The Rise and Fall of the EAST: Yasheng Huang in Conversation with Orvill...

The Rise and Fall of the EAST: Yasheng Huang in Conversation with Orville Schell

Asia Society

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39,242 views  Nov 17, 2023 

NEW YORK, November 13, 2023 — Yasheng Huang, Epoch Foundation professor of International Management and faculty director of Action Learning at the MIT Sloan School of Management, discusses his new book, “The Rise and Fall of the EAST: How Exams, Autocracy, Stability, and Technology Brought China Success, and Why They Might Lead to Its Decline,” which explores China's shift from dynamism to severe stagnation after the Keju was introduced, and considers the lessons these historical patterns might offer for China's current path. Orville Schell, Vice President and Arthur Ross Director of the Center on U.S.-China Relations at the Asia Society, moderates the discussion. (1 hr., 29 min.)

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been reading a lot of books about China for a lot of decades um I have to say th

this book here is really good uh and I think you you you in many

ways yashang have really uh given us a wonderful tour through the various

Decades of sort of uh Chinese history since Ma's death and uh really helped uh

readers to understand you know what it is that's going on between the US and

China so so let's dive in the the the first thing I found really interesting

about um your book was that you talk a little bit about traditional China and

one of the questions that I've always uh found uh interesting is to what degree

has China sort of old authoritarian dynastic history dovetailed quite neatly

with uh leninist onep party authoritarianism and so what's the

cultural sort of uh uh Providence of China worth in this new kind of a of a

onep party State yeah so I I think the there's a

um um ideological or cultural uh Affinity between the

traditional Chinese political ideology and the Communist uh ideology

in in the following sense um both ideologies gave and Empower gave a lot

of power and enable the state at the expense of society and

independent actors in The Society such as

intellectuals um Commerce not so so much sort

of you know wiping out Commerce wiping out intellectual it is reducing them to

their own individual capacity rather than having them as a organized

potentially competitive force with the state right so China has intellectuals

China has uh entrepreneurs and business people but

mostly they are intellectuals and business people in their own individual capacity

rather than as a part of a organization as a part of a a uh

Collective entity that is separate from independent of the state both

ideologies are extremely um careful

about about managing the relationship between State and Society traditional

Chinese uh political culture has very little room for

independent society and I go back to the exam system as a way to make sure that the

state dominates the society the state so so for those who

are uh not familiar with the exam system so the the title is Rise uh in the fall

of the year East and East um EA St stands for exam autocracy stability and

technology so I start with a ye letter E the exam and the exam was the civil

service exam established in 500

87 and that exam system was extremely powerful

in uh uh for the state to monopolize the human capital and regiment thought and

regiment thought that exactly so even though the state itself was not large

right so if you look at the exam system at the end of the system you had about

400 people uh that eventually went into the

highest level of the Imperial bureaucracy but the exam system was

so um uh such a large participation from the

masses and unlike sat you know in the US the college uh the the the you actually

had to know something uh well so so I was going to make a different point

which is that in the uh us you know you may take uh sat once you may take it

twice but that's about it to pass the uh Imperial service exam uh exam

you had to take it multiple times and we have a a data uh data set

database on the uh exam candidates in the main

Dynasty the youngest person who passed the exam was 13 years old right so

clearly a genius the oldest was 59 right so this

is mean dynasty this is 400 400 years ago 500 years years ago when the life

expectancy was probably in the 40s so you take it multiple times so in my book

I argue that the state monipoly the um the best of the human capital

they monopolize the ideology they also monopolize your time and they socialize

you into a certain mindset completely socialize you into a certain mindset

completely and so scholars believe that China reflects its

own history that's absolutely true but I think we have been a little bit vague about exactly what part of the history

that the current system reflects uh so I pin it down to the exam

system you know other people can argue that could be other things but I think

we need to be more specific than just saying that it is a product of History we need to be very very uh concrete when

we say okay it's part of that history and the exam system has survived into these days right the G call the G call

and the civil service exam and also the entire uh meritocracy right the

the idea of meritocracy there are different ideas about what meritocracy is uh my own definition of meritocracy

is that you promote your reward people on the basis of

objective metrics right uh could be GDP or could be something else exam system

was meritocratic in the sense that you got promoted on the on your exam

performance uh during much of the time since 1978 the Chinese system relied on GDP as

a performance metric so in that sense it was meritocratic I'm not saying it is

necessarily good it's just saying that there is a objective measure yeah yeah

um so uh I mean you had this Millennial long system of confusion classical

education which enabled you to take and maybe pass the exam get into the bureaucracy and that was sort of a a way

to create a common culture and also it was like a propaganda Bureau in a

certain sense so then Along Comes Lenin yeah in 1921 when sunen gets interested

in how to build a party and the nationalists and the Communists both adopt Lenin so um do you think Lenin

would have been as digestible to China if they hadn't had this past well so I

think what leninist um ideology did to China was

that they further empowered this traditional

um traditional preference and traditional um endowment of political uh

Authority by adding to that political Authority control of the economy at

least in the traditional uh Chinese Society you didn't have the state

controlling the economy to the extent that the um Central planning system did

uh so it it kind of move the system even further in the direction of the control

by the state then it would have been if they just rely on the

traditional uh traditional political system right so I would argue that

National nationalist government relied on the traditional

model there you had definitely authoritarianism but a mixture of

private economy and and strong government and over time in Taiwan they

began to open open up whereas in uh Mainline China you had the elements of

the uh leninist ideology and then the traditional ideology and they complemented with each other one is more

on the politics political side the other is on the economic side so here's a question that I I've always vexed over

an economic question I mean I mean you had a traditional system which for many

centuries disesteemed Commerce yeah I mean in the hierarchy of things the

merchants are at the bottom yeah yeah strangely in traditional Chinese culture

that it was the scholars the Learned people who were esteemed and in a communist system of course the merchants

