(UNTITLED)

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP86T01017R000606670001-5
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 9
• Document Creation Date: January 12, 2017
• Document Release Date: April 12, 2011
• Sequence Number: 1
• Publication Date: October 6, 1986
• Content Type: MEMO

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DAT E
DOC NOC--A1
OIR 3
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Central Intelligence Agency
DIRECTORATE OF INTELLIGENCE
6 October 1986
China: The Debate Over "Political Structural Reforms"
SUMMARY
China's reform leaders initiated a wide-ranging discussion in March
on the need for "political structural reform" to accompany China's
economic reforms. Triggered in part by lower level party and bureaucratic
interference that has slowed industrial reforms, the proposed political
reforrns attempt to clarify party and government functions, reduce
"bureaucratism," and open the decisionmaking process to nonparty views.
Formulating specific measures to accomplish these goals will force top
party leaders to grapple with contentious issues, including defining the
role of lower level party committees in reform, and expanding the freedom
of expression for intellectuals. Several reform leaders have stated that a
year of "investigation and study" will be needed before fundamental
political reforms can be introduced. We believe, however, that limited
political reform measures may be introduced in the near future, including
new guidelines on cadre selection, advancement, and accountability.
This memorandum was prepared by Office Of East Asian Analysis.
Information available as of 6 October 1986 was used in its preparation. Comments and
queries are welcome and may be directed to the Chief, Political Assessments Branch,
China Division, OEA
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Reformists Call for "Political Structural Reform"
China's proreform leaders increasingly see the success of urban 'economic
reforms--such as the "factory manager responsibility system," labor reforms, and the
development of urban capital markets--tied to reform of the political system. They
believe that the greater threat to reform now comes not from senior party figures, but
from midlevel bureaucrats and party members who resist implementing reform policies
a "stalemate" had developed between new economic reforms
and the old systems of political control.' Political reforms are designed to break the
stalemate by creating a political climate favorable to economic reform and formulating
guidelines that will improve implementation of reform policies.
Political Structural Reform - Main Objectives
Judging from leadership statements as well as coverage of political reform
forums and seminars that organizations such as the Central Party School began to hold
in May, political reform is a group of ideas rather than a specific program. Different
Chinese leaders stress different aspects. Nonetheless, we believe the ideas discussed
under the rubric of political reform have one of four major objectives:
The problems that led Hu to suggest reforms might be stalled have been widely
illustrated in mainland press accounts. The "factory manager responsibility system,"
for example, has encountered stiff resistance because it erodes the authority of
factory party officials and the bureaucratic organizations (the so-called
"mothers-in-law") that have overseen factory operations in the past. Press reports
suggest that many recently appointed reformist managers have been badgered out of
office through such practices as accusations of corrupt behavior. In April, for
example, People's Daily reported the case of a manager of a small motor vehicle plant
who achieved a "miracle" in increasing production and profits by using reform
management methods. As plant profits went up, however, local bureaucrats and party
officials refused to grant the enterprise greater autonomy as called for under reforms.
When the manager persisted, he was investigated on trumped-up bribery charges,
and eventually dismissed. Press reports on the results of a recent poll of 300 factory
managers stated that all the managers complained of such interference with reforms,
and over half were "fed up" with their jobs. Other mainland press reports have
indicated that interference has forced factory reforms to slow or even be reversed in
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? Separating Party and Government Functions
The political reform discussion has stressed the need to clearly separate party
and government functions, and to grant greater responsibility to managers and
technical personnel for economic decisions. Political reform advocates claim, for
example, that the party committees in factories--and specifically the party
committee secretaries--often are too involved in day-to-day m4nagement
decisions despite their limited expertise. As a Chinese newspaper commented in
late June, party members have grown used to "cultivating others' land while
wasting their own," resulting in excessive party interference in nonparty functions
that actually hinders overall party leadership.
