China and its Discontents

The Chinese Communist Party (CCP) has hit some serious speed bumps in the run-up to the 18^th National Congress and the highly anticipated transfer of power to Xi Jinping and a new Politburo Standing Committee. The New York Times published an investigative article exposing Premier Wen Jiabao’s estimated family fortune of  $2.7 billion, and over the past few days, protests and riots have erupted in the coastal city of Ningbo over a toxic PX (paraxylene) chemical plant.

While both are serious sources of instability, the CCP’s public responses to each have differed in important ways. As for the Wen Jiabao scandal, both the English and Chinese versions of the New York Times website were quickly blocked in Mainland China. All search terms relating to the story, including Wen’s name, have been blocked on popular twitter-like service Sina Weibo and negative references to Wen have remained sanitized from the search engine Baidu. Lawyers supposedly representing the Wen family issued a strong statement condemning the New York Times article and rebutting particular facts, and Foreign Ministry spokesman Hong Lei said the article “blackens China’s name and has ulterior motives.”

Meanwhile, the official reaction to the Ningbo PX protests has been quite different. Although Public Security Bureau (PSB) riot control squads were out in force using tear gas and batons against the crowd and making arrests, the city quickly folded Sunday evening, declaring that it would stop the PX plant from being built. Online, first person accounts of police brutality and rumors of a Ningbo University student death were suppressed; Sina Weibo even blocked photo-uploads from local Ningbo IP addresses. But the story was not censored to the same degree as the Wen Jiabao scandal. The Ningbo protests are being talked about and photos do circulate on Sina Weibo and elsewhere. The central and local governments want everyone to know that the issue had been resolved: the official announcement was trumpeted nationwide through the People’s Daily and to foreign audiences through the English-language Global Times.

What accounts for this considerable difference? In one case, the news has been thoroughly cleansed from the Internet as to make it impossible to even hear of the news. In the other case, the most egregious examples of state malfeasance have been removed, but the story itself remains. In the case of the Wen Jiabao scandal, the New York Times reporting strikes directly at the legitimacy and authority of the CCP; it goes to the very top. But cases like the Ningbo PX plant can serve as outlets for popular discontent without directly challenging the authority of the CCP.

As Rebecca MacKinnon argues in her recent book “Consent of the Networked,” netizens in China can bring attention to social injustice and can even have an impact on government policies; but ultimately these cases can serve to bolster state legitimacy when the CCP is seen as resolving the problem. There has been a raft of environmental protests recently that have been resolved in similar ways: the Shifang copper plant protests in July, Dalian PX plant protests in August 2011, and the Xiamen PX plant protests in 2007, among many others. The environment is not the only issue handled with relative kid gloves: the Party also emphasizes efforts to fight corruption in cases where the target of an anti-corruption sting is an expendable cadre; food safety is handled much the same (see the death sentences handed out as a result of the melamine tainted-milk scandal). And of course, nationalist protests are skillfully manipulated to further particular narratives and claims to legitimacy.

Hardly any of the actions of the PSB or the Propaganda Department are completely predictable during times of protest and damaging news, but there is a recognizable pattern. The Wen Jiabao and Ningbo cases are indicative of a larger truth: Chinese real-life activists and ordinary netizens are occasionally able to affect real social change in China, but they do so within the confines of acceptable political dialogue that the CCP has already laid out for them.

Duan Weihong, a wealthy businesswoman whose company, Taihong, was the investment vehicle for the Ping An shares held by the prime minister’s mother and other relatives, said the investments were actually her own. Ms. Duan, who comes from the prime minister’s hometown and is a close friend of his wife, said ownership of the shares was listed in the names of Mr. Wen’s relatives in an effort to conceal the size of Ms. Duan’s own holdings.

“When I invested in Ping An I didn’t want to be written about,” Ms. Duan said, “so I had my relatives find some other people to hold these shares for me.”

But it was an “accident,” she said, that her company chose the relatives of the prime minister as the listed shareholders — a process that required registering their official ID numbers and obtaining their signatures. Until presented with the names of the investors by The Times, she said, she had no idea that they had selected the relatives of Wen Jiabao.

The New York Times’ expose on Wen Jiabao’s family fortune is nothing but incredible, but the details are just completely absurd and at times hilarious. For example, if you were a shell investor for Wen Jiabao’s family, why in the world would you ever allow yourself to be interviewed by the New York Times?! The above passage is mind-blowing.

