Durban Summit and China in the BRICS Multilateralism

We have witnessed the world moving away from unipolarity to bipolarity and now to multipolarity. The US is not declining; however, its clout is fading away as other countries such as China and India are rising.  The multipolarity is reflected not only in the emerging economies but also in the organizations formed by the states and also those by the non state actors. The heterogeneous multipolarity has called for a structural change. Various scholars have tried to find out answers to these structural changes. Samuel Huntington (1999:35) has coined the notion of Uni-multipolar structure with the US in the core and various other countries extending diplomatic, economic and military support for its initiatives. Some of its representations have been obvious in the invasion of Iraq, Afghanistan and recently the NATO led regime change in Libya. Such a structural arrangement is unsustainable in long term, the Libyan crises is a pointer to this, where the US including its allies remained non-committal on sending ground forces. Richard Haass (2008:44) has argued that ‘nonpolarity’ is the answer, where a dozens of countries could have the capability of ‘exercising different powers.’ Giovanni Grevi (2009:9) on the other hand argues that the world is becoming increasingly “interpolar” which is “multipolarity in the age of interdependence.” He puts the state at the centre, however, agrees that non-state actors could inflict a severe blow on the system. The 9.11 and 26.11 terror strikes in the US and India are pointer to the capabilities acquired by the non-state actors and their disastrous consequences. Whatever may be the acronyms, all are a pointer to multilateralism in the age of global interdependence. Multilateralism or multi-multilateralism is not necessarily an ultimate solution to bilateral or multilateral problem, however, is extremely important for conflict resolutions and enhancing understanding and cooperation among the nations, the BRICS is just an example of that, and China has furthered its strategic depth in politico-economic affairs not only amongst the BRICS but also in the world at large .

 

The acronym, BRIC was coined by Jim O’Neill (2001), an economist with the Goldman Sachs in a paper entitled “The World Needs Better Economic BRICs” published in 2001. Yet in another paper Dominic et. al. (2003) argues that over the next 50 years, the BRICs could become a much larger force in the world economy and could be larger than the G6 in US dollar terms. For example the GDP of the BRICS would be around 85 trillion USD comparing 66 of the G6 countries. Therefore, the notion signals a shift in the global economic power away from the G7 economies toward the emerging economies with China as a dominating force. The BRIC thesis holds that China and India will become the hub of world’s manufactured goods and services, while Brazil and Russia will become leading suppliers of raw materials. This however, may not hold true for the future, as China is determined to move away from the labor intensive industries to R&D and high end manufacturing during the 12^th Five Year Plan (2011-2015) as revealed by the Chinese Premier Wen Jiabao in his 2011 Government Work Report and also in 2013 work report.  

At present, the BRIC account for more than 25% of the world’s land mass; more than 40% of world population; over 50% of world economic growth; and around 15% of the world economy.  The economic indicators are bound to further shift the balance given the impressive growth rates in these countries. With South Africa, the world’s 31st-largest economy joining the ranks, the BRICS has started to wield even more influence in the world economy. Even though, South Africa’s 286 billion US dollar economy and population of 49 million pales in comparison to other BRIC members, especially China and India, however, it is the most advanced economy in Africa; the largest trade partner of China in Africa; and more importantly has provided a gateway to the BRICS into Africa for greater trade and investment. Furthermore, South Africa’s entry has given the BRIC a voice in the African Continent, and is bound to strengthen the economic base of a multi-polar world on the one hand, and create conditions for strengthening of the global peace and security on the other.

China in BRIC Summits:  

The BRIC was formally institutionalized as an international forum during the First BRIC Summit hosted by Russia in June 2009 albeit the BRIC Foreign Ministers had met in Yekaterinburg a year earlier. The summit primarily dealt with the global economic crisis and looked for answers as how to build a new international financial system. In this regard, the Chinese and Brazilian move to invest 40 and 10 billion US dollars respectively in International Monetary Fund (IMF) bonds was considered as a move to diversify their dollar-heavy currency reserves, as these nations, especially China was increasingly apprehensive about the safety of the exchange reserves held in US dollar denominated assets. China holds about over 3 trillion US dollars in foreign exchange reserves, of which more than 70 percent are held in US dollar assets. BRICS nations hold a total of $3.8 trillion in international reserve assets excluding gold, 42 percent of the world's total. It is discernable that why China should initiate such a step in the BRICS multilateralism.

