By David Bandurski — Given state propaganda controls, hard-hitting coverage of the melamine-tainted milk scandal is now impossible for China’s media. But facts lurking in reports from a handful of Chinese newspapers in recent days beg serious questions about the government’s handling of a scandal China’s leaders want very much to put behind them.
Specifically, there are indications that dairy companies and retailers are now employing aggressive sales promotion campaigns to offload products manufactured in the months before the scandal came to light — products that could be harmful despite government reassurances.

[ABOVE: The October 9, 2008, issue of Nanfang Daily includes coverage of widespread sales campaigns for dairy products in China.]

A report in Thursday’s Information Times newspaper said Mengniu and Yili, two dairy companies at the center of the tainted milk scandal, were pulling ice cream from store shelves in Guangzhou this week. As the report points out, Hong Kong announced back on September 18 that it had found high levels of melamine contamination in eight of thirty products tested from Yili Industrial Group.
What was Hong Kong’s response? First off, the SAR recalled all Yili products, not just those eight types that tested positive for contamination. Here is the rest of the response as reported by the BBC:

“I call on the public not to consume any products of this brand,” said Constance Chan, controller for the territory’s Food Safety Centre.
She added that the government had asked Yili to stop supplying products to Hong Kong.

The Information Times report suggests — although it cannot state so explicitly — that even now, almost a month after the scandal broke, dangerous products are still on shelves in Guangzhou.
The report also lets us now that when Yili ice creams finally were “pulled from shelves” (下架) in Guangzhou this week, they were not being “recalled” (召回) for quality concerns. Instead, Yili representatives told the Information Times, the products were being pulled because the company was carrying out a comprehensive “re-labeling” campaign.
An unnamed “industry insider” speculated to the newspaper that the Mengniu and Yili products were in fact being pulled as a result of the test results announced in Hong Kong. If that is true, why has it taken so long to remove the products? And why, again, are the companies the one’s taking the initiative?
China’s leaders are reassuring the public that milk products are now safe. What does that mean, specifically?
It means that new dairy products — those manufactured after September 14 — are safe, as indicated in this Xinhua story.
That sounds great. But how is it that not ALL products possibly contaminated with melamine have been systemically removed from store shelves across China?
This question looms large between the lines of the Information Daily report, which also describes the aggressive sales campaigns retail chains in Guangzhou are using to get rid of milk products manufactured before the all-important date of September 14.
After describing city-wide retail campaigns slashing prices on dairy products by around 25 percent and offering everything from “buy one case get one free” to “buy one case get three free,” the Information Daily reporters use the voice of a consumer to deliver a key fact:

Even as dairy companies are determined to find a market with strong sales campaigns, the reporter noticed that perhaps no one pulled out money to actually buy. In the space of ten minutes, the reporter saw eight different customers drawn by the “big sale.” But after they looked carefully they lowered their heads and walked away. A Ms. Wu said angrily to the reporter: “These liquid milks were manufactured in July and August, before they even found melamine. Who would buy that? No wonder they’re so cheap!”

For related news on sales campaigns for major milk brands, readers can turn also to this Thursday report from Guangdong’s Nanfang Daily, which quotes one expert as saying the government must be strict in its examination of dairy inventories that are coming out of store rooms after weeks of dismal sales.
Given the practical limitations of product testing and the fact that problems are known to have been widespread (thousands of milk collection stations across China were suspected of contamination), it is impossible for the government to suggest that products on shelves are safe in lieu of effective recalls.
Responding to the Information Times story on QQ.com, Web users expressed anger and frustration:

From 119.141.42:
Putting problem milk out there on sale. Ha! “Meng”niu is right! [“Meng”, “蒙”, is a synonym for “cheat”]. But it seems you can’t cheat those you’d like.
From Shenzhen:
I went to the supermarket to look for myself, and most of the milk products are from before September. And they say nothing contains melamine now. Who would believe that?
From Hezhou City:
Mengniu still has the nerve to say it’s “changing out its packaging.” Mengniu, Mengniu, you cheated once and still you’re still going strong.
From Guangzhou:
If Hong Kong hadn’t discovered problems in its inspections, I don’t think you [companies] would ever have come clean!
From Shanghai:
These products are just now being recalled? Didn’t Hong Kong find problems with them earlier?
From 65.185.139.*:
Look at how much time has passed, and still they talk about “urgently” [removing these products].
From Guangzhou:
Over the last week in Guangzhou, on North Guangzhou Avenue (Meihua Garden) [广州大道北(梅花园)], there’s been a store holding a huge sale on problem milk!! Mengniu, Sanlu are all on sale. This store is called Happy Purchase (乐购).
From 58.62.97.*:
I want Yili, Mengniu and all the rest to go bankrupt! I’m staunchly against them!
From Shenzhen:
I suppose you could buy it for bathing, or for washing your feet.

