally refers to the better educated who are used and abused throughout the long road of the CCP’s ascendance to power and its rule of the country. As an official statistic category, it includes all people with at least some tertiary education.29 Increasingly, these people are also referred to as “professionals and technical specialists,” (zhuanyejishu renyuan) and more recently, the term “managerial personnel of business and non-profit organizations” (qishiye guanlirenyuan) is added to or differentiated from it, reflecting the Party’s emphasis on the skills and expertise needed for modernization; whereas traditionally the word “intellectual” connotes trainings in the humanities such as history, literature, and philosophy. On the website of the CUFD, the term “intellectual” is used interchangeably with “professional and technical specialists.” In an article posted on CUFD’s website, the anonymous author cites a speech by Jiang Zemin at the 19th National Work Conference on the United Front that the size of intellectuals had grown from 10 million at the outset of the reform to 50 million in 2000, half of whom were non-Party members. According to the same article, 38 million of them were so-called professional intellectuals (zhuanye zhishifenzi, meaning those trained in technology, engineering, law, medicine, etc.) and 10 million worked in the private sector.30 Intellectuals schooled in modern sciences, technologies, and management are essential to any kind of modernization. Unfortunately for generations of them under Mao, they tended to come from backgrounds of well-to-do families and hence were frequently associated with “class enemies” of the communist revolution. The vicissitudes of their lives and fortune under CCP rule all stem from a dilemma the Party faces: these people are needed for modernization purposes but despised for the purpose of the revolution. This dilemma has been the driving force in the love-and-hate relationship the Party has had with the Chinese intellectuals. Once the Party abandoned its revolutionary goals and shifted its focus on modernization, the value of the intellectuals soared. One of the first things Deng Xiaoping did when he returned to the power center was to declare that “science and technology is forces of production” at the National Science Conference in March 1978. In 1988, he further expanded the claim into “science and technology is the primary forces of production” when he met with the visiting president of then Czechoslovakia. In Marxist theory, only the proletariat is the representative of the advanced forces of production. The political significance of Deng’s declaration is that, as the human embodiment of science and technology, the intellectuals are not only part of the proletariat but also the cream of the working class. Once the ideological

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The Party in the new social spaces 67 straitjacket is removed, the door of the Party is thrown wide open for them. As a matter of fact, they have become the staple in Party recruitment because education attainment is made an important criterion in Party recruiting and promotions; the CCP itself is rapidly being “intellectualized.” At the end of 2008, 34 percent of CCP members were college educated, compared to only 2.89 percent in 1979 at the outset of the reform and the meager 0.3 percent in 1949 at the founding of the People’s Republic of China.31 Figure 4.3 categorizes the social background of the CCP’s membership in 2008. It shows that “the professionals” are the second largest group after “peasants”; the “workers”—the proletariat that is supposed to be the communist party’s class base—account for less than 10 percent of all Party members. Considering that most if not all those in the “cadre” group and many among the retirees also fit the bill, the intellectuals are definitely the largest group in the Party. Most current leaders from the county level up are college graduates or hold advanced degrees; in general, the higher they are in the party-state hierarchy, the high their education attainment tends to be. The love-and-hate history between the Party and the resilient intellectuals— the base of China’s middle class—has come around a full circle. To the extent that the intellectuals play an indispensable role in and are part and parcel of the product of China’s modernization, they can be treated as the proxy of China’s middle class. There are in fact two types of middle class today, one old and one new. The “old middle class” consists Others 7.38% Retirees 18.81%

Workers 9.66%

Peasants 31.10%

Students 2.65%

Professionals 22.23%

Party-state Bureaucrats 8.18%

Figure 4.3 Social composition of the Party membership (2008). The exact Chinese terms used by the COD for the categories are: workers, 工人; peasants, 农牧渔民 (farmers, ranchers, and fishermen); Party-state bureaucrats, 党政机关工作人员; professionals, 企事业单位管理人员, 专业技术人员 (managers, professionals, and technicians); students, 学生; others, 其他职业 (such as the military, the police, etc.); retirees, 离退休人员. The figures are rounded. (Source: COD, “Intra-party statistics communiqué, 2008,” People’s Daily, July 7 2008.)

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68 The Chinese Communist Party and China’s Capitalist Revolution of intellectuals or professionals concentrated in the state sector, mainly in party-state bureaucracies, SOEs, education and research institutes, and other nonprofit organizations (shiye danwei). They are educated under the PRC but are nevertheless the products of modernization. The “new middle class” mostly work in the private sector; they are also well-educated professionals but in contrast are the product of both modernization and marketization. People in these two tend to develop very different relations with the CCP.32 The intellectuals working in the state sector are still the majority of China’s middle-class professionals. According to the CUFD, 60 percent of China’s “professionals and technical specialists” are employed in stateowned nonprofit organizations (shiye danwei).33 According to Li Zeyan, deputy director of the Human Resources Research and Training Center of the Center for Development Studies of the State Council, all of the 12 professions in which 60 percent of the employees held college or advanced degrees were in the party-state bureaucracies and the service sectors such as the finance and insurance industries that are predominantly state owned.34 An increasing number of these people are leaving the state sector to seek career opportunities elsewhere. For example, between 1991 and 1998, the total number of China’s research scientists declined from 341,934 to 290,537. Some went abroad for further study or employment but most either started their own businesses, went to work in the businesses affiliated with the research institutes or universities they used to work for, or were hired by foreign firms or domestic private businesses.35 However, the fact remains that many state-sector jobs (mostly white-collar jobs), especially in the civil service, the financial, telecommunication, energy, and other monopolistic industries, as well as in higher education, are, with the exception of some large foreign corporates, still the most prestigious and most sought after. The CCP has a well-established organizational infrastructure here; in other words, the base of the old middle class is also the organizational stronghold of the Party. Party membership is also worth more in the state sector for obvious reasons. In general, the interests of the old middle class are consistent with those of the Party, and the old middle class is generally supportive of the Party. It does not mean that there is no diversification of values, ideas, and ideological beliefs; nor does it mean they agree with all the Party’s policies, but we do not expect a “middle-class revolution” any time soon from these people.36 It is the relationship between the Party and the new middle class that is problematic. The challenges of party building in the new middle class Party building in the new social strata and among the “two new organizations,” (i.e. new social and new economic organizations) is a new frontier for the CCP. Based on Jiang Zemin’s definition cited earlier, the new middle class should constitute a large part of the new social strata—with the

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The Party in the new social spaces 69 exception of some large private business owners and many self-employed (getihu) running petty family businesses. Because of their professional autonomy and education, the Party finds that the new middle class is becoming more and more difficult to penetrate, organize, and mobilize. These people are better informed, more sophisticated, more individualistic and independent minded, and less likely to be swayed by Party propaganda. They have developed extended social and professional relations both at home and abroad. The Party has to gain their support not out of gratitude but out of their self-interests. Unlike the peasants and industrial workers, the middle-class professionals already enjoy certain social status and earn a decent income; they look down upon people with low professional competence or poor education. As a result, the Party cannot use poorly educated or professionally incompetent Party members to deal with them.37 The Shenzhen Organization Department thus describes the complexity of its dealing with the new social strata: Compared to other strata, the life and work of the people in the new social strata are less open or transparent, mainly because they do not have government supervisors (zhuguan bumen). Their methods of running businesses are flexible and fast changing, and the society38 has very few effective means to monitor and control them. Within their danwei the owners enjoy absolute authority and hence the internal checks also lack strength. In addition the scope of these people’s activities is extraordinarily broad and impossible to track down. All this directly results in our ignorance of their true conditions.39 The trend in political participation among the new middle-class people appears to be mixed. A CUFD study found that on the one hand “they are more and more concerned with and interested in the political life of the nation”; on the other the study also found that some of them embrace money worshiping, the pursuit of life’s pleasure and personal success, and individualism, exihbiting diverse value orientations and confusion. … in addition, some intellectuals have shown reduced interest in politics, feeling that the matters of ideology are beneath them; some even cannot tell right from wrong.40 Political participation by these people, according to the study, was “more rational” and they had abandoned some “obsolete values and ideas” (i.e. the orthodox of the Party) and embraced ideas about “self interests, equality, freedom, competition and efficiency.”41 The new middle-class professionals tend to spontaneously form a complex array of civic associations—NGOs, hobby groups, and other organizations around issues such as the environment and public health, usually outside the traditional command and control structure of the Party.42 These

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70 The Chinese Communist Party and China’s Capitalist Revolution organizations have political implications the Party believes that it cannot afford to ignore, especially after the Falungong Incident of 1999. Nevertheless, it is neither possible nor desirable for the Party to ban them all. How the Party’s base-level organizations relate to them presents a real challenge. As an all-purpose political organization it is hard for the Party, or rather its base-level organizations, to compete with these special-purpose or issuespecific groups for the attention and the devotion of its members on their own turfs. In the area of recruitment, even if the Party is successful to enroll people from the new middle class, it also faces tough challenges on how to indoctrinate and control them. Enhancing the “partiness” (dangxing) of the Party members is an increasingly unattainable proposition, when the Party draws its members from all walks of life. These Party members are unlikely to believe the same thing or embrace the same values or moral standards. Their different formative experiences do not make it easy for them to enjoy each other’s company or share camaraderie despite that their indoctrination by the Party is the same or very similar. This is true of both the old and the new middle class. However, if the Party cannot impose some common standards and a code of conduct on all Party members regardless of their class origin, powerful interest groups may form from within and the breakup of the Party may become a possibility.

Party building on college campuses One of the few commonalities among middle-class professionals, whether old or new, is their college education background. If a college degree is the most reliable predictor of the middle-class status of individuals, then college campuses are the intersection from which Party members of different future groups or classes can be strategically recruited. Recruiting college students is an effective way to get around the logistic difficulties of party building among the new social strata in the future, and the CCP has not lost sight of its strategic importance. Bumper harvest? On their part, college students are also among the most adamant in the Chinese society in seeking Party membership.43 Attending Party schools and taking Party training courses required for admission into the Party are popular on many campuses. There are numerous websites devoted to the “how to” process of joining the Party, with sample application letters and “thought reports” readily available for download with a fee. Table 4.1 details the training activities for Party recruitment on college campuses of Anhui Province. “Activists” refer to those groomed by Party organizations for Party membership, and “organization liaisons” (zuzhiyuan) are Party members whose job is to go out to identify potential recruiting targets and try to involve them in the recruiting process.

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The Party in the new social spaces 71 Table 4.1 Indoctrination of Party activists, Anhui Province Four-year Polytechnic public colleges colleges (benke) (dazhuan), 3-year Party schools 24 Branch Party schools 67 Activists among students 26.79% Party Courses offered in 2003 90 Class sessions (minutes) 30–60 Students trained in 2003 25,979 Full-time Party affairs staff 22 Part-time Party affairs staff 204 Full-time Party school 5 instructors Part-time Party school 296 instructors Organization liaisons 35

34 0 18.95% 82 30–60 15,117 17 121 14

Private colleges 4 0 6.75% 8 30–60 1,330 4 4 4

245

5

56

4

Sources: Education Work Committee of Anhui Provincial Party Committee, “Investigation and reflections on several issues in party recruitment among college students in Anhui,” Journal of Anhui Institute of Technology (social sciences edn.), June 2004, vol. 6, no .2, pp. 56–60. Adapted from pp. 57–58.

The combined result of the push and pull forces is that every year since the 1990s new Party members have been disproportionately drawn from college students. For example, in 2008, matriculated college students accounted for only 1.6 percent of the national population but contributed to 38 percent of the new Party members that year.44 In contrast, peasants constituted 55 percent of the population but contributed only 20 percent of new Party members.45 A college student is 67 times more likely to be recruited into the communist party than a peasant.

Motivation Despite the impressive recruitment successes, party building on college campuses is also deeply impacted by the market environment. College students seeking to join the Party are motivated by diverse considerations, many at odds with the Party’s objectives. A time-series survey cited by the Minister of Education “revealed diversifying value orientations among students,” which in turn is associated, in Minister Zhou Ji’s analysis, with the increasing “diversification of the economy, organization forms, social interests and mode of wealth distribution.” More specifically, the diversification of the economy and society gives rise to increasing “autonomy, selectiveness, instability and differences” in

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72 The Chinese Communist Party and China’s Capitalist Revolution people’s thinking, which “poses a special challenge how to establish and firm up the students’ faith in the communist ideal and in socialism with Chinese characteristics.”46 Indeed, student motives in joining the Party come from a complex set of factors that are intrinsically tied to the larger socioeconomic environment. For college students whose futures are wide open with many possibilities and contingencies, membership in the ruling Party is one of the many factors taken into consideration when they make their career plans after graduation. Party membership may turn out to be an advantage in their future careers, and for a successful career with the government, which is still the most desired career choice among college graduates, it is a prerequisite. For example, according to a document of the Party Building Association of Zhejiang dated February 2001, 10,510 of the 11,350 cadres (93 percent) in the 66 departments and agencies of Zhejiang Provincial Government were CCP members.47 In a nationwide survey of the 2004 graduating class, 35.4 percent wanted to work in Party and government bureaucracies (dangzheng jiguan), 18.9 percent in state-owned nonprofit organizations (shiye danwei), 17.8 percent would wanted to have a teaching or research job, 13.6 percent hoped to work for state-owned enterprises, and 15 percent for foreign companies; only 1.3 percent were willing to work for private businesses.48 Nevertheless, each year only a shrinking minority of college graduates succeed in getting a job in the state sector, of whom only a fraction land a job in civil service. Most have to find a job in the private sector. The Ministry of Personnel’s statistics showed that, of the college graduates of 2004, only three percent found a position in the party-state apparatuses, 20 percent in shiye danwei (state-owned nonprofit organizations), 24 percent in SOEs, and 52 percent in the private sector.49 Therefore, for the vast majority of college grads, Party membership as a political capital remains only potentially cashable. Then why do so many students opt to join the Party? There have been numerous surveys conducted by Party affairs workers and Party researchers across the country on the motivation of students in joining the Party. The purposes and quality of these surveys varied and most of the questionnaires are in some way loaded with a pervasive “political correctness.” For example, these surveys have consistently shown high percentages of students choosing “faith in communism” or “ideological conviction” as a top reason for joining the Party, which is highly dubious. No student applying to join would be foolish enough not to reply so whatever their true beliefs. In addition, students have been taught to embrace communism since elementary school; they probably have written numerous assigned papers, “thought reports,” etc. in middle and high schools and become conditioned to “say the right thing.” Nevertheless, the general array of student motivation is discernable. This author has gathered 23 studies on students’ motivation in joining the Party conducted by Party affairs specialists in Chinese in colleges and universities

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The Party in the new social spaces 73 in 16 provinces.50 These investigations revealed diverse motives, the top five are (in no particular order): 1) faith in communism, 2) vanity, 3) challenging oneself, 4) external pressure (from family, peers, or teachers), and 5) job market advantage. Of these five, job advantage is found in all 23 studies in 28 types and subtypes; “vanity” is identified in 10 studies; “faith in the Party” in 10; “peer pressure” in 8; and “family pressure” in 4. Others include “to change the Party from within” (in two studies) and “to look for a spiritual home” (in two studies). Table 4.2 reports a survey of student motives in three colleges in Shanxi Province. What is noteworthy of the survey result is that in all three colleges the influence of existing Party members as role models is minimal in the students’ decision to join the Party. This appears to belie the choice of “communist belief,” high on all three, as the motivation to join the Party, since non-Party members cannot possibly believe in the ideology more than Party members. The survey also identifies nationalism as a strong factor: that students wanted to join the Party so as to better serve the country and the people implies an approval of the job the CCP had done to champion the Chinese nation. The CCP, it seems, is considered more of a nationalist party than a communist party. Job advantage Job advantage, which motivates the students deserves some elaboration. The rapid expansion of college enrollment after the Asian financial crisis of 1997—as part of the state’s measures to stimulate the domestic market when Table 4.2 College students’ motives for joining the Party Motive

Colleges 1

2

3

39.89

10.04

10.96

To contribute to country and people 29.07 To better utilize one’s own talent 20.73 Glory, indicating self-worth 4.27 To seek spiritual belonging 3.05 Benefiting own future career 2.24 To change the nature of the Party 0.2 To change current condition of the Party 1.02 Parental pressure 0.41 Influenced by Party members around 0.41

39.33 29.29 8.58 5.65 4.18 0.42 4.61 1.05 1.05

8.33 37.28 14.91 8.99 12.94 0.44 10.84 2.41 1.1

Communist belief

Sample size: 971. Source: Li Jinlin, Zhou Wenwen, and Yao Li, “Examining the strategies of party building in colleges and universities based on an understanding of the ideological conditions of college students,” Social Sciences Journal of Colleges of Shanxi, vol. 14, no. 5. pp. 85–86.

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74 The Chinese Communist Party and China’s Capitalist Revolution China’s export took a plunge—began to exert enormous pressure on the job market four years later. Figure 4.4 describes the explosive growth of the college population in the past decade and the resulting rapid rise in the number of new college graduates entering the job market each year, reaching 5.12 million in 2008 and 6.2 million in 2009. The steep climb is set to continue given the even larger expansion of the freshman class every year, which exceeded 6 million in 2008. According to an official from the Ministry of Education, about 9 million new jobs became available nationwide in 2005 while new college graduates that year alone were 3.4 million.51 Unemployment among college graduates has become widespread and persistent in recent years. In major cities, including Beijing, the unemployed and underemployed college graduates have formed ghetto-like communities commonly called “ant colonies” (蚁族). The misalignment of the skills in demand on the job market and the majors offered in China’s colleges and universities further aggravated the situation. It is reported that half of the 2004 graduates did not find jobs appropriate for their trainings, and as a result their entry level salary plummeted, some even below what peasant workers were earning.52 In the cutthroat competitions on the job market, a curious phenomenon is observed: college graduates who are CCP members tend to be quicker in finding jobs and often better jobs too. Many employers, not only SOEs and the state-owned nonprofit organizations but also private and foreign businesses, seem to have developed a preference for Party member graduates. And the students are quick to pick up the cue.

700.0 600.0

10 thousand

500.0 400.0 300.0 200.0 100.0

1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

0.0

New Student

Graduates

Figure 4.4 College new students and graduates 1978–2008. (Source: China Statistics Yearbooks (1980–2009), State Statistics Bureau, Beijing.)

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The Party in the new social spaces 75 The reasons why employers prefer Party member graduates remain a mystery deserving further investigation. However, one hypothesis stands out above all others: the CCP’s elitist approach to recruitment. To put it simply, by the time college students graduate most of the best and brightest among them have been herded into the Party through a long process starting from elementary school—good students win prizes and these prizes in turn attract Party recruiters. As a result, Party membership becomes a reliable indicator of quality—not necessarily ideological or political quality, but quality in terms of knowledge, skills, and leadership capability. As the president of the student union of Beijing University put it, one of the reasons that students join the Party is to show they are among the best students, and “employers quite often recruit Party members from graduating classes, as they believe Party members are the top students.”53 It is a strange twist in the spontaneous adjustment of the job market to the communist polity. Value reorientation The societal value reorientation toward the market has had a profound impact on the recruiters and the recruited alike, as well as on the Party’s campus-recruiting machine. Good education, skills, expertise, hard work, guanxi (similar in meaning to “connections”), entrepreneurship, creativity, etc. are the yardsticks used by the market to measure one’s worth and hence generally considered more important than Party membership by college students. Party membership may give one an extra edge on the job market, but most likely it is only a proxy measure of these other qualities. Sometimes it can also be a liability—plenty of capitalist employers still do not like communists, especially foreign capitalists. In addition, Party membership frequently exacts a toll on the individual when he or she is held to a higher standard by the masses or the employers. On the recruiting side, the general value reorientation has led to reduced flow of resources and efforts to party building and to the instability of the campus-recruiting machine. A minimalism in Party affairs is widely reported on college campuses as is elsewhere. Faculty and staff Party members would rather invest their time and energy in research and publication or cash in on their expertise and reputation by moonlighting.54 Party building is often unloaded onto the shoulders of junior members of the faculty and staff and further onto student Party members in senior classes or graduate students. Party affairs workers mostly work part time and are often in a revolving door with everyone rushing for the exit so that they could switch to and concentrate on the “real work.” Liang Zhengqing of Guangxi Normal University noted a “general passivity in this area” (i.e. party building) because of “the influence of the market economy.” He lamented that, in an environment dominated by “money worshipping and individualism among young teachers and students,” it was “hard to build the correct ideological and political attitude” for party building.55 The deterioration of the

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76 The Chinese Communist Party and China’s Capitalist Revolution campus-recruiting machine is wide reported. Gao Yaohong observed that because student branch Party secretaries mostly work part time, they “cannot maintain the intensity of party building work” due to “the lack of attention and resources.”56 Yan Zhen of Tianshui Teacher’s College (Gansu Province) also reported “inadequate (organizational) infrastructure and lack of attention” to party building.57 The same study reported in Table 4.1 also identified a series of problems: “shortage of full-time party building staff,” “incomplete base-level organizational infrastructure of the Party in new colleges,” “inadequate attention,” “the lack of planning and coordination,” “too much energy devoted to recruiting but too little to training, education and management of student Party members,” as well as the lack of involvement by the teaching faculty. All these helped to marginalize party building. To sum up, the minimalism in Party affairs has many manifestations. The first is the single focus on recruiting—“getting them in” while minimizing the rest because the number of new Party members per year is hard quota while the rest are soft targets. Gao Xiaoyu et al. call it “biased toward recruiting and negligence of education and management.”58 The second is the impact of the dwindling energy and resources for party building on the quality of Party activities. Party classes (dangke) were widely reported as “obsolete,” “boring,” and “pains with no gains” for the lack of resources to update the study materials and improve teaching. Yang Mingsheng of Nanjing University complained that “the monotony of ideological education causes resistance from the students.”59 Liu Danfen criticizes that “both forms and content of Party activities are obsolete, ignoring youth psychology and hence ineffective.”60 Third, a widely reported practice is substituting grades for the Party’s political and ideological criteria in recruiting. For example, Gao Xiaoyu et al. noted the “bias toward scholarship winners in Party recruiting to the negligence of political and ideological screening.”61 The fourth manifestation is the substandard and relaxed procedure used in recruiting. Guo Wei used the phrases “watered down criteria, lax procedures” to describe it. Yang Mingsheng included “inadequate screening” and “lower standard” as one of the three tendencies he observed on campus recruiting. Zhang Chengshong of Shijiazhuang Railway College also identified “do not follow procedures or unclear about procedures” and “lax screening and training” as common problems. He found in his investigation that some Party recruiters “even have no idea about the Party’s rules on mentoring and recommenders/introducers in Party recruiting,” and that “when the time comes they improvise to get the job done, some even using recommenders from other branch committees,” which is a gross violation of the Party’s rules. The fifth commonly observed tendency is quotas and rush recruiting in the senior classes.62 The lack of resources and effort and the need to fill quotas frequently led to a situation in which most student Party members are recruited from the senior class in a rush right before graduation. For example, the recruitment distribution in the four-year colleges and universities of Anhui Province is as follows:63 freshman, three percent;

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The Party in the new social spaces 77 sophomore, nine percent; junior and senior, 88 percent. The same phenomenon is also reported by Guo Wei of Pingxiang College, Chen Yujun of Nantong Teacher’s College, Yang Mingsheng of Nanjing University, and Song Zhenxian et al. of Baotou Medical College (Inner Mongolia).64 Yan Zhen of Tianshui Teacher’s College reported that recruiting in his college “occurs only when pressure (from above) mounts.” The investigations of Deng Mingzhai and Fu Yuexiang of Hainan Radio and TV University found the rush recruitment in the graduating class and the recruitment drought in lower classes “disruptive” of campus party building and the study conducted by Song Zhenxian et al. showed that Party members rush recruited before graduation are generally “of unimpressive quality.” Young communists? The Party’s propagated values, ideals, principles, and moral standards are not necessarily what the students are after when applying to join the Party. Gao Xiaoyu et al. (2004) remarked, “Society has a negative influence on the students—materialistic, self-interested etc.” In a survey of student Party members covering Fudan University, Shanghai Communication University, Tongji University, Shanghai Foreign Languages University, Shanghai Second Medical University, Shanghai University, and Shanghai Teachers University, it was found that more than half of student Party members did not pay their Party dues according to the Party’s rules:65 once a month, 33.3 percent (standard); half yearly, 28 percent; once a year, 2.3 percent; irregularly, 12.4 percent.66 What is more, only 20.9 percent of student Party members paid voluntarily, while 73 percent had to be reminded or collected from, and 3.3 percent paid “whenever they remembered.” The Party Committee of Tsinhua University in a study in 2003 identified three main “weaknesses” using comparisons: 1) compared to non-Party member students, Party member students were not advanced enough (to distinguish themselves as Party members); 2) compared to before they joined the Party, their self-discipline was too lax after joining, and in some cases it was loose on both sides; 3) compared to individual Party members, the student Party cells were low in visibility on campus—they conducted their activities as if undercover and were hence called by students the “underground party.”67 Another researcher found a “weakened sense of belonging” among student Party members: Only 17.1 percent of the student Party members surveyed would first seek the help of Party organizations when in difficulty, only 14.8 percent believed that the Party was the main source of important information that would have an impact on their lives, 40.3 percent felt the Party’s help and guidance “were available but not effective,” and 19.3 percent believed such help “urgently need improvement.” Finally, only 23.7 percent thought Party organizations enjoyed prestige among students. The researcher concluded that “for many Party members, although inside the Party, their sense of belonging to the

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78 The Chinese Communist Party and China’s Capitalist Revolution Party in areas like emotion and ideology is absent.”68 Shi Gongzhong of Xiamen University, Fujian Province, remarked that the quality of today’s student Party members were “nowhere near that of those recruited before the Cultural Revolution.”69

Conclusions In this chapter, we have examined mainly two areas in which the organizational foundation of the Party is shaken by the market-driven social transformation: the emergence of a mobile population and the rise of the new social strata. At a more general level, the diffusion of the normative order and value orientations of the market is having an isomorphic effect on the CCP, quietly reshaping its basic character. To the extent they exist at all, Party organizations in the mobile population are weak, fragile, and without the administrative power they enjoyed in the danwei era. This is a fundamental transformation that is being experienced, as we shall again see in the chapters to follow, by all of the Party’s grassroots organizations to varying extents. As a result, a new institutional model is emerging in party building,70 one that is purged of many of the basic assumptions of the danwei institution, especially the assumptions about power relations. For marketization has altered the distribution of power and resources and created a new incentive structure, new values, norms, ideas, and attitudes as we have discussed in the theoretical chapter. The expansion of the middle class and the rise of the new social strata (expecially the new middle class) have had different and yet fundamentally similar effects on the Party. The majority of China’s middle class—the old middle class—are embedded in the state sector. The people of this class live in the stronghold of Party organizations and maintain very close and yet very complex relations with the Party. They are rapidly becoming the majority in the Party and because of their membership, the CCP is rapidly being “middle-classized” as Figure 4.3 indicates. According to a 2001 study by the Chinese Academy of Social Sciences (CASS), the strictly defined middle class was only 4.1 percent of the population above 16 years of age or eight to ten percent in major cities,71 and yet the middle-class professionals constituted at least 20 percent of the Party membership then. The old middle class has considerable interests vested in the party-state. In contrast, the market-driven expansion of the new middle class creates a social space so complex that it far outpaces the expansion of the Party’s traditional organization structure and renders obsolete the old model of party building. The difficulties in reaching out to the new middle class forced the CCP to adopt united front tactics instead of seeking direct control over them. For example, the CUFD has a Bureau on Non-Party Member Intellectuals. As in the mobile population, the Party has had only minimal organization development and its recruitment among them has also been minimal. Despite their differences, there are substantial similarities between the two

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The Party in the new social spaces 79 middle classes in terms of values, taste, lifestyle, world views, etc., which they have acquired from the common market environment and the same educational background. In terms of transforming the Party, the old middle class is destined to play a much larger role than people in the new social strata because they are a part and parcel of the party-state establishment. The CCP’s recruitment is strategically focused on the fountain head of China’s future political and economic elite, as well as the middle class in both the state and the private sectors—the college campuses. On the surface, Party recruitment has been wildly successful—more than a third of the new recruits each year are from college students and graduate students. However, here the Party is similarly incapable of ideological indoctrination and organizational control, which are the trademarks of a Leninist party. Although college students are among the most eager to join the Party, what motivates them is a far cry from what the Party would like it to be. It is questionable that the communist party is in fact recruiting communists. If the quality of today’s student Party members is “nowhere near that of those recruited before the Cultural Revolution,” then what quality do they have? And, as Figure 1.3 in Chapter 1 indicates, the bulk (72 percent) of today’s CCP’s members joined in the post-Mao era during market transformation. The market is remaking the CCP by transforming its members.

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5

The Party in corporate governance

In so far as it is accepted that the Chinese economy is on an irreversible course of marketization and globalization, the CCP faces unprecedented challenges in minimizing the damages rendered by market forces to its ideological and organizational integrity and in reinventing itself to harmonize with the market environment. The party-state has been fundamentally transformed from the price setter of the planned economy era to a price taker in the era of economic globalization. It still controls to varying extents the domestic pricing of some key products such as oil and gas, electricity, railway, banking, telecommunications, and foreign exchange, but its ability to do so is increasingly constrained by the larger market environment. The balance of power between the state and the market has shifted in favor of the market; it is the market that is exerting an isomorphic effect on the state and the Party organizations operating in a market environment, not vice versa. This chapter examines this effect on Party organizations in corporate governance.

The decline of the Party in industrial organizations The presence of Party organizations inside enterprises is the legacy of the microrule of the CCP in the planned economy era, which is carried on with the Party’s insistence on its organizational presence at the center of business decision-making today. During the Cultural Revolution, Party organizations literally ran the state-owned enterprises (SOEs) and most collective firms. However, once becoming businesses operating in the marketplace, these enterprises are forced to play by market rules and adopt market institutions, resulting in a power shift and a sharp decline of the enterprise Party. Recall from Table 2.2 that the rate of the Party’s organizational coverage in business enterprises was only 22.6 percent, compared to the 90 percent plus coverage rates in other areas where Party organizations were traditionally as strong. Further breakdown shows that the coverage rate remained high in SOEs—86.8 percent, while in private businesses it was only 15.9 percent. Transition to a market economy is melting down not only the “iron rice bowl” but also the institutional foundation of the Party’s grassroots organizations. In the fast-changing business world, enterprises no longer provide a

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The Party in corporate governance 81 stable base of “carriers” for Party organizations to continue with their traditional form of existence and operation. Increasing cross-business, crossindustry, and cross-locality personnel mobility also atomizes the working class, perhaps more thoroughly (albeit differently) than danwei used to. The Chinese workers find themselves having to pursue individualized survival strategies in wrestling with market forces that also undermine the organizational stability of the enterprise Party, making it difficult for the CCP to conduct its work among the working class—the class base it claims. Depreciation of the enterprise Party As market players, businesses have to economize to stay competitive. This reality undermines Party organizations in enterprises. It can happen in two ways. First, once displaced by the management, enterprise Party organizations become superfluous. Second, the development of the labor market considerably puts constraints on the Party’s practice of appointing enterprise cadres (managers), because market competition tends to enforce the market criteria of human resources over the Party’s political and ideological standards for appointment and promotion. The existence of market opportunities has also caused many enterprise cadres to bolt from the Party’s control into the human resources market—a “brain drain” from the Party. As the job market competition intensifies, the costs of controlling enterprise cadres also rise sharply. In a market environment, Party organizations in business enterprises will inevitably be marginalized if they do not reinvent themselves and find a role that contributes to business survival. As one Party researcher put it, “the cutthroat competition in the marketplace put tremendous pressure on the survival of enterprises. Under this condition enterprises have to concentrate resources on business, often to the negligence of party building.”1 The marginalization of Party organizations in enterprises has severely impacted Party affairs personnel as well. Zhong Zhuqi, another Party researcher, found that “in many enterprises the remuneration of cadres in charge of Party affairs was noticeably the lower than that of cadres of the same rank but in management positions.”2 Zhong’s investigation also revealed a fairly common practice, as a cost-cutting measure, of assigning a single person to be in charge of all Party affairs, including propaganda, united front, recruitment, etc. In some cases, this person was also in charge of other “nonessentials” such as the three officially sanctioned “mass organizations”—the Trade Union, the Youth League, and the Women’s Association. For example, one person was simultaneously the secretary of the Party Discipline Inspection Committee, the chairman of the Trade Union, the director of the Party-Mass Relations Department, and the secretary of the branch committee of retired Party members, making it “very difficult to conduct normal activities of the Party.”3 To add to the difficulties, enterprise Party affairs staff tended to be, as described in an investigation of the COD on SOEs,

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82 The Chinese Communist Party and China’s Capitalist Revolution “advanced in age, with poor education background and obsolete knowledge, skills and ideas,” and were stuck in a dead-end job that attracted few people.4 Sorting through the Chinese research literature, two main manifestations can be identified of the decline and the depreciation of the Party in enterprises. First, the Party secretary and the Party affairs staff seek to evolve their careers in the direction of business executives, engineers, or technicians, and by doing so they neglect Party work. Second, enterprise Party organizations are systematically excluded from major decision-making processes of business firms and treated as dispensable or even a burden on the business. An informal but widespread practice in SOE cadre assignment is to assign the talented to management positions, while the old, feeble, and incompetent ones are in charge of Party affairs. Party positions are used as the dumpsite of old cadres.5 And “because enterprise work has concentrated on the business side, the statue and role of the Party are weakened.”6 Table 5.1 reports the result of an investigation conducted by the organization section of CCP Beijing Industrial Committee on the conditions of the Party in the municipally owned SOEs. It shows not only a trend of dwindling numbers in full-time Party affairs staff between 1992 and 2004 but also a clear institutional isomorphism at work—Party organizations and personnel are gradually assimilated into the business management. On the surface, it appears that the Party was winning—more and more Party secretaries became the CEOs or top managers. In reality, the isomorphism more often occurred in reverse: more and more CEOs or top managers had to take on interlocking appointments as Party secretaries. It is not difficult to imagine what they emphasized in their daily routines—management or Party affairs. Table 5.1

Decline of the enterprise Party in Beijing

Year

1992

2004

Total number of municipal SOEs Party committees in firms retaining separate departments (%) Full-time Party affairs staff in total workforce (%) Full-time Party secretaries Committee level (%) General-branch level (%) Branch level (%) Party secretary and CEO/top manager as one person Committee level (%) General-branch level (%) Branch level (%)

721 39.1 1.34

871 22.9 0.67

80.1 64.6 56.1

54.6 51.5 29.5

16.2 21.4 –

24.9 33.4 81

Source: CCP Beijing Industrial Committee, “Investigation of party organizations and party affairs staff in enterprises,” Beijing Dangjian (online), September 9, 2001. Available at: www.bjdj.gov.cn.