? Reducing the Bureaucracy and Streamlining Administrative Staffs
Reformers believe bureaucratic oversight and redtape must be cut if the
economic reforms are to succeed. Although some progress was made in
streamlining drives in the early 1980s, recent press reports have complained that
overstaffing is still a problem, and that the proliferation of bureaus and the
growth in administrative costs have accelerated in recent years.
? Reforming the Cadre Selection, Hiring, and Promotion System
Reform of China's cadre system--the method of hiring, transferring, and
promoting state functionaries and party workers--is also a major concern. Such
"unhealthy practices" as nepotism, favoritism, and bribery in assigning posts
undercuts the reforms--which require the recruitment and promotion of better
educated cadres--and tarnishes the party's reputation.2
? Strengthening "Socialist Democracy"
The least well-defined category, "socialist democracy" covers proposals designed
to create a political and intellectual atmosphere conducive to reform. Some
leaders are calling for stronger party and government assurances to academics
and scientists that they can carry on their work and make recommendations
without concern for ideological issues. Other proposals under the "socialist
democracy" heading include giving greater attention to popular wishes in
decisionmaking; increasing the stature of nonparty government organs and
"democratic" political parties and personages; and increasing the scope and
eff
ti
'
ec
veness of the country
s legal system to guarantee the changes.
The Issues at the Core of Political Reform
The issues at the core of political reform are some of the thorniest before
Chinese leaders. Although these contentious points are rarely raised in public, we
believe any political reform initiative will be formulated with an eye to how it affects the
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What Is the Party's Role?
At the heart of political reform controversies is the continuing ambiguity over the
role of the party in an economically liberalized China. In an August 1980 address to the
Politburo, Deng Xiaoping attacked the "overconcentration" of power in party committees,
which in practice means that party committee secretaries end up deciding everything.
Party leaders including Deng, however, remain fundamentally unwilling to subordinate
the party to other institutions or to an independent legal code. Although some progress
has been made over the past six years in separating party and government functions,
and in granting greater autonomy to producers, whether they be farmers, entrepreneurs,
or larger enterprises, the limits of the authority of party committees at all levels has not
Nor probably can it be without surrendering large blocks of authority. If concrete
measures were adopted to address the four areas of political reform listed above, party
members at lower levels would find their authority to intervene in government and
economic decisions truncated, the key party prerogative of appointing functionaries
would be curtailed, and nonparty groups and individuals would have greater latitude to
criticize party decisions. Political reforms along these lines would institutionalize and
accelerate the erosion of mid- and lower-level party member authority. Although Deng
Xiaoping has claimed that a reduction in excessive party interference at lower levels is
necessary to improve party leadership, we believe many leaders remain concerned that
any reduction in party authority will lead to a loss of control.
What Is the Role of Ideology?
The political and economic reform programs directly question the utility of
Marxism in meeting China's needs and explicitly reverse the Maoist principle of "politics
in command." The party, however, continues to derive its legitimacy and its right to
govern from claims that it possesses an all-encompasing ideology that guides party
decisions. Although the Maoist approach has been largely discredited, we believe that
many party members and some leaders are genuinely concerned that "political reform"
will put "economics in command," weakening the party's legitimacy and undermining the
ideals of the Communist revolution. Some party members may fear that with
"economics in command," outside critics of the party could even call for a reexamination
of the usefulness of socialism and the need for party leadership altogether. Thus,
finding a way to reconcile Marxism with Deng's pragmatic economic policies and
defining a role for ideology in post-Mao China are critical issues for many party
members that are sure to contribute to the controversy surrounding political reforms.
How Much Freedom of Expression?
Reform leaders recognize that intellectuals, including scientists and economic
theorists, must be permitted to express opinions without fear of political repercussions.
Evidence suggests, however, that reformers are divided over how much freedom to
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permit. Some reform leaders--along with party conservatives--remain skeptical of
opening the door to politically sensitive and controversial topics. There is also
disasgreement over whether freedom of expression should be extended to include
freedoms for artists and writers. Following the recent affirmation of the "100 flowers"
policy, intellectuals and other nonparty officials have gained unprecedented leeway to
criticize local party interference with reforms, but behind the scenes intellectuals are
pushing for even wider freedom of expression.'
