Bo Xilai Trial - Western Press out to extract Maximum Mileage?

Bo Xilai Trial Begins

  

The trial of 'princeling' Bo Xilai, the Party Chief of    Chongqing Municipality, has begun on August 22, in  Jinan the capital city of Shandong province. Bo Xilai is the son of Bi Yibo who was one of the "Eight Immortals" who had a long revolutionary past and   who formed the ruling clique under Deng Xiaoping. 

Bo Xilai has held a number of important posts. He has been Mayor of fast-growing Dalian city, Governor of Liaoning province, a Politbureau member from 2007 to 2012 and finally the Party Chief of Chongqing Municipality.

Although he has been dogged by rumours of corruption even from his early Dalian days, his reign in Chongqing was marked by new controversies - populism, anti-crime drives, promotion of 'red culture' which included Maoist-era songs and even a move to Maoist-era social and economic policies. Such an overt move towards red culture has been shunned as a disruptive retreat to Politics in the Economy-focussed post-Mao days. The Anti-crime actions were said to be rough based on rumour hearsay and often bypassing the Law. His egalitarian and populist moves which are called the Chongqing Model were being guided by prominent academicians of the New Left especially Cui Zhiyuan. An important social policy was the substantial allotment of urban hukou to rural migrant workers. His economic policies blended the use of State Owned Enterprises along with Foreign FDI invited through lenient policies. Bo Xilai was understood to be on the path of making it to the Standing Committee of the Politbureau maybe as early as the 18th CPC Congress in late 2012. 

But then in February 2012, after Wang Lijun the police chief of Chongqing took refuge in the US Consulate at nearby Chengdu. On investigation the details of a huge scandal emerged quickly over the next couple of months to swallow up Bo Xilai. There are several rumors both for and against Bo Xilai and facts are hard to establish. However it seems  that Neil Heywood a Britisher had acted as an agent for several companies in Chingqing. Eventually he became close to Bo Xilai family and for a long time he was secretly carrying money out of China.. He seems to have been very close to Gu Kailai, Bo's wife. He had started demanding higher commission for his services. In retaliation he seems to have been poisoned and killed by Gu Kailai. Details of Bo's corruption and ruthlessness also started doing the rounds. 

His powers were withdrawn over the next few months. Bo was first eased out as the Chongqing party chief in March 2013. He was removed from the Politbureau and the Standing Committee of the Communist Party in April. In September he was expelled from the Communist Party of China and in October he was removed from his post of legislator in the National People's Congress which cleared the grounds for his trial to be started. Meanwhile, Gu Kailai's trial completed much earlier and she was handed out a suspended death sentence ion August 2013.

On August 22, 2013 the charges against Bo Xilai have been revealed by the prosecutors at the beginning of this trial. The Court in Jinan city has stated on its blog account that prosecutors have charged Bo Xilai for having taken bribes totaling 21.8 million yuan ($3.6 million) from two Chinese companies - Dalian International Development and the conglomerate Dalian Shide Group. This should have happened much earlier in his career when Bo was Mayor of Dalian. In addition Bo is said to have abused his powers when allegations about Heywood's murder by his wife's were brought to his notice. Other serious charges like - wiretapping, torture during the anti-crime phase and other cases of corruption - rumours of which had been circulating in 2012, seem to have been dropped. Were those just  unintentional rumours which normally build up in celebrity cases? or Were they intentional rumours used to disparage Bo Xilai in the heat of the moment last year? Or have those charges been dropped to stick to those which can be proved ? Remember Al Capone could not be charged for his smuggling in Prohibition era and so had to be hauled up for a secondary income tax charge. Or is it that the other charges have been dropped because the government wants to quickly and smoothly get beyond this case? They do not want any sentiments to get whipped up in favor of Bo Xilai over a slow trial. Many conjectures abound, but there is no certainty.

