Can China reform?
June 3rd, 2013
09:47 AM ET

Can China reform?

By Global Public Square staff

There's a powerful new voice calling for smaller and more market-friendly government. If you think it's a second coming of the Tea Party, you would be wrong. In fact, this call doesn't come from America at all. It comes from half-way around the world, from...the Communist Party of China.

Last week, Chinese Premier Li Keqiang made an unusually bold speech – rare for a Chinese leader. He said his government would loosen control of the economy and allow free market forces to blossom. A few days later, he made another speech, this time in Berlin. There, Li backed an ambitious set of specific proposals that included giving foreign companies the chance to compete on equal terms in China. This, in a country where the state controls – and manipulates – almost every major industry: finance, transport, energy, and communication.

Li's comments may sound radical, but they're part of a trend. For many months now, the two most powerful people in Beijing, Li and President Xi Jinping, have said that the state's command systems need an overhaul. In fact, this is criticism of their predecessors – Wen Jiabao and Hu Jintao – whose ten years in office were marked by passivity and a lack of courage to reform. Corruption flourished under their watch: China is ranked only as the 80th most clean country in the world by Transparency International in its latest corruption index. State controls, nepotism and a culture of bribery made it difficult to do business: the World Bank ranked China 91st in the world – behind the likes of Azerbaijan and the Kyrgyz Republic.

More from CNN: Is Chinese dream a fantasy?

China has had remarkable growth, but the buildup of these conditions is beginning to show. Foreign investment is declining; trade with Europe and the United States is slowing. According to a recent survey, more than a third of U.S. companies in China say that their business there is hindered by state favoritism for Chinese companies. The same survey also reveals that the two biggest perceived risks in China are an economic slowdown, and rising labor costs.

In short, there is a strong case to be made for a round of serious reforms in China.

The question is, will any of it actually happen? Economic reforms everywhere are politically difficult. Beijing's leaders realize that reforms are necessary to boost long-term growth but some of them will actually address public discontent, on issues like corruption. But on the other hand, many reforms will face resistance – from political elites that run state-owned enterprises and local governments that make deals with developers.

So how Beijing navigates these waters will be fascinating to watch. Maybe this week, when Xi Jinping meets President Obama in California, we will learn some more.

Keep one thing in mind, though. China's new leaders want growth, modernity and all of that good stuff, but they don't want to become a Western-style liberal democracy. Last January, when Xi went on a speaking tour of the country, he claimed that his reforms do not equal Westernization. One reason why the Soviet Union collapsed, Xi said, was because it wavered on its beliefs.

So China wants to refine and reform its state capitalist model and maintain its political Leninist model. But if its reforms are actually implemented, they will create larger and larger groups of Chinese who think of themselves as middle class, do not owe their livelihood to the government, and seek greater individual autonomy and freedom. Eventually, that tends to produce political change.

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Topics: China • Economy • What in the World?

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soundoff (54 Responses)
  1. Really?

    Who would want the US model of democracy? It's ineffective in too many ways, and besides the author is unfortunately bias. Why does modernization and reform have to equal western ways only? Every country have their own path, the US system is forced upon weak developing country, neo-liberalization is only good for the developed countries and multinationals.

    June 3, 2013 at 10:25 am | Reply
    • Maersk

      When a fool who didn't even know errection and Iraqtion is not the same was able to steal the presidency, started two wars that killed so many people, tripled the national deficit, and still got reelected for a second term, America is not a democracy, it's a demo-of-crazy. You need to be as silly as Curious George to believe America is a democracy.

      June 5, 2013 at 6:46 am | Reply
      • uh-huh....

        You are a massive, massive tool. Get a life, dude.

        June 7, 2013 at 12:52 pm |
      • Sieta Era Mannas

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        August 7, 2013 at 11:34 am |
      • Sieta Era Mannas

        Hey! You're not an American. Quit being so rude. Wars over. Haven't you heard the news?

        August 7, 2013 at 11:41 am |
    • niuniu

      怎么这里也有五毛党?

