The Renmin University professor urges systemic reforms to elevate the yuan’s international role via a "Third Way," calling the task China’s “hardest nut to crack.”
I've always found the official translation of 法治 interesting. Official PRC translations always translate it as rule of law. Rule of law can't be limited to the economic sphere, one of its effects on the economy is that it makes the business environment more predictable. Good for business but the Party wants to maintain control, to manage society.
More like rule by law -- the law as a tool of the state and not constraining the state -- just like in 古代。If that were to change, would the all central and various levels of 政法委员会 lose their jobs? Would lawyers be allowed to defend their clients in court even if the Party is very unhappy about it? Today telephone justice -- instructions to judges -- continues and Chinese defense lawyers are persecuted for defending people accused to political crimes. See for example: 2022: Zhou Shifeng on 2015 China’s Rights Lawyers Mass Arrests https://gaodawei.wordpress.com/2022/12/07/2022-zhou-shifeng-on-2015-chinas-rights-lawyers-mass-arrest/
Just what 法治 means in practice is important --- it is about trust. As Chinese has developed over the past few decades, the business environment on China's most developed east coast become more predictable while in the interior courts often ruled against foreigners and Chinese from other provinces who lacked the connections guanxi that locals had. So calling for greater fairness for the sake of business is not new. Becoming more like rule of law yet perhaps also ordered administratively from above so not quite) I remember back in 2000 reading in the Chinese press an article from the Party Secretary of Guizhou.
[Watch Out for the "Outside Merchants Always Lose in Court" Phenomenon
from Zhonghua Gongshang Shibao April 10, 2000 Liu Jianwen article, reprinted in
Wenzhai Bao (Guangming Ribao) April 16, 2000
Party and government leaders in western China are now paying close attention to
the "merchants from outside always lose in court" phenomenon. Liu Fangren,
Secretary of the Guizhou Party Committee said recently that "we must solve the
"red eye sickness" [hongyan bing] problem in which the investors come in the
front of the court and in the back the outsiders are "slaughtered" in the back.
Liu Fangren confirmed that some enterprises had complained to the Guizhou Party
and government about this problem. "This one has got his hand out, that one has
If the Chinese economy becomes more 'rule of law' can that change be confined to the economic sector? Makes me think of Marx. “随着经济基础的变更，全部庞大的上层建筑也或慢或快地发生变革。” https://www.marxists.org/chinese/marx-engels2/02/12.htm Preventing the gradual peaceful evolution 和平演变 heping yanbian of the PRC political-economic system has been a top Party priority for decades.
Although Marxist theory is always evolving, focusing on the 'principal contradiction', this seems to be bedrock. Whether or not Marx was right, it seems that the Party people, the policymakers, would think so.
Making the yuan fully convertible would make China more exposed to the world economy and add worries for the Party about social stability. In 1989 an economic crisis of inflation coincided with a political crisis. They worry a lot. I am afraid that I think of the Party as being 'control freaks' defined as
--- "A "control freak" is a colloquial term describing someone with a strong need to control people or situations in everyday matters . This behavior often stems from underlying psychological factors such as anxiety, insecurity, or past trauma." Ref https://chatgpt.com/share/68b43633-4920-8008-b86b-8acbecc974f9
We'll see.
Another point. Professor Wu writes "Some U.S. actions are self-contradictory—for instance, after observing China's significant improvements in chip manufacturing capabilities, they suddenly lifted sales restrictions on certain products."
Professor Wu's understanding of export controls may be incomplete. The purpose of the controls is to constrain or slow down the technical advance of the targets at some cost to US companies who want to export a product. If the target country advances in a certain technology anyways, the rationale for the controls disappears and so penalizing US companies by denying them permission to export their products then serves no purpose.
«in the interior courts often ruled against foreigners and Chinese from other provinces who lacked the connections guanxi that locals had.»
This happens in every country; in the USA there is for example a lot of "court shopping" (and even "jury selection") to have a case tried in a court known favorable to one of the parties, and regularly corporate contracts are written so the courts for disputes be the one where the corporate headquarters are located. In the USA many local judges and prosecutors are elected so obviously if they want to be re-elected...
The common solutions is to recognize that happens and have rules to have cases tried in areas where neither parties are located, or to have nationally managed instead of locally managed first and second level appeals courts.
«I am afraid that I think of the Party as being 'control freaks' defined as [...] The purpose of the controls is to constrain or slow down the technical advance of the targets at some cost to US companies who want to export a product.»
It looks to me that it is the USA globalists who are "control freaks" and only invested in the PRC when they thought they had control there as they have control in Europe or Japan, China-Taiwan, Australia, Philippines, etc. :-)
My thinking is that the current Gongchan "dynasty" is not totalitarian, as in wanting to control every public opinion or behavior, but like western "liberal democracies" it merely has "guardrails" and public opinion and behavior are relatively free inside those "guardrails". Arguably those "guardrails" in the PRC are far wider than those in previous feudal dynasties.