the Bourgeois yeah uh entrepreneurs are also dis esteemed they're scums they're scums

yeah yeah so toota if I'm a republican candidate yeah so H how did we and I and

then I want to get you to kind of look through the various decades at how things have really changed in China but

how the heck did we get to this place where Chinese are suddenly these celebrated entrepreneurs yeah I

mean talk until right until exactly but there there have been

a number of decades where they were the Envy of the world well so the key thing that changed was the uh the goal changed

right so the um the goal for Imperial regimes was political

stability political control it was never about economics uh in fact the chapter on

technology uh shows that even though China was extraordinarily inventive

um there was never really any kind of technological agenda uh on the part of

the government it really just happened that way and then they lost it completely uh after they introduced the

exam system and never the the economic development was never really a concern

on the part of the Imperial regimes until the open War because they got they

got hit so badly by the by the by the by the imperialist powers and then D shaing

came along in 1978 and he engineered I would argue a

ideological Revolution right not in the sense of you know toward democracy

constitutional democracy but but this idea that the goal of the government is

to develop the economy that just opened up so describe

what what preceded that I mean most people understand the ma Revolution but that certainly was not about getting

rich mous Revolution oh absolutely it was so so and then let's talk about what

dung did and what that meant in terms of revolution of its own kind so so M

Revolution was not about getting rich but it was

about getting the country to be strong so so there is a there is that differenti iation between kind of

individual wealth accumulation that we typically associate with capitalism and

the kind of the power of the country the power of the state yeah the fuang and power sort of wealth and power right so

it could be military power it could be it could be economic power um but that

didn't work right Central planning failed miserably and and Ma didn't

didn't help I mean he launched cultural solution he launched uh great Le forward

that further damaged the economy so essentially by the late 1970s Central

planning was uh ideologically bankrupt um and they needed a new method of uh

developing the economy and that's when the market economy idea began to um to

sort of reluctantly adopted by the ch Communist party and D

shaing really meant it when he said that U doesn't matter the color of the mice

as long as they can catch the oh that's right yeah the cat yeah in my household

it's the other way around okay yeah uh uh yeah that's right

it doesn't matter the color of the cat as long as they can catch the mice and so that's a really

really revolutionary um idea right would would you say that I mean when D shaing came

on the scene and remember he had been cashiered twice yeah and had been totally humiliated sent down and ignored

so he came back into power do you think that his genius was that he he actually

believed that we had to have more incentives and Innovation and capitalist impulse or do you think he kind of just

let the pressure off yeah and and things s started to develop yeah I think is

more the latter yeah right so it is not a um sort of a story about

heric leader uh imposing yeah imposing market economy on on the Chinese I my

own view of market economy capitalism is it is more consistent with human nature

than socialism right so essentially if you leave the human beings alone they

tend to go capitalistic rather than socialistic so the issue here is is more

about removing the barriers removing the obstacles toward basic human nature and

and dung the The Genius of dung was well it's not so much the genius of

dung it is really the unique aspect of dung was that he had the

credibility um precisely because he was purged twice by by mou

so when the Chinese peasants saw that dun came back they really believed that

the world had changed right so for many many years academics are puzzled by this

phenomenon of incredible entrepreneurship bursting out in China

first in the countryside first in the countryside for sure right but under one party autocracy without rule of law you

know without Free Press without all these niceties that we associate with the democratic system and some argue

that oh that means that the uh democracies are not necessary rule of law is not necessary but we have to

remember though uh we shouldn't look at this issue from the perspective of those of us who live in the Democracy we have

to look at this issue from the perspective of these rural entrepreneurs

in 1977 1978 to then Danga ping now

coming back to uh to Beijing and taking over the government to that rural

entrepreneur that could be a difference between stalinist Russia and jeffersonia

America right so I mean to him or her this is a huge difference yeah I mean you have to remember that Malong had

communized the entire country taken all private property away all private homes

and sudden this guy D sha ping appears and you start getting people getting

rights to farm land they can have their own house they can EMB raise a chicken a pig and take it to Market that's you

know from the so so just imagine that you have been socialized to a world

where even raising your chicken is capitalistic yeah and you can go to

prison and from that to a world where oh raisin chicken is okay that's a huge

difference within a couple years within a couple of years right so and and so in my book I I talk about um because

Economist you know talk about incentives never underestimate the power

of uh uh the incentive effect of not getting arrested right that's that's

incentive right there pretty pretty basic it's Prett starting place for an incentive I think so at that time it was

the fact that you no longer face imprisonment that enable you and to go

into entrepreneurship today I think we have to talk about rule of law because

you have amassed billions of dollars of assets you have build a entrepreneurial

Empire then you can't just say okay I'm not going to arrest you then you say oh

I feel so good I I'm not arrested so I work hard to create technology today you

kind of have to introduce rule of law okay now we're getting ahead of ourselves a little here I I I want to S

take you down through the I'm impatient yes so okay so so then uh if we sort of

go through your your your your chapters which sort of document the different periods which are quite extraordinary

they're like almost like dynasties characteristic in very distinctive ways so the