It is owing to this fact that the BRICS nations call for the reforms of the world organizations, including the financial institutions and the United Nations, and demand greater role for the emerging economies in these bodies. This is obvious from the BRIC foreign ministerial meeting on May 16, 2008 in Yekaterinburg prior to the first BRIC summit at the same place in 2009. During the meeting, the BRIC nations called for the emerging economies to play more assertive role in the World Bank and the International Monetary Fund. This has also been endorsed by the G20 summit held in South Korea in November 2010, of which all the BRIC nations are members. The reform of the world financial institutions is considered as an important step towards a more legitimate, credible and effective system of governance where emerging economies like India and China will find greater representation.

Impressive growth trajectory of the BRICS nations, and the currency appreciation especially in China has provided a huge opportunity for the investors in BRIC assets; meanwhile, the BRICS countries are also contemplating to buy each other’s bonds and swap currencies so as to reduce their dependence on dollar; and why not when the combined reserves of these countries are so huge. Apart from discussing economic issues at the first summit, the BRIC countries also issued political statements concerning the UN reforms and the global food security in the wake of inflationary trend in the world food prices in 2007-08.

The Second BRIC Summit was hosted by Brazil in Brasilia on 15 April 2010. At the close of the summit, a Joint Statement was issued that highlighted various issues of common concern such as global governance, international financial issues, trade, agriculture, climate change, energy and terrorism etc. issues. As regards the global governance, the group called for supporting “a multi-polar, equitable and democratic world order, based on international law, equality, mutual respect, cooperation, coordinated action and collective decision-making of all States.” In this respect the member nations hailed G-20 as the premier forum for international economic coordination and cooperation.  The role of multilateral diplomacy with the United Nations playing the central role in dealing with global challenges and threats was also stressed. 

In order to make the governance structures of IMF and World Bank more representative, the BRIC nations reiterated that there is a need to shift the voting power in favor of emerging market economies in respect to their relative weight in the world economy. In order to reduce their dependence on dollar trade, the grouping resolved to study the feasibilities of monetary cooperation, including local currency trade settlement arrangement between BRIC countries. The BRICs also urged all states to resist all forms of trade protectionism and fight disguised restrictions on trade, and pledged to make sustained efforts to achieve the MDGs of the UN by 2015.

As regards agriculture, the BRIC decided to create an agricultural information base system of member states and enhance agriculture technology cooperation and innovation. On energy and climate change, the BRIC reiterated their resolve to develop cleaner, more affordable and sustainable energy systems, to promote access to energy and energy efficient technologies and practices in all sectors, and sought western cooperation and support for the same. United Nations Framework Convention on Climate Change and the Kyoto Protocol were considered as the framework for international negotiations on climate change. As far as terrorism is concerned, the statement stated that terrorism cannot be justified by any reason, and urged early conclusion of negotiations in the UN General Assembly of the Comprehensive Convention on International Terrorism and its adoption by all member states. The statement also called for “Alliance of Civilizations” by way of which dialogue among civilizations, cultures, religions and peoples would be strengthened.

The Third BRIC Summit was held in April 2011 in Hainan province of China. It formally became BRICS as South Africa joined the summit. Chinese President Hu Jintao, who presided the summit delivered a speech entitled “Broad Vision, Shared Prosperity,” and held that the 21st century should be marked by peace, harmony, cooperation and scientific development. At the ministerial level meetings the four impressed upon China to open its markets for more value added products, e.g the Indian pharmaceuticals, Brazilian aircrafts etc. they also voiced their concern about the artificially undervalued Yuan that they claimed was undermining the exports from these countries. The stand on issues such as, reforms of the international monetary system, terrorism, and the Libyan crisis were reiterated. China also endorsed the aspirations of India, Brazil and South Africa for permanent membership of the UNSC. 

