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Strategies & Market Trends : Asia Forum

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To: hui zhou who wrote (9728)8/14/2000 6:36:57 PM
From: CIMA   of 9980
 
Beijing's Anxiety

Summary

Almost half of the Chinese Communist Party's local secretaries have
been called back to Beijing for further indoctrination and
training. These chiefs are Beijing's front line troops in the
country's great contradictory effort: opening the economy while
maintaining tight political control. These low-ranking officials
occupy the pivotal point at which the party and business intersect,
and Beijing is signaling that they may not be up to the job.

Analysis

For the first time in more than 50 years Communist Party chiefs at
the county level have been summoned to Beijing for indoctrination
and management training. More than 2,000 party secretaries - nearly
half the total in China - will undertake advanced studies at the
Central Party School. This is the party's top educational
institution, formerly reserved for high officials.

The training program highlights Beijing's concern with the
interaction between politics and economics at the local level.
Though they make thousands of decisions about which companies will
thrive and which will not, these local officials are a long way
from the center of power and often prone to bribery. Beijing
clearly sees its authority slipping at the most significant level -
this interface between the party and the masses - and appears to be
taking emergency measures to bolster its authority.

County authorities form a critical link between the Communist Party
and the people. Many are elected by popular vote. Counties are the
lowest levels of the party with the power to form standing
committees - which is where much of the real work of governance is
done. Though the lowest officials with real power - and the most
distant from Beijing - these people are critical to the
government's control of the regions.
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On Aug. 7, Hong Kong iMail reported that Chinese authorities are
hiring additional lecturers and building additional classrooms and
dormitories at the Central Party School campus in western Beijing.
The paper reported that it would take at least three years to
complete the training courses for the 2,000 party heads. The
courses will last six months, longer than the four months allotted
for ministerial officials.

The entire process is unorthodox, considering that local Communist
officials have their own schools, usually at the provincial or
municipal level. This high-level attention underscores the
importance Beijing attaches to this training. The secretaries are
to "advance their ideology, [at the] professional and managerial
level," according to sources cited by iMail.

This massive educational effort appears to be an attempt to
buttress the party at what is simultaneously its weakest and most
critical point. The Chinese government is constantly attempting to
manage the pains of economic growth, for example weighing the
economic benefits of shutting down inefficient state-owned
enterprises against the social costs -- and political risks - of
increasing the number of unemployed workers.

While Beijing is attempting to handle questions about the roles of
multinational corporations and large Chinese companies in a state-
controlled economy, local authorities deal with much lower profile,
but myriad companies. The tens of thousands of small- and medium-
sized businesses are the real engines of economic growth. County
authorities need to make thousands of delicate, difficult decisions
- which cumulatively add up to a large portion of the national
economy.
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These officials have to resolve the tension between economic reform
and social stability, and operationalize central policy on a daily
basis. This is especially true if China becomes a member of the
World Trade Organization (WTO). If accepted, the country will
likely have to liberalize its agricultural sector, which will
involve thousands of low-level decisions involving millions of
farmers.

But distance makes it difficult to double-check their judgement,
and erodes the central government's authority. Central officials
often lack sufficient power and are prone to corruption. Beijing
clearly sees its authority slipping at the most significant level
and appears to be taking emergency steps to bolster its authority.

This training program is an attempt to prepare the local
authorities to make the decisions that will set the course for the
economy.
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For more on the Asia, see:
stratfor.com
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(c) 2000 Stratfor, Inc.
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