The Party: The Secret World of China's Communist Rulers

by Richard Mcgregor

  As soon as the scandal became public, Li had sent out emails and text messages calling for lawyers to volunteer to organize class actions in each province where there were victims. The response was unprecedented. Within days, he had the services of 124 lawyers in 22 out of China’s 31 provinces and regions. ‘I think there are more and more lawyers who want to give their services to society,’ Li said. ‘But then, this was a crisis on a national scale.’ On this last point, the Party agreed. Sanlu should have been the biggest case Li had ever handled. But from the day the New Zealand government had belatedly informed Beijing of the problem, Sanlu became the concern of the top leaders of the country. Lawyers like Li, in such circumstances, were to be sidelined.

  Once the scandal became public, the Central Propaganda Department changed tack in an instant. The department in Beijing had not been directly involved in the original conspiracy to suppress the news about the tainted milk, even though its Olympics reporting restrictions had given Shijiazhuang every incentive to join in one. Strict secrecy was no longer an option. With the games out of the way, the department’s job now was to manage the news and guide public opinion, with two objectives in mind. The department had to make certain the fury of the aggrieved parents did not get out of hand and become a larger public political issue. And it also had to ensure the scandal did not taint the image of the senior leadership itself.

  To handle the legal fallout, another shadowy branch of the Party was brought into play alongside the propaganda department, a body known as the Central Politics and Law Committee of the Politburo. Li felt the committee’s influence as soon as he tried to mount a class action for his clients. The first call pressuring him to drop the action came from the All-China Lawyers’ Association. ‘Put your faith in the Party and the government!’ he was told. Soon after, he was called in for a meeting, for another instruction. ‘Don’t take these cases, and do not try to represent clients across provinces!’ The Justice Bureau in Beijing then got in touch. ‘If you take these kinds of cases, you must report them immediately!’

  The Lawyers’ Association, the Justice Bureau and indeed any legal body, all ultimately come under the control of the Politics and Law Committee. The control is exercised, backstage, out of public view, through the party cells that all legal bodies are required to maintain. The party secretary of the Lawyers’ Association, for example, was a government official from the Justice Bureau in Beijing. The city’s Justice Bureau sat under the Justice Ministry, which in turn reported ultimately to the Politics and Law Committee. ‘It is the spider at the centre of a web,’ said Li, of the committee, ‘connecting the police, the prosecutor’s office, the courts and the judiciary.’

  Li is a softly spoken Christian who displays his faith on a wristband, saying: ‘Pray for China.’ Each time he was told to drop the case, he says he argued back. ‘They are not happy that I have organized these private cases,’ he said. ‘They do not like private involvement at all.’ Li had no direct contact with the Politics and Law Committee. Such party bodies prefer to exercise their control at one remove, through government organs or state-controlled professional associations. Li said he had been told by a local journalist about the committee’s directives to rein the lawyers in. The conversation between Li and the journalist was an only-in-China moment, in many ways. The journalist was in possession of important, newsworthy information about party manipulation of the legal system. But while he could pass it on privately to Li, the party’s propaganda wing ensured he could not report it in his newspaper. Gradually, Li said, the lawyers around the country who had volunteered to take the case began dropping out. Some succumbed to threats that their licences would be removed. Most discontinued their actions once the courts throughout the country refused to take the cases.

  The Politics and Law Committee, like the propaganda department, had a delicate political process to manage. They needed to ensure that justice was seen to be done, without letting the legal process develop a life of its own. The committee contrived first to get the trial of Ms Tian and her main co-defendants from Sanlu out of the way in a single sitting. In a day’s work that would have tried the hardiest sweatshop labourer, the three-judge panel opened proceedings at 8.30 a.m. on 31 December, and did not rise until nearly fourteen hours later, at 10.10 that evening. The sentences, for Ms Tian and more than twenty other people charged with a variety of offences, were all announced on a single day as well, a month later.

