Jimmy Haddow (SPS)
21st April 2012, 09:55
Thursday, 19 April 2012.
Vincent Kolo of chinaworker.info interviewed on Melbourne radio about China’s economic trends and the arrest of Bo Xilai
China’s economy is growing at its slowest rate for three years and fears of a ‘hard landing’ are on the rise. This, and the top-level power struggle inside the Chinese dictatorship were key topics when Diana Beaumont of 3CR community radio in Melbourne interviewed Vincent Kolo, senior editor of chinaworker.info, on his recent visit to Australia. The following is a transcript of the interview.
Listen to the podcast here: http://podcast.3cr.org.au/pod/3CRCast-2012-04-07-72204.mp3 (http://podcast.3cr.org.au/pod/3CRCast-2012-04-07-72204.mp3)
Diana: This week I spoke at length with Vincent Kolo, who is the senior editor of the chinaworker.info website, for the Committee for a Workers’ International in Hong Kong. And I began by asking him how close to crisis the Chinese economy actually is.
Vincent: I think this is something that’s being debated all around the world by the heads of big corporations and governments, because China plays such a central role in the global economy. I mean it’s been the real locomotive for world capitalism in the last four years. It’s taken over largely from the former role that the US played. Whereas the US was sucking in consumer goods from the rest of the world, China is sucking in primary goods, resources, energy, so it’s been a boon to countries like Australia, Brazil, African and other oil producers.
So it’s really got a huge effect on the global economy and it’s obvious that there’s a big crisis already unfolding before our eyes. The property bubble has really peaked. And there are signs that there could be quite a dramatic fall in house prices this year, which in the Chinese context is going to have a huge effect.
‘Cat-and-mouse game’
Diana: It’s an intentional government policy isn’t it, to try and bring down the housing prices and control property speculation? Do you think the government’s efforts have been effective and will it stave off a crisis?
Vincent: Well, it’s interesting. It shows you the realities of how the different wings of the Chinese state work. Because what’s going on is described as a ‘cat-and-mouse game’. Beijing, the central government, has since 2010 been trying to slow down the increases in the property prices. They’ve imposed curbs on who can actually buy a house. They’ve tried to restrict speculation; stopping people from buying a second, third, and multiple houses, which is common for the rich in China and for big companies.
So, those polices have been in force for two years now. But local governments have been resisting it, because the local governments – the city governments, the province-level governments – they’re dependent on land sales for half their income. And, of course, falling land prices is bad news for them and their spending plans. And many of them now are up to their neck in debt, because in the stimulus plan that was launched four years ago the local governments bore the brunt of the spending. They splashed out on expressways, on bridges, on new hydroelectric power projects, and so on. But also a lot of wasteful prestige projects like multi-storey police stations, golf courses, seven-star hotels, conference centres.
And within this you’ve also got the phenomenon of the ghost cities, like the city of Kangbashi. It’s very famous in China. It’s in the province of Inner Mongolia. It’s housing could provide accommodation for half a million people, but only 20,000 people live there. The sports stadium, which is state-of-the-art, can hold 30,000 people. So that if everyone in the whole city turned out to watch a sporting event, they would not be able to fill the seats in the stadium – it’s that bad! And there are ghost cities all over China. And the local governments have got into extreme problems of indebtedness as a result of this.
Local government debt crisis
Diana: And you explained at a meeting in Melbourne [the national conference of the Socialist Party] last week how this represents a change in policy in China. That previously the local governments were not allowed by the central government to go into debt. Is that true?
Vincent: Yes. By law they are not allowed to incur debt and they’d been kept on a tight rein previously. But the government hit the panic button in 2008. It could see that the global capitalist crisis in the wake of the Lehman Brothers collapse was going to hit China hard. Unemployment was going to explode, particularly among the migrant workers who have no job protection – they are casual workers. There are 200 million of them in China, and when I say migrants, I don’t mean foreign imported labour, I mean they are Chinese workers from the poorer provinces.
So the government hit the panic button and they allowed the local governments to spend, but the way they’ve done it is they’ve actually copied a lot of the Wall Street ‘witch doctory’. They’ve set up local government finance vehicles (LGFVs) using land as collateral and borrowed heavily from the banks, which of course are also government-owned in China. And this has resulted in a collective debt – the government says that the local government debt, from almost nothing four years ago, is now 10.7 trillion RMB, which in Australian dollars is around A$1.65 trillion, which is significantly more than entire GDP of Australia. So, there is a major local government debt problem. One Chinese professor said, “Every province of China is Greece”.