      June 16, 2013 at 9:49 pm | Reply
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      June 20, 2013 at 11:48 am | Reply
    • Richard

      You make a good point – the same point I made in my post. This website is always going to be a bed of pro-US hotheads who treat suggestions that their country is broken as nonsensical drivel, but if I were China I'd be looking at US experts telling them that what they need above all else is democracy – clearly a molasses of corruption and lobbyists – and cracking up.

      June 30, 2013 at 6:07 am | Reply
  2. Michelle

    America needs reform ! America can not afford losing, not only in foreign markets, but unfortunatelly also domestically. And there is no need that America continues losing. We just need to reform our politics, and focus on winning strategies. In regions where we can not immediatelly win, we need to at least defend ourselves. Chinese will not give us any victory, that's why China as a business partner should not be on our priority list. There are other more US-friendly nations, that deserve our attention, such as Turkey, Southern Europe or even Russia.

    June 3, 2013 at 10:30 am | Reply
    • LiveFree

      That would begin with eliminating tax loopholes that encourage corporations to outsource manufacturing and rewarded with direct export to other countries from where products were made. Google "Corporate America and its Growing Pile of Offshore Cash". Otherwise, very soon, our political system will be governed by corporation pile of cash. Every policy will be profit-based and our children will be sent to wars to protect their profit.

      June 4, 2013 at 2:21 am | Reply
      • kersh

        Haven't your political system been governed by corporation pile of cash ? and haven't your best boys been sent to wars?

        June 4, 2013 at 4:53 am |
  3. jackinbox

    They need to provide a way out for millions of college educated young people. Let them start businesses and work for private businesses. The state sector can absorb only a fraction of them. If you leave too many angry young men with fancy ideas out there doing nothing, you have a hissing fuse on your hand.

    There is no need to get too ideological.

    June 3, 2013 at 5:27 pm | Reply
  4. j. von hettlingen

    With its 1,3 bn inhabitants, every reform is a Herculean task, if it has to be implemented top-down. The first reform the centralised government should undertake is to decentralise bureaucracy and delegate its power. This should create a form of federal governance and promote grassroots strength. Let the people check on its regional governments. Of course it's exactly what the central leadership tries to avoid.

    June 4, 2013 at 9:26 am | Reply
    • double fish99

      it seems like a contradiction,nevertheless china is a complicate society with self balancing philosophy,which derive its splendid history and culture.

      July 11, 2013 at 9:11 am | Reply
  5. Pete

    If China favours own companies it is called corruption. But if USA or German favours own corporation, it is called strategic planning or market determination. It is generally called, multinationals protectionism and dictate of local markets.
    That is why China needs to maintain a smaller version of its communist tradition when multinationals dictate the terms of its local market opening up China for the internationalisation of the Yuan and normalising relations just like any other democratic sovereign.

    June 4, 2013 at 12:27 pm | Reply
  6. JTBurton

    Kudos to China. Capitalism works because the consumers have lower prices and better products/services because businesses, small or larger, compete for their business. Equally good, businesses have goods/services the consumers need/want. Additionally, it is my opinion that Democracy, some form of, should be a part of China's future. Best Wishes to China. Peace.

    June 4, 2013 at 3:21 pm | Reply
  7. vistar hornbill

    The west calls it reform, I say its another step forward in China's 30 year roadmap towards a Socialist democracy. But China's Asian style democracy will never be an American style democracy which is evidently paralysing their country.

    June 4, 2013 at 9:24 pm | Reply
  8. JTBurton

    Socialism destroys initiative. The truth is: money is a good incentive. The Law, true law, is the cornerstone of society; the Law should prevent corruption. Checks and balances [mentioned below] may prevent corruption.

    Okay, so China may or may never have a "Westerner-style" Democracy, but is there some form of Democracy that is favorable that is not Parliamentary nor a three branch system with checks and balances (Executive, Legislative, and Judicial) with a President, Administration, and a Congress (a two house system of state leaders: a Senate and local representatives: a House of Representatives?)

