Privatization and the Political Change in China
Economics is one of the important aspects of social life. Then and now, many countries, kingdoms, nation-states and city-states rise to power or crumble to ashes because of problems with regards to economics. China and its history has been witness to how economics can make or break the political strength and unity of a particular place, whether it is a city, province or a sovereign country. It seems that China is taking the lessons of past failures to heart by considering and implementing economic reforms in the hope of improving and strengthening the economy and in the process strengthening the political stability of the country as well. Over the past two decades...China... (has) changed immensely (Li, 2004, p. 105). Today, China is considered as one of the emerging global superpower as it flexes its economic muscle in the Asian region and globally by standing shoulder to shoulder with economic powerhouse countries like the US. The country has experienced drastic and radical improvement in its economic status. Moreover, this change is influencing and affecting not just the country but the global economy as well. While there maybe reasons for such development and improvement, one of the possible reasons behind the success of China is the shift towards privatization. Privatization is considered as an important strategy for a country to be able to participate and compete in the global economic stage (Overman, 1995, p. 46). In the recent years, China has made it clear that it wants to be able to participate more in the global economic activities and it showed that it is ready and willing to try privatization and give its economy a make over which, evidently, had stunning results. While privatization is good, it is also important to know how privatization and the change in the economics of the country have affected other aspects of the country for example, its politics and the political realm. It is expected that the shift to privatization and the economic change will entail political change, too. Because of the significance of this inquiry, the focus of this paper is the discussion and analysis regarding the idea that privatization in China is leading to political change.
Privatization and China
Privatization is the move of a particular country to change its economic practices, policies, perspective and outlook for example, shifting from state-owned and state-controlled practice to privately owned and privately controlled and operated industries, or even introducing foreign role in managing Chinese industries and enterprises. In the recent years, the government has started an ambitious program to privatize much of Chinas state-owned enterprises and open them to foreign investment (Li, 2004, p.109). Privatization is a crucial and significant move because of how the reform can impact and change not just the economy of the country but the other aspects of the country as well that would be affected by the change. The change in the economy of the country may not always be a positive turn, but many countries are openly trying this practice. They believe that this will work, considering how it has worked in the past based on the experience of many other different countries. The opening towards privatization is not simultaneous, since countries tend to follow one another if they see that the style and approach has a promise of economic success (Li, 2004, p.109).
Communist countries, in particular, find it very difficult to transition towards privatization. Many aspects of privatization lean towards democratic and capitalist practices and beliefs, which go against communist beliefs. That is why, in the history of economic shifts from communism to privatization, like the case of Russia for example. It is always expected to result to noticeable changes that the government should anticipate and the government should be ready to accept and accommodate, not to mention the struggle that has to come along first before the change is realized and complete. The reform starts to manifest the expected changes once the society and its aspects have been fully able to adjust to the implications of the change towards privatization. In the last several years the world is witness to the opening up of China. Part of this opening up is the very ginger process of privatization. Slowly but surely, China and its Communist party and government are turning over to private entities the control and management of industries by selling stocks.
The idea of privatization is the belief in allowing private entities to have more control and more say on the process of managing industries. The country can expect a better result from it. The experiences of other countries before China act as proof that this is not just doable but has the ability to bring out the best in the country and make the country and its industries yield more profit and be more productive. Privatization has been a very controversial and critical issue in China among the different spheres of the society, like politics. While a considerable portion of the population may have agreed and approved of the move for privatization, similarly and parallel to this position is the considerable number of people who, in turn, feel that privatization is not the answer, and thus, not agreeable to and not approving of such economic move. The government eventually have to make a decision and choice, and evidently, they went with giving privatization a chance in China. Because of privatization, the role and scope of state ownership of industries are slowly decreasing in exchange of or in favor of private ownership (Li, 2004, p.109).