UPDATE (October 14, 2008):
“China recalls all dairy products over one month old: state press,” AFP, October 14, 2008
[Posted by David Bandurski, October 11, 2008, 12:01am]

By David Bandurski — CMP wrote last week about how a toxic media environment in China contributed to the melamine-tainted milk powder scandal that continues to ripple across the globe. And in Tuesday’s edition of The Wall Street Journal Asia, I argued that the milk powder scandal underscored the fact that China’s press controls are a global problem. [Frontpage image: package label for milk powder manufactured by Sanlu Group, a company at the center of the scandal in China’s dairy industry.]
There are clearly limits to how far China’s media can run in exploring the cover up of the dairy industry scandal and the media’s own share of the responsibility. No media can be expected to discuss directly the role of press controls, or the strict climate of “positive propaganda” enforced in the run-up to the Beijing Olympics.
However, a number of Chinese media continue to discuss more vaguely the question of “media conscience” and the role of corporate public relations in the milk powder scandal.
One of the best examples yesterday came from Hunan’s Shaoxiang Chengbao. The column, featured on page two, is written by Meng Bo (孟波), and is called “N-number of Ways the Media’s Conscience Can Be Bought.”
The editorial likens the way public relations and the pursuit of profit have generally poisoned China’s news media to the dangerous use of the chemical melamine in the manufacture of milk products.
Is it time to coin a new catch phrase for China’s uniquely toxic combination of power, profit and public relations in the media? . . . How about “melamedia”?
Key portions of the Shaoxiang Chengbao editorial are included below:

Pulitzer once said: “A journalist is the lookout on the bridge of the ship of state.” This lookout, however, is routinely blindfolded.
[NOTE: The remainder of Pulitzer’s quote goes: “He notes the passing sail, the little things of interest that dot the horizon in fine weather. He reports the drifting castaway whom the ship can save. He peers through fog and storm to give warning of dangers ahead. He is not thinking of his wages or of the profits of his owners. He is there to watch over the safety and the welfare of the people who trust him.”]
The blinding of the media is customarily achieved by the forcing on of blindfolds through political power. But another way is [for the media] to be bought by power. The Nandan and Fanzhi mining disasters are classic cases in point.
The Sanlu milk powder case once again revealed the sale of the media’s conscience, and a new form of blindfolding. On September 12, a post called “Suggestions on Sanlu Group’s Public Relations Crisis” (三鹿集团危机公关建议) made the rounds on the Web. According to the post, the public relations firm representing Sanlu Group recommended that the company sign a three million yuan advertising deal with [search engine] Baidu and arrange for the deletion of negative news. Baidu has since issued a statement saying they rejected the proposal by Sanlu’s public relations company, and that they have not suppressed search results.
Actually, “news deletion” is just one of many “unspoken rules” in the selling out of the media’s conscience to public relations firms. Beneath this tip of the iceberg is a vast continental shelf [of dirty deals] that would meet with public disapproval.
The most commonly seen form of selling out is the sale of soft content. The genius of soft content lies in this word “soft.” It is like a needle hidden in softness, there but concealed, an invisible menace. By the time you’ve realized it is a piece of soft content you’ve already fallen into the well-laid trap of this “soft advertisement.” It seeks to make an impact by constantly impinging on your attention, like a soft but permeating rain.
Soft advertisements are often buried within the news, and at times are indistinguishable. Because they have broken the boundaries between news and advertising, readers feel they can readily trust them . . .
This “peaceful evolution” of public relations into news is getting worse and worse. The “news safety” (新闻安全) resulting from this “peaceful evolution” of the media is more frightful even than “food safety.” The impact it has on the conscience of the media is more poisonous even than “melamine.” “Melamine” constitutes an open threat, and it can be more easily avoided. But the “melamine” that poisons our news is hidden, and therefore much harder to avoid.
The widespread use of “melamine” in China’s news has resulted in some media in the loss of even the most rudimentary notions of truth and fairness. As media competition intensifies, the exchange between news and money has already become a conscious choice for some media . . .

[Posted by David Bandurski, October 9, 2008, 1:21am HK]

Media commercialization, which accelerated in the 1990s, has been the primary engine driving change in China’s media, and has given rise to a group of professional newspapers and magazines, including Southern Weekend, Southern Metropolis Daily and Caijing. Through in-depth reporting and commentary on current affairs, these media have championed universal values in China. Today, however, the forward progress of professional media and the universal values they espouse is being challenged by the rise of a “new nationalism” in China.
LECTURE: “Fighting the Undertow of China’s ‘New Nationalism'”
SPEAKER: Xiao Shu (Chen Min), columnist for Southern Weekend
WHEN: October 13, 2008 (Monday), 5:30pm – 7:00pm
WHERE: Foundation Chamber, Eliot Hall, The University of Hong Kong
The lecture will be given in Mandarin, no interpretation provided.
About the Speaker:
Chen Min, best known for his work under the penname Xiao Shu, worked for nearly two decades as an academic historian before entering China’s media. He served for several years as managing editor of China Reform magazine before joining the editorial page at Southern Weekend in 2005. He is the author of several books, including The Truth About Liu Wencai.