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The Party in corporate governance 83 For a while at least, the precipitate decline brought the informal ranking of the full-time enterprise Party secretary down from number one to number five in the corporate hierarchy, after the CEO, the chief economist, the chief accountant, and even the chairman of the union. It is reported that some Party secretaries who were unable to secure interlocking appointments in the management were reassigned to work in the company cafeteria or the sales department. The plight of enterprise Party organizations is captured in a host of jingoistic complaints by Party affairs workers: “In the past you do whatever the Party told you to; at present the Party does whatever it is told to.”7 Party affairs workers’ self-description of their line of work is: “short in political status, meagre in financial rewards; hard in life, difficult at work.”8 The balance of power between the Party and the management is well described in the jingles: “[We]’d rather break our legs running errands for the manager than pour a cup of water for the Party secretary”9; “The first class people are in management positions; the second-class in technical positions; the third in production positions, and the fourth in Party and mass organizations”;10 “Ten years as CEO open up all roads; ten years in sales accumulate great wealth; ten years as technician bring advanced titles; ten years as political workers get one nowhere.”11 Party affairs workers were considered “Jack of all trade” with the connotation of “good for nothing.”12 There was widespread belief among Party affairs workers that Party organizations were unnecessary in enterprises. Many young workers, especially those in private companies, saw little point in joining the Party and existing Party members often saw little point in letting known of their status as Party members in their new workplaces. As one Party researcher describes the situation, “Because non-public firms are usually very flexible in hiring workers, the workers commonly feel that they are there only temporarily; … in addition, fierce competition in the market constantly generate closures, mergers, and acquisitions; under such conditions workers can be fired any time, resulting in some Party members unwilling even to admit that they are Party members.”13 Weakening presence among the working class Marketization has also led to the reduced organizational presence of the Party in the working class. From the perspective of the Party, the “structural weaknesses” of its presence in the working class include: 1) aging—not enough young industrial workers are recruited; 2) uneven distribution of Party members—too few in the private sector, among “frontline workers” and women. For examples, at the end of 1998, Baoshan Steel Co., China’s premier steel company, had 30,000 or so Party members, of which 33.9 percent were retired; 46.13 percent were 46 and above, and a third of the company’s frontline production teams had no Party members at all.14 Similar conditions were also reported by an investigation of party recruitment conducted by the Organization Department of Jilin Chemical Plant Party

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84 The Chinese Communist Party and China’s Capitalist Revolution Committee. The report characterized the situation as: “too many recruited from the management and too few from frontline workers; too many from SOEs and too few from collective firms; too many among old workers and too few young workers, and the number of production teams without a Party member was increasing.” Party affairs workers in enterprises were demoralized; they felt being slighted, unwanted, and the value of their work unappreciated. They were gradually losing their sense of belonging to the Party. Party researcher Zhang Jiayuan exclaimed that “it’s not a minor issue that members of the ruling Party are ‘lost’ or ‘wandering’ away from the Party.” As to the impact of the low morale on party recruitment in businesses, no one could have put it better than the Party researcher Cao Shengyi: “When Party affairs workers are disheartened with their jobs, how can they motivate the workers to joint to Party?”15 An investigation of the collective firms in Songyuan, Jilin Province, found that, negatively impacted by xiagang (layoffs) and the market fluctuations, “some Party members abandoned communist belief and their responsibilities.” Inactive Party members—those who did not show up in Party activities and did not pay Party due—abound. Party committee members were “too old, sick, and of poor personal quality” (geren shuzhi dixia); some Party committees “totally abandoned their Party members and some have not recruited a single member for five years.”16 Table 5.2 describes the declining party recruitment among urban industrial workers in Chongqing between 1997 and 2003. The overall decline can be attributed to the massive reduction of SOEs during the period—from 858 in 1998 to 382 in 2002, because the bulk of the recruits from workers were from SOEs: 94 percent in 1997 and 90.8 percent in 2003. The recruitment in the private sector remained minimal but was increasing: 491 in 2001, 542 in 2002, and 651 in 2003. In comparison, the size of the people employed in the private sector in the three years was massive: 427,358, 546,599, and 763,800, respectively. The reduction of the percentage of workers in all Party members in the municipality—from 10.3 percent in 1997 to Table 5.2 Decline of Party recruitment among workers in Chongqing municipality

Total recruit among workers Workers in total new Party recruits SOE recruits among all worker recruits Recruiting from front-line workers Party members among all employed workers Workers among all Party members

1997

2003

7,770 21.3% 7,300 7,137 132,554 10.3%

7,058 18.4% 6,407 4,026 109,661 7.8%

Source: Bie He, et al., “Reflections on the strategies dealing with the declining party recruitment from workers,” Zuzhirenshibao, April 15, 2004.

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The Party in corporate governance 85 7.8 percent in 2003—is indicative of the declining status of the working class in the market-driven social transformation.17 A 2007 survey of 4,000 households in Shanghai found that only one percent of the surveyed wanted to become a worker.18 The lack of interest in joining the Party can be attributed to two commonly identified reasons: first, corruption among Party member cadres turned off the workers; second, workers would rather use their time and energy on upgrading marketable job skills than participating in Party activities.”19

The Party in corporate governance The real threat to Party organizations in enterprises is not the drying up of the working-class applicant pool. It is instead the marginalization of Party organizations in corporate governance. The more fundamental question therefore is how the enterprise Party can stay relevant in the affairs of the enterprise and play a role important enough to justify its existence to the enterprise. It is true for state owned as well as for private firms, despite that the political context of party building in each is very different. In search of a role Unlike the roles or missions of business bureaucracies, which are in general clearly defined, those of a political party in corporate governance is even difficult to imagine: it is not the regulator of the firm as that role has been taken by the state, nor is it business administration because it’s the job of the COE and his team. It cannot be the management of labor relations because it is in the purview of the trade union, nor can it be the oversight of the business operation because in the structure of corporate governance,20 this role is taken by the board of overseers on behalf of the investors; nor is the board, which is also answerable to the investors, not to a political party. It is therefore not surprising that the enterprise reform—the effort to create real business enterprises to replace the implementers of the state plan, that is, the so-called enterprises of the Mao era (It is a simple but frequently overlooked fact that without a market there is no business enterprise)—began with the weakening of the power of the Party secretaries. The “State-Owned Enterprise Law” passed in 1986, while putting business executives firmly in control, left the role of the Party committee unspecified. To accommodate this legislation, the CCP Central Committee issued a circular on April 28 of the same year that amounted no less to a coup in enterprise governance. It states: It must be made clear that enterprises are not government organs and the role of enterprise Party organizations is different from that of political leadership of central and local Party committees. It no longer performs single-pole leadership role (yiyuanhua lingdao); instead, its role is to ensure and monitor (business operations). Its energy should be

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86 The Chinese Communist Party and China’s Capitalist Revolution concentrated on enterprise party building, on fully utilizing Party organizations as the fighting fortress (in fulfilling tasks), and on mobilizing Party members to serve as role models (for workers). … It should also support the manager or CEO in order for them to fully exercise their power in accordance with the ‘SOE Law’, and offer suggestions on major issues and decisions of the enterprise. —State-Owned Enterprise Law (1986) In addition, the circular also urged the reduction of Party organizations in enterprises. It stipulated that in principle in small enterprises there should not be full-time Party affairs cadres or Party bureaucracies; the mediumsized enterprises should decide on their own whether to have full-time Party affairs staff and Party organs. Party committees of large enterprises could have full-time Party secretaries, deputy secretaries, and a simple Party bureaucracy. It further stated that, after the separation of the Party and management, the ideological and political work on non-Party member workers should be the purview of the business executive and base-level Party organizations “should primarily use persuasion and act as role models” to draw a following to fulfill its advocacies. After the 1989 Tiananmen Incident, however, the CCP began to reemphasize the importance of the base-level Party organizations as the foundation of its political power. On August 21, 1989, the newly appointed General Secretary Jiang Zemin invented the idea that enterprise Party committees should be the “political core” of business organizations and resurrected the “Party-control-cadres” policy in businesses. He pointed out that the “political core is empty without the Party’s organizational leadership.”21 A week later, on August 28, the Central Committee issued a circular formally designating enterprise Party committees as the “political core” and specified the status of Party committees in the corporate governance structure: first, to participate in making major business decisions; second, to appoint middlelevel management personnel jointly with the CEO or top manager; third, to maintain a team of full-time Party affairs workers, the number of which “should normally not exceed 1 percent of the total workforce”; last but by no means the least, the remuneration of Party cadres should be comparable with that of management cadres of the same rank.22 From then on the wrangling over the role of Party organizations in enterprises entered a new phase. Nevertheless, like the “SOE Law” of 1988, the Chinese “Company Law” (passed in 2002 after China joined the WTO) also made no provisions for Party organizations, calling attention to the legality of the Party in businesses. There are many legal as well as practical issues in the relationship between the Party and corporate governance. The Party committee cannot legally exercise oversight of the legal representative (faren daibiao) of the enterprise (often the CEO or the chairman of the board), and the Party secretary’s participation in major business decisions also lacks legal basis in the Company Law. Frequently, the enterprise Party asserts its rights in

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The Party in corporate governance 87 participating in business decision-making on the basis of the CCP Central Committee Document No. 4 while the management invokes the “Company Law” in support of its power and defends its turf. In China’s political context, Party documents enjoy de facto authority even if it is not legal. For instance, the CCP’s “principle of the Party control cadres” is definitively not a company policy but it can have a major impact on business administration and business performance. Depending on the actual balance of power between the Party and the management worked out in real-world situations, the ambiguity and legitimacy issues of the Party’s role in business firms can lead to two problems. The first occurs when the Party secretary is powerful: the manager or the legal representative of the enterprise will be held responsible by law for the consequences of bad business decisions made by the Party secretary, creating conflicts between the Party and the management and subject the Party to criticisms. The second is that the Party either refrains from, or is barred from or simply incapable of participating in business decision-making.23 This is particularly true when Party cadres lack the expertise or experiences to contend for power with the management. Nevertheless, enterprise Party organizations are branches of the ruling Party in an authoritarian political system and reflect the particular mode of rule of the CCP. They are supposed to be the sensors and nerves of the Party that help to maintain the Party’s broad domination in society. This political backdrop makes it difficult for businesses to either drive out Party organizations or to sweep them aside when the ruling CCP insists on their presence and their playing a major role in business decision-making. In the contestation between the Party and the market in today’s China, each is too powerful to be subjugated completely by the other at this juncture. The overall trend however is the decline of the Party in the corporate governance due to its lack of an appropriate and legitimate role. Reflecting this trend in power distribution under which the institutional isomorphism of the market exerts its impact, the CCP was rather subdued in defining the position of Party organizations in businesses: their work should evolve around the firms’ business activities rather than, like in the Mao era, “politics taking command.” The CCP has held that the enterprise Party should play the role as a helper, a cheerleader, or a “guarantor” to provide the “rearguard,” so to speak, to help in business success. The Party should utilize its “comparative advantage” in mobilization to boost workers’ morale, to mediate conflicts and mend fences, to mobilize mass campaigns to improve efficiency and expand sales, to build up the “spiritual civilization” (in fact, corporate culture). For instance, on April 20, 2001, the COD issued its “Opinions on the party work in the 100 pilot modern enterprises,” in which it decreed that the enterprise Party committee should support and facilitate the work of the shareholders’ conference, the board, the supervising committee, as well as the manager or CEO, to help them do their jobs in accordance with the law, to enhance the cohesion or unity among workers, to take the lead building a positive enterprise culture, and

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88 The Chinese Communist Party and China’s Capitalist Revolution to ensure discipline among the workers. The Party should also shore up the authority of the CEO, helping him or her to do his job better. The Party’s ideological work should emphasize helping the workers to move away from the “iron rice bowl mentality,” reprogramming them mentally for market competition, and hence helping the CCP’s objective of building a socialist market economy. Such a role is soft, amorphous, and highly unsettling; it is in general an auxiliary role but also leaves the door open for turf wars and power struggle between the Party and the management. The Party in SOEs This self-assigned auxiliary role and the centrality of the management in business operation together produced a power shift that put the enterprise Party in an often awkward position with diminished relevance. And it is the Party affairs workers that bear the brunt directly and personally. In a study by Wei Shaofu of Guangxi Provincial Party School on “how to strengthen the Party organizations in business firms,”24 the following obstacles are identified to “the effective participation by enterprise Party in major business decision-making.” First and foremost is the “belief that economic organizations do not need a Party establishment if they are to conform to international best practice,” and that the Party should mind Party business only. Many Party secretaries are of the view that “Enterprise Law” already clarified enterprise governance structure and decision procedures; participation by the Party is unlawful and trespasses on others’ turf. Second, Party secretaries often do not have the expertise and experiences in business to participate meaningfully. Third, many Party secretaries do not participate on behalf of Party organizations—they do so as individuals. Wei claims that “the overwhelming majority of enterprise Party organizations in SOEs are unable to involve in key areas of business”: investment, finance, supply, etc. and hence are unable to fulfill their supposed role as the “political core” and in oversight. The above-mentioned study on the conditions of Party organizations in collective firms in Songyuan municipality also found that the participation of the Party in business decision-making was “superficial” and the status of the Party organizations was “reduced to that of a servant”; enterprise Party committees became the “errand-running department” or “department at large” due to the loss of power, role, and prestige. Cutting back on Party organizations and personnel was widely reported. An investigation on the conditions of the Party organizations in a large chemical plant in Shaanxi Province in 2004 found that its Party organization was “cut to bear bones”: only six of the original 37 full-time Party affairs workers remained.25 In the city of Baoji, also in Shaanxi Province, many enterprise Party committees were found understaffed, “presumably some have left to pursue alternative careers.”26 Another study by Wang Xingmin indicates that 69.9 percent of the 6,275 centrally and provincially owned large and medium-sized SOEs that had gone through corporatization (gaizhi) by the

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The Party in corporate governance 89 end of 2001 had members of the Party committee sitting in the board and in 46.9 percent of these enterprises the Party secretary was also chairman of the board. Party affairs essentially were relegated to sideline work by many enterprise Party secretaries who believed that business was real and party building was considered intangible and hence dispensable.27 The People’s Daily reported on October 20, 2002, that in 57 percent SOEs (including those enterprises with the state holding the controlling share) nationwide, the Party affairs workers held interlocking appointments with the management, in 34 percent of which the Party secretary was also the CEO, and in 54 percent the members of the enterprise Party committees also sat on the board. Another study by Ye and Shao found that “the 1 percent full time Party affairs workers requirement was frequently not met” and in some enterprises it was as low as 0.2 percent.28 The main reason cited for Party members to be laid off was “poorly educated,” incompetent, or lacking necessary skills. These people were often holdovers from the Mao era when the standards used to recruit and promote Party members and cadres were very different. Complaints were often heard from the management that Party activities compete with business administration for time and manpower. Because of the lack of a demonstrable benefit to either businesses or individual Party members, Party activities in general were not welcomed in the business world. Therefore, the increase of the interlocking appointments between the Party and the management is the result of the strategy the CCP adopted in dealing with the decline of its organizations in business enterprises. The Party actively promoted interlocking appointments to keep the enterprise Party from slipping away from the center of business action. A statement of this policy, “Opinions on strengthening and improving party building in central enterprises” was jointly issued by the COD and the State Assets Administration in 2005.29 This directive emphasized the importance of reforming the enterprise Party in “consolidating the Party’s class foundation and improving the capability of the Party to rule,” and clarified the objective of enterprise party building as follows: “to build and perfect a system and the mechanisms by which enterprise Party organizations can play the role of political core and participate in major decision-making,” and this was to be achieved by integrating “Party work with business management, Party-control-cadres/talents with market mechanisms of selecting and appointing talents, enforcing discipline inside the Party with the rule of law in enterprises, ideological and political work with building enterprise culture.” These four integrations were to be realized by enforcing the policy of “mutual penetration and interlocking appointments,” that is, top executives sitting on the Party committee and top Party personnel joining the top management team. The document specifically advocated that “the Party secretary and chairman of the board can be held by one person” and, “when necessary the Party secretary can also be the CEO.” Party positions were in fact assimilated into management positions.

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90 The Chinese Communist Party and China’s Capitalist Revolution The 2005 COD and State Assets Administration Guideline marked an increased clarity in the CCP’s thinking on this issue. However, how did it work out in reality? Available evidence suggests that, first, the ambiguity and uneasiness in the relationship between the CEO and the Party secretary have not really been resolved. In many SOEs, the two remain, in CCP’s jargon, “two skins” (liangzhangpi). On the practical side, almost everything works out in favor of the management, which controls the power of the purse. The consequence is that all supervising bodies within the firm, including the Party committee, are made dependent on and de facto subordinate to the management. Even the Party leadership inside the government, which appoints both the Party secretary and the CEO of SOEs, relies on the business side of the enterprise for revenue and economic growth. One author noted that “it has become a common practice” that the government supervisors would reprimand both the CEO and the Party secretary when the enterprise’s performance lagged, but if an in-fight broke out between the CEO and the Party secretary, the latter would be transferred regardless.30 Second, the political meddling by the CCP in enterprises has resulted in perhaps the most complex corporate governance structure known to history. The Party committee has to not only manage its relationship with the management but also deal with other centers of power in the enterprise. The situation is called in China as “three olds vs. three news” (lao san hui, xin san hui). The governance of the Chinese SOEs is a hybrid of three old communist institutions (Party committee, the trade union, and the conference of workers’ representatives) and three new capitalist institutions (the executive committee, the board of trustees, and the shareholders’ conference).31 Nevertheless, the Chinese SOEs are no democracies; the market imperatives in business operation do not allow such luxury anywhere, even (or in particular) in Western democracies. Power tends to migrate to the chief executive from all these other bodies regardless of the intention behind their design. Finally, because SOE personnel on both the Party and the management sides come from the same pool of cadres in the compartmentalized government bureaucracy, the corporatization of SOEs is not as meaningful as when the management personnel are hired from the open market. The dark side of the bureaucratic compartmentalization is the development of the “old boys’ network” from their long-term associations in the same “compartment” under the same supervising Party committee. Reported cases of cohesion and synergy between the Party and the management emerge most likely from the collusion between the two, albeit an asymmetric one, with the Party joining the management in “insider control.”32 Good working relations also rely on the personal friendship among the CEO, the manager, the chairman of the board and the Party secretary, etc. as buddies. They collude because they share the same interests. One interesting observation is that the number of the Party’s discipline inspectors has declined precipitously over the last decade or so. That they are “all in this together” and ought to “watch each other’s back” is often the reigning norm

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The Party in corporate governance 91 or code of conduct. Collusion in corruption further strengthens the bonds of the network, making cases of corruption hard to crack. Most corruption cases exposed in recent years involve such networks, which distort or disrupt the implementation of the “modern enterprise system” in SOEs. The trinity of the board, the executive, and the oversight committees is often preemptied by this network of informal power, neutralizing the oversight mechanism and checks and balances intended in the design of Western corporate governance system. Because both the stock and the stake holders of SOEs are part of the government, which has jurisdiction over them, board members tend to be local government officials in the same old boys’ network and buddies of SOE managers. The board and the management of SOEs are often appointed by the same organization department at the same time and rank; sometimes even with the same letter of appointment. Shareholders and the management are not sufficiently differentiated for the proper functioning of the corporate governance structure. And because of the small local or departmental pool of cadres, one government official often has to serve on the board of many SOEs. As a result they are either too busy to do a good or even a serious job in exercising oversight or do not have the right expertise or information to participate in a board meeting in a meaningful way.33 Long-term implications for the enterprise Party To the extent that an enterprise must compete in the marketplace for survival and growth, the value of every one of its components will be measured with the same scale—market price. The key implication here is that the sustainability of the enterprise Party depends on its marketability. As long as enterprise Party secretaries or other Party affairs specialists are not traded on the market, their value to the business is always in doubt.34 A second development with long-term significance is the “professionalization” of the Party. This happens in two ways. One is what we have just discussed: Party personnel actively seek to acquire skills and expertise of a technical and managerial nature so as to strengthen their career prospects and make themselves more marketable. It also stems from the Party’s overall need to become proficient as a ruling Party in handling a modern market economy and from the necessity for Party secretaries to participate meaningfully in business decision-making. For the CCP recognizes that to ensure Party leadership in business firms, the Party cadres must be able to contribute to business success—they must be able to work with the management as a team. These practical factors compel enterprise Party cadres to become professionals in businesses or technical/engineering matters. Party secretaries with no professional skills and competency are not respected and tend to be marginalized. The second way of professionalization is more problematic. To stem the massive desertion of enterprise Party jobs and to recover at least some respectability for Party affairs work in enterprises, the CCP made major efforts to turn Party affairs work into a “profession,” with titles,

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92 The Chinese Communist Party and China’s Capitalist Revolution certificates, and training programs that could be cross-referenced with the established professions such as law, medicine, or teaching. On June 26, 1990, the Central Propaganda Department (CPD), the Ministry of Personnel, the Ministry of Labor, and the Ministry of Finance jointly issued a directive titled, “Several stipulations about the implementation of the ‘Provisional Act on the Profession of Enterprise Ideological and Political Workers’.” The hope was that with professional titles and certificates, these Party affairs “professionals” would be treated equally as any other professional. To address the rather uncomfortable reality that Party affairs workers tended to be older, frail, poorly educated, and lacking real business skills and expertise, on September 15, 1993, the CCP took special measures to assist the older full-time “ideological and political workers” in their successful passage of professional evaluation and accreditation so that they would be able to obtain titles that were otherwise unattainable.35 A third significant development is the trend for the Party to exercise power through market institutions. A 1993 document issued by the General Office of the CCP Central Committee highlighted the urgency of translating into concrete measures the five duties of enterprise Party organizations specified in the Party Constitution. A wide range of experiments were conducted by the localities and SOEs. To solve the compatibility problem between the “Party-control-cadre” principle and market allocation of human resources, the organization departments of Shanghai, Shenzhen, and other municipalities joined with the personnel department of the local government to start their own “management talent companies” (guanli rencai gongsi), utilizing a semimarket approach to recommend Party member executives to companies. It was an awkward substitute for direct appointment by the organization or personnel departments of the partystate, but nevertheless a substitute. A more specific guideline of how enterprise Party organizations should conduct activities discretionarily was spelled out in another document of the COD, “Opinions on the party work in the 100 pilot modern enterprises,” which followed the same general pattern of working along with, not against, capitalist institutions: •

•

• •

Major decisions that require the participation of the Party were defined as everything the enterprises propose to the board and at shareholders’ meetings. Party member on the board should report to the Party committee in advance the agenda of the board meeting and bring the opinions and suggestions of the Party committee to the board meeting. Party committee should do its homework, upgrading its professional knowledge and skills in order to make good suggestions. Party committee must strengthen its control of Party members on the board.

It seemed that all roads led to the convergence of the enterprise Party to the capitalist corporate governance. An unmistakable institutional isomorphism

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The Party in corporate governance 93 is at work here. However, in this case the Party is being assimilated by the business environment rather than the other way around as in the Mao era.

The Party in private businesses The situation that Party organizations face in private businesses is very different. While in SOEs the “public property rights” (gongyouzhi) lend a level of legitimacy for the existence of Party organizations as well as a convenient avenue for local Party and government authorities to reach into the enterprise in support of Party organizations there, in private businesses or even in those with mixed state and private ownerships, the enterprise Party is largely at the mercy of the owners or top managers, regardless of whether the owners are Party members or not.36 The Party researcher Xuong Chenjia put it this way: “In private and mixed ownership enterprises, especially those whose shares are widely disperse, what methods to use in choosing the leading cadres (top managers—author), what attitude the private/non-state shareholders will have with regard to residential Party organizations, how the Party organizations should operate and be managed, all become complicated.”37 The main difficulties of party building in private businesses The number of private businesses and foreign companies has exploded since the economic boom of the 1990s and, with the political and legal environment improving significantly since the late 1990s, the private sector constitutes a large and rapidly growing part of the Chinese economy. The CCP as a Leninist party instinctively feels the need to incorporate this new “territory” under its organizational coverage. Party building in the private sector started with joint ventures between SOEs and foreign capital quite early in the reform era. In November 1985, the COD called a week-long workshop on party building in Sino-foreign joint ventures. In August 1987, a circular on the implementation of “Provisional Guideline on the Ideological and Political Work on Chinese Employees in Joint Ventures” was cosigned by the State Economic Commission, the CCP Central Propaganda Department, the All China Association of Trade Unions, and the Central Committee of the Chinese Communist Youth League. On April 23, 1993, the COD held a national workshop on party building in foreign firms and on August 27, it issued the “Opinion on further strengthening party work in foreign firms.” However, rapid changes on the ground exceeded the Party bureaucracies’ capability to handle the situation. Before long, voices were widely raised about the “vacuum of Party organizations” in private firms.38 A research team of the Organization Department of CCP Jiangsu Committee summed up five effects of the changes in ownership structure (that is, privatization) on enterprise party building: first, reforms in the property

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94 The Chinese Communist Party and China’s Capitalist Revolution rights structure “have advanced far faster than the development of theories and experimental studies on party building in private firms, causing some erronous ideas to gain currency”; second, the major changes in government–business relations resulting from property rights restructuring pose serious challenges to the traditional chains of command and organization framework of the Party; for example, the CCP cannot easily bypass the private owners to reach into private businesses and issue orders to Party organizations there. Third, private businesses, especially small and mediumsized ones, are quite unstable—going in and out of business all the time; without suitable adaptations, the traditional form of Party organizations cannot keep up with the changes. Fourth, even more than in SOEs, it is difficult for Party organizations in private or foreign firms to find a role to play.39 Finally, Party members in private businesses are scattered and constantly on the move, causing logistic difficulties for the Party even to keep track of Party members. As a result, many Party organizations and Party members in private firms remain “undeclared.” The Jiangsu Organization Department characterizes Party organizations in private enterprises as “diluting, aging, osifying, and virtualizing.”40 With the exception of SOE-turned private firms, the private sector (including foreign capital firms) in China has emerged from outside the preexisting CCP’s organization coverage. Hence, party building in the private sector started from very different initial conditions. In private firms, the relationship between the employer and the employee is clearly defined. The employees, Party member or not, can be laid off at any time. They understand that they are little more than a hired hand in their relationship with their employers. With the constant changes in the world of business, there is a universal sense that they are there only temporarily. Because the firm is privately owned, Party participation in major business decisionmaking lacks not only legality but also practicality if the Party leader is not also the owner of the business. As employees, Party members are expected to protect the interests of the firm like any other employee, which sometimes runs against the role prescribed by the CCP for enterprise Party organizations, especially the oversight of business conduct. No businessman wants an extra whistle blower among his employees who is connected to the powerful ruling party. Compatibility issues As in SOEs, the fundamental issue is for the enterprise Party to find itself an appropriate role if it is to stay relevant. But unlike in the SOEs, the lack of property rights ties with private businesses also cuts off the channels through which the party-state exerts influence on private firms and hence weakens the ties between the enterprise Party and its superior Party organs in the state. The enterprise Party in private firms must find a way to overcome the “bully’s logic” of “participating in major business decision-making” as a

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The Party in corporate governance 95 nonowner or shareholder and properly define its relationship with the owners or shareholders. In addition, the “cadre status” (ganbu shengfen) is nonexistent for Party members in private firms, putting in doubt how to implement the “Party-controls-cadre principle.” Other issues and theoretical questions raised include how should the job performance of Party members who are top executives be evaluated by the Party and how the Party’s evaluation squares with that of the shareholders’ since the focus of the two is likely different. There is also a difference of opinion on whether Party organizations in private businesses should be the “political core” of the entire business or of the workers only. The behavioral choices faced by Party members in private businesses are however much simpler than those in SOEs: they get rewarded for contributing to the business and possibly degraded or even fired if they do not. They will not be rewarded for serving the interests of any outside parties including the CCP and the government, which is exactly the purpose of the CCP in promoting party building in private enterprises. This is particularly true when the outside interests are in conflict with those of the capital or management. The result is that individual Party-member employees in private firms often conceal their membership status, and Party organizations tend to collude with the management or the owner of the business. Party organizations in private firms tend to be captured by capital or their existence tends to be only window dressing; they seldom act as a stand-alone organization.41 Despite the Party Center’s repeated urges to extend Party organizations into the so-called two new organizations—the new enterprises/market intermediaries (mainly private businesses) and new social organizations (NGOs, NPOs, etc.) that are associated with the emergence of the private sector, the objectives of party building in private firms have never been clearly articulated except in broad and vague terms such as maintaining the CCP rule or oversight of business conduct. A communist party is fundamentally an antithesis of capitalism and it is only natural that private business owners are wary of party building inside their own territories. They are worried that Party organizations would undercut and constrain their power and freedom, and that in economic terms Party activities would take time and resources away from business and add to the production costs. “They therefore instinctively resist enterprise party building.”42 Foreign vs. domestic firms Establishing Party organizations in foreign capital firms poses perhaps the toughest challenge to the CCP. The commonly cited difficulties of Party organizations in foreign capital firms include the hostility of foreign owners or managers to Party organizations or at times even Party members,43 the uncertain legal status of Party organizations in foreign firms, the lack of funding, venue, as well as time for Party activities, and the concealing by Party members of their membership or the existence of Party organizations

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96 The Chinese Communist Party and China’s Capitalist Revolution for fear of losing their jobs. The historical irony is that under the CCP rule situations emerge in which some of its members once again find it necessary to go underground. Party organizations in foreign firms are in general powerless unless it is a joint venture with SOEs and the chairman of the board or CEO is from the Chinese side. After enduring for a while the embarrassing situation, the CCP decided that it was better to make Party organization an issue from the very beginning at business registration or during the negotiations with prospective foreign investors. Because foreign capital is crucial to the country’s modernization, the CCP cannot afford to scare foreign investors away with its usual domineering approach to impose Party organizations on foreign firms. With neither clear objectives nor a demonstrable need among business firms (both private firms and SOEs) for party building, the Party attempts to present itself as user friendly “political core” that can help business performance. To forge goodwill and cooperative relations with the owners, the enterprise Party is urged to take over the role of smoothing out the labor relations and “encourage workers to work hard and love the enterprises as if their own”; workers who are Party members are expected “to serve as role models for non-party member workers.” In this way, the CCP hopes to win the affirmation of business owners.44 Unlike in the SOEs, there is no way of directly applying the principle of “Party-control-cadres” to foreign-funded firms. The biggest hurdle for the Party is to appoint Party members to top management positions. Here the CCP mainly relies on the innovations of local Party committees. But in general the Party is forced to resort to legitimate market channels to achieve that objective, for example, to run an employment agency to supply foreign firms with needed personnel who are also Party members. If the company is a joint venture with majority or substantial shares owned by the government, the organization department of the local Party committee, the department of labor, or the department of personnel of the local government would directly appoint top managers on the Chinese side; they can either transfer cadres from SOEs or appoint the local government economic cadres whom they trust. For instance, the government of Qingdao reported that between 1998 and 2001 it had gathered a pool of 964 Party members with suitable skills to be trained and sent to work in foreign enterprises. They were selected from SOEs, collective firms, and even from laid-off workers. By 2000, the city had assigned 219 cadres to foreign firms.45 In comparison, the clout of the local state is a significant leverage the CCP can use to push party building in domestic private businesses; it often plays an important role in both Party recruiting and organizational development. On the other hand, Party work in private firms is also expected to evolve around promoting business. For example, to encourage Party members in the enterprise to work harder, the party-building director of a certain private firm dissuaded Party-member workers from the “incorrect idea” that hard work and extra contribution only served to increase the

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The Party in corporate governance 97 profit of the capitalist boss and hence is not worthwhile.46 Such use of the Party for commercial purposes reached a new high when the Party committee of the Shanxin Embroidery Market of Haimen County, Jiangsu Province, ordered the Party-member traders in the fair to put out a sign over their stalls declaring their status as “member of the communist party” as the symbol and a guarantee of the trustworthiness of the products they dealt in. Thus, in an unexpected twist Party memberships were turned into business assets. The market Party committee also asked Party members to serve as role models in paying taxes and fees, in providing good customer service, in openly displaying their business licenses, in fairness of business transactions, in mass-line work, and in promoting the principle of getting rich together with the masses.47 Of course these cases are by no means representative of Party work in the private sector as a whole, nor do they reflect the typical condition of the Party in private businesses. They are however indicative of the Party’s intention, guideline, and the experimental explorations driven by them. More than in the SOEs, the Party has not found a suitable role to play in and become compatible with private businesses. It is true even for the privatized SOEs that have inherited wholesale the preexisting Party organizations (most likely under the insistence of the government agencies that supervised the privatization), and their owners or top managers are often already Party cadres before they became capitalists. In a report to the CCP Shenzhen Committee, the Shenzhen Organization Department pointed out that “the function and the status of the Party organizations in privatized SOEs and how they should conduct their work are all undefined, adversely affecting the morale of the comrades working in Party affairs as well as party building (in enterprises).”48

Assessment The CCP’s heroic struggle to reestablish its grassroots organizations in business enterprises appears to be driven not by any well thought-out rationale but by the instinct of domination and the inertia of microrule. It is true that after all businesses are the places where the majority of the workforce spent at least eight hours of their most productive time of the day and hence a desirable potential interface with the working population. However, the purpose and usefulness of such an interface remain ill defined: what does it mean by “strengthening the Party’s class base” (that is, the working class) when the Party has to win the acquiescence of business owners or executives by taking a procapital stand, collude, or even become part of the capitalist class? In addition, the time, energy, and resources of those eight working hours have been fully claimed by businesses, putting Party organizations and Party members in an awkward position of either having to compete for these or hiding themselves to avoid such competition. In business organizations, one’s reward has to come from one’s performance and there is a limit

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98 The Chinese Communist Party and China’s Capitalist Revolution to what the Party can offer (in terms of job security or career advancement) to induce behaviors it desires from Party members, especially in private firms. The Party tries to create a role for itself in augmenting businesses (cultivating a productive enterprise culture, smoothing out labor relations, etc.) and hence making Party work skills marketable; but it is far from clear that it can be successful. In intense market competitions, there are little ounces the firm can spare and in all the roles that it wants to carve out for itself, the enterprise Party is treading on the territories of other more conventional organizations such as the trade union and the management. The only tangible reward the Party can offer to its members—to appoint board members and chief executives—is in fact in violation of the market rule if done on the basis of nonbusiness criteria; and even here there is a limit, that is, the survival of the business. In other words, the Party can ill afford to appoint its favored people who lack business expertise. Top management personnel of enterprises are now more and more procured from the human resources market. In a market environment, the two logics: “the Party-controls-cadres/talents” and the market allocating human resources are fundamentally incompatible. Many top executives of Chinese businesses are Party members, especially in the large and prestigious SOEs. This alone however cannot be regarded as the result of applying “the Partycontrols-cadres” principle, for these people increasingly arrive at their positions because of their management skills and experiences instead of their Party loyalty. Presumably, they could have obtained their positions through the human resources market just the same: the fact that many top executives of private and foreign firms are “brain drained” from the SOE sector attest to this point—they are hired for their expertise, skills, and experiences, not for their Party credentials. Hence, as remarked by a Party researcher, “whether ‘the Party-controls-cadre principle’ is applicable in private enterprises urgently need study and solution at both theoretical level and at the practical level.”49 The market is homogenizing, which is another way of putting institutional isomorphism. In the long run, Party organizations in enterprises (perhaps even in SOEs) will not be sustainable due to several factors. First, the cutthroat market competition does not tolerate well any amount of added cost, and Party organizations can become a cost of production of the business it is embedded in. Second, this added cost is unlikely to be counter-balanced by any benefit that enterprise Party organizations may bring to the business. From what we have observed so far, the Party could not find a positive role without treading on the turfs of other more conventional institutions in a market economy such as the board, the union, etc. and once in such roles the identity of the Party is also put at risk.50 Third, the organization of a ruling Party is almost the natural enemy of private enterprises because of the many ways it could bring trouble for businesses, not the least is an extra eye observing every move of the owners or managers, catching them red-handed in tax evasion or some business practices that they would rather nobody knew.