The Fourth Summit under the theme "BRICS Partnership for Global Stability, Security and Prosperity "was held in Delhi and the close of the summit a declaration was issued on March 29, 2012.  Concerns we expressed at the global economic situation, and the priority was accorded to restore market confidence and global growth. BRICS leaders felt that it is critical for advanced economies to adopt responsible macroeconomic and financial policies, avoid creating excessive global liquidity. In this context, the G20 was considered as a premier forum for international economic cooperation. The call for a more representative international financial architecture, with an increase in the voice and representation of developing countries and the establishment and improvement of a just international monetary system was reiterated. The leaders also considered the possibility of setting up a new Development Bank for mobilizing resources for infrastructure and sustainable development projects in BRICS and other emerging economies and developing countries. On international issues, the members expressed deep concern at the current situation in Syria and called for an immediate end to all violence and violations of human rights. Commitment to multilateral diplomacy with the United Nations playing a central role in dealing with global challenges and threats was reiterated. In this regard, the need for a comprehensive reform of the UN, including its Security Council was reaffirmed. Besides there was a Delhi Action Plan that envisaged ministerial meetings of BRICS nations. 

The Fifth Summit was held in Durban South Africa between March 24 and 26 under the themeThe theme of Durban summit is "BRICS and Africa Partnership for Development, Integration and Industrialization." The focus of this summit was the establishment of Development Bank, the feasibility study of which has been completed and report submitted to the respective governments. The leaders reached an agreements on the development bank and the contingency fund. BRICS also launched a business council to drive private sector investment among them and a think tank council to assist with innovations. The size of the contingency fund has been worked around $100 billion, in which China would contribute a $41 billion share, followed by Brazil, Russia and India with $18 billion each, and South Africa with $5 billion. It is believed that it would take a year or so for each nation to regulate the fund, and a final agreement could be signed when the BRICS meet next year in Brazil. Some of the contentious issues would be where to host such a bank and how much the respective countries are asked to contribute towards it. Whether it would be a level playing field, or the countries are permitted to pool funds at will, remains to be seen. There are also apprehensions that China may wield more influence on the establishment of such a bank with more financial and governing powers.

The Cooperation

There are various sectoral initiatives between the BRICS aimed at strengthening cooperation. There are ministerial meetings as regards agriculture and development, finance and trade, and various meetings of governors of the central banks, heads of the statistical institutions, and conference of the think tanks of BRICS nations. There are plans to publish a joint encyclopedia of the BRICS too. On security issue the BRICS insists on common security and the resolution of conflicts in a peaceful way, and calls for regional security cooperation.

 

Besides, there are various agreements and frameworks concluded among the BRIC countries such as the Shanghai Cooperation Organization (SCO), where India is included in the capacity of an associate member and could become a full member in future as Russia has supported its candidature; the IBSA, which unites Brazil, India, and South Africa in annual dialogues; and more importantly, all BRIC nations including the new entrant are the members of G20. South Africa, India and Brazil will also take up a two-year seat on the United Nations’ Security Council from this year, resulting in all BRIC nations being represented on the council.

Challenges

Regardless of the potentials and opportunities, and the reach through every continent, the BRICS will face enormous challenges as they do not have a common agenda. Added to this, they are not an economic block like the European Union or a political alliance like the NATO, albeit capable of converting their economic prowess into a greater geopolitical clout; all have diverging interests, and at times conflicting (Ariel Cohen et. al. 2010). 