By David Bandurski — In news splashed across the major Chinese Web portals today, the official Xinhua News Agency reports that 20 officials have been taken into custody over the July cover-up of a mine explosion in Hebei in which at least 30 workers were killed. According to the Xinhua release, officials and local mine bosses in Hebei’s Yu County worked together to suppress news of the explosion, and secretly buried the bodies of the dead in a neighboring county.
The news is the second national embarrassment for officials in Hebei this fall, after reports last month revealed that local officials in the province covered up problems in July with milk powder manufactured by Shijiazhuang-based Sanlu Group, the company at the center of China’s ongoing dairy scandal.
The explosion was at least the second major accident to occur in Yu County in the last nine months. In December 2007, eight miners were killed in a mine collapse that received only scant coverage by Xinhua. The 2007 accident was not mentioned in today’s Xinhua release.

[ABOVE: Screenshot of today’s news page at QQ.com, headline on mine accident cover up indicated in red.]

Workers from the Lijiawa (李家洼) Mine where the accident occurred came from Sichuan, Chongqing, northeast China and other areas, the Xinhua report said.
This accident and cover-up bears striking resemblance to the “Gold Nugget Case” reported by China Youth Daily journalist and CMP fellow Liu Chang in June 2002, in which eleven reporters, including four from Xinhua, were found to have accepted bribes from mine owners and local officials in exchange for keeping quiet about an explosion in which 37 workers died.
There is no indication yet from the Hebei case whether journalists have been implicated in the cover-up, and details about how the case came to light after more than two months have not yet been released.
Like the more recent Hebei case, the explosion in the “Gold Nugget Case” was caused by the unlawful storage of explosive materials, and the bodies of dead miners were eventually located at makeshift burial sites and in abandoned mine shafts.
FURTHER READING:
July 2008 Chongqing Evening Post coverage of the cover-up of a mining accident in Chongqing
July 2008 Legal Daily coverage of the cover-up of a mining accident in Shanxi province.
March 2008 Xinhua coverage of the cover-up of a mining accident in Heilongjiang province
[Posted by David Bandurski on September 7, 2008, 11:12am HK]

Throughout Chinese history, those relying on violence to survive have comprised an important part of society, and have in large part determined the rise and fall of dynasties. How can we understand their behavior? How can we calculate the costs and benefits of violence? In this lecture, “Blood Reward: The Costs and Benefits of Violence in Chinese History,” the speaker’s unique exploration of these questions fills in a gap that has been neglected by economists and historians.
LECTURE: “Blood Reward: The Costs and Benefits of Violence in Chinese History”
SPEAKER: Wu Si, editor in chief of Yanhuang Chunqiu
WHEN: Friday, October 10, 2008, 5:30pm to 7:00pm
WHERE: The University of Hong Kong, Library Extension 9 (LE9)
The lecture will be given in Mandarin, no interpretation provided.
About the Speaker:
Currently editor in chief of Yanhuang Chunqiu magazine, Wu Si was formerly a top editor at Farmer Daily newspaper and Bridge magazine. He has written several books on history, including Unwritten Rules and Blood Reward.

By David Bandurski — In early August, as the stage was set for the Beijing Olympic Games and news about poisonous milk powder was being suppressed by corporations and officials, scores of print media and major Web portals across China ran a story about how the dairy brand Sanlu, now at the center of the dairy industry scandal, had been honored in an award campaign called “30 Years: Brands that Have Changed the Lives of Chinese.”
No one could have seen it so clearly then, but the “30 Years” award campaign, hosted by Huaxia Times in cooperation with China Central Television, Sina.com, China National Radio and other media organizations, was the plainest illustration of a media system gone horribly rotten, in which media are pushed to profit richly from falsehoods even as public interest news is systematically suppressed.

[ABOVE: Screenshot of Xinhua website coverage showing Sanlu PR manager Jia Jingxue (being held up) as an official bearer of the Olympic flame.]

The August 6 article reporting the “30 Years” honor bestowed on Sanlu was written by Miao Wanfu (苗万福) and appeared virtually everywhere — in scores of newspapers, at the website of the official People’s Daily, at Tianya, at Sina, and at a leading food industry website, to mention just a few.
And who is Miao Wanfu?
As the Oriental Daily and others have reported, Miao runs Sanlu’s internal public relations machine. But readers of the above “news” would never have guessed as much. Miao is identified — when a byline appears at all — as “correspondent Miao Wanfu” (通讯员苗万福).
On the People’s Daily website, Miao manages to come off as a staff reporter for the CCP’s top daily. And when the report runs subsequently at China’s leading food industry website it is attributed again to “correspondent Miao Wanfu.” We are told that the news comes from “People’s Daily Online.”
Misrepresentations of this sort are perpetuated across China’s media, where a lack of professional standards means “news” space is stuffed routinely with material from valuable advertising clients.
Here is “correspondent” Miao Wanfu again for People’s Daily Online, and for Hebei Daily. And here he is apparently reporting for the Central Propaganda Department’s Guangming Daily in June 2006 about the purchase of a stake in Sanlu by New Zealand’s Fronterra Group.
When Southern Metropolis Daily broached the topic last week of how Chinese media had contributed to the tragedy of China’s tainted milk crisis it was opening up a great big can of worms.
There are many hard and searching questions to answer. As the newspaper asked, why, before the breakthrough report by Oriental Daily journalist Jian Guangzhou (简光洲), did media suggest only that “certain brands” of milk powder had problems? And why, even as questions were beginning to surface about the safety of milk powder from Sanlu, were the company’s supposed contributions to the lives of ordinary Chinese being trumpeted so loudly.
Chinese media will not be given an opportunity to delve very deeply into these questions. The answers, after all, point to the ugliness of state media controls and the failure of media policy as well as to runaway commercial greed. The Chinese media’s role in the tainted milk crisis should remind us again just how poisonous the combination of rigorous press controls and unfettered commercialization can be.
Another Sanlu public relations manager, Jia Jingxue (贾静雪), is perhaps the best icon for the false messages drummed into the Chinese public about the company’s products even as news of life-and-death importance was being suppressed in the interest of corporate profits and China’s Olympic image.
As the Olympic torch — the “sacred flame,” as it was generally called in China’s media — made its way through the city of Shijiazhuang on July 30, Sanlu’s Jia Jingxue was official torch bearer number 36, right behind local cultural official Zhou Jian (周健), and the two of them struck the following memorable pose.

