Last updated: May 26, 2014 4:28 pm

China’s very success could cost the regime dearly

Endemic corruption is the most visible sign of decay in the party, writes Minxin Pei

One hundred China Yuan Renminbi bank notes with the image of former communist party leader Mao Zedong, are being counted in Beijing, 05 December 2006. China's central bank newspaper said monetary authorities should consider adjusting the trading band for the nation's currency at an appropriate time. Currently the yuan's daily trading limit against the dollar is 0.3 percent either side of a base rate set by the central bank as it ended at a new closing high of 7.8265 per dollar on the exchange-traded market Monday 04 December, since it was revalued in July 2005. AFP PHOTO/Frederic J. BROWN (Photo credit should read FREDERIC J. BROWN/AFP/Getty Images)©AFP

As we approach the 25th anniversary of the Tiananmen Square crackdown, much of the international focus on China is on the country’s unimaginable transformation since the People’s Liberation Army suppressed a peaceful pro-democracy movement in Beijing on June 4 1989.

Many may be tempted to marvel at the resilience of the Chinese Communist party, which had a close brush with collapse yet went on to preside over the greatest economic boom in history.

One question few would ask is how the party itself has been transformed. The conventional wisdom is that it has adapted skilfully to the post-Tiananmen challenges.

The party’s survival strategy relies on four pillarsrobust growth, sophisticated repression, state-sponsored nationalism and co-opting of social elites.

The party’s success in staying in power has given rise to a popular theory of “authoritarian resilience”, which seeks to explain the survival of a one-party state seen in the wake of Tiananmen as a doomed regime.

This view has some basis in fact. The post-Tiananmen years are the golden age for the CCP. Yet believers in “authoritarian resilience” have overlooked one crucial fact: the decay of the party as a ruling institution. Today it is impossible to ignore the evidence that the rot of corruption has spread throughout the party (and therefore the state).

The source of regime decay originates, ironically, in the very success with which the CCP has achieved its two central objectives: economic growth and repression of pro-democracy forces.

Twenty-five years of high economic growth have produced enormous wealth that invites looting by the ruling elites. At the same time, the party’s suppression of the opposition and civil society has created an ideal environment in which the ruling elites can loot without restraint.

Endemic corruption is the most visible sign of the decay of the regime. We have heard shocking tales of thievery and lawlessness involving senior CCP officials such as Bo Xilai, the former Chongqing party boss. One can make a case that a kleptocracy has taken root in China.

Organisationally, members of this kleptocracy have privatised the power of the party-state, forming patronage networks based on personal loyalty and exchange of favours. Again, according to accounts in the media, such networks now permeate the Chinese political system and the country’s economy. In the economic realm, powerful politicians, their family members and business croniesknown as “families” – dominate lucrative sectors such as property, energy, telecommunications and natural resources.

State-owned enterprises have degenerated into conduits through which assets nominally owned by the Chinese people can be cheaply, if not freely, acquired by such families.

This post-1989 kleptocracy has harmed the Chinese people. But the CCP has suffered from its depredations as well. Privatisation of state power and usurpation of the party’s authority by patronage networks have gravely undermined its organisational integrity. Its elites have become so thoroughly cynical and self-serving that they are only motivated by private gain, not the party’s corporate interests or long-term wellbeing.

The underlying dynamics invite comparison with the “tragedy of the commons”. Anyone who enters the party and climbs the hierarchy can expect a share of the spoils. Such lucrative perks and opportunities for self-enrichment lure opportunistic elements in Chinese society. The usual approach is to seek out patrons.

Far from being motivated by the party’s now-bankrupt Maoist ideology, such individuals aim to maximise the returns on their political investment in the party, as quickly as possible.

Yet, indebted only to their patrons, these people have no loyalty to the party. Intellectually they may understand that its long-term survival as China’s central political force demands that they observe its rules and implement its policies.