The trial which began on August 22 is being held behind closed doors and is likely to finish within two days! And the sentence is likely to be announced in September. It is felt that the Party has several goals in this whole process. As far as the trial is concerned it would like, Bo Xilai to quietly accept the charges and end this turbulent period peacefully. In addition they would like to prevent any secret statements or documents to get smuggled out and create social unrest. Even the possibility of his relatives attending the trial carrying out the details is viewed as a threat. Over the longer run experts claim that this trial is supposed to send out the signal to similar "troublemakers" to stay away from flashy self-promoting populist politics and stick to the 'well-rehearsed style of bland back-room politics'. 

What stands out however is the unprecedented openness with which the trial is being carried out - with constant communication of happenings and statements within the room to the outside world. The Chinese court itself is issuing almost real-time tweets on social media! Perhaps to preclude twisted misrepresentations and distortions in social media. Could it be that the ability to report first on social media is a way to minimize the ability of subversive elements to create social unrest. Maybe the Chinese are trying to find a way to have live with twitter without suffering from "Twitter Anarchy"! The Chinese journalists are staying away although it is being covered officially - uniformly negatively as expected. The Chinese TV channels are also reporting the Sina Weibo commentary. However, the Foreign media is in full force and covering it with its usual political stance of being caustic, critical and cynical of the Chinese Political System? 
On the other hand, how does explain the huge change of approach being displayed by the Chinese authorities? They have opened up remarkably and unprecedentedly. Can one view this as an another attempt by the Chinese to use every crisis as an opportunity. In this case for opening up the political world in a measured way. One can also see it as a defensive attempt to appear open in anticipation of western criticism. This openness is perhaps an attempt to contain and hold back expected western criticism which might arise out of the trial and its conduct.

Update - Very briefly - over the last few days of the trial it seems that Bo Xilai has put up a strong defence. This is unexpected given the Chinese States's previous ability to work out such outcomes in a predictable manner. The level of openness and near-transparency with which the trial has gone on is also quite unexpected. However, a likely explanation which appears to be emerging is that Rash bossy flash of anger and violence on the part of Bo Xilai might have proved his undoing. Wang Lijun the chief prosecutor's witness was the police chief of Chongqing under Bo Xilai. In a fit of rage Bo Xilai seems to have treated Wang with contempt and even hit him in public. Wang seems to have been infuriated at his public humiliation and has taken his revenge by exposing Bo Xilai's dirty linen in public. Possibly a case of Get furious in Haste and Repent at Leisure. The fact that Wang Lijun was hit in anger has been acknowledged by Bo Xilai as well. It seems that Wang Lijun knew about Gu Kailai's involvement in Heywood's murder since November 14, 2011. But till Jan end of 2012 he merrily kept quite. This complicity is perhaps an indication of what goes on in the higher echelons of the Chinese polity. In Jan end of 2012, he was mistreated by Bo and promptly took his revenge. We see how a mighty politician of China who despite his involvement in ambiguous and even shady activities seems to have been surviving and prospering in China due to the submissive and mutually beneficial relationship with bureaucrat juniors and the silence of the mainstream media on such matters. He seems to have been undone by his momentary weakness - an uncontrolled fit of anger. Going by this scenario - one can assume that the Mighty in China can afford to be corrupt. The system protects them. However, once the dirty linen of the corrupt mighty comes out (even though accidentally) the other seniors will immediately abandon there own - in order to protect themselves. Then there is nowhere to hide and the once mighty  will come crashing down. This is a plausible line of thinking which however needs to be confirmed.

Why was Bo Xilai such a threat to the Chinese Political System?
Bo Xilai was attracting unprecedented attention for his dramatic policies during the heydays of Chongqing. As a result of the limelight he seemed to be emerging as a solitary "Star" politician, independent of the political rankings in the Zhongnanhai. Such disorderly, unpredictable and even aggressive behavior at the highest echelons of the Party was quite unprecedented. And it was a huge challenge not just to the existing political leaders but also to the existing system of doing politics. 

Bo Xilai's populism and popularity based political legitimation was a sort of anathema to the current model of Economic legitimation. The Party's legitimacy over political control derives from its ability to provide economic and social well-being to the people. That is the only real link between Politicians and Society. Political contests take place behind closed doors away from public attention.

