The WSJ is well known for twisting irrelevant tidbits into sweeping conclusion about China. The "Family Matters" report was part sham social criticism and part wishful thinking. Wall Street would love to see China degenerate into "Latin American-style oligarchy of powerful families" with whom Western transnationals can make private deals to bleed the Chinese people. Unfortunately for Wall Street, the real China is very different. While Wang Jun is the head of Citic, he personally does not own a single share of Citic stock. He holds the top management position, albeit with attendant privileges and benefits, but with no stock options, golden parachutes, incentive packages and what not common to American CEO's. Citic is 100% state-owned on behalf of the entire Chinese people. The problem of residual Confucian preference for family relationships in socialist China has been amply acknowledged in my recent postings on Confucianism. Yet it is fair to point out that the Chinese Communist Party (CCP) has made serious efforts to combat this cultural affliction. Also, there is commercial value in name recognition that should be very familiar to Americans. American corporations routinely embrace executives with prominent family names. A Ford just became Chairman of the Ford company. There are the Rockefellers, the Tisches (Loews), the Bronfmans (Seagram), the Murdochs (News Corp.), the list goes on. The irony is that many of the so-called "red princes" got their appointments to high level titular positions in Chinese companies because they manage to convince their superiors that their family connections will impress the foreigners who think that any company with a red prince as its head must be influential. In the last decade, red princes are also in great demand from foreign companies who wants to impress their share holders back home. It is an insider joke in China.
Politically, America has the Bushes, the Kenendys, the Roosevelts, the Humphreys, the Stevensons, the Rockefellers, the list goes on of families that are political dynasties. Mao's only son was killed in Korea and his grandson is not in politics. Several sons of prominent party and government leaders failed to win enough votes in their vigorous campaign to be elected to the CCP Central Committee in the last Party Congress. China treats economic crimes as capital crimes not because of the Chinese penal code believes in the sanctity of property, but because in a socialist economy, economic crimes are crimes against the people. It is a classic Confucian posture. It is interesting to contrast this attitude with America's treatment of the convicted crooks in the Savings and Loan Crisis, including Madison Guaranty. This raises the issues of the privatization of state-owned-enterprises (SOE) in order to dance more efficiently to the tune of market capitalism. We know what liberal economists have been saying. And the disastrous Russian lesson is for all to see. Any policy proposals for China from marxist economists?
Henry C.K. Liu
Louis Proyect wrote:
> Henry Liu:
> >It is also clear that the survival of socialism in China is in no small
> >measure due to CCP's refusal to unconditionally open China's markets to
> >global capitalism, despite the substantial costs inherent in such a policy.
>
> >From "Family Matters", Wall Street Journal, page 1, July 17, 1995:
>
> Late last year, when Wang Jun opened China's first business club, in a
> skyscraper high above this city's glittering night lights, the elite
> flocked to sip champagne and offer congratulations.
>
> But few exuded the warmth of Xiao Rong, the youngest daughter of China's
> paramount leader, Deng Xiaoping. While other guests politely shook hands
> with Mr. Wang, a gruff engineer-turned-financier, Ms. Xiao kissed him on
> one cheek, then prompted her 15-year-old daughter to "give Daddy a kiss" on
> the other.
>
> Ms. Xiao and Mr. Wang aren't related but their families are close. More
> than four decades ago, Mr. Deng and Mr. Wang's father fought in the
> revolution to bring communism to China. Their descendants remain tight:
> Wang Jun, who runs China International Trust & Investment Corp., or Citic,
> is a business and golfing partner of Ms. Xiao's husband; Ms Xiao's
> brother-in-law heads several Citic subsidiaries; and Mr. Wang's niece works
> for Ms. Xiao's property company.
>
> Family ties have always mattered in China, but never so much as today. In
> the so-called classless society of the past, one leader reigned supreme;
> everybody else lived in relative equality, which usually meant poverty.
> Now, with decentralization of control and growing economic opportunities,
> power in China is being diffused. As the nation is prospering, so are the
> children of the revolutionaries who founded the Communist Party.
>
> This small group claims a major hold on the power, wealth and opportunity
> that elude most of China's 1.2 billion people. Members of these loose,
> family-based alliances lead lives of privilege: attending the right
> schools, making the right friends, securing the right jobs--and staying far
> from the limelight to avoid criticism of their lifestyles.
>
> All this makes China's ongoing leadership transition look ever more like a
> shift from a dictatorship of one--Mao Tse Tung or Mr. Deng--to rule by a
> Latin American-style oligarchy of powerful families.
>
> Louis Proyect
>
> (http://www.panix.com/~lnp3/marxism.html)