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The Lifeof theParty

The Post-Democratic FutureBegins
EricX Li
n November 2012, the Chinese Communist Party (ccr) held its
18th National Congress, setting in motion a once-in-a-decade
transfer of power toanewgeneration of leaders. Asexpected, Xi
]inping took over asgeneral secretary and will become the president
of thePeople's Republic this March. The turnover wasasmooth and
well-orchestrated demonstration by aconfidently rising superpower.
That didn't stop international media and even some Chinese intel-
lectuals, however, fromportraying it asamoment of crisis. Inanissue
that waspublished beforethebeginning of thecongress, for example,
The Economist quoted unnamed scholars at arecent conference as
saying that China is "unstable at the grass roots, dejected at the
middle strataand out of control at thetop." Tobesure, months before
thehandover, thescandal surrounding BoXilai, theformer party boss
of the Chongqing municipality, had shattered the ccr's long-held
facadeof unity, whichhadunderwritten domestic political stability since
theTiananmen Squareupheavals in1989.Tomakematters worse, the
Chinese economy, which had sustained double-digit GDP growth
for two decades, slowed, decelerating for seven straight quarters.
China's economic model of rapid industrialization, labor-intensive
manufacturing, large-scalegovernment investments ininfrastructure,
and export growth seemed to have nearly run its course. Some in
China and theWest havegonesofar astopredict the demise of the
one-party state, which they allegecannot surviveif leading politicians
stop delivering economic miracles.
Such pessimism, however, is misplaced. There is no doubt that
daunting challenges await Xi. But those who suggest that the cCP
ERICX. LI isaventure capitalist andpolitical scientist inShanghai.
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The Life of the Party
will not be able to deal with them fundamentally misread China's
politics and theresilienceof itsgoverning institutions. Beijingwill be
ableto meet thecountry's illswith dynamism and resilience, thanks
tothe ccr's adaptability, system of meritocracy, and legitimacy with
the Chinese people. In the next decade, China will continue to rise,
not fade. The country's leaders will consolidate theone-party model
and, intheprocess, challenge theWest's conventional wisdom about
political development and the inevitable march toward electoral
democracy. In the capital of the Middle Kingdom, theworld might
witness thebirth of apost-democratic future.
The assertion that one-party rule is inherently incapable of self-
correction does not reflect the historical record. During its 63years
in power, the cCP has shown extraordinary adaptability. Since its
founding in1949,thePeople's Republic haspursued abroad rangeof
economic policies. First, thecCP initiated radical land collectivization
intheearly 1950s. This wasfollowed by thepoliciesof theGreat Leap
Forward inthelate1950sand theCultural Revolution inthelate1960s
to mid-1970s. After them camethe quasi-privatization of farmland
intheearly 1960s, Deng Xiaoping's market reforms inthelate1970s,
and J iang Zernin's opening up of the cor's membership to private
businesspeople in the 1990s. The underlying goal has always been
economic health, and when apolicy did not work-for example, the
disastrous Great Leap Forward and Cultural Revolution-China
was able to find something that did: for example, Deng's reforms,
which catapulted the Chinese economy into the position of second
largest intheworld.
On theinstitutional front aswell, theccr hasnot shied awayfrom
reform. One example is the introduction in the 1980sand 1990sof
term limits for most political positions (and even of age limits, of
68-70, for the party's most senior leadership). Before this, political
leaders had been abletousetheir positions toaccumulate power and
perpetuate their rules. MaoZedong wasacaseinpoint. Hehad ended
thecivil wars that had plagued China and repelled foreign invasions
tobecome thefather of modern China. Yethisprolonged ruleled to
disastrous mistakes, such astheCultural Revolution. Now, it isnearly
impossible for the few at the top to consolidate long-term power.
Upward mobility within theparty hasalsoincreased.
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Eric X. Li
Intermsof foreignpolicy,Chinahasalsochanged coursemany times
to achieve national greatness. It moved from aclose alliance with
Moscowinthe1950stoavirtual alliancewith theUnited States inthe
1970sand 1980sasit sought to contain the Soviet Union. Today, its
pursuit of amore independent foreign policy has once more put it
at oddswith theUnited States. But initsongoing quest for greatness,
China isseeking todefy recent historical precedents and risepeace-
fully, avoiding themilitarism that plagued Germany andJ apan inthe
first half of the last century.
