September 19, 2002
FALL 2002 – Political Issues Speech
My thoughts on where the most important political decisions would be made, and the follow-up First Session of the 10th National People’s Congress the following March.
AS MANY OF YOU ARE AWARE, THE 16TH CONGRESS OF THE CHINESE
COMMUNIST PARTY IS TO BE CONVENED IN NOVEMBER.
THIS PARTY CONGRESS IS A VERY IMPORTANT MILESTONE IN TODAY’S CHINA
BUT WE KNOW VERY LITTLE ABOUT WHAT IT WILL DISCUSS AND WHAT IT WILL
ACCOMPLISH. ALL THAT THE PARTY TELLS US, THROUGH IT’S PUBLIC
STATEMENTS AND IT’S BASIC DOCUMENTS IS THAT THIS CONGRESS IS PART OF
THE 5 YEAR CYCLE OF PARTY MANAGEMENT; THAT IT WILL BEGIN ON NOVEMBER
8; THAT IT WILL BE ATTENDED BY 2,120 DELEGATES; THAT 98% OF THEIR
MEMBERS HAD PARTICIPATED IN THE DELEGATE SELECTION PROCESS; AND
THAT 63.1% OF THE DELEGATES ARE 55 YEARS OLD OR YOUNGER, ‘INDICATING
THE PARTY’S VITALITY. THESE DELEGATES WERE SOMEHOW ELECTED AND
VETTED BY PARTY MEMBERS AT ALL LEVELS, TO REPRESENT THE 66 MILLION
MEMBERS OF THE CCP.
THE PARTY CONSTITUTION SAYS THAT THE CONGRESS MAY DEAL WITH 6 BASIC
ITEMS, INCLUDING REPORTS FROM THE PARTY’S CENTRAL AND OTHER
COMMITTEES; DISCUSS AND DECIDE ‘MAJOR QUESTIONS CONCERNING THE
PARTY’; AND THAT IT MAY REVISE THE PARTY CONSTITUTION.
THE PARTY CONGRESS IS ALSO MANDATED TO ELECT A NEW CENTRAL
COMMITTEE OF 300 OR SO MEMBERS, AS WELL AS THE MEMBERS OF THE KEY
CENTRAL COMMISSION FOR DISCIPLINE INSPECTION.
IT IS ONLY AFTER THE PARTY CONGRES, USUALLY THE NEXT DAY, THAT THE
NEW CENTRAL COMMITTEE CHOOSES THE MEMBERSHIP OF THE 20 MEMBER
PLUS POLITICAL BUREAU, AS WELL AS THE STANDING COMMITTEE OF THE
POLITICAL BUREAU, IN WHICH ALL POWER LIES.
NEXT SPRING, THE NATIONAL PEOPLE’S CONGRESS WILL DECIDE THE NEW
STATE AND GOVERNMENT LINE-UP, STARTING WITH THE NEW PRESIDENT AND
VICE-PRESIDENT, AS WELL AS THE SENIOR MEMBERS AND MINISTERS OF THE
STATE COUNCIL, THE CABINET IN OUR PARLANCE. BECAUSE OF THE LEADING
ROLE OF THE PARTY IN NATIONAL AFFAIRS, MANY OF THE VERY SENIOR PARTY
OFFICIALS WILL HOLD CONCURRENTLY BOTH PARTY AND GOVERNMENT
POSITIONS.
STRICTLY SPEAKING, THIS IS JUST ABOUT ALL WE KNOW FOR SURE. SECRECY IS
ONE OF THE HALLMARKS OF THE CCP, AND IT REMAINS AIR-TIGHT, GIVEN
SANCTIONS AGAINST PUBLIC COMMENTS, ESPECIALLY CHINESE MEDIA, AND
DESPITE INTENSE CURIOSITY OF THE FOREIGN MEDIA AND DIPLOMATS.
ANOTHER HALLMARK IS THAT THE PARTY CONSTITUTION, AND THE RULES
ISSUED BY THE ORGANIZATION DEPARTMENT OF THE PARTY HAVE LITTLE MORE
THAN INDICATIVE VALUE. WHAT THE PARTY DECIDES IS BASED ON PEOPLE AND
POWER RELATIONS AND GUANXI AND BY WHAT PEOPLE CAN GET AWAY WITH.