I think in the PRC they are wider than in the "liberal democracies" of the USA empire (see for the past decades the "cancellations" of "wrong thinkers" and in previous decades the persecutions of socialists and communists). As a result currently in the USA empire those who are not "centrists" (globalist neoliberals) are very few among the elites and are targeted by fairly brutal propaganda (and worse) campaigns and most politicians, civil servants, academics, professionals are very conformist to "centrism".
Note: broadly speaking my impression of the "guardrails" in the PRC is 1) prevent foreign influence operations 2) do not challenge the leading political role of the CPC. As to 2) my impression is that the CPC allows wide ranging political and policy discussions but does not allow the rise of *political* organizations that do not accept the leading role of the CPC and this is done mainly because of 1). In practice the principal aim of the CPC is long term national independence and given recent chinese history it is easy to understand.
«The core logic of the reform is to rebuild market rules and a trust system, making China's capital market a place where global investors are willing to come, stay, and invest. This is the true institutional foundation for realizing the goals of RMB internationalization and building China into a financial powerhouse.»
It seems to me that the eminent professor is a committed Reagan, Thatcher inspired neoliberal propagandist and what he wants means that globalist finance speculators would replace the CPC as the leading power of the PRC as they have become the leading power of the USA replacing the USA industrial capitalist class.
Since WTO entry the PRC has benefited from globalist industrial investors which chose the PRC because wages were low and invested to build lots of valuable fixed capital that they cannot easily relocate and that has made the PRC richer; financial oligarchs in the capital markets are quite different and only invest in areas where they control the government or just put in "hot money" that can be withdrawn quickly, and they want is to extract profits from speculation.
There was a pre-liberation period of chinese history when globalist investors did stay and dominated the chinese capital markets and the chinese economy, and I think most chinese people despise that period.
Consider the case of Japan: even if it has been forced to become an USA vassal their government policy has still been to protect their capital markets, their currency and in general their economy from globalist forces (while taking advantage of them...). Because economic independence is the basis of political independence and should not be surrendered to the global capital oligarchs so easily.
Thank you for this discussion.
I've always found the official translation of 法治 interesting. Official PRC translations always translate it as rule of law. Rule of law can't be limited to the economic sphere, one of its effects on the economy is that it makes the business environment more predictable. Good for business but the Party wants to maintain control, to manage society.
More like rule by law -- the law as a tool of the state and not constraining the state -- just like in 古代。If that were to change, would the all central and various levels of 政法委员会 lose their jobs? Would lawyers be allowed to defend their clients in court even if the Party is very unhappy about it? Today telephone justice -- instructions to judges -- continues and Chinese defense lawyers are persecuted for defending people accused to political crimes. See for example: 2022: Zhou Shifeng on 2015 China’s Rights Lawyers Mass Arrests https://gaodawei.wordpress.com/2022/12/07/2022-zhou-shifeng-on-2015-chinas-rights-lawyers-mass-arrest/
Just what 法治 means in practice is important --- it is about trust. As Chinese has developed over the past few decades, the business environment on China's most developed east coast become more predictable while in the interior courts often ruled against foreigners and Chinese from other provinces who lacked the connections guanxi that locals had. So calling for greater fairness for the sake of business is not new. Becoming more like rule of law yet perhaps also ordered administratively from above so not quite) I remember back in 2000 reading in the Chinese press an article from the Party Secretary of Guizhou.
[Watch Out for the "Outside Merchants Always Lose in Court" Phenomenon
from Zhonghua Gongshang Shibao April 10, 2000 Liu Jianwen article, reprinted in
Wenzhai Bao (Guangming Ribao) April 16, 2000
Party and government leaders in western China are now paying close attention to
the "merchants from outside always lose in court" phenomenon. Liu Fangren,
Secretary of the Guizhou Party Committee said recently that "we must solve the
"red eye sickness" [hongyan bing] problem in which the investors come in the
front of the court and in the back the outsiders are "slaughtered" in the back.
Liu Fangren confirmed that some enterprises had complained to the Guizhou Party
and government about this problem. "This one has got his hand out, that one has
his hand out too! What can we do!", they ask. https://web.archive.org/web/20011031151810fw_/http://www.usembassy-china.org.cn/english/sandt/sandsrc.htm#Economy ] I suspect that over the past two decades, courts in the Chinese interior have become not quite so unfriendly to people from outside the province. ]
If the Chinese economy becomes more 'rule of law' can that change be confined to the economic sector? Makes me think of Marx. “随着经济基础的变更，全部庞大的上层建筑也或慢或快地发生变革。” https://www.marxists.org/chinese/marx-engels2/02/12.htm Preventing the gradual peaceful evolution 和平演变 heping yanbian of the PRC political-economic system has been a top Party priority for decades.
