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China's kleptocracy cashes in as resistance grows

China’s National People’s Congress, which is now in session in Beijing, is in effect a gathering of the country’s most powerful shareholders and capitalists. It puts in the shade the close connection between business and politics in other countries.

The NPC, whose 3,000 members meet for a week each year to rubber-stamp new laws, boasts some of the richest people in China as key members.

In fact, the richest 70 NPC deputies are worth nearly $90 billion, according to the Shanghai-based magazine the Hurun Report, that publishes a Chinese rich-list every year (the number of billionaires in the country doubled between 2009 and 2011, according to Hurun).

“It is extraordinary to see this degree of a marriage of wealth and politics,” says China expert Kenneth Lieberthal from Washington’s Brookings Institution. “It certainly lends vivid texture to the widespread complaints in China about an extreme inequality of wealth in the country now.”

China’s per capita annual income in 2010 was $2,425, less than in Belarus and much lower than the $37,527 in the US. A widening gap between the rich and the poor has, in recent months, been the source of social unrest and rebellion by farmers and factory workers alike.

The takeover of politics began when the “capitalist roaders” seized control of the Communist Party in the late 1970s after Mao’s death. Minqi Li, a former political prisoner and author on China, now living in the US, explains:

In a few years, Deng Xiaoping consolidated his political power and China was on the path of capitalist transition. The so-called economic reform started in the countryside. The people’s communes were dismantled, and agriculture was privatised. Over the following years, hundreds of millions of rural workers became “surplus” workers, made available for exploitation by domestic and foreign capitalist enterprises.

Massive privatisation was undertaken in the 1990s. Virtually all of the small and medium-sized state-owned enterprises and some big state-owned enterprises were privatised. Almost all of these were sold at artificially low prices or simply given away. The beneficiaries included government officials, former state-owned enterprise managers, private capitalists with connections in the government, and transnational corporations. In effect, a massive “primitive accumulation” was completed and a new capitalist class was formed, based on the massive theft of state and collective assets. Meanwhile, tens of millions of state- and collective-sector workers were laid off and left impoverished.

Among the NPC delegates is Zong Qinghou, China’s second richest person and chairman of the beverage company Hangzhou Wahaha Group. And delegate Wu Yajun, whose family wealth soars upwards of 40 billion yuan ($6.5 billion), is a property baroness.

The third-richest person in the NPC, autoparts magnate Lu Guanqiu, travelled with Vice President Xi Jinping – the presumed successor to President Hu Jintao – to the United States during his official visit in February.

The advance continues. It has been reported that China’s richest man, Liang Wengen, may soon become the first private businessman to join the party’s ruling Central Committee.

Millions of Chinese now identify the Communist Party with corruption and theft on a grand scale. Huge protests are taking place in the countryside against the seizure of valuable farm land for property speculation.

Struggles at some factories have led to wage increases of 20% or more, enough to force some capitalists to consider moving production to Vietnam where workers are cheaper. Waves of strikes and riots among migrant workers on production lines in southern China shook the authorities.

A massive social explosion is in the making, which could easily sweep away the kleptocracy now running – or ruining – the country. It can’t come too soon.

Paul Feldman
Communications editor
6 March 2012

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Iris Kirkwood says:

Excellent Article!

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