First of all, the mammoth economic growth of the BRICS counties is dependent on the manufacturing based on raw materials such as iron ore, copper, aluminum, fossil fuel and natural gas; technological breakthrough in renewable energy could shift the balance again in favor of G 7, and could result in slower economic growth than anticipated. Secondly, the so-called currency manipulation by some BRICS countries has ‘harmed’ the manufacturing in some countries, as admitted by the Brazilian finance minister Guido Mantega recently. Thirdly, there is an asymmetric relationship between the polities and economies of the BRICS nations. For example, the economy of China is bigger than the rest 4 and holds over $3 trillion of reserves, over 30% of the world reserves; its political clout is also bigger, as it holds the veto power in the UNSC besides being talked as the G2 partner with the US. Fourthly, the political equations between India, China and Russia are impregnated with ‘mutual mistrust’ and huge ‘security deficit’, especially between India and China on the issue of border, and China’s entente with its ‘all weather friend’ Pakistan. Fifthly, some other regional flashpoints weather in the South China Sea or in the subcontinent could make the cooperation between major BRICS countries irrelevant.  Sixthly, the domestic issues, especially the increasing social imbalance in the BRICS nations could also pose serious challenges to the internal security and economic development in these countries. 

And finally, even though India has welcomed South Africa’s entry into the folds of BRICS, but it is believed that the entry has also intensified the rivalry between India and China, for China would like to dilute IBSA by amalgamating it into the BRICS. India knows that China has a domineering role in the BRICS and would like to keep its strategic space open by way of IBSA. Since Africa is India’s major foreign policy target for the year 2011, it may not be willing to dilute IBSA so easily. The South African entry could open this ‘alliance’ to other emerging economies such as Indonesia, Vietnam and South Korea in Asia, and Egypt and Saudi Arabia in the Middle East. Nonetheless, so far the going has been good for China, including other members. The differences so far have not boiled down to open conflicts; it remains to see how far China would be able to steer its agenda through BRICS as well as other multilateral forums.

References:

Ariel Cohen, Lisa Curtis, Derek Scissors, and Ray Walser (2010) “Busting the Brazil/Russia/India/China (BRIC) Myth of Challenging U.S. Global Leadership” The Heritage Foundation, paper no. 2869, April 10, 2010 http://report.heritage.org/wm2869 (Feb 28, 2011)

Council on Foreign Relations (2010) BRIC Summit Joint Statement, April 2010, http://www.cfr.org/brazil/bric-summit-joint-statement-april-2010/p21927 (February 15, 2011)

DominicWilson and Roopa Purushothaman (2003) “Dreaming with BRICs: The Path to 2050” Goldman Sachs Global Economics Paper No. 99, http://www2.goldmansachs.com/ideas/brics/book/99-dreaming.pdf

Giovanni Grevi (2009) “The Interpolar World: A New Scenario”, Occasional Paper 79, Paris: EU Institute for Security Studies, June 2009, p. 9.

Jim O’Neil (2001) “Building Better Global Economic BRIC” Goldman Sachs Global Economics Paper No. 66 http://www2.goldmansachs.com/ideas/brics/building-better-doc.pdf

Richard N. Haass (208) “The Age of Nonpolarity: What Will Follow US Dominance”, Foreign Affairs, vol.87:3

Samuel P. Huntington (1999) “The Lonely Superpower”, Foreign Affairs, vol. 78:2 , pp. 35-49.

Thomas Renard ( 2009) “A Brick in the World: Emerging powers, Europe and the world order” Egmont paper, The Royal Institute for International Relations, Brussels

Leadership Transition in China: What it holds for China

China’s leadership transition in the wake of the 18^th Party Congress and the “two sessions” concluded in December last and yesterday has been orderly except a few hick ups created by the by the Bo Xilai episode. With this Xi Jinping is at the helm of China’s military, party and state, and Li Keqiang has taken the reins of government affairs. The going would not be as smooth as the transition had been for the new leadership, for the macro as well micro socio-economic and political environments are not as conducive as these were a decade back. A year or two or even more would be invested in consolidating and strengthening leadership positions before making big decisions. The top priority of the leadership would be to focus on the domestic economy, the “three rurals” corruption and other welfare measures as regards the education and health. It would be extremely challenging to further consolidate post reform achievements, and the task of making China a fully well off society by 2020. Let’s examine the major challenges new leadership would face in the coming decade:

1.      High expectations and pressure on economic front

Topmost priority for the new leadership would be to maintain the momentum of the growth so that the social stability is maintained and unemployment rate controlled to manageable levels. Urban registered unemployment rate at the end of 2012 stood at 4.1%. Hu -Wen decade witnessed a strong growth, high employment and stable polity. 