A simple Chinese-language search for “Jia Jingxue” makes it clear that she was one of the most prolific contributors to the relay of lies about Sanlu that were perpetuated throughout China’s media.
Take, for example, this August 2007 news report from China Food Quality News (中国食品质量报), the newspaper designated by China’s State Council as the primary vehicle for disseminating food quality and supervision policies and regulations.

The article, “Sanlu Group Promotes Use of Chinese Herbal Medicine to Prevent Illness Among Dairy Cows,” has a double byline that reads somewhat ambiguously: “China Food Quality News reporting (Jia Jingxuan reporter Shi Wei).”
While Chinese media insiders might understand that the odd placement of names before and after the title “reporter” suggests this is a corporate press release placed directly in the newspaper, ordinary readers would have no way of recognizing this. Jia Jingxue is effectively passed off as a staff reporter for China’s top newspaper devoted to issues of food quality and safety.
Why would China Food Quality News allow this to happen? Because Sanlu is as valuable as advertisers come.
For a glimpse at how profit-oriented this government-designated food quality mouthpiece has become, you need only visit their home page, a sloppy collage of corporate logos — Jiuhe Foods, Bright Dairy and Foods, Yurun, Wahaha, Shineway Group, and of course Sanlu, to name just a handful.
In July this year, just days before her participation in the Olympic torch relay, Jia Jingxue was writing for the local party daily in Shijiazhuang. The article appeared at several major Websites, including Sina.com, with a logo and link to Shijiazhuang Daily and a byline that read: “From this newspaper, Jia Jingxue reporting” (本报讯, 贾静雪).
On September 1, just two weeks before the scandal broke, Jia appeared as a reporter for the official Hebei Daily as well as the official Hebei Economic Daily. The article was called, “Sanlu is Honored with the Nation’s Only Science Progress Award for the Dairy Industry,” and it also appeared on the official Website of the Hebei provincial government.
The examples go on and on. As the screenshot below attests, the same Jia Jingxue has apparently also been a correspondent for the official China National Radio.

In sickening parallel to the quality problems plaguing other consumer products, examples like these are flagrant abuses of the trust of the Chinese media consumer. Poisonous milk has its parallel in poisonous media.
But the complicity of China’s media is doubly disturbing because it underlines a dangerous trend resulting directly from the party’s policy on media — an amplification of falsehood driven by the narrowest commercial ends attended by state news censorship that suppresses information that is critical to the well-being of ordinary Chinese.
As the tainted milk scandal shows only too clearly, this is a volatile combination.
Sanlu, no doubt, is just the tip of the iceberg. And unless the media are given greater freedom to monitor officials and corporations on behalf of the people, the cruel and cynical contrast between public relations ploys and hidden realities will persist.
Consider this chilling study in contrasts.
On August 12, a rosy piece of soft news on China’s top food quality website reported that Sanlu was generously giving free cases of milk powder to “Olympic babies” born on the first day of the Games.
The final line of the “news article” shouted out with exclamation points:

“Sanlu milk powder says ‘Let’s go!’ to the babies of the Olympics. Let’s use high-technology, high-standard and high-nutrition Sanlu milk powder to say ‘Let’s go!’ for the future of China!”

[Posted by David Bandurski, September 28, 2008, 2:15pm]

By David Bandurski — As China’s top quality inspection official sought to alleviate lingering concerns today over the safety of Chinese dairy products in the midst of the “Sanlu Milk Powder” scandal, Chinese media poked about the issue of who should bear responsibility and how, and Web users continued to voice their anger and frustration.
At China Youth Daily, columnist Liu Yibin (刘以宾) picked up on a phrase used recently by Premier Wen Jiabao in which he said dairy enterprises would, “without exception,” be “cleaned up” and dealt with firmly. Liu suggested that the best medicine for such enterprises might instead be to simply allow them to “die.”
“It would be best for enterprises lacking conscience just to die,” he wrote (没良心的企业最好死掉).

[ABOVE: “Mad in China” label photographed by Andrew Huff, available under Creative Commons license at Flickr.com.]