Privatization in China is an economic movement that has been around and observed by political and economic analysts for some time and for several years now in consideration to the action plan and the implementation strategy for the gradual move towards privatization of the country and its industries. Because of the intensive undertaking involving the implementation of privatization where it is already suitable at the moment, the impact of privatization is felt not only and exclusively in urban areas where economic activity is dominant and strongly felt, but also in rural areas of the country where there is equal potential for rise to significant economic role, considering the fact that manpower is there. Often, it allows businesses to be closer to supplies and raw materials. State ownership to a large extent no longer exists in rural areas (Fin, Heberer, Taubmann, 2006, p. 287). The private sector is more or less dominant (Fin, Heberer, Taubmann, 2006, p. 287). This is already one of the changes resulting from privatization, which in turn, would result to changes in the political aspect of China because of the new political role that the shift from state to private ownership brings to the table.
One of the reasons why privatization is a very strong and loud issue is because people believe that there is an impending political change that will happen as a result of the privatization. And worse, many are made uncomfortable with the fact that there are those who predict massive political changes although these predictions are often not strongly supported by credible empirical evidence. Surely, not many people have a clear idea what the political change would be, how it would manifest itself, what is its exact extent, and other information. There is indeed the possibility of a massive political impact but it can be in the long term rather than in a short term, sudden influx of change. This is understandable because, as professionals explain, people cannot help but fear for the worse when political change is perceived and when the political change is not clearly defined, in the fear that the political change may eventually break the economic reform because of the degree of the impact of political change (Des Forges, Luo, Wu, 1993, p. 230). There was, for instance a widespread fear of turmoil and anarchy when political changes were heading in a completely new and unpredictable direction (Des Forges, Luo, Wu, 1993, p. 230).
But what is clear is that the political change will mean not just small changes that China can easily live with or big changes that China cannot live with. Some of the changes will come in broad strokes but will happen under a certain pace that will make the country able to adjust. The change will significantly alter and re-do the previous details of the social life in the country, with focus on and relying on the effect of the political change (Dickson, 2003, p. 116). The eventual impact of privatization on Chinas political system is still uncertain, but previous research and experiences of Chinas entrepreneurs provide grounds for assessing their potential to be agents of change (Dickson, 2003, p. 116). Economic growth, no doubt, is characterized by a growth that is fast paced. Even though the political change is expected to happen as a result of economic change, it does not say that it will occur in the same pace and speed as economic growth did. The rapid economic growth has led in turn to political and social changes (Li, 2004, p. 105).
Inside privatization, the idea is this - the social condition is already ripe for economic change. This reform requires the introduction of a new practice with regards to economic functioning of the state and its people, and the new division of roles as well as responsibilities among the state and its people. In economic reforms such as privatization, reform is gradual and incremental (Li, 2004, p. 109). This is good because a sweeping and swift privatization is probably not an attractive option for many social sectors (Des Forges, Luo, Wu, 1993, p. 230). Privatization is one of the economic reforms which have enjoyed success in the past and many countries are testament to the positive impact of privatization. Political change that comes with it, like privatization, is something that the people can use to work for them in a positive way. Like any other successful economic change that happened in the country, there are expected changes in the social characteristics, and the change includes political change (Heberer, 2003, p. 1). Successful economic reforms were followed by a process of gradual social and political change (Heberer, 2003, p. 1). Privatization is an ideal move, but it is only ideal and can realize the optimum potential of a countrys economy if the transition to privatization is made complete and comprehensive. Only comprehensive privatization will eliminate those forces that have interests in preserving as many state-owned firms as possible (Zuzowski, 1998, p. 22).
It is ironic that what is set to be affected significantly is the political sphere, when the power to make change happen actually comes from the same source. Political factors largely determine the pace and extent of privatization (Tsui, Bian, Cheng, 2006, p. 313). The political sphere knows what will happen should it pushes through and uses its powers to undertake this task. Because of greater reasons transcending the consideration for the preservation of power and status quo in the politics in China, it is the same political power that will be used to make the change and the shift in economic stance happen. As the change is felt because of privatization, the political sphere, according to professionals, is bound to be affected and changed by the economic change and reform undertaken through privatization (Tsui, Bian, Cheng, 2006, p. 313.
What are the Political Changes
At the onset of privatization, political change is expected to follow. Reform in economics results in direct political change as a consequence, or because it was expected (Stanford University, 2009), or both. The political change is manifested in the changes happening in the political culture, political institutions and in the political entities (groups and individuals). There are many reasons for the political change at the onset of the economic change in the form of privatization in China. It varies from the change and shift of power and clout, the restructuring of the social echelon and strata, the change in the status quo in economic practices that impacts politics, etc.