  While the process was expedited, to limit the opportunity for victims’ families to protest, the courts’ verdicts were harsh. Three of the peddlers of the ‘protein powder’ received death sentences, one of them suspended. Ms Tian got life. The Shijiazhuang mayor was sacked, along with a number of senior officials immediately under him. The party secretary of Shijiazhuang, the most powerful official in the city, was also eventually removed from office. And Li Changjiang, the head of the food inspection service who earlier in the year had fumed about foreign criticism of Chinese product safety, was forced into an ignominious resignation. Tens of thousands of families received compensation according to a payment schedule drawn up by the government. As a final gesture to simmering public anger, the Supreme People’s Court in Shijiazhuang agreed to hear the lawsuits from five families, as a way of finally putting the issue to rest.

  Soon after the Sanlu verdicts, a businessman in the US state of Georgia was arrested for knowingly selling contaminated peanut products, leaving hundreds ill and a number of people dead. The Chinese state media, stung by blanket foreign coverage of the Sanlu scandal, reported the Georgia case with glee. Nearly 600 people had fallen ill after eating the company’s products. Eight deaths had also been tied to the strain. The Xinhua headline drove the point home. ‘Fully Aware Product Could be Contaminated with the Salmonella Virus; Continued to Sell Products; Agencies in Charge Discovered the Situation but Did Not Investigate.’

  Behind the resentful tone of moral equivalency of the Xinhua report lay a missed opportunity that the Sanlu case contained for the Chinese system. The human factors that drive cover-ups, of greed and self-interest, combined with an indifference to the consequences, are evident no matter where they occur. Institutions are fallible, and manipulated to corrupt ends, all over the world. The Sanlu case displayed more than the foibles of ordinary people trying at great cost to save their careers and businesses, however. From start to finish, the scandal provided a lesson about the Communist Party’s subterranean exercise of power, against its citizens, and also against itself.

  In times of national crisis, the Party can choose to flaunt its leadership and its ability to mobilize resources on a scale few states in the world can match. The Party responded like a whirlwind after the 7.9-magnitude Sichuan earthquake in May 2008, for example, which killed nearly 90,000 people and left millions homeless. Wen Jiabao, the Premier, was on a plane to the disaster zone within hours of the quake. Thousands of officials, soldiers and ordinary citizens were marshalled in an instant for relief work. ‘Faced with such a grim natural disaster, the Party and the government are the powerful social mobilizing force of the socialist state,’ the People’s Daily said. ‘Any hardship can be overcome.’

  The authorities’ relief efforts had initially been surpassed by the community itself. Rich entrepreneurs, fledgling NGOs, private companies and even individual citizens, in an unprecedented, spontaneous surge, had rushed to the quake site to set up independent relief efforts in such numbers that the authorities did not dare to force them to leave.

  A few weeks later, the Central Organization Department called an unusual press conference to enumerate the Party’s own achievements during the rescue mission, as if to set the record straight. The Party, which sees itself in the Marxist tradition as the vanguard of the people, had clearly been uncomfortable with the impression that its relief efforts had been bringing up the rear. One of the department’s vice-ministers, Ouyang Song, listed the Party’s contributions to the earthquake effort at the press conference as though he was reading monthly pro
duction statistics. Over 500 party committees of soldiers, close to 10,000 grassroots party bodies, 1,000 temporary party organizations and over 40,000 party members, all ‘had faced danger and difficulty without retreating’.

  The press conference, only the fourth in the organization department’s seventy-year history, was a strange affair. If Ouyang sounded like a machine politician boasting post-election about his get-out-to-vote effort, it was because after a fashion he was. The earthquake had paradoxically been a political triumph for the leadership, because of the way it had emotionally united the nation behind a single goal. But the Party’s sense of self-esteem still demanded it place on the record the work of its members in going to the rescue of their fellow citizens.

  Success has a single father in China, a maxim which often makes for improbable reporting. According to an official media dispatch from the scene of a mining accident in Henan province in 2007, the moment one rescued miner emerged out of the blackness into daylight, his first words were: ‘I thank the Central Party! I thank the State Council! I thank the Henan provincial government! I thank the people of the nation!’ Apart from the fact that the rescued miner made no reference to his family or loved ones, what is notable about this quote is that it captures perfectly the ruling hierarchy, with the Party at the top, followed by the central government, the provincial leadership, and finally, the people. The organization department’s boasting about earthquake relief, or, on a much smaller scale, the reporting of the mining rescue, are the exceptions that prove the rule. Usually, party bodies prefer to fly under the radar, as they did in the Sanlu case, to ensure the sinews of their power remain out of sight.