Hu’s tenure witnessed China’s GDP touching to 8.3 trillion USD from a meager 1.20 trillion USD when he assumed the office a decade back, registering an impressive 10% and above growth per year. Not only the financial crisis was effectively dealt with, but it also contributed almost 50% of the world’s economic growth during the slump. Rapid growth catapulted China to second largest economy of the world leaving behind countries like UK, France, Germany and Japan. China’s entry into the World Trade Organization in 2001 brought in export boom, registering almost 30% annual growth until 2007 capturing more than 10% of the global market. The trend in recent years have shown that the room for further expansion is limited, for the wages have been rising, the Yuan appreciating and China focusing on high end products.  The so called famous “Wenzhou Model” of yesteryears is showing cracks.

Individual income increased rapidly, with urban per capita disposable income reaching 24,565 yuan (3962 USD) and rural per capita net income reaching 7,917 yuan, (1276 USD) up 9.6% and 10.7% respectively in 2012. China thus came out of the ranks of poor nations and gate crashed into the middle income level countries. 

The urbanization has registered fastest ever growth anywhere in the world, by the end of 2012 over 52% Chinese were living in the urban areas. The urbanization opened up real estate sector, and in fact became catalyst in maintaining and sustaining rapid growth; as a result the ghost cities in China also registered an increase.  Despite that, the gap between China’s haves and have-nots has widened as could be seen from the rural urban income. Moreover, it is estimated that 10% of the Chinese own 56% of the wealth in China.

2.      Three “rurals” or sannong issue

Chinese peasantry has been subjected to harshest of taxes and levies by the Central as well as provincial government throughout its history. The taxes levied on peasants by the Central government were 93 types, and those levied by the local governments included some 269. Besides, there were fines and penalties that are not counted for (Chen et. al (2004). The exorbitant taxation, illicit fees, charges, and fines lead to a widespread discontent in rural areas, especially the grain producing provinces.  According to reports there were 180,000 mass incidents in 2010. That’s up from 50,000 in 2002 when Hu Jintao took over. Governing a less harmonious society will be a challenge for China’s new leaders. Though the agricultural tax and levies have been totally abolished since 2006, and there is a massive drop in the petitions, almost 80% according to my research in 2007, however, the mass protests have gone unabated. The most recent one being Shangpu in Guangdong on 5^th March 2013 over illicit land sales, it was the day when Wen Jiabao was delivering his Government Work Report, reviving the memories of the Wukan village rebellion of 2011 in the same province. China experiences more than 180,000 “mass incidents” every year – street marches, strikes or violent disturbances. Almost two-thirds of these incidents are related to the seizure of farmland for development.

This year Chinese government has earmarked 1.3799 trillion RMB (225 billion USD) for “three rurals” an increase of 11.4% over the last year. The money would be spent on enhancing agricultural production, subsidies, and promoting rural education and health. I believe, following are the areas where the new leadership would like to focus their energies on:

2.1 Uniform rural-urban property right system

The present property system has many anomalies, for example the urban land is under the state ownership, whereas the land in the rural areas is under the ownership of village collectives. Under the present urbanization drive, when the cities are expanding towards the suburbs, land property right are subject to conflict and contradictions, which is not conducive to the efficient and effective use of land resources as well as labor force mobility. In the light of this, there is an urgent need to implement a compensatory and transferable urban land system. The system would enable peasants to lease and transfer their land for a reasonable compensation through proper channels. 