The changes will open new opportunities for politicians, for the political institution and the political culture in China. Besides the opportunities, this change will also create new roadblocks and hindrances which will force the political culture, political institution and political individuals to create a new approach or perspective as a reaction to change. New opportunities will include opportunities to bring in new power and new policies, as well as new priorities, goals and agenda. This can also open new doors that are susceptible and vulnerable to being used to undertake acts of graft and corruption among public officials and private business entities and groups. This is important since China has a strong history of corruption. The old system was an example of how the political aspect contributed to the deterioration of the economic system through the work of greedy politicians who used the economic system not for the countrys gains but fir their own personal financial gains (Li, 2004, p. 109). The Chinese regime has long refused to abandon control of their money-losing state-owned enterprises which serve as power networks and cows for Chinas unaccountable and greedy ruling party networks (Li, 2004, p. 109).
One the other hand, the new roadblocks may include roadblocks towards continued maintenance of previous exercise of power and clout and the creation of roadblocks that can hinder actions counter to the system of the newly introduced economic system. These are all mere general bullet points since there are more to mention and discuss. All of these are proofs that the privatization is not only making changes in the economic sphere, but also in the political sphere. The economics is strongly connected to the political realm of a country or government, regardless of whether it is private, public or state-owned and in whatever different degree of control the state or the private entities have prior to the entry of a catalyst of economic change in the form of privatization.
The changes are intertwined, and in some aspects, looks like interconnected series of events, wherein the change can lead to a series of different and strongly related and linked changes. The privatization will impact the many aspects of politics - political culture, politicians and the political institutions. All of these are bound to change in reaction to the changes that will happen in line with privatization. The changes and resulting reactionary change can either be positive or negative.
A. Impact on political institutions
Political institutions, like the party and the political organizations acting in support of or against the Communist party, will be significantly affected by the economic development with the entry of privatization practices. This is because these political institutions function are dependent and dictated by both political and economic situation and condition in place inside a particular country. If there are changes in these two spheres as radical as the move towards privatization, it is expected that these political institutions will also be affected one way or another. One of the possible impacts of privatization towards political institutions is the change in the concept of and bearer of social power, vis--vis the change in the composition of the power strata. Political institutions that previously monopolized social power, influence and clout will have to adjust and make room for new holders of power and clout in the social level.
Change in power and power strata - Politics and economics is about power and influence. If there are changes in these two realms, automatically the nature of power will change also. The change may mean that original power and power holders retain their status or even experience improvement, or the opposite. Another possibility is that the previous power holders have to learn to share the power with a new group of individuals. The social strata are changed so that there is room for the new entities. Because of the change in power and power distribution, political institutions need to re-evaluate how they relate to, interact and coexist with the new sections and entities inside the power strata of the society.
The rise of the middle class - Another important aspect in the socio political change is the creation of a new group, which is identified as the middle class. Observers believe that privatization will help in allowing the middle class to rise and become an influential group. And with the rise of the middle class comes the need once again to re-arrange the state of power in the society and the distribution and exercise of power. Middle class, and its rise to significance in the society, depends on privatization in some degree. That is why, many observers who are in favor of this criticizes the practice of taking alternatives versus true and genuine privatization, noting that through this delaying tactics and effort, the middle class and its growth and rise to prominence is being hampered (Lindau, Cheek, 1998, p. 117). Marketization without privatization, however, will not provide the economic base for an autonomous middle class (Lindau, Cheek, 1998, p. 117).
The problem of marketization without privatization is one of the problems hindering Chinas development and economic change towards privatization. One of the examples of this is the township and village enterprises. The prevalence of this in rural areas and the fact that this practice encourages marketization without privatization, it hinders direct privatization, and in the process, denies the development and change that is set to happen in China once the economic upheaval is experienced through privatization (Lindau, Cheek, 1998, p. 117). TVEs themselves are examples of marketization without privatization, thus preventing the emergence of an autonomous middle class in rural areas (Lindau, Cheek, 1998, p. 117).