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The Party in corporate governance 99 In addition, what would such an externally subjugated organization do to the commercial secret? Where does their loyalty reside? Can they be trusted? Party organizations distract from business purposes. The relationship between the Party and businesses, especially private businesses, is similar to that between the CCP and the Falungong sect. At present the Party is trying to either force or sweet-talk its way into private businesses generally on the promise that Party organizations will be business friendly and so far, judging from available evidence, in the dispute between capital and labor they tend to side with the capital. However, their position may change overnight because they are in the final analysis part of a hierarchy controlled by a powerful external authority. Businesses want to suppress Party organizations for the same reason the CCP wants to crack down on Falungong because it is controlled by an external authority (Li Hongzhi) residing in a potentially hostile country—the United States—and can turn overnight a peaceful quasireligious exercise group into a formidable antigovernment force as it did in 1999, when more than 20,000 Falungong followers suddenly surrounded the Party and government compound in Beijing. And in the contex of the Chinese political economy, there are numerous ways in which the party-state can get to the enterprise if it so chose. Such attempts may or may not be effective. From the perspective of Party-member employees, their personal interests are aligned more with their company than with the Party—as long as the Party cannot guarantee them an iron rice bowel or a career. Party building on the other hand poses limitations to the rationalization of corporate governance. Party organizations in enterprises will also continue to lose grounds to market forces with each passing day until they completely fade away, become an empty shelf, or a tool for or a cozy ally with the capitalists. A Leninist party is good at monitoring, maintaining discipline, boosting morale, and mediating in disputes to avert possible major disturbance. To business owners, the question is: Are the benefits outweighing the costs? Can these roles be played more conveniently or more cost-effectively by other more conventional institutions?

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6

Community Party building

One of the most visible consequences of the market-driven social transformation is the spatial rearrangement of the patterns of people’s work and residence or the transformation of the urban human ecology. The most conspicuous of it is the rapid emergence of the communities (shequ), especially in the areas where urban expansion takes place. The Chinese urban shequ is an administrative area similar to the administrative village in rural areas in that it nominally practices self-governance but in fact falls under the overall administrative structure of the party-state. Unlike the rural villages, the urban shequ attempts to create a sense of community out of strangers and hence in some ways is comparable to the towns of the United States. Within these communities, new social relations are developing and changing, driven by an organizing principle radically different from that of the work units or danwei. To varying degrees across the country and in different sectors of the socioeconomic landscape, a mass society is replacing the one structured around the party-state. This transformation is drastically changing the incentive or the opportunity costs structure in the society. Party building that follows a default course extended from the danwei era runs into considerable difficulties here. The adaptations by the Party in both its organizational structure and mode of operation are pushing the evolution of the Party at the grassroots level in urban areas in a new direction to face many new unknowns as well as political risks. It amounts to no less than a total transformation of the Party’s social and organizational foundation and hence its identity.

Transformation of the urban social landscape The transformation of China’s urban social landscape manifests first and foremost as changes in the individual’s self-identity not in the reemergence and consolidation of classes. The class structure is still fluid in China but the individual defined by and subjugated to his or her danwei is irreversibly transformed. He or she is becoming, from a “screw on the giant revolutionary machine,”1 a free agent of the market.

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From “danwei man” to “societal man” The erosion of danwei by market forces started from the market gradually taking over an increasing number of the services that danwei used to provide to its members and completed with the establishment of a new contract between danwei and its members, by which these members are turned into employees.2 By the same token, danwei was also marketized and in due time transformed into business firms or nonprofit organizations. The diffusion of the contractarian institutional principle of the market was not limited to the economy; increasingly it spread to certain areas of the state such as the civil service, to social relations, and even infiltrated the family. The process began at first not in the danwei but between danwei and the state. Decentralization, or more specifically the contract responsibility system (which is a quasimarket institution)—the dominant reform strategy in the 1980s and early 1990s—led to cutbacks of the state budgetary support of danwei, forcing them to make up the budget falls by pursuing opportunities in the marketplace with activities commonly referred to as “chuangshou” (literally “revenue creation”).3 During the late 1980s and early 1990s, the whole nation became obsessed with “xiahai”—plunging into the sea (of the business world; i.e. going to business). Numerous danwei became business firms; many more business firms were started by danwei or the people loaned from danwei.4 New firms and fresh labor that came of age each year (about 11 million in urban areas alone in the 1990s) were overwhelmingly market players from the start, as were the 200-million strong migrant peasant workers flocking into coastal and urban areas each year. The spur of privatization in the late 1990s and early 2000s and reforms of the government bureaucracies also eliminated large numbers of danwei, together with many of the assumptions underlying the danwei institution. Once danweis derive their income primarily from the market, their ties to the state are either considerably weakened or completely severed. Once danwei must seek survival on the market, it is forced by competition to economize. It no longer can or wants to provide job security and comprehensive benefits to its employees because these negatively affect their bottom line. Therefore, in its turn danwei also moves to sever its ties or rescind its commitments to its members, turning them into employees who have to compete with strangers on the labor market for continued employment. With the severance of the tie between danwei and the state as well as between danwei and the individual, party building also changes its dynamic. This is the basic story of the transformation of danwei into businesses and “danwei man” into danwei-less or “societal man.” A “societal man” (shehuiren) in this context simply means that the individual is no longer owned by danwei and has joined the anonymous society at large.5 Once individuals are untied from the organizational structure of the party-state through danwei, their personal spaces expanded far beyond their places of work into the

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102 The Chinese Communist Party and China’s Capitalist Revolution larger community to which their interests are shifted from their former danwei. The whole society becomes mobile, and it is this mobility that is constantly reshaping the urban social landscape.6 From neighborhood committee to shequ The most socially and politically significant physical transformation of the Chinese cities in the reform era is not the glitzy, postmodernistic high rises and the shining thoroughfares that first catch a visitor’s eyes. Instead, it is the disappearance of the wall that encircle the danwei—the basic building block of the communist system. In Mao’s time, the Chinese urban landscape followed a monotonous pattern everywhere: walls separating roads and buildings. The buildings belonged to one or another danwei and the walls demarcated the borders between danweis or between danwei and the limited public domains. Within the walls, the members of the danwei formed a distinctive minisociety where danwei provided for the members their basic needs between job and home. The public domain outside the walls of danwei or between the walls separating the neighboring danwei was extremely limited. Only the marginal people of society—usually people without danwei—fell into this domain. The governing body of this domain at the grassroots level was juweihui (neighborhood committee). It had relatively little to do and there were not many people who wanted to do it (i.e. working for juweihui) either. Juweihui typically was staffed by retirees or housewives advanced in age; it was in charge of nickel-and-dime affairs such as keeping the streets clean, monitoring the activities of the people who did not live in a danwei compound and checking on “strangers” whose hukou (residential permit) was not on file with the local police. It also mediated in petty conflicts, disputes, or divorce cases; sometimes it also operated petty businesses to provide employment for the unemployed in the neighborhood. The walls of danwei were battered down in the reform era not by any suddenly acquired enlightenment but by market forces—or simply by greed. They were replaced by lines of retail stores or other businesses either started by danwei behind the wall or by outside entrepreneurs who leased the premise to build their businesses. These businesses in turn gradually took over from danwei many of the services it used to provide to its members, in the process wiping out the socialist assumptions behind the provision of these services and transforming danwei man of the party-state into free agent of the market. The domain between the walls separating the neighboring danwei suddenly expanded with the crumbling of these walls. And with the withering of danwei as a socialist institution, many of its other functions fell on the local public administration. Old neighborhoods disappeared or transformed. Numerous new issues in public administration were created by the new communities mushrooming from urban renewals and expansions, from migration that drastically altered the character of urban neighborhoods,

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from foreign investment and business redeployment,7 and from the new residential patterns created by the geographic clustering of social classes that provides the real estate market its characteristic dynamic similar to those observed in any capitalist market economy. The magnitude and complexity of these new and old issues, such as parking, public hygiene, the migrant population, the laid-off workers, the surge of crimes and illegal activities such as drug trafficking and prostitution, pollution, relocation of households, land and property disputes, and so on, are far beyond the capability of the grannies of the neighborhood committee. A new model of governance is needed. Emerging characteristics of China’s urban communities The communities (shequ) replacing the neighborhood committees (juweihui)8 are overlapping geographic entities and public administrations similar to the incorporated towns in the United States. As geographic entities they are more or less self-contained in that the most basic daily needs of the residents are met locally—within an area that has its own characteristics, a separate identity, and usually a name. The so-called bedroom communities commonly found in the suburbs of the United States are just beginning to emerge in China as the colonies of the rich on the one end and of migrant peasant workers on the other. Three types of communities can be indentified: those evolving on the basis of juweihui, those that are transformed suburban or rural villages,9 and those made up by brand new urban blocks (xiaoqu) planned out by developers before their construction. As natural formations of urban ecology, these communities are in part the creations of market forces; they may or may not coincide with the jurisdictions of the old neighborhood committees. The Chinese community (shequ) consists primarily of individuals, families, businesses, and social entities/ organizations. The role of the Party and the state is significantly diminished in the daily life of these communities because, unlike the organic society of the traditional rural villages or their neotraditional reincarnation—the politically created and operated danwei, these communities are part of the emerging “mass society” that renders the old model of party building based on danwei obsolete. Unlike the situation of danwei, people here are on different trajectories of lives and careers that seldom cross paths. These are mixed communities in two senses: first, they are gatherings of strangers from different walks of life and backgrounds and hail from different regions of the country; second, they contain a mixture of permanent residents and transient individuals and families and a mixture of residence, businesses, and other types of organizations. Here each day a large number of individuals and organizations emerge outside the party-state’s traditional command and control structure. These communities are fertile soil for the spontaneous development of civic associations, NGOs, and other types of organizations to cater to the diverse

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104 The Chinese Communist Party and China’s Capitalist Revolution needs and aspirations of the people living in these communities. The anonymity, complexity, diversity, and fluidity that characterize these communities exact high costs to the party-state’s effort to penetrate, monitor, and control them. However, it is in the nature of a Leninist party to seek control over them and preempt the political organizations that are likely to emerge from them by extending its own organizational coverage over them and maintaining its own organizational monopoly. As a result, these communities all have a governance structure established at least in part by and connected to the party-state. As administrative entities, each of these shequ constitutes a unit of provision of certain basic public goods such as public security and public hygiene, infrastructure of roads, sewage, water and power supply, parks, play grounds, and other public facilities. The community council relates to the party-state through the Street Affairs Administration (jiedao banshichu) on the government side and the Street Work Committee (jiedao gongwei) on the Party’s side, which in turn are under the jurisdiction of the district or the municipal Party committee and government. Usually a Street Administration covers a few to a dozen or so communities. In 1999, long after the urban transformation rendered inept the governance structure inherited from the Mao era, the Ministry of Civil Affairs started its pilot program on community building in urban areas. Following its lead, more than 20 provinces simultaneously launched 100 local pilot programs. In most cities, the boundaries of the communities (shequ) are drawn based on the natural configuration of businesses and residential patterns. A typical shequ contains 1,000–2,000 households, which may be further divided into subunits (i.e. pian’er) For instance, Anshan municipality of Liaoning Province in the northeast restructured the original 1,064 juweihui into 409 communities with 1,928 elected officials.10 Shenyang, the capital city of Liaoning, merged more than 2,700 juweihui into 1,277 communities; the latter also inherited from the former land, properties (including real estates, collective businesses, offices, and other facilities), as well as the tax bases.11 By the end of 2007, nationwide China had 655 cities (four at the provincial level, 283 at the prefecture level, and 368 at the county level), 856 city districts, 6,434 Street Affairs Administrations, and more than 115,000 urban shequ.12 Like the rural villages, shequ are not formally part of the state administrative structure but conceived as self-governing entities run by the people in the community. Officials of the community council (still called juweihui in many places) are by law popularly elected by the people of the community, although the implementation of this law has been problematic.13 Community building (shequ jianshe) at the current stage emphasizes service; it has concentrated on building the community service programs and facilities. It comes as no surprise, not so much because of elections but because the community council’s ability to control over individuals living in the community is nowhere near that of danwei. With only weaker clubs in its arsenal,

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carrots have to be used liberally to induce compliance. This service orientation also deeply affects community party building.

A Party in disarray The shift of the urbanites’ main living space from danwei to the community is accompanied by a fundamental power reconfiguration in society that has tremendous implications on the evolution of the CCP. Power reconfiguration Table 6.1 outlines the main politically relevant differences between danwei and the new urban communities. In a sense, it is comparing apples with oranges because community is an area administration while danwei is organization-level administration. But in terms of their relationship to the individual, the comparison is both relevant and appropriate because they both constitute a unit of party building. The table describes two very different party-building environments; in contrast to the loose, fluid, anonymous, and relatively free environment of the community, danwei presents a very structured environment where the ruler enjoys much more leverage over the individual (the ruled). The distribution of power in communities is more in favor of the individual than it is in danwei, and the two are structured under quite different institutional principles and profess different value orientations. These differences have important implications on the role played by the Party, the approach to party building, as well as how Party organizations operate in these two environments. What makes the difference between the two is the market, which breaks the resources monopoly of the states, raises substantially the costs of individual-level monitoring and control, liberates the individuals from their Table 6.1 Political ecology: danwei and the community compared

Individual’s status Mobility Wealth distribution The ruling Resources control2 Cost of information monitoring The ruled Power over the individual 1 2

Danwei (work unit)

Shequ (community)

Member Low (stable) Via state1 Total High Low In organized dependency High

Employee, resident High (unstable) Via market Partial Low High In relative autonomy Low

In the sense that danwei are attached to the state’s redistributive network. In terms of per individual bearing on average.

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106 The Chinese Communist Party and China’s Capitalist Revolution organized dependency, sets off a general social mobility, and creates an impersonal mass society that offers the individual many choices but few guarantees. The gradual replacement of danwei by communities as the center of social life lowers the political center of weight toward individuals and families whose concerns are quite different from those of danwei. Party building must adjust to this new reality to gain traction. As the Party’s traditional media of social control—danwei—is disintegrating, the Party has to develop new arms or tentacles to reach to the individual. The main target of the CCP’s effort to gather support and other political resources is no longer danwei; it is the mass community that is fast becoming the main interface between the Party and the masses. The Party must now learn how to successfully deal with the individual, including individual Party members, without the overwhelming power and leverage of danwei. Obviously fiat alone will not work because the individual or individual Party members can simply hide away from the Party behind the urban high rises or “vote with their feet.” Carrot must be used in the place of the club, which means the Party must appeal to its members by offering needed services. At the grassroots level, the role of the Party and the way it exercises power and influence and relates to the people all have to be changed. From Table 6.1 we can tell that party building in danwei is easier because it is based on the stability of the members, on the monopoly of resources, opportunities, and rewards by danwei leaders and on the highly structured domination by the Party. Community party building on the other hand has to do without either the help of the structured power of danwei or the partystate’s monopolistic control of resources, opportunities, and rewards, despite the high costs of information, monitoring, and staying connected with Party members or potential Party members. In the government and danwei, Party power and leadership are carried through the administrative structure and legitimized by the inherent functions of these organizations. The community Party cannot issue orders as Party secretaries inside the government and danwei do because it has much less leverage over the individual. The costs and information constraint mentioned earlier are part of the new equation of power redistribution in the community. In contrast to the situation in danwei where “the Party secretary controls all” (shuji guashuai), the overwhelming majority of the economic resources in the community is not in the hands of the community governing body and the Party organizations but in the possession of private citizens, businesses, and other organizations. The party-state’s monopoly over organizational resources has also been considerably weakened and will continue to. The effect of the economic power shift is immediately visible in the low level of funding for community governance: poor pay for community officials, the inadequate office facilities, and funding shortages for organizing community events as well as routine activities. These in turn translate into the shortage of competent personnel to staff the public offices of shequ.14

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The impact on Party organizations The political impact of the changing social landscape is both visible and profound. The rate of mobility in the urban communities is high compared to the American “bedroom communities,” partly because of the still low rate of home ownership and partly because of rapid economic development. In the previous chapters, we have seen the impact of mobility on Party organizations in businesses and rural villages. In the case of the former, Party organizations have at least a transient organization carrier—the businesses—to possibly attain a degree of organizational stability (although nowhere near that provided by danwei). In the case of the latter, villagers share either a common history or ancestry and have been in interaction with each other for decades if not for generations. In other words, the rural village constitutes to varying degrees an “organic society” with a high degree of permanence.15 Community party building has neither advantage. At least in its current stage of development, the community is still an anonymous mass society that exacts high costs and poses many logistic difficulties for a Leninist party seeking to reestablish its microrule. The established model of recruitment lacks a stable organizational base to be implemented, but the Party continues to insist on the recruiting procedure being carried out in full. In addition, the people in the targeted demography (the young, the better educated, and the more successful) are often too busy and preoccupied with their careers and lives to put joining the Party on their agenda. All the above contribute to the underdevelopment of Party organizations in shequ. The dissolution of danwei is also the process of weakening or in some cases dismantling the vertical integration of the Party, and community party building often represents a transition to horizontal integration based on the contractual institutional principles of the market. The organization-based society is being replaced by a rule-governed one; a danwei-based society is evolving into an individual-centered one. The resulting gradual awakening of the consciousness of rights among citizens is also creating a more assertive society that is reshaping the ways in which the government and the Party operate and relate to the people. A mass society relies much more on the legal system or impersonal rules to regulate interpersonal relations. The acceptance of laws as the arbitrator of human relations tends to heighten the consciousness of rights because the enforcement of laws is premised on the rights and responsibilities of individuals being clearly defined. Barring regression to its statist roots, the community Party is left with the option of only providing service in exchange of loyalty of Party members and influence over the masses. It can no longer make the kind of demand on Party members as its predecessor in the era of danwei routinely made. This shift carries with it profound implications for the future of the CCP, considering that sooner or later the majority of its members and grassroots organizations will be relocated to the communities. Party organizations must

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108 The Chinese Communist Party and China’s Capitalist Revolution find appropriate forms of existence in the community to ensure their survival. Finding the appropriate forms in turn depends on finding an appropriate role to play in the community. Challenges to community party building There have been numerous reports about the difficulties in community party building around the country. For examples, Nanjing’s Hongshan District Party Committee identified on its website the following difficulties. The first is weak Party affairs workforce: some community Party secretaries were from among the unemployed and others were retirees; both lacked the energy and leadership skills. The second stems from the diversity of Party members that made up the community Party: they were in different lines of work and followed very different daily routines; it was difficult to find an agreeable time and place for Party activities and even if they did meet, they lacked a common language because of their diverse backgrounds. The third is the shortage of funding and facilities for Party activities, and the fourth is the lack of interest among Party members in community Party activities. The Organization Department of the Party Work Committee (gongwei) of Buji Street, Longgang District of Shenzhen, identified the following four very similar problems bedeviling the community Party: 1) facility—there was no reliable venue for Party activities and they often had to rent a meeting place; 2) funding shortage; 3) the difficulties in dealing with Party members—they were too diverse in education, ideology, and too mobile; 4) the difficulties to hold election because of the difficulties in gathering Party members together so that elections could take place.16 Zhang Hong of Wuhan Party School also cited the “lack of interests” among retired Party members in the community Party; for these people, “Party activities have lost meaning”; Zhang also pointed out the “blanks” of the Party’s organizational coverage in the private sector and the general lack of interest among the employees (mostly the urban youth, the rehired SOE workers and the peasant workers) in joining the Party.17 Another Party researcher from Beijing Academy of Social Sciences, Liu Jiyuan, identified additional difficulties for community party building, including loose connections between Party organizations and Party members in the community: individual Party members’ vital interests were often not vested in the community and hence they showed little interest in the community Party— “most of them even did not establish formal organizational relations with the community Party.” He also complained that the “party-building resources” (mainly Party members and Party cells) in the community were “not well integrated” and the organizations located in the community (businesses, government organs, nonprofit organization, etc.) were like “flying islands”—separate entities with little to do with the community Party.18 A study by the Organization Department of CCP Jiangxi Provincial Committee identified similar problems in community party building: 1) the old Party

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organization structure within the community could not deal effectively with “flow-by Party members”; 2) too few full-time Party affairs workers; 3) Party members newly arriving in the community were not integrated into the community Party organizations; 4) Party organizations in nonpublic businesses did not fit into the existing structure of the Party in the community.19 From the dozens of investigative reports by Party researchers collected by this author, the following five challenges of community party building can be summarized. Fluidity and anonymity of the community The most direct challenge to community party building is the fluidity and anonymity of the community. If the recruiters of the Party do not know the people around them, recruiting simply cannot take place; if they do not know who the Party members in the community are, they will not be able to organize them to engage in regular Party activities. According to a study by the Organization Department of CCP Chaoyang District Committee of Beijing,20 in the first five years of the new century there was a net inflow into the district of 40,680 mobile Party members (8,136 per year on average); however, the base-level Party organizations only increased by 211 in the same span of time—one for every 192.8 in-flown Party members; whereas nationwide there is on average one Party organization for every 23 Party members. Aging Aging will have a profound effect on China, and its impact on the Party already began to show as a shortage of capable Party affairs workers. The most stable members of the community are retirees, who also have more time at hand than those who go to work every day. The study of the Organization Department of Chaoyang District found that 57 percent of community Party members were retirees and only 8.27 percent were under the age of 35. Nationwide the Party is aging as well. Figure 6.1 shows that in 2008, 77 percent of all Party members were above 35; 18.81 percent were retirees (refer to Figure 4.3), and there were more Party members above the age of 60 (24.58 percent) than under 35 (23.52 percent). Many retiree Party members were no longer interested in Party work; those who were willing to help out often had a hard time adjusting to community party building, which was quite different from what they were used to in the danwei era. Community Party work is far more laborious or physically demanding because of the logistic difficulties cited earlier. In addition, while party building mainly targets the young generation, the retiree Party affairs workers do not connect well with the younger generation because of the large gaps in values, knowledge, skills, ideologies, etc. Community Party positions were not well paid and did not offer long-term career prospects to

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110 The Chinese Communist Party and China’s Capitalist Revolution above 60 25%

46–59 29%

below 35 23%

36–45 23%

Figure 6.1 Age distribution of Party members. (Source: COD, “Intra-party statistics communiqué, 2008,” People’s Daily, July 7, 2008.)

attract young people (this could change though with worsening unemployment). The total result was weak manpower in community party building. Logistic woos Unlike the situation in danwei, where all members go to and from work at the same time, interacting with the same set of people at work and live in close proximity with them after work, the difficulties of arranging a meeting of Party members widely dispersed in both workplace and residence and following different schedules are widely reported. The lack of venues and funding of Party activities was also common. It is difficult to track down the mobile Party members and dig out the “underground Party members.” In major cities, the bulk of the mobile population no longer consisted of peasant workers but of white-collar professionals.21 Party membership rate in the latter was substantially higher than in the former because many, if not the majority, of them came from state sector or were recent graduates from colleges. This made them a much higher priority for the CCP than the migrant peasant workers. The patterns of work and leisure of these people were much more complicated than peasant workers. Community Party affairs work was complex, involving a good deal of coordination among strangers and different Party organizations that normally had nothing to do with each other; it was physically demanding.22 Fragmentation Sorting out the relationships between the community Party and those Party organizations inside the various business and other organizations located in the community can be thorny. In the case of state-owned enterprises (SOEs) or organizations affiliated with the government, many of them rank far

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higher than the community Party (which is ranked at the village level) in the traditional party-state pecking order. They often continue to treat community Party as the grannies of the neighborhood committee fussing about trivial matters. In the private sector, because many private business owners do not support party building in their businesses, many mobile Party members employees are unwilling to reveal their Party member status as discussed in Chapter 5. In sharp contrast to the well-organized Party in the state, Party organizations in communities are in disarray. Finding a role in community Perhaps the most fundamental challenge in community party building is to find an appropriate role or a niche in the community. The community Party must make itself useful to the community to stay relevant. This is by no means easy because it faces many competitors from the market and the emerging civil society. In the public domain, they include environmental advocacy groups, rights protection groups (weiquan zuzhi), religious organizations, physical exercise, leisure and hobby groups, and professional associations, charities, social workers, arts and literary societies, etc. In the private sector, there are property management and security companies, home-owners’ associations, Internet cafés, entertainment clubs, clinics, law firms, employment agencies, and so on. The natural turf of political parties at this level is campaigning for elections. It may be the future role of the community Party but as of now genuinely competitive elections are yet to be fully implemented. As a general-purpose political organization, the community Party does not compete well against those special-purpose organizations in their own domains. Managing the relationships of the Party with them can be very complicated and difficult, and the community Party’s meddling in their affairs could be counterproductive and create frictions in the community.23 Staying “advanced” As a ruling vanguard party it is in the nature of the CCP to assert its “leadership” wherever it finds itself. This causes problems for Party organizations as well as for Party members. Party members are constantly reminded that they are role models exemplifying the virtues of the Party; they are supposed to do more for less and help the masses in need. This has created role expectations for Party members that are tiring to meet and quixotic to pursue in today’s capitalistic environment in China. The retired Party members cannot enjoy peace in a laid-back retirement life—they are urged to continue to exert themselves even after a lifetime’s toil. For the young and middle-aged Party members they are supposed to be working for the Party for free after the eight hours at their jobs, while they would rather lose themselves in entertainment or leisurely activities. For community Party organizations,

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112 The Chinese Communist Party and China’s Capitalist Revolution they are supposed to assert a leadership role in community affairs without the power of the state and minimal organized dependency of the society. To do so requires profound changes in their self-identity, roles, organization structure, and mode of operation. These changes will result in new forms of existence of the Party, leading to the coexistence of two organization models in the same Party, one in power and the other not. As China’s urbanization progresses, the vast majority of the ruling party will no longer be in power.

Strategies of adaptation In an article that was widely disseminated on party-building websites around the country, the Party theorist Wu Yongnian emphasized the Party’s role in “coordination and integration” of community development programs. He proposed to build five systems of the community Party. The first is the organization system, which provides the basic framework coordinating Party organizations at four levels: the municipal/district level, the street level, the community level, and the sub-community levels. The second is the recruiting and training system, which recruits new Party members, does the propaganda work, and organizes meetings and study sessions. The third is the service system consisting of the community service centers; the fourth is the cooperative system in which Party organizations joins force with other organizations to promote community development, and the last one is the evaluation system, which provides feedback on the grassroots Party organizations’ performance. The community Party personnel have a dual role of linking the Party and the masses, serving both the Party and the masses and feeding information for both.24 Community party building occurs at two levels. The first is to get the Party’s own house in order and the second is to refashion or reinvent the Party’s role in the community. On June 22, 2005, the COD issued its guideline for community party building: “Opinions on further strengthening and improving street and community Party building,” in which it stressed the “importance and urgency” of community party building in “consolidating the Party’s social base” during rapid social transformation. Service, coordination among different interests, expansion of coverage, and innovative organizations were emphasized. The CCP wants to remain relevant by carving out for itself a role in providing services needed in the community, such as helping the unemployed, poverty relief, rights protection for the mobile population, and social welfare, and in coordinating the increasingly complex relationships and mediating the mounting conflicts of interests between the various groups and organizations in the community. Getting the Party’s house in order Getting the Party’s house in order consists of routine Party affairs such as seeking out Party members living or working in the community,

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organizing them into Party cells, collecting Party dues, recruiting new members, and organizing study sessions and social activities among Party members. However, it also entails organizational redesign to suit the new, non-danwei environment; it is to regroup the Party fragments scattered by the market on a new organizing principle. Within the communities, the scattered “Party fragments” include mobile Party members, Party cells (active or dormant inside the various business and social and professional organizations located in the community), retired or unemployed Party members and cadres, as well as Party organizations in the local government. Community party building attempts to reintegrate them into a viable network of Party cells so that the Party can extend its organizational coverage and regain its influence over the communities where the majority of China’s population will soon live. This is of strategic importance for the CCP. As discussed earlier, community party builders have limited leverage over Party members. In a “community of strangers” the Party members also have few incentives to actively participating in community Party activities. The first hurdle to party building is to seek out the Party members in the community. As described in Chapter 4, the CCP has mobilized considerable resources of the government, including the police, to get a basic idea of the number of Party members in the mobile population. The Party is also developing a system of “mobile Party member registration,” requiring Party members to establish contact with the local Party organizations wherever they go and record their participation in local Party activities. Since the community Party has little leverage over Party members, who can always hide behind strangers and live in anonymity, ways must be found to attract them to the community Party. The result is the establishment of a network of Party member service centers. On September 8, 2007, the People’s Daily reported a COD survey of 15 viceprovincial-level cities (usually provincial capitals), which claimed that 73.9 percent communities, 92.6 percent Street Affairs Administrations, and 71.2 percent urban districts (or county-level municipalities) nationwide had established Party member service centers, offering business seminars, job skill training, employment referrals, and legal services for Party members; 8,031 phone lines were set up nationwide providing consulting services to mobile Party members. Modest financial support to Party members living in poverty was also available in some cities. At this early stage of development, the effectiveness and sustainability of this Party member service network is still difficult to assess. The footloose attribute of Party members in the community and their lack of organic relations to each other, as well as the absence of a solid organizational base that danwei used to provide, are constantly eroding whatever has been accomplished in community party building. It appears that the key to any possible solution is to maintain a corps of Party affairs cadres who are relatively young, energetic, and up to date with the developments in the

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114 The Chinese Communist Party and China’s Capitalist Revolution community as well as in the country. Party-building positions have been created in communities across the country. The actual titles vary but they all perform similar roles. The party-building director (zhidaoyuan) is in charge of the overall Party activities in the community; he or she is usually a full-time Party cadre from the municipal or urban district Party committees. The organizational liaison (zuzhiyuan) is in charge of building, rebuilding, and maintaining Party organizations in the community. In addition, the Party-affairs liaisons (lianluoyuan) who are usually retired cadres and Party members in the community help out in managing Party members in private businesses, NGOs, and other social or professional organizations. The Yangpu Street Party Work Committee of Shanghai’s new Qingpu District further divided these people into “political and ideological propagandists,” “social stability monitors,” “clean-government watchdogs,” “environmental clean-up coordinators,” and “conflict mediators.”25 Community party builders may or may not work full time and their level of compensation also varies greatly across the country. In prosperous cities like Shenzhen, for example, they tend to be full-time workers and on the payroll of the local party-state. “Grand area Party building”: a new organization model? As the basic building block of the Chinese society shifts away from the vertically integrated danwei to more diverse organizations interacting with each other on a market basis, the structure of the Leninist party fractures. Power and resources are drained from grassroots Party organizations; a crisis situation is created that compels the grassroots Party organizations to search for new organization models that are compatible with the new social environment. The term “grand area party building” (dadangjia) is coined by the CCP to refer to the non-danwei based party building or party building based on a network model. “Grand” is used to contrast to the limited scope of danwei and to emphasize the geographic basis of the new party-building model. Grand area party building is to economize on the Party resources scattered in the community by gathering, regrouping, and integrating them at the community level for more effective use. On the surface, the numeric rules for setting up Party cells remain the same. That is, in principle a Party committee should be established where there are at least 100 Party members in a community; for communities with less than 100 Party members, general branches (zongzhi) or branches (zhibu) should be established as necessary. In Tianjin, one of China’s four provincial ranked cities, there were 1,396 administrative shequ with 125 Party committees, 782 general branches, 489 branches, 2,432 “building branches” (that is, branches based on apartment buildings), and 10,636 Party small groups (dangxiaozu) in 2006.26 These are no longer the Party organizations nested comfortably in danwei; they are instead grafted onto

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the social landscape shaped by market forces and must seek out their own raisons d’etre. The forms and structure of community Party organizations are also more diverse as well as unstable. For example, a Party branch or small group can be established in an apartment building on the basis of the Party members living in that building, but it is unclear what role such a Party cell can play when neighbors on the same floor remain strangers for years if not forever. Instead of being the center of administrative power, community Party organizations now have to adapt their forms of existence and mode of operation for the convenience of the widely scattered Party members on separate daily routines. Party organizations are set up according to the availability of Party members and to the geographic, social, or workplace proximity of these Party members, and can cease to exist if Party members move away or die out. This is a fundamental transformation of the Party at the grassroots level. The Party researchers Li Caoyang and Ren Liang used “four transitions” to characterize this transformation: from state to party,27 from rule by man to rule of law, from compulsory to voluntary compliance, and from leading to servicing.28 In the absence of the coercive structure of danwei, the community Party has evolved in the direction of a political party in the more traditional sense of the word. The CCP is still in power, but many of its grassroots organizations are no longer ruling. The most comprehensive description of the Party’s vision of community party building is found in the COD’s guideline: “Opinions on further strengthening and improving street and community Party-building work,” issued on June 22, 2005, in which it prescribed ambitious roles for the community Party: it was to serve as the platform for party building in the private sector and of the Party’s effort at building “a harmonious society”; it was the main front in the Party’s effort to “expand its social foundation,” and it constituted the organizational network used by the Party to extend its coverage over the massive number of retirees, mobile workers, and the unemployed that flood the communities. The COD recognized the “urgent need of changing the management model and methods of work” of the community Party in coordinating and harmonizing the different interests in the community. In addition, the community Party was also expected to actively participate in community planning and development to “lead the selfgoverning organizations in the community,”29 to “discuss and decide major issues in the community,” and to maintain social stability. They were to provide services to the community at no or low cost. Party and Youth League members should be the “backbones of community volunteer programs.” To strengthen the Party’s capability of social control, the community Party should join force with government agencies in charge of the registration of private businesses and social organizations and with business regulators, keeping each other informed about what they were doing and keeping the Street Party Working Committee well informed about what was happening in the community.