Diana: Wow, that’s phenomenal! And some of the infrastructure projects that the government has invested in are also quite problematic. At the meeting in Melbourne you also gave some examples to do with road construction and railway construction. Are you able to share any of those with us now?
Vincent: Of course most visitors and particularly the journalists and the businessmen who go to China, they go to the big cities and of course they’re dazzled by what they see. I mean there is some incredible development. In the last ten years, China has built an infrastructure, which on most levels is similar to what you’ve got in the US. They have roughly the same amount of expressways by kilometre, but they don’t have anything like as many cars. They only have about a quarter of the number of motor vehicles that you have in the US. And the geography of China, and the demographic pattern, is very different. Most of the population of China live on the eastern coast, from Beijing down the coast through Shanghai, other big cities, to Hong Kong and Guangzhou. But in the inland provinces development is much lower. And the further west you go, towards Tibet, towards Xinjiang, the population is quite sparse.
But they’ve been building a whole network of expressways, and you have to question whether this is the most sensible way to be spending the money when there are 260 million people in China that lack safe drinking water. When there is an urgent need for irrigation systems to be updated in China and there are areas of the country where the rural population don’t even have electrification.
‘White collar railway’
Then there is the high-speed rail project, which is extremely controversial now, because you know, a year ago in July 2011, there was a serious crash, a collision between two high-speed trains. 40 people were killed. And it questions the use of the technology that the Chinese companies that have been building the railways. And China now has more high-speed rail networks than any other country. They’ve really gone at a turbo-charged speed in building this. And it’s become a kind of symbol for the development of the economy: So fast that you can almost not believe the speed it is moving at…
Diana: And also quite out of touch with the needs and the economic capacity of most of the population. The high-speed railway is very expensive to ride.
Vincent: Well that’s right. It’s really been built for a kind of niche population, for the urban elite. They call it the ‘white collar railway’ – that’s the nick name that most people give it, and this has also contributed to the debt problem, because the ticket sales on the big high speed rail lines, for example, the recently opened Beijing-to-Shanghai line, the ticket sales are no way near at the level of the projections when they were building the project. So they are not going to recoup the money that they expected and they’ve got a big debt problem. The Railway Ministry alone has a debt which is equivalent to 5 percent of China’s GDP, and they are now having to cutback on the projects. There is a 15 percent cutback in rail investment this year. And actually tens of thousands, even hundreds of thousands of workers on these projects – because the people who build the railways are also migrant labour, they have no firm job contracts, they have no pensions, they have no medical insurance, they work a 12-hour day, 7-day week.
Diana: Well in theory if they work on a government project they shouldn’t, but again that’s one of the massive problems of the inability to protect working conditions without a functioning union.
Vincent: That’s right. Unions of course are illegal. And you have the situation where the state-owned companies which control these projects like the construction, the railway projects, they subcontract out to private companies which are run by their family or by other friends of the officialdom. And of course they enrich them, there’s a lot of bribery involved in the contracts. So, actually there is enormous criticism of this within China itself and on the internet.
Regime is openly split
Diana: Well on that point, of criticism about the direction of economic and social development in China, we’re at a very interesting juncture in Chinese politics. Recently an enormous split has become public in the Communist Party between two factions, and I wonder if you can explain that for our listeners.
Vincent: Yes, it’s a very significant development. It’s the first time since the massacre of pro-democracy protesters in 1989 that the regime has been so openly split. They’ve had an unwritten law really for more than two decades that they keep all of their differences behind closed doors, and that’s begun to break down now.
Now, nothing that is going on has anything to do with communism or socialism. The Communist Party in China is a very different organisation to what it was 30 years ago or before that. All of the main business interests are enmeshed in the ruling Communist Party. At the recent National People’s Congress (NPC) in March, which is the annual parliamentary session, you saw, as is widely quoted in the media, that the 70 richest delegates or ‘Members of Parliament’ in China had a combined wealth of 95 billion USD. This is eleven times the wealth of the whole US government, from Obama’s cabinet, to the US Congress with its 500-plus members, to the Supreme Court! So there’s enormous wealth concentrated in the top layer of the Communist Party in China.