    June 5, 2013 at 6:04 am | Reply
    • JTBurton

      I know this has mentioned before, perhaps in a small part in jest, but is there a blueprint for a good, fair, strong, prosperous, peaceful Democracy? Emerging Democratic Governments need the wheretofors or ins and outs of what is important to have and not to have. Additionally, every nation is different and may have different needs, wants and dislikes. "What Makes A Good Democracy And How You Achieve It" may be a great read if written truthfully and very well. Best Wishes

      June 5, 2013 at 6:27 am | Reply
  9. Bender B. Rodriguez

    El Presidente Xi!! Be a Patriotic Chinese Supreme Hero! Dissolve the PRC and your party!!! Be the bigger man, be the next Yeltsin!! be like an semi-god jr!!! Restore Power and Glory to our First/1st Republic!!! A world sight to see when China will finally be complete! 中華民國!!!! UUUUURRRRRRAAAAAAAA!!!!!

    June 5, 2013 at 6:34 am | Reply
  10. mike

    Can America reform.

    June 5, 2013 at 7:28 pm | Reply
  11. Europeman

    Thank you for the great comment. It is indeed highly interesting to see what Obama and Xi are discussing and how the reform will develop in China. An interesting analysis!

    Still I'd like to point out that the pattern of growing middle class leading into the more political system, may not be the case with the Middle Kingdom. China is such a vast and different country from all of those that we use as previous examples. Yes, many Western countries have followed that pattern – and in some ways even Asian countries, like South Korea. Some people are suggesting that Myanmar is also on the road of opening up. Yes that can be argued, but these patterns may not be applied to China. David Shambaugh reminded well that most of the guesses about China's social or political direction have often proved wrong (check f.e. Time 2009 cover "China's Moment"). People have just picked it wrong for so many times. That's why I'd also like to urge people to caution in making these foreseen predictions – they don't always apply to China, which differs dramatically from most of the countries sharing a very different scale, culture or history.

    June 7, 2013 at 3:06 am | Reply
    • LostMan

      Oh so well done turning Mao’s HISTORY and flipping it! … Mao on his run from Chiang Kai Sheik … HUNGRY and CRAMPING UP without food … fed his army on poor peasants he captured (at night – using the butcher commandos) on his way into Tibet … at worst when he reached into the thousands of miles “barren” (still Indian Protectorate - by permission of someone gullible called NEHRU in India) plateau of Tibet he had to cannibalize his own army … secretly (using special butcher commandos during the nights and shuffling his platoons as patrols against Sheik’s army who were “phantomlike” FIXED rumor “pursuing” – NOT – and assumed killed!) culling weakened soldiers from diverted “patrols” – same taste as “pork” – ONLY a few know and the “NEW” from childhood the new education is an effort of smoke and mirror “creative” history to en-mass the (“knowledge”) PLOY and garner internal support (using the now evolving brain-washing Maoism-red-book) to overcome the knowledge trickling AROUND from the FEW of the “butcher commandos” – and wiping the knowledge of STEALING Tibet from under the WORLD’s nose – for ever! Courtesy of USA in MANY ways!

      June 8, 2013 at 7:05 pm | Reply
  12. Muslim

    What is the meaning of reform? Becoming a US slave?

    June 9, 2013 at 1:59 am | Reply
    • Bob

      Yo Muslim dude! We've been trying to reform your Muslim nations for years with no success. Stay in your ignorant 13th century ways and stay out of the whole idea of reform. You don't want any input from anyone non-Muslim.

      June 9, 2013 at 11:39 am | Reply
  13. Bill Rich

    Will China reform ? Not over their dead bodies.

    June 16, 2013 at 2:04 pm | Reply
  14. EdL

    Can the U.S. reform?

    June 17, 2013 at 10:23 am | Reply
  15. CelestialOne

    By the time Obama finished his second term, many analysts such Paul Roderick Gregory have estimated that the US debt will be over $20T (or $23T by usdebtclock using current rate). Before telling China how to suck eggs, the writer should have better spent his time asking the question whether US is capable of reform.