AsChinaundergoes itsten-year transition, callsathomeand abroad
for another round of political reform have increased. One radical
camp in China and abroad is urging the party to allow multiparty
elections or atleast accept formal intraparty factions. Inthisview, only
full-scaleadversarial politics canensurethat China getstheleadership
it needs. However sincere, thesedemands all missabasicfact: thecCP
hasarguablybeenoneof themost self-reforming political organizations
inrecent world history. There isnodoubt that China'snewleadersface
adifferent world than HuJ intao did when hetook over in2002, but
chancesaregoodthat Xi'sccswill beabletoadapt toandmeetwhatever
newchallenges therapidly changing domestic and international envi-
ronments pose. Inpart, that isbecausetheccr isheavily meritocratic
and promotes thosewith proven experience and capabilities.
China watchers in the West have used reports of corruption-
compounded by sensational political scandals such as the Bo Xilai
affair-to portray theruling party asincurably diseased. The disease
exists, tobesure, but themost important treatment istheparty itself.
As counterintuitive asit might seemto Westerners, the ccr, whose
political preeminence isenshrined intheChinese constitution, isone
of themost meritocratic political institutions intheworld.
Of the25members that madeup thepre-18th-Congress Politburo,
thehighest rulingbody of theCCP, only five(theso-called princelings)
came from privileged backgrounds. The other 20, including the
president, Hu, and the premier, WenJ iabao, camefrom middle- or
lower-classbackgrounds. Intheccr-'s larger Central Committee, which
wasmadeup of morethan 300 people, thepercentage of peopleborn
into wealth and power waseven smaller. The vast majority of those
ingovernment worked and competed their way through theranks to
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The Life of the Party
Chinese democracy: voting in Guangdong Province, China, March 3, 2012
the top. Admittedly, the new general secretary, Xi, is the son of a
previous party leader. However, anoverwhelming number of those
who moved up the ranks this past fall had humbler beginnings.
Sohowdoes China ensure meritocracy? At theheart of the story
is apowerful institution that is seldom studied in the West, the
Organization Department of theccr. This department carries out an
elaborateprocess of bureaucratic selection, evaluation, and promotion
that would bethe envy of any corporation. Patronage continues to
play arole, but by and large, merit determines whowill risethrough
the ranks.
Every year, thegovernment and itsaffiliated organizations recruit
university graduates into entry-level positions in one of the three
state-controlled systems: the civil service, state-owned enterprises,
and government -affiliated social organizations such asuniversities or
community programs. Most new recruits enter at the lowest level,
or ke yuan. After afewyears, the Organization Department reviews
their performance and canpromote themupthrough four increasingly
elitemanagerial ranks:fu ke, ke,fu chu, andchu. Therangeof positions
attheselevelsiswide, coveringanything fromrunning thehealth-care
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Eric X. Li
systeminapoor villagetoattracting commercial investment inacity
district. Once ayear, the Organization Department reviews quanti-
tative performance records for each official ineach of these grades;
carriesout interviews with superiors, peers, andsubordinates; andvets
personal conduct. Extensive and frequent public opinion surveys are
alsoconducted onquestionsrangingfromsatisfactionwith thecountry's
general direction toopinions about moremundane and specific local
policies. Oncethedepartment hasgathered acomplete dossier onall
thecandidates, and hasconfirmed thepublic's general satisfaction or
dissatisfaction with their performances, committees discuss the data
and promote winners.
After this stage, public employees' paths diverge, and individuals
canberotated through and out of all three tracks (the civil service,
state-owned enterprises, and social organizations). An official might
start out working oneconomic policy and then movetoajob dealing
with political or social issues. He or shecould gofromatraditional
government position toamanagerial roleinastate-owned enterprise
-+' or auniversity. Inmany cases, theOrganization Department will also
-........ send alargenumber of promising officialsabroadtolearnbest practices
around theworld. Thelikesof Harvard University's Kennedy School
of Government and the National University of Singapore regularly
host Chinese officialsintheir training programs.
Over time, themost successful workers arepromoted again, towhat
areknownasthefu ju andju levels, atwhichpoint atypical assignment
isto manage districts with populations inthe millions or companies
with hundreds of millions of dollarsinrevenues. Toget asenseof how
rigorous theselection process is, in2012, therewere900,000 officials
at thefu ke and ke levels and 600,000 at thefu chu and chu levels.