80s by your account and I would agree with you was pretty extraordinary time so so so describe why you felt it was

such an amazing time and and and how does it counterpose against what preceded one reason it was amazing is

because I was a young person then so that's did you get country no no no I wasn't old enough to be sent to the

countryside so so that was nice but other than that uh it

was um in doing the research for this book I found out lots of things about

the 1980s that I didn't know about before what I knew before was in the

80s the economic development the economic growth by the way in the 1980s

the Chinese GDP growth um and other measures of the development are no less

uh impressive as compared with later decades arguably they are even more

impressive as compared with later decades so incredible economic growth

and in fact uh income inequality began to decline in the 1980s so on the

economic side you have really just remarkable economic

performance on the intellectual side that was the time you wrote about this

right that was a time when the intellectuals were really free to

explore many ideas that uh they were not able to before and even many ideas they

are not able to explore even today right um and uh intellectuals criticize unin

by name by name right buan and F and people like democracy War democracy War

right was down for sure uh but it never really went away in other ways

manifested in other ways so those things we know because uh Scholars have done

research on on on these issues what I didn't quite know before is that the

political structure was also quite fragmented so at one point in the 1980s

the political power was divided among five individuals the secretary uh

General Secretary of the Communist party is one individual the president of the

country is another individual chairman of the military Affairs commission is another uh individual the perier is

another individual and then there is a institution called the um Central

advisory commission and that's another Power Center which got abolished which got abolished after

1989 so you know these are not like separation of power and constitutional

division of labor but to have institutional separations the minimum

condition is that you have separation of individuals right so five individuals

holding five different positions of power I consider that as the beginning

of possible Evolution toward a institutional separation of power so

politically you know we we we for the 1980s many people think about T xaing

and they think t shaing as a um you know strong man and that's actually not true

D Shin compromised on many many issues D Shin had to make concessions to Chen and

to many other conservatives uh in the party and to the military and then on

his left he had these party ideologues economic conservatives on his right he

had you know fairly radical reformers Jang and

huabang who advocated both economic and political reforms and D was right in the

middle and he had to kind of navigate the political forces from the left and

from the right so that was the landscape of Chinese politics in the 19080s so

there was a kind of a factional check and balance system so essentially it's a de facto check and balance not

necessarily according to the rules and regulations but still you know some

check and balance is better than than than none right so China already began

to have a de facto check and Balan political Dynamics not political system

but political Dynamics that all went out of the window because

of tanan right so so okay but before we get to tan yeah we're going to get

there I want to keep order here in the court um I want you to to just to remind

everybody that Not only was this a time of a of immense economic sort of uh

ferment but it was also a time of incredible intellectual artistic in fact

I think think the first time I met you yashang was at a at a weird rock concert

with Su Jan yeah this is this this guy who used to play trumpet in the Beijing

philarmonic and he went off the reservation grew long hair got a band

with a Hungarian guy an american guy and he was sort of the first efflorescence of Cosmopolitan pop

culture so they had this weird thing in the middle the middle of the night as I remember with fires burning off and and

I I ran into you there uh but it was a kind of a emblem of the sort of

incredible um sort of artistic and intellectual ferment so so describe that

well so Tran uh I didn't talk about him in the book but I should have Tran was a

a rock and roll star lot of his songs were political

overtly political right against Authority against um not not against C

Chinese Communist Party per but the the the against the idea of political

Authority dictating everyday life right kind of the rebellious spirit that that

is you know fairly uh common among rock and roll um um um rock and roll music

and he was the first rock and roll star in China and he was worshiped by the young people and he he played a pretty

important role in the chman demonstration he played at the monument yeah and also there were art exhibits I

remember visiting these art exhibits and there's a one um uh one very famous art uh exhibit the

title of the exhibit is no your turn right it is a the idea is that we don't

want to go back to cultural revolution um a lot of the paintings and the

exhibits again have a overt political tone I remember actually a few years ago

when I visited the um um uh the Modern Museum in New York

um it's not Tate but there's another one and I forgot the name they had the

Chinese um art exhibition it's very interesting that they they they had the

paintings and Exhibits from China divided by decades 1980s 1990s and then

2000s in the 1980s the paintings and the

exhibits more or less all of them were about politics yeah and they were using a lot of maest iconography making fun of

it spoofing that's right yeah and and and then after

1989 gradually these exhibits Express economic ideas right so pivoting so

essentially this is the The Divide between 1980s and 190 they had to vacate they had to vacate the politics yeah and

and and now economics became the uh the the reigning

ideology uh so I remember ly seeing that exhibit and and and and which is very

consistent with what I uh experienced and there was another Art Exhibit I

remember I wasn't there at the time this happened one artist had a pistol and she

shot herself in the mirror um so the kind of performance uh artist that was

at the central uh Art Museum Cal use shut down yeah yeah yeah so so I that

was pretty extreme right um and then they were also protest by the students in 1986 um and then um on University

campuses they had many many discussions about politics about Taiwan model about

Japan model these and they had local elections

uh at the Village level also in Beijing at the district level in in the

University District hyan district they had um University students

campaigning uh for the district legislature and then so so just imagine

uh maybe myh B you call it borrow borrow yeah or Council the Burrows yeah burs

okay State uh burrow counselors right campaing for that seat and then you go to these debate they're debating rouso

and they're debating Fabian socialism you know you wouldn't do that

if the objective is just to land a uh seat at the Boral uh

Council it was just just incred and some of them got elected um and so it was a

very open era politically artistically and

intellectually and another uh interesting thing about the era is that

was all before the internet for sure right 1980s official media people's daily sometimes you will

see two editorials opposite of each other printed on the same page arguing against

each other right about the pros and cons of certain issues you will also see

government official officials coming out and apologize for the wrong things that

they did you also see the peasants suing the local government for taking of their

land and won the lawsuit right it was an incredible era um and many young people

in China have no idea that was how China began its economic takeoff so in my book

I argue that political liberalization even though China didn't

transition to a democracy we shouldn't understate the degree of political

liberalization in the 1980s and we shouldn't understate the contribution of

political liberalization to economic liberalization that's an important point that the two do have a kind of a

symbiosis they are symol symol Artic relationship with each other they

complement with each other so you may say oh what's the big deal about that perspective many people

believe you need an autocrat to in to enforce economic

reforms right when shinpin came into Power that's how people thought we

needed autocrat to uh start and to deepen economic reform many respectable

economists would make that point of view many respectable Scholars would uh argue

that position historical evidence I believe is squarely on the opposite right and

more liberal political system you have more liberal economy and more IL liberal political system you have a more

illiberal economy yeah it's sort of you can't have one without the other you you they have to go together that's what