Change in political entities - One of the political changes that will result from privatization is found in the changes in the behavior of political entities. In China, the dominant political entity is the Communist Party. Once privatization takes place, the study on the comparison of how the Communist Party behaved before and after privatization will reflect noticeable changes. The change in behavior of the political party is a result of the change that happens around it. The Communist Party cannot assume that it will not be affected by the political and economic change in China. There will be the re-distribution of power and the political roles of many entities involved in the political and economic sphere will change in line with the changes that will happen in the economic roles and responsibilities of the different parts of the Chinese economic machine at the onset of privatization. Along with it is the reactionary change that the Communist Party will manifest as what some analysts predict, the Communist Party now will learn to compete and must relinquish previous monopolized hold on the economic powers (Tsui, Bian, Cheng, 2006, p. 313). Transitional economies vary widely in the extensiveness of regime change - defined as the degree to which, prior to or simultaneous with the onset of market reform, Communist Party hierarchies lose their political monopoly and must compete with other organized entities for political power (Tsui, Bian, Cheng, 2006, p. 313).
B. Impact on Political Culture
Political culture is bound to change because of the change in economy, particularly as a result of the onset of privatization. This is because political culture is affected not just exclusively by politics and political events, but also by other events in the society, one of which (and in significant degree) the economic changes.
Corruption - China has its problems with corruption by government officials. One of the reasons in the past is because of the practices that are created and sustained because of the system of having the economy run by the state. With the entry of privatization, there will be a change in the aspect of corruption, but it is important to stress that there is no definitive answer if the change pertains to positive change (which would mean less or decreased cases and tendencies of corruption or less individuals participating in corruption) or negative change (which means the condition of corruption will grow worse than before.
Change emergence of a new political struggle hinged on economic goals - Privatization will bring forward new political struggle. For example, the privatization of township and village enterprises or simply TVEs during the 1990s feature the struggle politically of those who are in favor of privatization in the TVE sector versus those who oppose this move, largely as an act of protecting their own interests, and using political authority to subvert and repress such move. The political struggle will come about especially when people use the idea of economic growth as a legitimate reason to push for the economic and political changes. They would cite the manner by which China has risen to economic importance and stability (Li, 2004, p. 108). In only two decades, China has transformed itself from a dormant introspective giant into a dynamic powerhouse of major potential significance in the world of economy (Li, 2004, p. 108), and use this to legitimize calls for action that impacts economic and political change. The completion of the privatization move inside the country will be not just an economic struggle but a political struggle as well.
The problem with China is that its economics and politics are intertwined and the string that binds them is that which is made of individuals who profit through the use of political clout to control local economics. Those who illegally profit from this illegal powers and exercise of illegal transactions will most likely move towards the blocking of any change in socio economic status quo in fear of losing what they had in the past, blocking not just privatization but development and the new opportunity for other people who is set to enjoy the benefits of privatization. The privatization will move people towards pursuing struggle to attain the change knowing that they can benefit from it. Once the social struggle begins like the case of the struggle for TVEs in the 90s, there will be two or more blocs fighting this struggle. The result will either strengthen the prior ruling political blocs and groups or there will be a change in the socio political and socio economic status quo in local and national levels, in the process, creating a new political and economic power strata that will be peopled by a new set of individuals and groups that possess a new set of power, influence and clout brought about by the economic change and the resulting social and political change.
New problems, new policies created in the political level - The culture of political problem detection and problem solving will be affected by the change. There are many ways in how this can happen. Here is an example - hypothetically, the privatization will result in economic boom. The economic boom, in return, will result to the increase in factories, mills, offices and production sites and buildings that are fuelling the economic boom, which results to the rise of environmental problems. The environmental problems now become a focal point and issue in the policy-creation and problem solving tasks of the political system in place in China. This will not be limited to hypothetical exploration. As some analysts have pointed out, this is a real possibility that countries, like China, have to deal with in relation to the entry of privatization (Szelenyi, 1998, p. 92). Marketization and privatization - the mantras of the reform movement - have introduced new, qualitatively different, and deeply troubling environmental problems (Szelenyi, 1998, p. 92). The change in this scenario is viewed in the fact that because of the string of events, previously unnoticed problems or problems that does not exist in the past becomes a significant cause of concern now. Because of the importance of economic growth, the political system is now constrained to immediately act upon the issue but without upsetting or reversing the economic growth being experienced by the country (Fin, Heberer, Taubmann, 2006, p. 287). In the book talking about economic and social change in China in the 20th century, the authors explained that if strict and controlled regulations are not introduced soon, in some rural regions it might become almost impossible to cope with the environmental damage, despite many new regulations (Fin, Heberer, Taubmann, 2006, p. 287).
