China's Internal Pluralism Is Nothing to Cheer About

Anne-Marie Slaughter has put out some interesting tidbits from a recent Singapore-based conference foray focused on China's future.

Slaughter, who just left her perch as Director of Policy Planning at the State Department, and is now back teaching at Princeton University, has joined The Atlantic as a correspondent.

The part that I found of most interest was this:

Instead of describing the Chinese political system as an "autocracy," some at the conference argued that we should think of it as a system of "internal pluralism," where the checks and balances are all inside the party and government structure. The Communist Party has 80 million members -- with a collective leadership of nine members, growing local power, and calls for internal party democracy, there is far more pluralism in the Chinese system than first meets the eye. This view of Chinese politics may well be overly sanguine, but it's an interesting perspective.

What Slaughter describes here is essentially the much neglected and often misunderstood model of Japan, at least pre-2001 Japan.

Japan's long-ruling Liberal Democratic Party (LDP) was for the most part a catch all party that ran Japan's political economy for fifty years and maintained "internal pluralism" via a factional system of competing groups -- usually organized around bosses but occasionally jousting over the shades of gray on some respective policy issue.

Japan's keiretsu -- or families of firms in large scratch-each-other's back networks -- supported this or that faction in the LDP, producing a highly successful, structurally corrupt model of economic development that showed remarkable resilience through Japan's high growth economic period.  Japan had the outward facade of democratic practice, but it probably wasn't a true democracy until the decisive August 2009 win of the then-Yukio Hatoyama led Democratic Party of Japan over the LDP.  Since then, Japan's government has been tied in knots -- and real democracy looks much less efficacious than the 'internal pluralism' that the LDP managed during the era of Japan's fake democracy.

Chinese industrial conglomerates are emerging as huge zaibatsu or keiretsu look alikes -- based not around banks and trading houses as in the case in Japan but around Chinese military divisions around the country.

The Chinese Communist Party -- which is about to promote and demote from its current roster of leaders in the 18th Party Congress set for 2012 -- has many similarities to Japan's LDP, including its embedded corruption.  But as in the case of Japan, the results of self-dealing corruption largely remain in the country rather than escaping to Swiss bank accounts as often happened with the style of 1950s era corruption seen in Vietnam or the Philippines.

So, the lesson is that internal pluralism is probably better than no pluralism -- and at least in the case of Japan, more effective in achieving growth and economic prosperity than genuine democracy.  But it also means that China, like Japan, is going to carve up its market in favor of internally competing domestic champions, with foreign firms relegated to the periphery.

Internal pluralism may sound good -- but it's echo effects are essentially to block the outsider and maintain arrangements not through fair and overt competition but rather through back room deal-making.

This is going to be a real problem when the world is waiting to see a slightly more selfless China emerge, one that is willing to lose some arenas of competition to preserve the stability of the global order.  Internal pluralism doesn't get China where the world needs it to be.