Jaan argued that's what hu argued and they're absolutely right okay so now we

can come to 1989 so here's my question for you you all remember what what

happened this incredible Outburst of of sort of populist sentiment and free

speech and one thing or another that filled ten and square for seven weeks with a million people sometimes and it

was the most extraordinary I think period of history that I've actually

sort of live lived in and through do you think if that hadn't happened which

effectively ended this very golden period that you've described yeah do you

think then reform might have worked and the Communist Party might have slowly

been reformed out of its position of unilateral power yeah so that's a

contrafactual question right so we we know the history that happened we don't know the history that could have

happened but didn't my answer to that is yes uh so it's not just tan per say it

is the manner with which T was ended right this violent

Crackdown um and that finished off this

kind of gradual opening of Chinese Politics the fragmentation of the

political structure and it

demolished one part of the Chinese Communist Party represented by J Young Who was a

very liberal open yeah uh First Premier and then party General Secretary that's

right and somebody who believe that the best thing to do is to open up both

politics and economic system

gradually which would enable social forces intellectual

independent social forces commercial development and

Society to emerge over time that's basically East Asian model right that's

how Taiwan transitioned to democracy that's how South Korea transitioned to

democracy if T didn't happen you know I I'm not going to say if tan didn't

happen China today is a constitutional democracy but I'm pretty sure it is

going to be far more open both politically and economically

and by the way it is going to be a China that has a far better relationship with the West

than the China we actually have so 1989 in effect then is what you suggesting

triggered those incipient latent forces of autocracy and one party rule which

were always there and allowed them to come back yeah in a way that we've never

quite recovered from so um so so so tman

um to be fair to the post tman leadership they didn't reverse economic reforms

they continue with economic reforms they reverse some of the economic reforms but

then we're getting into the sort of operational details but by and large they privatized the economy they opened

up the Chinese economy to the world the World Trade Organization right so all

these things that they did in the 1990s but they revers every single

political reform from the 1980s so I compare the economic changes

to physical changes in the nature right so you can go far in terms of making

physical changes but the physical changes can change back the political changes I compar

particularly since the structure didn't change the stru yeah political exactly

so so that's the chemical change that they didn't Institute so they

essentially reversed the chemical changes they went pretty far in fiscal

changes right they went pretty far so let's give them credit for that but the

possibility of going back the possibility of reversion has always been

there because they didn't undertake political reforms and again you know maybe today

people say oh what's what's the big surprise from that well it's a big surprise to a lot of Scholars in the

1990s and 2000s you know lot of scholars believe that all you need is economic reforms

all you need is economic development then Economic Development this is engagement policy we then push the

political that's exactly the Assumption of the engagement policy which is that

as long as economic changes happening that's okay it's a one party system

autocracy is okay because it's going to flip right I mean Clinton peaceful Evolution peaceful Revolution and uh

Evolution and Bill Clinton made that argument explicitly in 1993 right as a

justification why us should um should Grant China the WTO and mfn the most

favorite Nation trading status that was made as an explicit part of the US

strategy which is econ e omics is going to result to political changes now we

know that didn't work out well the Germans had a version of this what was it

vand my German is a little bit Rusty I what is it van Durand that through trade you'll

have change yeah oh Hitler yeah you got it you got him um yeah so the and in my

book I went into some details was looking at Taiwan and South Korea again

these are things I didn't know before so there was a simplistic idea

that the political changes there were result of Economic Development right

South Korea became Rich it very Marxist in a way wasn't it because it is a Marxist Marx adopted from Hegel this

notion that history had a direction and things followed automatically yeah so

and and it's it's kind of the material base of super infrastructure

right it's a very marxan View and ironically uh adopted by many uh

capitalist leaders but unconsciously unconsciously yeah so so yeah uh so we

shouldn't give them that credit for understanding Marxism and the and and so

I looked at some details of Taiwan and South Korea it was not at all because

only because of economics they had political reforms too uh they had

partial opening of the media the Korean national legislature was always

competitive even under martial law they had you know elections uh they had presidential

elections that were semi decent Taiwanese provincial legislature was

always competitive and in terms of Elections the national legislature was not right

because the kmt still used the old uh seeds from the

mainland to assign seeds at the national legisl they had to find two guys

from that's right so so it's uh over time it became more and more difficult

but at the provincial level um it was always competitive um there was far more press

freedom than there was in the 19 1990s uh on mainland China so the political

opening in South Korea they had unions they had independent uh uh unions labor

unions they had independent student unions uh unions uh launched strikes all

the time uh student unions demonstrated all the time none of that you had in

China after 1989 that was one of the big demands in 1989 ver was a student union

that's right there was yeah that was one of the former demands uh for the government to recognize the independence

of the Student Union but South Korea had that right so and and and the US let's

not underestimate the role of the US in directly helping South Korea become

Democratic president Carter intervened uh many many times uh when South Korea

arrested dissidents the constitution of South Korea was written by Harvard political

scientist um rubert Emerson um and so

the the the interactions with the West were always there influencing and and

let's also point out South Korean Society was 30% Catholic right so the religion played a

very big role so it was quite diverse compared with China in the 1990s and we

ignore all of that and then we ping every hope political Hope on one thing

which is economic development trade and foreign investment yeah in fact it's the

odd thing is y I'm sure you agree that the logic of Engagement when it started although we didn't call it that was

let's let's gang up against the Soviet Union then Soviet Union collapsed and we had to repurpose engagement with the new

rationale and the new rationale was trade will equal openness yeah so you

could argue that it was the rationale that you had to invoke because the

Strategic rationale disappeared right Soviet Union collapsed yeah in 1991 and

essentially you didn't have to use China as a counterbalancing force against Soviet Union then you invented this

