Party of the people or the profits? – the WTO-column

(later also at Chinabiz)
“Hold on, all this talk about ‘people oriented’ business is very interesting, but should I not first make a profit for our shareholders? Is it not the society that should take care of the people?”
The anonymous Chinese business man in the back of the Shanghai conference room referred to the classic dilemma between capitalism and socialism, and for that reason rather relevant in de country like China that is still finding its way into the global economy.

This dilemma came up during a discussion at the newly establish party school in Shanghai at a one-day forum on leadership. A group of Chinese mayors, CEO’s of state-owned companies and Chinese and foreign scholars discussed how to deal with leadership in a globalizing world in a fairly new and open setting.
The impressive new building of the China Economic Leadership Academy Pudong (CELAP) is not unlike a church: huge and impressive, meant to make the visitor feel small and humble. Opinions at the site were very much divided on the question whether CELAP is just an extension of the traditional party school or really the open and innovative institute its leaders say it wants to be. Like so much in China, it is probably the result of many conflicting motives and interests, that all can be valid at the same time.

The building has cost an 800 million Renminbi (100 million US dollar) and is one of three institutes set up at the request by former party leader Jiang Zemin, two years ago. I joined the festivities and discussions for a good reason. In any discussion about long term developments in China, the communist party has been, is and most likely will be the most important platform. Some people will not like that, but it would be a strategic mistake to think it will be different anyway soon. CELAP has an advantage other schools, like the famous CEIBS, can only dream of.
By opening up to a foreign audience, the new party school diverts from the traditional rather closed way of discussing important issues in a more secretive fashion. Since it is part of profound changes in China, the ruling party is changing too. Not acknowledging the profound way China’s structures are changing, means missing much of the actual change that is taking place.
When I arrived a decade ago in China, I wondered whether there was something like a private economy. “How can you think that,” my Chinese friends told me. “This is a communist country, how can we have a private economy?” Still, they took me to many companies that smelled like private companies, acted like private companies, but mostly were called ‘collective’ companies.
In political discussion the issue of private companies popped up, but only in 1999 the central government said that companies should reregister under their truthful name, and suddenly a private economy emerged that was larger than the state-owned economy.
When I now ask whether a civil society is emerging, people react in a similar way. But I do see how the government is actively retreating from regulating the society in every detail, and how new ways to negotiate deals in this society emerge. Again, China does not have the regulations to deal with that civil society yet, but when it becomes strong enough it will officially emerge, and become part of the society.
When CELAP can facilitate the discussion about these new features that emerge in the Chinese society, the 800 million Renminbi spent on its beautiful building is well spend. It would explain also the enthusiasm of foreign academic institutions to set up affiliation with CELAP, and will explain why international students are eager to get their degrees also at this starting institute.

Fons Tuinstra
Also published at the blogger news.