The sentiment struck a chord with many Web users.
“Well said! You’ve spoken what was in my heart!” effused one reader. “Take Mengniu, for example, and all of it poisonous milk . . . They should be punished severely. Their lives should not be spared, and their family’s assets should be seized. Only through such strong measures can we rid ourselves of all of China’s scourges!!!!!”
“Death to them all!” roared another user in Beijing.
“Let’s give these wolves the heavy punishments they deserve,” wrote another participant from Heilongjiang province.
Others turned with venom on the system and its policies, and raised the problem of corporate abuses in other areas of popular concern.
“We demand safe products, not products that are exempted from inspection. Such exemptions are ridiculously unreasonable,” wrote a reader from Liupanshui City.
“If you open your eyes a bit further you have to wonder how many of the foods you eat are harmful. The freaking problem isn’t this or that person, or this or that company, but the whole set of policies in effect. Sure, we can cross the river by feeling the stones. But what if there are no stones? Why don’t we look back? Must we continue to court death? Healthcare reforms are just one example.
“‘It would be best for enterprises lacking conscience just to die . . . ‘ China’s real-estate industry is the most lacking in conscience. They’ve robbed generations of their hard-earned money and brewed up hordes of housing slaves.”
Portions of Liu Yibin’s editorial in China Youth Daily follow:

“Death is Only Fair for Enterprises Lacking Conscience”
As he visited children affected by the “Sanlu Milk Powder” affair, Premier Wen Jiabao pointed out: “This incident reveals that government inspections were insufficient, and shows us that a number of enterprises lack professional and social morals, what we call in common speech ‘lacking conscience’.” We need not only to hold leaders accountable, he said, but we must “firmly clean them up and deal with them, with no exceptions.”
Enterprises lacking conscience would be best to die off – this is not a rash conclusion but one arising rather from good sense.
[Product problems are to some degree unavoidable]. . . However, tolerance has its basic preconditions or “bottom line,” and that is that product quality issues be accidental, local and fragmentary in nature. If enterprises are not active and deliberate [in product quality issues], these can be considered objective faults, and when problems do occur they should blame themselves out of a sense of conscience. In the event that they pass this bottom line, particularly if they are reduced to the point of acting willfully against conscience, then they cannot be forgiven, and they should die (应该死掉).
. . . The real problem is that no local government wishes that its enterprises die, particularly those that contribute to GDP and generate tax revenues. Some leaders knew [about problems] earlier on, and we can’t rule out that some few might have encouraged them. From this standpoint, in “firmly cleaning them up and dealing with them, with no exceptions” we must break through the barrier of local protectionism.

[Posted by David Bandurski, September 24, 2008, 1:53pm HK]

By David Bandurski — Since it was founded in 2003, the China Media Project has hosted close to forty journalism fellows, representing the very best of professional journalism and media scholarship in China. The research undertaken by our fellows has offered important insight into the process of change in China’s media, and into the problems that continue to face journalists on the mainland.
In cooperation with Hong Kong’s Cosmos Books, CMP has now published a collection of fifteen essays from former CMP fellows and guest speakers, offering original perspectives on everything from the launch of the feisty Southern Weekend to the rise of the Chinese weblog.

Copies of the book are now available at Cosmos Books locations in Hong Kong, and will be available soon on the publisher’s website.
Chapters in the book include: “Launching Southern Weekend,” by Zuo Fang; “Ten Years at Caijing,” an account of one of China’s leading business and current affairs magazines by its founder and editor in chief, Hu Shuli; “Libel Law in China,” and account by lawyer Pu Zhiqiang of the history of libel in China and his observations based on defendants he has represented; “Rebuilding and Renewal in China,” an essay by political reform activist and scholar Chen Ziming; “Gradual Reform in China’s Media,” observations on changes in China’s media by veteran journalist Yang Jisheng.
[Posted by David Bandurski, September 23, 2008, 3:30pm HK]

By David Bandurski — Continuing our series of Chinese voices on the topic of economic and political reform — see previous posts here and here — we offer readers a translation of a recent talk by former People’s Daily editor in chief Zhou Ruijin (周瑞金). Zhou is best known to most as “Huang Fuping” (皇甫平), a nom de plume he used to pen a series of essays in 1991 that had a decisive impact on the debate over China’s future path of development.

[ABOVE: Chinese flag photographed by Philip McMaster available at Flickr under Creative Commons license.]

At the outset of the 1990s, following the June 4, 1989, crackdown on democracy protesters in Beijing, China was thrown into internal political turmoil over the direction of reforms. There was a resurgence of leftist elements within the Communist Party who resisted economic reforms as part of a general charge against liberalization (自由化).
The essays of “Huang Fuping” voiced strong support for Deng Xiaoping’s reforms and answered the leftist debate over whether China’s reforms were really “surnamed She (socialism) or surnamed Zi (capitalism)” (姓社还是姓资). Zhou Ruijin was serving at the time as deputy editor in chief of Shanghai’s Liberation Daily.
On September 6, Zhou Ruijin spoke in Guangzhou as part of the Lingnan Auditorium Series (岭南大讲堂). In his talk Zhou discussed political reform and “institutional renewal” as the heart of China’s latest round of social and political debate over the direction of reforms.
Portions of Zhou Ruijin’s talk follow:

Guangdong is on the front lines of reform and opening, and Guangdong’s reformers are bold, not afraid to be the first to make a move. From Comrade Ren Zhongyi (任仲夷) to Comrade Yuan Geng (袁庚) — all of these characters form a whole generation of reform leaders with a strong sense of idealism and possessed of strong contemporary political awareness. Guangdong’s reforms are again been passed along, although they hang precariously by a thread. This year Premier Wen Jiabao came to Guangdong on an inspection visit and gave his hearty approval to the latest round of Guangdong’s though liberation movement, and he talked about new reform tasks that needed to be tackled. Here once again is the hope that Guangdong will fulfill its longstanding role as a window, model and experiment for the rest of the nation, that its soldiers will march at the front of the formation, that it will blaze new trails.
Investigations into China’s third major debate over reform
The achievements of market reforms over the past 30 years have been witnessed by everyone. But market reforms have also accumulated a number of problems, and in 2004 a major debate broke out. At that time some people seized on the loss of state-owned assets in the process of state enterprise reform, and they used these extreme cases to deny the entire process of enterprise reform. At the same time they took exception to housing reforms, education reforms and healthcare reforms. As these problems touched on issues of immediate concern to the rights of ordinary people, they really reverberated. This round of [social] debate is different from the previous two debates over the commodity economy (商品经济) and the market economy in that it is not primarily ideological in nature, but rather about very real questions of popular interests and livelihood, and so debate has persisted much longer.
In January 2006 I wrote a piece called “Reforms Cannot Be Shaken.” I felt that on the problems we are now facing the two sides of the debate were not greatly at odds. I also acknowledged six problems with market reforms. First, there is the widening of the three big gaps, between domestic regions, between the city and the countryside, and between rich and poor. Figures released by the World Bank show that China’s Gini coefficient has risen from 16 percent prior to reform and opening to 47 percent, surpassing not only the international warning line of 40 percent but surpassing that of all developed nations. Secondly, social undertakings been severely impeded. In the process of economic development, social undertakings have been overlooked. Work in healthcare, education and culture, for example, have fallen behind. The battle against SARS in 2003 made this even more obvious, exposing the weakness of healthcare infrastructure in the countryside. In 2004, the central party promoted the idea of people-based and scientific development, and this offered a new view of development that is comprehensive, coordinated and sustainable. It is not only the economy that must develop, but also politics, society and culture. Social and economic development have to go hand in hand . . . Only in this way can we achieve sustainable development. Everyone has witnessed the change in recent years, as GDP has grown rapidly and tax revenues have expanded, that many areas have built huge buildings and renovated old city neighborhoods. Government buildings have been erected with lavishness, but education, health and culture have not been given the priority they should. Many rural children cannot attend school, many urban and township residents cannot afford to buy homes and endure poor living conditions, etc. In particular, a social safety net has not yet been established. This has brought about the third problem, which is the prominence of problems of basic livelihood. For example, difficulties finding employment, going to school, seeing the doctor, finding a place to live, growing crime, etc., issues that concern ordinary people — all of these are accumulating, and cannot be resolved in one fell swoop. The fourth issue is that our method of development is rough and unrefined. A high-level of input and consumption has brought serious waste of energy, raw materials and assets. Figures in 2006 told us that while we produced four percent of the world’s economic output, we consumed 32 percent of the world’s steel, 40 percent of its concrete, 25 percent of its aluminum, 23 percent of its copper, 30 percent of its zinc and 18 percent of its nickel, and 31 percent of new demand for oil was generated by China. Fifth, we have ecological destruction and pollution of the environment, and one particularly serious problem is the shortage of potable water. The sixth problem is the spread of corruption, of collusion between officials and business interests, of exchange between money and power. The general mood of society is poor, and issues of crime and safety still need to be dealt with.
Both sides of our major debate have the same view of these six problems, but they disagree as to their causes. One side believes that they are a direct result of market reforms, that having a market economy necessarily means that gaps will widen, that the divide between rich and poor will expand, and corruption become rampant. The other side believes that market reforms have not yet been soundly implemented, that the problem is not the general move in the direction of a market economy but rather problems in the specific route chosen to reform, that power has interfered in the market, that power and capital have combined forces, and this has widened the wealth gap and brought the spread of corruption. That is to say, that these problems arise from lagging political reform. In my piece “Reforms Cannot Be Shaken,” I wrote from a theoretical perspective about major shifts in the nature of key problems, that the government’s system for administrative management had not changed, that the shift had not yet been made toward a public service model of government, realizing that after basic material subsistence issues had been resolved we needed to go further in providing fair and effective public goods, such as education, healthcare, housing, pensions, judicial fairness, information symmetry, democratic rights, etc. And so I said that we are right now “holding the bowl level with both hands to eat meat” (端起碗来吃肉), suggesting we have resolved the problem of food and clothing but we still “set down our chopsticks to curse our mothers”, meaning that it is still tough for us to get work, find a home, afford the doctor, get an education, find justice under the law, and we still do not have transparent information, or the right to participate or express our views, etc. This is the result of market reforms not going far enough.
After that essay was published it found favor with the central party, and once they had looked into its background (发表背景) they expressed immediate support. Not long after, in early March, as the “two meetings” were going into session, President Hu Jintao visited with the Shanghai delegation and gave a speech called, “We Must Unshakingly Promote Reform and Opening,” and he said we must improve the scientific basis of reform and opening decisions and raise coordination [with other pressing issues] of reform and opening moves. He was talking about letting all people taste the fruits of reform and opening. This is the note the central party has struck in this third major debate.
Changing methods of development to break through development problems
So why is it that market reforms have accumulated so many problems along with their achievements? There are now many different analyses of this question from a theoretical perspective, and most boil down to the basic point that we have only been doing market economics but have not commensurately carried out political reforms, that the reallocation of resources has not placed the market in the leading position but has allowed unchecked power to enter the marketplace. This has caused a growing gap between rich and poor and fueled the spread of corruption. Mr. Chen Zhiwu, a professor of finance at Yale University, has researched this topic over the last two years. In one of his articles he points out that no country that has carried out privatization and market economics — no matter whether it is the United States, Britain, Germany, Russia or the transitional countries of Eastern Europe — has a gap in national income as large as China’s. Chen Zhiwu believes that privatization and the market economy are not root causes of runaway income disparities. He believes that the problem lies in the fact that China lack an effective mechanism for putting power in check, and so all resources are controlled by administrative power, and must go through state-owned enterprises and state-run banks, etc., which means that vast majority of resources affecting ordinary people are allocated by the government. As government power is subject to no checks and balances, and as resource allocation is handled by the government on behalf of the market through a state system, these resources and their opportunities are necessarily meted out among those with power and with connections to power. More resources are allocated to the “first world,” comprising places like Beijing, Shanghai and Guangzhou, then come other provinces and autonomous regions of the second world, and then come the counties, which receive yet fewer resources . . . Chen Zhiwu believes that this marriage between the pyramid of income and the pyramid of power speaks to fact that whoever has power and connections can access riches, can seek out and find opportunities for work at a higher income. This is another way of saying that those seeking wealth and higher income must travel the road where power and business intersect (官商勾结的道路). When the government steps in for the market in allocating resources, the governing principle of resource allocation is not efficiency — allocation is not market driven. Nor does allocation occur under the principle of fairness — there is no system by which citizens can check power and ask questions. Therefore, the only principle [of resource allocation] is power. This kind of economy is a power economy. He believes this is a principle reason for the growing gap between rich and poor and the spread of corruption.
Looking at the crux of the problems lately facing [China], what is the way forward for reform? This requires a new round of thought liberation (解放思想) so that we can slice anew through reforms. First of all, if this latest thought liberation differs from those in the past, this lies primarily in the fact that the previous two liberations of thought were ideological in nature, while this time the focus is on adjusting the structure of benefit distribution [in our country]. Previous liberations were about returning benefit to the people, while this time emphasizes returning rights to the people, about granting rights to citizens. The party’s 17th Congress talked about the right to know, right to express, right to participate and right to monitor, about the need to protect the rights demands of the citizens, including carrying out fair and effective allocation of public goods. Previous thought liberations focused on resolving problems on the level of thought. It was enough to raise recognition and awareness. This time around the focus is on institutional renewal (制度创新), on the building of regulations and mechanisms, improving the socialist market economic system on the basis of the legal system. The adjustment of benefit patterns and the granting of rights to the people, these are institutional matters in and of themselves. So we can only achieve these two goals through institutional renewal and regulatory protections . . .
The task of this latest round of thought liberation is to break through traditional modes and concepts of development, on the one hand setting up new development methods to promote economic development, on the other hand changing the political mode of “omnipotence” (全能主义). So the focus of this round of thought liberation is the deepening of political reform, promoting institutional reform and constructive development in a “four-in-one” model encompassing the economy, politics, culture and society.