ration but the rationale was not completely artificial um many people I I

believe in it at the time and uh I think I did now but I'm not sure then but I'm

not sure I do now what do you think well I I don't but on the other hand I I

think if there's nothing left then economics is if economics is the only

thing that that's left then we have to rely on it but then

we just have to be realistic didn't stop World War One sadly yeah true all right

so since time is advancing here so then we end up with Jang zamin and hentau

where as you point out and some very interesting chapters here in the book on

this um reform didn't completely end things opened up again CH China joined

the world system uh economics and trade so what happened when XI Jin ping arrives yeah

what's going on here and why did it happen yeah so so there's a political

Story and there's a economic story let me uh tell the political story

first one of the things that happened so I basically Trace everything to tman

right on the politic as a Tipping Point as a Tipping Point as a Tipping Point uh as a point

that incubated lot of the later Dynamics so one of the things that

happened after T was D and other revolutionary

Elders decided to strengthen the power

of the General Secretary of the Communist party uh they essentially demolished

this fragmented structure they themselves created and the reason is very

straightforward they the party secretary Jang was

sacked you know this is a guy who engineered the rural revolution in

sichan Province this is a person who launched

uh implemented industrial and Rural reforms throughout the 1980s basically

responsible for the Chinese economic takeoff pulled the Communist Party cells

out of all of the businesses he also separated the party and the state right

he implemented political reforms a extremely smart person and Milton

Freedman met with him and later said that he has never met a political leader

who really intuitively understood market economics

right so this is a guy who never spend the day in college um and also like many

liberal reformers he was very um he was not into

you know Prosecuting other people he was not into Power struggles uh he was really interested

deeply in ideas and uh in in the genuinely interested in improving the

Weare of the Chinese people so he was gone because of T now

how you had this leader from Shanghai Jan zamin and how should I put it um

everybody thought he was a little clownish at the time but I must say I have a different view now as I look back

well but but the thing you may be influenced by Shin ping though so so I I

think yeah it's a little bit like our view of George W bush right and yeah um

so but but remember janami came from Shanghai Shanghai was in the 1980s the least

reformed part of China um and and jamin's performance

economic performance was mediocre um his

political performance was mostly about controlling the demonstration in 1989 which he did

which he did he diffused the situation in in Shanghai that was about it I mean

compare with the person who engineered the rural revolution in China you know

pull China from poverty right now you have this guy uh who had no political

credentials in the capital of the of of China who didn't really know other

leaders you sort of put him in charge because sort of a desperate Choice had

to come up with someone no don't sh he said it uh although I didn't find the U

documentary confirmation of this said we look left we look right oh nobody sort

of stood out okay let's just give it to him and that that was pretty casual right um and so you now you have him so

the elders were terribly worried about his weakness so what do you do you

strengthen his position you you gave the Secretary

General Secretary position to him you also gave the presidency to him so

remember I talk about five centers of power right so now you combine two two

you got rid of the central advisory commiss Commission because this is an

institution that had the retired leaders who had a habit of intervening in the um

in the Affairs of the government you don't want them you got rid of that you

also gave him the military so he now was the president the SEC General Secretary

and the chairman of the military Affairs commission and now you also got rid of

the uh The Advisory commission you basically transition the

country from a five power structure to a two power structure the premier the

premier that's all you have and that was the system that persisted

onto Shin ping right so it was a kind of a halfway house it's a halfway house to

more of centralized power and the most important change I would argue of the

changes they made was the abolition of the Central Central advisory Commission

that had retired leaders so this is the argument I make in my book which is that

in the autocracy the only people the current

autocrat is accountable to are his

predecessors so you know nobody else has that kind of power right the only people

who have that power are the people who who kind of incubate you who nominate

you who appoint you the central advisory commission essentially is a

institutional base of the retired leaders if it had existed it could have

exercised That Power by 2012 that was gone yeah as D shaing did

D shaing yeah so so so so you may ask well but that was gone in 1989 what

about the previous years in the previous years dun was still okay you know he was

still alive he died in 1997 so he essentially exercised some constraint on

Jan zamine from 1989 to 1997 and then Jan zamin stepped down in

2002 and he persisted so we all remember that very well right hin didn't really

have much power so essentially you have a the facto division of labor is by by

biology by human biology rather than by institutions D Shin checked and balance

the power of J the famous sou trip yeah D shaing made in 1992 was basically a

balancing act on janim because he felt janim was not sufficiently reforming the

economy he had to go to Shenzhen and said if you don't reform the economy you

should get out right and by 2012 jine was too old he was uh

88687 D already died long time ago and hin now for whatever reasons

decided I'm fed up with politics I'm just going to go and fishing and I'm I'm

done so he stopped himself from exercising that Regency

power so all that check and balance was left to the biology of these

predecessors as well as to their individual preferences had a

institutional had a institution such as Central advisory commission existed it

would have exercised that power and I believe that you know SHP could still become the party secretory in

