Open Alliance of Power and Money Meets in Beijing

The Communist Party’s 18th Congress helps turn power into wealth

By He Qinglian.
Translation first appeared on Epoch Times.

The United States presidential and general elections and the Communist Party of China’s (CPC) 18th Party Congress, which commences its once-in-a-decade process of installing new leadership, were held almost simultaneously this year.

The Chinese regime’s propaganda has been saying that the U.S. capitalist system is money-driven politics that favors the big bourgeoisie and the rich, whereas China is a socialist country whose politics favor the overwhelming majority of the people. The composition of the CPC’s 18th Congress tells a different story, one involving an alliance of power and money.

Political Elites and the Rich

The state-run Xinhua News Agency recently published an article by China Economic Weekly titled “Red Entrepreneurs.” The article reported that, according to incomplete statistics, 145 out of the 2,270 Party delegates are CEOs of state-owned enterprises, banks, and financial institutions, and of private enterprises from provinces and municipalities.

Bloomberg News published an article in February, titled, “China’s Billionaire People’s Congress Makes Capitol Hill Look Like Pauper,” saying, “The net worth of the 70 richest delegates in China’s National People’s Congress, which opens its annual session on March 5, rose to 565.8 billion yuan (US$89.8 billion) in 2011, a gain of US$11.5 billion from 2010, according to figures from the “Hurun Report,” which tracks the country’s wealthy. That compares to the US$7.5 billion net worth of all 660 top officials in the three branches of the U.S. government.”

The 18th Party Congress is hosting political and military elites, along with rich businessmen.

Marketization of Power

Through messages circulating on Weibo, China’s twitter-like platform, the Chinese people came to realize a cruel reality about the elections in the two countries: the United States is more like the socialism that China claims to be, while China features crony capitalism.

In the United States, rich peoples’ wealth is mainly attributed to personal capabilities. Bill Gates is a successful player in the computer industry. Internationally renowned investor George Soros is a Hungarian immigrant. Michael Bloomberg, the New York City mayor who accepts a symbolic salary of one dollar per year, had already built a media empire before he assumed the office of mayor. Their stories demonstrate the advantages of the U.S. social system.

In China, however, wealth is closely tied to power behind the scenes, and political power has been a magic wand that creates wealthy tycoons.

The marketization of power in China has one special characteristic, that is, power relies on the market to realize profit, and the two operate closely together to make power profitable.

The most convenient way to do this is to have two systems in one family, which means the head of a family works in a government agency, whereas the wife, offspring, and siblings run businesses to cash in on the power.

The feast of wealth began in 1990s in China, and now red aristocrats can be seen in every sector, including electricity, oil, real estate, the stock market, the financial sector, and so on. According to reports on the Internet, about 200 Chinese political families have monopolized China’s wealth.

A diplomatic cable leaked by WikiLeaks in August 2011 said former Chinese Premier Li Peng and his family controlled all electric power interests, Politburo member and security czar Zhou Yongkang and his cronies controlled the oil interests, while Premier Wen Jiabao’s wife controlled China’s precious gems sector.

Over 130 state-owned enterprises under the state-owned Assets Supervision and Administration Commission of the State Council are said to be operated or managed by people who come from an official family background.

In fact, the biggest problem in China today is not the gap between rich and poor, but that the regime’s insiders took the nation’s wealth hostage long ago.

There is no doubt that these “red entrepreneurs” will become an important force influencing China’s economic policies in the future. They will participate in policymaking, especially the heads of some of the monopolized industries in important sectors vital to the national economy and peoples’ livelihoods.

For example, the will of Party delegates from oil, electrical, coal, and chemical industries can be easily transformed into the nation’s industrial and social policies.

The Three Represents

Throughout the post-Mao era, the CPC has been pondering how to explain the distribution of wealth under one-Party dictatorial rule. The reality of the alliance between power and money has put the CPC in an awkward situation.

However, former Party head Jiang Zemin’s contribution to communist ideology, called the “Three Represents,” has helped free the CPC from this theoretical dilemma. It has changed the CPC from representing the three revolutionary classes of workers, peasants, and soldiers, to representing three key interests: the development of advanced productive forces (directed toward economic elites, urban middle class, intellectuals, and high-tech experts), the orientation toward an advanced Chinese culture, and the interests of the vast majority of the Chinese people.

The introduction of the “Three Represents” provided legitimacy for the CPC to build a new social foundation. Since then, the CPC has implemented new strategies to recruit economic elites (or capitalists) to join the Party. This strategy establishes institutional ties by way of industrial and commercial associations representing the interests of the economic elites, and thereby eliminating potentially challenging political forces.

U.S political scientist Samuel Huntington found that one of the main threats to an authoritarian regime is the “diversification of the elite resulting from the rise of new groups controlling autonomous sources of economic power, that is, from the development of an independently wealthy business and industrial middle class.”

The high degree of monopolization of national resources combined with the marketization of power has turned Chinese officials into people who are capable of “creating kings.”

Now the CPC has turned its Party Congress and the annual sessions of National People’s Congress and National Committee of the Chinese People’s Political Consultative Conference into institutional opportunities for political elites to meet with rich people, thereby effectively eliminating the potential threat from these economic elites and achieving an “elite republicanism.”