Welcome to the Party

Reviewing Richard McGregor’s The Party: the secret world of China's communist rulers

When designing a World War II battleship, or any large naval vessel with turrets, stability was never far from the chief engineer’s mind. Stability affects accuracy, since the fire control officer must factor the ship’s roll rate into his trajectory calculations. Even the smallest miscalculation can compound into a miss over a twenty-mile flight path.

There are two ways of achieving stability, or a lack thereof. The first method is to make the ship wide relative to its draft, so that the vessel is steady in the ocean. A chunky ship is a steady ship in calm waters, but once the sea gets rough the boat may unexpectedly list to one side and then violently right itself. The motion happens too fast to compensate for when firing.

The second design option is to make the ship narrow enough that it easily rolls. A narrow ship is consistently unstable, going from side to side in a steady rhythm. While it’s prone to making sailors seasick, this design has its advantages. The ship’s movement is so predictable that the fire control officer can account for it, allowing the turrets to be fired even during a storm. The wide ship may be more comfortable in calm seas, but as soon as the waves hit the flexible ship proves its superiority.

Communist regimes have historically been wide ships. Stability is maintained at all costs, right up until the citizens storm the palace and take the head commie out back for a 3 o’clock appointment with Doctor Kalashnikov. Volatility can only be stored, not dispelled, and a regime suppresses motion at its own risk.

Acutely aware of the failings of previous communist experiments, the Chinese Communist Party (CCP) has retrofitted their organization’s structure to be more like the narrow ship. The CCP’s most important modification of communism was in giving the private market room to grow. The Party is also surprisingly tolerant of protests (provided that they don’t get too large), they’ve allowed China to become heavily integrated with the global economy, and Chinese citizens are allowed to travel abroad without jumping through too many hoops. None of these things were possible in Soviet Russia, for example.

Luckily for China, Deng learnt early on a lesson that nearly every other failed socialist state neglected to heed, that only a boisterous private economy could keep communist rule afloat.

China’s economic growth has been nothing short of miraculous, which begs the question: how can an ostensibly communist state allow a robust private economy without losing control over the population? The CCP came up with a rather elegant solution. They’ve relaxed restrictions on business formation and trade, but enforce strict control over the people.

Any sufficiently large business must have a political coordinator, or multiple coordinators. Corporations are expected to pay lip service to Party doctrine, important executives are encouraged to join the Party, and the Party may retire business leaders who violate communist doctrine. I liken the CCP’s control over the private sector to letting a pack of dogs out in the forest. They’re free, but every animal is wearing an electric collar and can be electrocuted if it gets out of line.

In place of Mao’s totalitarian terror, the Party has substituted a kind of take-it-or-leave-it compact with society. If you play by the Party’s rules, which means eschewing competitive politics, then you and your family can get on with your lives and maybe get rich.

But let us not dwell on China’s economic ascendancy, since the topic has already been widely covered. Instead, let’s begin with an autopsy of the Chinese Communist Party to uncover the exact methods it uses to control a country of 1.4 billion people, how corruption runs rampant through the Chinese state, and the most surprising discovery in my reading of Richard McGregor’s The Party.

“The Party is like God. He is everywhere. You just can’t see him.”

The Chinese are fair weather communists. The CCP borrows from Marxism when it will further their own interests —their primary interest being to stay in power— but the Party discards those bits of Marxism that don’t suit them. There is not, for example, an egalitarian redistribution of wealth or a nationwide class of peasants managing the factories. While several hundred million Chinese citizens have been lifted out of poverty in the last thirty years, the wealth gap in China remains one of the highest in the world.

The gap between the fiction of the Party’s rhetoric (‘China is a socialist country’) and the reality of everyday life grows larger every year. But the Party must defend the fiction nonetheless, because it represents the political status quo. ‘Their ideology is an ideology of power and therefore a defense of power,’ said Richard Baum, a China scholar.

Political positions in China are bought and sold, often for tens or hundreds of thousands of dollars. These positions can be very lucrative, given the rampant corruption in China. Let’s say Li wants to build a factory in Guangzhou. To get the plant started he’ll need to pay bribes for the building permit, business license, tax certificates, real estate office, etc. There are dozens or even hundreds of officials who will get a bribe before the first backhoe ever shows up.

Corruption in China seems to operate more like a transaction tax that distributes ill-gotten gains among the ruling class. In that respect, it becomes the glue that keeps the system together.

It’s a bit of a stretch but we might compare the CCP to John D. Rockefeller’s Standard Oil, before it was broken up. Despite being a devout Christian, Rockefeller ran a monopoly that was anything but Christlike. Standard oil bankrupted competitors by forcing the railroad concerns to charge other oil companies unreasonable freight rates, or by temporarily lowering the price of oil.

Standard Oil lobbied legislators for favorable treatment and crushed upstart competitors with unsavory businesses practices. For many years Standard Oil operated above the law, and the same thing can be said of the CCP. They’re not so much a communist organization looking out for the working class, as an elite club of gangsters who control the courts, police, army, central bank and anything else worth having a say in.

The tentacles of the state, and thus the Party, go well beyond the government. As well as sitting above state-owned businesses and regulatory agencies, these party departments oversee key think-tanks, the courts, the media, all approved religions, and universities and other educational institutions, and maintain direct influence over NGOs and some private companies.