There wereonly 40,000 at thefu ju andju levels.
After theju level, avery talented fewmoveup several moreranks
and eventually makeit totheparty's Central Committee. The entire
process could taketwotothree decades, and most of thosewhomake
it tothetop havehad managerial experience injust about every sector
of Chinese society. Indeed, of the25 Politburo members before the
18thParty Congress, 19had runprovinces larger than most countries
intheworld andministrieswithbudgets higher thanthat of theaverage
nation's government. A person with Barack Obama's pre-presidential
professional experiencewouldnot evenbethemanager of asmall county
inChina's system.
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The Life of the Party
Xi's career path is illustrative. Over the course of 30 years, Xi
rose from being afu ke level deputy county chief in apoor village
to party secretary of Shanghai and amember of the Politburo. By
the time hemade it to the top, Xi had already managed areas with
total populations of over 150 million and combined GDPS of more
than $1.5 trillion. His career demonstrates that meritocracy drives
Chinese politics and that those who end up leading the country
haveproven records.
China'scentralized meritocracy alsofostersgovernment entrepreneur-
ship. The practice of conducting top-down policy experiments in
select locales and expanding the successful ones nationwide iswell
documented. The best-known example isDeng's creation of "special
economiczones" inthe1980s.ThefirstsuchzonewasinShenzhen. The
district wasencouraged tooperateunder market principles rather than
the dictates of central planners. Shenzhen's economy grew rapidly,
which prompted thecentral government to replicate theprogram in
the cities of Zhuhai and Shantou, inGuangdong Province; Xiamen,
inFujian Province; and throughout Hainan Province.
There arealsothousands of policy experiments that riseup from
thelocal level. The competitive government jobmarket givescapable
local officials incentives to take risks and differentiate themselves
fromthepack. Among the2,326 party representatives who attended
the 18thParty Congress, onesuch standout wasQiu He, who isvice
party secretary ofYunnan Province. Atthecongress, Qiuwasselectedas
analternate member of theCentral Committee, putting the55-year-
oldmaverick near thetop of thenation'spolitical establishment. Qiuis
theultimate political entrepreneur. Borninto poverty inrural China,
Qiu watched two of his eight siblings die of childhood illness and
malnutrition. After taking thenational collegeentrance exam, China's
great equalizer, hewas able to attend university. When he entered
the work force, he held several low-level civil service jobs before
being appointed party secretary of Shuyang County, in northern
J iangsu Province, inthe1990s. With apeasant population of 1.7mil-
lion and anannual per capita GDP of only $250 (less than one-fifth
the national average), Shuyang wasoneof thepoorest rural areas in
thecountry. The county alsosuffered fromtheworst crimerateinthe
region and endemic government corruption.
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Eric X. Li
Qiu carried out abroad range of risky and controversial policy
experiments that, if they failed, would havesunk hispolitical career.
His first focus was Shuyang's floundering economy. In 1997, Qiu
initiated amandatory municipal bond purchase program. The policy
required every county resident topurchasebondstofund much-needed
infrastructure development. Thegeniusof theplanwastwofold. First,
he could not have raised the funds
through taxesbecause, at hislevel, he
had no taxation authority. Second,
themandatory bond programoffered
the citizens of Shuyang something
taxeswould not have: yes, they were
required to buy the bonds, but they
eventually got their money back, with
interest. Qiu alsoassigned quotas to
almost every county government
official for attracting commercial investments. Tosupport their efforts,
inadditiontobuildingupthearea'sinfrastructure, Qiuofferedfavorable
tax rates and cheap land concessions tobusinesses. Injust afewyears,
thousands of privateenterprises sprangupandtransformed adormant,
centrally planned rural community into avibrant market economy.
Qiu'ssecond focuswascombating corruption and mistrust between
thepopulation and thegovernment. Inthe late 1990s, heinstituted
twounprecedented measures tomaketheselection of officialsmore
openandcompetitive. Onewastopost upcoming official appointments
inadvanceof thefinal decisions toallowfor apublic comment period.
Theother wastheintroduction of atwo-tier voting systemthat enabled
villagers tovote among party members for their preferred candidates
for certain positions. The local party committee then picked between
thetop twovotegetters.
