In-Depth

by Malcolm Riddell

What the West Gets Wrong About China
3

Part 3 | ‘Myth 2: Authoritarian Political Systems Can’t Be Legitimate’

Harvard Business Review

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Rana Mitter | Oxford
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Elsbeth Johnson | MIT Sloan School of Management

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June 20, 2021
Part 3 | ‘Myth 2: Authoritarian Political Systems Can’t Be Legitimate’
Part 3 | ‘Myth 2: Authoritarian Political Systems Can’t Be Legitimate’
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Rana Mitter | Oxford

What the West Gets Wrong About China

3

BIG IDEA | ‘A Marxist-Leninist system is concerned not only with economic outcomes but also with gaining and maintaining control over the system itself.’
‘That has huge implications for people seeking to do business in China.’

‘Many Chinese not only don’t believe that democracy is necessary for economic success but do believe that their form of government is legitimate and effective.’

  • ‘Westerners’ failure to appreciate this explains why many still expect China to reduce its role as investor, regulator, and, especially, intellectual property owner when that role is in fact seen as essential by the Chinese government.’

‘Part of the system’s legitimacy in the eyes of the Chinese is, again, rooted in history:’

  • ‘China has often had to fight off invaders and, as is rarely acknowledged in the West, fought essentially alone against Japan from 1937 until 1941, when the U.S. entered World War II.’
  • ‘The resulting victory, which for decades the CCP spun as its solo vanquishing of an external enemy, was reinforced by defeat of an internal one (Chiang Kai-shek in 1949), establishing the legitimacy of the party and its authoritarian system.’

‘Seventy years on, many Chinese believe that their political system is now actually more legitimate and effective than the West’s.’

  • ‘This is a belief alien to many Western business executives, especially if they’ve had experience with other authoritarian regimes.’

‘The critical distinction is that the Chinese system is not only Marxist, it’s Marxist-Leninist. Many Westerners don’t understand what that means or why it matters.’

  • ‘A Marxist system is concerned primarily with economic outcomes. That has political implications, of course—for example, that the public ownership of assets is necessary to ensure an equal distribution of wealth—but the economic outcomes are the focus.’
  • ‘Leninism, however, is essentially a political doctrine; its primary aim is control.’
  • ‘So a Marxist-Leninist system is concerned not only with economic outcomes but also with gaining and maintaining control over the system itself.’

‘That has huge implications for people seeking to do business in China.’

  • ‘If China were concerned only with economic outcomes, it would welcome foreign businesses and investors and, provided they helped deliver economic growth, would treat them as equal partners, agnostic as to who owned the IP or the majority stake in a joint venture.’
  • But because this is also a Leninist system, those issues are of critical importance to Chinese leaders, who won’t change their minds about them, however effective or helpful their foreign partners are economically.’

‘This plays out every time a Western company negotiates access to the Chinese market.’

  • ‘Business executives, particularly in the technology and pharmaceutical sectors, expressed surprise at China’s insistence that they transfer ownership of their IP to a Chinese company.’

‘Some have expressed optimism that China’s need for control will lessen after they’ve proved their worth as partners.’

  • ‘That’s not likely, precisely because in China’s particular brand of authoritarianism, control is key.’

‘A Leninist approach to selecting future leaders is also a way the CCP has maintained its legitimacy, because to many ordinary Chinese, this approach produces relatively competent leaders:’

  • ‘They are chosen by the CCP and progress through the system by successfully running first a town and then a province; only after that do they serve on the Politburo.’
  • ‘You can’t become a senior leader in China without having proved your worth as a manager.’
  • ‘China’s leaders argue that its essentially Leninist rule book makes Chinese politics far less arbitrary or nepotistic than those of many other, notably Western, countries (even though the system has its share of back-scratching and opaque decision-making).’

‘The Leninist nature of politics is also evidenced by the language used to discuss it.’

  • ‘Political discourse in China remains anchored in Marxist-Leninist ideas of “struggle” (douzheng) and “contradiction” (maodun)—both seen as attributes that force a necessary and even healthy confrontation that can help achieve a victorious outcome.’
  • ‘In fact, the Chinese word for the resolution of a conflict (jiejue) can imply a result in which one side overcomes the other, rather than one in which both sides are content.’
  • ‘Hence the old joke that China’s definition of a win-win scenario is one in which China wins twice.’

‘Recognizing that the authoritarian Marxist-Leninist system is accepted in China as not only legitimate but also effective is crucially important if Westerners are to make more-realistic long-term decisions about how to deal with or invest in the country.’

‘But the third assumption can also mislead those seeking to engage with China.’

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