This op/ed in the New York Times written by Reagan’s OMB director and former Republican congressman David Stockman is the best piece of writing I have read about the deficit in the past year. And Stockman even manages to be bipartisan in his criticism of the various deficit plans! It’s common knowledge at this point that Rep. Ryan’s budget makes the deficit worse immediately by extending the Bush tax cuts and not doing anything with Medicare until the 2020’s; furthermore he focuses on cost-shifting and raising the burden on seniors and the poor and not on actually making the delivery of healthcare cheaper. But what Stockman reintroduces to the debate is that the Obama budget has its own problems – it is too timid and doesn’t call for any shared sacrifice from the middle class in the form of raised taxes.

This is the liberal argument we have been missing. But it’s also a realistic argument that states the obvious. The deficit debate has measurably shifted to the right – first, the Simpson-Bowles Deficit Commission was supposed to be the centrist plan, the compromise. Then the Republican Study Group’s budget was labeled conservative, the Ryan plan was labeled ‘serious’ and moderately conservative, and the Obama plan came out to the right of the Deficit Commission. Viola – a new middle, seriously shifted to the right.

There seems to be two methods of leading and bargaining in a political context – first, “The American President”-Michael Douglas style, where a leader articulates his preferred outcome, negotiates and compromises. Or, the second, where a leader releases a bargaining position that is designed to appeal to the other side, already compromised from the ideal. The President embraced the second tactic from the get-go, and he’s received a lot of flak from the Left and the media for doing so. Personally, I’m torn – I’m sure the success of tactic #1 is idealized, where the perfect outcome only exists in movies, like “The American President.” At the same time, I think the country needs presidential leadership with an aspirational vision. I don’t see that vision articulated in the Obama White House. I see: “We’re cutting less spending than the other guy.”

So does the White House need more David Stockmans in the White House – and a more liberal-sounding president? Do we need more people like Jared Bernstein, Biden’s economic advisor who just resigned to join the Center on Budget and Policy Priorities? I’d like to think so, if only because I still believe policy is ultimately an extension of the values we hold as a country. And would that mindset cause negotiations to grind to a halt, and lose on every priority the president has? Ideological conviction doesn’t seem to have stopped the Republicans from winning the debate.

Around the country, many teachers see demands to cut their income, benefits and say in how schools are run through collective bargaining as attacks not just on their livelihoods, but on their value to society.

This great New York Times article gets to the heart of the matter: breaking the backs of public sector unions inherently entails vilifying teachers and everyone else who enters public service as ‘leeches’ and the like. Ironically, this also comes at a time when more young people than ever are entering into public service. People decry poor results in education and yet don’t realize that attracting better teachers means that we have to raise the status of teachers in society and pay them more. There’s a reason why Teach for America is effective at getting college students to commit to the job for a few years, but isn’t as effective in recruiting life-long teachers.

This isn’t just true in education; it’s true across the public sector. We wonder why the SEC isn’t doing its job effectively and then forget that the GOP is cutting its budget, which just sends more quality public service employees into the much higher-paying financial industry.

The New York Times’ recent article on the nature of Hezbollah’s current existential predicament was extremely instructive – mainly because many people don’t view Hezbollah’s problems as an issue over its very existence (but it is). The best quote, unfortunately, was wedged toward the bottom:

“Hezbollah doesn’t want to control the government or country, even though they could if they wanted,” said Anis Nakkash, director of the Aman Research Center here in Beirut.

The article identified the problem; that is, Hezbollah can’t consolidate power. But this quote says why: Hezbollah doesn’t want to claim total power. The real reason behind this being, Hezbollah is a militant group, and ruling governments by definition cannot fill the same role as a militancy. An institutionalized Hezbollah is no longer the same Hezbollah that once existed, and the leaders of the group don’t want to lose sight of their original goal: vengeance and destruction upon Israel. Now this is not to say that states that employ terror do not exist. They do. But they generally operate dysfunctionally and are rejected by the global community (Iran, North Korea, China at its worst, etc.).

Hezbollah is on a very shaky path right now. It simply does not have the requisite credibility among the international community to act as a real, normalized stakeholder in any Lebanese government. But it’s also true that we need Hezbollah to become legitimate more than anything – to shake off some of its radical roots, cut off ties with Iran (which might already have happened), and take over some responsibility in representing Lebanese’ interests on the world stage. This outcome is possible, but it will require a careful dance by US diplomats. As for Hamas – well, Hamas is another story. They’re really off the deep end.