[Posted by David Bandurski, September 16, 2008, 11:46am HK]

By David Bandurski — Earlier this week we posted the latest reform related piece by prominent party scholar Li Junru (李君如), in which he argues that China has made substantial progress over the last 30 years not only on economic reform but also on political reform. Li said party leaders had “promoted democratic elections, democratic decision-making, democratic governance and democratic monitoring” and had worked hard “to ensure the citizens’ right to know, right to participate, right to express and right to monitor (知情权、参与权、表达权、监督权). [Frontpage Image of Mao at Tiananmen by Davidfg available at Flickr under Creative Commons license.]
But in an editorial in yesterday’s edition of Southern Metropolis Daily, Nanjing professor Shao Jian (邵建) wrote of the failure to implement democracy at the county and township level as a primary cause leading to abuse of power and cases of mass social unrest like those seen recently in Weng’an and Menglian.
Shao’s piece does not address Li Junru’s remarks directly, but opens up the issue of political reform by addressing remarks over the weekend by economist Zhang Wuchang (张五常), who rather boldly suggested that China had already arrived at “what is in Chinese history, and even in human history, the best system.”
Before leaping into Shao’s Southern Metropolis Daily editorial it is worth noting that while “political reform” has persisted as a topic in China’s media over the last year, there is no particular indication that the issue is growing, and it is premature to suggest, as some commentators have, that change is in the air.
In fact, the language of “political reform”, or zhengzhi tizhi gaige (政治体制改革) has moderated somewhat since last year’s 17th National Congress. The following is a graph plotting all articles in the mainland media (300+ newspapers) making use of the term “political reform” since October 2007:

There is a drop in November 2007, following the peak that came with the 17th National Congress, and a large peak again with the National People’s Congress and a wave of discussion about “super-ministry reform.”
We are probably approaching another October peak, and can expect to see more intensified coverage (on a statistical basis) of issues like “intra-party democracy” (党内民主) and “thought liberation” (解放思想).
As for real and substantial progress on political reform — don’t hold your breath. Having said that, we are hearing some interesting voices on political reform and democracy. Shao Jian’s editorial follows in full:

“There is No Such Thing as the Best System, Only a Better System”
By Shao Jian (邵建)
At a market economics forum hosted recently in Beijing, participants held that “the system and rules in various regions of China have experienced huge change over the last 30 years, and clear signs of this can be seen in the protection of private property, the steady decline of the public economy, and in the gradual development of private enterprise, which now comprises half of the overall economy.” On this basis, Chinese economist Zhang Wuchang (张五常) asserted: “Over the last 30 years China has groped about and found what is in Chinese history, and even in human history, the best system.” From the standpoint of “political correctness” (政治正确), this statement is not a problem naturally. But for so-called systems, no matter what kind we’re talking about, there is really no such thing as “the best.”
China has gone through 30 years of reform, and the main thrust has been economic reform, whose achievements were enumerated by the forum participants above. But I personally do not share their optimism. Not long ago I saw some numbers about how state-owned assets account for more than 75 percent of total assets, and that by contrast total private assets (民间总资产) account for less than 25 percent. Assuming these figures are accurate, we cannot really say that that we’re seeing the steady decline of the public economy, nor can we say that the private economy accounts for half of the overall economy. Unless we accelerate economic reform, even with another 30 years we will not reach the point where half of the economy is private. This cannot be called a market economy, but only a “Chinese market economy” (中国市场经济). Theoretically speaking, a market economy should not have such a robust state-owned economy.
Market economies are about opening up rights and benefits to the people, not about government power. When inequality persists between rights and power (权力和权利), the market’s basic character cannot be competition. The problem is that when power creeps inside, can we really expect rights and interests (权利) on the one hand and power (权力) on the other to enter into fair competition? Needless to say, in many state monopolized sectors rights are excluded altogether and there is no competition whatsoever to speak of.
The obstacles to further economic reform in China clearly do not lie in the economy, but in another critical place. In my view, the crux of the Weng’an and Menglian incidents is the fact that democracy has not been properly carried out at the county and township levels. Some commentators have attributed the Weng’an incident to local government bureaucracy, saying that after the incident occurred key local officials were unable to make decisions properly . . . But this view is only skin-deep. The logic of an official, after all, is to be responsible to whomever invests him with power. If those above invest officials with power they are naturally going to handle matters according to the designs and purposes of these superiors. As in the case of Menglian, they will not hesitate to mobilize police power against the villagers. Two points in Yunnan province’s report [on the Menglian incident] should particularly draw our attention. The first is that the local rubber company had long provided the county party secretary with a luxury off-road vehicle for his own personal use. The second is that a small number of county leaders were stakeholders in the rubber enterprise and received shares of the profits . . . We can quite plainly determine in whose interests police were mobilized. These two incidents were not at all about improper handling [by party bureaucrats]. Instead, they bring institutional dilemmas into sharp relief. If we do not deal [with such issues] from this standpoint [of institutional failures], it is hard to envision fundamental change of any sort.
I must emphasize that I am not a negativist, but there is little need for us to harp on our achievements. If we dwell a bit more on our problems this will allow us to seek further improvements. I am confident that on this question my sentiments as here expressed will appeal to common sense. But Mr. Zhang Wuchang tells us instead that right now at this very moment we have the best system in human history. One of the themes of the above-mentioned forum was how China can pursue further reforms looking back now on these three decades. Zhang’s logic tell us we need not do anything at all. We are already the best. I think the popular expression contradicts [this reasoning] most succinctly: “There is no such thing as best, only better.” Zhang’s words fail to recognize this. In point of fact, humanity cannot arrive at the best in terms of choosing systems. As Churchill once said concerning democracy, it is the worst form of government except that humanity has not yet been able to find a better one. And so we see that even in democratic societies the assessment of the democratic system is only that it is the least awful.
[Churchill said: “Many forms of Government have been tried, and will be tried in this world of sin and woe. No one pretends that democracy is perfect or all-wise. Indeed it has been said that democracy is the worst form of Government except all those other forms that have been tried from time to time.”]
In terms of the market economy and democratization, if our system reforms are not yet complete we need to make further shifts – and aside from putting our nose to the grinding wheel there are no other choices.
(The writer is a professor at Nanjing Xiaozhuang University)

[Posted by David Bandurski, September 12, 2008, 9:52pm HK]