Democratization - The change in the economics in China and the use of privatization to achieve, in part, the perceived change was received in the political and economic sphere with varying reactions, anticipations and inhibitions. Some were openly questioning of there is indeed the possibility of political change at the onset of and as a result of the privatization, wondering if the political system in China at place is not as strong as it may seem and would yield to the changes that privatization will bring along with it.
Some accepted the fact already, that the country and its people, its economy and politics are all facing privatization and the resulting change. Even though it was something that the selected few genuine leftist are not overly excited about considering its capitalist and consumerist qualities that are not in alignment with Communist beliefs, tenets and practices, this was not enough to stop privatization dead on its track. On the contrary, it was allowed to enter the lives of the Chinese, in anticipation of the biggest political change of all - the move towards democratization.
Many believed that the economic change was a jump off point to a more important political change. Through the privatization, the country will be designed in a way that in few years, it is already suitable to adapt to another change, this time a political one and is a result of privatization, and that is the entry of democratization inside China, affecting its life, its people, its society and its economics and politics (Dickson, 2003, p. 116).
Will the emergence and growth of private entrepreneurs lead to the transformation of Chinas political system This is the hope of many observers of Chinese politics, and also the fear of the remaining leftists within the CCP. The former group wants to encourage the continuation of privatization in China, expecting that privatization will lead to the formation of a civil society which in turn will lead to eventual democratization (Dickson, 2003, p. 116).
This political change is expected, especially if there are many people and social entities that are against the manner by which the existing political system handles the economy. The economic change and the resulting political change should equally both be the main goals since both are important to change the current status of economic and political system and to make the change in these two spheres something that will last for longer than short term (Des Forges, Luo, Wu, 1993, p. 230). In any country with a predominantly state-run economy, privatization is bound to be a process parallel to democratization in order to undermine an omnipotent bureaucracy (Des Forges, Luo, Wu, 1993, p. 230).
Change of economic role of politics - According to Lindau and Cheek (1998), one of the components of the economic liberalization in China includes the states role shifting from micromanaging these enterprises to macroeconomic management of the economy (Lindau and Cheek, 1998, p. 117). Privatization will allow them to do that. Indeed, there will be political changes. This is manifested in how the politics will act in terms of its direct and indirect responsibilities to the economy. Just as what Lindau and Cheeks explained, the shift of the politics and its role in economics will be significant and important and will impact how politics function, especially as a reaction to economics (Lindau and Cheek, 1998, p. 117).
Agent of change - Another change in the political sphere that is expected to happen as a result of economic
reforms via the privatization of industries inside China is the designation of new roles, particularly the discovery of the new strata or group in the society that wields power and influence over the society and how this new strata will be the new source of development and change, including modernization, and even democratization in the case of communist countries transitioning towards a privatized economy. In the past and prior to the onset of privatization, the key agent of change in the society is either the government and its agencies, departments and leaders, or the people who, en masse made revolutionary movements, albeit everyone is working under government rule since prior to privatization, industries and the jobs are state-controlled.
This often leads to a stagnated society. The eventuality of change happening or someone or something triggering change is very little because control and power over significant aspects like economics are controlled and monopolized by a particular entity (the government). But with privatization, with the creation of new strata and the new source of people that will wield their own share of power over the society to affect change, what is created also is the reality that there is a new source of power that can be used for change, and in the process, the state is being replaced not just in ownership and control, but also when it comes to power to influence change (Heberer, 2003, p. 1). We argue that the privatization process...is a bottom-up privatization process and led to the formation of new entrepreneurial strata and began at least partially to replace the state as an agency of development and modernization (Heberer, 2003, p. 1).