Qiuinitially met tremendous resistance fromthelocal bureaucracy
and population. But today, he is credited with turning one of the
country's most backward regions into a vibrant urban center of
commerceand manufacturing. Other poor regions haveadopted many
of hiseconomic policy experiments. Moreover, thepublic commenting
period hasbeenwidely adopted acrossChina. Competitive voting is
finding its way into ever-higher levels of the party hierarchy. Qiu
has been personally rewarded, too, moving rapidly up the ladder:
to vicegovernor of J iangsu Province, mayor of Kunmin, viceparty
The CCP's role in saving
China from outsiders is a
far more durable source of
its legitimacy than the
, .
country seconomic
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The Life of the Party
secretary of Yunnan Province, and now analternate member of the
Central Committee.
Even if critics accept that the Chinese government isadaptable and
meritocratic, they still question its legitimacy. Westerners assume
that multiparty elections arethe only source of political legitimacy.
Because China does not hold such elections, they argue, the cce's
rule rests on inherently shaky ground. Following this logic, critics
havepredicted the party's collapse for decades, but no collapse has
come. The most recent version of the argument isthat the cCP has
maintained its hold onpower only becauseit hasdelivered economic
growth-so-called performance legitimacy.
Nodoubt, performance isamajor sourceof theparty's popularity.
Inapoll of Chinese attitudes published by thePewResearch Center
in2011,87 percent of respondents noted satisfaction with thegeneral
direction of the country, 66percent reported significant progress in
their livesinthepast fiveyears, and awhopping 74percent said they
expected the future tobeevenbetter. Performance legitimacy, how-
ever, isonly onesource of the party's popular support. Much more
significant isthe roleof Chinese nationalism and moral legitimacy.
When the ccr built theMonument to thePeople's Heroes at the
center of Tiananmen Square in 1949, it included afrieze depicting
thestruggles of the Chinese to establish the People's Republic. One
would expect the ccr, a Marxist-Leninist party, to have its most
symbolic political narrative begin with communism-the writing of
The Communist Manifesto, for example, or perhaps thebirth of theccr
in1921. Instead, thefirst carving of thefrieze depicts anevent from
1839: the public burning of imported opium by the Qing dynasty's
imperial minister, Lin Zexu, which triggered the first Opium War.
China'ssubsequent losstotheBritish inaugurated theso-calledcentury
of humiliation. Inthefollowinghundred years, Chinasufferedcountless
invasions, wars, and famines-all, in the popular telling, to reach
1949. And today, the Monument to the People's Heroes remains a
sacred public siteand themost significant symbol of theccr's national
moral authority.
The ccr's role in saving and modernizing China is afar more
durable source of its legitimacy than thecountry's economic perfor-
mance. It explains why, evenat theworst times of theparty's rulein
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Eric X. Li
thepast 63years, including the disastrous Great Leap Forward and
Cultural Revolution, the ccr was abletokeep thesupport of main-
stream Chinese long enough for it to correct its mistakes. China's
recent achievements, fromeconomic growth tospaceexploration, are
only strengthening nationalist sentiments inthe country, especially
among theyouth. The party cancount ontheir support for decades
to come.
A final typeof staying power comesfromrepression, which China
watchers in the West claimis the real force behind the cCP. They
point to censorship and the regime's harsh treatment of dissidents,
which undoubtedly exist. Still, theparty knowsvery well that general
repression is not sustainable. Instead, it seeks to employ smart
containment. The strategy istogivethevast majority of people the
widest rangepossibleof personal liberties. And today, Chinese people
arefreer than at any other period inrecent memory; most of them
canlivewhere they want and work asthey choose, go into business
without hindrance, travel within and out of the country, and openly
criticizethegovernment onlinewithout retaliation. Meanwhile, state
power focuses oncontaining asmall number of individuals whohave
political agendas and want to topple the one-party system. As any
casual observer would know, over the last ten years, the quantity of
criticism against the government online and in print has increased
exponentially-without any reprisals. Every year, there are tens
of thousands of local protests against specific policies. Most of the
disputes areresolved peacefully. But thegovernment dealsforcefully
with thevery fewwho aimto subvert China's political system, such
asLiu Xiaobo, anactivist who callsfor the end of single-party rule
and who iscurrently injail.