Diana: Which I think has been obscured to some extent by sweet sounding rhetoric particularly from Premier Wen Jiabao about the need to address social inequality and have a more humane mode of development. But he obviously is completely enmeshed in this web as well.
Vincent: Well, he is. It’s a very good example. I mean, he calls himself the ‘People’s Premier’, but his wife actually is said to control the jewellery industry in China. His son is the former head of a hedge fund with 1 billion USD in assets. But his son has recently been given another responsibility; he’s now the CEO of a major telecom company in China, state-owned telecom company. And he’s what you in Chinese parlance would call a princeling. The princelings are the sons and daughters of top party officials who set up in business, and they are incredibly rich. And most of them, like Premier Wen’s son, are US educated. They have business degrees from top US or other Western universities.
But the split you mentioned that has taken place now – they recently purged three weeks ago, Bo Xilai, who is a very important figure in China. He is also a princeling. His family is also incredibly rich. His son Bo Guagua has attracted a lot of gossip on the internet because he drives a red Ferrari. He’s been linked with all kinds of...
Diana: … at least it’s red – it’s their colour, isn’t it?
Vincent: Yes (laughs)… that’s about all they’ve got in common with the Communist Party of the past.
Diana: Oh well, now that the ‘sing red’ campaign is all over in this faction, it could be the ‘drive red’...
Vincent: Yes, well the point is that his son, the younger Bo, he was at Oxford, where he joined the Adam Smith Institute…
Diana: Adam Smith?
Vincent: That’s right.
Diana: The son of the so-called new-Maoist of China!
Vincent: That’s right. And previously he was educated at Harrow, which is an elite ‘public school’ – or private school – in the UK.
Arrest of Bo Xilai
Diana: Let’s talk about what his father Bo Xilai stood for and what that says about this new left faction in the government in China. And what’s the significance of the fact that he has been removed from his position and his faction has now lost power to the ruling faction represented by the current leadership of Hu Jintao and Wen Jiabao?
Vincent: Well, I think we just have to be a little bit cautious in terms of how it’s going. At the moment it seems definitely that Hu Jintao, the president, and Premier Wen are in the driving seat, and Bo Xilai – it seems that his career in top politics is over, and he may well now be facing imprisonment. I mean he is almost certainly under arrest, we don’t hear anything about it. But it would be strange if he weren’t under arrest, because they would be very afraid if he was to try to escape from China. He could be a huge problem for the current leadership of the Communist Party. [This interview was conducted on 4 April, before Beijing’s official announcement on 10 April that Bo and his wife Gu Kailai were being held for serious criminal investigation and possible murder charges].
But the ‘new left’ is a kind of generic term for all kinds of... there’s a kind of left revival in China, particularly of Maoism or neo-Maoism. And what it is is a backlash against the kind of ultra-capitalist polices of the Communist Party over the last period. It’s an attempt to try to find ideas and an ideology to counter privatization, the extreme wealth gap. I mean it is an incredible wealth gap. China has gone in 30 years from being one of the most equal societies to one of the most unequal anywhere. The wealth gap is on a par now with Brazil, and there are probably only 20 countries in the world which have a more extreme wealth gap than China.
Bo Xilai made some very radical populist statements…
Diana: When he was the governor of Chongqing in the west of China?
Vincent: That’s right. He ran Chongqing, which is a big city; it’s a city and a province, with about 30 million population. And he made a whole new sort of trend, organising the singing of Maoist-era songs, the ‘singing red’ campaign or ‘red-culture’ campaign. The idea was to try to revive the idea of solidarity, of a common identity, which was broken down in China. People don’t feel that anymore.
But there was really nothing more than that. It was really a lot of presentation, but almost no substance, and if you look at the policies that the Chongqing government carried out, they’re no different really from the governments in other parts of China. They attracted huge amounts of foreign investment – companies like Hewlett Packard, Acer and Foxconn, the infamous suicide company which does most of the work for Apple that builds the iPad and the iPhone. They’ve all set up in Chongqing and got extremely generous terms from Bo Xilai’s government. They’ve got virtually free land. The government builds the factories for them. The government dragoons students on the myth that they’re doing an internship, to do half a year or so on the production line under extremely exploitive conditions.