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116 The Chinese Communist Party and China’s Capitalist Revolution A service party? Compared to danwei, the community is infinitely more diverse and complex. This makes whatever role the Party takes on a more difficult one. As the single ruling party with a long history of microrule, the natural instinct of the CCP is to control. For that purpose, it is usually the state (the part of the party-state structure above the horizontal line in Figure 3.1) that provides the power and resources buttressing the domination of grassroots Party organizations. However, the transformation of the social landscape makes this traditional model of exercising power less viable or ineffective. This is a quintessential part of the power shift accompanying the marketdriven social transformation that forces the grassroots organizations of the CCP to reinvent themselves. In recognition of this new reality, General Secretary Jiang Zemin in his report to the CCP’s 16th National Congress set the guideline for community party building as “to construct a new framework of urban community party work with the emphasis on serving the masses.” The aforementioned COD’s “Opinion on further strengthening and improving street and community Party-building work” was intended to operationalize this vision. Cut off from much of the administrative power and resources of the state, the community Party has to sweet-talk its way into the heart of the community by providing services needed by the community. The community Party in some areas operates many service centers or stations for both Party members and the larger community. In Yichun of Jiangxi Province, for example, community Party organizations set up service organizations such as community volunteers association, public interests promotion station, environment surveillance station, athletic and entertainment liaison station, neighborhood mutual help station, civil dispute mediation station, and “get-rich” information station.30 Similar services were also offered by a community in Qingpu district of Shanghai as mentioned earlier.31 The community Party faces a question and a dilemma. The question is: Can these services and roles be performed by other special-purpose organizations or by the market? If they can, then the community Party faces a dilemma: Should it provide them for free? To do so the community Party must have sufficient funding that has to come from the state budget in addition to party dues. If on the other hand it charges fees for its services, then it will be in competition with NGOs and other special-purpose organizations as well as private businesses, compromising its status as a political Party and undermining its public image. For inevitably it will attempt to, with the help of the local state, impose barriers of entry to NGOs and private businesses and create varying degrees of monopoly in selling these services, as is so common today in China’s marketplace. This will add to charges of corruption the Party is already subject to widely. The CCP may or may not be more corrupt than other regimes, but its more extensive exposure to society certainly makes it look so. More importantly, by

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providing these services and performing these roles, the community Party effectively preempts the spontaneous emergence of organizations in these areas, thereby disrupting, retarding, or hijacking the development of the civil society in China.

Assessment The decoupling of grassroots Party organizations from their marketized “carrier organizations” deprives these Party organizations of their raisons d’etre. Once taken out of the “real action”—the day-to-day running of public, businesses, and other types of organization, their previous forms of existence are no longer sustainable. The penetration of the market principles of equal exchange, contractual relations, and above all the individual free will has eroded the organizational integrity of the Party and reconstituted the identity of Party members. When Party members must fend for themselves in the marketplace the same way as non-Party members, Party organizations no longer possess the hold over them. For the rank-and-file, Party membership may be as much a burden as a “political capital.” The undeclared Party members and the dormant Party organizations scattered around the communities testify to this fundamental change in the relationship between Party members and Party organizations. Marketization has led to the expectation that the Party must provide something in return for the loyalty and obedience of Party members. And the Party has responded accordingly with Party member service networks, poverty relief funds for struggling Party members, Party member cooperatives, and other services or privileges to its members. The fundamental assumption of a Leninist party about the relationship between the Party and its members has subtly changed as a result. The CCP could no longer maintain its root systems in the badly eroded soil of danwei. It must replant them in the rapidly emerging communities, which are qualitatively different from danwei in almost every aspect of their existence. As a result, the grassroots organizations of the Party have to seek alternative forms of existence. Community party building is still in its early stages and we cannot tell yet whether a robust model of the Party’s new organizational existence will emerge. The CCP is yet to learn new ways of existence as a Leninist party adapted to China’s new social landscape. It senses a role in “building a harmonious society” but is yet to work out the specific organizational mechanisms for its actualization. Meanwhile, the diverse adaptive experiments conducted by grassroots organizations of the Party in the communities across the country may result not only in the preservation but also in the transformation of the CCP. Multiple scenarios may follow from this preservative transformation. As the single ruling Party, the authoritarian institutional principle long nurtured in its organizational hierarchy will assert itself wherever possible. This is evident in the tendency for the community Party to regress to its statist

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118 The Chinese Communist Party and China’s Capitalist Revolution origin and operate as part of the party-state. The only reliable source of authority for the community Party is the party-state and it is only natural for it to bind itself to the party-state and tap into the latter’s resources and power. This statist tendency of the community Party may have also benefited from the cultural remnants that individuals in the community carry with them from the danwei era; for the rules and norms of that political culture are readily understandable, at least by the generations of people who spent a portion of their lives in the danwei era. The same also goes for the community council. In fact the quasi-governmental quality of community “selfgovernance” is widely noted around the country,32 and in many places a substantial part of the community council’s operating budget is provided by the state at the street, district, or municipal level. The state also routinely assigns various tasks to the community council as if it were part of the government. This is the easy and often preferred way out for grassroots Party organizations—they all want to rule. The second scenario is the emergence of exactly the same situation in village politics in which the community Party finds itself pitched in an intense rivalry with the popularly elected community council for authority and control of community resources. For direct election of the community council is mandated by law and, like village elections, it is rapidly spreading. The two may be driven to conflict by two fundamentally incompatible political logics: the top-down appointment of community Party cadres and popular election of community council officials, which will produce a dualist political structure similar to that in village governance and a similar protracted struggle between the two. This may create the incentives for the community Party to seek popular mandate too, leading to the third scenario—democratization. The community Party committee, like the village Party committee, is supposed to be elected by Party members in the community according to the Party Constitution. Both the community Party and the community council elections have been routinely rigged but both have the potential to become genuinely competitive. There is also the possibility of the de facto merge of the two elections. Bottom-up pressure for more democratic decisionmaking in community affairs is rising and will continue to strengthen. For example, home owners in the community have a much larger stake in community affairs and therefore their political docility cannot be taken for granted. As the community Party evolves into a “service party” that must make itself useful in order to stay relevant, certain forms of “small-town democracy” may emerge from the trend toward community self-governance. For it is entirely conceivable for the community Party to be captured by community interests, especially when the community Party members also own properties or have other vested interests in the community. In this scenario, the community Party is likely to be “normalized”: it becomes an “election party” whose main mission is campaigning for its candidates in electoral contests. When the division of labor among market, state, and

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social organizations leaves little room for the Party, campaigning in periodic elections provides the natural niche for the community Party; between the state and the society, the community Party would evolve toward the society and may even become alienated from the ruling Party. However, to keep up with the changes, stay relevant, and have a positive impact, the community Party needs not only a new identity, new organization forms, and new roles to play but also fresh blood or better human resources. It will be marginalized if its cadre corps consists mainly of marginal people in the community: the old, the retired, the unemployed, the ailing, and those who do not command respect professionally. This is the least desirable scenario to be avoided at all cost.

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7

The Communist Party in a capitalist revolution

There are two things holding a political party together: ideology and organization. In America, the two parties are formed around their ideological differences without elaborate organizations; the Chinese Communist Party in contrast has been kept together by organization during market transition. It is however losing both ideology and organization. It is clear from the preceding chapters that China’s capitalist revolution has had a profound impact on the Chinese Communist Party in almost every aspect of its existence. The impact is most evident in the Party’s 3.72 million grassroots organizations. This final chapter summarizes the findings in the empirical chapters and recasts the argument that the market has remade the Chinese Communist Party. The first section summarizes the main finding; the second section assesses the adaptive strategies pursued by the CCP; the third section outlines and characterizes the general trends in the CCP’s evolution, and the final section recapitulates and qualifies the mainconclusions and works out the implications for the political prospects of China.

The political impact of the market The diffusion of market relations is remaking not only the economy but to a considerable extent also the polity and the society. The comprehensive changes in China rendered by the marketization of the economy and by market penetration into social and political relations have transformed the institutional environment in which Party organizations exist and operate, calling into question the viability of its classic formation. Marketization has caused changes in the relative price that inevitably leads to a power shift and to new departures in institutional development, providing the catalyst to a quiet transformation of the CCP. The implications of this transformation are perhaps no less far reaching than the Dengist economic reforms in Chinese politics. The empirical research in Chapters 3 through 6 conducted under the theoretical framework outlined in Chapter 2 can be summarized in the following nine political impacts of the market.

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The Communist Party in a capitalist revolution 121 Transformation of the institutional environment At a general level, marketization and the market-driven social transformation have created an institutional environment that clashes with and challenges the basic form of the organizational existence of the Party. The institutional principle, the normative order, or the value orientations introduced with the market economy are depriving the Party of the autonomy of its organizational development. They have dislodged the Party’s grassroots organizations from their hosting danwei, which are reorganized under the institutional principle of the market to become market players.1 They also erode the Party’s cultural and political identity as expressed in its core values and code of conduct for Party members, many of which are inherently at odds with the culture of consumerism—the hallmark of the modern market economy and the ultimate engine of economic growth. The Party needs a new cultural identity in a market economy, which is hard to acquire without repudiating much of its Marxist ideological edifice that is diametrically opposed to the basic tenets of capitalism.2 Its grassroots organizations are compelled by the new institutional environment to search for new hosts or new forms of organizational existence, new identities, new roles, new ways of winning influence, and new methods of managing party affairs that are compatible with the market environment. Power shift With marketization, the control of resources has been shifting steadily from the hands of the party-state to the market. Large numbers of the Party’s grassroots organizations are dethroned from the vanishing danwei and left to the fluctuation of market forces. The organized dependency has crumbled and new sources of wealth, power, and opportunities are opened up that are not controlled by the party-state. The combined effect is a subtle but profound power shift from the state to the society. The party-state is no longer the “price setter”3 and its rule-making capability has greatly diminished. In its ever-expanding spheres of influence, the market now dictates the rules of the game on its own terms, punishing deviances by market players of all kinds, including bureaucratic entrepreneurs.4 The CCP has openly resigned to let the market play the main role in resource allocation. When the market takes the lead, the Party is no longer a vanguard. From this perspective, its effort to maintain its “advanced nature” is doomed as long as it retains the giant tail of a mass party. Control over human resources The power shift directly affects the Party’s control over human resources, which is essential for the long-term sustainability of the one-party rule. The development and maturation of the labor market fundamentally undermine this control by providing alternative outlets for leadership talent,

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122 The Chinese Communist Party and China’s Capitalist Revolution professional skills, expertise, and experiences of Party members as well as nonmembers. The Party has to compete for their service and loyalty in the open market. In the political context of China, it remains the case that those in possession of both skills and Party membership may have an edge in life’s competition. However, while one with the right skills or expertise can now be successful without being a Party member, the reverse is no longer true. In the long feud between “red” and “expert” (hong yu zhuan), the scale has decisively tilted in favor of “expert.” For the expert is not only desired by the Party but also in demand on the market. Ending microrule Marketization has broken up the party-state’s monopoly of resources and rewards in society, which is the foundation of the “organized dependency,” which in turn is the foundation of the microrule of grassroots Party organizations. With danwei dissolving or transformed, the grassroots Party organizations that are not assimilated into public, business, or other types of administration are no longer in power. This is an identity-shattering experience for many cadres who are used to issuing orders. The CCP is still the single ruling party but a large number of its grassroots organizations are no longer in power, defunct, or in atrophy, despite the Party’s constant effort to repair and rebuild them. Changing relationship with Party members The end of the microrule not only reduces the power the Party wields but also alters the incentive structure of Party members or would-be Party members. The Party can no longer count on the loyalty and obedience of its members. The growing importance of job skills and professional expertise, technical and technocratic competence—the essential ingredients of modernization—and the diversification of the channels of wealth distribution inevitably diminish the importance of Party membership in the career advancement of individuals. To many members, the Party has become increasingly “partial” or even marginal in their lives. Party membership is but one of the many identities individuals carry around with them and their enhanced bargaining position is rewriting their contract with the Party. Dilution While the size of the Party membership continues to swell, the content of the Party membership is changing rapidly. The expansion of the Party is counterbalanced by the fact that for the ordinary Party members their membership status matters much less than it used to. The Party is no longer the key element in the career successes of Party members as in the danwei era and joining the Party and being a Party member for most people are no longer a

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The Communist Party in a capitalist revolution 123 consuming business that involves major commitment in time and energy. To accommodate the diversity in society, the Party often has to lower the political and ideological threshold in recruiting new members. A community Party secretary in the West Borough of Beijing told me, “Party member now is just an honorary title.” Party members tend to behave no differently than ordinary citizens—they have lost their “advanced nature” and have become indistinguishable from the masses. The disappearance of this difference erases a key feature of the Leninist party. The CCP we see today is a “diluted” communist party with substantially reduced commitment and participation from its members. Atrophy The fluidity inherent in a market economy causes fracture, fragmentation, depreciation, and atrophy of Party organizations built upon the organizational stability of the planned economy era. Marketization erodes the Party’s grassroots organizations by subjecting their hosts (if they still have one) to perpetual fluctuations and uncertainties. Even the preexisting organizations carried over from the Mao era, such as the state-owned enterprises and nonprofit organizations (shiye danwei 事业单位), in which Party organizations have long nestled comfortably in dominance, are now thrust into the marketplace, being toyed by market forces, encountering considerable difficulties, and struggling for survival. The Party has to restructure its grassroots organizations very differently from the organizational model developed in the danwei era to accommodate the flow of market forces. Marketization is also constantly rearranging the job and residential patterns in society and as Party members become increasingly mobile, the entire organizational pyramid of the Party increasingly finds itself standing on loose sand. Pluralization The grassroots Party organizations are also deeply affected by the emergence of new actors, new classes or social strata, new interest groups, and new organizations outside the parameters of the existing Party organizational network. The broad-based recruiting policy of the Party is creating diversity within the Party; the graphing of Party organizations onto the new social landscape with the so-called “grand-area party building” tends to put into the same Party cell an assortment of people from different social backgrounds, on diverging career trajectories, with different interests, tastes, lifestyles, and of different ideological persuasions. Party cells as such are loose associations at best. The cumulative effect of the above is less internal cohesion and more political and ideological diversity within the Party. The tight organization, strict discipline, and the high level of centralization of the Leninist party are disappearing, as is the effectiveness of the Party’s grassroots

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124 The Chinese Communist Party and China’s Capitalist Revolution organizations, which are supposed to be the “fighting fortresses” (zhandoubaolei, or 战斗堡垒) carrying out whatever task assigned by the Party with enthusiasm and determination. To the extent the de facto factions exist in the Party, they are inevitably acquiring a social base and therefore becoming more enduring and less conciliatory. Hence the increasing pluralism as well as the social reorientation toward a market-driven professionalism and materialistic acquisitions has profound implications for the transformation of the CCP. Policy autonomy The CCP’s attempts to co-opt through its recruitment the elite elements of not one or a couple of classes but of all classes invite the penetration of social forces into the Party. With broad-based recruitment, the diverse interests in society will sooner or later find their organized representations inside the Party, which may eventually undermine the policy autonomy of the party-state by diminishing the CCP as an “organization party.” The heated discussions in China of “the rise of interests groups” and the complaints about SOE monopolies in recent years are the signs of things to come. The investigations conducted for this book did not find extensive evidence of Party members forming alliances or undertaking collective actions on the basis of their social backgrounds or class interests, despite the sporadic cases in which Party members or cadres led in protests or even riots. Individualized strategies appear to still dominate intra-party politics as well as people’s decision on whether to join the Party. Nevertheless, as the Party’s ability to indoctrinate, remold, and discipline Party members continues to dissipate, Party members are likely to act more and more upon their interests outside the Party than on those inside it. It takes time for social divisions to work their way up the Party hierarchy to penetrate the nerve centers of the Party.

From adaptation to transformation In the past decade or so, the CCP has not only tried mightily to repair and restore its badly eroded grassroots organizations but also mounted determined efforts to extend its organizational networks into the marketplace and to “recapture” the areas of society that have been ceded to the market. “Leaving no blanks” is the slogan of the CCP’s “party-building” drive. But as seen in the preceding chapters, in the contention between the two institutional principles the market overall has the upper hand, especially at the grassroots level, and has severely impacted almost all facets of the Party’s organizational existence. It will continue to reshape the Party according to its own rules, to which the Party has to adapt. This book does not provide a comprehensive study of the Party’s strategic adaptations to the changing environment; this section will only highlight those aspects of the Party’s

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The Communist Party in a capitalist revolution 125 approach to adaptation observed in the previous chapters that have inadvertently helped the transformation of the vanguard party. Ideological reformulation The logic of the communist rule is aptly summarized by a Chinese political scientist: An important difference between a ruling proletarian party and a bourgeois party is that the proletariat in a socialist country is not just a ruling but also a leading force. … therefore either in the revolutionary war era or in peace-time rule, being highly advanced is the foundation of the lasting rule of the Party under socialist conditions.5 Being “advanced” requires a teleological vision of history that can come only from a well-formulated ideology. From “Marxism-Leninism” to “Mao Zedong Thought,” to “Deng Xiaoping Theory,” to “the Three Stresses,” to “the Three Represents,” to “the Advanced Nature of the Party education,” to “the Scientific Concept of Development,” and so on, the CCP has never ceased in its effort to maintain an official ideology that simultaneously justifies the Party’s leadership role, maintains its organizational hierarchy, and is broadly acceptable to the increasingly diverse Party members as well as the masses. As a result, the ideology has become progressively more pragmatic and inclusive. Policy-wise, even capitalists can accept it. During the past 30 years, the Party leadership has mounted at least seven nationwide ideological campaigns. All followed more or less the same model of the Yan’an Rectification of the early 1940s and all attempted to unify the Party under a common ideological banner. They reflect an organizational imperative as well as an outdated mode of legitimation. However, none of them had any lasting impact and were forgotten almost as soon as they ended. The increasing market-driven social pluralism combined with the Party’s broad-based recruitment policy led inevitably to the differentiations of the Party members. At the individual level, the meaning of being a Party member is different as a cadre vs. a noncadre, as a college graduate vs. an illiterate, as a business executive vs. a clerk, as a private entrepreneur vs. a peasant worker, as an intellectual or whitecollar professional vs. a common laborer, as a poor man vs. a millionaire, as a manager in a multinational corporation vs. a sweatshop worker, as a celebrity vs. an obscurity, as one benefiting from the status quo vs. one disadvantaged by the existing order, as one embracing individualism vs. one believing in collective welfare, as a nationalist vs. an internationalist, and so on. It is increasingly more difficult to find a common denominator among these people except the label—dangyuan (Party member). The very different conditions these groups live in make ideological unity impossible and hence irrelevant at the level of individual Party members.

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126 The Chinese Communist Party and China’s Capitalist Revolution The CCP is not or will not be a vanguard party for long; ideologically it is being “secularized.” Relating to the classes China’s new class structure is the result of the market-driven social stratification. Its formation is influenced by political factors but the primary determinant is the market—the occupational differentiation and the rank ordering of the resulting concentrations of individuals in a new hierarchy of social status, as well as the ways in which these groups relate to each other. Although the class structure or the classes themselves are yet to take final shape and consolidate, the trends in their formation and their relations with the CCP are nevertheless discernable. The urban working class and the peasants are still the majority of the population but their importance to the Party has declined relative to the emerging new classes. Peasants broadly defined are still the largest group within the Party (31.1 percent in 2008). However, recruitment in rural areas declined faster than the reduction of the peasant population due to migration and urbanization. For example, only 20 percent of the new members recruited in 2008 were from the peasants, who still accounted for 55 percent of the population. The falling status of the urban industrial proletariat is an issue presenting the Party with considerable ideological difficulties and political embarrassment. To a great extent, the CCP has largely abandoned the working class to their employers—the capitalists as well as the managers or executives of state-owned corporations. As is elsewhere in the world, the rapid changes in the labor market under globalization and rapid technological change tend to atomize the working class, leaving most of them unorganized and politically impotent. The Chinese urban industrial workers have in general pursued individualized strategies to cope with the fall in their fortune despite the sporadic strikes and protests they mounted at the height of SOE “restructuring” in the late 1990s. In some sense, they are even less relevant to the CCP than the peasantry who still has the weight of its mass and some natural bonds such as tribal and religious organizations. In contrast, the “new social strata,” in particular the middle class, are “sun-rise” classes that have commanded more attention of the ruling Party. The new middle class is dispersed by the diversity and complexity of its various professions and generally prefers individual autonomy to any political affiliation. Their education and professional skills afford them stronger bargaining strength vis-a-vis both the capital and the party-state. The middle class is strategically important to the Party’s modernization ambition and its obsession with social stability. But it is very difficult for the CCP to build reliable and sustained ties with the middle class professionals in the rapidly expanding private sector, who generally see little point in joining the Party and are lukewarm to the courtship of the Party. As a result, the

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The Communist Party in a capitalist revolution 127 Party opts for a strategy of controlling the “fountain head” of the middle class—the college students. On college campuses a very different dynamic operates. College students per se do not constitute a social class but are nevertheless a political force to be reckoned with and hence an important category in discussing party building. Their strategic importance to the Party comes from the fact that they are simultaneously the main source of future cadres of the party-state, the middle-class professionals, and entrepreneurs in hitech industries. They are also more moldable than the adults already entrenched in their career paths as well as world views. With their future wide open, membership in the ruling Party is a potential “political capital” in their future careers. That the college students are the most enthusiastic of all groups in the society in seeking Party membership coincides with the Party’s emphasis on them in recruitment, resulting in the disproportionally large number of new recruits each year from college campuses. In 2008, for example, college students accounted for less than 1.6 percent of the population only but 38 percent of the new Party recruits were college students that year. Objectively speaking, the capitalist class is no lesser a representative of the “most advanced forces of production” than the middle-class professionals or the proletariat. Capitalists are more important to the Party’s modernization ambitions because they are not only the driving force for economic growth but also create jobs urgently needed for social stability—the top priority of the Party. On the positive side, they are essential to any market economy, even a “socialist market economy”; on the darker side, the collusion between money and power (qianquan jiaoyi) has become so pervasive and is forging such a strong bond between the political and economic elite— due in no small measures to the fact that a large number of private entrepreneurs share the same roots with party-state cadres—that a powerful, privileged, hybrid ruling class may emerge that is not unlike the “bureaucratic capitalist class” the CCP so painstakingly overthrew in 1949. This is by far the most serious danger facing the CCP and, given the power and incentive structure within the Party in its current form, the CCP is almost defenseless against this threat. Therefore, the increasing pluralism of the Chinese society is politically significant and the CCP is keenly aware of it. In the pre-1949 feuding between the KMT and the CCP, the KMT recruited from the old social elite while today’s recruitment emphasis of the CCP is mainly on the new social elite—the middle-class professionals, the entrepreneurs, and the people with social status and influence. This similarly leaves the masses a potential recruiting ground for possible oppositions just as the KMT left the peasant masses to the CCP and was as a consequence driven from national power. The Party is on the whole vigilant on this possibility; it has never ceased its organizational effort among the working masses. One may point to the disproportionately small size of the working masses in the Party’s total membership compared to their share in the larger population, and their

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128 The Chinese Communist Party and China’s Capitalist Revolution disproportionately even smaller voice inside the Party relative to their share of the Party membership, but it is remarkable that the CCP’s recruitment guideline still puts considerable emphasis on workers and peasants. In sum, the CCP now has to cope with complex problems emerging from the complex class relations—it is no longer dealing with isolated dissidents but with potential political forces rooted in the class divisions in society. In theory, an autonomous and cohesive Party (that is, an “organization party”) is in a position to mediate the conflict of interests among the classes, but the “reclassization” of the Chinese society is undermining both the autonomy and the cohesion of the CCP by melting down its grassroots organizations and dividing its members. Coping with the problems of compatibility In a fundamental sense, the objective of party building in the reform era is to overcome the compatibility problems between the Leninist vanguard party and the market environment in which it now operates. Unlike the “East Asian developmental state,” which usually stood outside businesses as the senior partner in the government–business partnership for economic development,6 the CCP seeks to plant its organizations inside businesses for a raison d’être that is political and ideological, not inherently business oriented. The issue of compatibility emerges when the hosting organizations of the party cells become market players while these cells remain part of a political hierarchy built for nonbusiness purposes. It does not present a problem unless Party organizations insist on being at the center of the business action. The microeconomic intervention by a Leninist party constitutes a unique type of state intervention rarely seen in history. It is a curious strain of the “market vs. hierarchy” analytic dichotomy because the “hierarchy” here is neither the state nor the corporation but a political party. Business organizations in a market economy are in a state of perpetual change. The Party organizations embedded in business organizations in comparison needs stability to enact the principle of top-down control, which is a defining characteristic of a Leninist party. To build and maintain the domination of party organizations inside enterprises that are being created and eliminated all the time is inherently unsustainable. The CCP’s general approach to enterprise party building has been market friendly. Party organizations frequently find it necessary to yield to market imperatives and adopt market practices to make its organizational form, policy and operation compatible with market rules. They typically have to redefine their roles, reshape their goals, and adapt their strategies to harmonize with the business environment. In the process, they have also adopted the values, norms, and standards of the market. They have to become market players themselves in order to avoid being marginalized. But when they do so, they lose their political identity and develop interests that tend to alienate them from the Party.

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The Communist Party in a capitalist revolution 129 “Following the money” With some exaggeration it can be said that it is money that is driving China today, including to some extent party building. It is imperative for individual Party organizations to “follow the money,” so to speak, to be in “the center of action” in order to stay relevant if not to regain microrule. As a ruling Leninist party, the CCP will always look for or attempt to create roles (such as the ill-defined role as the “political core” for the enterprise Party) for its extensive grassroots organizations so that they would not fade into irrelevance. Much of the CCP’s party-building effort is spent on finding such roles. However, in a self-regulating market economy and increasingly autonomous society there are very few natural roles for a political party, and as a result, the activities of the ruling party tend to become counterproductive meddling. In SOEs, Party organizations’ effort at remaining at the center of business decision-making tends to define for them a role that overlaps with that of business administration and is hence redundant. In private businesses such a role is next to impossible to find if the leader of the enterprise Party organizations is not also the owner of the business. In urban communities, Party organizations tend to take on roles that are better performed by more specialized NGOs and in rural areas the power struggle between the village Party and the popularly elected village council is yet to find an institutionalized solution.

Servicing In addition to the shortage of natural roles, the substantially reduced dependency of the masses and Party members on Party organizations and the rising costs of monitoring Party members as well as the ordinary citizens have also helped to redefine the relationship between the Party and the masses and between Party organizations and Party members. Increasingly, the grassroots Party organizations find it impractical to commandeer their way as they used to in the danwei era and realize that they have to provide services to establish their influence and shore up their authority. This is especially true for the community Party. In shequ the community Party must seek out the undeclared Party members and one way of doing this is to lure them out of their hideouts in the mass society with services such as poverty relief, job referral, and training. Service is also the community Party’s approach to relating to the masses. It is unique and yet characteristic of the CCP to expand its interface with the population while its grassroots organizations are either losing relevance or in atrophy. In a market economy, in businesses as well as in communities it is difficult to translate the overall status of the CCP as the ruling Party into the microrule or leadership roles of its grassroots organizations that often find that they have to maintain their relevance and legitimacy by offering services. While “serve the people” (wei renmin fuwu) is reenacting the Maoist dictum and hence consistent with the Party’s ideological and cultural tradition, open endorsement of

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130 The Chinese Communist Party and China’s Capitalist Revolution giving priority to Party members in matters such as job opportunities and poverty relief is betrayal to that tradition. It is a radical departure from the CCP’s long proclaimed self-identity as “a party without its own special interests except those of the working class and the largest majority of the people” (CCP Constitution). In a potent interaction between the Party’s tradition and the norms of the market, the CCP is becoming a “service party” in a strange way—serving to self-serve. In sum, the strategies the CCP has adopted are altering its ideology, changing its social composition, and driving its evolution away from a mass-oriented path in a more elitist direction. Specifically, ideological rerationalization has derevolutionized the official ideology, making it acceptable even to the capitalist class; coping with the compatibility problems leads to the assimilation of the Party into market institutions and the transformation of Party members into professionals of all walks of life; “following the money” tends to become counterproductive meddling and does little to stem the marginalization of the Party’s grassroots organizations in the marketplace; and the need to provide services in order to stay relevant is transforming the CCP from an arrogant, domineering vanguard party to one eagerly responding to popular sentiment. What then can we say about the prospect of the CCP?

What is becoming of the CCP? The Chinese Communist Party in a market environment is a package of contradictions. It is in transformation but unclear what into. The isomorphic effect of the market on it is however unmistakable. Organizationally, it is increasingly unstable as a Leninist party; the dismantling of the command economy deprives it of the institutional foundation of its organizational cohesion, and the market-driven social transformation creates heterogeneity among its ever more massive and mobile membership. Unity or uniformity is a thing of the past, as is its organizational efficacy at the grassroots level. The broad-based but elite-oriented recruitment practice is pulling the Party in opposing directions. Most notably it is creating a party of the middle class. A middle-class party Although the middle class according to most estimates is currently only between five to fifteen percent of the population, its representation in Party membership is disproportionately larger. Figure 7.1 disaggregates the new recruits of 2008 by social background; it shows that workers and peasants combine to make up only 27 percent of the total membership despite that they were the overwhelming majority of the population and 41 percent of the current Party members. In addition, the majority of Party members in rural areas are township and village cadres, many of whom qualify at least as “income middle-class” instead of ordinary peasants. Figure 7.2 illustrates the

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The Communist Party in a capitalist revolution 131 Others 9.55%

Workers 7.45% Peasants 19.91% Students 38.01% Party-state Bureaucrats 4.38%

Professionals 20.70%

Figure 7.1 Social composition of 2008 new recruits. The exact Chinese terms used by the COD for the categories are as follows: workers, 工人; peasants, 农牧渔民 (farmers, ranchers, and fishermen); Party-state bureaucrats, 党政机关工作人员; professionals, 企事业单位管理人员、专业技术人员 (managers, professionals, and technicians); students, 学生; others, 其他职业. (Source: COD, “Intra-party statistics communiqué, 2008,” People’s Daily, July 7, 2008.)

recruiting bias toward the middle, especially if we treat college students as future middle-class professionals and cadres. The only anomaly in Figure 7.2 appears to be “party-state bureaucrats” (or cadre) category. Cadres constituted 8.18 percent of the Party population but accounted only for 4.38 percent of the new recruits of 2008. One hypothesis is that because most of the people working in party-state bureaucracies were already Party members, the candidate pool was relatively small here. All of the 4.38 percent new

40

38.01

35

31.1

30 25 20.7

19.91

20

22.23

15 10

7.45

9.66

8.18

5

2.65

9.55

7.38

4.38

0 workers

peasants

students

New recruits

party-state professionals bureaucrats

others

Share in total membership

Figure 7.2 Recruiting bias, 2008 (given as percentages). (Source: same as Figure 7.1)

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132 The Chinese Communist Party and China’s Capitalist Revolution recruits, like most of the 8.18 percent Party members in this category, should fall into the middle-class because they were mostly likely to be entrylevel civil servants or white-collar office workers, most likely college educated as well. With continued expansion of the middle class, the CCP is likely to become a party not of workers and peasants as the Party Constitution stipulates but one overwhelmingly of the middle class. The middle class is not known for its political potency but the middle classization of the CCP is taming its Maoist excesses—it deideologicalizes or “secularizes” the Party. Growing pains of a “secularizing” party The Chinese middle class is generally conservative;8 the “middle-classization” of the CCP carries with it both elitist and populist tendencies to generate tension in its evolution. As a ruling party, its recruitment naturally gravitates toward the influential, especially the elite of the newly emerging and fastgrowing socioeconomic sectors on which the Party bets the nation’s future. This “elitization” however is not meant to be class specific—the CCP wants the elite elements of all classes or social groups, both privileged and underprivileged, ostensibly to deprive any potential opposition of its leadership talents. On the other hand, its founding ideology also requires the CCP to root in the masses, although its purpose has shifted from mobilizing to controlling the population. The result is that the CCP is evolving in the corporatist-elitist direction while dragging a gigantic tail of a mass party. Either way it leads to the “secularization” of the Party as it “melting into the background”—Party members become increasingly indistinguishable from ordinary citizens and Party organizations assimilated into the institutions of a market economy. The continued expansion of the Party membership fueled by broad-based recruitment wears down the “advanced nature” of Party members to “secularize” them. Li Yanxi, deputy director of the Research Office of COD, thus describes the dynamic of unbridled expansion of Party: [It] allows some people who do not meet the Party-member standards to easily get into the Party and, once in, these people would influence other Party members to increase the size of substandard Party members. … The more Party members, the more of them would not be able to serve as role models for and hence have a negative impact on (the masses).9

Li Yi, a Party expert, worried about the Party becoming a “mass organization.”10 Rang Yihui, a party school lecturer, used “the law of diminishing returns” in economics to describe the effects of the continued expansion of the Party.11 Indeed, as he points out, size alone does not increase the staying power of a ruling party in a non-democracy. Table 7.1 shows that in the mid-1980s many of the ruling communist parties had much higher party

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The Communist Party in a capitalist revolution 133 Table 7.1 Size comparison of the ruling communist parties in the mid-1980s Party Korean Workers’ Party (North Korea) Communist Party of Romania Communist Party of Czechoslovakia Socialist Unity Party of Germany (East Germany) Communist Party of Bulgaria League of Communists of Yugoslavia Hungarian Socialist Workers’ Party Communist Party of the Soviet Union Communist Party of Cuba Polish Unified Workers Party Albania Party of Labor Mongolian People’s Revolutionary Party Chinese Communist Party1 Communist Party of Vietnam Lao People’s Revolutionary Party

Size of membership (10,000)

As share of the population (%)

320 350 167 330

16.0 15.4 15.4 13.8

93 220 87 1900 70 212 14 8.8 4775 220 8.4

10.4 9.5 8.2 7.0 6.4 5.7 4.7 4.6 4.2 2.9 1.7

1

CCP figures are for 1987.