    June 18, 2013 at 12:03 pm | Reply
  16. Karl Drobnic

    “As nightfall does not come all at once, neither does oppression. In both instances, there is a twilight when everything remains seemingly unchanged. And it is in such twilight that we all must be most aware of change in the air — however slight — lest we become unwitting victims of the darkness.” William O. Douglas, Supreme Court Justice and author of Legions of Dissent wrote that decades ago. We should always be trying to reform how we do things as a society, and we should always have a healthy respect for the dissent that precedes reform.

    June 18, 2013 at 2:37 pm | Reply
  17. umish

    Who cares, we just have to defend ourselves against the red hord.

    June 18, 2013 at 9:46 pm | Reply
    • vistar hornbill

      I say man, this is not the 20th century, this IS the 21st century. The old style communist had faded into obscurity for over 3 decades.

      A little outdated knowledge can misshape your mental capacity. You need to get in touch with reality – go China (if you can afford it) and take a good look around. Because you would be disappointed that "this is no communist system I know, something is not right in here " :)

      June 22, 2013 at 9:48 pm | Reply
  18. Cecil

    If China become a super sized Singapore, would that make USA happy?

    June 19, 2013 at 12:19 am | Reply
  19. umish

    A problem of the issue of in China human rights and the information control should protest it

    June 19, 2013 at 2:56 pm | Reply
  20. tianan man

    i was in tiananman square on may 19th. it seemed calm but there were police and military everywhere, watching, looking for trouble. i explained to my 10 year old son where the young kids had erected the goddess of democracy and where they were machine gunned down. I pointed out where the man in the white shirt with the grocery bag stopped the line of tanks. then we walked over to the forbidden city side of the street using the underground tunnel. the streets were barricaded so you couldn't walk out into the street. as we approached the gate to the forbidden city, i saw a military guy standing on a concrete soapbox suddenly launch himself into the air and run at full tilt toward the street. i saw papers (pamphlets?) blowing way up in the air as the military grabbed a 40ish looking man and hustled him into a waiting paddy wagon type bus already stationed there by the forbidden city. the arrested man looked at me eye to eye and i acknowledged him, and his actions, but i have no idea what he was protesting. I do know he will spend most of the rest of this decade in some kind of detention or other for tossing those pamphlets (which nobody dared grab–because they flew over the barricade into the street). this was just another day in tiananman square. this man will spend years of his life in jail and nobody reported it until i did here. china is a country whose government is scared to death of it's people. deathly afraid of them. it's simmering, and it's just a question of time, when–not if–it will blow. by the way, the sky was a thick hazey grey with no blue anywhere, because of the degradation to the environment. whoever that man was, and whatever he was protesting, i will never forget the look in his eyes. he was saying "you see what it is like here?" yes, i saw. i hope the world sees also.

    June 19, 2013 at 10:44 pm | Reply
    • Jeff Stockwell

      Thanks for the report. China should have a government of the people. A government that looks after the needs and interests of the people not the interests of Party Secretaries. Because the international society tneeds to work and interact with equilty, authoritarian governements are problematic. They believe that a governement should belong to a particular person, family or party. China has many courageous people who are protesting for their rights. It is the obligation of the international community to stand in solidarity with the courageous Chinese people, and help them change the government of China.

      June 28, 2013 at 10:02 am | Reply
    • globeharmony

      Another brainwashed by western media on the myth of "Tiananmen square". Student massacre and army tanks rolling over unarmed students at Tiananmen stories were created by the shameless western media.

      The picture of the man in front of the tank is iconic in the West as it fits with a favorite theme/meme: The lone individual standing up against the State...But there is another side to this story that has not been heard and the recent "Wikileaks Cables" from the U.S. State Department as well as cables from other foreign diplomats on the scene at the time on the subject that show that the account from the Government of China was correct. They also show that there were foreign intelligence agents from the U.S. Germany, France, Britain and Ireland present among the demonstrators during the three-plus weeks of demonstrations before June 4.