  In the Sanlu case, the Party’s multiple organizations, at a local and then central level, often at odds with each other but sometimes in concert, enabled the suppression of the scandal at every turn. Party bodies censored the news, usurped the management of the company, sidelined the board, and finally sacked and arrested the executives. When the victims mobilized to take legal action, party bodies intimidated the lawyers, manipulated the courts and bought off the litigants, before finally letting a handful of cases proceed. In the end, the Party also harshly punished the wrongdoers as it closed off the case.

  In every instance and at each step of the way, the Party’s actions were only reviewable through its own internal processes and never subject to genuine public scrutiny. Other than passing references to Ms Tian’s position as the party secretary, the Communist Party’s role was barely acknowledged at all. Such observant silences remain par for the course in twenty-first-century China. The tasks of managing cadres, business, the media and the law are all in a day’s work for the Party, whose rule over China, it insists, represents ‘the verdict of history’.

  The Sanlu crisis displayed the system at its secretive, cabalistic worst. When it came to the private sector in China, which has blossomed in tandem with the state in the past three decades, the Party was more than happy to take its share of the credit. The Party threw out its longstanding practice of operating backstage and made sure to advertise its presence in private companies out front, in public. Far from being in conflict, the Party wanted to ensure that the private sector and officialdom were seen to be working in harmony, for the mutual benefit of all.

  7

  Deng Perfects Socialism

  The Party and Capitalism

  ‘Deng Xiaoping was wise. He perfected socialism. Before Deng, socialism had many imperfections.’

  (Nian Guangjiu, entrepreneur)

  ‘I appointed myself party secretary of Haier. So I can’t have any conflicts with myself, can I?’

  (Zhang Ruimin, the chief executive of Haier, China’s largest whitegoods manufacturer)

  ‘Government support for private enterprises is less than that given to the state sector. We take this as a rule of nature.’

  (Liu Yongxing, the East Hope group)

  The man known across China as ‘Mr Idiot Seeds’ pointed out of the window of his modest two-storey shop and storage centre at the towering office complex next door. ‘I wasn’t the only one in jail,’ he said. ‘Everything you can see around you is owned by the guy who was in there with me.’

  Nian Guangjiu, his real name, has had lots of time over the years to make friends in prison. He was jailed first in 1963 for engaging in illegal speculation, by running a private fruit stall in his home town of Wuhu, in central Anhui province. During the Cultural Revolution a few years later, his old capitalist rap sheet alone was enough to put him behind bars again, this time as a ‘cow demon and snake spirit’. After the suppression of the 1989 protests, hardliners in the Party lumped entrepreneurs in with the student demonstrators as subversive threats to the state and sent Nian back inside for the third time. In the cell with him was a fellow serial entrepreneur, who emerged from prison to build the office tower next door.

  In the years when he was free in the late seventies, Nian had opened a shop selling an affordable, everyman’s snack, the roasted sunflower and pumpkin seeds that Chinese chew meditatively, on and off, during the day. He bought in bulk from farmers and sold cheaply to consumers across the country. The same showy rebellious streak that had landed him in trouble with the authorities when he was growing up soon helped transform what could just have been a simple street-stall business. Nian’s illiterate father had always been known as the local ‘idiot’ in his district. Nian, who was also illiterate, was called the ‘little idiot’, or ‘idiot junior’, in turn. Grasping for a sales pitch for his seeds, he simply named them after himself. On the packet, next to a beaming picture of Nian, he added a tag-line to flesh out the product name–‘Idiot Seeds: The Choice of Clever People’. The brand quickly became famous. Within a few years, he had a thriving business, more than 100 employees and his first fortune.

