The One-Party Solution

On the first of July this year, the Chinese Communist Party (CCP) celebrated its centenary anniversary, noting among its list of achievements, e.g. the transformation of China’s economy, the elimination of absolute poverty, and the rise of China as a great power. China rose from a developing country with a per capita Gross National Income of $US200 to a middle-income country with more than $US100,00 in 2020. China’s GDP surpassed Canada in 1993, Italy in 2000, France in 2005, the UK in 2006 and Germany in 2008. In 2010, China overtook Japan to become the world’s second-largest economy and, in 2014, overtook the United States in purchasing power parity (PPP) terms. Given the current crisis of Western democracy, the success of China offers a clear example for other developing countries to follow but at what cost? Is China’s one-party dominant system applicable to Pakistan, Bangladesh and Sri Lanka?

While the search for a “one-party solution” in South Asia may be seen to accentuate the perception of a rivalry between democracy and autocracy - an ideological dichotomy the Biden administration willingly promotes - such a view overlooks the fact that both the US and China fall into the capitalist system, with the former featuring the domination of private capital and the latter the domination of state-owned enterprises (SOEs). The rivalry between the US and China, therefore, ought to be seen rather as a competition between different economic models within the capitalist system. Treating China’s one-party dominant system instead as a function of its state capitalism system, will help us better understand its advantages and disadvantages.

A distinct advantage of the CCP is that it controls all governmental organisations, other eight “democratic parties”, 97 national SOEs, and 460,000 local SOEs (which makes the CCP the wealthiest party in the world). The CCP also has comparative advantages in its institutional ability to develop and implement long-term plans or policies necessary for the completion of large-scale infrastructure projects. Its scope to mobilise national wealth and resources and deliver a high level of efficiency is unparalleled. In the two-party system, by contrast, defeated parties are often witness to the termination of infrastructure projects when opposing parties come to power. Even when parties are in power, projects can be debated for months and sometimes years on end without any results due to the blocking of motions by other parties or due to checks and balances of the branches of the government itself. A good example, is the separation of political powers in the US system.

The CCP has other comparative advantages. The intrinsic value of SOEs is that they are controllable entities that can be relied upon to toe the Party line – they can be deployed overseas to implement China’s global expansion. Answerable to the CCP, SOEs have a political utility – and can be leveraged by the CCP, often in pursuit of non- or semi-economic objectives. For example, the China Export-Import Bank (EXIM), established with a mandate and model that covered costs without necessarily making a profit, is a noteworthy manifestation of this. Unlike Britain and the United States that ‘succumb(e)‘ more and more to the money-lending classes dressed as ‘imperialists and patriots’ in the words of Hobson, the CCP is unique in that it controls five central state-owned banks plus other banks like EXIM. Within China’s one-party-dominant system, its banking CEOs are merely implementors of the decisions of the CCP; their mandated job is to ensure financial stability and suppress financial speculators. Under its party-controlled financial system, the CCP successfully defeated George Soros’s speculation in Hong Kong during the Asian financial crisis in 1997 and withstood the global financial crisis in 2008-2009. Remarkably, China has not generated a major financial crisis in the last 40 years. The key feature of its party-controlled system is its ability of preventing colossal scale speculation in China’s financial markets and accordingly providing economic and financial stability.

China’s party-controlled capital system does, however, have its problems and deficiencies. As Chinese leaders seek to develop an offshore market for the Renminbi (RMB), the CCP maintains strict controls on capital flows, thus preventing the RMB from developing into a global currency. In growing its global financial system, China has ironically sown the seeds of its demise. To compete with the USA, China attempts to expand the channels for foreign investors to enter the Chinese market and for domestic investors to issue Yuan-denominated financial products overseas. This policy would inevitably encourage a version of speculative capitalism. China might follow the example of the US by reducing its incentives in the production sector to earn quick money in the financial market.

Several more serious problems are also associated with the CCP, one of which is how it goes about maintaining its one-party rule; this being a top priority for the ruling elite. To prevent any significant challenges and reassert its ideological position, the CCP has instituted a rigid and extensive control system over NGOs, scholars, and social media to stop any dissent. This destroys independent thought and innovative ideas (which are the markers of any progressive society), thus inhibiting effective policy development, and generally making intellectual life in China miserable.

Another major problem is the governing of its 92 million party members, which is costly and raises serious management issues. Succession is also a challenging issue. Although Deng Xiaoping had introduced a two-terms rule, its abandoned in 2018 means that Xi Jinping will rule indefinitely. Rather than shoring up CCP power well into future indefinite rule will likely at some point result in a succession crisis potentially leading to the decline and erosion of CCP power. Whether Xi Jinping will pass his power onto the next generation of leaders remains to be seen. The most serious problem associated with the CCP’s rule, however, is on-going rampant corruption which is deeply rooted in state capitalism and the dominant one-party system, owing largely to fact that the CPP lacks external checks on its power.

The scale and level of corruption is shocking and has progressively worsened under Xi Jinping’s rule, which reflects poorly on leadership in this area, even though he has launched a ferocious campaign against corruption. Finally, but certainly not the least of its problems, is that while the CCP believes it has successfully framed the crisis and decay of American democracy, at the domestic level it is overwhelmed by the persistent demands of its own citizens’ for more democracy. A dominant one-party system cannot meet this demand half-heartedly; there appears to be no recourse other than to accommodate it. The CCP’s refusal to embark on democratisation also puts in a bind at the global level, such that it remains a critical factor preventing China and Europe from cooperating against US hegemony.

There are different evaluations of the dominant one-party system in China. CCP leaders see the system as a true and tried platform for China’s success and by extension their own personal success. For example, the top leaders have easy access to a portion of China’s GDP, which, less than one per cent of GDP amounts to more than one hundred billion dollars annually to spend on selected foreign countries, or high tech-areas for investment. Having this kind of money at their disposal to use on projects brings speedy results. From the perspective of about 600 million ordinary Chinese citizens, earning an average of US$145 per month, however, this use of public money rarely benefits them in any direct way, and they have no say on such a matter too!

Finally, whether other countries can successfully reproduce China’s model depends on several conditions. It is important to acknowledge that the practice of meritocratic leadership in China developed within its long-standing Confucian tradition had established the cultural conditions for CCP hegemony and China’s economic success. Without its meritocracy and thereby its citizens’ confidence in the system, it is unlikely that China would be the greater power that it is today. In this respect, it is difficult to see how the different colonial traditions and the multiple modern party systems of countries in South Asia could establish a CCP-style ruling.

The potential risks of creating a one-party state in terms of economic costs and citizen revolt against the government cannot be underestimated. Besides this, the other problems associated with the CCP mentioned here raise two substantive questions for imitators: is it possible to establish a hegemonic position similar to that of the CCP while South Asian countries are themselves still wrestling with China’s hegemonic ambitions in the region? If they are not able to surmount problems that are inherently rooted in the Chinese one-party dominant system, then would it still be desirable to emulate the CCP model? If Pakistan and other South Asian countries want to replicate China’s success story, rather than look to the CCP model in its entirety, in the end it comes down to pursuing its own adaptive, judicious, hybrid and creative policies and practices.