China is currently experiencing the beginnings of two possibly very destabilizing events: the political scandal surrounding Bo Xilai, and the mounting indications that China’s high growth rates are starting to slow. Because of the unique mixed economico-political model run by the Chinese Communist Party these events hold the possibility to unleash a mutually reinforcing spiral of instability.
Minxin Pei argues that Bo Xilai is not the exception to the Communist Party’s organization, but rather the norm. China’s “princelings” have gamed the system to amass huge personal fortunes through combinations of corruption, patronage, and manipulation. Most countries can point to insiders who profit from political positions, but the Chinese case is particularly troubling given that the Communist Party’s implicit agreement with the Chinese people holds that the Communist Party will select highly qualified people to run the economy in a more or less technocratic fashion to deliver widespread economic growth. If there are really as many super-rich princelings as David Barboza and Sharon Lafraniere claim there may be (hundreds of thousands), then the game is up in Beijing. The spoils system, they argue, “poses a fundamental challenge to the legitimacy of the Communist Party.”
But at the same time, there are growing indications that the model may be falling apart already. Continue reading