Reform with Chinese characteristics

Reformists are not holding their breath as Chinese policymakers emerge from a closed-door policy summit in Beijing.
Feng Xiaogang, China’s most popular movie director.
Feng Xiaogang, China’s most popular movie director.

Feng Xiaogang, China’s most popular movie director, complained to the Hollywood Reporter recently that it was hardly worth making films under the Chinese censorship regime.

“It’s ridiculous,” he said during a promotional visit to Los Angeles for his latest movie, Back to 1942. “It almost feels like, ‘Okay, I just don’t want to do this anymore because they’re always there to stop me.’”

Not everyone agrees with Feng, who is best known for making feel-good comedies. Older directors say that it was much worse under the pre-2004 censorship regime. But why does China, which is supposedly trying to promote a consumer society, still feel the need to censor popcorn movies at all?

Since Deng Xiaoping began the process of liberalisation in 1979, the new Chinese dream has essentially promised two things: prosperity through economic growth and freedom through social reform.

More than 30 years later, too many Chinese people are still waiting for both — and this year’s third plenary session of the Communist Party Central Committee is not expected to change much, despite promises from policymakers that the closed-door session would introduce a master plan for “profound” and “unprecedented” reforms.

The extensive role of the state, which pervades everything from blockbuster movies to the allocation of resources and capital, is evidently not much of a conversation topic over at The Great Hall of the People. State-owned enterprises’ role in the economy, for example, is not even on the agenda for the Third Plenum.

Some foreign bankers and investors will be happy with plans to increase the flow of credit to the private sector and bigger quotas for cross-border financial flows. But these are not the kind of qualitative changes that are going to help China beat the middle-income trap and become a rich country.

Indeed, that prospect is still a long way off, and history is not on China’s side. Economists studying the experience of fast-growing countries have found that slowdowns are more or less inevitable, and that China’s growth will decline further within the next decade.

Tinkering with deposit rates and facilitating usage of the renminbi in trade cannot be compared to real reforms, such as the creation of a proper system of private land ownership, free movement of people and decision-makers who are accountable through elections.

But China is quickly passing the point at which fundamental reforms are easy. The rapid growth of the past two decades has created a very forgiving backdrop for reform, but as wealth inequality entrenches the power of the vested interests, the Party will find it increasingly difficult to hand power to its critics and rivals.

Instead of censoring public discussion, China needs to find a way to accommodate a greater diversity of voices in its decision-making process, even if it cannot tolerate universal suffrage. And it must act sooner rather than later, because the prospect of slower growth and greater inequality may not have a happy ending for the current elite.

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