So, these polices are carried out in many Chinese cities, but also in Chongqing – there was no difference on that level. But, however, the central leadership of Hu and Wen, they did regard Bo as a threat. And the reason was because the Chinese government are extremely wary of a figure coming through the system who would have too much power. From the experience of Mao in ‘60s and ‘70s, and then under Deng Xiaoping in the two decades after Mao, these leaders created enormous instability by their tendency to appeal – outside the Communist Party and governmental apparatus – upon the people, to go to the streets, in order – I mean they did this in quite a cynical way of manoeuvring between the different class forces in China – to strike a blow against their opponents at any given time.
And the Chinese government wants to avoid that happening again. But they saw that Bo’s campaign – really what he was doing with the ‘red-culture’ campaign – he was promoting himself and trying to get a seat on the nine-member Politburo Standing Committee, which is the No.1 unit of power within the Chinese state. And so now they’ve brought him down, and that is a symbol also to others that they’ve got to follow the rules.
The struggle in Wukan
Diana: Speaking about people following the rules, I wanted to finish today with a bit of a discussion about popular dissent. It’s happening I suppose on two very obvious levels. One, which our listeners will be very interested in, is amongst workers. But there’s been a particularly recent case in a rural setting of a village, Wukan, rising up against the illegal seizure of land to sell-off for development for revenue for the local government. Can you tell us a bit about what happened in Wukan and what’s significant about this case?
Vincent: Yes, Wukan is one of the biggest stories to come out of China for many, many years. It’s a hugely important development. I mean, the population of this village in the south of China – around 15,000 people – they rose up in September, October, November of last year in a protest movement as you say against the corrupt Communist Party officials having stolen their land and sold it to property developers, including some really big Hong Kong property developers, some of the biggest developers in the world.
Diana: Yes, this village is in the south of China in Guangdong province, am I right?
Vincent: That’s right. And what it showed was a new level of organisation. The population of Wukan set up their own elected village committee, their own representatives. They organised their own defence guard, because the police of course were coming into the village and were picking up people, making sweeping arrests. So they organised a kind of militia. They organised the women’s committee in the village that was organising the distribution of food and essential supplies. They set up a hospital. They set up their own pharmacy, because the Communist Party officials tired to starve Wukan into submission, so they blockaded the village for nearly two weeks.
And the local population organised this incredible movement, and the significance is that for a period of weeks the Communist Party officials and the police had been expelled from the village. So this is the first time since 1949, that the Communist Party in China have actually lost control of an area of China’s territory.
Then there was a deal brokered. Now this is connected to what we were discussing before about the power struggle and the battle against the Bo Xilai faction. The head of Guangdong province, Wang Yang, he is on the other side of the spectrum within the Communist Party. He is in the liberal faction, the ‘free market’ faction, who also pay lip service to the idea of some democratic relaxation – political reform as it’s called in China.
So, Wang Yang brokered a deal in Wukan, which allowed them to have the first village election in their village, although these village elections have been going on for more than 20 years in other parts of China. There have been thousands of these village elections. Some are relatively fair, you could say, and others are not fair at all, they’re just rigged, as was the case in Wukan. But at the same time as they made some concessions there… Our message, my organisation and our website chinaworker.info which fights for workers rights, for the rights to organise free trade unions, and which also supports the struggle of the poor farmers, we said to the Wukan people through our articles, don’t give up the struggle, remain vigilant, and you have to keep your organisations – your independent organisations – going, because the Communist Party officials have shown they can’t be trusted. They will make promises when they are really forced into a tight corner, but then, when they feel that the movement has ebbed and that the resistance is not so strong, they will take away what they promised and they’ll even organise a crackdown, arresting people that have played a role in the struggle and so on.
This has happened many, many times, and we have seen unfortunately even in Wukan now, there has been a partial reassertion of the repressive apparatus after the elections. Some of the youth activists who’ve played a key role in the struggle have said that they are being followed, that they are under constant surveillance. Some of them are being threatened by being evicted from their housing and so on. So, it’s a struggle that’s by no means finished. The Wukan struggle has really only just begun.
Diana: Well, thank you so much for all the interesting insights you’ve shared with us today, I do wish we had more time. We’ll have to leave it there though. We’ve been speaking to Vincent Kolo, who is the senior editor of the website – the bilingual website – chinaworker.info. And that’s a very good resource, they’re on line with English and Chinese resources for listeners who would like to know more. Vincent, thank you so much for joining us and it’s been great having you in Melbourne!