2012 but I don't think he will get away with revision of the term limits so when

you look at him um just as a person who's has certain experiences and

acts in certain ways um what do you think he's up to what's important to him why is he act

why is he antagonizing so many countries abroad so many elements of Chinese

society and you catalog it very nicely in your book what what the hell's going on yeah so we we know what he has done

and nobody knows why um what do you think so I don't think a it has to

happen that way I think this is sort of evolution by by by different

stages I think it I think what he s what surprised him was how easily he got away

with all of that but why did he want to well I think so so so let me come back

to the economic story I I just I just told the political story on the economic

Side by 2012 China was deeply corrupt

deeply corrupt crony capitalism and that was also

tmen um in my book I show the data that corruption increased dramatically after

tmen tmen basically wiped out a social movement

for clean government right the student demonstrators who demonstrated for clean

government the leaders of the movement were arrested Jang was sacked he called for

investigations of Po Bureau members for corruption including starting with his own family he was sacked that was

basically open invitation to corruption right yeah you can you can now do

whatever so corruption incre dramatically since 1989 by 2012 there was a genuine sense

among the society among the political Elites economic Elites intellectual

Elites you got to deal with corruption right but there are two different ways

to deal with corruption most of us at that time believe that the way to deal with

corruption was to open up the media to in uce transparency to introduce rule of

law but many Chinese uh didn't share that perspective

they saw the urgency of uh corruption but then they believe that

the right way to do that is to arrest corrupt officials I remember vividly in

2014 a prominent um uh magazine in China

invited me and number of Scholars to a conference discussing

corruption and the um and the the organizers of the

conference asked us the following question how do we get rid of the

corruption without getting rid of the system most of us at the conference

believe that we couldn't do that well you actually believe that corruption makes the system work no the the yeah so

so so so that's why you kind of have to keep it well you keep it and then you

continue to be corrupt or you reform the system introducing transparency

introducing rule of law as a way to deal with corruption but obviously that was not a solution they settled upon the

solution they settled upon was massive campaign against corruption

the problem with that approach is it was always going to

be contaminated by political objective right the in many ways it is

one stone that kills two birds multiple Birds you want to get rid of your

political opponents and by the way the first opponent that he got rid of was

the oppon oppon opponent favored by his predecessors right

so going back to my argument that you fear the predecessors the most you got

rid of corruption and you got rid of the political opposition simultaneously and you strengthen your

power simultaneously to a rational autocrat that is the preferred solution

right to people like me we would argue no you actually need to give up power

you need to introduce transparency as a way to deal with corruption that

solution goes I I argue is a better solution in terms of corruption but it

is a worse solution from the perspective of the autocrat right so I think it's

it's it's gradual and I think he might have been surprised by how easy it was for him

what do you think impelled him to go on this route well so I I do believe there

was a objective ground to tackle corrupt

coruption in 2012 if not earlier corruption was so bad right so there was

there was a objective ground to deal with the issue I don't blame him for

having that policy objective the trouble I have is this

particular manner with which this particular solution that he settled upon

that in effect led to the strengthening of the autocracy

led to more accumulation of the power in the government these are precisely the

reasons the system is corrupt in the first place right so so it is like the

like going back to the cat uh analogy hopefully I'll get it right this time so

the cat chasing his own tail right it is a kind of a perennial forever movement

that you can never succeed so look at what is happening now right 10 years

after 11 years after the corruption campaign you're still chasing after

corrupt officials you're still sacking this person for corruption that person

for corruption I think you write that there 4 million people have been four million people that's a that's a lot of

people have in jail and and also the other thing the other problem with that strategy

is by definition the corrupt people people are powerful people because they use their political power to accumulate

wealth and then you antagonize the powerful

people powerful people like me right not very powerful person

have family friends you multiply that 4 million by four you got 16 million

people right you antagonize 6 15 million

people 20 million people by this strategy do you ever want to give up

your power once you have offended so many people but there's a a question prior question I want you to answer and

that is why do it in the first place why alienate 60 million people in China and

alienate half of the world outside with your so this is where ideology really

matters right so you could

have tackled the corruption issue through this

Democratic like Jos young I mean Jos young was uh arguing for more

transparency in the media and and allowed it he allowed it

and he also proposed to the PO Bureau that the polar Bureau members are

going to be required to disclose their assets right imagine putting that

provision in 1989 right um things would have been different you could have gone

down on that path right and lot of people had a high hope that he would

because of his father because of his own experience in the cultural Evolution

right he he suffered his family suffered but he didn't right so it has to be

because of his idea right the idea is that the right way to tackle uh

corruption is to increase my power and control and control increase my power

increase my control right and you know I I think this is the tragedy of that

system um the system requires a Visionary leader

who truly truly has innovative ideas um but the system typically

doesn't provide that kind of leader Jaan was so rare H was so rare uh to some

extent was also rare right kind of sh is more normal actually it just the

difference really supression and the difference between and know J didn't

believe opening up right as a way to deal with corruption they also believe in quacking down except that they didn't

go all the way to the logical conclusion of the anti-corruption campaign the way

that shinpin did directionally I don't see any difference among these three leaders the post T leaders I don't see a

single difference in terms of the direction I see the difference in terms

of the willingness to go so far right xinping there is

exceptional and that's something we had no idea about yeah all right listen uh

there's a lot more to chew on here but uh let's take some questions from you

there's a microphone so raise your hand one here and one over

there pardon uh yes have the microphone yeah and introduce yourself and let's make our questions brief and to the

point hello my name is Tuka I am a student um of and government politics

China Hunter College uh with Professor uh Zan Gran um my question that I pose

is do you think tanman and the tiating control of the CCP proved effective for

countering the West since perhaps open democracy and political activity can make China susceptible to being taken

advantage of I compare this to what happened to Libya under the Gaddafi regime since counterrevolutionaries

leading counterrevolutionary activities against the gfy regime led to a politically broken country and open Talk

without scrunity but by Gaddafi let the US to counteract the regime to its destruction Libya in turn faced many

challenges in the country could the prevent and also could the prevention of the tanaman or could the protest have

been handled differently and in turn could this open democracy strengthen China's position or weaken it so could

tanaman been handled differently yeah so the let me stay away

from the Qaddafi part of the question so let me focus on on on T yes could have

been handled differently um you were there I was there um essentially by June

2nd by June 1st the crowd on T was already pretty

thin uh it was getting very hot uh cuz the summer was arriving and if the

government chose to wait it out um that would be a solution you know I I

don't know how to characterize that solution kind of by attrition right so essentially