IN THE CCP, POLITICS IS EVERYTHING, AND RULES ARE ONLY AS IMPORTANT AS
THEY ARE USEFUL. THAT IS WHY SO MUCH OF THE SPECULATION IS ABOUT WHO
WILL BE THE NEW LEADERS, AND MUCH LESS ABOUT WHAT IT IS EXACTLY THAT
THEY WILL WANT TO DO, WHEN THEY ASSUME – OR REASSUME – POWER.
THUS, THE BUILDUP TO THE CONGRESS AND THE OUTCOME OF WHAT, AT THE
END, IS VERY MUCH A PRO-FORMA MEETING, AND ONE GIGANTIC HUMAN
RESOURCE MANAGEMENT EXERCISE.
SO WHAT IS EXPECTED TO EMERGE FROM ALL OF THIS?
THERE ARE THOSE WHO ARGUE THAT PRESIDENT AND PARTY SECRETARY
GENERAL JIANG ZEMIN, PREMIER ZHU RONGJI AND NATIONAL PEOPLE’S
CONGRESS CHAIRMAN LI PENG WILL KEEP ALL OF THEIR CURRENT POSITIONS,
OR SOME OF THEM, OR NONE AT ALL. VICE PRESIDENT HU JINTAO MAY OR MAY
NOT ASSUME SOME OR ALL OF THE TOP POSTS IN THE PARTY AND IN THE
NATIONAL GOVERNMENT. VERY CREDIBLE EXPERTS ON CHINESE POLITICS HAVE
DEVELOPED DIAMETRICALLY OPPOSED VIEWS ON WHAT WILL EMERGE. SO I AM
NOT GOING TO SPECULATE IN THESE REMARKS ON THOSE QUESTIONS.
I AM READY TO SPECULATE HOWEVER ON WHAT PERSONEL DECISION ARE
TRULY SIGNIFICANT FOR CANADA, AND WHAT DIRECTION CHINA’S POST-
CONGRESS LEADERSHIP MIGHT TAKE, AND HOW IT WILL AFFECT OUR
INTERESTS.
ON THE FIRST POINT, CONNECTIONS AND TRACK RECORDS ARE VERY
IMPORTANT IN CHINESE POLITICS. IT APPEARS CERTAIN THAT AT LEAST SOME
CHANGES IN NATIONAL LEADERSHIP IN CANADA AND CHINA WILL TAKE PLACE IN
THE COMING YEAR AND A HALF. YOU MAY NOT THINK THAT THIS IS IN ITSELF
IMPORTANT TO CANADA-CHINA RELATIONS, BUT IN FACT IT IS. MORE THAN YOU
MIGHT THINK, CANADA HAS A PLACE AT THE TABLE ON MATTERS OF STRATEGIC
INTEREST TO CHINA – NOT A BIG ONE, BUT A PLACE NEVERTHELESS.
DIPLOMATIC RECOGNITION AND WHEAT DEALS MAY BE ANCIENT HISTORY, BUT
THE IMPORTANT ROLES OF KEY PERSONALITIES SUCH AS TRUDEAU, CHRÉTIEN
AND DESMARAIS – WHO ESTABLISHED THE CANADA-CHINA TRADE COUNCIL – IN
THE DEVELOPMENT OF A GROWING RELATIONSHIP ARGUE FOR CONTINUING
HIGH LEVEL POLTICAL ATTENTION, NO MATTER WHO EMERGES FROM THE
LEADERSHIP BATTLES. SO WHO EMERGES AS SENIOR LEADERS IN CHINA AND
THEIR VIEWS ON CANADA DO HAVE AN IMPACT.
CANADA FITS INTO CHINA’S FOREIGN POLICY IN A NUMBER OF WAYS, BUT FOR
OUR PURPOSES, LET ME JUST FLAG THE ISSUE OF ECONOMIC RESTRUCTURING.
CANADIAN COMPANIES ARE IMPORTANT PARTNERS FOR THE MODERNIZATION
AND ECONOMIC TRANSFORMATION OF CHINA IN KEY SECTORS, SUCH AS
AEROSPACE, GROUND AND AIR TRANSPORTATION, TELECOMMUNICATIONS,
ENVIRONMENT, ENERGY – GIVEN THE CANDU PROJECT IN QINGSHAN – S&T,
BANKING AND INSURANCE AND OTHER SERVICES.