[ Preface of A Contribution to the Critique of Political Economy “With the change of the economic foundation the entire immense superstructure is more or less rapidly transformed.” https://www.marxists.org/archive/marx/works/1859/critique-pol-economy/preface-abs.htm ]
Although Marxist theory is always evolving, focusing on the 'principal contradiction', this seems to be bedrock. Whether or not Marx was right, it seems that the Party people, the policymakers, would think so.
Making the yuan fully convertible would make China more exposed to the world economy and add worries for the Party about social stability. In 1989 an economic crisis of inflation coincided with a political crisis. They worry a lot. I am afraid that I think of the Party as being 'control freaks' defined as
--- "A "control freak" is a colloquial term describing someone with a strong need to control people or situations in everyday matters . This behavior often stems from underlying psychological factors such as anxiety, insecurity, or past trauma." Ref https://chatgpt.com/share/68b43633-4920-8008-b86b-8acbecc974f9
We'll see.
Another point. Professor Wu writes "Some U.S. actions are self-contradictory—for instance, after observing China's significant improvements in chip manufacturing capabilities, they suddenly lifted sales restrictions on certain products."
Professor Wu's understanding of export controls may be incomplete. The purpose of the controls is to constrain or slow down the technical advance of the targets at some cost to US companies who want to export a product. If the target country advances in a certain technology anyways, the rationale for the controls disappears and so penalizing US companies by denying them permission to export their products then serves no purpose.
«in the interior courts often ruled against foreigners and Chinese from other provinces who lacked the connections guanxi that locals had.»
This happens in every country; in the USA there is for example a lot of "court shopping" (and even "jury selection") to have a case tried in a court known favorable to one of the parties, and regularly corporate contracts are written so the courts for disputes be the one where the corporate headquarters are located. In the USA many local judges and prosecutors are elected so obviously if they want to be re-elected...
The common solutions is to recognize that happens and have rules to have cases tried in areas where neither parties are located, or to have nationally managed instead of locally managed first and second level appeals courts.
«I am afraid that I think of the Party as being 'control freaks' defined as [...] The purpose of the controls is to constrain or slow down the technical advance of the targets at some cost to US companies who want to export a product.»
It looks to me that it is the USA globalists who are "control freaks" and only invested in the PRC when they thought they had control there as they have control in Europe or Japan, China-Taiwan, Australia, Philippines, etc. :-)
My thinking is that the current Gongchan "dynasty" is not totalitarian, as in wanting to control every public opinion or behavior, but like western "liberal democracies" it merely has "guardrails" and public opinion and behavior are relatively free inside those "guardrails". Arguably those "guardrails" in the PRC are far wider than those in previous feudal dynasties.
I think in the PRC they are wider than in the "liberal democracies" of the USA empire (see for the past decades the "cancellations" of "wrong thinkers" and in previous decades the persecutions of socialists and communists). As a result currently in the USA empire those who are not "centrists" (globalist neoliberals) are very few among the elites and are targeted by fairly brutal propaganda (and worse) campaigns and most politicians, civil servants, academics, professionals are very conformist to "centrism".
Note: broadly speaking my impression of the "guardrails" in the PRC is 1) prevent foreign influence operations 2) do not challenge the leading political role of the CPC. As to 2) my impression is that the CPC allows wide ranging political and policy discussions but does not allow the rise of *political* organizations that do not accept the leading role of the CPC and this is done mainly because of 1). In practice the principal aim of the CPC is long term national independence and given recent chinese history it is easy to understand.
«The core logic of the reform is to rebuild market rules and a trust system, making China's capital market a place where global investors are willing to come, stay, and invest. This is the true institutional foundation for realizing the goals of RMB internationalization and building China into a financial powerhouse.»
It seems to me that the eminent professor is a committed Reagan, Thatcher inspired neoliberal propagandist and what he wants means that globalist finance speculators would replace the CPC as the leading power of the PRC as they have become the leading power of the USA replacing the USA industrial capitalist class.
Since WTO entry the PRC has benefited from globalist industrial investors which chose the PRC because wages were low and invested to build lots of valuable fixed capital that they cannot easily relocate and that has made the PRC richer; financial oligarchs in the capital markets are quite different and only invest in areas where they control the government or just put in "hot money" that can be withdrawn quickly, and they want is to extract profits from speculation.
There was a pre-liberation period of chinese history when globalist investors did stay and dominated the chinese capital markets and the chinese economy, and I think most chinese people despise that period.
Consider the case of Japan: even if it has been forced to become an USA vassal their government policy has still been to protect their capital markets, their currency and in general their economy from globalist forces (while taking advantage of them...). Because economic independence is the basis of political independence and should not be surrendered to the global capital oligarchs so easily.