Sources: Xiandai zhijie zhengdang, Beijing: Qiushi chubanshe, 1989; also cited in Rang Yihui, “An exploration on controlling the number of Party members,” Hunan Shangxueyuan xuebao, no. 3, 2002, pp. 92–93.

member-to-population ratios than the CCP then or today but collapsed just the same. “Secularization” also takes place in the form of professionalism. It is the professional expertise and technological/technocratic competence—not ideological virtues—that matter for both Party members and Party organizations in real life; they may in the long run refashion the Party into an elitist club of skilled professionals or technocrats (possibly along the line of Singapore’s perennially ruling People’s Action Party), while the “gigantic tail of a mass party” melting back completely into the populace. Or conversely, the elite club may be burnt down by the democratization of the Party, which is likely to result in the breakup of the Party along class lines or interestsgroup divides. Meanwhile, the Party would continue to evolve in two directions and develop two wings: one in power, one increasingly not. The contradiction of intra-party democracy To accommodate social diversity the CCP leadership appears to be genuinely motivated to expand “intra-party democracy” based on the “primacy of

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134 The Chinese Communist Party and China’s Capitalist Revolution party members” (dangyuan de zhuti diwei—党员的主体地位, in other words, party members instead of party leaders should be the sovereign of the Party). However, party building so far has followed the same old top-down methodology, i.e., creating or inserting party organizations in all strategic social spaces and recruiting, promoting or demoting party members by Party authorities from above. This approach reinforces and perpetuates the authoritarian power structure in the Party hierarchy. Under these circumstances, intra-party democracy is self-defeating—democracy is impossible when the worth and status of the individuals in the electorate are bestowed from above. Fortunately, in today’s market economy these are no longer entirely bestowed from above—they can be earned from the marketplace as well. To fall or not to fall? As stated in the Introduction, this book does not directly pursue the question of survivability or sustainability of the CCP. There are plenty of empirical evidences in the book that lend support to MacFarquhar’s view of a deteriorating CCP; however, these evidences do not necessarily repudiate the majority view of a stronger and more resilient CCP. The CCP’s organizational hierarchy is built with metal frames instead of piles of stone or brick—it’s more like the Eiffel Tower than the Egyptian pyramid and can stand on loose sand, in water or mud (although not on shifting ground). Although infested with rust and deteriorating at the base, the whole structure is in no immediate danger of collapse as long as the ruling elite can hold together and are responsive to society. The CCP is capable of and in fact has a natural tendency to evolve into an exclusive club of ruling elite (and many such clubs at the local levels) with considerable internal cohesion regardless of the conditions of its grassroots organizations. The strength, the stability, the higher level of institutionalization, and the tight grip on power observed by scholars are also true but they come mostly from observing the part of the Party that constituting the state. To many this is the most important part and indeed it has attracted most scholarly attention. This study, however, has largely left it out in order to concentrate on delineating the impact of the market. To put it in perspective though, this part of the CCP accounted in 2008 only for 2.35 percent of all Party organizations and only 8.18 percent of all Party members worked in the party-state bureaucracies (党政机关)—many if not most were ordinary Party members holding no offices. However, the growth of interests groups (i.e., legitimized corruption) is the cancer of the party-state and the biggest threat to bring the structure down. Strong or weak? There is a tendency in the research literature to conflate the Party with the state. The two are intertwined but distinguishable nevertheless. The insights

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The Communist Party in a capitalist revolution 135 yielded from this study lead us to suspect that the observed strength of the Party is in fact a function of the development of the state—the rationalization of state bureaucracies that continue to serve as the “carriers” of Party organizations and from which Party organizations acquire administrative competence, professionalism, and a performance ethos. The CCP organizations in the state do not suffer from the “carrier” problem but are not immune to assimilation. Yongnian Zheng argues that the reform era has seen the transformation of the CCP from a revolutionary ruling party into an “administrative party” and is currently at the early stages of a transition into a more conventional political party.12 An “administrative party” is structurally assimilated into public administration. I submit that many of the strengths accredited to the Party are in fact attributable to the state; for the criteria commonly used to assert the strength of the Party, such as meritocracy, rational bureaucracy, “good governance”, better decision rules, and more institutionalized procedures etc., describe the classic Weberian bureaucracy of the modern state. Political parties are evaluated on quite different criteria because they play different roles and serve different purposes. Whether the CCP can function effectively as a “normal” political party is the real test of its strength. In a sense those grassroots organizations of the Party that are detached from administrative power have already completed the transition to a conventional party, but their performance so far has been abysmal. The relative immunity of the party-state from the atrophy at the grassroots does not, however, lead one to conclude that the Party’s grassroots organizations are irrelevant. They matter a great deal when it comes to the long-term transformation of the CCP. They are the floodgates through which social and economic forces penetrate and cause changes in the Party; they define for the general population who the Party is and what it stands for; they are the bridge between state and society, and the “handles” by which the people hold the Party “reputable” if not accountable. They help to shape the self-identity of the Party and the Party elite’s perception of the social conditions. They are the candidate pools from which future leaders of the Party are drawn and in which these leaders spend their formative experiences. Their importance will rise dramatically if the CCP succeed in introducing intra-party democracy, either in the original Leninist tradition or in the various forms experimented on today. The existence of these grassroots organizations enables us to draw the following conclusions.

Conclusions and implications The Chinese Communist Party as we knew no longer exists. The ruling party that we see today in China is but a shadow of its past. The pages of this book have shown that in subtle but fundamental ways the Chinese Communist Party is undergoing profound changes in a host of important areas: its class base, the social composition of its membership, the relationship between

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136 The Chinese Communist Party and China’s Capitalist Revolution Party members and Party organizations, its organizational forms and mode of operation, its resource control and ways of exercising power and influence, its values, culture and ideology, its policy orientations, its mission and identity, its roles in society and basis of legitimacy, and so on. Almost every aspect of its being is being eroded and reshaped by market forces, with which the Party has wrestled heroically to preserve its power, domination, and organizational integrity. In the struggle to adapt to the market environment, the CCP is gradually reinventing itself. The Party has been transformed from an avowedly “party of the proletariat” to one that attempts to speak for the entire society, from a party that suppressed the market to one embracing it, from a party running a planned economy to one whose interests are deeply rooted in the capitalist world economy, from a party of ideology to one of practicality or pragmatism, from a party dominated by paramount leaders to one accentuating institutionalized power and political processes, from a party of revolutionary internationalism to one fixed on nationalism, from a party whose grassroots organizations are comfortably nestled in danwei to one standing on loose sand, from a party that advocated thrifty living and self-reliance to one embracing consumerism, from a party that exalted the masses to one cozy with the elites, and from a party of class warfare to one attempting to “build a harmonious society.” These 10 transformations are neither trivial nor superficial. They lend credence to the claim that the market has transformed the Chinese Communist Party. In Chapter 2 we have characterized the classic CCP as “an elite-dominated mass party, an organization party or a party without a definitive social base, a party of personal interests, and a ‘vanguard’ party striving for legitimacy by winning people’s hearts but not their votes.” All these features are being erased by market forces. Under market-driven social stratification, Party members are being differentiated into different classes or attached to different interest groups; they are acquiring other identities that inevitably undermine their devotion to the Party (i.e. dangxing, 党性). The result is the erosion of the autonomy and the internal cohesion of Party organizations, which can eventually become so serious that the CCP may cease to be an organization party. The demise of the “organization party” in turn may jeopardize the CCP’s self-prescribed role of “lead all and coordinate the interests of all” and end its pursuit of legitimacy by “winning people’s hearts but not their votes.” Instead of a party without a definitive class base, the organizations of the Party in different sectors of the society may acquire different social bases and become anchored on different constituencies. The acquisition by Party members of class identities or interests-group affiliations may eventually give rise to the struggle for their shared interests, transforming the CCP from a “party of personal interests” into a tool for collective actions in the looming class warfare. Time has indeed changed. In Chapter 1 we have discussed Schurmann’s argument about the critical role of organizations in replacing the decimated

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The Communist Party in a capitalist revolution 137 old social system and maintaining the new social order created by the revolution. Today, with the return of market-driven social stratification, a new social or class system is taking shape and gradually displacing Party organizations in providing the basic order in society, beginning to reverse a long history in which the entire society is structured by the ubiquitous organizations of the ruling party. For, as we have seen in the preceding chapters, being marginalized, torn asunder by market forces, and challenged by the new organizing principle of the market, Party organizations, especially at the grassroots level, are no longer capable of that role. Nevertheless, a main objective of the CCP in rebuilding its grassroots organizations against all odds is so that they can integrate and stabilize the diversifying society—they are intended as an instrument for building a “harmonious society.” The CCP is still holding on to the old ideals of a Leninist party, striving to establish similar control over the economy and the society through its grassroots organizations as if in a planned economy. However, China’s transformation into a market economy raises serious doubts about the validity of maintaining millions of tightly knit grassroots organizations. While an extensive organizational infrastructure may be necessary to run a planned economy, a market economy has natural mechanisms for coordinating economic activities and integrating society. Wiring the entire society with the grassroots organizations of the ruling party serves no real purpose other than an irrational fear of being deposed from power. The rebuilt grassroots organizations so far have yet to prove their value in social control that is commeasurable with the heavy costs of their maintenance. They will have a real life only when they become genuine associations of Party members, instead of being forced together. In sum, the dynamic of political change in China is driven by two powerful, contending, and for the most part incompatible forces that vie to shape China’s political prospect. The influence of the market is pervasive and prevalent but the Party’s resistance is also stubborn and persistent. That prospect therefore is uncertain, variable, and in any case defies easy categorization. The contention between the two also creates a situation ripen for institutional innovation. Regardless what will become of the CCP, this much is clear: whatever political system emerges in the end, it will be a strange animal like no others. Numerous implications can be drawn from the findings of this book. I will however focus on the issue of democratization—if only for the popularity of the topic. Here we see a mixed picture. Despite the disastrous failure of Mao to keep the CCP alive as a revolutionary party, the Party has so far shown that it is not ready yet to become a “normal” ruling party. It still resists being “routinized” into a party of representation merely reflecting instead of shaping the preferences of the populace. The leaders of the Party will always be tempted to preserve the vanguard party structure because their positions are best served by it—barring the emergence of a Gorbachevlike idealist (or, to some, naïveté) at the top.

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138 The Chinese Communist Party and China’s Capitalist Revolution Does this mean that the CCP cannot make the kind of transformation the KMT underwent in Taiwan? Indeed, the CCP not only strives to preserve the vanguard party but also continues to monopolize organized political expression. The KMT attempted exactly the same before Taiwan’s democratic breakthrough in the mid-1980s. The breakthrough was made possible by continued and relatively open local elections even under the martial law13 and by a market-based economy that ensured a degree of autonomy for the society. It is the pluralistic competition under conditions of a market economy that built up the pressure to have eventually forced the transformation of the KMT. As long as there are no meaningful local elections, similar transformation of the CCP is unlikely. Today’s mainland China is already a vibrant market economy. Competitive elections at the grassroots level—in rural villages and urban communities both in and outside the Party—however slow, agonizing, and problem ridden, are mandated by law and implemented ever more widely. The possibility of competitive elections moving up the political hierarchy cannot be ruled out entirely either. In fact, a good amount of pilot programs have been carried out around the country in the past 15 years to elect township- or even county-level party-state officials. Election of public officials to deputy positions by local people’s congresses has reached much higher levels (such as deputy mayors and provincial governors). It takes time for manipulated and controlled “elections” to become genuinely competitive as voters develop greater stakes in these elections with the steady increase of private properties, conflict of interests, as well as externalities of human activities in the ever more densely populated communities. Inside the Party, at the top, the competition among Party elite for the top job without the arbitration of a paramount leader makes election (by the Central Committee of the CCP) the most obvious choice for legitimate succession;14 at the bottom, the Party leadership’s effort to shore up legitimacy and curb corruption may eventually connect with the Party’s grassroots diversity to create both the incentive and the momentum necessary for “intra-party democracy” to gain traction—by enfranchising mass Party members. For the time being, the CCP is the driving force for democracy despite its overall suppression of democratization. Democratic initiatives (including both village and community elections) tend to come from above rather than from below. In a strange twist, democracy practiced in certain ways is more useful to the Party than to the people, as the Party selectively utilizes democratic procedures to serve its objectives. However, history has shown that top-down democratization has limits and is easily reversed; it must be connected to bottom-up pressure from the people to become genuinely meaningful and has staying power. But so far there have been remarkably few overt signs of societal demand for democratization.15 It appeas what the people want is not democracy per se—it is what they can get from democracy that matters to them; democracy is yet to acquire moral value in the Chinese political culture. The numerous but sporadic popular protests were mostly about bread-n-butter (or rather,

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The Communist Party in a capitalist revolution 139 rice-n-noodle) issues and had little to do with democratic ideals. This lack of bottom-up pressure can be attributed to two main factors. First, the CCP regime as a whole has so far been surprisingly responsive to popular demands and public sentiment, which depressurizes democratization; the lack of accountability in the current system is made up for by a quick responsiveness that is usually less encumbered by legal complications and bureaucratic immobility. The second factor pertains the fact that so many people have benefited from the CCP’s reform policies and programs, and so many social elite have been co-opted into the status quo.16 Neither can be taken for granted though, especially considering the everwidening gap between the rich and the poor, the growing sense of injustice among the masses against the rise of a privileged class, and the apparent inability of the CCP to stem corruption. Rapid economic growth will not go on forever and the hardening of interests groups within the party-state can render it incapable of responding to the masses. The resulting tension in the society may cause the ground to shift underneath the party-state and, if China is lucky, provide the impetus for progressive political reforms. Shifting balance of power from the state to the society, although still limited, provides a generally favorable context for bottom-up pressure to emerge and gain momentum someday and somehow. Social change may eventually turn the party’s extensive (3.72 million in 2008) grassroots organizations into a hotbed for pluralistic competitions, generating the bottom-up pressure for intraparty democracy in spite of the Leninist contradiction cited above. And once made up of independent thinking, property-owning, rights-conscious, and more dignified Party members, the gigantic tail of the Party may well turn around to wag the dog. In addition, it is in competitive elections that the grassroots organizations of the Party may be reenergized: they would find a new mission, a new identity, new raison d’être, and new relevance with which they could develop new relationships with the masses. Their turning into an “election party” would mark the completion of the CCP’s transformation. “Intra-party democracy” in turn may “spill over” to connect with the pluralism in society to give broader democracy a boost. In the words of the democratizers in the CCP, it is to “promote people’s democracy with intraparty democracy.”17 Therefore Dickson’s earlier pessimism about the CCP’s ability to adapt and China’s prospect of democratization18 needs to be reexamined in the larger context of market-driven transformation of China’s economy and society, which inevitably causes important changes in the ruling party and gives rise to new political dynamics. These dynamics are at least more open to the possibility of democracy. The doomsday scenario still cannot be ruled out entirely but no longer seems inevitable in this light. Finally, some qualifications are in order. I have repeatedly stated that the emphasis of this book is on the impact of the market, not on the Party’s strategic adaptations. The primary objective of this book is to identify, describe, and understand the structural forces in a market economy that shape the CCP’s evolution. Nevertheless, it is the interactions between the

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140 The Chinese Communist Party and China’s Capitalist Revolution Party and the market that are remaking the CCP. The book is elaborate on what the CCP no longer is but sketchy on what it is becoming of, which depends in large measures on the choices the Party makes. These choices are important, but they have to be made within the constraints and context outlined in this book. With the advancement of “intra-party democracy,” which seems to be gaining some traction in recent years, what we have dealt with in this book should only become more relevant with the passage of time.

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Notes

1 Introduction 1 While working on this book, the world was plunged into a deep recession by the massive financial meltdown on Wall Street, which hit Western nations particularly hard. In contrast, China’s economy achieved an impressive 8.7 percent gross domestic product (GDP) growth in 2009 and took the lead out of the recession. The sudden surge of China’s clout and influence was marked by heated but short-lived discussions in the Western media of ideas such as the G2 (meaning the United States and PRC were in partnership in managing world affairs) and Chimarica (brief for “China–America,” highlighting the close integration of the world’s two largest economies). For a while the fact that China was still a communist country did not seem to matter anymore; the CCP seemed to have disappeared into a black box that was hidden away. 2 That is, if we use the year the CCP formally adopted a “socialist market economy” as the marker. 3 As I have written elsewhere, the driving force behind China’s hyper-growth is not solely the market; the communist institutions have also played an important role, especially in the early stages of the reform era. However, marketization of the economy is ultimately responsible for China’s economic miracle. 4 B. Naughton, Growing out of the Plan: Chinese Economic Reform 1978–1993, New York: Cambridge University Press, 1995. 5 It is marked by local state corporatism (J. Oi, Rural China Takes off: The Institutional Foundations of Economic Reform, Berkeley, CA: University of California Press, 1999) and bureaucratic entrepreneurialism (L. Gore, Market Communism: The Institutional Foundations of China’s Post-Mao HyperGrowth, Oxford University Press, 1998). As the studies conducted by a number of scholars have shown, the dominant players in the Chinese market are state actors instead of private entrepreneurs, especially earlier in the reform era. See also V. Nee, “Organizational dynamics of institutional change: politicized capitalism in China,” in V. Nee and R. Swedberg (eds), The Economic Sociology of Capitalism, Princeton: Princeton University Press, 2005, pp. 53–74. M. Blecher, “Developmental state, entrepreneurial state: the political economy of socialist reform in Xinji municipality and Guanghan county,” in G. White (ed), The Road to Crisis: The Chinese State in the Era of Economic Reform, London: Macmillan, 1991, pp. 265–291. 6 The Chinese economic boom started from the early 1980s; our focus, however, is mainly on the period since the CCP officially decided to adopt a socialist market economy in 1992, in the aftermath of the collapse of communism in Eastern Europe and the demise of the mighty Soviet Union.

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7 That is, privatization. Unlike the former communist states in Europe, China did not undertake a fundamental privatization; the state-owned enterprises (SOEs) still control the commanding heights of the economy. 8 “市场在资源配置中的基础性作用” is the precise wording in the Party’s 1992 “resolution on building a socialist market economy.” 9 COD, “Dangnei tongji gongbao, 2008 (Communiqué of intra-party statistics of 2008).” Xinhua News Agency, July 1, 2009. 10 Available at http://en.wikipedia.org/wiki/List_of_countries_by_population (accessed on August 2, 2009). 11 In 1999, the Party’s COD conducted a survey of 300,000 party members about their values and ideological beliefs, and the results shocked the Party authorities in Beijing, who have since launched a series of ideological campaigns to revive the faith and spirit of the Party members. Shocked by a survey of 300,000 Party members, the Party Centre will initiate intra-party education campaign (Liaowangdongfang Zhoukan, November 23, 2004). 12 This refers to the situation that the people, under the organizational structure of the communist system, depended on the party-state for the supply of their basic needs, such as jobs, housing, food rationing, consumer product allocation, and so on. See A. Walder, Communist Neo-Traditionalism: Work and Authority in Chinese Industry, Berkeley, CA: University of California Press, 1986. 13 Kenneth Lieberthal’s talk at the East Asian Institute, National University of Singapore, May 31, 2006. 14 See for a concise summary of it in P. Berger, The Capitalist Revolution: Fifty Propositions about Prosperity, Equality, and Liberty, New York: Basic Books, 1986. 15 R. J. Cooper, The Beijing Consensus, London: Foreign Policy Centre, 2004. However, Ramo does not explicitly mention authoritarianism as a key ingredient of the consensus, but it is alluded to when he emphasizes the importance of political stability. 16 M. Oksenberg, “China’s long march ahead,” South China Morning Post, October 1, 1999. 17 See, for example, X. Lü, Cadres and Corruption: The Organizational Involution of the Chinese Communist Party, Stanford, CA: Stanford University Press, 2000. 18 For instance, at an informal discussion at the East Asian Institute of National University of Singapore in May 2000, David Shambaugh put the issue in focus by proposing the question for discussion: “Within five years, would the CCP still be existence?” By now we all know that there is still a ruling party in China which still calls itself “communist party”; but how “communist” is it? Also in Singapore, at a dinner reception in the summer of 2006, Andrew Walder spoke about his experiences of being consulted by U.S. government officials and business people on China; one of the most often asked questions was “when would the CCP collapse?” 19 F. Schurmann, Ideology and Organization of the Chinese Communist Party, Bekerley: University of California Press, 1966. See the Prologue. 20 V. Nee, “The emergence of a market society: changing mechanisms of stratification in China,” American Journal of Sociology, 1996, vol. 100, pp. 908–949. 21 The similarity is however deceiving because of two factors: first, these social elite are not preexisting; they are instead the product of the reforms led by the Party. Secondly, the CCP currently faces no strong challengers to its power as the KMT did before 1949—there are no organized political forces championing for the downtrodden masses other than the CCP itself. 22 A detailed explanation of the “grassroots organizations” of the Party will be provided in Section 1 of Chapter 3.

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23 For a more extended literature survey, see the introduction of Brodsgaard, K. Erik and Y. Zheng (eds), Bringing the Party Back in: How China Is Governed, Singapore: Eastern Universities Press, 2004. It suffices to say that the earlier and rather voluminous literature on the CCP is mostly historical, pertaining to the CCP either before 1949 or up to the Cultural Revolution. 24 B. Dickson, Democratization in China and Taiwan: The Adaptability of Leninist Parties. Oxford/New York: Oxford University Press, 1997. 25 B. Dickson, Red Capitalists in China, Cambridge, MA: Cambridge University Press, 2003. B. Dickson, Wealth Into Power: The Communist Party’s Embrace of China’s Private Sector, Cambridge, MA: Cambridge University Press, 2008. 26 See the transcript of his debate with Andrew Nathan on this issue at the Carnegie Endowment for International Peace in 2006, obtainable from the website of the Endowment at http://www.carnegieendowment.org/events/. 27 See Pei (2006). 28 D. Shambaugh, The Chinese Communist Party: Atrophy and Adaptation, Berkeley, CA: Wilson Center Press/University of California Press, 2008. 29 A.J. Nathan, “Authoritarian resilience,” Journal of Democracy, 2003, vol. 14, no. 1, pp. 6, 13–15. 30 A.G. Walder, “The party elite and China’s trajectory of change,” China: An International Journal, September 2004, vol. 2, no. 2, pp. 189–209. 31 Fewsmith, “The changing methodology of ‘Beijingology’,” which can be accessed at www.carnegieendowment.org/files/Fewsmith. 32 Y. Zheng, The Chinese Communist Party as Organizational Emperor: Culture, Reproduction, and Transformation, London: Routledge, 2010. 33 B. Naughton, D. Yang (eds), Holding China Together: Diversity and National Integration in the Post-Deng Era, New York: Cambridge University Press, 2004, p. 9. 34 S. Heilmann, E. Perry (eds), Mao’s Invisible Hand: The Political Foundations of Adaptive Governance in China, Cambridge, MA: Harvard University Press (forthcoming) 35 This is the department of the CCP Central Committee that is in charge of all organizational affairs of the Party, including recruiting new Party members, screening candidates for promotions, and supervising organizational adjustments. Every level of the Party (central, provincial, municipal, county, township. etc.) and every committee the Party of significant size have their own organizational departments subordinated to both the local committee of the Party and the COD. 36 Dangwu gongkai (open Party affairs), a new thinking on “party building” first openly proposed by the COD in June of 2005 but is yet fully embraced by the whole Party. It may be just a test balloon or even an insincere public relations gesture. 37 The old “grand project” (Mao’s words), so to speak, refers to the CCP’s decision in 1935, right after the Long March when the Party was reduced to a fraction of its former size, on expanding the Party’s recruitment to the nonproletarian classes to broaden the Party’s support base. 38 A handbook of sorts was published on “electronic party affairs.” D. Ma (ed), Dianzi Dangwu: chubu shijian yu tansuo [Electronic Party Affairs: Preliminary Practice and Exploration], Beijing: Central Party History Press, 2006. 39 A poor translation of shiye danwei (事业单位), for which there is no equivalent in the English language. Hospitals, research institutes, schools, etc. are some examples. 40 In contrast, the websites of the Propaganda Department and the United Front Department are filled with empty and endless repetitions of official lines and slogans. 41 For example, the e-articles are sorted into the following categories: urban industrial workers, rural peasants, the new middle class, private entrepreneurs, the

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mobile population, youth and college students, social change, Party documents, Party statistics, recruitment, community party building, Party history, enterprise party building (divided into two subcategories: SOEs and private firms), theories, dissertations of the Central Party School, women and minority Party members, impact of the market, parties of other nations, Party controls cadres and talents, party systems, the conditions of the Party in different historical periods, the organization departments and Party affairs work, intra-party democracy, and strategies of adaptation. 42 A concept of sociological institutionalism; we will pick it up in Chapter 2. See W. W. Powell and P. J. DiMaggio (eds), The New Institutionalism in Organizational Analysis, Chicago: University of Chicago Press, 1991. 2 Conceptual issues and the theoretical framework 1 The Communist Party of Vietnam did something very similar but it is essentially an emulator of the CCP rather than a pioneer. 2 M. Duverger, Political Parties: Their Organization and Activity in the Modern State, translated by B. North and R. North, London: Methuen, 1964, p. 23. 3 Ibid. Duverger regarded the birth of the Fascist party the third revolution in the development of political parties. 4 Ibid. p. xxiii. 5 Short hand for “Communist International,” an umbrella organization created by Lenin in March 1919 to promote communist movements worldwide. Communist parties in various countries were nominally branches of the Comintern. 6 Without this support, the young CCP, consisting of a few dozen relatively poor intellectuals, could simply not carry on. For a detailed historical account of the financial support the CCP received in its earlier years from Moscow (via the Comintern), see Q. Shi, “Stalin did not allow revolution?!,” Bainianchao [Hundred Year Tide], 1998, no. 3, pp. 40–53. As Mao once said, there would not be a CCP without the Comintern. 7 Under the urges of the Comintern, the CCP actively recruited industrial workers. Xiang Zhongfa, a worker with mediocre leadership skills and questionable character (he later betrayed the Party), was made the top leader of the Party. In a letter to the regional headquarters of the CCP, “A Proposal to Expand the Party” dated October 17, 1926, the then General Secretary Chen Duxiu proposed a recruitment drive to turn the young Party into a “mass political party” from “a small study society.” 8 This does not however preclude that people are attracted by the Party because of its policies, which, as we will argue in later chapters, are made fairly independent of the self-interests of individual party members. In addition, ordinary members of the CCP can do little to influence policies of the Party, regardless of their views—even if they are true communist believers. 9 There are gaps in the data collected and sometimes reasonable guesses are used to fill in the gaps. For example, peasant Party members in 1922 are assumed to be negligible, and their share for 1924 is assumed at most to be 10 percent of the 650 or so Party members, because at this time the CCP began to be involved in peasant movements. After the KMT’s massacre of the communists in April and July of 1927, the CCP retreated to rural areas, peasants became the main source of Party members while the urban industrial sector was almost completely controlled by the KMT, and the CCP went underground in “white areas.” It is reasonable therefore to assume a low level of recruitment from industrial workers, whose share in the Party membership for 1931 is assumed at 3 percent of 120,000 Party members. For 1934, right before the long march, their share is assumed to have declined to around 1 percent and climbed back to 2 percent in 1945. Given their

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low percentages even after the CCP took over the cities and was in position to engage in massive recruitment of urban industrial workers, these guesses should not be too much off the mark. Nevertheless, they may be proven wrong when the actual figures become available. For instance, China’s strong economic growth at 8.7 percent in 2009 served as an engine pulling the world out of the worst recession since the Great Depression of the 1920s. See Moor (1966); Skocpol (1979); Fairbank (1987). The category “cadre” (ganbu) in the Mao era referred to anyone on state pay roll, including intellectuals, teachers, scientists, engineers, etc. Sons and daughters of prominent senior officials of the Party. This is illustrated by several widely publicized corruption cases in which the cadres of entire cities were implicated; the ties between the interests in and outside the Party are indicated by the fact that there are always private businessmen (often the relatives, mistresses, or cronies of the implicated cadres) involved in such cases. The Yuanhua smuggling case of Xiamen, Fujian province, the Chen Kejie case of Guangxi province, the Hu Changqin case of Jiangxi province, the Cheng Weigao case of Hebei province, to name just a few. The French revolutionaries considered themselves “patriots” and any party activities were “conspiracy against the nation.” Danton declared: “If we were to exasperate each other we would end up with forming parties, whereas we only need one, that of reason.” Saint-Just was even more drastic: “Every party is criminal.… Every faction is thus criminal.… All faction attempts at undermining the sovereignty of the people.” Still more concisely, he stated: “In dividing a people factions replace liberty with the fury of partisanship.” (cited in Duverger 1964: 35) Here the word “representation” is not used in its normal sense in Western democracies. It is more in the line of “accommodation” of the diverse interests from society. The CCP makes no distinction between factionalism (宗派主义) and “splitting the Party” (分裂党). Historically, all major intra-party purges were carried out under the accusation of “splitting the Party.” The Chinese “state” in turn consists at the top level of the administration (the State Council or SC, consisting of 64 bureaucracies—ministries, bureaus, commissions, etc.), the legislature (the National People’s Congress or NPC), the judiciary (the supreme court and the supreme procuratorate), the military, and the advisory body CPPCC (Chinese People’s Political Consultative Conference). The CCP is dominant in each one of them. Four of these are most prominent in the Chinese political process: CCP, NPC, SC, and CPPCC. In China these are referred to as “the four sets of teams” (四套班子), and their subsidiaries constitute the local governments at all four tiers—provincial, municipal, county, and township. B. Dickson, Red Capitalists in China, Cambridge, MA: Cambridge University Press, 2003, p. 48. For more extended elaboration of institutions, see D. North, Institutions, Institutional Change and Economic Performance, Cambridge, MA: Cambridge University Press, 1990. S. Huntington, Political Order in Changing Societies, New Haven, CT: Yale University Press, 1966. For further discussion on this topic, see J.W. Meyer and B. Rowan, “Institutionalized organizations: formal structures as myth and ceremony,” American Journal of Sociology, 1977, vol. 83, no. 2, pp. 340–363. J. Hannan and J. Freeman, “Structural inertia and organizational change,” American Sociological Review, 1984, no. 49, pp. 149–164. Dimaggio and Powell (1983) define the organizational field as “those organizations that, in the aggregate, constitute a recognized area of institutional life.”

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22 See R. Bates, “Social dilemmas and rational individuals: an assessment of the new institutionalism,” in J. Harriss, J. Hunter, and C.M. Lewis (eds), The New Institutional Economics and Third World Development, London: Routledge, 1995. 23 Orru et al., The Economic Organization of East Asian Capitalism. Thousand Oaks, California: Sage Publications, 1997. 24 Ibid. 25 P. DiMaggio and W. Powell, “The Iron Cage revisited: institutional isomorphism and collective rationality in organizational fields,” American Sociological Review, April 1983, vol. 48, no. 2, pp. 147–160. 26 In essence it is the same as “organizational isomorphism” but is at a higher level of abstraction. See Orru et al, The Economic Organization of East Asian Capitalism, Thousand Oaks, California: Sage Publications, 1997. 27 See also, for example, M. Boisot and J. Child, “From fiefs to clans and network capitalism: explaining China’s emerging economic order,” Administrative Science Quarterly, 1996, vol. 41, pp. 600–628. 28 For example see M. Gerlach, Alliance Capitalism: The Social Organization of Japanese Business, Berkeley, CA: University of California Press, 1997. 29 I will not get into the debate about whether the individual or the firm is the basic actor in a market economy. 30 S. Shirk, The Political Logic of Economic Reform in China, Berkeley, CA: University of California Press, 1993. L. Dittmer and L.P. Gore, “China builds a market culture,” East Asia: An International Quarterly, 2001, vol. 19, no. 3, pp. 8–50. 3 The logic of organizational atrophy 1 Jiedao, an administrative unit in urban areas that is the equivalent of township (or town) in rural areas. It will be covered in Chapter 6. 2 COD, Zhongguo gongcandang zuzhigongzuo cidian [A Dictionary of the Organization Work of Chinese Communist Party], Beijing: Dangjianduwu chubanshe, 2001, p. 74. 3 Note this figure more than doubles that shown in Figure 3.1 (1.8 million at and below the township (street) level. It is presumably due to the inclusion of smaller and more fragmented units of Party organizations, in particular those that do not control administrative power such as joint branches (lianhezhibu, consisting of Party members working in different companies in close geographic proximity), branches that are set up on the basis of apartment buildings or among mobile Party members, and those in the private sector. Figure 3.1 also does not include the base-level Party organizations (from the battalion down) in the military. 4 Lingdao hexing; as Mao puts it emphatically, “(Among) the Party, the government, the military, the people, the students, and of the east, the west, the south, the north and the center, the Party is the leader of all.” 5 Deng was among the earliest communist leaders who criticized substituting the government with the party (yidangdaizheng). In 1941, he pointed to the KMT as a bad precedent the CCP should draw lessons from: “The KMT’s poisonous legacy of using the party to run the country is the most effective way to numb the party, to damage the party, and to detach the party from the masses. We oppose the KMT’s one-party dictatorship of using the party to run the country; we especially should oppose the spread of the poisonous legacy of the KMT into our party.” (p. 16) Zhao Ziyang, while serving as the General Secretary, also attempted to take the Party out of the routine administration of the government

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so that “the party can attend to the party affairs” (his slogan was “dang yao guan dang” (the party must mind party affairs). They both failed to practice what they preached. For a more extended treatment of danwei, see X. Lu and E. Perry (eds), Danwei: The Changing Chinese Workplace in Historical and Comparative Perspective, New York: M.E. Sharpe, 1997. In China, the term refers to the officially sanctioned Trade Union, Women’s Association, and the Communist Youth League. Walder, A., Communist Neo-Traditionalism: Work and Authority in Chinese Industry, Berkeley, CA: University of California Press, 1986. The “iron rice bowl” created a situation in the late 1970s and early 1980s in which the managers of factories had to beg or bribe their workers to work hard or at all in order to fulfill the production quota assigned by the state plan. The most authoritative elaboration of this relationship between a Party member and the Party is Liu Shaoqi’s celebrated pamphlet “Lun gongcandangyuan de xiuyang [On character cultivation of a communist party member],” which was one of the required readings during the Yanan Rectification. That is, recruiting on a case-by-case basis rather than admission en masse. The terms in the parlance of the Party that best caricature this is dangxing, which can be roughly rendered as “partiness,” the meaning of which is a combination of “obedience to the Party” and “identifying or standing with the Party,” and zuzhishang, roughly “the organization,” which is another way to refer to the Party as a corporate entity. These terms are invoked usually in the context in which the Party demands loyalty and unconditional obedience from individual Party members. Organization Department of Huizhou Party Committee, “Investigation and reflections on the structure of peasant party members in rural Huizhou,” Dangzheng Ganbu Xuekan, 2001, no. 2, available at http://www.dzgb.org.cn/. Wang Yi and Wang Shun “Investigation and reflections of recruiting peasant party members,” Dangjian Yu Rencai [Party-building and Talent], 1998, no. 3, pp. 15–16, in which there is a discussion of “value changes brought by market economy.” Wang Anshun, “Devote great effort to study the new problems brought about by the ‘five diversifications,’” 2005, available at: http://www.shjcdj.org.cn/. The main thrust of this argument is consistent with Victor Nee’s theory of market transition and Walder’s thesis of the decline of communism. What I want to emphasize is that, although the Party has lost its monopolistic control of resources, Party members, especially those who are cadres, continue to enjoy some advantage that come with their Party membership even if they are on a market-determined career path; for the CCP is still the ruling Party. Zhu Runming, “Major zones of error in present party recruitment and counter strategies,” Dangzheng Ganbu Xuekan [Journal of Party-State Cadres], no. 6, 2001, pp. 26–27. Wang Qiantai, “How to understand ‘nengren’ [the talented] joining the party,” Dangyuanzhiyou [Friend of Party Members], March 2001, p. 40. Zhang Yuebing, “Actual problems confronting party recruiting work under new situations and selection of lines of inquiry,” Shehui Kexue Dongtai, no. 12, 2000, pp. 64–66. Wu Zhen and Yang Cun, “Four tendencies should be avoided in recruiting party members from the outstanding elements of the new social strata,” Dangyuanzhiyou [Friend of Party Members], no. 4, 2002, p. 22. Wei Lei, “A few issues that need to be resolved in recruiting the advanced elements in the new social strata,” Lilun Xuexi [Theory Studies] no. 10, 2002, pp. 22–23. Li Yi, “Reflections on the holding capacity of the party and party recruitment,” Social Sciences, no. 4, 2001, p. 17.

