Reed Hundt on China's political future

A new business magazine, The American, has published an excerpt from a book by Reed Hundt, entitled In China's Shadow: The Crisis of American Entrepreneurship.

The excerpt is long, and dwells for a long time on the nature of entrepreneurship in China and the United States. However, the author also neatly summarizes the current nature of the Chinese political situation:

Numbering somewhere between 5 and 500 people at the apex of the 65-million-member Communist Party, this group can barely rule their huge population, even when collaborating with the handful of super-rich Chinese who made their fortunes outside the People's Republic. Centers of governmental and economic power are emerging in the various regions in rivalry against Beijing, as has repeatedly occurred in Chinese history. New influences threaten not only the existing order but anyone's ability to exercise order. Perhaps 30 million Chinese can taste the West's standard of living, and 500 million might hope to enjoy that life in one generation. But a billion are still trapped in desperate poverty. Powerful forces rend the social fabric: international capital, the military strength of the West, an aging population and overwhelming population shifts, the Internet's disruptive spread of information, the devastating environmental impact of development, massive energy shortages, and the ever-present risk of political instability.

Later, Hundt makes this surprising statement about long-term political development in China:

The Chinese Communist Party apparently plans to craft a state corporatism that will manage the Chinese economic and political strategies for the next several generations. Entrepreneurs are to be part of political leadership. Political leaders, in their own names and through family members, will take a share of entrepreneurial wealth and portions of the state-owned firms as they slowly convert to private firms. Meanwhile, the government will provide Chinese entrepreneurs with the trade policies, educational resources, transportation, and other public goods that let them take on Western rivals in the commercial battles of the century. The entrepreneurs may see the government as an unwanted partner, or even an agent of corruption. But as long as the country's economy grows at nearly 10 percent a year, everyone will make enough money for the new business leaders and old government elite both to obtain their shares of the country's wealth creation.

I say "surprising" because one almost never sees long-term political predictions relating to China and the Chinese Communist Party, at least in the English-language press and academic literature. Why not? I believe it partly relates to the failure of almost all Western observers to predict the collapse of the Soviet Union and Communist states in Eastern Europe until people started taking to the streets in 1989. It also relates to the regular occurrence of political and social instability in China, which every two or three decades results in old plans, policies, and politicians being purged and replaced, often by radically new policies.

The excerpt, unfortunately, does not explain where Hundt was able to find out about Beijing's master political plan for the next few generations, or how he interpreted various sources and factors to arrive at this conclusion.

Nevertheless, this excerpt is intriguing, and warrants further exploration. The book is available now.