The almost-democratic nature of political legitimacy which Bo Xilai was aiming for was a huge threat to the stability of the Chinese system. He probably managed to cover up his shallow ambitious and  ruthless nature with his high-sounding populist ideals for sometime. The 'princeling' tag too protected him for so long. However, his hubris, ruthlessness and arrogance had to eventually end in this fall. 

People will be watching out for whether Bo Xilai accepts the charges and pleads for leniency or he goes down defiantly challenging all charges. But in the overall scheme of things it is going to be less significant. Early reports from the trial indicate that Bo Xilai has denied the bribery charge which he says he had accepted under mental stress during the investigations. He said he was treated well physically. He called the main witness a 'mad dog' and has 'sold his soul' and was reprimanded by the judge. 

The New Left and the Maoists who were on a high till a couple of years ago with many of their welfare policies gaining traction at the Center. But since Bo Xilai's arrest they have suffered an immense setback. With populist Bo Xilai being targeted it is almost as if the entire set of populist New Left policies themselves have become suspect . However, the intellectuals who were his closest policy advisers have been more affected the most.

To continue with the idea of Regime Legitimacy, the new concept of the Chinese Dream, perhaps modifies the old idea of Legitimation to the provisioning of Economic opportunities and moves away from providing actual economic support. Possibly, when the tiny remaining section of the population moves above the Poverty Line, the state will gradually limit itself to facilitating the progress of people instead of providing hand-outs and freebies.

The Live coverage of the Bo Xilai trial is available through written text messages at the Soutch China Morning Post website. Please click here to access.

The significance and impact of the Bo Xilai case has been evaluated by Minxin Pei in The Indian Express of August 22, 2013. Please click here to read.

China's contribution to Economic Model Theory

The Socialism-Capitalism Debate

and

What does China bring to the Economic Model Table

What is the need to call it Economic Model Theory and why Development Theory is inadequate?

The idea of Development Theory reeks with a faint notion of  Orientalism. It is looked down upon, even dismissively, as something applicable only to Developing countries - the nations which got left behind. The concept therefore implies an unworthiness, an inadequacy springing from its lack of universal applicability. And therefore its scope and relevance gets limited. But the Chinese Miracle due to its extent and intensity goes way beyond anything the developing world has achieved and rises as a broader more universal challenge to some of the most central and sacred economic concepts. In order to stress the broad scope and universal relevance of the experiments and innovations taking place in China, for the entire economic world including the developed countries one needs to move out from the limiting "Development" nomenclature and consider them as more broad and central achievements worthy of consideration at the highest economic platforms For this reason "Economic Model Theory".

Capitalism vs Socialism – One can view this debate throw the Rose-thorn analogy. Those of us who hold strident views, we see only part of the picture and make up our minds based on those views. In the economic model we prefer we see only the rose – the rosier aspects and are blind to the thorns which are inherent and intrinsic within the existing models. It is just the reverse in the opposing models we dislike and even hate. We see only the problematic thorns and are blind to the rose centered within those thorns. The Chinese model does it plan ambitiously to grab both the roses - the roses offered by the two competitive and contradictory economic models - and at the same time avoid all the thorns.

Capitalism – Rent-seeking develops over time. By the very capitalists who  were supposed to terminate rent-seeking. And so we need a “Disruptive” Creative Destruction phase in capitalism. Why doesn’t a constant process of innovative process and product changes happen? Entrenched Elites blocking new emerging elites.  And so it needs a ‘creative destruction’ phase. But quite inefficient due to disruption caused. Lots of collateral damage. Many useful and Working processes go under. Replacement-destruction of entrenched elites has to be done through an act of physical uprooting. Capitalism’s own revolution.  We lately see that one can have the pain of creative destruction without the advantages of new more productive innovative elite class. Financial elites have grown so big that while society has managed to go through disruption they have managed to avoid any disruption to themselves and the new and better financial systems and processes have not emerged. Maybe in this case a bigger revolution will be needed to overthrow the entrenched elites. Social disruption of a bigger order.