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17 According to reformulated ideology, China is now in the “preliminary stage” of socialism. The main task of the party at this stage is to develop the forces of production by whatever means. Ma Yiqi, “The few zones of error that the work of party recruitment needs to get out of,” Dangjian Yu Rencai [Party Building and Talents], no. 8, 1998, p. 14. The author is a faculty member at the Nanjing Institute of Politics of the People’s Liberation Army. 18 Ma Bo, “An investigative report on party recruitment among the advanced elements of the new social strata,” Gazzet of Harbin Party School, vol. 26, no. 2, 2003, p. 48. The author is a lecturer of Harbin Party School. 19 It is true that there are many who prospered because of their close ties with individuals in powerful positions in the party-state but this is a different matter. 20 See Miao Shaowei et al., “The impact of the present-day diversification of the peasantry on party-building,” Xuexiluntan, no. 11, 2002, pp. 19–20. 21 By the definition used in the official statistics, it includes others from the primary sector as well: fishermen, foresters, and ranchers, although peasants are the overwhelming majority. Source: Xinhua News Agency, July 1, 2009. 22 A system of political economy promoted by the CCP in rural areas: the lower tier consists of peasant household-based production; the upper tier management is led by the village Party in charge of land and resources allocation, infrastructure, and the collective enterprises. The system is designed to take full advantage of peasant initiatives while allowing the party-state (via the village Party branch) to retain a degree of control in the rural economy. 23 “CCP Central Committee, “Circular on strengthening construction of rural base-level organizations,” November, 1994. 24 The centrality of growth is reflected in the organizational structure of rural administrations. Jean Oi applies the label “local state corporatism” to describe the corporation-like administrative structures at the village, the township, and the county levels. See Oi, Rural China Takes off: Institutional Foundations of Economic Reform, Berkeley, CA: University of California Press, 1999. 25 Wang Guozhong, “The fundamental way out of the plight of marginalization for rural party organizations,” Zhongzhou Xuekan, no. 7, 2007 available at www.hnass.com.cn/index/0P/k1/Index.htm. 26 Wu Xu, “Preliminary analysis of rural base-level organization building after tax-for-fees reform,” Sannong, no. 4, 2004, pp. 12–13. 27 Wang Yi and Wang Shun, “Investigation and reflections of the work of recruiting peasant party members,” Dangjian Yu Rencai [Party Building and Talent], no. 3, 1998, pp. 15–16. Nan Junying, “Innovation: the ultimate route out of the ‘marginalization’ of rural grassroots party organizations,” 2006, Available at: http://www.hnass.com.cn/html/Dir/2006/05/30/00/14/07.htm (accessed, June 3, 2008). 28 For examples, Organization Department of Cixi Municipal Party Committee, “Analysis of the current conditions of village collective economy under new situations and reflections on counter-strategies,” 2001, available at: www.dfdj. gov.cn (Party building website of Ningbo Organization Department). Organization Department of Huizhou Party Committee “Further strengthening and improving the building of troops of peasant party members,” available at: www. dfdj.gov.cn. Party School of Xiamem Special Economic Zone, “Investigation and revelation of the base-level organization building of village A in Xiamen countryside,” Journal of the Party School of Xiamen Special Economic Zone, 2001, no. 13, pp. 6–11. Wang Yi and Wang Shun, “Investigation and reflections of recruiting peasant party members,” Dangjian yu rencai (Party-Building and Talent), 1998, no. 3, pp. 15–16. Li Weisheng and Liu Zuojin, “Strengthen baselevel organization building in rural areas around developing the rural economy,”

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Nongye Guanli Kexue [Agrarian Management Science], no. 43, 1997, pp. 17–18. This is not universally true though. In poorer areas, in particular, the village party secretary is still the envy of the rural youth because of the lack of alternative opportunities. In some rich villages, the Party secretaries may control sizable assets of the village commons. “Tax-for-fees” reform refers to the policy of abolishing the various fees levied upon the peasants and replacing them with regular taxes so as to reduce the burden on peasants. There are numerous investigative reports on the issue of village cadre compensation. For example see, Xia Tian and Shang Honggang, “An investigation of village level cadres’ compensation,” Available at: http:// zzb.hanzhong.gov.cn/dcyj/inex2.htm (accessed, March 18, 2005). Xia and Shang are members of the Organization Department of Gushi County, Henan Province. That is, if the task is not fulfilled in any one of the following six areas, the responsible cadre would be demoted: tax/fee collection, population control, comprehensive rectification, public security, k-9 education, and highway construction. These are heavy work loads for township cadres with limited power and resources. Liu Yongzhe, “The plight of rural base-level party organization building in less developed regions and the way out,” Zhongguo gongcandang, no. 7, 2004, pp. 116–119. See for example, Li Yuzhi, “Investigation of the factors obstructing rural party members to serve as role models,” available at: www.zgdjyj.com (accessed January 15, 2005) As the author puts it, “whatever talents grown up on rural resources are not serving the rural areas.” Zhao Lifu, “An ecological analysis of the building of base-level party organizations in rural areas,” Dangzheng Ganbu Luntan, no. 6, 2004, pp. 12–14. (The author is a doctoral candidate of the College of Politics and Public Administration of Wuhan University). See also, Yangzhou Organization Department and Yangzhou Party School, “The development of rural economy calls for the party member cadres to lead on the way to cooperation,” Weishi [Truth Only], no. 2, 2004, pp. 70–74. Wei Jiangsheng, “The dialectical management of the rural recruitment work,” Dangzheng Ganbu Luntan, no. 4, 1995, pp. 20–21. (The author is from the general office of Longyian Municipal Party Committee, Fujian.) Lu Yumin, “The existing problems in the rural recruitment work,” Journal of Taiyuan Municipal Party School, no. 2, 2004, pp. 44–46. Liang Sheng, “Pay close attention to the rural ‘left behind syndrome,’” Nongjiacanmou, no. 8–9, 2004, pp. 24–26. (The author is a reporter.) According to Liang, idling farmland in Hubei—a main agriculture province—was once as high as 24.2 percent. Yuan Maqing, “Talent drain in rural areas urgently need to be stemmed,” Xiangzheng Luntan, no. 7, 2004, p. 23. See for example, Mei Yizheng, “Old party secretary syndrome a double edged sword: field investigation in Anhui, Shanghai, Jiangsu, Liaoning, Tianjin etc.,” Xiangzheng Luntan, no. 7, 2004, pp. 12–13. However, there are cases in which village Party secretaries have earned their lengthy or even life tenures of office by their contributions to building a prosperous village. They are the indispensable “talent” of the “talent economy” of the village. See for examples, Liu Kaishou, “The new situations and new problems in building rural base-level party organizations,” Beijing Dangjian [Beijing Party Building], 2001, available at: www.bjdj.gov.cn. Hong Yuantao, “Factors influencing

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The Chinese Communist Party and China’s Capitalist Revolution party-mass relations in rural areas and counter-measures,” Beijing Dangjian [Beijing Party Building], 2003 available at: www.bjdj.gov.cn. Yan, B., “Present conditions of party building in administrative villages,” Xuanwu dangjian (website of Organization Department of Xuanwu disctrict, Nanjing), 2004, available at: www.xudj.gov.cn. Tang Bowen, “Reflections on how to enhance the attraction of rural base-level party organizations,” Beijing Dangjian, 2003 available at: www.bjdj.gov.cn. Organization Department of CCP Ninghai Committee, “An analytic exploration of the current conditions of the base-level organizations in rural areas,” Journal of Ninghai Party School, no. 3, 2002, pp. 67–69, Tian Gang, “The trend toward tribalization and the construction of rural base-level democracy,” Journal of Yunnan College of Public Administration, no. 1, 2004, pp. 44–46. Yu Jianrong, “Beware of the influence of tribal forces on the construction of rural base-level organizations,” Jiangsu Social Sciences, 2004, no. 4, pp. 7–8. (The author is a research fellow at the Institute of Rural Development, CASS). T. Sach, Governance and Politics of China, New York: Palgrave, 2004, p. 1. Zhang Huaqiang, “The bleeding syndrome of Nanan village,” Party-State InfoNet, pp. 69–71, available at: www.1921.cn. (Yu 2004) Zhang Wenbiao, “Challenges to the authority of the CCP at the rural grass roots,” Zhongguo Gongcaidang, no. 2, 2004, pp. 115–118. The author is a professor at the CCP Guangdong Provincial Party School. Lin Shenggeng and Zhang Nuofu, “The impact of religions and folk beliefs upon the construction of base-level party organizations in some coastal rural areas of Fujian,” Journal of Fujian Party School, no. 2, 2001, pp. 54–59. Both authors work for the Fujian Provincial Party School. As reported by Xinhua News Agency on September 10, 2007. (Lin and Zhang 2001) Deng Hongxue, “Reflections on the adjustment and optimization of rural baselevel organizations under the new situation,” Dangjian yanjiu neican, available at: www.zgdjyj.com (accessed January 15, 2005). See also Organization Department of CCP Anyang Municipal Committee, “The main causes of rural party members and organizations ill-adjusted to economic development,” Dangjian Yanjiu Neican, no. 2 1995, available at: www.zgdjyj.com (accessed January 15, 2005). Liu Yongzhe, “The plight of rural base-level party organization building in less developed regions,” Zhongguo Gongcandang, no. 7, 2004, pp. 116–119. Li Yi, “Reflections on the hold capacity of the party and party recruitment,” Zhejiang Social Sciences, no. 4, July 2001, pp. 15–18. The author was the president of Taizhou Academy of Social Sciences. In the same article, he also estimated that about half of the village heads and seventy percent of villager’s groups (村民小组) leaders nationwide were not Party members (p. 16). Ibid., p. 117. See also Liu Changjiang, “Village party organizations under conditions of villagers self-governance,” Zhongguo Gongcandang, no. 2, 2006, pp. 106–110. Pan Jiawei and Zhou Rixian, The Conflict between Villagers’ SelfGovernance and Public Administration, Beijing: People’s University Press, 2004. He Xuefeng, “Factionalism and factions in rural elections,” Zhongguonongcun Guanca [China Rural Observer], no. 4. 2001, available at: http://www.aisixi ang.com/data/32793.html (accessed June 6, 2004). Guo Yuejing and Chang Chengjiu, “An investigation of the relations between the rural ‘two committees,’” Zugong Zhiyou [Trusted Friend of Organization Workers], Beijing Dangjian, 2004, available at: www.bjdj.gov.cn (accessed June 30, 2005). Zeng Qingmei, “The present plight of building rural base-level party organizations

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and countermeasures,” Beijing Dangjian, 2004, available at: www.bjdj.gov.cn (accessed June 30, 2005). 52 The rich running for village offices became increasingly common since the turn of the century and attracted a lot of media attention as well as scholarly debates. Some rich individuals, and the business empires they built, have taken control of the village or even township administrations. See for examples, Wang Yongmin and Chen Guoqiang, “An investigation and analysis of the phenomenon of the high winning rate of rich people in village elections,” Dangjian Yanjiu Neican, 2004, available at: bjdj.gov.cn (accessed May 11, 2007). Ao Daiya, Siyingqiyezhujiechen De Zhengzhicanyu [The Political Participation of the Private Business Owners], Guangzhou: Zhongshandaxue chubanshe, 2005. See also Dickson’s Wealth into Power (2008) and Red Capitalists in China (2003). 53 Organization Department of Huizhou Party Committee, “Further strengthening and improving the building of troops of peasant party members,” Dangzheng ganbu xuekan, no. 2, 2001. Also discussed in the article “Investigation of party building in Xunwu countryside” by Dangjian Jiaoyan Shi [Office of Party-Building Pedagogy] of the CCP Jiangxi Provincial Party School. (Available at: www.jxdx.gov.cn) 54 The goal of the CCP is to have two to three college graduates in every rural village in China. Typically, these young graduates sign a three-year contract with the government. On completion of their terms, they would have priority in civil service recruitment and enjoy a number of other advantages. 4 The Party in the new social spaces 1 The term danwei continues to be used in China to refer to any relatively stable organization where people work. Obviously, many of the connotations associated with the original usage no longer apply. 2 The Party researcher Ma Bo thus describes the attitude of some toward joining the Party: “[They] don’t care. Money is most important; the door of the Party is hard to get in and hard to get out.” Ma Bo, “An investigative report on party recruitment among the advanced elements of the new social strata,” Gazzet of Harbin Party School, vol. 26, no. 2, 2003, pp. 46–48. 3 Renminribao, September 8, 2007. 4 Renminribao, November 23, 2007. 5 Gao Dongxu and Tang Jinfeng, “The current conditions of the management and education of mobile Party members,” Loaning Dangjian, no. 11, 1995, available at: www.lnjn.gov.cn. 6 Xinhua, July 25, 2005. 7 Organization Department of CCP Beijing Committee, “An investigation of the conditions of the management and education of the mobile Party members in Beijing,” available at: http://www.bjdj.gov.cn/article/showarticle.asp?articleid=232 (accessed on August 17, 2009). 8 See for example, Wu Kexiong, “The ‘three too many and one shortage’ of floating Party members,” Xian Dangjian (website), posted on September 25, 2003, available at: www.xadj.gov.cn. This investigative report of mobile Party members in the Jianghan District of Wuhan also appeared in many other organization department websites around the country. 9 Web downloaded journal article from Qinghuatongfang electronic journal collection. (Available at: www.cnki.net) 10 He Weidong, et al., “The conditions and reflections on the management of community mobile party members,” Zhonggong Jinan Shiwei Dangxiao

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The Chinese Communist Party and China’s Capitalist Revolution Xuebao [Journal of CCP Jinan Party School], 2007, available at: http://www. bjdj.gov.cn/article/showarticle.asp?articleid=31561 (accessed March 24, 2008). Ibid. Ma Zhiyong and Jiang Chun, “Reflections on the management of college graduate mobile party members,” Xuexiao dangjian yu sixiang jiaoyu [School PartyBuilding and Ideological Education] no. 1, 2004, pp. 11–13. Wu Kexiong, “The ‘three too many and one shortage’ of floating party members,” Shequ [Community], no. 12, 2003, p. 16. The author also reported that some Party members who were receiving from their original danwei the minimum living allowances were afraid that reconnecting with the Party would reveal their other sources of income and hence they would lose the eligibility for such allowances. Organization Department of CCP Shijiazhuang committee and CCP Committee of the Geti and Private Sectors in Shijiazhuang, “A preliminary exploration of party building work in geti and private firms,” Zuzhirenshixue Yanjiu [Organization and Human Resources Studies], 1999, no. 6, pp. 38–40. As reported by the Xinhua News Agency on January 4, 2008. Organization Department of CCP Shijiazhuang Committee and CCP Committee of Geti and Private Sectors in Shijiazhuang, “An preliminary exploration of party building work in geti and private firms,” available at: http://www.people. com.cn/. He Weidong et al., “The conditions and reflections on the management of community mobile party members,” Zhonggong Jinan Shiwei Dangxiao Xuebao [Journal of the Party School of CCP Jinan Committee], no. 9, 2007. Ma Bo, “Putian strengthens the incentives and protection of mobile Party members,” Zuzhirenshibao, no. 1446, available at: www.jxay.gov.cn. As reported by the Xinhua News Agency on January 4, 2008 (online news). State Statistics Bureau, China Statistics Yearbook, 2008. Table 4.1. Ye, Xiaonan, “Interview with Che Xiqing, Deputy Director of the Central United Front Department,” People’s Daily (overseas edn.), February 13, 2007. For complex reasons, people from the “new social strata” were unwilling or reluctant to join the Party. See for example, Zhang, Lina, “A preliminary understanding of the attitude of the new social strata toward joining the party,” Journal of Ningbo University (Liberal Arts edn.), vol. 16, no. 3, September 2003, pp. 154–156. The author is from Party School of Ningbo, Beilun District, Zhejiang Province. With the noticeable exception of private entrepreneurs, a third of them were Party members. We will pick up this topic in Chapter 7. “以社团为纽带、以社区为依托、以网络为媒介、以活动为抓手”的工作方法. People’s Daily (overseas edn.), February 13, 2007. According to CUFD, more than 10 professionals from the intermediary organizations were appointed as NPC deputies or CPPCC members; many experts from the new social strata were recommended by CUFD to serve in positions in the procuatorate, the department of supervision, the auditing department, and the court. (People’s Daily, overseas edn., February 13, 2007). However, Dickson’s recent survey indicated an increasing willingness of nonParty member private entrepreneurs to join the CCP. (Dickson 2008). Ibid. For a Party researcher’s perspective on this, see Ao Daiya, Siying qiyezhu jiechen de zhengzhi caiyu [The Political Participation of Private Business Owner Class], Guangzhou: Zhongshan daxue chubanshe, 2005. Wang Xiaoyan, Siying qiyezhu de zhengzhi canyu [The Political Participation of Private Business Owners], Beijing: Shehuikexue chubanshe, 2007. See also Dickson’s From Wealth into Power (2008). The more conventional definition of “intellectual” refers to accomplished and influential scholars sometimes characterized as the “ideational men” (观念人).

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They are also “public intellectuals” who are expected to serve as opinion leaders of society and, in the Chinese cultural tradition, the public conscience. They are preceded by a very long historical tradition under the imperial order, with iconic figures such as Wei Zhen of the Tang Dynasty and Hairui of the Ming Dynasty, who risked their lives to speak the truth with the emperor. Under communist rule, people like these are typically regarded as dissidents. That is, three-year colleges (dazhuan) or above, although sometimes it also includes people with only a technical secondary school education (zhongzhuan). Available at: http://www.zytzb.org.cn/zytzbwz/intell/chanshu/200804/t20080430_ 374223.htm (accessed, March 10, 2010). Beijing Deng Xiaoping Theory Study Center, “A historical review of the social compositions of the CCP membership,” Zhongguo Gongcandang, no. 6, 2002, pp. 97–98. The Party membership was 4.488 million in 1949 and only 14,000 of them had some college education (dazhuan or above). Central Organization Department, “Opinions about recruiting new party members,” cited in Li Lieman, “Retrospect and reflections on the 80 years of party membership development,” Dangjian Yanjiu [Party-Building Research], no. 4, 2001, pp. 27–29. There is another way of classifying China’s middle class: the “old middle class” in this case refers to those who are financially well off but lack social status, such as getihu (the self-employed) and certain private business owners. These people have generally received low education and are from social backgrounds that are not well respected. The “new middle class” in contrast are well-educated professionals. The article “The trend in the change and development of the intellectuals in the new era” was posted on CUFD’s website under the section “non-Party intellectuals.” In contrast, according to CUFD, 70 percent of their counterparts in Western countries work in business organizations. Reported in Beijingribao, April 8, 2007. Li Zuopeng, “The intellectual class,” in Yan Zhimin (ed), Zhongguo xianjieduan jiejijiechen yanjiu (A Study of Classes and Strata at Present Stage in China). Beijing: Zhonggong zhongyang dangxiao chubanshe, 2002, chapter 4. For an interesting discussion of China’s status quo middle class, see Unger, Jonathan, “China’s conservative middle class,” Far Eastern Economic Review, vol. 169, no. 3, 2006, pp. 27–31. Here the “middle class” referred to are predominantly in the state sector. The CCP is well aware of this dynamic; its regulation requires Party members with equal or greater professional status to deal with “advanced intellectuals” (gaozhi) in Party recruitment or United Front affairs. Meaning “authorities”; this is a curious usage of the word similar to the usage of “the people” in the “People’s Republic.” Wang, Wu and Xie, “The development of the ruling party and the political orientation of the new social strata: analysis based on an investigation,” Lilun yu gaige [Theories and Reforms], 2003, no. 6, pp. 37–41. Methodology stated: 6,500 survey questionnaires were sent out and re-collected 5,105 valid returns; 36 follow-up group interviews (座谈). Policy objective of the study: increase the party’s influence, attraction in these new strata, and enhance its ability to integrate these people. Of course, according the Party’s standard. The Li Zuopeng chapter in the Yan Zhimin book identified exactly the same list of values: “The trend in the change and development of the intellectuals in the new era” in Yan Zhimin (2002). These are what the Party calls “new social organizations.” The CCP has so far succeeded in containing them in local areas—national or cross-regional associations as such are prohibited.

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43 With the exception of perhaps soldiers, so far the majority of the membership consists of rural youth with relatively few other opportunities to move up the social ladder. 44 About 1.07 million of the 2.81 million new recruits were from college campuses, which was a net increase of 71,000 over 2007. COD, CCP Intra-Party Statistics Communiqué, 2008. 45 Calculated based on the data from the China Statistic Yearbook (2008) and People’s Daily report on the 2007 Party statistics published on July 2, 2008. 46 Zhou Ji’s speech at 12th National Conference on Higher Education in 2003, from the Ministry of Education’s website: www.moe.edu.cn/edoas/website18/ info8179.htm. 47 Li Yi, “Reflections on the holding capacity of the party and party recruitment,” Zhejiang Social Sciences, no. 4, 2001, p. 17. (The author was the president of Taizhou Municipal Academy of Social Sciences.) 48 Guo Jinghui, “Pay attention to the structural unemployment of college graduates: between ideals and reality,” Diyicaijiribao (First Financial and Economic Daily), May 31, 2005. 49 Ibid. 50 The geographical distribution of the surveys is: Inner Mongolia, Jiangsu (2), Anhui, Henan (3), Hebei, Shanghai, Beijing, Hubei (2), Sichuan, Jiangxi, Shandong (2), Guangxi, Liaoning (2), Shanxi, Hainan, and Zhejiang. 51 Diyicaijiribao, May 31, 2005. 52 Ibid. See also “Salaries of college graduates in mainland is lower than that of peasant workers,” Liaowang zhoukan (Outlook Weekly), December 16, 2004. 53 As reported by the Xinhua News Agency on June 30, 2006. 54 In 2006, the General Bureau of Taxation named college professors as one of the high income groups on its priority list for individual income tax collection. Their regular salaries are by no means high, but most faculty members derive their main income from other sources such as consulting, tutoring, teaching additional courses (often in places other than where they are employed), giving invited speeches at conferences, publishing popular books and so on. Teachers who have an excellent track record of high rate of success in college entrance exams, TOEFL, GRE, etc. are the hottest items on the market. During my field research trip to Shenzhen in summer 2007, I learned from my informants that some teachers who were very successful in getting high school students to pass exams withheld the key components of their lessons from their regular classes so as to lure their own students to the evening classes that they offered commercially; the students had to make extra payment to receive the lessons they should have received in their regular classes. 55 Liang Zengqing, “The difficulties, causes and counter-measures in the party recruitment work in institutions of higher education,” Journal of Guangxi Normal College (Social Science edn.), no.1, 1997, pp. 88–90. 56 Gao Yaohong, “The problems in base-level party building in higher education and solutions,” Zhongguo gongcandang, no. 3, 2004, pp. 113–114. 57 Yan Zhen, “The problems in recruiting party members from college students and counter-strategies,” Journal of Gansu Teachers’ Education, vol. 8, no. 4, 2003, pp. 48–49. 58 Gao Xiaoyu, Wu Xiaoli, and Xiao Shuqing, “Reflections on the problems in recruiting among college students under the new situation,” Journal of Liaoning Public Administration College, vol. 6, no. 2, 2004, pp. 60–61. The same is also reported in Deng Mingzhai and Fu Yuexiang, “A study on the problems in recruiting college students in the institutions of higher education in Hainan Special Economic Zone and counter strategies,” Journal of Hainan Radio and TV University, no. 2, pp. 27–30, 2004. Yan Zhen, “The problems in recruiting party members from college students and counter-strategies,” Journal of Gansu

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Normal College, vol. 8, no. 4, 2003, pp. 48–49. Deng Hui, “Problems and solutions of recruiting party members from college students,” Journal of Wuzhou Teachers College of Guangxi, vol. 18, no.4, 2002, pp. 30–32. Guo Wei, “On the role and effects of party building among college students,” Journal of Pingxiang College, no. 12, 2004, pp. 25–29. Yang Mingsheng, “Problems in recruiting party members from college students and counter-measures,” Jiangsu Gaoxiao [Jiangsu Higher Education], no. 1, 1994, pp. 28–30. Liu Danfeng, “Problems and solutions of party building among college students,” Zhibu Shenghuo [Branch Committee Life], web edn., May 14, 2004. Other research reports have cited similar cases: Guocheng, Gong, “Existing problems in recruiting college students and counter-measures,” Journal of Tianzhong, vol. 19, no. 4, 2004, pp. 105–107. (Guocheng is from Zhumadian Teacher’s College in Henan Province.) Gao Xiaoyu, et al, “The problems and reflections on party recruiting in higher education under the new conditions,” Journal of Liaoning College of Public Administration, vol. 6, no. 2, 2004, pp. 60–61. “Setting quotas and proportions” has long been frowned upon by the Party but is nevertheless widely practiced. One main reason is the Party’s contradicting policy that Party recruitment should be planned (annual plans, 3–5 year indicative plans, etc.), and a main component of recruitment planning is the proportionate targeting of certain groups in society—usually women, ethnic minorities, frontline workers, the young, the well-educated and talented, as well as some successful business people. Education Work Committee of Anhui Provincial Party Committee, “Investigation and reflections on several issues in party recruitment among college students in Anhui,” Journal of Anhui Institute of Technology (Social Sciences edn.), vol. 6, no. 2, June 2004, pp. 56–60. Song Zhengxian, et al, “An investigation of recruiting party members from college students and strategies,” Journal of Baotou Medical College, vol. 11, no. 4, 1995, pp. 70–72. See Wang Bo, “Investigation and analysis of the current conditions of the undergrad party branch building on college campuses,” 思想理论教育 [Ideological and Theoretical Education], April 2003, pp. 51–54. According to the Party Constitution, a Party member must pay Party dues on a monthly basis; nonparticipation in Party activities, nonpayment of Party dues, or refusal to do work assigned by the Party for consecutive 6 months will be considered as voluntarily quitting the Party. The remainder unspecified. There can be many interpretations of the “secrecy,” one of which may be that the leaders of the student Party organizations tried to minimize the “cost” of their status as the “most advanced elements” among the student body, such as sacrificing their study time for Party activities or help non-Party member students with their studies. Gu Jihu, “Characteristics of the changing relations between party members and party organizations in higher education,” Shanghai Dangshi Yu Dangjian [Shanghai Party History and Party Building], no. 12, 2002, pp. 25–27. Shi Gongzhong, “Problems in college student joining the party under the new situation,” Qingnian Yanjiu [Youth Studies], no. 10, 1994, pp. 12–13. The new model is roughly captured by the CCP’s concept of “grand area partybuilding” (quyu dadangjian), which will be discussed in Chapter 6. The nationwide survey found that 15.9 percent of the eligible population could be considered middle class based on occupation and 24.6 percent based on income; 35 percent of the population was “consumption middle class” and 46.8

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5 The Party in corporate governance 1 Zhang Linxiang, “Difficulties and solutions in recruiting party members from frontline,” pp. 43 (scanned articles in Qinghua Tongfang Optic Disc Ltd., 2000). Available at: www.cnki.net (accessed November 22, 2004). 2 Zhong Zhuqi, “An investigative report about the new problems and new situations in SOE party building,” Dangjian wenhu (Party-Building Digest), December 11, 2004, p. 15. 3 The Party researcher Li Huaisheng in his article, “Economic analysis of the weakening of the political workers corps in SOEs,” highlights the high opportunity costs, poor remuneration, and limited prospects of a career in political and ideological work, and advocates the marketization—put a dollar value on—of the work of Party affairs workers. (Li’s article is available at http://www.bjdj. gov.cn/Article/ShowArticle.asp?ArticleID=14297.) Zhong Zhuqi (2004) voices the same view. 4 Party-building Research Institute, COD, “An investigative report on the ways to improve how enterprise Party organizations play a role,” Dangjian Yanjiu (online; publishing date unmarked). A similar finding is also reported by Zhong Zhuqi, “An investigative report about the new problems and new situations in SOE party building,” p. 9. 5 Ye Wuxi and Shao Yunduan, Xiandaiqiye dang de jianshe (Party Building in Modern Enterprises), Beijing: Zhongguo fangzhen chubanshe, 1996, p. 53. 6 Zhong Zuqi, “An investigative report about the new problems and new situations in SOE party building,” p. 9. 7 过去是党叫干啥就干啥; 现在是叫党干啥就干啥. 8 政治上矮, 经济上穷, 生活上苦, 工作上难. 9 宁给经理跑断腿, 不给书记倒杯水. 10 一类人才在管理岗位, 二类人才在技术岗位, 三类人才在生产岗位, 四类人才在 党群岗位. 11 十年厂长路路通, 十年供销成富公, 十年技工晋高工,十年政工一场空. 12 “Wanjinyou cadres.” [Wanjinyou (万金油) is a traditional Chinese medicinal paste used as folk remedy for a whole array of minor ailments such as headache.] 13 Ma Bo, “Zai xinshehuijiechende xianjingfenzi zhong fazhan dangyuan de diaoca baogao (An investigative report on party recruitment among the advanced elements of the new social strata),” Gazette of Harbin Party School, vol. 26, no. 2, 2003, pp. 46–48. 14 Baoshan Steel Party Committee, “An investigation of party recruitment at Bao Steel,” Dangjian yu rencai (Party Building and Talents), no. 1, 2000, p. 39. 15 Cao Shenyi and Yao Xianli, “Why the number of party-less work teams increasing?” Gongrenribao, June 12, 2004. 16 Songyuan Party Committee, “An investigative report of party-building in the collective enterprises of Songyuan municipality,” Available at: http://www.jlsydj. org.cn (accessed on September 22, 2004). 17 All the above figures are from Bie He, et al, “Reflections on the strategies dealing with the declining party recruitment from workers,” Zuzhirenshibao, April 15, 2004, p. 11. 18 Xinhua, April 7, 2007. 19 For examples, Cao and Yao, “Why the teams without Party members increase every year?” Gongrenribao (Worker’s Daily), June 2, 2004. Zhong Zhuqi, “An