Privatization is all the more supported because of the belief of economic and political analysts that what the government can do in the past, private firms can duplicate today, and even surpass in many cases. Government entities are considered to have the ability to plan for projects and undertake the creation of infrastructure to support business. However, the monopoly of government agencies of this action is now a thing of the past because as analysts pointed out, these same functions are easily doable to many private firms (Tanzi, Chu, 1998, p. 40). If this is the case, what is stopping the country from allowing private entities to operate and control some of the enterprises and industries in the country and allow for privatization to take place
C. Impact on politicians
Another aspect of the political sphere that will experience change in different ways as a result of privatization is the politicians. These individuals have the power to isolate themselves as an elite group. They can also become prominent political entities even when they are not genuinely political in nature, at least not in the manner by which politicians are political. Capitalists now form an important part of the political system after their integration to the political system as initiated by the Chinese Communist Party and as a response to the economic change because of privatization (Stanford University, 2009). Politicians and political leaders will react to the entry of privatization in many different ways.
One of the changes is the change regarding how they see themselves and their role and significance in the society. Privatization is expected to bring out a new group of individuals that possess significant power and clout in the form of businessmen, in the form of entrepreneurs and in the form of the economic elites (Dickson, 2003, p. 116). Since China adopted the policy of reform and opening up, the composition of Chinas social strata has changed to some extent. There are, among others, entrepreneurs (Dickson, 2003, p. 116). As a reaction to this, politicians, who in the past did not have to live with the presence of other non-political individuals who possess as much power and clout (and money), now have to reconsider how this situation can work to their best interest. Most of them will make a move to forge alliance with the new group, if only to protect their own power base or what would be left of it once the new group composed of businessmen and entrepreneurs started flexing their muscles in the economic and political circles. Some politicians may even make the shift from being a politician to being a business, or even try to juggle doing both.
They are in an excellent position since they have the privilege and leverage brought about by their current political position to help them secure and establish their paths outside or parallel to their political career. Those who will remain strictly political will realize the need to foster amiable relationship with the entrepreneurs and businessmen especially in the local level. While those who will venture towards becoming businessmen and entrepreneurs themselves will have to face many obstacles and hurdles, like the question of double jeopardy during the transition from politician to business, the questions on abuse of power, and if the politician can fit in inside the new group especially once the entrepreneurs and businessmen have managed to form their own elite group and once they realize the power they have. Politicians behavior will change. How they approach the tasks involved in their being a politician will now include and involve the consideration on how the businessmen and or entrepreneur group will react to such actions, and if the repercussions coming from this group is something that the politician is willing to accept.
Again, the change is because of the change that happened to power - who holds it and how many are them and the degree of power that a group or individual can exercise over the other and over the society. This group of people (businessmen) has the power to create a pipeline of financial support leading inside particular communities, which will benefit, directly and indirectly, local politicians. Although businessmen that give money back to the community, they do not make their intentions clear. People are wondering if this was a result of goodwill so that the community can have better roads and schools and infrastructure, if this is a result of the pressure from political leaders, or if this is the way of entrepreneurs and business to make sure that other people who are not financially blessed as they are at the onset of privatization will remain content and not challenge the status quo of the economics and politics (Dickson, 2003, p. 117). What is important is that the political realm finds a new ally in civic assistance and the society now does not have to rely solely on what the government can do for them since privatization creates entrepreneurs and businessmen who can give aid and support to communities, particularly poor and depressed communities.
Politicians and political groups now move towards wooing in the new leaders of the economic-political sphere as a result of privatization in China. This is the economic elites, the entrepreneurs, which are expected to support the agendas of those supportive of them and their cause in return (Stanford University, 2009). The changes that will manifest in politicians will contribute to the overall political change experienced by China as a result of the economic change due to privatization.