you're waiting out so that's one scenario that could have happened the other scenario was and and there I

blamed the students um the students persisted in a

way that was simply naive and

counterproductive they didn't understand the Dynamics among the Chinese leaders well they

thought they might win yeah but that's yeah but but I think na I think naiv was was was driving it

and you know a system that has thousands of years of autocracy behind it is not a

system that is going to give in so easily and and the government then already give in to a far greater

extent than we could have reasonably expected but the students

persisted and driving out basically jaang losing the one part of the

political establishment that could have reformed the system gradually and in a

in a less violent manner um and I

I was there and I also try to talk to the students and try to reason with them

about this Dynamic uh didn't succeed uh at all um

well there are a lot of new students coming in too you know yeah so yeah

there were new students um coming in and they wanted to participate in this uh uh

experience I I think we really need to think about these mass movements they

they are they don't have they don't have a coherent strategy they don't have a good tactic they often are the worst

eneme to their own causes and I characterize the Hong Kong movement that

way you know so they got lot of concessions from the Hong Kong government but they still persisted

nobody can argue with a straight phase that Hong Kong today is better than Hong Kong in 2019 right so if you are really

to go into mass movement you got to be strategic you got to think about your

long-term objective and Vis AES the satisfaction of the short-term

satisfaction of course they had no Ms of doing to lead the mass movement it was in Co yeah it was in coet and you know

this is probably the price that you pay for a uh in autocracy you don't have this tradition of social movement

organization and Society right so there's a kind of a tragic element here

that the there is a tragic element that was that was justified in many ways uh ended the greatest promise of of of a

transition for China yeah okay right

here I to Professor hang several years ago I'm just a fan of him uh thank you

for the talk tonight I learned a lot however um as a very young participant back in

1989 I cannot fully just what you said about tmn tonight uh the pill is too big

to to swallow um my question is if this kind of U bottom up bottom up social

movement from started from young people was the wrong pass for China back in 1989 I guess something similar like the

white paper movement last year wasn't the right path either um when you talk

about strategic movement the example I think first was the one started in

probably more than 100 years ago started by Sun junan but it was initiated

overseas um so in your opinion for China does China still have a chance to become

open um modern society with democracy and um if that could happen What would

be the right pathway yeah so so let me first draw a sharp distinction between

1989 and the white paper movement in 1989 you had a divided government you

had a divided government the reformers would have gain the upper hand

if the students collaborated you know either explicitly

or implicitly with the reformers that's not a scenario in 20 uh

22 with the white paper movement now you have you know basically a single

autocrat there's no visible division among the top

leadership um so there's no opportunity to use the kind of strategy I was

talking about in 20 uh 22 and so that's one big difference

between the the the the two and the other big difference is that the white paper move I wouldn't

call it movement t was in the movement the white paper was a protest it was a

grievance based protest against the specific policies of zero covid

controls whereas 1989 was much bigger and and it was idea

based and I would I would not put 1989 you know I will not put the 2022

move uh protest at the same level as 19 1989 was much deeper much much deeper

and strangely it was deeper against the reform minded government which we now

lament it's passing yeah the objective effect of that so I don't with

their ideals right I don't with their with their um with their

motivations but let's just be honest the OB the objective re the result of that

movement was reformist leaders were

demolished were demolished and that was because of failure to understand the

complexities of the Chinese political system and political

Dynamics I I don't think you know I I'm being sort

of unfair it's it's it's it's hard to argue that the leaders that came after

19 1989 were better for democracy Democratic Prospect of China than the

leaders before it right so you know again you know student movement is student movement right so they they they

tend to behave that way um but I think we need to think really hard in a

society such as China um I I again you know I I'm not against

the movement itself what I'm critical of is lack of

strategy and lack of complexity in the way that they opposed the political

Dynamics okay one more question

yes yeah Peter Walker made a lot of trips to China over the years um my

question is to what extent do you believe that the Chinese system is gradually self-correcting so if I take

three data points one is what happened in zero covid were really changed

overnight and then the second one was the early push in favor of s soes at the

expense of private Enterprise that seems to be swinging back as the government realizes that economically that's a bad

call and then politically if you look at the early handling of Australia which a

lot of people felt was bully likee and now it seems to be much more more congenial obviously different players

involved so one view of the current government is they're going down a

learning curve and they're correcting their mistakes you know a different view

is this is just noise along the way nothing fundamental is changing so I'd

love to get your perspective on that good question yeah I I I I actually think it's neither um neither of the two

scenarios you you laid out first let's just get the fact right about the lifting of of the covid

controls the virus was already spreading so it was no longer effective

the all the quarantine measures that they put in place were absolutely not

effective and they had to lift the controls not because of some

intellectual recognition of the shortcomings of the measures that should have been there a long time ago CU every

Public Health expert will tell you this method was absolutely not effective

against Omicron variant of covid-19 virus right

so it I think we need to be precise in our semantics I wouldn't call that

self-correction when the thing that you try to uh contain is already spreading

um Community spreading um in in the in in a community the the other two

examples uh so if if you believe that's learning

then the Assumption there is these are some stupid people we're talking about

right so Australia is the biggest supplier of the iron ore to

China and to cut off the supplies of iron or to your country it is going to

have a incredibly negative effect on your economy which it did um and

especially because the IR or from Australia is much more clean than the

iron or that China can produce itself right it has so in terms of environment

in terms of climate uh the Australian IR or is much better than the Chinese

IR so not recognizing that having a bad relationship so as soon as they uh began

to cut off the uh imports from um

Australia they they were running shortages of electricity in some regions

of the country they began to shut down electricity right so you know again you

know self-learning usually in my own mind is that there's new information and

you revise your policy because you have new data you have new information but the knowledge is all

