Category Archives: capitalism

“Where’s the party?”

The Economist has an article about how the Communist Party is trying to stay relevant by inserting itself into companies:

The subject exposes some of the deepest contradictions that now lie at the heart of Chinese society. How can the party maintain control over a place that, in ideological terms, is no longer communist? The closure in the 1990s of vast numbers of state-owned enterprises shattered the party’s grassroots base. Over the past decade a priority of the party’s secretive Organisation Department (it handles personnel issues for the 80m-strong party, yet has no listed telephone number) has been to form party cells in private businesses, or “new economic organisations” as the official literature calls them. In 1999 only 3% of private businesses had party cells. Now the national figure is nearly 13%. Coastal Zhejiang province claims all private firms with more than 80 employees have a branch.

As party officials see it, setting up branches in the private sector is about more than just proving that a once-revolutionary party is still in touch with the masses. At a time of rapid social change and outbreaks of unrest, officials hope the new party branches will reinforce stability and keep the party abreast of potential trouble. Some bosses of private firms encourage the formation of cells, in which at least three party members are required. They do so in order to curry favour with local officialdom. But others have misgivings. They worry that the “red-collar” workers, as party-member employees are sometimes called, might interfere in the running of the company.

Xinhua, the state news agency, reported without irony last July that Communist Party branches in foreign-invested firms in Shanghai had acted as a “red impetus” to growth in the wake of the global financial crisis of 2008. It said one such branch in a British marine-equipment company wrote to the firm’s headquarters in London suggesting that the company take advantage of strong local demand by moving more of its operations from Britain to China. On receiving this suggestion, “light filled the eyes” of the top British management, and the firm carried out the party’s plan.

In practice, party cells are most unlikely to be debating ideology with company management. Even within the party, few people believe in Marxism any longer. The tension between an attractive private-sector career and allegiance to the Communist Party is always there for the new breed of party members: 20-somethings who tote iPhones and tweet furiously. Many of them joined the party in the first place only because they were top of their college class and they saw it as a way to earn a lot more money.

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“The End of the Chinese Dream”

There should probably be a question mark at the end of that headline, but many Chinese might leave it as is. Essentially FP is writing about the growing income inequality that is making many common Chinese angry- they notice that while the economy is still growing quickly, less and less of the money is making its way down to them. Have the Chinese rich managed to pull an America and cut the rest of the country out of the rise?

In June, a Chinese friend of mine who grew up in the northern industrial city of Shenyang and recently graduated from university moved to Beijing to follow his dream — working for a media company. He has a full-time job, but the entry-level pay isn’t great and it’s tough to make ends meet. When we had lunch recently, he brought up his housing situation, which he described as “not ideal.” He was living in a three-bedroom apartment split by seven people, near the Fourth Ring Road — the outer orbit of the city. Five of his roommates were young women who went to work each night at 11 p.m. and returned around 4 a.m. “They say they are working the overnight shift at Tesco,” the British retailer, but he was dubious. One night he saw them entering a KTV Club wearing lots of makeup and “skirts much shorter than my boxers” and, tellingly, proceeding through the employee entrance. “So they are prostitutes,” he concluded. “I feel a little uncomfortable.”

But when he tallied his monthly expenses and considered his lack of special connections, or guanxi, in the city, either to help boost his paycheck or to find more comfortable but not more expensive housing, he figured he’d stick out the grim living situation. “I have come here to be a journalist — it is my goal, and I do not want to go back now. But it seems like it’s harder than it used to be.”

Despite China’s astonishing economic growth, it has gotten harder for people like my friend to get by in the big city. His is not a particularly lucrative profession. Like many in Beijing, he cannot count on his annual pay to keep pace with China’s official rates of inflation — which many economists suspect are lowballed anyway.

Could it possibly be true that a swath of people in China’s big cities is downwardly mobile, if one compared wages with living expenses? I asked Patrick Chovanec, an associate professor at Tsinghua University’s School of Economics and Management in Beijing. Alas, he told me, it’s difficult to find much clarification in China’s famously fudgeable official statistics. (For instance, the official unemployment rate only includes individuals with urban hukous, or permanent residency permits — which excludes the most economically vulnerable.) Still, he noted: “If you perceive that you’re losing buying power — or have rising but unmet expectations — that’s when people get upset.… And this country, for a country growing at over 9 percent, is in a foul mood.”