2.2 Uniform HR and employment system

The present HR system in China violates the basic principles of market economy, which not only has divided the labor market into rural and urban, but also discriminates rural areas on account of a series of preferential treatment enjoyed by the urban areas. The education system also creates rural-urban divide, for the government is responsible only for the employment registration of the city people not the rural, even the migrant laborers are not incorporated into the urban labor employment management system. Even if there have been some attempts to reform the present HR system, the peasants still do not enjoy the rights enjoyed by the urbanites in the fields of employment, education, housing and social guarantees. Therefore, there is a need that the reforms in HR and employment etc. systems are synchronized.   

2.3 Uniform rural-urban education system

At present huge gap exists between the rural and urban education system. Chinese Government’s investment in rural education is far behind the investment in urban areas. The discriminatory policy has had a bearing on the overall quality of the rural residents; as a result the rural labor force has been put in an unfavorable situation in the labor market competition. Especially a lot has to be done as regards the 9 year compulsory education and secondary education in the rural areas. During my field investigations in Anhui, the peasants I interviewed revealed that the secondary education was getting very expensive and there are hardly people going to the high school. They revealed that annual expenditure of sending a child to a high school is between 1,500 and 2000 Yuan, which was about 70 to 80 percent of their annual income. I did not find a single student going to the university during my Anhui investigations. Meanwhile, the peasants favored vocational training at township and towns levels; this they said would enhance their human capital accumulation level and fetch good money in the market. 

2.4 Uniform rural-urban social guarantee system

The social guarantee system in China has not yet covered a large number of rural populations. Social guarantees such as medical insurance, old age pension, housing, minimum subsistence, labor protection etc. guarantees have largely remained confined to the urban areas. Therefore, various kinds of insurance system have to be introduced in the rural areas. Of late there have been attempts to establish a rural cooperative medical insurance system (2.2 trillion yuan ($354 billion) to support the ongoing medical reform that was launched in 2009), but the system as such is imperfect, for it only calls for reimbursement to peasants only for major diseases. Moreover, the central government pool to the rural medical fund is very small per household.  

2.5 Uniform rural-urban taxation and financial system

Almost 80% of the revenues are spent in the urban areas that have only 40% of China’s population. Hitherto, the peasantry was subject to various taxes, levies and pool funds. As regards the rural financial capital, most of it has been diverted to the cities and townships. Under these circumstances, the peasantry in China has been subjected to various burdens but has not enjoyed corresponding benefits and rights.  

2.6 Scale management of land

Scale management could augment the income levels of peasants. However, at present due to the highly fragmented land holding, scale management is not possible. Other factors such as HR and property rights are also hindrance to the scale management. The township government or the collectives could explore the idea of renting land which the relevant household or households do not wish to cultivate to agricultural enterprises or peasant households who are willing to enlarge their production scale. The household which surrenders his land should be given appropriate compensation after carrying out the valuation of land. Qiaoan Township, Tianchang County in Anhui province has adopted such a method and has been quite successful. The township government did a survey of the households who were engaged in nonagricultural sectors or who thought that engaging in agriculture was not a profitable proposition. The survey took account of their yearly inputs and outputs as well as the profit on contracted land. Contracts were signed after negotiation between the respective parties and conditions such as rent, contract period, rights and responsibilities of parties concerned were clearly stipulated. The township rent some or all of the land from these households temporarily or permanently. 

  

According to Lin Yifu, the leading authority on sannong in China, to achieve the goal of building a new socialist countryside, China need to spend about four trillion RMB towards public infrastructure development by 2020, implying that an average annual capital investment of 270 billion RMB. However, in 2005, China’s investment in rural infrastructure construction is only 29.3 billion RMB; in the year 2006, the entire outlay for “sannong” was 44.2 billion RMB. There is a huge gap between an annual projected expenditure of 270 billion RMB and the entire outlay for agriculture. Even if the public infrastructure investment is mobilized from cities, banks and other channels the spending on rural infrastructure is going to be a big problem. 