China has probably been trying through a process of experimentation to blend capitalism and socialism or one may say to improve capitalism which is the same thing.

We shall see this through a class perspective but through a three class perspective and not a two-class perspective. Though more classes can help us to get a more sophisticated idea. Three classes will simplify matters enough for us to understand point being debated.

But in exactly what way? Mao despite all the pain and misery which was caused did raise the poor masses into a lower middle class – all round education,  health and employment though at a rather basic level and nothing beyond that. No way to channelize human capacities beyond that. With the Deng reforms the social networks were disrupted to incentivize people only according to performance. An elite class developed from the lower middle classes but due to the demise of social welfare schemes many descended back into poverty. Pure capitalism was modified and a social welfare net was developed for – welfare capitalism or a social market as one wants to call it. In addition to this there has also been the recognition of importance of regulation. Not burdened by ideology of either colour, China is probably trying to evolve a more orderly process of elite churn. One on which the entrenched economic elites are not allowed to emerge.  Despite the growth of certain real estate billionaires the Chinese rich are still far smaller in wealth compared to Western elites and relatively speaking maybe smaller even than Indian elites. And so their power to exert control over economic processes is limited. The Regulatory process makes it difficult to

Theoretical question – How does one restrict the growth of powerful economic elites who lead onto regulatory capture, rent-seeking and inefficient self-preservation? How does one avoid the Big Bank, Big Oil, Big Pharma, Big Telecom, Big Media, etc. nightmare of the US model?

1.      Pray and hope that profit-driven elites will not misuse their power for easy unnatural profits and continue to earn it the hard way! That their unproven urge to self-regulate will somehow be more powerful than their urge to earn profits as easily as possible. That they will not be able to offer incentives to the political and bureaucratic class:

i)                    to subvert the competitiveness of the system to prevent challenge from a more vigorous and innovative new elite class. 
ii)                   To corner the natural resources at considerable discount (rent-seeking).

2.      Limiting elite size to a certain point, by

i)                    Keeping them away from the Large Naturally Monopolistic sectors. By limiting these sectors to the control of the State.

ii)                   Progressively increasing Taxation.

iii)                  Regulation

3.      A State “somehow” blocks powerful entrenched elite pressures and continues to incentivize and unleashing the entrepreneurial energies of the middle classes. 

In this regard one must mention the US Big Business elites in monopolistic sectors have not yet gone on to block the growth of Small Business to Middle Business. In fact US and China have the most successful business emergence policies. But there is Sectoral Regulatory Capture. They have certainly cornered specific domains as personal fiefdoms in which newcomers are not welcome. Newcomers are welcome to create domains of their own in IT and Biotech and Genetics but not present a challenge in existing domains. Even in IT and Biotech now the Potential Newcomers are snapped up as soon as they show potential by a newly emerged elite in these sectors which too is looking to block new challenges.

4.      Representative Democracy has not shown any real capacity or even potential for being able to do withstand Elite Pressure. Direct Democracy is messy and inefficient even unworkable except through referendums.  And so we are left with an Authoritarian state. But most authoritarian states too are naturally driven by personal profit motives of the leadership. So why has China evolved differently? Maybe because there is a very small class of tiny nationalistic leaders who are driven by a social impulse to nurture and develop their society and nation despite all the attractions and distractions. A relatively light and benevolent control over the politics and economics of Chinese society. Watching out for negative trends and offering incentives without getting trapped in any ideology.

On the basis of the above complications and limitations with western capitalistic economic model, the Chinese Economic Model relatively free from concentrated economic power stands out. And what stands out equally is the engine behind this accomplishment - the nature of the Chinese state. Authoritarian but benevolent, responsive, caring and nurturing. Maybe not at an individual level as it might not be possible with a billion people. But at a collective level. As a state which stands stands up as a balancing force between Society and the Market. A state which nurtures the market but when the same market grows and concentrates to a point where it starts challenging Society the State jumps in to restore the balance.