How To Layoff Bureaucracts?
Along with abstract questions over the party's function in reform and the
legitimacy of the party's ideology, political reforms touch on questions such as the
trimming of the bureaucracy that bear direct, personal costs for Chinese leaders. The
bureaucracy is largely based on patronage and is an interlocking system of personal ties
that reach to the highest levels of the party. In addition to exacerbating China's
unemployment problem and demoralizing the bureaucracy, extensive layoffs of
bureaucrats would rend this fabric of personal relationships, and are likely to encounter
significant resistance. Although the costs of maintaining China's bloated bureaucracy
are widely recognized, we believe Chinese leaders will, with one eye on how this affects
their own old-boy networks, have difficultly reaching agreement on methods to
effectively trim the bureaucracy.
Where Leaders Stand on Political Reform
The political reform goal of reducing party and bureaucratic interference at lower
levels virtually ensures that concrete reform measures will be resisted by party
apparatchiks as well as entrenched bureaucrats. In addition, party traditionalists at all
levels are likely to feel threatened by the increased liberalism implied in political reform.
The controversial issues connected with political reform, however, have divided even
those leaders firmly placed in the reform camp.
Judging from public statements, Hu Qili and Party General Secretary Hu Yaobang
appear to be the most vigorous supporters of political reforms. ~
Other reform leaders have spoken of
political reform in sparing terms, which may reflect their concerns about it. Premier
Last fall a young academic at Nanjing University published an article that was carried
in the 2 November 1985 Gongren Ribao under the pseudonym "Ma Ding." The article,
which advocated studying non-Marxist economics, was attacked by conservative
propagandists, but subsequently defended by party reform leaders. The resulting
affirmation of the rights of academic expression set the stage for the 30th
anniversary of Mao Zedong's "100 flowers" speech, which called for intellectual
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Zhao Ziyang endorsed the need for political reform in July only in response to a direct
question from a Yugoslav journalist. Vice Premier Wan Li's August speech on the need
for increasing socialist democracy as part of political reforms was narrowly focused on
the role of "expert" opinion in decisionmaking. Vice Premier Qiao Shi missed an
opportunity to publicly support the need for political reform at a conference on
strengthening the socialist legal system this summer.
These differences probably account for changes in the tenor of the discussion.
The rousing calls for political structural reform voiced during the spring and summer
have given way to caution. The Hong Kong newspaper Wen Wei Po reported in early
August that leaders meeting to discuss the Sixth Plenum were divided over the
"fundamental issue" of political reform. Deng Xiaoping himself stated in September that
the political reform question would not be on the plenum's agenda. Meanwhile,
statements by Vice Premier Tian Jiyun and and propaganda chief Zhu Houze focused on
the need for a year of "study and investigation" before introducing major political reform
measures. Beijing also appeared to be limiting the public participation of nonparty
intellectuals in the discussion; press coverage of August forums on political structural
reform was sparse compared with the treatment given forums last spring and early
Reports claiming that the Sixth Plenum would not propose new political reform
measures proved correct. The plenum document only referred to the need for political
reform in passing without suggesting either specific reforms or a reform timetable.
Political Reform--What's Been Accomplished and What's Ahead?
We believe that the political reform discussion has already served some
objectives of Deng Xiaoping and his proteges, particularly Hu Qili. The attention to
cadre abuses has pressured rank-and-file party members to implement reforms more
conscientiously and enabled intellectuals to- voice controversial opinions and criticize
officials who stall on reforms. Moreover, the political reform discussion has significantly
raised the profile of reformists Hu Qili, propaganda chief Zhu Houze, and Secretariat
member Wang Zhaoguo--young leaders favorably disposed to political reform who we
believe will push for change whenever they sense an opportunity for progress. Indeed,
press treatments and leadership statements suggest that we will see movement during
the coming year:
? In calling for greater "democracy" in decisionmaking at a speech before a recent
convention on soft sciences, Vice Premier Wan Li advocated a larger role for
feasibility studies and expert consultations before projects are undertaken. New
guidelines that would increase the role of technical experts in China's
modernization at the expense of party hacks may be in the works.