They know the party needs them to confine themselves to petty theft rather than looting. In the real world, however, these pragmatic souls are only too aware that the party may soon be over. Everyone around them is busy stealing. If they think twice before cashing in, they risk looking like fools.

Since Tiananmen, such dynamics – and two generations of opportunists who have colonised the Chinese regime – have made the once-mighty CCP into a hollow leviathan.

Shortly after his appointment as the new party chief in 2012, Xi Jinping lamented that when the Soviet Union collapsed, not a single party member came to the defence of the old regime. It is impossible to know what was on his mind.

All we can guess is that, having seen the rot inside the CCP, Mr Xi must be worried the party might not survive another Tiananmen.

The writer is a professor of government at Claremont McKenna College

Copyright The Financial Times Limited 2014.

Europe’s Geography of Values

Dominique Moisi

MAY 26, 2014
Newsart for Europe’s Geography of Values

PARIS Confronted with Russia’s reassertion of its imperial tradition and the deceptive methods and reflexes of the Soviet past, how should Europe respond? Should it give priority to “the value of geography” or to “the geography of values”?

Those who opt for the former do so in the name of short-term energy realism,” arguing that it is vital to reach an agreement with Russia because Europe lacks America’s shale gas and oil. According to this reasoning, the United States can live without Russia, but Europe cannot.

Moreover, for the realists, America’s defiant behavior toward its oldest and most faithful allies reflected in the recent surveillance scandals implicating the National Security Agency – has discredited the very idea of a “community of values.” If America no longer respects the values that it professes, why should the European Union lose the goodwill of the Kremlin in the name of upholding them?

Such realists also claim that by aligning the EU’s positions with those of NATO, Europe has recklessly chosen to humiliate Russia – a useless and dangerous course of action. The time has come, they say, for a policy that reconciles historical and geographic common sense with energy necessity. Europe’s future is inexorably linked to that of Russia, whereas America has turned its back on Europe, out of disinterest if not disillusion. The commemoration of a glorious past – the 70th anniversary of D-Day cannot hide the diminished present: Though Europe may try to diversify its energy resources, it cannot do without Russia in the foreseeable future.

Why, the realists ask, should one die for Ukrainians who are even more corrupt and much less civilized than the Russians themselves? Ukraine had its chance as an independent state and failed, the victim of its political elites’ venality. It is time to close this unhappy parenthesis.

This vision is not theoretical. It can be found, in various guises, throughout the EU, on the right and the left, and in all professions. The perception of relative US decline and the EU’s deepening loss of confidence in its values and model seem to legitimize a stance that is built in many cases on the remnants of older anti-Americanism.

The other path, which emphasizes the geography of values over the value of geography, was the one chosen by the founding fathers of the European project and NATO. According to this view, failure to recognize Putin’s imperial designs would heighten the risk of Europe falling prey to a non-benevolent form of dependency.

For Europe, to heed the siren song from the East – a melody of complementarity between Russia’s strategic power and the EU’s economic power – would be akin to paying the Mafia for protection. How could a club of democracies be entirely dependent for its security on an authoritarian power that openly despises their “weakpolitical systems?

It is no coincidence that this Russian discourse opposing democracy, immigrants, and homosexuality should find support among the EU’s most conservative, extremist, and nationalist parties. By contrast, the strength and attractiveness of the EU model depends upon its democratic nature. Europeans who have stopped dreaming about Europe, who take peace, reconciliation, and above all freedom for granted, do not realize what is at stake.

To embrace an “energy raison d’état” that leaves Europe dependent upon Russia for about one-third of its energy resources would be suicidal. Alternatives do exist. Europe can say no to the Kremlin and Gazprom if only it has the will to do so.

The only possible policy that can be both realist and dignified consists in a combination of firmness and resolution to set limits to Putin’s Russia. It is precisely because America is no longer what it used to be (having done too much under George W. Bush and too little under Barack Obama) that Europe’s values-based alliance is more indispensable than ever.