GIVEN THE NATURE OF POLITICS AND GOVERNMENT IN CHINA, WE NEED TO
HAVE THESE FORMS OF COLLABORATION ENDORSED AND SUPPORTED, IN REAL
WORLD, REAL TIME DECISION MAKING.
SO QUESTIONS AS: WHO WILL SUCCEED ZENG PEIYAN AT THE STATE
DEVELOPMENT PLANNING COMMISSION, CHAIRMAN MA YOUNG WEI AT THE
CHINA INSURANCE REGULATORY COMMISSION, SHI GUANSHENG AT THE
MINISTRY OF FOREIGN TRADE AND ECONOMIC RELATIONS, DAI XIANLONG AT
THE PEOPLE’S BANK OF CHINA, ZHOU XIAOCHUAN AT THE STATE SECURITIES
REGULATORY COMMISSION, XIE JIANHUA AT THE STATE ENVIRONMENTAL
PROTECTION AGENCY, EVEN ZHANG CHUNXIAN AT THE CCP, THESE PEOPLE AND
THEIR INSTITUTIONS MATTER A GREAT DEAL TO CANADA. THEY PLAY KEY ROLES
IN THE BILATERAL RELATIONSHIP, BECAUSE THEIR DECISIONS CAN DETERMINE
THE ACCESS OF CANADIAN COMPANIES.
SO IN REAL WORLD TERMS, MUCH RIDES ON THE SELECTION OF THE RIGHT
PEOPLE – PEOPLE WE KNOW AND WHO KNOW US – COMING OUT OF THE PARTY
CONGRESS AND THE NPC.
THERE IS ALSO THE MATTER OF POLITICAL ORIENTATION. ONE CAN MEET THE
MOST SOPHISTICATED AND REFLECTIVE THINKERS IN POLITICS AMONG CHINA’S
TOP LEADERSHIP, PEOPLE WHO ARE AS WELL AND BROADLY READ AND
EXPERIENCED AS ANYONE IN PUBLIC POLICY ANYWHERE IN THE WORLD. MANY
HOLD CLEAR AND FORTHRIGHT VISIONS ABOUT WHERE CHINA SHOULD BE
HEADED, AT THE MINISTERIAL, INSTITUTIONAL AND BUSINESS LEVELS.
BUT ONE ALSO MEETS VETERAN POLITICIANS WHOSE PRINCIPAL CONCERNS
ARE WITH PRESERVING THE AUTHORITY OF THE PARTY AS WELL AS THEIR OWN,
OR WITH KEEPING POWER AMONG THE TRADITIONAL ELITES, INCLUDING THOSE
AT PROVINCIAL AND LOWER LEVELS, OR STATE-OWNED ENTERPRISES, OR
OTHER BENEFICIARIES OF THE STATUS QUO, NATIONAL INTERESTS BE DAMNED.
OTHERS ARE MORE CONCERNED ABOUT THE GREAT DISCREPANCIES IN WEALTH
AND OPPORTUNITY THAT HAVE EMERGED UNDER CURRENT LEADERSHIP, AND
WISH TO SEE REFORM SLOWED TO LESS DISRUPTIVE DEGREES.
THESE VIEWS AND MANY OTHERS WILL BE REPRESENTED AT THE CONGRESS,
AND PROBABLY AMONG THE FUTURE LEADERSHIP OF THE PARTY AND
GOVERNMENT. HOW AND WHETHER THEY ACHIEVE CONSENSUS AND
DETERMINE THE FUTURE OF CHINA WILL BE ONE OF THE KEY DETERMINANTS OF
THE DECADE.
ALL-IMPORTANT PERSONNEL ISSUES ASIDE, LET ME VENTURE OUT ON A LIMB
AND PREDICT THAT THE POLICIES THAT WILL EMERGE WILL PROBABLY
COALESCE ALONG THE FOLLOWING LINES. THE MAINTENANCE OF POLITICAL
AND ECONOMIC STABILITY WILL CONTINUE TO BE THE KEY DRIVER OF NATIONAL
GOVERNANCE: ‘WENDING YA DAO YI QIE’ – STABILITY OVERRIDES EVERYTHING,
AS DENG XIAOPING FAMOUSLY SAID TO PRESIDENT BUSH IN FEBRUARY 1989.