Vincent: Thank you!
Vincent Kolo of chinaworker.info interviewed on Melbourne radio about China’s economic trends and the arrest of Bo Xilai
China’s economy is growing at its slowest rate for three years and fears of a ‘hard landing’ are on the rise. This, and the top-level power struggle inside the Chinese dictatorship were key topics when Diana Beaumont of 3CR community radio in Melbourne interviewed Vincent Kolo, senior editor of chinaworker.info, on his recent visit to Australia. The following is a transcript of the interview.
Listen to the podcast here: http://podcast.3cr.org.au/pod/3CRCast-2012-04-07-72204.mp3 (http://podcast.3cr.org.au/pod/3CRCast-2012-04-07-72204.mp3)
Diana: This week I spoke at length with Vincent Kolo, who is the senior editor of the chinaworker.info website, for the Committee for a Workers’ International in Hong Kong. And I began by asking him how close to crisis the Chinese economy actually is.
Vincent: I think this is something that’s being debated all around the world by the heads of big corporations and governments, because China plays such a central role in the global economy. I mean it’s been the real locomotive for world capitalism in the last four years. It’s taken over largely from the former role that the US played. Whereas the US was sucking in consumer goods from the rest of the world, China is sucking in primary goods, resources, energy, so it’s been a boon to countries like Australia, Brazil, African and other oil producers.
So it’s really got a huge effect on the global economy and it’s obvious that there’s a big crisis already unfolding before our eyes. The property bubble has really peaked. And there are signs that there could be quite a dramatic fall in house prices this year, which in the Chinese context is going to have a huge effect.
‘Cat-and-mouse game’
Diana: It’s an intentional government policy isn’t it, to try and bring down the housing prices and control property speculation? Do you think the government’s efforts have been effective and will it stave off a crisis?
Vincent: Well, it’s interesting. It shows you the realities of how the different wings of the Chinese state work. Because what’s going on is described as a ‘cat-and-mouse game’. Beijing, the central government, has since 2010 been trying to slow down the increases in the property prices. They’ve imposed curbs on who can actually buy a house. They’ve tried to restrict speculation; stopping people from buying a second, third, and multiple houses, which is common for the rich in China and for big companies.
So, those polices have been in force for two years now. But local governments have been resisting it, because the local governments – the city governments, the province-level governments – they’re dependent on land sales for half their income. And, of course, falling land prices is bad news for them and their spending plans. And many of them now are up to their neck in debt, because in the stimulus plan that was launched four years ago the local governments bore the brunt of the spending. They splashed out on expressways, on bridges, on new hydroelectric power projects, and so on. But also a lot of wasteful prestige projects like multi-storey police stations, golf courses, seven-star hotels, conference centres.
And within this you’ve also got the phenomenon of the ghost cities, like the city of Kangbashi. It’s very famous in China. It’s in the province of Inner Mongolia. It’s housing could provide accommodation for half a million people, but only 20,000 people live there. The sports stadium, which is state-of-the-art, can hold 30,000 people. So that if everyone in the whole city turned out to watch a sporting event, they would not be able to fill the seats in the stadium – it’s that bad! And there are ghost cities all over China. And the local governments have got into extreme problems of indebtedness as a result of this.
Local government debt crisis
Diana: And you explained at a meeting in Melbourne [the national conference of the Socialist Party] last week how this represents a change in policy in China. That previously the local governments were not allowed by the central government to go into debt. Is that true?
Vincent: Yes. By law they are not allowed to incur debt and they’d been kept on a tight rein previously. But the government hit the panic button in 2008. It could see that the global capitalist crisis in the wake of the Lehman Brothers collapse was going to hit China hard. Unemployment was going to explode, particularly among the migrant workers who have no job protection – they are casual workers. There are 200 million of them in China, and when I say migrants, I don’t mean foreign imported labour, I mean they are Chinese workers from the poorer provinces.
So the government hit the panic button and they allowed the local governments to spend, but the way they’ve done it is they’ve actually copied a lot of the Wall Street ‘witch doctory’. They’ve set up local government finance vehicles (LGFVs) using land as collateral and borrowed heavily from the banks, which of course are also government-owned in China. And this has resulted in a collective debt – the government says that the local government debt, from almost nothing four years ago, is now 10.7 trillion RMB, which in Australian dollars is around A$1.65 trillion, which is significantly more than entire GDP of Australia. So, there is a major local government debt problem. One Chinese professor said, “Every province of China is Greece”.
