Elites fight secret battle for China’s soul
Published: November 12, 2012 – 3:00AM
Two years ago, China’s most successful investment banker broke away from his meetings in Berlin to explore a special exhibition that caught his eye: Hitler and the Germans: Nation and Crime.
In the basement of the German Historical Museum, He Di [pronounced Her Dee] watched crowds uneasily coming to terms with how their ancestors had embraced the Nazi promise of ”advancement, prosperity and the reinstatement of former national grandeur”, as the curators wrote in their introduction. The UBS banker found the exhibition so enthralling, and so disturbing for the parallels he saw developing back home, that he spent three days absorbing everything on Nazi history that he could find. On returning to China, he sharpened the mission statement at his think tank and redoubled its ideological crusade.
He Di’s Boyuan Foundation exists almost entirely under the radar but may well be the most ambitious, radical and consequential independent panel of advisers in China. After leading the Chinese economy into the arena of global capital, he aspires to enable Chinese people to live in a world of liberty, democracy and free markets. The challenge for Boyuan is that these ”universal values” are the antithesis of the principles by which the Communist Party keeps itself in power.
”Boyuan is like the salons that initiated and incubated the governing ideas of the French revolution,” says David Kelly, who is a research director at China Policy, a Beijing advisory, and maps China’s intellectual landscape. ”They explicitly want to bring the liberal enlightenment to China.”
He Di is quietly at the forefront of an ideological war that is playing in the background of this week’s epic leadership transition. At one pole of this contest of ideas are his universal values and at the other is the revolutionary ideology of the patriarch of the party, Chairman Mao. This battle for China’s future plays into the decade-long factional wrestle between the outgoing president, Hu Jintao, and his recently-resurgent predecessor, Jiang Zemin – the outcome of which will be clearer when the new leadership team lines up under a new general secretary, Xi Jinping, on Thursday.
Jiang’s ideological disposition has evolved in chameleon fashion but in recent years, in subtle ways, he has let it be known that if the party remains too firmly beholden to Mao Zedong thought and Soviet-era institutions, it faces the risk of Soviet-style collapse.
He Di says there are ”two forces debating each other” as if he were engaged in an abstract, academic debate. Actually, he is up against the legacies of Mao, Stalin and 2000 years of dynastic rule but he believes the overwhelming majority of Chinese people are on his side. ”If you test how many Chinese people really want to return to Mao’s period, to become North Korea, I don’t believe it’s 1 per cent of them” he says. But He Di is also facing off against the world’s largest vested interest, the party itself.
The party’s ”deep red” ideological spear-carriers have been fighting as if their lives are on the line. The neo-Maoists – to use He Di’s term – are sceptical of private capital, appalled by rampant corruption and antagonistic towards what they see as dangerous Western values. These adversaries, whose heroes include the fallen political star Bo Xilai and the politically-wounded corruption-fighting general, Liu Yuan, have a term for everything that He Di’s Boyuan represents: ”the Western hostile forces”. Luckily, He Di has some weight behind him, too.
He Di’s father was a minister in the reformist 1980s, responsible for agriculture. His foundation has a fearless chairman, Qin Xiao, who held a ministerial-level position as chairman of one of China’s top state-owned financial conglomerates. His directors include Brent Scowcroft, a former US national security adviser. The Boyuan steering committee includes the publisher of path-breaking Caijing magazine, a son of one of the most important generals of the revolution, Marshal Chen Yi, and a group of serving officials who, between them, manage the largest accumulation of financial assets in the history of global capital.
Childhood friends who have worked closely with Boyuan include the governor of the People’s Bank of China, Zhou Xiaochuan, and Wang Qishan, the financial system czar who is set to enter the Politburo Standing Committee this week. They, along with several other ”princelings” who have risen to the top of Chinese finance, became close friends, ironically, when they were all red guards fighting ”capitalist roaders” in Chairman Mao’s Cultural Revolution.
Many of the protagonists at Boyuan are creatures of the party, with levers of the state at their disposal. They are organising and challenging ”the party line” in ways that could lead ordinary citizens to be seen as dissidents. Further in the background are members of some of China’s most powerful families – the world’s most powerful families – including the former security chief Qiao Shi, and the former premiers Zhu Rongji and Jiang Zemin.
When He Di retired as chairman of UBS China – after leading the investment banking charts for four straight years – they gave him an office, a secretary and a salary with no minimum work requirements. He continued to find them lucrative deals, capable princelings to hire (such as the son of the former vice-premier Li Ruihuan) and introductions to wealthy private banking clients. The Swiss bank also gave him $US5 million to inject into Boyuan, just weeks before the 2008 global financial crisis, without any strings attached except the appointment of a UBS representative on his board. He Di tipped in a million dollars of his own as he redeployed his resources to build a platform for ideas. ”One day, I picked up the phone and called potential board members, and in that one day, I called six or seven ministers or vice ministers, without any hesitation,” he says.
