BY EVA CHENG
Capitalists have been guaranteed new room to expand their interests by the National People's Congress (NPC) — China's parliament — during its annual session in Beijing on March 5-18. The assurances came amid hollow statements by top Communist Party leaders that the public sector remains the foundation of the country's "market socialist economy".
As in previous years, the country's largely ceremonial "advisory" body, the Chinese People's Political Consultative Conference (CPPCC), was also in session in Beijing.
To match their rising strength in the economy, capitalists pressed for, and achieved, increased representation in both bodies. Granted the right to be members of the Communist Party at its 16th congress last November, capitalist representatives won 55 places, among the nearly 3000 NPC deputies' positions. Private businesspeople also secured 65 positions among the more than 2000 CPPCC representatives.
While those numbers may seem small, they could be strategic. For example, in January, Xu Guanju, a 43-year-old billionaire, who is chairperson of Zhejiang province federation of industry and commerce, and president of the large chemical Chuanhua Group, assumed the influential position of vice-chairperson of CPPCC's Zhejiang provincial committee. Zhejiang, near Shanghai, is a rich province. According to the March 2 People's Daily, the CPPCC provincial committees in Guizhou and Chongqing, in China's south-west, have also appointed capitalists as vice-chairpersons.
In an obvious bid to increase the capitalists' political influence, during the latest CPPCC session Xu urged fellow capitalists to do more to "share the worries of the country".
In 2001, there were 24 million "individual self-employed" businesses registered in China, which included about 2 million private companies, with a combined work force of more than 70 million people. The private sector now accounts for one-third of China's gross domestic product, according to the March 17 People's Daily.
During the NPC, Beijing also announced that nearly 30 sectors previously shut to mainland Chinese capitalists, but not to foreign capitalists, will now be opened to them to invest in. In fact, this only formalises a measure that has already in operation for several months. This has enabled the Wenzhou-based Junyao Group to acquire the Three Gorges airport in Hubei province in central China and a 18% stake of the state-owned Wuhan Airlines.
Beijing has repeatedly affirmed that sectors which "hold the lifeline of the economy" will still be "no-go" areas for private capital. But these restricted areas have been shrinking, with newly "liberated" areas spanning from banking and telecommunications to education, medical services, the auto industry, civilian satellites, large equipment manufacturing, large-scale integrated circuits and airport construction. The privately owned Minsheng Bank was opened in 1996.
Planning will 'fade' away
To reinforce this trend, the NPC has approved the formation of a State Development and Reform Commission to replace the State Development Planning Commission. The official Xinhua Agency on March 6 spelled out why the change was made: "The word 'planning' will thoroughly fade away from the names of the nation's macro-management bodies".
The new body, Xinhua continued, will "drastically reduce the amount of administrative approvals and other micro-management matters so as to allow the market mechanism to work better in regulating economic activities".
The junking of the planning commission is part of a reshuffling of government structures approved by the NPC. According to the secretary of the State Council, this aims to "perfect the socialist market mechanism [and] enhance reform of the political infrastructure under the basic principle [of the] separation of functions between government and enterprises".
A special body will be formed to "supervise and manage" state assets with emphasis on furthering the restructuring (meaning dismantling) of state enterprises. A new banking supervisory commission will be formed which could signal the formation of more private banks. The two bodies which have been overseeing domestic and foreign trade will be collapsed into a new single Ministry of Commerce.
Beijing didn't reveal the political motivations behind these changes but they are consistent with China's process of restoring capitalism. Since the early 1980s, there have been four similar restructuring exercises.
Apart from the annual budget, the NPC also received major reports on the judiciary, the criminal justice system, the economy and development, and the overall work of the government. In the main, they are generally a collection of isolated statistics and non-substantiated claims. They reveal little about how life has become much harsher for ordinary Chinese people.
Even so, telling snippets still emerge. In his report on the economy and social development, state planning chief Zeng Peiyan named four main lingering "social contradictions":
- the shortage of "effective demand" (i.e. the people cannot afford to buy goods and services), a result of stalled growth of rural income, the low income of some urban residents and the "very harsh conditions that some masses are still confronting";
- "severe" employment and reemployment conditions;
- "deep contradictions" persisted in the reform of state enterprises; and
- "chaotic market economic order", the credit system lagging behind the economy's needs and the frequent occurrence of major "disastrous incidents".
Though hardly a problem that confronts only China, a deficit in "effective demand" has plagued the country since the 1997-98 economic crisis, a problem mitigated partly by government spending, which has created a fiscal deficit of 309.8 billion yuan in 2002. These deficits, in turn, have been plugged by state borrowing, which reached an accumulated outstanding amount of 640.4 billion yuan. The 150 billion yuan borrowed by the state last year, the NPC was told, has helped boost China's GDP growth by 2%.
The NPC approved a military budget of 185.3 billion yuan for 2003, 9.6% more than 2002. It wasn't clear how much would be spent on social security in 2003, but the finance minister told the NPC that "in principle, all other [aside from the military budget] general expenditures will experience a zero growth". Social security spending rose 38.6% in 2002 to 136.2 billion yuan.
The "crime" report to the NPC continued to single out the "forces in splitting the nation" as a target for suppression. It was reported that 3550 people were charged last year as "a threat to national security". Political offences were lumped with general crime statistics, making it hard to gauge the scale of political victimisation.
The NPC was also told that, in the last five years, there were 5541 corruption cases. More than 80,000 public officials were charged, which included 12,830 Communist Party cadres who were county chiefs or a higher rank. Since 2000, more than 22 billion yuan of public assets have been recovered.
New guard
Sweeping personnel changes at the top also marked this NPC. Jiang Zemin had concurrently held China's top three positions for the last decade: Communist Party general-secretary, state president and chairperson of the Central Military Commission (CMC). After giving up the top party post last November to Hu Jintao, he also let go of the state presidency during the NPC. Hu Jintao won the presidency with 2937 votes in favour, four against and three abstentions.
Jiang retained his post as CMC chief, but received a humiliating vote of 2726 votes in favour, 98 votes in opposition and 122 abstentions.
Jiang's top protege, Zeng Qinghong, who was admitted to the CP Politburo's standing committee only last November, was elected by the NPC as deputy state president. An indication of Jiang's powerful residual influence in the ruling hierarchy, Zeng also holds the powerful posts of secretary of CP's Central Secretariat and head of the party school.
The NPC also reelected Hu Jintao as one of the three vice-chairpersons of the CMC, together with Cao Gangchuan and Guo Boxiong, who have both had long military careers.
After five years as premier, Zhu Rongji stepped aside for Wen Jiaobao, who secured the position with 2906 votes in favour, three against and 16 abstentions. Wen was admitted to the CP Politburo as a full member in 1997 and into its standing committee last year. He also became a vice-premier in 2002. The NPC also approved four vice-premiers: Huang Ju, Wu Yi, Zeng Peiyan and Hui Liangyu.
Li Peng, infamous for his notorious role in the Tiananmen massacre in 1989, has finished his non-renewable term as the NPC chief. Wu Bangguo was elected in his place, with 2918 votes in favour, 20 votes against and 12 abstentions.
The new chairperson of the CPPCC is Jia Qinglin, another of Jiang's proteges.
From Green Left Weekly, April 2, 2003.
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