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investigative report on the new developments in SOE party-building,” Zhang Shuangchao “Problems in party recruitment in large and medium-sized SOEs”; Zhang Linxiang, “The difficulties in recruiting from front-line workers and strategies of coping.” Available at: www.cnki.net (accessed December 12, 2004). (All three of the above are from the scanned articles in Qinghua Tongfang Optic Disc Ltd. Dates of publications were not scanned). Zhuang Tianyuan, “Bluecollar workers viewing the Party” Shanxigongrenbao (Shanxi Worker’s Daily), June 22, 2002. Zhang Linxiang, “The difficulties in recruiting from front-line workers and strategies of coping,” Wan Xuzhao, “Reflections on party recruitment under multiple systems of employment,” Zhongguogongcaidang, December 8, 2003. “Xiandai qiyezhidu (现代企业制度),” a buzzword in the discourse of enterprise reform, which in essence is corporatization. This is the Chinese communist way of saying “personnel power.” The Party’s organization department is in fact its personnel department. CCP Central Committee, “Circular on strengthening party-building,” in Qiyedangjian dashiji (Chronicle of Major Events in Enterprise Party-Building). Beijing: Dangjianduwu chubanshe, 1996, pp. 52–53. The same circular also prohibits owners of private enterprises to join the Party. From the speech about strengthening party building in the enterprise reform by Zhong Zhaojun of the Enterprise Bureau of COD, cited in Li Shenglan, “With the spirit of reform to study and resolve the new situations and new problems in enterprise party-building,” Shiyou zhenggong yanjiu (石油政工研究), no. 69, 1999, pp. 13–14. Wei Shaofu, “The severe challenged posed to SOE party-building by the modern enterprise system,” Journal of Guangxi College of Education, no. 1, 2002, pp. 20–21. Cao Shenyi and Yao Xianli, “Why the number of Party-less work teams increasing?” Gongrenribao, June 12, 2004, pp. 12–13. Anonymous,“An investigation of improving the methods of operation of SOE Party organizations,” Party Building Studies, no. 1, 2005, Gao Jingan, Du Jingeng, “A investigative report on the rectification of Party organizations in in-operational or partially operational SOEs in Baoji,” Also Zhang Linxiang, “Difficulties and solutions in recruiting Party members from frontline”, p. 43. Wang Xingmin, “Reflections on the problems and solutions in enterprise partybuilding,” Weishizhazhi (唯实杂志), no. 3, 1998, pp. 57–58. Ye Wuxi, Shao Yunduan, Party Building in Modern Enterprises, Beijing: Zhongguo fangzhen chubanshe, 1996, p. 17. COD required that the number of fulltime staff on Party affairs in each enterprise should fall in the range between 0.5–1 percent of the total work force. http://www.jxcc.com/jtdj/xjjy/xjjy_sjjs_08.htm (accessed January 23, 2005). Department of Investigation (COD), “Reflections on speeding up the construction of the troops of enterprises managers and entrepreneurs.” Zugong yantao (Research and Discussion of Organizational Work), no. 87, 2001, pp. 21–23. 党委会, 工会, 职工代表大会 vs. 管委会, 董事会, 股东代表大会. Liu Peng, “The current restructuring of SOEs and the challenges party-building faces,” Zhongguo gongcandang, no. 12, 2004, pp. 111–115. (Peng is from the Party-Building Department, Central Party School.) Ye Wuxi, Shao Yunduan, Party Building in Modern Enterprises, Beijing: Zhongguo fangzhen chubanshe, 1996, p. 53. Also see: Department of Investigation, COD (ed), “Reflections on speeding up the construction of the troops of enterprises managers and entrepreneurs,” Zugong Yantao [Research and Discussion

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The Chinese Communist Party and China’s Capitalist Revolution of Organizational Work], no. 87, 2001, pp. 21–23. These patterns were widely reported in the Chinese literature on enterprise Party organizations. Recently it that appears they begin to be. Job ads for Party affairs specialists are occasionally seen in online career websites. Party-building Institute, COD, Chronicle of major events in enterprise partybuilding, Beijing: Dangjianduwu chubanshe, 1996, p. 113. This author has a couple of friends who are Party members as well as private business owners; they fiercely oppose setting up Party organizations in their businesses. Xong Chenjia, “Actively explore new ways of party-building in mixed ownership enterprises,” Qiushi, no. 12, 2004, pp. 24–25. (Xong is a member of the Party Standing Committee of Yichang and the organization department director.) Party-building Institute, COD, Qiyedangjiandashiji, Beijing: Dangjianduwy chubanshe, 1997. The problems of party-building in private enterprises are well documented by Bruce Dickson (2008); see especially chapter 4. That is, if they are not to lead the labor movement against the capitalists as the CCP used to be before 1949—the Party now of course wants to help rather than hurt businesses. 淡化, 老化, 僵化, 虚化. CCP Jiangsu Provincial Committee, “Reflections on the impact of changes in property rights structure on party-building,” Makesizhuyi yu xianshi (Marxism and Reality), no. 3, 2002, pp. 4–16. Hu Xuhang, “A comparison of party building in private firms with that in SOEs and other types of enterprises,” Zhejiang xuekan (academic edn.), no. 5, 2002, pp. 220–224. Xu Guangzhong, “A preliminary analysis of party building in private businesses,” Journal of Qinghai University (philosophy and social sciences edn.), vol. 91, no. 4, 2001, pp. 21–25. As we have seen in Chapter 3, many private and foreign businesses prefer to hire college graduates who are Party members because of their presumed better competence. This is an anomaly calling for further study; in any case the relationship between the CCP and private firms is a complex one that defies simple characterization. Organization Department, Party School of Yangzhou, “Investigation and reflections on recruiting party members from the new social strata,” Weishi, January 2003, pp. 56–60. Organization Department of CCP Shijiazhuang Committee and CCP Committee of geti and Private Enterprises in Shijiazhuang, “A preliminary exploration of party-building work in geti and private firms,” Zuzhirenshixueyanjiu (organization and human resources studies), no. 6, 1999, pp. 38–40. CCP Qingdao Municipal Committee, “Apply ‘blood transfusion’ and ‘blood making’ together to strengthen the Party in foreign-capital enterprises,” in Ye, Luo and Chen (eds), “Liangxinzhuzhi” de dangjianchuangxin (Innovations of Party Building in “the Two New Organizations”), Hangzhou: Jiangsu renmin chubanshe, 2001, p. 4. Lu Jinggao, “Assigning political directors to private enterprises where party organizations have not been established,” in Ye, Luo and Chen (eds), “Liangxinzhuzhi” de dangjianchuangxin (Innovations of Party Building in “the Two New Organizations”), Nanjing: Jiangsu renmin chubanshe, 2001, p. 28. Ibid. pp. 208–213. Shenzhen Organization Department Document no. 18 (2004) found at the Organization Department’s website (http://www.zzb.sz.gov.cn/Program/INDEX.asp). Yin Shuliang, Song Fufan, and Liu Daxiu, Quanqiuhua yu dangdejianshe (Globalization and Party Construction). Beijing: Renminribao chubanshe, 2003, p. 118.

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50 Here one is reminded of Lenin’s discussion of the vanguard party vs. trade unionism. See Lenin (1961) 6 Community Party building 1 A Mao-era slogan urging individuals to be an obedient tool to the Party. 2 By this danwei in its traditional sense has also disappeared; although the term danwei is still widely used in China, it means something quite different now. 3 See L. Gore, Market Communism, Oxford: Oxford University Press, 1998, chps. 3 and 4. 4 Some quit their positions in danwei but most retained formal or nominal ties with their danwei for security and for the remaining welfare benefits provided by danwei. This also gave rise to the phenomenon called “one-family, two systems,” in which the one of the spouses held onto his or her job in danwei to provide the security and fall back base while the other braved the storm to try out his or her “sea legs” in the marketplace. 5 The word “societal” (shehui) in the Chinese usage connotes “individuals in a mass society.” 6 For the importance of this monumental shift on party building from the CCP’s perspective, see Li Caoyang and Ren Liang, “On the shifted weight center of organization building at the base level and the innovation in grassroots partybuilding,” Jinyang xuekan (Taiyuan), no. 1, 2006, pp. 16–19. (Li was associate professor at the College of Marxism of Tianjin Teacher’s University and Ren a post-doctoral fellow at the College of Public Administration of People’s University in Beijing). 7 For example, the Chaoyang District used to be the poorest among the urban districts of Beijing but ever since it has become the China headquarters of many prestigious foreign corporations; it has become the richest district with some of the hottest and most expensive real estates in Beijing. 8 The name juweihu is still in use in many places but in most cases it refers to the governing body of shequ. For example, the CCP official documents frequently use “shequ (juweihui),” i.e. “community (neighborhood committee)” in reference to the community. Community building is still in its formative stage and partly because the community is supposed to be self-governing; a wide range of institutional experiments are being carried out around the country. 9 The formation of rural communities (nongcun shequ) is a more recent trend. However, it is left out in this study because the dynamic there is quite different. 10 Project team of Liaoning Party School, “Investigation and reflection of the construction of base-level democracy in Anshan municipality,” Dangzheng ganbu xuekan (Journal of Party-State Cadres), no. 11, 2004, pp. 26–27. 11 Renminribao, June 16, 2005. Street industries (jiedao xiaogongye, mostly collective firms) from the Mao era have developed into a sizable part of the local economy in many places. For example, in 2004, in Longgang District of Shenzhen there were 593 community joint-stock cooperative companies (gufeng hezuo gongsi) with 20.5 billion total assets. (Longgang Organization Department and Base-level Affairs Office, “Carry out strengthening the foundation project and build peaceful and harmonious community,” 2006, available at: www.lg.gov.cn. 12 State Bureau of Statistics, China Statistic Yearbook, 2008, available at: www. stats.gov.cn (online at the SSB website). 13 The chairman of a community council in Beijing’s Western District (who is also the Party secretary of that shequ) that I visited in June 2008 describes the election as the “so-called election” and explained to me how the election was a prearrangement for a sure outcome. Unlike the village election, people in the

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The Chinese Communist Party and China’s Capitalist Revolution shequ seemed to be less involved in electoral politics, which made it easier for local Party organizations (street work committee, community part committee, or general branch, etc.) to manipulate the election. In addition, mass political participation in urban areas is more issue driven than election driven. However, this situation can be changed easily if community leaders are put on state payroll and the state provides the main budget of shequ operation. Indeed, many of the communities this author visited did draw their funding and their main cadres from the party-state. However, this would effectively push community development toward the statist direction. E. Durkheim, The Division of Labor in Society, New York: Free Press, 1984. Organization Department of CCP Longgang Committee, “The four difficulties in the work of community party-building,” Longgang Zugong tongxun [Longgang Organization Work Communication], no. 1, 2006. Zhang Hong, “The difficulties of community party-building and strategic reflections,” Changjiang luntan (Wuhan), no. 6, 2005, pp. 7–9. Also see Li Han, “The new problems in community party-building and counter-strategies,” 2003. Available at: www.xadj.gov.cn. (Li Han is the director of the Division of Party History and Party-building of Xi’an Party School.) Liu Jiyuan, “A preliminary exploration of the interaction between danwei and community party-building,” Zhongyang shehui zhuyi xueyuan xuebao (Journal of Central Socialist College), no. 6, 2005, pp. 86–89. (The author is a research associate with Beijing Academy of Social Sciences.) CCP Jiangxi Committee, “Deal with the difficulties in shequ party-building with organization liaisons,” Renmin Lutan, no. 9, May 10, 2006. CCP Chaoyang District Committee, “An investigation of grassroots partybuilding in Chaoyang District and reflections,” posted on the Chaoyang Organization Department website on June 16, 2004 (http://www.chyzg.gov.cn/rese/ ff808081f2d7dbd500f2dc2ab5ff0043.html). See for example, Chaoyang Organization Department, “A glimpse of the management and education of the mobile Party members in Nanjing,” Zuzhirenshibao, no. 1217. Zhang Hong, “The difficulties of community party-building and strategic reflections,” Changjiang luntan (Wuhan), no. 6, 2005, pp. 7–9. For a discussion of this issue, see Gao, Shangrong, “Community party-building and the reconstitution of the base-level self-governance in our country—a reflection from the perspective of building the ruling Party,” Journal of Wunan College of Public Administration, no. 6, 2003, pp. 90–93. (The author is from the Department of Political Science and Public Administration of Zhejiaqng University.) Wu Yongnian, “On the five systems in community party-building,” Chongqingribao, June 14, 2006. Ibid. “Tianjin created 205 municipal-level advanced community Party organizations,” Tianjinribao, February 6, 2006. In other words, detaching Party organizations from state power. Li Caoyang and Ren Liang, “On the shifted weight center of organization building at the base level and the innovation in grassroots party-building,” Jinyang xuekan (Taiyuan), no. 1, 2006, pp. 16–19. Mainly the community council, which is supposed to be popularly elected. CCP Jiangxi Committee, “Deal with the difficulties in shequ party-building with organization liaisons,” Renmin Lutan, no. 9, May 10, 2006. Renminwang [People’s Net], “Mobilizing party-building resources inventory: the practice and revelations of building the five service teams in Yingpu Street, Qingpu District,” March 6, 2006. Available at: www.xf.people.com.cn/ GB/42464/4168162.html (accessed on October 21, 2007).

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32 See, for example, Zhang Zhigang and Xu Jing, “’Quasi-governmental’: the indelible color of the urban communities of our country,” Dangzhengganbuxuekan (Journal of Party-State Cadres), no. 10, 2004, p. 32. Both authors are from the College of Public Administration, Dalian Technology University. Lu Hanlong, “Community development and the development of democracy: the organizational restructuring of the grassroots society of our country,” Beijing Shehui Kexue (Beijing Social Sciences), Zhongguo shequ jianshe (China Community Building), 1999, pp. 103–107. China Community Building is a special issue of Beijing Social Sciences and was coedited by the Beijing Community Development Promotion Society and Center of Comparative Studies on Urban Communities in large and Medium-sized Cities in Foreign Countries of the Beijing Academy of Social Sciences. 7 The communist party in a capitalist revolution 1 Party cells are still found in most functional organizations but they are no longer the integral part of these organizations. 2 For instance, the CCP is completely silent on the issue of “exploitation,” which is the cornerstone of the Marxist theory of capitalism. In this regard, the “three represents” is representative of the Party’s search for it and, compared to the “advanced nature of the Party” campaign, it is more of a breakthrough in theoretical thinking. 3 Although the government still has a Price Bureau and at the local level, state interventions to influence price are still reported time and again; they are marginal and on the whole ineffective. It will be even more so with China’s deeper integration into the world market. 4 That is, party-state officials who have become market players. See L. Gore, Market Communism: The Institutional Foundations of China’s Post-Mao Hyper-Growth, Oxford University Press, 1998. 5 Lin Shangli, Dangne minzhu: zhongguo gongcandang de lilun yu shijian (IntraParty Democracy: The CCP’s Theory and Practice), Shanghai Academy of Social Sciences Press, 2002, p. 68. 6 See for examples, F. Deyo (ed), The Political Economy of the New Asian Industrialism, Ithaca: Cornell University Press, 1987. P. Berger and M. Hsiao (eds), In Search of an East Asian Development Model, New Brunswick, NJ: Transaction Publishers, 1990. Chalmers, Johnson, MITI and the Japanese Miracle, Stanford: Stanford University Press, 1982. 7 There is no reason to expect differently in other provinces. Li Yi, “Reflections on the holding capacity of the Party and party recruitment,” Zhejiang Social Sciences, no. 4, 2001, p. 17. The author was president of the Taizhou Academy of Social Sciences, Zhejiang Province. 8 For an insightful discussion of this conservatism, see J. Unger, “China’s conservative middle class,” Far Eastern Economic Review, vol. 169, no. 3, 2006, pp. 27–31 and M. Pei, China’s Trapped Transition: The Limits of Developmental Autocracy, Cambridge, MA: Harvard University Press, 2006. 9 Li Yanxi, “On controlling the number of Party members,” Dangjanyanjiu, no. 3, 1989, pp. 24–26. According to him, the COD estimated that based on the investigations in various localities in the late 1980s, 30 percent of the Party members were good (好), 50 percent were OK (中), and 20 percent were below par (差). 10. Li Yi, “Reflections on the holding capacity of the party and party recruitment,” Zhejiang Social Sciences, no. 4, 2001, p. 17. The author was the president of Taizhou Academy of Social Sciences, Zhejiang Province.

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11 Rang Yihui, “An exploration on controlling the number of Party members,” Hunan Shangxueyuan Xuebao, no. 3, 2002, pp. 92–93. (The author is a lecturer at the Loudi Party School, Hunan.) 12 See Zheng Yongnian, “Rennen shehuizhuyi, zhengdang de zhuanxing he zhongguo mosh [Humanist socialism, the transformation of the party, and the China model],” in Zheng Yongnian (ed), Zhongguo moshi: jinyan yu kunju [The China Model: Experiences and Dilemmas], Hangzhou; Zhejiang renmin chubanshe, 2010, pp. 57–84. 13 Dickson (1997). 14 Hu Jintao is the last Party General Secretary designated by China’s last paramount leader—the late Deng Xiaoping. 15 The few attempts by dissidents to organize opposition parties, which were widely publicized in Western media, in fact lacked popular base and hence were easily crashed by the regime. In comparison, the Falungong sect has deeper social roots and therefore is much harder for the regime to suppress. 16 Minxin Pei (2006). 17 “以党内民主促进人民民主.” The rationale here is that intra-party democracy is not only easier to control (because it takes place in the broader framework of party organizations and party discipline) but also less likely to degenerate into street battles or fist fighting on the parliament floor as the official media used to be so fond of airing of the incipient democracies such as Taiwan, South Korea, and Eastern European countries—supposedly because Party members have higher personal quality (素质). A recent case illustrates well the dynamic of democracy at the grassroots: in August, 2009, for the first time competitive elections of Party secretaries of all 363 urban communities of Nanjing were implemented. The Party secretaries were elected directly by Party members in these communities and the elections included open nominations, competitive campaigning, public debates between candidates and other trappings of a full democracy. It is noteworthy also that non-Party member residents were allowed to participate in the “open nomination” of the candidates, which fits the pattern described in this book that the CCP is “melting into the background.” (“Nanjing urban communities experimenting on intra-party direct elections,” available at: http://www.sina.com.cn, posted on September 10, 2009). 18 Dickson (1997).

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164 The Chinese Communist Party and China’s Capitalist Revolution Deng, Xiaoping, Selected Works of Deng Xiaoping (vol. III), Beijing: Renmin Chubanshe, 1993. Deng, Xiaoping, “The Party and anti-Japanese democratic government,” (党与抗日 民主政权 April 15, 1941) in Selected Works of Deng Xiaoping (vol. 1), Beijing: Renmin chubanshe, 1989. pp. 8–21. Dickson, B. J, “The lessons of defeat: the reorganization of the Kuomintang on Taiwan, 1050–1052,” The China Quarterly, March 1993, no. 133, pp. 87–112. ——, Democratization in China and Taiwan: The Adaptability of Leninist Parties, Oxford/New York: Oxford University Press, 1997. ——, “Cooptation and corporatism in China: the logic of party adaptation,” Political Science Quarterly, 2000/2001, vol. 115, no. 4, pp. 517–540. ——, Red Capitalists in China, Cambridge, MA: Cambridge University Press, 2003. ——, “Populist authoritarianism: the future of the Chinese Communist Party,” paper presented at the Conference on Chinese Leadership, Politics, and Policy, Washington DC, November 2, 2005. ——, Wealth into Power: The Chinese Communist Party’s Embrace of China’s Private Sector, Cambridge, MA: Cambridge University Press, 2008. Dickson, Bruce and Maria Rost Rublee, “Membership has its privileges: the socioeconomic characteristics of communist party members in urban China,” Comparative Political Studies, February 2000, vol. 33, no. 1, pp. 87–112. Dimaggio, Paul and Walter Powell, “The iron cage revisited: institutional isomorphism and collective rationality in organizational fields,” American Sociological Review, April 1983, vol. 48, no. 2 pp. 147–160. Ding, X. L., The Decline of Communism in China: Legitimacy Crisis 1978–1989, New York: Cambridge University Press, 1994. Dittmer, Lowell and Lance L. P. Gore, “China builds a market culture,” East Asia: An International Quarterly, 2001, vol. 19, no. 3, pp. 8–50. Dow, Jay, “Who joins the Chinese Communist Party? changes in response to the emergence of the market economy 1988–1995,” paper presented at the annual meeting of the Midwest Political Science Association, Chicago, Illinois, April 7, 2005. Durkheim, Emile, The Division of Labor in Society, New York, Free Press, 1984. Duverger, Maurice, Political Parties, Their Organization and Activity in the Modern State, transl. by Barbara North and Robert North, London: Methuen, 1964. Eckholm, Erik, “At China’s colleges, a rush to party, as in communist,” New York Times, January 31, 1998. Fairbank, J. K., The Great Chinese Revolution, 1800–1985, New York: Harpercollins, 1987. Fewsmith, Joseph, “Rethinking the role of the CCP: explicating Jiang Zemin’s party anniversary speech,” China Leadership Monitor, December 2001, available at: http://www.hoover.org/publications/china-leadership-monitor. ——, “Staying in power: what does the Chinese Communist Party have to do?,” in Cheng Li (ed), China’s Changing Political Landscape : Prospects for Democracy, Washington DC: Brookings Institution Press, 2008. ——, China Today, China Tomorrow: Domestic Politics, Economy, and Society, Lanham, MD: Rowman & Littlefield Publishers, forthcoming. Fletcher, Bill, Jr., “A struggle within the Chinese Communist Party,” Monthly Review, May 2002, available at: http://www.monthlyreview.org/0502cpc.htm Froissart, Chloe, “Escaping from under the party’s thumb: a few examples of migrant workers’ strivings for autonomy,” Social Research, Spring 2006, vol. 73, no. 1, pp. 197–218. Gerlach, Michael, Alliance Capitalism: The Social Organization of Japanese Business, Berkeley, CA: University of California Press, 1997.

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Selected Bibliography 165 Goldstone, Jack (ed), States, Parties, and Social Movements, Cambridge, MA: Cambridge University Press, 2003. Goodman, D. S. G., “The interdependence of state and society: the political sociology of local leadership,” in Chao Chen-min and Bruce Dickson (eds), Remaking the Chinese State: Strategies, Society and Security, London: Routledge, 2001, pp. 132–156. Gore, L. L. P., Market Communism: The Institutional Foundations of China’s PostMao Hyper-Growth, Oxford University Press, 1998. ——, “Rethinking the sudden collapse of communism in Eastern Europe,” in Gungwu Wang and Yongnian Zheng (eds), Damage Control: The Chinese Communist Party in the Jiang Zemin Era, Singapore: Eastern Universities Press, 2003. Groot, Gerry, Managing Transitions: The Chinese Communist Party, United Front Work, Corporatism, and Hegemony, New York: Routledge, 2004. Guiheux, Gilles, “The political ‘participation’ of entrepreneurs: challenge or opportunity for the Chinese Communist Party?” Social Research, Spring 2006, vol. 73, no. 1, pp. 219–244. Guillermaz, Jacques, [The Chinese Communist Party in Power, 1949–1976], Boulder, Colorado, 1976 (transl. from French). Hanson, Stephen E, “Gorbachev: the last true Leninist believer?” in Daniel Chirot (ed), The Crisis of Leninism and the Decline of the Left: The Revolutions of 1989, 1991. Hao, Zhidong, Intellectuals at a Crossroads: The Changing Politics of China’s Knowledge Workers, Albany: State University of New York Press, 2003. Harrison, James Pinckney, The Long March to Power: A History of the Chinese Communist Party, 1921–1972, New York: Praeger, 1972. Heilmann, Sebastian and Elizabeth. J. Perry (eds), Mao’s Invisible Hand: The Political Foundations of Adaptive Governance in China, Cambridge, MA: Harvard University Press, forthcoming. Hu, Chiao-mu, Thirty Years of the Communist Party of China, Peking: Foreign Languages Press, 1951. ——, Seventy Years of the Communist Party of China, Peking: Foreign Languages Press, 1991. Hu, Shaohua, Explaining Chinese Democratization, Westport, CT: Praeger, 2000. Huang, Shu-min, The Spiral Road: Change in a Chinese Village in the Eyes of a Communist Party Leader. Boulder, CO: Westview Press, 1989. Huntington, Samuel, Political Order in Changing Societies, Haven, CT: Yale University Press, 1968. ——, “Social and institutional dynamics of one-party systems,” in Huntington, S. and Moore, A. (eds), Authoritarian Politics in Modern Society: The Dynamics of Established One-Party Systems, New York: Basic Books, 1970. ——, The Third Wave: Democratization in the Late Twentieth Century, Norman, OK: University of Oklahoma Press, 1991. Jen, Lin-Liu, “Student membership in China’s Communist Party soars,” Chronicle of Higher Education. Available at: http://chronicle.com/weekly/v50/i13/ 13a03302.htm (accessed March 15, 2007). Johnson, Chalmers (ed), Change in Communist Systems, Stanford, CA: Stanford University Press, 1970. ——, MITI and the Japanese Miracle: Growth of Industrial Policy 1925–1975. Stanford, CA: Stanford University Press, 1982. Jowitt, Kenneth, The Leninist Response to National Dependency, Berkeley, CA: University of California Press, 1978. ——, “Soviet neo-traditionalism: the political corruption of a Leninist regime,” Soviet Studies, 1983, vol. 35, no. 3, pp. 275–297. Kalyvas, S. N., “The decay and breakdown of communist one-party systems,” Annual Review of Political Science, June 1999, vol. 2, pp. 323–343.

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166 The Chinese Communist Party and China’s Capitalist Revolution Kraus, Richard, Class Conflict in Chinese Socialism, New York: Columbia University Press, 1981. Ladany, Laszlo, Communist Party of China and Marxism 1921–1985, Stanford, CA: Hoover Institution Press, 1988 Lawson, Kay (ed), How Political Parties Work: Perspectives from Within. Westport, CT: Praeger, 1994. Lawson, Kay and Thomas Poguntke (eds), How Political Parties Respond: Interest Aggregation Revisited, London: Routledge, 2004. Lee, Hong Yung, From Revolutionary Cadres to Party Technocrats in Socialist China, Berkeley, CA: University of California Press, 1991. Leib, E. J., “The Chinese Communist Party and deliberative democracy,” Journal of Public Deliberation, 2005, vol. 1, no. 1. Lenin, V. I., What Is to Be Done? in Lenin’s Collected Works, Moscow: Foreign Languages Publishing House, 1961, vol. 5, pp. 347–530. Li, Hongbin, et al., “Economic returns to communist party membership: evidence from urban Chinese twins,” Economic Journal, October 2007, vol. 117, no. 523, pp. 1504–1520. Liu, Shao-chi, How to Be a Good Communist, Peking: Foreign Languages Press, 1951. Lü, Xiaobo, Cadres and Corruption: The Organizational Involution of the Chinese Communist Party, Stanford, CA: Stanford University Press, 2000. Lü, Xiaobo and Elizabeth Perry (eds), Danwei: The Changing Chinese Workplace in Historical and Comparative Perspective, New York: M.E. Sharpe, 1997. Manion, Melanie, “The cadre management system, post-Mao: the appointment, promotion, transfer and removal of party and state leaders,” China Quarterly, 1985, no. 102, pp. 203–233. Marquand, Robert, “China’s Communist Party—different in all but its name,” Christian Science Monitor, November 14, 2002. McGregor, Richard, The Party: The Secret World of China’s Communist Ruler, New York: HarperCollins, 2010. Michels, Rrobert, Political Parties: A Sociological Study of the Oligarchical Tendencies of Modern Democracy, New York: Free Press, 1966. Minxin Pei, “Will the Chinese Communist Party survive the crisis?” Foreign Affairs, March 12, 2009. Moor, Barrinton, Social Origins of Dictatorship and Democracy: Lord and Peasant in the Making of the Modern World, Boston, NJ: Beacon Press, 1966. Nathan, A. J., “Authoritarian resilience,” Journal of Democracy, 2003, vol. 14, no. 1, pp. 6, 13–15. Naughton, Barry, Growing out of the Plan: Chinese Economic Reform 1978–1993, Cambridge, MA: Cambridge University Press, 1995. Naughton, Barry and Dali Yang (eds), Holding China Together: Diversity and National Integration in the Post-Deng Era, New York: Cambridge University Press, 2004. Nee, Victor, “A theory of market transition: from redistribution to markets in state socialism,” American Sociological Review, 1989, vol. 54, pp. 663–681. ——, “The emergence of a market society: changing mechanisms of stratification in China,” American Journal of Sociology, 1996, vol. 100, pp. 908–949. ——, “The role of the state in making a market economy,” Journal of Institutional and Theoretical Economics, 2000, vol. 156, pp. 64–88. ——, “Organizational dynamics of institutional change: politicized capitalism in China,” in Victor Nee and Richard Swedberg (eds), The Economic Sociology of Capitalism, Princeton, NJ: Princeton University Press, 2005. ——, “Developmental state and corporate governance in China (with Sonja Opper and Sonia Wong),” Management and Organization Review, 2007, vol. 3, pp. 19–51.

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Chinese (Only some article titles have English translations. Except the first authors, the Chinese names follow the Chinese custom of placing the surname first.) An Rongquan, et al., Fadadiqu xinminjian sushi fan Zhan Jixi angina gonzo kanji [A Study of the Development of new NGOs in Developed Areas and PartyBuilding Work], Hangzhou: Hangzhou chubanshe, 2004. Anonymous, “Fengyun bianhuan de sulian dong’o junshi [Treacherous storms of the situation in the Soviet Union and Eastern Europe],” Documents for internal circulation and publisher unmarked, 1990. Anonymous, “Jiji tansuo shehui zhuyi shichang jingji tiaojian xia dang de lingdao shixian xingshi [Exploring the realization of the party’s leadership under the conditions of the socialist market economy],” Tequ lilun yu shijian (Shenzhen), August 1999, pp. 13–17. Anonymous, “Nongmin rudang yaoqiu danhua xianxiang toushf [Examination of the phenomenon of the peasants’ weakened demand of joining the party]” Renminribao, March 31, 1989, p. 5. Anonymous, “Nongcun jiceng dang zuzhi shezhi de tansuo yu wanshan [Exploration and perfection of building grass roots party organizations in the countryside],” Zuzhi renshixue yanjiu (Lanzhou), January 1999, pp. 45–48.

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Selected Bibliography 169 Anonymous, “Nongcun gangqun guanxi shuli de diaocha yu fansi [Some reflections and investigation on the estranged relationship between cadres and the masses],” Kexue Shehuizhuyi Yanjiu, 1990, no. 1, pp. 41–46. Anonymous, “Zhonggong dangzuzhi zai nongcun shiwei [The weakening power of the CCP in the countryside],” Jiushi Niandai, June 1990, p. 70. Ao Daiya, Siying qiyezhu jiechen de zhengzhi caiyu [The Political Participation of Private Business Owner Class], Guangzhou: Zhongshan daxue chubanshe, 2005. Beijing Deng Xiaoping Theory Study Center, “A historical review of the social compositions of the CCP membership,” Zhongguo Gongcandang, 2002, no. 6, pp. 97–98. Cai Dingjian (ed), Zhongguo xuanju baogao [China Election Report], Beijing: Falu chubanshe, 2002. Cao Jin and Zhang Baoni (chief compilers and eds), Dang zhibu gongzuo shouche [A Handbook for Party Branch Committee Work]. Shanghai: Shanghai People’s Press, 1984. CCP Central Committee, (Party Literature Research Office), Guan yu jian guo yi lai dang di ruo gan li shi wen ti di jue yi [Resolution on Several Major Events of Party History Since the Founding of the PRC], 1st edn., Beijing: Renmin Chubanshe, 1985. Central Organization Department of the CCP, Zhongguo gongcandang zuzhigongzuo cidian [A Dictionary of the Organization Work of Chinese Communist Party], Beijing: Dangjianduwu chubanshe, 2001. Chen Baoheng and Qian Yushen, “Nongcun gaige yu xingzheng cun dang de jianshe [Rural reform and party building in administrative villages],” Nantong xuekan, April 1991, pp. 9–15. Chen Fenglou, Zhongguo gongcandang ganbu gongzuo shi gang, 1921–2002 [An Outline History of the CCP’s Cadre Work, 1921–2002], Beijing: Dangjian duwu chubanshe, 2003. Chen Guanren and Yi Yang, Zhongguo zhongcanzhe diaoca [China Middle Class Investigation], Beijing: Tuanjie chubanshe, 2004. Chen Guiyi and Li Chuntao, Zhongguo nongmin diaocha [China Peasant Investigation], Beijing: Renminwenxue chubanshe, 2004. Chen Shaoyi, “Dui guoyou gongsizhi qiye jianchi dang guan ganbu yuanze de sikao [Thoughts on the ‘party controlling cadres’ principle in state owned enterprises],” Lilun tantao (Harbin), February 1999, pp. 88–90. Chen Zhili, Zhongguo gongchandang jiansheshi [The History of CCP’s PartyBuilding], Shanghai: Shanghai renmin chubanshe, 1991. Chinese Academy of the Social Sciences, 2004: Analysis and Forecast of China’s Social Conditions. Beijing: Shekewenxian chubanshe, 2003. Compiling group of this book (本书编辑组), Dangde jichenzhuzhi zhidu jianshe shouce [A Handbook for Building and Strengthening the CCP’s Base Level Organizations and Operations], Shanghai : Shanghai People’s Press, 1990. Compiling group of this book (本书编辑组), Shenru ganburenshi zhidu gaige gangyao xuexi wendai [Q&A on Studying An Outline for Deepening the Reform of the Cadre and Personnel System], Beijing: CCP Central Committee Literature Publishing House, 2000. Dong Lianxiang and Zu Qiang, “Guanyu waishang touzi qiye dang de jianshe [Regarding party building in enterprises with foreign investment],” Tansuo: Zhe-sheban (Chongqing), June 1995, pp. 11–13. Fang Jiangshan, Feizhidu zhengzhi canyu: yi zhuanxingqi zhongguo nongmin weiduixiang de fenxi [Non-Institutionalized Political Participation: Analysis of Chinese Peasants in the Era of Transition], Beijing: Rnemin chubanshe, 2000.