It is these values that led to the fall of the Berlin Wall and motivated the demonstrators in Kyiv to brave the brutal Ukrainian winter outdoors on the Maidan. From Asia to Africa, people seem to have a much better understanding than Europeans of the significance of European values. You just have to listen to them praising the continent of peace, reconciliation, and even relative equality (compared to the US).

For the EU, the choice has never been clearer. If it is to survive and prosper, it must set the geography of values above all else.

Dominique Moisi is Senior Adviser at The French Institute for International Affairs (IFRI) and a professor at L'Institut d’études politiques de Paris (Sciences Po). He is the author of The Geopolitics of Emotion: How Cultures of Fear, Humiliation, and Hope are Reshaping the World.


A Cable Merger Too Far


MAY 26, 2014

There are good reasons the Justice Department and the Federal Communications Commission should block Comcast’s $45 billion acquisition of Time Warner Cable. The merger will concentrate too much market power in the hands of one company, creating a telecommunications colossus the likes of which the country has not seen since 1984 when the government forced the breakup of the original AT&T telephone monopoly.

The combined company would provide cable-TV service to nearly 30 percent of American homes and high-speed Internet service to nearly 40 percent. Even without this merger and the proposed AT&T-DirecTV deal, the telecommunications industry has limited competition, especially in the critical market for high-speed Internet service, or broadband, where consumer choice usually means picking between the local cable or phone company.

By buying Time Warner Cable, Comcast would become a gatekeeper over what consumers watch, read and listen to. The company would have more power to compel Internet content companies like Netflix and Google, which owns YouTube, to pay Comcast for better access to its broadband network. Netflix, a dominant player in video streaming, has already signed such an agreement with the company. This could put start-ups and smaller companies without deep pockets at a competitive disadvantage.

There are also worries that a bigger Comcast would have more power to refuse to carry channels that compete with programming owned by NBC Universal, which it owns. Comcast executives say that they would not favor content the company controls at the expense of other media businesses.

The company argues that this deal would not reduce choice because the company does not directly compete with Time Warner Cable anywhere. Comcast would face plenty of competition in high-speed Internet service, they say, from telephone and wireless companies.

The reality is far different. At the end of 2012, according to the F.C.C., 64 percent of American homes had only one or at most two choices for Internet service that most people would consider broadband. Wireless services can handle streaming video, but many customers of Verizon or AT&T would blow through their monthly wireless data plan by streaming just one two-hour high-definition movie, at which point they would have to fork over extra fees.

Comcast executives argue that companies like Sprint are planning to provide very fast Internet service that will compete with wired broadband. But wireless companies have been working on such services for more than a decade with little success.

The Justice Department and the F.C.C. could try to address some of the problems with the Comcast-Time Warner Cable deal by imposing conditions, like requiring the company not to give favored treatment to established content providers like Netflix and Google at the expense of smaller companies. Comcast agreed to similar terms in exchange for government approval of its 2011 acquisition of NBC Universal.

Even so, this merger would fundamentally change the structure of this important industry and give one company too much control over what information, shows, movies and sports Americans can access on TVs and the Internet. Federal regulators should challenge this deal.

05/27/2014 04:19 PM

A Real National Front

The French Far Right Aims High

By Stefan Simons in Paris

With its triumph in Sunday's European election, Marine Le Pen's far-right Front National is hoping to move from the margins to the mainstream.

After its triumph in European elections on Sunday, the French far-right Front National is hoping to increase its power back home, with Marine Le Pen aiming for the presidency in 2017. With François Hollande's popularity plummeting, it is not out of the question.

Marine Le Pen shed tears of joy after her triumph in European Parliament elections on Sunday. When she arrived after midnight at a Parisian night club for the victory celebration with her fellow party members, the head of the far-right Front National (FN) embraced fans and family before letting the champagne flow. Marine's father Jean-Marie, who was re-elected to the EU body for the seventh time, was also on hand to congratulate his daughter. "It was a historic victory," he said.