CHINA’S LEADERS WILL CONTINUE TO PRIORIZE IT’S GROWTH OBJECTIVES AND
THUS ECONOMIC DEVELOPMENT AND RESTRUCTURING WILL STAY AT THE TOP
OF THE AGENDA. FOREIGN POLICY WILL CONTINUE TO BE DRIVEN BY THE NEED
TO GIVE CHINA TIME TO GROW. MANAGEMENT OF STRONG US RELATIONS WILL
REMAIN ON TOP OF THE AGENDA. AS LONG AS TAIWAN DOES NOT SERIOUSLY
PROVOQUE CHINA, THE RELATIONSHIP BETWEEN THE TWO WILL BE MANAGED IN
A WAY TO REASSURE BOTH INVESTORS AND TRADING PARTNERS AND THAT ON
BOTH SIDES OF THE STRAIT. CHINA WILL CONTINUE TO SEEK TO EXPAND TRADE
AND INVESTMENT, AND GENERALLY HONOUR ITS WTO COMMITMENTS.
I SAY GENERALLY HONOUR BECAUSE CHINA WILL BE SEEKING TO BALANCE
MANY DIFFERENT AND COMPETING OBJECTIVES. FOR EXAMPLE, USING THE WTO
TO ADVANCE DOMESTIC REFORM AND RESTRUCTURING AND, IN WHAT APPEARS
TO BE A CONTRARY STANCE, USING THE LATITUDE IT DEEMS NECESSARY IN
IMPLEMENTING ITS COMMITMENTS TO LIMIT THE NEGATIVE FALLOUT OF MARKET
OPENING.
WE ARE NOW WELL INTO THE WEEDS ON THE WTO. SOME THINGS HAVE GONE
SMOOTHLY: TARIFF REDUCTIONS ARE ON SCHEDULE; THERE IS, UNDENIABLY,
GREATER TRANSPARENCY; CHINA HAS MADE SIGNIFICANT CHANGES TO THE
REGULATORY ENVIRONMENT.
BUT THERE ARE, IN MANY AREAS IMPORTANT TO CANADIANS, SIGNIFICANT GAPS
BETWEEN THE IDEAL OF OPEN MARKETS AND THE EMERGING REALITY. IN SUCH
SECTORS AS BANKING, INSURANCE, FUND MANAGEMENT, TARIFF RATE QUOTA
ADMINISTRATION, NEWSPRINT, LEGAL SERVICES AND OTHERS, THERE ARE
OUTSTANDING ISSUES. WE WILL HAVE TO WORK CLOSELY WITH CHINESE
AUTHORITIES IF WE ARE TO GET THESE FIXED.
THAT GET’S US BACK TO WHY THE 16TH PARTY CONGRESS ARE NEXT YEAR’S
NPC ARE SO IMPORTANT.
WE WON’T REALLY KNOW WHERE THE COUNTRY IS HEADED IN EITHER MACRO
OR MICRO TERMS UNTIL WE KNOW WHO OCCUPIES WHAT POSITION, WHETHER
THEY HAVE REPUTATIONS AS REFORMERS, CONSERVATIVES OR TIME SERVERS,
WHO THEIR PATRONS ARE, AND HOW MUCH POWER THEY CAN EXERCISE.
THE JURY WILL BE OUT, AND ITS DELIBERATIONS WILL LARGELY REMAIN
SECRET.
IT WILL BE EVERYBODY’S JOB TO TRY TO UNDERSTAND THIS NEXT
INSTALLMENT OF THE CHINESE REVOLUTION. YOUR EXPERIENCES, AS BUSINESS
PEOPLE, WILL TELL US A GREAT DEAL.
ON BALANCE, I REMAIN OSTIMISTIC THAT CHINA’S NEW LEADERS WILL WANT TO
STAY THE COURSE.
WHETHER CIRCUMSTANCES WILL ALLOW THEM TO DO SO MAY DEPEND ON
POLITICAL AND SOCIAL FACTORS OVER WHICH THEY HAVE LIMITED CONTROL.