? Several references have been made during the political reform discussion to the
need for a comprehensive law governing the selection and evaluation of state
functionaries, and recently the mainland press reported that a draft state
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functionaries law was being circulated among some leading bodies for comments
and suggestions. Such a law might address outstanding questions in China's
cadre system, including restricting party member authority in the cadre selection
process, and placing cadres under contract employment rather than lifetime
appointments.
? Guidelines on the subordination of party members who commit crimes to legal
authorities appear likely judging from Chinese media reports.
? Beijing will probably unveil a new drive to trim the size and number of
bureaucratic offices at lower levels.
? We believe that Beijing will continue to define the "100 flowers" policy, spelling
out more clearly the extent of academic and artistic freedom of expression.
Given the issues and disagreements, we believe a period of consensus-building
will be required before more ambitious political reforms can be launched. The strongest
proponents of political reform seem to be targeting next year's party congress for
a decision. For now, in any case, Beijing is signaling not to expect broader measures. A
recent People's Daily article alluding to reformist factory managers' failure to win
necessary support from "higher authorities," or announcing urealistic "grand programs,"
seemed to be telling managers that they will have to live with the party committees and
bureaucratic meddling for some time, and that they had best adjust their styles
accordingly. Newspaper articles have suggested that up to a decade will be required to
significantly adjust the political structure
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Subject: China: The Debate Over "Political Structural Reforms"
Distribution:
National Security Council
1 - David Laux, Senior Assistant for China, Taiwan, and Hong Kong,
Room 302, OEOB
Department of State
1 - Richard Williams, Director, Office of Chinese Affairs (EAP/C),
Room 4318
1 - Joan Plaisted, Deputy Director of Economic Affairs, Office of Chinese
Affairs (EAP/C),
Room 4318
1
- Richard Howarth,
Director, Office of Economic Policy (EAP/EP),
Room 5321
1
- G Eugene Martin,
(EAP/CH), Room 4318
1
- Doug Paal, Policy Planning Staff, Room 7330
1
- Tom Fingar, Chief, INR/EAP/CH, Room 8840
1
- Chris Clarke, INR/EAP/CH, Room 8840
Department of Defense
1 - DIA/JSI, Room 1C945, Pentagon.
1 - Maj. Suggs, Headquarters, Dept of the Army, Office of the Assistant
Chief of Staff for Intelligence, Attention: DAMI-FII. Room 2A474,
Pentagon
Department of Commerce
1 - Byron Jackson, Office of Intelligence Liaison, Room 6854
Other
1 - (Chief B412, Room 25010-2, National Security Agency,
Ft. Meade
1 - Chief, B441, Room 1W140, National Security Agency,
Ft. Meade
1 - Bill Abnett, Director for Chinese Affairs, USTR, 600 17th St. NW, 20506
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Central Intelligence Agency
1 - DDI (7E44)
1 - NIC/ Analytic Group (7E47)
1 - NIO/EA (7E62)
1 - NIO/Econ (7E47)
1 - D/OEA (4F18)
2 - C/OEA/CH (4G20)
1 - OEA Production Staff (4G48)
1 - C/OEA/SDS (4G32)
1 - C/OEA/CH/IS (4G32)
1 - C/OEA/CH/EA (4G32)
1 - C/OEA/CH/PA (4G32)
1 - C/OEA/CH/TT (4G32)
1 - PDB Staff (7G15)
5 - CPAS/IMC/CB (7G07)
1 - CPAS/ILS (7G50)
1 - CH/EA/CORR (5D38)
1 - C/EAD(5E18)
1 - C/PES (7G15)
1 - C/DO/PPS (3D01)
1 - D/OLL (7B24)
1 - SRP (5000)
1 - LDA/AN/CH (1H18)
1 - D/DCI/DDCI Executive Staff (7D60)
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