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170 The Chinese Communist Party and China’s Capitalist Revolution Gong Kaijin, “Guanyu Shanghai shi Chuanshe xian nongcun jiceng dang zuzhi jianshe zhuangkuangde diaocha [An investigation of basic level party organization building in the rural areas of Shanghai’s Chuanshe county],” Dangzheng luntan (Shanghai), November 1988, pp. 38–42. Guo Dingping, Zhengdang yu zhengfu [Political Parties and Governments], Hangzhou: Zhejiang renmin chubanshe, 1998. Guo Yuejing and Chang Chengjiu, “An investigation of the relations between the rural ‘two committees,’” Beijing Dangjian (Beijing Party-Building), 2004. Available at: www.bjdj.gov.cn. Hong Yuantao, “Factors influencing party-mass relations in rural areas and countermeasures,” Beijing Dangjian [Beijing Party-Building], 2003. Available at: www. bjdj.gov.cn. Hu Qiwang, Daxuesheng jiuye baogao [The Report for Employment of college Graduates], Beijing: Zhongyang bianyi chubanshe, 2004. Huang, Daxi, Zhongguo gongcandang zushi jiegou fazhan lujing de lishi kaocha [A Historical Study of the Evolution Path of CCP Organizational Structure], Tianjin: Tianjin renmin chubanshe, 2004. Huang, Hong and Gu Shong (compilers), Dong’o jubian yu zhizhengdang jianshe [Catastrophic Changes in Eastern Europe and the Building of the Ruling Party], Beijing: Hongqi chubanshe, 1991 (for internal distribution). Huang Rongkun, “Sanlingwushen yu Iii jin bu zhi de fansi [A reflection on the inefficacy of orders and decrees]” Dangxiao Luntan, 1989, no. 2, pp. 59–62. Huang Weiding, Sulian wangdang shinianji [Commemorating the Tenth Anniversary of the Demise of the CPSU], Nanchang: Jiangxi gaoxiao chubanshe, 2001. Institute for Research of Party Building, the Organization Department of CCP Central Committee, (compiler), Qiye dangjian dashiji [Chronicle of Major Events in Enterprises Party Building], Beijing: Dangjian duwu chubanshe, 1996 (for internal circulation). Institute of Human Resources Research, 2005 zhongguo rencai baogao [China Human Resources Report, 2005] Beijing: Renminchubanshe, 2005. Ji Yan, “Dangnei buzhengzhifeng suoyuan [Tracing the sources of intra-party unhealthy tendencies],” Shanxi Shida Xuebao, 1989, no. 1, pp. 26–27. Jiang Zemin, Lun “sangedaibiao” [On “Three Representatives”], Beijing, Zhongyang wenxian chubanshe, 2001. Jiang Yi, et al., Zhongguo gongchandang zai Shanghai: 1921–1991 [The Chinese Communist Party in Shanghai: 1921-91], Shanghai: Shanghai renmin chubanshe, 1992. Li Hongfeng (chief compiler), Nuli badangjianshechenwei lindaoyouzhongguo teshe shehuizhuyi shiyede jianqiang hexin: shisida yilai dangdejianshe dashiji Oct. 1992–Aug. 1997 [Strive Hard to Build the CCP into a Steadfast Leadership Core of the Cause of Socialism with Chinese Characteristics: A Chronicle of Major Events of Party Construction Since the Fourteenth Party Congress Oct. 1992–Aug. 1997] Beijing: China Fangzhen Press, 1997. Li Huibin and Xu Xiaoyuan (eds), Zhongguo diaocha baogao: shehui guanxi de xin bianhua yu zhizhengdang de jianshe [China Investigative Report: New Developments in Social Relations and the Building of the Ruling Party], Beijing: Shehuikexue chubanshe, 2003. Li Lieman, “Retrospect and reflections on the 80 years of party membership development,” Dangjian Yanjiu [Party-building Research], 2001, no. 4, pp. 27–29. Li Lulu and Li Han, Zhongguo de danwei zuzhi: ziyuan, quanli yu jiaohuan [Resources, Power and Exchange in the Chinese Work Unit Organization], Hanzhou: Zehiang renmin chubanshe, 2000. Li Peiling, et al., Zhongguo shehui fengchen [Social Stratification in China], Beijing: Shehuikexue chubanshe, 2004.

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Selected Bibliography 171 Li Yanxi, “Shelun dangyuan duiwu de shuliang kongzhi [Limit the number of CCP Members],” Xuexi yu shijian (Wuchang), January 1989, pp. 49–51. Li Yi, “Reflections on the holding capacity of the Party and party recruitment,” Zhejiang Social Sciences, 2001, no. 4, pp. 15–18. Liang Xiaosheng, Zhongguo ge jiechen de fenxi [The Analysis of the Classes in China], Beijing: Jingjirnbao chubanshe, 1997. Liang Yanhui and Yuan Yidao, “Xiangzhen qiye zhuanzhi hou dang de jianshe xin bianhua [New changes in party building in township and village enterprises that have changed their ownership modes],” Zhongguo dangzheng ganbu luntan (Beijing), February 1999, pp. 32–33. Liang Yanjia and Li Kaisheng, “Jiguan qishiye danwei dangyuan liudong de diaochahe sikao [Investigation and reflection on mobile party members in administrative and enterprise units], Lingnan xuekan (Guangzhou), January 1994, pp. 53–56. Lin Shangli, Dangne minzhu: zhongguo gongcandang de lilun yu shijian [Party Internal Democracy: The CCP’s Theory and Practice], Shanghai: Shanghai Shehuikexue chubanshe, 2002. Lin Shenggeng and Zhang Nuofu, “The influence of religious and folk beliefs on some rural base-level organizations in the coastal region of Fujian province,” Journal of Fujian Party School, 2001, no. 2, pp. 54–59. Liu Kaishou, “The new situations and new problems in building rural base-level party organizations,” Beijing Dangjian (Beijing party-building website). ——, (ed), Xiandai shijie zhengdang he zhengdang zhidu bijiao yanjiu [A Comparative Study of Political Parties and Party Systems of Contemporary World], Chongqing: Chongqing chubanshe, 2001. Liu Yongzhe, “The plight of rural base-level party organization building in less developed regions and the way out,” Zhongguo gongcandang , 2004, no. 7, pp. 116–119. Liu Zhenqi, “Guanyu cunmin weiyuanhui zuzhi zhuangkuang de diaocha yu sikao [An investigation and reflection on the situation of the village council],” Unpublished manuscript, 1989. Liu Zhenru, “Dangnei fubai xianxiang genyuan chutan [A preliminary study of the sources of intra-party corruption],” Lilun Jiaoxue, 1989, no. 4, pp. 37–38. Lou Ximing and Wu Jian, “Dang guan ganbu yuanze yu jingyingzhe jingzheng shanggang [The ‘party controlling cadres’ principle and the advantages of competitive recruitment of enterprise managers],” Xingzheng yu renshi (Shanghai), January 1999, pp. 26–27. Lu Cheng, et al., Dangde jianshe qishinian jishi [Seventy Years of Party Building]. Beijing: Zhonggong danshi chubanshe, 1991. Lu Cheng and Wang Guotian (chief compilers, zhu bian), Fazhan dangyuan gongzuo shouche [A Handbook for Recruiting Party Members], Beijing: Hongqi Chubanshe, 2002. Lu Hanlong, “Community development and the development of democracy: the organizational restructuring of the grassroots society of our country,” in Zhongguo shequ jianshe [China Community Building], a special issue of Beijing Shehui Kexue [Beijing Social Sciences] coedited by Beijing Community Development Promotion Society and Center of Comparative Studies on Urban Communities in large and Medium-sized Cities in Foreign Countries, Beijing Academy of Social Sciences, 1999, pp. 103–107. Lu Nanquan and Jiang Changbin (eds), Sulian jubian shenchenciyuanyin yanjiu [A Study of the Deeper Causes of the Catastrophic Changes in the Soviet Union], Beijing: zhongguo shehui kexue chubanshe, 1999. Lu Xueyi (chief compiler), Dangdai zhongguo shehui liudong [Social Mobility in Contemporary China], Beijing: Shehuikexue wenxian chubanshe, 2004.

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172 The Chinese Communist Party and China’s Capitalist Revolution ——, (ed), Dangdai zhongguo shehui fieceng yanjiu baogao [Research Report on Social Stratification in Contemporary China]. Beijing: Shehui kexue wenxian chubanshe, 2002. Lu Yumin, “The existing problems in the rural recruitment work,” Journal of Taiyuan Municipal Party School, 2004, no. 2, pp. 44–46. Ma Dexiu (chief compiler), Dianzidangwu: Chubushijian yu tansuo [Electronic Party Affairs Preliminary Practice and Exploration], Beijing: Zhongyang dangshi chubanshe, 2006. Ma Bo, “An investigative report on party recruitment among the advanced elements of the new social strata,” Gazzet of Harbin Party School, 2003, vol. 26, no. 2, pp. 46–48. Ma Yiqi, “The few zones of error that the work of party recruitment needs to get out of,” Dangjian yu rencai, 1998, no. 8, p. 14. Mao Shaojun, “Nongcun zongzu shili manyan de xianzhuang yu yuanyen fenxi [The current situation and analysis of the rampancy of clan power in the countryside],” Zhejiang Shehuikexue, 1991, no. 2, pp. 51–55. Miao Shaowei, et al., “Dangdai nongmin jieji de fenghua dui dangdejianshe de yingxiang [The impact of the present-day diversification of the peasantry on party-building],” Xuexiluntan, 2002, no. 11, pp.19–20. Organization Bureau of the Organizational Department of CCP Central Committee (compiler), Dangzhuzhi xuanju gongzuo shouche [A Handbook of Elections in Party Organizations], Beijing: Party Construction Readings Press, 1995. Organization Department of CCP Anyang Municipal Committee, “The main causes of rural party members and organizations being ill-justed to economic development,” Dangjian yanjiu neican, no. 2, 1995. Organization Department of the Sichuan Provincial Party Committee, “Shilun ‘sankua’qiye jituan dang zuzhi zhengzhi hexin zuoyong de shixian xingshi he jiben tujing [On the practical form and basic means ofthe party’s organizational and political core role in ‘three trans’ enterprises],” Zuzhi renshixue yanjiu (Lanzhou), June1998, pp. 35–39. Organizational Department of CCP Ganzhou Municipal Committee, Jiangxi Province, Xiagangzhigong dangyuan peixun jianminjiaochai [A Short Training Course for Laid-off Party Members], Beijing: Dangjianduwu chubanshe, 1998. Organizational Department of CCP Central Committee, Zhongguo gongchandang zushigongzuo cidian [A Dictionary of Organizational Work of the Chinese Communist Party], Beijing: Publishing House of Readings on Party Construction, 2001. Organization Department of CCP Ninghai Committee, “An analytic exploration of the current conditions of the base-level organizations in rural areas,” Journal of Ninghai Party School, 2002, no. 3, pp. 67–69. Organization Department of CCP Sichuan Provincial Committee, Dangzheng lingdao ganbu zhidu gaige yanjiu [A Study of Reforming the Party-State Cadre Systems], Beijing: Central Party School Press, 2002. Organization Department and Party School of Yangzhou, “The development of rural economy calls for the party member cadres to lead on the way to cooperation,” Weishi, 2004, no. 2, pp. 70–74. Pan Jiawei and Zhou Xianri, Cunmin zizhi yu xingzhengquan de chongtu [Conflict Between Villagers’ Self-Governance and Administrative Power], Beijing: Zhongguo renmindaxue chubanshe, 2004. Party Building Investigation Team of Shanghai’s Municipal Party School System, “Guanyu Shanghai shi Chuanshe xian nongcun jiceng dang zuzhi jianshe zhuangkuang de diaocha [An investigation of basic level party organization building in the rural areas of Shanghai’s Chuanshe county: a report],” Dangzheng luntan (Shanghai), November 1988, pp. 38–42.

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Selected Bibliography 173 Party Construction Research Institute of the Organizational Department of the Central Committee of the Chinese Communist Party, You zhongguo teshe shehuizhuyi yu zhongguo gongcandang [Socialism with Chinese Characteristics and the Chinese Communist Party], Beijing: Zhongyang dangxiao chubanshe (Central Party School Press), 1996. ——, Qiye dangjian dashiji [Chronicle of Major Events in Enterprise Party Construction]. Beijing: Dangjian duwu chubanshe, 1999. Rang Yihui, “An exploration on controlling the number of Party members,” Hunan Shangxueyuan xuebao, 2002, no. 3, pp. 92–93. Section One of Party History Research Office of the CCP Central Committee (compiler), Zhongguo gongcandang lianzhengfanfu shiji [A History of Promoting Clean Governance and Fighting Corruption of the Chinese Communist Party], Beijing: Zhongguo Fangzheng Press, 1997. Shen Xueming and Zheng Jianying (chief compilers), Zhong gong zhongyang weiyuan: diyi zhi di shiwu jie zhong yang wei yuan [The CCP Central Committee Members: From the First to the Fifteenth Party Congresses], Beijing: Zhongyangwenxian chu banshe, 2001. Song Xiaomin (chief compiler), Zhonggong dangjianshi, 1976–1994 [A History of Party Construction 1976–1994], Beijing: Dangjianduwu chubanshe, 1996. State Statistic Bureau, Zhongguo jiben danwei nianjian, 2003 [China Basic Unit Yearbook 2003] Beijing: Zhongguo tongji chubanshe, 2004. Tang Bowen, “Reflections on how to enhance the attraction of rural base-level party organizations,” Beijing dangjian (Beijing party-building website), 2003. Tang Zhengmang and Tang Jinpei, “Exploring the causes of the rapid expansion of party membership between the 4th and 5th party congresses,” Shanghai dangshi yu dangjian [Shanghai Party History and Party Building], 2004, no. 8, pp. 37–39. Tang Zhuchang (ed), Eluosi jingji zhuangui toushi [In-depth Analysis of Russia’s Economic Transition], Shanghai: Shanghai shehuikexueyuan chubanshe, 1999. Tian Gang, “The trend toward tribalization and the construction of rural base-level democracy,” Journal of Yunnan College of Public Administration, 2004, no. 1, pp. 44–46. Wang Qiantai, “How to understand ‘nengren [the talented] joining the party’,” Dangyuanzhiyou, March (second half) 2001, p. 40. Wang Sibin, “Cunganbu de bianji diwei yu xingwei fenxi [An analysis of the marginal status and behavior of village cadres],” Shehuixue Yanjiu, 1991, no. 4, pp. 46–51. Wang Xiaoyan, Siying qiyezhu de zhengzhi canyu [The Political Participation of Private Business Owners], Beijing: Shehuikexue chubanshe, 2007. Wang Xijia, “Nongcun ganqun guanxi heyi ruci jinzhang [Why are cadre peasant relations so tense?],” Shehui, 1991, no. 11, pp. 18–19. Wang Yi and Wang Shun, “Investigation and reflections of the work of recruiting peasant party members,” Dangjian yu rencai [Party Building and Talent], 1998, no. 3, pp. 15–16. Wang Ying, Zhe Xiaoye, and Sun Bingyao, Shehui zhongjianchen: gaige yu zhongguo de shetuan zuzhi [Middle Society: Reform and China’s Social Organizations], Beijing: Zhongguo fazhan chubanshe, 1993. Wang Yuchen, Wu Yude, and Xie Zhigui, “The development of the ruling party and the political orientation of the new social strata: analysis based on an investigation,” Lilun yu gaige (Theories and reforms), 2003, no. 6, pp. 37–41. Wang Zongru, “Nongcun gangqun guanxi shuli de diaocha yu fansi [Some reflections and investigation on the estranged relationship between cadres and the masses],” Kexui Shehuizhuyi Yanjiu [Studies in Scientific Socialism], 1990, no. 1, pp. 41–46. ——, “Bixu gaodu zhongshi dangde jicengzuzhi jianshe [Grassroots organizational building must be given attention],” Dangjian Yanjiu [Studies in Party Building], 1990, no. 3, pp. 37–39.

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174 The Chinese Communist Party and China’s Capitalist Revolution Wei Jiangsheng, “The dialectical management of the rural recruitment work,” Dangzheng ganbu luntan, 1995, no. 4, pp. 20–21. Wei Lei, “A few issues that need to be resolved in recruiting the advanced elements in the new social strata,” Lilun xuexi, no. 2002, 10, pp. 22–23. Wei Zhiyang, “Analysis and reflections on the structure of the party membership,” Dangzheng ganbu xuekan, 2001, no. 6, pp. 22–22, 26–27. Work Committee of CCP in Government Bureaucracies (compiler), Dangzu shuji tan dangjian [Party Group Secretaries Talking About Party-Building], Beijing: Renmin chubanshe, 2002. Wu Jixiang (ed), Shehuizhuyi shichang jingji yu zhizhengdang jianshe [Socialist Market Economy and the Construction of the Ruling Party], Nanchang: Jiangxi renmin chubanshe, 1994. Wu Yan, “Seven tendencies to be avoided in party recruitment,” Zhibu jianshe [Construction of Party Branch Committees], 2002, no. 8, p. 30. Wu Zhenhua, “Making sense of the three historical expansions of the composition of party membership,” Gazzet of Liaocheng University, Jinan, Shandong, 2002, no. 6, pp. 12–15. Xie Qingkui, “Xin zhongguo wushinian de zhengzhi fazhan [Fifty years’ of political development in new China]” Lilun yu xuexi, 1995, no. 5, p. 17. Xu Genyi and Cheng Huiqiang, “Qieshi jiaqiang waishang touzi qiye de dangjian gongzuo [Strengthen the work of party building in enterprises with foreign investment],” Lilun xuekan (Jinan), February 1995, pp. 31–34. Xu Minjie (chief compiler), Dang jian zhu zuo dao du shou ce [A Reader’s Guide to the Works on Party Construction], Dalian: Dalian ligong daxue chubanshe, 1992. Yan Zhimin (ed), Zhongguo xianjieduan jiejijiechen yanjiu [A Study of Classes and Strata at Present Stage in China], Beijing: Zhonggong zhongyang dangxiao chubanshe, 2002. Yan B, “Present conditions of party building in administrative villages,” Xuanwu dangjian (website of OD, Xuanwu disctrict, Nanjing), 2004. Available at: www. xwdj.gov.cn. Yang Xiaoming (ed), Ren zai danwei [People in Work Units], Beijing: Zhongguo chengshi chubanshe, 2002. Yang Xiaoming and Zhou Yihu, Zhongguo danwei zhidu [China’s Work Unit System], Beijing: Zhongguo jingji chubanshe, 1999. Ye Duchu, “Various aspects of preserving the advanced nature of communist party members,” Outlook News Weekly, no. 1, 2005. Ye Luo and Cheng (eds), “Liangxin zhuzhi” de dangjian chuangxin [Innovations in Party Building in the Two New Organizations], Nanjing: Jiangsu renmin chubanshe, 2001. Ye Wuxi and Shao Yunduan, Xiandanqiye dang de jianshe [Party Building in Modern Enterprises], Beijing: Zhongguo fangzhen chubanshe, 1996. Ying Shuliang, Song Fufan, and Liu Daxiu, Quanqiuhua yu dangde jianshe [Globalization and Party-Building], Beijing: Renminribao chubanshe, 2003. You Longbo, “Xin shiqi Fujian yanhai nongcun xianjin dang zhibu jianshe de chenggong jingyan [The successful experiences of building party branches in the coastal villages of Fujian],” Zhonggong Fujian shengwei dangxiao xuebao, July 1999, pp. 53–56. Yu Jianrong, “Beware of the influence of tribal forces on the construction of rural base-level organizations,” Jiangsu Social Sciences , 2004, no. 4, pp. 7–8. Yu Yingjie, “Gaohao dangfeng bixu chongpo ‘Guanxiwang’ [Connection net works must be broken in order to maintain a healthy party],” Shehui Kexue [Social Science], 1986, no. 10, pp. 25–27. Zeng Qingmei, “The present plight of building rural base-level party organizations and countermeasures,” Beijing dangjian [Beijing Party-Building], 2004, pp. 12–17.

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Selected Bibliography 175 Zhang Dejiang, “Jiaqiang feigong youzhi qiye dang de jianshe gongzuo xu yanjiu jiejue de jige wenti [Several questions about strengthening party building in non-state owned enterprises that require study and solution], Dangjian yanjiu (Beijing), April 2000, pp. 13–16. Zhang Deling (ed), Jiguan dangjian xin shijian [The New Practice of Party-Building in Party-State Bureaucracies], Beijing: Renmin chubanshe, 2002. Zhang Houyi and Liu Wenpu, Zhongguo de siying jingji yu siying qiye zhu [Chinese Private Economy and Private Entrepreneurs], Beijing: Zhishi chubanshe, 1995. Zhang Houyi, Ming Zhili, and Hang Zhuanyun (eds), Zhongguo siying qiye fazhan baogao no 5 (2003) [Blue Book of Private Enterprises]. Beijing: Shehui kexue wenxian chubanshe, 2004. Zhang Lina, “Xinshehui jiechen rudangyiyuan wenti zhi qianjian [A preliminary understanding of the attitude of the new social strata towards joining the Party],” Journal of Ningbo University (Liberal arts edn.), vol. 16, no. 3, September 2003, pp. 12–17. Zhang Mingchu, “Xiandaihua yu nongcun dang zhibu shezhi de xin bianhua [Modernization and new changes in party branches in the countryside],” Shanghai dangshi yanjiu (Supplement), 1999, pp. 143–146. Zhang Yuebing, “Actual problems confronting party recruiting work under new situations and selection of lines of inquiry,” Shehui kexue dongtai, 2000, no. 12, pp. 64–66. Zhang Yun, “Quanmian tigao dangyuan suzhi shi dangfeng genben haozhuan de jianshi jichu [Improving the quality of party members is the foundation for improvement of the party’s orientation],” Hongqi, 1986, no. 10, pp. 21–23. Zhao Lifu, “An ecological analysis of the building of base-level party organizations in rural areas,” Dangzheng ganbu luntan, 2004, no. 6, pp. 12–14. Zhao Xilin, “Party recruiting must get away from four areas of error,” Zhibu jianshe [Construction of Party Branch Committees], 2002, no. 7, p. 35. Zheng Yongnian, Zhongguo moshi: jinyan yu kunju [The China model: experiences and dilemmas], Hangzhou: Zhejiang renmin chubanshe, 2010, pp. 57–84. Zheng Zhaohong, et al. (compilers), Zhoujin xinshedai: shishanjie sizhongquanhui yilai dangde jianshe jishi [Marching into a New Era: A Chronicle of PartyBuilding Since the Fourth Plenary of the Thirteenth Party Congress], Xi’an: Shanxi Renmin chubanshe, 2001. Zhong Zhushang, “Nongcun jiceng dang zuzhi xianzhuang tanxi [Examination of current conditions in rural basic level party organizations],” Liaowang yuekan, January 1990, pp. 12–14. Zhou Enlai, Zhou Enlai xuanji [Selected works of Zhou Enlai], 2 vols., Beijing: Renmin chubanshe, 1978. Zhou Heling, “Dangqian jiceng dang zuzhi he dangyuan duiwu jianshe de jige wentz [Several problems regarding grass roots party organizations and party members], Dangzheng luntan (Shanghai), April 2000, pp. 4–7. Zhou Linghua and Zheng Hefu, “Siying qiye: Dangjian luohou de yuanyin ji duice [Private enterprises: the causes and policies toward sluggish party building],” Dangzheng luntan (Shanghai), January 1995, pp. 29–30. Zhou, Peng, “Shinian lai fazhan dangyuan gongzuo de huigu [Review of the past ten years of party recruitment],” Dangzheng wenhui (Luoyang), January 1989, p. 12. Zhu, Runmin, “Major zones of error in present party recruitment and counter strategies,” Dangzheng ganbu xuekan [Journal of Party-State Cadres], 2001, no. 6, pp. 26–27.

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Index

Diagrams and tables are given in italics

advanced forces of production 25, 66, 127 Anhui Province 76–7 Anshan municipality 104 An Ziwen 20 assimilation 31, 33, 130, 135 atrophy 10, 15, 32, 34–5, 37–9, 46–8, 55–6, 107, 122–3, 129, 135 Baoshan Steel Co. 83 Bates, Robert 146, 163 bedroom communities 103, 107 Beijing consensus 5 Biggard, Nicole W. 31 Bolshevik party 18 bureaucratic capitalist class 127 cadres 21–3, 32, 39–40, 44–50, 52–4, 56, 65, 72, 81–2, 85–7, 89–90, 96–8, 113–4, 118, 122, 124, 127, 130–1 Cao Ruguo 55 Cao Shengyi 84 capitalism alliance 31; network 31 carrier organizations/carriers 38–9, 135 Central Committee Document No. 4 87 Central Organization Department (COD) 12, 61, 63, 89–90, 93, 143n.35 Central Party School 13 Central Propaganda Department (CPD) 92–3 Central United Front Department (CUFD) 64–6, 68–9, 78

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Chaoyang District Party Committee 109, 159n.7 Chinese Communist Party (CCP) adaptation/transformation 124–30; and aging 109–10, 110; assessment 97–9; atrophy of rural party organizations 46–56, 151n.54; balance of power between Party organizations 41–2; booming membership 2–5, 3–7, 8–10, 142n; and communities 105–19; conclusions/implications 135–40; evolution of organizations 12; expansion in the reform era 57, 58, 59–63; fragmentation 110; and the free market 1–2, 15–16, 25–8, 27, 33–4, 120, 141–2n, 161n.2; the future 130–5; grassroots organizations 35–41, 36–7, 146n.3; impact of the market 42–5; institutions and institutional change 28–34; and the internet 13–15; modernization 45–6; new classes 63–75, 67, 71, 73–4; not withering away xvii–xx; Party organizations in corporate governance 80–8, 82, 84; Party in SOEs 88–93; political impact of the market 120–4; political party 17–25, 19–20, 144–5n; in private businesses 93–7; profound changes i; single ruling party 57; societal value reorientation 75–9, 155–6n.71; state-society relations 23–4, 145n.14; tight grip on the media 11

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Index Chinese Company Law (2002) 86 Chinese State 25, 145n.17 class structure 126 Comintern 18, 144n.5 communist parties 132–3, 133 Communist Party of the Soviet Union (CPSU) 25 communities 100, 103–11, 159–60n. community of strangers 113 compatibility problems 9, 15, 28, 31, 33, 128, 130 corporate governance 8, 15, 32, 80–99 corruption 5, 8, 22, 26, 44, 85, 91, 116, 134, 138–9 “crony communism” 10 Council of Elders, the 50, 52 Cultural Revolution 10 Dali Yang 11 dangxing 70, 136, 147n.12 dangyuan 125 danwei and aging 109–10; atrophy of 39–43, 56, 62; and communities 100–5, 105, 115–18, 159n.4; future of the CCP 136; and the market 121–2; meaning of 15, 151n.1; and mobile party members 59, 78 decentralization 101 democratic centralism 18, 41 democratization 137–9, 162n.17 Deng Hongxue 53 Deng Mingzhai 77 Deng Xiaoping 66, 125 devotee party 18–19 Dickson, Bruce xix, 10, 26, 28, 65, 139 Dictionary of Chinese Communist Party’s Organization Work (COD) 35 dilution 122–3 Dimaggio, Paul 31 double-tiered management system 46, 148n.22 Duverger, Maurice 18, 41, 54 East Asian development state, the 128 election party 118, 139 “elitization” 132 experts 122 factionalism 25 Falungong Incident (1999) 70, 99, 162n.15 Fascist/Nazi parties 18

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177

Fewsmith, Joseph 11 floating population xvii “following the money” 129 four transitions 115 Fu Yuexiang 77 Gao Xiaoyu 76, 77 Gao Yaohong 76 General Office of the CCP Central Committee 92 getihu 46, 59–60, 64, 69 globalization 5, 17, 27, grand area party building 114 guanbenweizhi 41 “guerrilla policy style” 11 Guo Wei 76, 77 Hamilton, Gary G. 31 Hongshan District Party Committee 108 Huang Min 48 Huang,Weiding 170 Hu Jintao 13, 66 human resources 121–2 Huntington, Samuel 41 institutional diffusion 33 institutional isomorphism 27, 30–1, 47, 82, 87, 92, 98 institutional principle 16, 30–3, 41–4, 101, 105, 107, 117, 121, 124 institutionalism 16, 20 institutions 8, 11, 16, 28–34, 42–3, 50–1, 56, 80, 90, 92, 98, 130, 132 intellectuals, the 20–1, 66–8, 152– 3n.28/37 interface with society 9 Internet, the 13–14 intra-party democracy 133–4, 138–40 iron rice bowl 80, 88, 147n.9 Jiangsu Party Committee 93–4 Jiangxi Provincial Committee 108–9, 116 Jiang Zemin 13, 66, 68, 86, 116 jichen zuzhi (grassroots/base-level organizations) 5 Jilin Chemical Plant Party Committee 83–4 joint branches 62 juweihui 102–4 Khrushchev, Nikita Sergeyevich 25 kinship organizations 50–1

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178 Index KMT (Kuomintang) xvii, 8, 10, 138, 142n.21, 146–7n.5 leadership, single pole 23 leading squads/teams 46 Leninist party the CCP future 130, 137; and communities 104, 114, 117; and compatibility 128; introduction 8–9, 15–16; and the mobile population 61; and the private sector 93; and representation 21; trademarks of 79 Lenin, Vladimir Ilyich 22 Liang Zhengqing 75 Li Caoyang 115 Lieberthal, Kenneth 5 Li Huaisheng 156n.3 Lin Shenggeng 52–3 Liu Danfen 76 liudong renkou see floating population Liu Jiyuan 108 Liu Yongzhe 48 Liu Shaoqi 147 Li Yanxi 132, 161n.9 Li Yi 132 Li Yuzhi 54 Li Zeyan 68 Ma Bo 45 MacFarquhar, Roderick 10, 134 marketization 2, 5, 8, 11, 15–17, 24, 26–7, 32–3, 41–2, 47, 56–7, 63, 68, 78, 80, 82, 117, 120–3 mass organisation 39, 81, 83, 132 mass party 17–18, 23, 121, 132–3, 136, 138 masses, the 8, 18, 22, 34, 36–7, 40–1, 44, 46, 53, 55, 75, 97, 106–7, 111–12, 116, 123, 128, 129, 132, 136, 139 McGregor, Richard 11 Mao Zedong 10–11, 23, 33, 137 Ma Yiqi 45 melting into the background 132 microrule 26, 38, 80, 97, 107, 116, 122, 129 middle classes 65–9, 130–2, 131, 153n.32/36 middle classization of the party 132 Minxin Pei 10

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mobile population 59–60, 78, 110, 113, 151n.8 modern enterprise system 15 modernization 36, 44,–5, 66–8, 96, 122, 126–7 moonlighting 75, 154n.54 Nathan, Andrew 10 Nationalist Party see KMT (Kuomintang) Naughton, Barry 11 Nee, Victor 147, 166 “New Grand Project” 13 new social organizations 69–70, 153n.42 new social strata 63–4, 126 nomenklatura system 11 Oi, Jean 148, 167 Oksenberg, Michel 5 old boys’ network 90–1 old Party secretary syndrome 50 one-vote negation 48, 149n.31 open party affairs 13, 143n.36 “Opinions on the party work” 87 Opium War (1841) 23 organization departments 13, 92 organized dependence 40 organization infrastructure 59 organization party 19, 22–3, 41, 124, 128, 136 organizational/institutional isomorphism 30–1, 33, 82, 87, 92, 98 organizational liaison 114 organizing principle 30, 34, 39, 55, 100, 113, 137 Orru, Marco 31 Party-affairs liaisons 114 party affairs workers/specialists 13–14, 72, 75, 83–4, 86, 88–9, 91–2, 109 party-building 13–14, 49, 61, 63, 96, 105, 108, 112, 114–6, 124 Party Building Association of Zhejiang 72 Party committees Shenzhen Chamber of Commerce 62; Yandu County, Jiangsu Province 62 party dues 77, 155n.65 Party and State InfoNet 13 party fragments 113

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Index

179

party of personal interests 21, 23, 136 party-state 5, 10–12, 23–5, 30–3, 35, 35–44, 65, 67–8, 72, 78–80, 94, 99–104, 106, 111, 114, 116, 118, 121–2, 124, 126–7, 131, 134–5, 138–9 peasant workers 46, 59, 74, 101, 103, 108, 110 People’s Daily 13 People’s Republic of China (PRC) 4, 23 Perry, Elizabeth xix planned economy 1–2, 17, 21–2, 25–6, 30, 56, 80, 123, 136–7 pluralism 123–4, 127, 138 policy autonomy 124 political change 4–5, 8–9, 12, 16–17, 46, 49, 57, 137 Powell, Walter 31 primary-stage standard 45, 148n.17 “principle of the Party control cadres” 87 princelings 4–5, 8–9, 12, 16–17, 46, 49, 57, 137 private sector 10, 59–60, 63–4, 66, 68, 72, 79, 83–4, 93–5, 97, 108, 111, 115, 126 proletariat, the 18, 20, 25, 57, 66–7, 125–7, 136 public property rights 93

Shanxin Embroidery Market 97 Shanxi Province 73 Shao Yunduan 89 Shenzhen Organization Department 97 shequ see communities Shi Gongzhong 78 Shirk, Susan 146, 167 single pole leadership 23 small town democracy 118 social base (of the Party) 21, 23, 41, 112, 124, 136 social space 11, 15, 26, 57, 79, 134 social stability 24, 53, 65, 114–5, 126–7 societal man 101 Songyuan Party Committee 84, 88 Song Zhenxian 77 Soviet Union 18 Stalin, Joseph 18 State-Owned Enterprise Law (1986) 85–6 state-owned enterprises (SOEs) 44, 65, 80, 82, 90, 110–11 state–society relations 16, 23 Street Affairs Administration 104 Street industries 159n.11 Street Work Committees 104 sustainability/survivability 10, 91, 113, 121, 134

Qingdao government 96

Taiwan 8, 10, 138 talent economy 47 Tax-for-fees reform 48, 149n.30 Tiananmen Incident 22, 86 township and village enterprises (TVEs) 47 tribalization 51 Tsinhua University 77 Tsuo Tang 24 TVEs 47, 56 “two-dime Party members” 55 two new organizations 68, 95

Rang Yihui 132 recruitment 8, 12, 14, 18–21, 34, 41, 45–6, 48–50, 55, 59, 67, 70–1, 75–9, 81, 83–4, 107, 124–6, 128, 130, 132, 155n.62 Red Capitalists (Dickson) 10, 65 relative price 16, 30, 33, 45, 47, 120 religious organisations 52–3, 55 Ren Liang 115 resource control 39, 44, 46, 136 revenue creation 101 rules formal 28–9; informal 28–9 Saich, Tony 51 Schurmann, Franz 8, 136–7 “secularization” 132–3 service 129–30 service party 116, 118, 130 Shaanxi Province 88 Shambaugh, David xix, 10

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underground party 77, 110, 155n.67 united front department 64 vanguard party 18, 22–3, 111, 125–6, 128, 130, 136–8 village Party organizations/branch 48–55, 118, 148–9n.28 Walder, Andrew 11 Wang Anshun 44

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180 Index Wang Gunwu xix Wang Guozhong 47 Wang Xingmin 88–9 Wealth into Power (Dickson) 10, 26 Wei Shaofu 88 Wong, John xix work unit see Danwei World Trade Organization (WTO) 2 Wu Xinyong 47 Wu Yongnian 112 Xi Jinping xviii xinde weida gongcheng see ‘New Grand Project’ Xuong Chenjia 93, 158n.37 Yan’an Rectification 125 Yang Mingsheng 76

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Yangpu Street Party Work Committee 114 Yan Zhen 76, 77 Ye Wuxi 89 Yuan Maqing 49 Yu Jianrong 52 Zhang Chengshong 76 Zhang Hong 108 Zhang Huaqiang 52 Zhang Jiayuan 84 Zhang Nuofu 52–3 Zhang Wenbiao 52, 150n.44 Zhao Li 47 Zheng, Yongnian 11, 135 Zhong Zhuqi 81 Zhou Ji 71

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