  Far from being thrilled with Nian’s success, the Anhui party chiefs who managed one of China’s poorest and most populous provinces were initially petrified. Trumping any concerns about the parlous local economy, they fretted that they might be committing a political error by allowing a private company like ‘Idiot Seeds’ to trade. Anhui sent report after report to Beijing about the ‘Idiot Seeds’ phenomenon, asking whether it should be shut down for being capitalist. Finally, Nian’s business landed on the desk of Deng Xiaoping himself in 1984. Soon after, Deng delivered a crafty rejoinder, in keeping with the wild economic experimentation he was encouraging at the time. Closing down the business would make people think the open-door policy had changed, he told the then ruling council of elders. Let’s look at it again in two years. ‘Are we really afraid,’ Deng said, ‘that “Idiot Seeds” will harm socialism?’

  By the time I met him, in late 2008, Nian had morphed from subversive capitalist into a state-sponsored business celebrity. The official from the local propaganda department who greeted me at the entrance to Nian’s store was confirmation alone of his elevated status. Chinese officials habitually harass foreign journalists interviewing citizens about past injustices and see them out of town. Instead, the Wuhu official offered me a banquet, a city tour and help with anything else I needed. With the national commemoration of the thirtieth anniversary of Deng’s open-door policy just a few months away, the city had adopted Nian as its homegrown mascot for the entrepreneurial economy.

  Now in his seventies, Nian has the look of an ageing matinée idol, with a deep farmer’s tan, loose, longish hair, and a faux-Nehru jacket lined with chinoiserie-patterned silk. His success had not rid him of his small-town habits. Every so often, he would noisily clear his throat and spit heartily on the office floor, as casually as if he were scratching his nose. His raspy voice and crackly laugh, toned by years of chain-smoking, was overlaid by a full-blooded local accent which made him difficult to understand. When he first started talking about his life, I wasn’t sure if I had heard him correctly. Had he just denounced Mao for his ‘enormous crimes’ and killing countless people? The official from the propaganda department laughed nervously. Don’t take him too seriously, he
said.

  As Nian warmed up, he began to sound less like a rebellious businessman and more like a party official. Slogan was laid upon slogan, punctuated by long pauses, and delivered in a booming voice. Each pronouncement finished with a screeching, rising inflection, as if someone was sticking a pin in his behind as he approached the end of the sentence. Anyone who has sat through speeches by top leaders in the Great Hall of the People will recognize this technique, of the rising pitch used to signal to the audience it is time to applaud. Nian hailed the ‘third plenary session of the eleventh congress’, in 1978, as the meeting which had ‘invigorated China’s fate’. (Applause.) He declared the Chinese economy to be in ‘good shape and developing in an orderly fashion’. (Applause.) He pronounced that the legal system had been modernized and freed from government interference. (Applause.) As he went on, the most striking thing about Nian wasn’t his occasional denunciations of the old Maoist system, but his praise for the Party, most of all for his hero, Deng Xiaoping. ‘Deng was wise,’ he said. ‘He perfected socialism. Before Deng, socialism had many imperfections.’

  Nian’s statement–that ‘Deng perfected socialism’–captures in three words the topsy-turvy world that the Party and the private sector have come to inhabit in China. The Party, which espouses socialism, spends much of its time deferring to the market. Entrepreneurs like Nian, who worship the market, are careful to defer to the Party. In this environment, it is little wonder that the dividing line between what is public and what is private in China is often still impossible to detect. After coming to power in 1949, the Party closed private businesses and confiscated their assets. Over time, they criminalized private commercial activity, although the execution of the policy waxed and waned with political cycles and in different regions. The suspicion harboured towards entrepreneurs lingered long after Deng’s market reforms in the late seventies. As late as July 2001, Jiang Zemin’s decision to allow entrepreneurs to officially join the Party stirred a rare public split among the leadership and deep disquiet in the conservative rank and file. Deng, and Jiang after him, grasped what many of their conservative opponents never did–that the Party had much in common with private entrepreneurs, who disliked democratic politics and independent unions as much as they did. The Party’s authoritarian powers not only kept workers in line. They also bestowed on policy-makers a flexibility that politicians in democratic countries could only dream about. Even by the standards of a capitalist economy, the Party could be unusually pro-business, as long as the state got a cut along the way.