China: Bo Xilai purge and the World Bank

Did you happen to notice this one? Just before last month's notorious purge of Bo Xilai, the populist Chinese Communist Party chief in Chongqing, World Bank President Robert Zoellick lectured the People's Republic that its economic model is "unsustainable," and it is in danger of falling into a so-called "middle-income trap" if it fails to reform. "This is not the time just for muddling through," Zoellick said at a late February Bejing conference. "It's time to get ahead of events and to adapt to major changes in the world and national economies." At the conference, the World Bank submitted a hefty report making policy recommendations—of course with special criticism for the state sector. (LAT, Feb. 27) Further details on the report are provided by the NY Times Economix blog March 5, via the Trade Reform website:

SHANGHAI — When the World Bank and a Chinese research organization called on Beijing policy makers this week to scale back the power of state-owned companies, reform-minded economists offered praise. But not everyone is pleased. The 448-page report, "China 2030," urged China to rethink the government's role in managing the economy and move toward a more market-oriented system. According to Tuesday’s online edition of The 21st Century Business Herald, a respected Chinese publication, the State-Owned Assets Supervision and Administration Commission sharply criticized the report even before it was released to the public on Monday. The commission, a powerful Beijing organization with oversight of some of the biggest centrally controlled state companies, sent a letter to the study's authors arguing that reducing state involvement in the economy would be "unconstitutional" and effectively "subvert the basic economic system of socialism."

The Chinese organization that helped produce the study is the Development Research Center, a tellingly understated technocratic name.

Two weeks later, as the National People's Congress opened its annual meeting in Beijing, came news that Bo Xilai—thought to be fast-tracked for the Politburo's nine-member ruling committee—had been purged. The purge was accompanied by a burst of red-baiting from China's "Communist" rulers. Premier Wen Jiabao told a press conference at the Great Hall of the People as the Congress closed that without political reform, China could face another tragedy "like the Cultural Revolution." Bo, meanwhile, had led a "red revival" campaign on his turf, promoting (at least) the symbols and music of the Mao era. In his crackdown on the Chongqing mafia, he was accused by critics of a "red terror." But it won him local support, as did his program of "social housing" projects that helped Chongqing's working class, hard hit by soaring rents and real estate prices (fueled by land privatization). (SMH, March 27; Washington Post, March 16; Forbes, March 15; LAT, March 14)

In another bit of interesting timing, this whole affair broke just as it was reported that ExxonMobil has lost its crown as the world's biggest publicly traded oil company to PetroChina. PetroChina reported that it pumped 2.4 million barrels per day previous year, beating Exxon by 100,000. Exxon remains the more valuable firm, with a market capitalization of $400 billion against PetroChina's $280 billion. But PetroChina's production is increasing, and Exxon's decreasing. (Galaxy Stocks, April 2; AFP, BBC News, March 29)

Note that contrary to some reports, PetroChina has overtaken Exxon only as the biggest publicly traded oil giant. There are several parastatals that are bigger than either—most notably Saudi Aramco, but also the company that spun off PetroChina twelve years ago, the China National Petroleum Corporation (CNPC) (which has beaten the US to the punch in Afghanistan). The China National Offshore Oil Corporation (CNOOC) (which famously made a bid for Unocal a few years back) is also in state hands. Sinopec (with operations in US-occupied Iraq and in US "backyard" state Ecuador) is the publicly traded successor to the former state-owned China Petrochemical Corporation. In the global struggle for control of oil, PetroChina's emergence is a top Western concern—and increases the necessity for a conciliatory Chinese leadership.

Lest you buy the empty prattle about how economic "liberalization" will mean political freedom, note that one of the proud achievements of the National People's Congress meeting was a new law allowing police to hold political suspects for up to six months in secret detention facilities commonly known as "black jails." Political suspects are defined as those deemed to be threatening to the CCP. The bill passed with a vote of 2,639 delegates in favor and only 160 opposed. Human Rights Watch vainly urged China not pass the new law, calling it "a clear danger for government critics and human rights activists, and [places China in] clear contravention of [its] international obligations." (Jurist, March 14)

It is now clearer then ever. Whether you think Mao's China was (as the anarchists and dissident Marxists have it) "state-capitalist" or (as the Trotskyists have it) a "deformed workers' state" or (as the Maoists and Stalinists have it) a "correct line" socialist state, it is clear that its legacy has been completely betrayed. The "People's Republic" is now even moving away from state capitalism to plain old Western-style (or worse) savage capitalism. And the emerging New Cold War between the US and China is unburdened of the ideological baggage of the first Cold War. It is a plain old rivalry between capitalist Great Powers.

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A good article.