As Michael Anti, a popular Chinese blogger and political commentator, told me, “The rich are becoming a dynasty.” Now people in China recognize that “you get your position not by degree or hard work, but by your daddy.” Anti added that though corruption and guanxi are hardly new concepts in China, there was previously a greater belief in social mobility through merit. “Before, university was a channel to help you to ruling class. Now the ruling class just promote themselves.”

There is a dark sense that something has changed. “It’s not simply income equality that bothers people — that’s a misconception,” Chovanec told me. “When Jack Ma makes a billion dollars for starting a successful company, that’s OK.… It’s inequality of privilege. It’s how people make their money. There’s now a whole class of people getting wealthy because of who they are, not what they do — and they follow a different set of rules.”

In today’s China, the abilities to buy and sell real estate and to win government contracts are among the greatest drivers of wealth, and it’s those who are already wealthy and well-connected who have access to these opportunities. If their children are lazy or dull, they can use their stature to create opportunities and positions for them, cutting short the trajectories of more able aspirants. Social status is becoming further entrenched because, as Chovanec notes, “Government is so pervasive in China’s economy.… Government has great power in determining winners and losers, so who you are and who you know does more than anything else to determine success.” And those at the top increasingly act above the law. “Privilege begets money, and money begets privilege.”

There are certainly many counter-examples, but the trend of super-rich getting super-richer while the middle class admits fewer and fewer members (and at a higher and higher price) seems undeniable.

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“China’s newest export: Internet censorship”

Another piece from David Rohde, who posts about a deeply worrying trend:

China’s system is a potent, vast and sophisticated network of computer, legal and human censorship. The Chinese model is spreading to other authoritarian regimes. And governments worldwide, including the United States, are aggressively trying to legislate the Internet.

“There is a growing trend toward Internet censorship in a range of countries,” said Rebecca MacKinnon, a prominent online democracy advocate and author of the forthcoming book “Consent of the Networked: The Worldwide Struggle for Internet Freedom.” “The same technology that helps secure your network from attack, that actually enables you to censor your network also.”

The problem is not software or hardware developed in a secret Chinese government laboratory. Recent news reports have uncovered American and European companies selling surveillance technologies to Libya, Syria, Bahrain, Thailand and other governments that block the web and brutally suppress dissent.

A core problem is the pursuit of the almighty online dollar. An extraordinary story in The Guardian introduced readers to Jerry Lucas, the president of TeleStrategies, a Virginia company that organizes conferences around the world where firms sell surveillance and other technologies to governments. In an interview, Lucas said companies have no ethical obligation to determine if their products are being sold to regimes that will use them to suppress dissent.

“That’s just not my job to determine who’s a bad country and who’s a good country,” he told the reporter. “We’re a for-profit company. Our business is bringing governments together who want to buy this technology.”

A morning coffee with a prominent Chinese blogger brought to life the success of the Chinese model and the chilling intersection of modern communication and surveillance. The blogger, who asked not to be named, said the Chinese government’s “Great Firewall” is succeeding. Twitter, Facebook and YouTube are banned in China, but the government allows the Chinese computer firm Sina Weibo to operate microblogs that are the mirror image of Twitter.

Sina Weibo’s CEO, in an interview with Forbes Asia, said the company has as many as 100 employees working 24 hours a day to track and block user content, in order to avoid running afoul of the government.

The blogger said that basing the servers in China made it possible for the Chinese government to allow microblogging but maintain control. “Put the server in your hands, the data in your hands,” he said. “The people are happy but they don’t overthrow you.”

He said that when he blogs in English, electronic and human censors largely ignore his work. When he expresses dissent in Chinese, the content is blocked by programs that search the web for banned terms, such as “Tiananmen Square,” “Tibet,” or “Falun Gong.”

“They just stop the topic,” the blogger said. “They have good search engines for the different topics.”

The “well it isn’t our fault if our products just happen to enable governments seeking to censor information, find dissidents, and crush dissent- what could we do, we’re just a for-profit company trying to make some money!” argument is one of the most loathsome things I’ve ever read. Their actions have real-life consequences for people around the world, but corporations exist to serve the dollar, not the human being. Are Western arms companies allowed to do business with these governments? If not, why should these companies be allowed to do so?! And beyond the law, why is it that they can get away with it without being shamed out of society by everyone else in the country?!

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Filed under capitalism, censorship, internet