Diana: Wow, that’s phenomenal! And some of the infrastructure projects that the government has invested in are also quite problematic. At the meeting in Melbourne you also gave some examples to do with road construction and railway construction. Are you able to share any of those with us now?
Vincent: Of course most visitors and particularly the journalists and the businessmen who go to China, they go to the big cities and of course they’re dazzled by what they see. I mean there is some incredible development. In the last ten years, China has built an infrastructure, which on most levels is similar to what you’ve got in the US. They have roughly the same amount of expressways by kilometre, but they don’t have anything like as many cars. They only have about a quarter of the number of motor vehicles that you have in the US. And the geography of China, and the demographic pattern, is very different. Most of the population of China live on the eastern coast, from Beijing down the coast through Shanghai, other big cities, to Hong Kong and Guangzhou. But in the inland provinces development is much lower. And the further west you go, towards Tibet, towards Xinjiang, the population is quite sparse.
But they’ve been building a whole network of expressways, and you have to question whether this is the most sensible way to be spending the money when there are 260 million people in China that lack safe drinking water. When there is an urgent need for irrigation systems to be updated in China and there are areas of the country where the rural population don’t even have electrification.
‘White collar railway’
Then there is the high-speed rail project, which is extremely controversial now, because you know, a year ago in July 2011, there was a serious crash, a collision between two high-speed trains. 40 people were killed. And it questions the use of the technology that the Chinese companies that have been building the railways. And China now has more high-speed rail networks than any other country. They’ve really gone at a turbo-charged speed in building this. And it’s become a kind of symbol for the development of the economy: So fast that you can almost not believe the speed it is moving at…
Diana: And also quite out of touch with the needs and the economic capacity of most of the population. The high-speed railway is very expensive to ride.
Vincent: Well that’s right. It’s really been built for a kind of niche population, for the urban elite. They call it the ‘white collar railway’ – that’s the nick name that most people give it, and this has also contributed to the debt problem, because the ticket sales on the big high speed rail lines, for example, the recently opened Beijing-to-Shanghai line, the ticket sales are no way near at the level of the projections when they were building the project. So they are not going to recoup the money that they expected and they’ve got a big debt problem. The Railway Ministry alone has a debt which is equivalent to 5 percent of China’s GDP, and they are now having to cutback on the projects. There is a 15 percent cutback in rail investment this year. And actually tens of thousands, even hundreds of thousands of workers on these projects – because the people who build the railways are also migrant labour, they have no firm job contracts, they have no pensions, they have no medical insurance, they work a 12-hour day, 7-day week.
Diana: Well in theory if they work on a government project they shouldn’t, but again that’s one of the massive problems of the inability to protect working conditions without a functioning union.
Vincent: That’s right. Unions of course are illegal. And you have the situation where the state-owned companies which control these projects like the construction, the railway projects, they subcontract out to private companies which are run by their family or by other friends of the officialdom. And of course they enrich them, there’s a lot of bribery involved in the contracts. So, actually there is enormous criticism of this within China itself and on the internet.
Regime is openly split
Diana: Well on that point, of criticism about the direction of economic and social development in China, we’re at a very interesting juncture in Chinese politics. Recently an enormous split has become public in the Communist Party between two factions, and I wonder if you can explain that for our listeners.
Vincent: Yes, it’s a very significant development. It’s the first time since the massacre of pro-democracy protesters in 1989 that the regime has been so openly split. They’ve had an unwritten law really for more than two decades that they keep all of their differences behind closed doors, and that’s begun to break down now.
Now, nothing that is going on has anything to do with communism or socialism. The Communist Party in China is a very different organisation to what it was 30 years ago or before that. All of the main business interests are enmeshed in the ruling Communist Party. At the recent National People’s Congress (NPC) in March, which is the annual parliamentary session, you saw, as is widely quoted in the media, that the 70 richest delegates or ‘Members of Parliament’ in China had a combined wealth of 95 billion USD. This is eleven times the wealth of the whole US government, from Obama’s cabinet, to the US Congress with its 500-plus members, to the Supreme Court! So there’s enormous wealth concentrated in the top layer of the Communist Party in China.