3.      Dealing with corruption

Government control of major investment projects, and key resources like land, offers multiple opportunities for graft. Out of 176 countries in the world, China ranks 80th in the Transparency International Corruption Perception Index. Nothing to cheer about as India ranks 94 even worse than China. Along with problems like land grabs and environmental degradation, corruption has contributed to an increase in social unrest. It would be the top concern for the new leadership and Xi Jinping and Li Keqiang has pronounced this very categorically in their speeches. 

 It could endanger social stability and the legitimacy of the CPC, for the 1989 Tiananmen protests were triggered by the corruption issue itself.  According to a recent report in February a former vice president of the Shenmu Rural Commercial Bank in the northwestern province of Shaanxi, Ms. Gong Aiai (popularly known as House sister, there are many house brothers and house uncles in China) owned 41 residential and commercial properties in Beijing alone.  Such exploits, however, appear puny next to those of Zhao Haibin, a party official and former public security chief in Lufeng in southern China, who was accused by a local businessman of accumulating at least 192 apartments and other units of real estate (New York times Feb 5 2013). These are still smaller fish in the ocean of corruption. The very top party leaders including Jiang Zemin, Zhu Rongji have been airing their views against the corruption.  Former Premier Zhu Rongji vowed to give his life in the fight against official malfeasance. He pronounced in 1998 shortly after assuming office:  “I’ll have 100 coffins prepared, ninety-nine are for corrupt officials, and the last one is for myself.” However, his son, Zhu Yunlai, became head of one of China’s biggest investment banks shortly after Zhu left office. Jiang Zemin’s son, Jiang Mianheng has stakes in China Netcom Telecommunications Limited, Shanghai Automobile Industry, Shanghai Information Network, and Shanghai Airport Corporation.  Wen Jiabao, China’s departing prime minister, have controlled assets worth at least $2.7 billion according to a New York Times October 2012 story. According to public documents compiled by Bloomberg, Xi Jinping’s extended family expanded their business interests to include minerals, real estate and mobile-phone equipment.  Those interests include investments in companies with total assets of $376 million; an 18 percent indirect stake in a rare-earths company with $1.73 billion in assets; and a $20.2 million holding in a publicly traded technology company. Other influential leaders such as Beijing Mayor Chen Xitong, Shanghai Mayor Chen Liangyu have all been fired and punished for alleged corruption charges. Zheng Xiaoyu, the director of the State Food and Drug Administration was found guilty of personally approving unproven and unsafe medicines after taking bribes from eight pharmaceutical companies totaling more than 6.49 million and executed in 2007. Lai Changxin, the business man who built a business empire under the nose of influential party chiefs including Xi Jinping the then governor of Fujian, have been sentenced to life after China secured his extradition from Canada in 2011. 

It could be seen that there are “tigers” as well as “flies” in the battle against corruption. Xi Jinping, who became president on last Thursday, has been driving an anti-graft campaign ever since he was made party chief in November. He has told that he would deal with both the “tigers” and “flies” sternly. He has identified fighting corruption as a priority It has been speculated that Xi will put a broad anti-corruption law on its legislative agenda for the coming five years. Other measures could be the declaration of assets by the party officials on the lines of Guangdong experience; Law on whistleblowers, to bring in transparency and rule of law; the publication of family backgrounds even private lives of the leading party members is an inkling in this direction. Finally the crackdown would be another measure, as more than 160,718 people were punished in China for disciplinary violations in 2012 and 7.83 billion yuan (around 1.24 billion US dollars) in economic losses were recovered. Wang Qishan, the new secretary of the Central Commission of Discipline Inspection of the CPC, is going to have a tough time ahead. The Commission is already busy drafting a working plan on punishing and preventing corruption between 2013 and 2017. However, many in China say the problem cannot be rooted out unless the party undertakes fundamental political reforms, such as the development of an independent judiciary and media.