"It is a plain old rivalry between capitalist Great Powers."
Or, perhaps, simply a plain old rivalry between great powers without important distinctions of ideology or organization.
Such was the case before ideology came to play such an explicit role.
The Latin Empire vs. Iran during ancient times comes to mind, as does the rivalry among Egypt, the Hittite Empire, and Babylon even earlier in ancient times.

capitalism matters

"Without distinction" because they are both capitalist. But it is the dynamics of capitalism that are driving the rivalry. See Lenin.

China shuts down Maoist websites

Well, this keeps getting better and better. It now emerges that Chinese authorities have ordered closed two Mao-nostalgist websites, Mao Flag and Utopia, for "rectification." Authorities said their postings had "maliciously attacked state leaders" and espoused "absurd views," according to statements posted on the websites when they were shut. Accounts from China Post and AP April 6 failed to provide the URLs, but the site MaoFlag.net seems likely—it is online, but completely empty, displaying only a blank grey field. We weren't able to find the Utopia site, but it is apparently associated with a leftist bookstore of that name in Beijing, and was founded by professor Han Deqiang of Beijing Aeronautical University. The Economist informs us that another figure associated with the bookstore and website, Fan Jinggang, has been a chief propagator in China of the theory of a World Bank role in the Bo purge.

Internet censorship in defense of free markets carried out by a government that rules in the name of a Communist Party. Orwell would shit.

A friend in China...

...supplies the URL for the Utopia website, somewhat incongruously, as wyzxsx.com. At the moment, it is not loading. It will be interesting to see if it comes back on line in the coming days, and if so, what we will see there...

China cyber wars reach US

A US-based website that has reported extensively on the Bo Xilai scandal was crippled by a cyber-attack April 20. Watson Meng, the manager of the Boxun.com website, said it was out of action for several hours after a "denial of service attack," in which several hackers overload a website with hits. The site was forced to hurriedly switch to a new hosting service after its previous host said the attacks were threatening its entire business. Meng charged that China's security services ordered attack, noting the site has seen visitor traffic rise 155% this year. The site has widely aired accusations that Bo's wife was involved in the death of British businessman Neil Heywood. (RTHK, April 21; The Guardian, April 20)

It is certainly possible China's security services were unpleased with a foreign website airing what are considered internal matters. But given that Boxun was airing allegations unflattering to the ousted Bo, the attack may have been launched by his own network of sympathizers in China. Note that this is the same sort of attack notoriously launched on targeted websites by the Anonymous network.

Where is Bo Xilai?

A grimly fascinating story in the New York Times June 14 on China's "opaque Soviet-style disciplinary machine, known as 'shuanggui,' that features physical torture and brutal, sleep-deprived interrogations." Bo Xilai, who has not been heard from since his purge, is believed to have disappeared into the shuanggui system's secret prisons. As in Orwell's 1984, this is reserved only for the party elite, and is entirely extra-legal. Those who enter the secret prisons are rarely heard from again, and their deaths are reported as suicides. Those who make it out are broken and repentant. Again, what a strange irony that a thoroughly capitalist state is wielding this machinery against a retro-communist dissident...

Bo Xilai formally charged with corruption

China's former Communist Party leader Bo Xilai  has been formally charged with corruption, embezzlement and abuse of power, the state-run news agency,Xinhuaannounced July 25. Bo allegedly used his position in the Communist Party of China (CPC) to accept bribes in the form of property and money for himself and others. Bo's case is viewed as a challenge  for China's new president Xi Jinping, who faced pressure from within the CPC not to punish Bo harshly and to avoid a public trial. Though Xinhua stated that Bo's arrest is an example of China's "strong determination" to end corruption.

From Jurist, July 26. Used with permisison.

China court upholds life sentence for Bo Xilai

A Chinese court on Oct. 25 upheld a life sentence for former Communist party leader Bo Xilai. Bo was sentenced to life in prison in September for corruption, embezzlement and abuse of power. The High People's Court of the Province of Shandong rejected Bo's appeal, ruling that the facts of the first instance are clear, the evidence is reliable and sufficient, and the sentence appropriate, according to a statement on the court's website. Bo does not have another chance to appeal, and if he submits a complaint to the Supreme People's Court in Beijing, it will likely be rejected, according to a BBC report.

Bo was convicted for using his position in the Communist Party of China (CPC) to accept bribes in the form of property and money for himself and others from 1999 to 2012. The Jinan Intermediate People's Court stripped Bo of all political rights and seized his personal assets. Chinese authorities formally charged Bo in July. His case has been viewed as a challenge for China's new president Xi Jinping, who has faced pressure from within the CPC to punish Bo lightly and to avoid a public trial.

From Jurist, Oct. 25. Used with permission.