That isnot tosay that there aren't problems. Corruption, for one,
could seriously harmtheccv's reputation. But itwill not derail party
ruleanytimesoon. Far frombeing aproblem inherent totheChinese
political system, corruption is largely abyproduct of the country's
rapid transformation. When theUnited States wasgoing through its
industrialization 150yearsago,violence, thewealth gap, andcorruption
inthe country werejust asbad as, if not worsethan, inChina today.
According toTransparency International, China ranks 75th inglobal
corruption and is gradually getting better. It is less corrupt than
Greece (80th), India (95th), Indonesia and Argentina (tied at lOOth),
and the Philippines (129th)-all of which areelectoral democracies.
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The Life of the Party
Understood insuch acontext, the Chinese government's corruption
isby nomeans insurmountable. And theparty's deeply rooted popu-
lar support will allowit thebreathing roomtograpple with eventhe
toughest problems.
China's new leaders will govern the country for the next ten years,
during which they will rely on the ccr's adaptability, meritocracy,
and legitimacy to tackle major challenges. The current economic
slowdown isworrying, but it is largely cyclical, not structural. Two
forces will reinvigorate theeconomy for at least another generation:
urbanization and entrepreneurship. In 1990, only about 25 percent
of Chinese lived incities. Today, 51percent do. Before 2040, afull
75 percent-nearly one billion people-are expected to be urban.
The amount of new roads, housing, utilities, and communications
infrastructure needed to accommodate this expansion isastounding.
Therefore, any apparent infrastructure or housing bubbles will be
momentary. In fact, China's new leadership will need tocontinue or
even increase investment inthese sectors intheyears tocome. That
investment and thevast newurban work force, with all itsproduction
and consumption, will drivehigh economic growth rates. The party's
extraordinary ability to develop and execute policy and its political
authority will help it manage theseprocesses.
Meanwhile, entrepreneurship will help China overcome threats to
its export-fueled economic model. Externally, the global economic
downturn and arising currency valuehavedampened Chinese trade.
Internally, laborcostshaveriseninthecountry's coastal manufacturing
regions. But themarket will sort out theseproblems. After all, China's
economic miracle was not just a centrally planned phenomenon.
Beijing facilitated the development of apowerful market economy,
but private entrepreneurs arethelifeblood of thesystem. And these
entrepreneurs arehighly adaptive. Already, somelow-end manufac-
turing has moved inland to contain labor costs. This is coinciding
with local governments' aggressive infrastructure investments and
innovative efforts toattract newbusiness. Inthecostal regions, many
companies areproducing increasingly-higher-value goods.
Of course, the government will need to make some economic
adjustments. For one, many state-owned enterprises havegrown too
big, crowding out theprivate-sector growth that iscritical toeconomic
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vitality. Plans to require companies to payout dividends to share-
holders and other limits onexpansion arealready intheworks. These
will likely beimplemented early oninthe new administration. And
some stalled measures encouraging financial liberalization, such as
allowing the market to determine interest rates and the develop-
ment of private small and medium-sized lending institutions, which
wouldbreak thelargestate-owned banks' near monopoly incommercial
lending, arelikely to get picked up. These reforms would facilitate
more efficient flowsof capital tobusinesses.
Economic liberalization will likely be matched by a two-track
reform of social policy. First, the process of making theparty more
inclusive, which began with J iang's
inclusion of businesspeople in the
CCP, will be accelerated. Second,
the ccr will begin experimenting
functions to approved nongovern-
mental organizations. Rapid urban-
ization isfacilitating thegrowth of a
successful alternatives exist. largemiddle-income society. Instead
of demanding abstractpolitical rights,
asmany inthe West expected, urban Chinese arefocused onwhat
are called min sheng (livelihood) issues. The party may not be able
to manage these concerns alone. And soprivate businesses or non-
governmental organizations might be called in to provide health
careand education inthecities, which hasalready started tohappen
inGuangdong Province.
Corruption remains thehardest nut tocrack. Inrecent years, family
members of someparty leaders haveused their political influence to
build uplargenetworks of commercial interests. Cronyismisspreading
fromthetop down, which could eventually threaten theparty's rule.