4.      Political reforms?

Wen Jiabao, the outgoing premier has been the strongest votary of political reforms in China in recent times. Wen had joined the student protesters at Tian Anmen with the then Party Secretary, Zhao Zeyang, who was equally sympathetic about the cause of the students, and political reforms being one of their demands. Zhao got booted out for his sympathy, whereas Wen survived. Since then, especially in his last stint as Premier, he did reveal his thinking, on and off about the political reforms in public. Last he spoke about these reforms was in March 2012 when he said during the National People's Congress meeting in a live broadcast on March 14 that "Without the success of political structural reforms, economic structural reforms cannot be carried out in full.” So far his remarks proved to be no more than rhetoric. 

As far as the President designate Xi Jinping’s attitude towards political reforms is concerned, he has been talking a lot about reforms, but what he is indicating so far is his commitment towards economic reforms. His south China visit between December 7-11, 2012 is an indication, and more symbolic in terms of market reforms. And, why not, he represents the Shanghai clique in the Party who has vociferously advocated the deepening of reforms without touching the sensitive political reforms. 

The hue and cry about political reforms in China has been kept alive in its best political tradition by the Peking University, which was at the forefront of these movements, be it the May Fourth New Culture Movement of 1919, or the Tian Anmen demonstrations of 1989 or the recent 8,000-word petition drafted by Peking University Law Professor, Zhang Qianfan, and signed by 70 odd renowned legal experts, political scientists, economists, journalists and writers. Professor Zhang came to limelight last in 2011 when one of his classroom lecture entitled “The Xinhai Revolution and the Chinese constitutional government” went viral on the You Tube and China’s own version of You Tube, the Youku. Zhang took the stock and unleashed scathing attack on China’s present situation, and called for political reform, so as the sufferings of China are done away with. He said, although the reforms and opening up brought China a relative peace for three decades or so, brought China out of the dangers of famine and ‘great revolution’; brought China to the folds of the comity of world civilizations, but the nature of the totalitarian structure of the power has not changed at all.  Prof. Zhang continued, “In a century after the Xinhai Revolution, civil rights have remained constricted as against the unprecedented expansion of the government power. Extortion, unlawful acquisitions, indiscriminate demolitions, and even disregard for human life are rampant.”  Prof. Zhang further says that “today, China seems calm on the surface, but it is sitting on a powder keg. China could draw lessons from the fall of the Manchus, only the swift implementation of constitutional reforms can prevent the tragedy of the revolution. Past hundred years of history and ups and downs demonstrates that only a constitutional government can save China. We must rely on people to get rid of the totalitarianism…”

The petition drafter by Professor Zhang was released on 25 December 2011 and sought milder political reforms in China. This is in contrast to the Charter 2008 when signatories asked for democracy and end to the single-party rule. The architect of the Charter, Liu Xiaobo, a dissident writer ended in prison for inciting subversion, even though the Nobel Committee found him suitable for the Nobel Peace Prize.

It is too early to predict the impact of such petitions in China, however, I believe Xi would require a few years to consolidate his power before initiating drastic changes, we can expect, however, him enhancing intra-party democracy; greater transparency as regards the assets of CPC leaders. Administrative reforms could be another area where we can see Xi initiating some steps. For example The Ministry of Railways will be dissolved, and amalgamated into the ministry of Transport; The National Family Planning Commission will be merged with the Ministry of Health; General Administration of Food and Drug, the newly formed body will have the responsibility of taking over the duties of Food Safety Office of the State Council; the merger of two main media watchdogs - the State Administration of Radio, Film and Television as well as the General Administration of Press and Publication; National Oceanic Administration will come under Ministry of Land and Resources; State Electricity Regulatory Commission will also be dissolved and its responsibilities transferred to the reorganized National Energy Administration. The kind of political reforms dissidents in China and abroad are seeking would be a distant dream as China has categorically said that it will never go down the path of western democracy.