Diana: Which I think has been obscured to some extent by sweet sounding rhetoric particularly from Premier Wen Jiabao about the need to address social inequality and have a more humane mode of development. But he obviously is completely enmeshed in this web as well.
Vincent: Well, he is. It’s a very good example. I mean, he calls himself the ‘People’s Premier’, but his wife actually is said to control the jewellery industry in China. His son is the former head of a hedge fund with 1 billion USD in assets. But his son has recently been given another responsibility; he’s now the CEO of a major telecom company in China, state-owned telecom company. And he’s what you in Chinese parlance would call a princeling. The princelings are the sons and daughters of top party officials who set up in business, and they are incredibly rich. And most of them, like Premier Wen’s son, are US educated. They have business degrees from top US or other Western universities.
But the split you mentioned that has taken place now – they recently purged three weeks ago, Bo Xilai, who is a very important figure in China. He is also a princeling. His family is also incredibly rich. His son Bo Guagua has attracted a lot of gossip on the internet because he drives a red Ferrari. He’s been linked with all kinds of...
Diana: … at least it’s red – it’s their colour, isn’t it?
Vincent: Yes (laughs)… that’s about all they’ve got in common with the Communist Party of the past.
Diana: Oh well, now that the ‘sing red’ campaign is all over in this faction, it could be the ‘drive red’...
Vincent: Yes, well the point is that his son, the younger Bo, he was at Oxford, where he joined the Adam Smith Institute…
Diana: Adam Smith?
Vincent: That’s right.
Diana: The son of the so-called new-Maoist of China!
Vincent: That’s right. And previously he was educated at Harrow, which is an elite ‘public school’ – or private school – in the UK.
Arrest of Bo Xilai
Diana: Let’s talk about what his father Bo Xilai stood for and what that says about this new left faction in the government in China. And what’s the significance of the fact that he has been removed from his position and his faction has now lost power to the ruling faction represented by the current leadership of Hu Jintao and Wen Jiabao?
Vincent: Well, I think we just have to be a little bit cautious in terms of how it’s going. At the moment it seems definitely that Hu Jintao, the president, and Premier Wen are in the driving seat, and Bo Xilai – it seems that his career in top politics is over, and he may well now be facing imprisonment. I mean he is almost certainly under arrest, we don’t hear anything about it. But it would be strange if he weren’t under arrest, because they would be very afraid if he was to try to escape from China. He could be a huge problem for the current leadership of the Communist Party. [This interview was conducted on 4 April, before Beijing’s official announcement on 10 April that Bo and his wife Gu Kailai were being held for serious criminal investigation and possible murder charges].
But the ‘new left’ is a kind of generic term for all kinds of... there’s a kind of left revival in China, particularly of Maoism or neo-Maoism. And what it is is a backlash against the kind of ultra-capitalist polices of the Communist Party over the last period. It’s an attempt to try to find ideas and an ideology to counter privatization, the extreme wealth gap. I mean it is an incredible wealth gap. China has gone in 30 years from being one of the most equal societies to one of the most unequal anywhere. The wealth gap is on a par now with Brazil, and there are probably only 20 countries in the world which have a more extreme wealth gap than China.
Bo Xilai made some very radical populist statements…
Diana: When he was the governor of Chongqing in the west of China?
Vincent: That’s right. He ran Chongqing, which is a big city; it’s a city and a province, with about 30 million population. And he made a whole new sort of trend, organising the singing of Maoist-era songs, the ‘singing red’ campaign or ‘red-culture’ campaign. The idea was to try to revive the idea of solidarity, of a common identity, which was broken down in China. People don’t feel that anymore.
But there was really nothing more than that. It was really a lot of presentation, but almost no substance, and if you look at the policies that the Chongqing government carried out, they’re no different really from the governments in other parts of China. They attracted huge amounts of foreign investment – companies like Hewlett Packard, Acer and Foxconn, the infamous suicide company which does most of the work for Apple that builds the iPad and the iPhone. They’ve all set up in Chongqing and got extremely generous terms from Bo Xilai’s government. They’ve got virtually free land. The government builds the factories for them. The government dragoons students on the myth that they’re doing an internship, to do half a year or so on the production line under extremely exploitive conditions.