Theccr- hasarticulated athree-pronged strategy toattack theproblem,
whichthenewleadership will carryout. Themost important institution
for containing corruption isthe ccr's Central Commission for Dis-
ciplineInspection. Its leader usually sitsontheStanding Committee
of the Politburo and has more power than the state judiciary. This
person candetain and interrogate party members suspected of corrup-
tionwithout legal limits. Inrecent years, thecommissionhasbeenvery
aggressive. In 2011, it conducted formal investigations into 137,859
Eric X. Li
The significance of China's
success is not that China
provides the world with an
alternative model but that
it demonstrates that
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The Life of the Party
casesthat resulted indisciplinary actions or legal convictions against
party officials.This number represents anearly fourfold increasesince
the years before 1989, when corruption was one of the main issues
that drove the Tiananmen protests. One sign to watch in the next
administration iswhether thecommission isauthorized toinvestigate
wrongdoing within theinner sanctum of theparty leadership, where
corruption canbethe most detrimental totheparty's credibility.
Complementing theparty's ownantigraft efforts isthe increasing
independence of mediaoutlets, both state- andprivately owned. News
organizations have already exposed cases of official corruption and
disseminated their findings onthe Internet. The ccr hasresponded
by pursuing someof the casesthat the media havebrought to light.
Of course, this system is not perfect, and some media outlets are
themselves corrupt. Illicit payments to journalists and fabricated
stories arecommonplace. If theseproblems arenot corrected quickly,
Chinese mediawill losewhat little credibility they havegained.
Accordingly, the next administration might develop moresophis-
ticated political regulations and legal constraints onjournalists to
providespaceforthesector tomature. Officialshavealready discussed
instituting apress lawthat would protect legitimate, factual reporting
and penalize acts of libel and misrepresentation. Some might view
theinitiative asthegovernment reining injournalists, but thelarger
impact would betomakethe media more credible inthe eyesof the
Chinese public. J ournalists whotakebribes or invent rumors toattract
readers canhardly check government corruption.
Alsototacklecorruption, theparty plans toincrease open compe-
tition within itsownranks, inspired by theefforts of officialssuch as
Qiu. The hope is that such competition will air dirty laundry and
discourage unseemly behavior. The Hu administration initiated an
"intraparty democracy" program to facilitate direct competition for
seats onparty committees, anidea that received high praise at the
18th Congress.
Should the18th Party Congress' initiatives succeed, 2012might one
day beseen asmarking theend of the ideathat electoral democracy
is the only legitimate and effective system of political governance.
While China's might grows, theWest's ills multiply: sincewinning
the Cold War, the United States has, inone generation, allowed its
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Eric X. Li
middle classtodisintegrate. Itsinfrastructure languishes indisrepair,
and its politics, both electoral and legislative, havefallen captive to
money and special interests. Its future generations will besoheavily
indebted that asustained declineinaverageliving standards isall but
certain. In Europe, too, monumental political, economic, and social
distress hascaused theEuropean project torunaground. Meanwhile,
during the same period, China has lifted hundreds of millions of
people out of poverty and isnowaleading industrial powerhouse.
The West's woes areself-inflicted. Claims that Western electoral
systems are infallible have hampered self-correction. Elections are
seen asends in themselves, not merely means to good governance.
Instead of producing capableleaders, electoral politics havemade it
very difficult for good leaders to gain power. And in the few cases
when they do, they are paralyzed by their own political and legal
systems. As D.S. Secretary of State Hillary Clinton travels around
theworld extolling electoral democracy, the legitimacy of nearly all
D.S. political institutions is crumbling. The approval rating of the
D.S. Congress among the American people stood at 18percent in
November. Thepresident wasperforming somewhat better, with ratings
inthe50s. And evensupport for thepolitically independent Supreme
Court had fallen below 50percent.
Many developing countries havealready cometolearnthat democ-
racy doesn't solveall their problems. For them, China's example is
important. Itsrecent successand thefailures of theWest offer astark
contrast. Tobesure, China's political model will never supplant elec-
toral democracy because, unlike the latter, it does not pretend to
beuniversal. It cannot beexported. But its success does show that
many systems of political governance can work when they are
congruent with acountry's culture and history. The significance of
China's success, then, is not that China provides the world with
an alternative but that it demonstrates that successful alternatives
exist. Twenty-four years ago, thepolitical scientist Francis Fukuyama
predicted that all countries would eventually adopt liberal democracy
and lamented that theworld would become aboring placebecause of
that. Relief isontheway. A more interesting agemay beupon us.~