The Party controls the private sector by placing loyal communists in key positions in every significant company. At their most subtle, the CCP uses executives who are also Party members to guide corporate policy towards benefitting the Party (rather than the shareholders). At their least subtle, the CCP revokes business licenses, encourages protests, refuses police protection, prevents bank lending and/or has executives jailed on tax evasion charges. I think this anecdote is a great example of the Party’s near complete control over the private sector.

The day before in China, the Central Organization Department had announced without warning a reshuffle of the top executives at China’s three big state-owned telecoms companies. - It was the equivalent of the CEO of AT&T being moved without notice to head its domestic US competitor, Verizon, with the Verizon chief bieng appointed to run Sprint.

This shouldn’t suggest that the Party is only a bane to entrepreneurs, however. Many of the highest ranked government and business leaders in China are in the Party, and favors flow freely between members. A head of the local bank, who is a Party member, may give preferential lending terms to a Party-aligned business. Party membership is also an easy way to network with leaders who would otherwise be inaccessible. This network is tangibly manifest by a red telephone, a private communications network that connects many of the most powerful people in China.

On the desks of the heads of China’s fifty-odd biggest state companies, amid the clutter of computers, family photos and other fixtures of the modern CEO’s office life, sits a red phone. The executives and their staff who jump to attention when it rings know it as the “the red machine”, perhaps because to call it a mere phone does not do it justice. “When the red machine rings,” a senior executive of a state bank told me, “you had better make sure you answer it.”

Corruption in the Party

High ranking officials and Party members are rarely held to account for their incompetence or corruption, but when they are the punishment can be life changing.

Late in 2007, the government sent as clear a signal as the state could muster on the issue. It executed the head of the State Food and Drug Administration, Zheng Xiaoyu, after he was convicted of taking bribes from pharmaceutical companies seeking government approval to market their products.

Executing corrupt ministers is surprisingly common in China, and when I found out how they do it I felt sick to my stomach. China has a fleet of execution vans that deliver death to your doorstep. The CCP is a godless organization and nothing epitomizes their disrespect of the human spirit more than casually executing a person in the back of a vehicle, as if they’re a lame cow that must be put down. Absolutely disgusting.

Elite ministers are not the only officials with their necks on the line. Execution for bribery and corruption is relatively common in China, I encountered many instances of it as I was reading The Party. However, the severity of the crime isn’t correlated to one’s chances of being prosecuted. When someone is arrested for corruption the first question isn’t how much did they steal, but who did they piss off? If you want to stay out of jail it’s more important to know the right people than to steal the least.

The biggest surprise

There exists, at least within my media circle, a certain mythos surrounding the Chinese Communist Party. The Chinese are playing 4-D chess while we’re over here in the United States of Bumfuckery, losing our sanity over pronouns and cancelling our best thinkers because they Tweeted something nasty when they were thirteen. China’s supremacy is a seductive narrative, but it doesn’t survive contact with reality.

“In the west, a politician might be elected for just a few years. In China, they have a lifelong career. We are stuck with them for life.”

Mayor, health minister, police captain, judge, tax official and dozens of other positions are up for sale in China. Cash (or Party loyalty) trumps competency in many cases, and once an official has their position they’re hard to get rid of. From a western perspective this system looks cohesive, but up close it’s a thousand competing fiefdoms run by self-interested officials. Yes, the officials must follow Party dictates up to a point, but they’re also in business for themselves and loyalty is bought not earned in China.

If they [corrupt party members] are not given some advantages, why should they dedicate themselves to the regime? They give their unwavering support to the regime because they get benefits from the system. Corruption makes our political system more stable.

The Chinese system is inestimably inefficient in many respects. Tragedies like crop failures, poisoned products, environmental pollution, real estate overinvestment and bad lending practices are part and parcel of China’s quasi-communist system, but we rarely hear about these catastrophes.

The CCP controls the news cycle in China and little light escapes from their media blackout. This means that as westerners we have a slanted view of reality. We’re bombarded with our own system’s incompetence, but only have a cursory understanding of the shit that’s happening in China. The Chinese Communist Party is at the 4-D chessboard all day but every night they’re drunk and playing Russian roulette with four rounds in the chamber.

Conclusions

The Party was drier than an aqueduct beneath a golf course. I wouldn’t recommend it unless you have a burning desire to educate yourself about the inner workings of the CCP. Even then, there are probably better books to read. I didn’t realize that The Party was published in 2010 until I was too deep to quit. A lot has changed since then. New technology has made it easier than ever for the CCP to track its citizens, and the Party has taken full advantage of this tech to create a more restrictive society than what existed just a dozen years ago.

If there is one takeaway from this book it’s that “communist” is not an entirely accurate description of the Chinese Communist Party. The Party is part communist, part mafia, part business monopoly. It’s a highly flexible organization that operates outside the boundaries of the law and will do anything to stay in power. So long as the Party is in charge, China is a tiger fighting from a corner*. A powerful if lightly armored beast, unpredictable in the extreme and best viewed from a distance.

*The Party is insecure about its grasp on power and worried about a historical reversion to the mean in China: revolution and usurping of the dominant power structure. Despite blustering about becoming the new superpower, China barely grows enough food to feed its own population and doesn’t produce enough oil domestically either. I covered China’s weakness, plus a lot more, in my review of Peter Zeihan’s book: The Accidental Superpower.

Thanks for paying for a subscription! If you’re bored, please go to China for a month and then tell me what it’s like to live there. I’m curious.