along there right if you it's just as simple as if I stop eating for three

days I kind of I'm pretty confident I'm going to get hungry right so it doesn't

take self-learning to actually start for three days to realize oh actually I need to eat right the on the is soe

point there's a third years of research to show that favoring s soes is going to

be very bad for your economy you know every single academic study shows that s

soes have lower productivity and have very very bad L

performance that you still favor s soe and then you'll correct that policy

because when you favor the S soe you get exactly the same results as you have before right do I call that self

learnning I don't know I mean they have learned that so many times since 1978 um

anytime after T men in 1989 they began to favor soes okay

so I so I I I think I'm a I'm academic so I I care about the words that I use I

wouldn't describe those as supporting examples of

self-learning so uh that has some relevance to the last question I want to throw at you self-learning um if you had

to place your money on reform or regime change Where What Where would you come

down I still want in in terms of my subjective preference I want to see

reforms do you think it's possible I think it's possible I think it's possible with Xin ping or do you think

we have to wait him out well okay so I so so so let me lay out the following

dynamic um I think the reforms are still

possible because there's a fundamental difference between Shin

ping the era of shiin ping and the person of shiin ping between that and

the era of maon and the person of maon in in the following sense during the ma era Chinese economy

didn't grow right so that we know but now didn't spend a lot of money

either he had satellite he has some of these things so essentially if you don't

have lot of money coming in that's okay if you don't spend a lot of money right I mean basically that's how lot of poor

people live the problem arises when you spend a

lot of money but you don't earn it I will characterize that as the

current situation in China look at his pro programs

Belton Road semiconductor self-reliance the big urbanization

programs the social transfer programs that he has right so essentially to use

academic language that's a definition of dise

equilibria because you are spending a lot of money but you're not earning money right and whereas the previous

leadership they also spend another the money so let's let's let's be clear that the

semiconductor industrial policy has always been there Chinese government has always spent a lot of money on

semiconductors but the thing about Janam huin is they were also earning money

right the real estate was developing the trade was developing foreign direct investment was coming in right so the

equation is not going to hold right and now you have a whole bunch of

choices one choice is to cut down on the expenditure cut down on the spending you

give up on the Buon Road you give up on the semiconductor you give up on the big

urbanization infrastructure programs then you you you get into

balance or you start to think about on the income side how to get economic

growth to generate the tax revenue the the the the financial resources to

support the big ticket items that you have and I believe it will be very hard

for the Communist Party to give up on the big

programs and Belton Road you actually kind of have to spend money more and

more because you have to bail them out I never believe in road but that's a separate issue and and I wrote about it

in 2018 and I argued in the in the article that uh in the end it was going

to be the Chinese who who are going to hold up the bag and which is happening

now um so so that's not going to change then you have to come back on basic

economic sense which is you need a market economy you need a trade you need

foreign direct investment in the last period also China experienced for the

first time a net outflow of foreign direct investment has never happened

before right over the last two years the inflow has begun has begun to decrease

has begun to decline but still there's more money coming in than the money going out now there's there's more money

going out than the money coming in right the consumption is not picking up the

infrastructure program is no longer uh necessary really on objective economic

grounds China has some bright spots like EVs and solar but let's be honest those

you add them up it's about 6% of the Chinese economy 25% of the Chinese

economy is thinking right okay you have 6% which is good better than 0% you have

25% going down trade China is losing trade shares to uh

Vietnam to Mexico to many other countries in terms of the trade with the United States um trade is very important

part of the Chinese economy right and to have a good trade relationship you need

to repair the political relationship this is the way that I explain why xinping is

gradually moving in the direction of trying to normalize the relationship

with the United States the economic reality is too Stark you know whether

you call it self-correction I I don't you know but I believe that

um many people would have told him that if you just like if you're are CEO of a

company you don't want to uh offend the your customers right us is your customer

and all this talk about the bricks the global South it's pure nonsense um the

trade with Russia or trade Russia some Chinese uh commentators say wow has

increased 60% yes with the US has decreased 6% but the trade with Russia has increased uh

uh 60% 70% let's be real Russian the size of Russian economy is the size of

guandong Province it's about $2 trillion the US Imports every year $3.2

trillion the US import is bigger than the Russian GDP right outside of um um

sort of us Europe Japan South Korea if you add the developed countries together

we are talking about $ 55 trillion Russia is 2

trillion bricks you know Wall Street people would tell you oh bricks replace

the uh us and just sheer nonsense the the bricks account for

maybe 26 27 29% of the worldwide GDP of

that 25% is Chinese okay just let's just be real right so the math simply doesn't work in

terms of damaging the relationship with the West the relationship with

Australia I do believe that's a good movement right so you begin to

repair the relationship of Australia hopefully you repair the relationship with the United States and hopefully you

repair the relationship with Japan with South Korea well then we're talking about going back to huin era but that

does presuppose yashang that they that that sh doesn't continue to see the West

as a hostile Force yeah so so that's a big if but but again let's I I think

what we should do is we shouldn't write off this automatically and I personally

welcome self-correction or whatever Corrections and I I think that's that's

a good I think a better way for China to move forward is still the 19 80s model

you gradually reform politically economically rather than you

know through a revolutionary process we saw that in Russia it was Libya you we

saw that right so it it was terrible right so I mean so I didn't answer the

question about Libya the lesson from Libya is absolute AutoCat don't end up

very well that's the lesson ch school that's the lesson you maybe maybe that's the

final benediction here that autocrats don't end up very well absolute no

absolute autocrats absolute self autocrats they're okay J Jing and is

getting as absolute as he can yeah so that's that's why I worry right so the

Libya example is the example you don't yeah want to happen to

yourself all right thank you everybody for coming y thank you so much do we we do we have books here is we do good so I

would strongly urge you to uh pick this up good read and uh

listen China's really the the only other big dog on the Block so read up thank

you thank [Applause]

you