He Di had intended his Boyuan Foundation to be a retirement pursuit, a project of collective self-enlightenment with close childhood friends. But as he studied, broadened his networks, and watched Chinese citizens embrace modernity and the party-state slide back towards the revolutionary ideology of his childhood, his ambitions turned from supporting China’s modern evolution to saving it.
He Di traces China’s spiritual and policy drift to 2003, which happens to be the year in which President Jiang Zemin and Premier Zhu Rongji entrusted the party and government apparatus to Hu Jintao and Wen Jiabao. He says the administration drifted away from ”opening and reform” and the nascent internet space began to fill with critics of privatisation and reform. Leaders are isolated from their mid-level officials, each bureaucracy is siloed from the next, and there is no framework to mediate their interests or debate the wider merits of any particular proposal, he says. And once they started back down the old road of central planning, they grew addicted to the power it brought them.
”The current leaders have really disappointed because I don’t know what they believe,” He Di says. ”They were educated by the party, the old doctrines of Marxism, they lack growth experiences at the grassroots. They are really engineers who still want to enjoy the dividends from the previous generation leadership.”
He Di’s worries grew as he watched a fellow princeling, Bo Xilai, a true son of the revolution, breathe new life into the spirit of Mao Zedong and whip up a popular frenzy in the inland mega-city of Chongqing.
A turning point was his visit to the history museum in Berlin. ”I saw exactly how Hitler combined populism and nationalism to support Nazism,” He Di says. ”That’s why the neighbouring countries worry about China’s situation. All these things we also worry about. If we are really following extreme nationalism, extreme populism, and the economy is following state capitalism, history can be repeated again.”
When He Di returned to Beijing, he discovered renowned scholars were well advanced in investigating those same parallels, even if they could not safely publicise their work. He discovered Shanghai historian Xu Jilin. Professor Xu traced China’s leftward turn to the 1999 US bombing of the Chinese embassy in Belgrade, which grew into a ”nationalist cyclone” in parallel with China’s rising pride and power and the political phenomenon of Bo Xilai.
”Statist thinking is gaining ground in the mainstream ideology of officialdom, and may even be practised on a large scale in some regions, of ‘singing Red songs and striking hard at crime,”’ Xu said, in a talk delivered to the Boyuan Foundation. ”The history of Germany and Japan in the 1930s shows that if statism fulfils its potential, it will lead the entire nation into catastrophe.”
Xu’s antidote is right out of the Boyuan mission statement: ”What a strong state needs most is democratic institutions, a sound constitution and the rule of law to prevent power from doing evil.”
Boyuan’s Beijing headquarters is an elegantly renovated courtyard home in the city’s inner north. Behind He Di’s desk is a wall of books on history, philosophy and reform. Over a simple lunch and endless cups of tea, he tells me how his commitment to liberal values is rooted in a strand of Communist Party tradition which flourished in the 1980s – when his father was at the height of his power – and has since been subordinated but not entirely vanquished.
”My grandfather and father were all fighting to establish, not dictatorship, not feudalism, but so that people at the grassroots could enjoy a good life.”
He Di’s father, He Kang, was a talented scientist, respected for his integrity, who helped guide China’s peasantry into the market place and enjoy the greatest burst of poverty alleviation the world has seen. This was China’s moment of enlightenment, he says, where the revolutionary veterans respected the judgment of peasants and entrepreneurs alike to choose what to plant, what to make, and how to take it to market. The trick was simply to get out of the way.
”At that time, the top leaders really understand the concept of so-called universal values, which means human rights and allowing the people freedom to choose what they want,” He Di says. ”They respected the abilities of the people, reflecting a universal value not necessarily coming from the West but based on human beings’ basic needs.”
In He Di’s book, Mao Zedong was an aberration, a diversion, who has no positive contribution to offer in his family’s 100-year quest to bring China into modernity. Mao saw democracy as a tool, not a value. Mao saw peasants and workers as an undifferentiated mass to be organised and mobilised but not respected. He represents China’s past, and used ideology instead of Confucianism as his doctrine of control.
”Mao called himself Qin Shi Huang plus Stalin,” He Di says, embellishing Mao’s actual words. ”He used revolution to repackage China’s despotic tradition and crown himself emperor.” He says when Deng Xiaoping and his successors, Jiang Zemin and Zhu Rongji, committed to the market, they also committed to the values that underpinned it, including the ideal of law.
The absence of values led to nihilism and the state-worshipping catastrophe in Nazi Germany. An absence of values has led the administration of Hu Jintao far off course in the decade it has been in power, he says, eviscerating the integrity of the individual and leaving nothing to define itself by – except its enemies.
John Garnaut is author of a new Penguin e-book, The Rise and Fall of the House of Bo. A version of this article appears at foreignpolicy.com