By Monday morning, the emotional evening had already been forgotten and strategists were once again busy at work at the party's headquarters in Nanterre. Until Sunday's election, the Front National had occupied but three seats in European Parliament -- one each for Marine, her father and his political companion Bruno Gollnisch -- and had led a largely unnoticed existence on the political fringes in Brussels. Now, though, the party's caucus will grow by 21 representatives.

After pulling in a triumphant 25 percent of the vote, the Front National will now have the largest number of seats of any French political party in the European Parliament. Marine Le Pen has every intention of using the party's presence at parliament's headquarters in Strasbourg and Brussels for political gain. Some within the far-right in France are already considering their political futures -- all the way up to the presidential palace in Paris.

The 'Long March'

The first step in the "long march," as Marine Le Pen has termed it, is the creation of a party group in the European Parliament comprised of skeptics of the euro common currency, EU opponents and the far-right or right-wing populists. Doing so would provide the parties with greater access to money and key posts and would also raise their profile. To create a group, at least 25 members of parliament from seven different EU member states must join together in a bloc. Given the divergent ideologies on Europe's right wing, that won't be an easy task.

The only true support Le Pen can count on is from the Austrian right-wing Freedom Party. Right-wing populist parties in Belgium and the Netherlands failed to deliver on Sunday, managing only disappointing results. Meanwhile, radical political forces in Denmark and Britain have said they will not join an alliance with the Front National.

Despite Le Pen's triumph -- which the front pages of France's newspapers described as a "Big Bang," a "repudiation" and even an "earthquake" -- right-wing populists will remain a minority among the 751 members of the European Parliament. "They won't have enough influence to determine policy direction," FN expert Joel Gombin told French news station BFM. "On the contrary," the sociologist said. "The relatively good showing of the euro opponents will force existing EU parties to increase their cooperation."

That, though, is of little consequence for Le Pen and the Front National. This election cycle clearly demonstrated that the party's anti-EU message, and its criticism of an EU that takes power away from member states, is attractive to both workers and young voters.

To be sure, the French far right's success is also the product of French voters' frustration with the country's economic malaise and a growing disillusionment with established political parties. Indeed, the Socialists and the conservative UMP are increasingly perceived as being muddled, unreliable or even corrupt. To capitalize, Marine Le Pen has refashioned Front National's ideology from the ground up, and now appears to many in France as a modern and dynamic force.

Conquering France One Step at a Time

Thus, Sunday's success is seen as but a stage victory among Front National's leaders. They have set their sights on more than EU institutions in Brussels; they also want power back home. "Conquer France first, then destroy Europe," Louis Alliot, deputy head of the party as well as Marine Le Pen's companion, said of the strategy.

With 4.5 million votes, the party didn't fare as well on Sunday as it did during the 2012 presidential election, when it attracted 6.5 million French voters. Still, the party did manage to attract around 11 percent of all eligible voters, which has sparked hopes among FN supporters for the 2017 presidential campaign.

In order to position Marine Le Pen as a realistic alternative to the mainstream parties, the far-right is focusing on conquering the country one step at a time. Next year's regional elections could prove decisive. Of the 21 regional administrative bodies where elections are to be held, 20 are currently led by the Socialists.

If the left fares as poorly in those elections as it did on Sunday -- the Socialists managed just 14 percent -- the FN could profit from its continued decline. Marine Le Pen could also stand a real chance in a match-up against President François Hollande. Current polls show that, with a public approval rating of just 11 percent, Hollande is the most unpopular president of France in decades.

But is Le Pen's shot at the presidential palace little more than wishful thinking? "In the past, the Front National has only had bastions of support in certain areas," says political scientist Gombin. "But with this election, FN has become a national party. Next to the traditional left and right, it has now risen to become France's third political force."

Translated from the German by Daryl Lindsey