So, these polices are carried out in many Chinese cities, but also in Chongqing – there was no difference on that level. But, however, the central leadership of Hu and Wen, they did regard Bo as a threat. And the reason was because the Chinese government are extremely wary of a figure coming through the system who would have too much power. From the experience of Mao in ‘60s and ‘70s, and then under Deng Xiaoping in the two decades after Mao, these leaders created enormous instability by their tendency to appeal – outside the Communist Party and governmental apparatus – upon the people, to go to the streets, in order – I mean they did this in quite a cynical way of manoeuvring between the different class forces in China – to strike a blow against their opponents at any given time.
And the Chinese government wants to avoid that happening again. But they saw that Bo’s campaign – really what he was doing with the ‘red-culture’ campaign – he was promoting himself and trying to get a seat on the nine-member Politburo Standing Committee, which is the No.1 unit of power within the Chinese state. And so now they’ve brought him down, and that is a symbol also to others that they’ve got to follow the rules.
The struggle in Wukan
Diana: Speaking about people following the rules, I wanted to finish today with a bit of a discussion about popular dissent. It’s happening I suppose on two very obvious levels. One, which our listeners will be very interested in, is amongst workers. But there’s been a particularly recent case in a rural setting of a village, Wukan, rising up against the illegal seizure of land to sell-off for development for revenue for the local government. Can you tell us a bit about what happened in Wukan and what’s significant about this case?
Vincent: Yes, Wukan is one of the biggest stories to come out of China for many, many years. It’s a hugely important development. I mean, the population of this village in the south of China – around 15,000 people – they rose up in September, October, November of last year in a protest movement as you say against the corrupt Communist Party officials having stolen their land and sold it to property developers, including some really big Hong Kong property developers, some of the biggest developers in the world.
Diana: Yes, this village is in the south of China in Guangdong province, am I right?
Vincent: That’s right. And what it showed was a new level of organisation. The population of Wukan set up their own elected village committee, their own representatives. They organised their own defence guard, because the police of course were coming into the village and were picking up people, making sweeping arrests. So they organised a kind of militia. They organised the women’s committee in the village that was organising the distribution of food and essential supplies. They set up a hospital. They set up their own pharmacy, because the Communist Party officials tired to starve Wukan into submission, so they blockaded the village for nearly two weeks.
And the local population organised this incredible movement, and the significance is that for a period of weeks the Communist Party officials and the police had been expelled from the village. So this is the first time since 1949, that the Communist Party in China have actually lost control of an area of China’s territory.
Then there was a deal brokered. Now this is connected to what we were discussing before about the power struggle and the battle against the Bo Xilai faction. The head of Guangdong province, Wang Yang, he is on the other side of the spectrum within the Communist Party. He is in the liberal faction, the ‘free market’ faction, who also pay lip service to the idea of some democratic relaxation – political reform as it’s called in China.
So, Wang Yang brokered a deal in Wukan, which allowed them to have the first village election in their village, although these village elections have been going on for more than 20 years in other parts of China. There have been thousands of these village elections. Some are relatively fair, you could say, and others are not fair at all, they’re just rigged, as was the case in Wukan. But at the same time as they made some concessions there… Our message, my organisation and our website chinaworker.info which fights for workers rights, for the rights to organise free trade unions, and which also supports the struggle of the poor farmers, we said to the Wukan people through our articles, don’t give up the struggle, remain vigilant, and you have to keep your organisations – your independent organisations – going, because the Communist Party officials have shown they can’t be trusted. They will make promises when they are really forced into a tight corner, but then, when they feel that the movement has ebbed and that the resistance is not so strong, they will take away what they promised and they’ll even organise a crackdown, arresting people that have played a role in the struggle and so on.
This has happened many, many times, and we have seen unfortunately even in Wukan now, there has been a partial reassertion of the repressive apparatus after the elections. Some of the youth activists who’ve played a key role in the struggle have said that they are being followed, that they are under constant surveillance. Some of them are being threatened by being evicted from their housing and so on. So, it’s a struggle that’s by no means finished. The Wukan struggle has really only just begun.
Diana: Well, thank you so much for all the interesting insights you’ve shared with us today, I do wish we had more time. We’ll have to leave it there though. We’ve been speaking to Vincent Kolo, who is the senior editor of the website – the bilingual website – chinaworker.info. And that’s a very good resource, they’re on line with English and Chinese resources for listeners who would like to know more. Vincent, thank you so much for joining us and it’s been great having you in Melbourne!
Vincent: Thank you!