WHATEVER image you may have of
the reformists hoping to shake up China’s creaking economic system, it is
probably not one of octogenarians who fiddle with their hearing aids and take
afternoon naps. But that is a fair description of three of the country’s
loudest voices for change: Mr Market, Mr Shareholding and the most radical of
all, the liberal. With growth slowing, the stockmarket once again in trouble
and financial risks looking more ominous, their diagnoses of the economy, born
of decades of experience, are sobering.
Wu Jinglian,
Li Yining and Mao Yushi—their real names—were born within two years of each
other in 1929 and 1930 in Nanjing, then China’s capital. Whether it was that or
pure coincidence, all three grew up to demand an end to Soviet-style central
planning and to propose, to varying degrees, capitalism in its place. Their
influence has waned with age, but their powers of analysis remain sharp. And
they do not much like what they see.
Mr Wu is in
some ways the most important of the group. He advised the government from the
earliest years of China’s “reform and opening” in the 1980s, through the 1990s
when the great China boom got under way (see timeline). He proposed that the
Communist Party should declare China a “socialist market economy”, a twist of
words (and a hugely controversial one—conservatives abhorred any positive
mention of markets) that opened the door to private enterprise.
But Mr
Market, as he came to be called, thinks this kind of linguistic ruse has
outlived its usefulness. Imprecise concepts have led to flawed actions, he
warns. Though the private sector has flourished over the past couple of
decades, the state still looms large, controlling financial flows and acting as
gatekeeper for virtually all important decisions, from land deals to mergers.
“Even a low-level bureaucrat can decide the life or death of a company. You
need to listen to the party,” says Mr Wu, who now teaches at the China Europe
International Business School in Beijing.
Mr Wu notes
contradictions in the official blueprint for reforming state-owned firms. The
party promises to empower their boards, but still wants to retain authority
over the appointment of top executives. “If you can’t solve this problem, it
will be very difficult to develop effective corporate governance,” he says. Mr
Wu argues that political change is now needed to shore up the economy: the
government must stop meddling in markets and instead focus on developing the
rule of law. Holding up a copy of his recent book, he chuckles softly. “All my
ideas are in here. No one pays them much attention.”
Getting
heard is less of a problem these days for Li Yining, who has spent his entire
academic career at Peking University. His former pupils include Li Keqiang,
China’s prime minister. His big idea in the 1980s was that selling partial
stakes in state-owned companies to the public would improve their
performance—hence his nickname, Mr Shareholding. The party eventually took his
advice, though the companies remain hugely inefficient.
In
diagnosing the problems of today, Li Yining is blunt: the previous few years of
ultra-high-speed growth “did not accord with economic laws”. China wasted
natural resources, damaged its environment, piled up excess capacity and missed
opportunities to fix its economic model. Yet perhaps because of his connections
to those in power, Mr Li is by far the most sanguine of the old guard of
reformers. “The new normal”—President Xi Jinping’s favourite economic slogan—is
shifting the economy in the right direction, by aiming for lower growth and
structural changes.
Mao Yushi
disagrees. And unlike many economists cowed by a frostier political climate, he
is unafraid to say so. Mr Mao started his career in the railway system,
including a spell driving trains, before retraining as an economist in the
1970s. Always on the margins of Chinese academia, he founded the Beijing-based
Unirule Institute of Economics in 1993, an independent think-tank (a rarity in
China). He champions deregulation and courts controversy in his criticism of
Mao Zedong’s disastrous rule. Some diehard Maoists call the softly spoken
economist “Mao Yu-shit” online, playing on a homonym of his name.
In Mr Mao’s
view it is already too late for the economy. China has too many empty homes and
its banks have too much bad debt. “A crisis cannot be averted,” he says. Mr Mao
allows himself some optimism, however. The young generation is educated and
open-minded. The waste of capital and resources of recent years implies that
China still has good potential for growth, if it can operate more efficiently.
But he believes that Mr Xi, while espousing reform, is strengthening the
state’s economic grip. “He has the power and the determination to fix problems,
but in many cases he does not properly understand the problems,” says Mr Mao.
Such
unvarnished, open criticism of Mr Xi is rare in China these days. Speaking in
the living room of his apartment, its walls stacked high with books and
yellowing newspapers, Mr Mao says that his age and experience give him, and the
other elderly reformists, a bit of leeway. “If it was someone else speaking,
they would probably be arrested. But to me, the government is polite.” If only
it would pay more heed to the elders’ advice, too. SCMP
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