      Wikileak cable: http://www.telegraph.co.uk/news/worldnews/wikileaks/8555142/Wikileaks-no-bloodshed-inside-Tiananmen-Square-cables-claim.html

      The Myth of Tiananmen and the price of a passive press
      http://www.cjr.org/behind_the_news/the_myth_of_tiananmen.php?page=2

      For detail: http://jimcraven10.wordpress.com/2013/06/02/birth-of-a-massacre-myth-how-the-west-manufactured-an-event-that-never-occurred/

      July 27, 2013 at 1:15 pm | Reply
    • globeharmony

      And the worst of all, the US government with full knowledge used the myth created by its media to further demonize and force sanctions to isolate China for many years, hence the continued suffering of Chinese at its hand.

      The question is also, what else?

      July 27, 2013 at 1:37 pm | Reply
  21. Tahir

    Only reform china needs is to submit their will to US.

    June 20, 2013 at 3:35 pm | Reply
  22. LaKeisha Jackson

    The Chinese government does what it thinks is best for CHINA...and to hell with the rest of the world. They will say the right things, and make whatever promises the rest of the world might want to hear...and then continue right on to do what is best for China. Not sure whether that's the best way to run a country or not, but it sure is effective.

    June 28, 2013 at 10:08 am | Reply
  23. Glenn

    The question should be: "Does China really want to reform?" I think that answer is obvious–don't you?

    July 2, 2013 at 11:51 am | Reply
    • luna

      when you say china, do you mean ccp or chinese people? the ccp don't want a reform. and the people don't want a reform too, it is a revolution that they want!

      July 26, 2013 at 1:16 pm | Reply
  24. Scott

    It's a lost cause. China will never reform and never ever be like us. They are to Ignorant in their ways. The Population is too uneducated all in all. Plus DUHHH they are COMMUNIST. They are going to collapse economically and that will bring them back to where they were 10 yrs ago.

    July 4, 2013 at 4:18 am | Reply
    • Stellenbosch

      would love to chat

      July 26, 2013 at 6:24 pm | Reply
  25. Tim

    China isn't going to really reform until the people rise up and overthrow the Party. The corruption in China is discusting. There is no freedom, no political chooses, and no real future.

    July 4, 2013 at 11:00 pm | Reply
    • luna

      Thank you! and when the day come theyll die ugly

      July 26, 2013 at 1:13 pm | Reply
  26. Socrates

    Can the US really reform?

    July 18, 2013 at 12:53 pm | Reply
    • RigdeN gyalpo

      CCP needs reform before it callapse down.

      July 19, 2013 at 10:58 pm | Reply
  27. John Paul

    The impact of the chinese communist party on the World should not be ignored.
    In South Africa, a communist controlled ANC, after destroying the Governments Departments, now wants to Control the Economy, including Private Pensions and Private Medical Aid, theoretically to fulffil their social functions which they have already failed to deliver via the Government Departments.
    They are building a " Platform " of ANC members who are employed as the managers of the private companies, behind the cover provided by Affirmative Action.
    In reality After grabbing and ruining the State, the government departments, they now want to grab and spoil the Private Economy for their back pockets.
    You can take the person out of the KGB, like President Zuma and spokesperson Maharaj, but you can not take the criminal mentality out of the person.

    July 21, 2013 at 4:14 pm | Reply
    • Stellenbosch

      ppl can build a new party or elect DA. ANC is losing their ballot gradually.

      July 26, 2013 at 6:28 pm | Reply
  28. vistar hornbill

    Excuse me, but seems like CNN reporters are starting to slack in knowledge of the real China. Its no longer a question of will China reform, but really its about would America be able to keep up with China once the Chinese Reform is done witin 8-10 years time.

    July 25, 2013 at 11:37 pm | Reply
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    August 14, 2013 at 10:49 pm | Reply
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    September 16, 2013 at 9:07 am | Reply

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