What bothers critics is not only the thought of politicians becoming businessmen and entrepreneurs and shifting into the other side, but the thought of the opposite, when entrepreneurs and businessmen became more significantly involved in politics. And worse, if it is the result of their own volition and consciousness and not just by mere chance that these people are openly working for more role, power and clout in the society, which will make them dangerous to the society, to the people, to the system and to themselves as well, especially once these individuals take the role of political manipulators and through their financial capability use their power and clout to undermine or use to their advantage political practices that can make them even more powerful. Like for example, the tampering of election processes and election results so that it turns out favorable for their particular group (Dickson, 2003, p.116). If private entrepreneurs are allowed into the party, some of them may even use their economic strength to stage-manage grass-roots level elections and control grass-roots organizations. This will have serious political ramifications (Dickson, 2003, p.116). And although the political ramifications are not really 100 per cent crystal clear so far since the privatization has not be complete yet and the effects are not yet completely understood, documented and studied by professionals, it does not mean that the worst possible manifestation of the political ramification will be avoided. In fact, it is better to anticipate for the worse. As China tries to get used to the economic reform, it is also addressing problematic aspects and weeding out and pruning the economic and political processes even before it becomes deeply rooted like traditional economic and political problems that has long been criticized and was subjected to the need for change and reform. Some of the entrepreneurs and businessmen forming the economic elite will realize the power they wield and become more conscious of their social roles, particularly their role in identifying local political leaders. There is the tendency that the economic elite will opt for supporting candidates who run for elections in the basis of belief in agenda and platform. The support was because they support the candidates and their political agenda, and in turn, political leaders will also seek the support of these individuals. The reliance on the support of the entrepreneur reflects generally one of the noticeable changes in politics and in the political system (Dickson, 2003, p. 116), since in the past when there is no such thing as powerful non-political economic elite the political practices of these political leaders do not include such consideration.
Changes in economic policy directions and approach by political leaders - Part of the political sphere and realm is the plotting of economic directions by political leaders. With the change in economic design and structure, there are also expected changes not just in the people who will now plot the economic directions, but more importantly, how the people will now move to plot the future economic directions of the country now that it is experiencing the impact and effects of privatization. An example of the change in economic policy directions influenced by the political leaders is the alliance of local government leaders and those which are called economic elites especially those who function in the local sphere.
The political leaders in the local level knows that the shift of economic design will make them more amenable to new opportunities for profit, as well as for development, if the economic change pushes through. That is why, they give their support to the economic elites, in the hope that the economic elites, once given what they want which is economic decentralization and privatization, will not forget those who supported them. Because this is happening in the local level, business that will become private and operate in the local level will most likely interact with the local politics, which in turn, can use the favorable relationship of the economic elites and the local political leaders. Political agenda in the local level is given support and assistance by the privatized entities, particularly financial support.
This is an ideal and positive vision for the possible future in consideration to privatization in China. However, the problem is that this similar situation can be used by the local political entities for their own profit and financial gain and can be a factor in the worsening of corruption in the local government level. Once the local government politicians mediate for the cause of the economic elites in the hope that the economic elites goals are realized, the local government politicians, the political culture and the political institution in the local level, in a way, betrays the national government and failed to perform the role as political agents that should have been working and functioning for, and not against, the central government.
There is a belief that the only thing constant is change. For China and its economy, that belief has been true and has been felt through out Chinas history considering the many different changes that happened and impacted the economy and politics of China, then and now. In this paper, the thrust is looking at the impact of privatization as an economic reform towards the politics and the political aspect of the modern day contemporary China. It appears that in many different spheres and parts of the political realm, the change that privatization has brought forward will be significantly felt and manifested. Privatization is all about change because it changes the role of the state in the economy, and as a result, will also change many economic and political aspects of the society. Moreover, the change is characterized by struggle since those affected by privatization and by the resulting change have different roles, different responsibilities and different stakes in the economic-political structure of the country. This results to struggles and clashes among groups and individuals as change is taking place. A decrease in state economic power is best achieved through widespread and thorough privatization this means fragmentation of economic power among many people with different, often clashing interests and, at the same stroke, a boost in economic efficiency and productivity (Zuzowski, 1998, p. 22).
China should be commended for making the brave step towards change even if it means breaking away from traditional economic practices and beliefs. The forward thinking attitude of China has allowed the country to experiment regarding what other economic options can do for them. In analysis and observation, it is noticeable that China has already undertaken numerous economic reforms. China has instituted far-reaching economic reforms - trade liberalization, deregulation and the privatization of state-owned companies. The economic reforms have represented...fundamental departures from the earlier practices (Li, 2004, p. 105).
All of these economic developments have supremely re-shaped the features of the economic facet of Chinese social life, but the analysis should not be limited to that. There should be equal focus to political changes, which can be good or bad, depending on the perspective of the one looking and observing. Pro democratization will laud economic developments because of its role in paving the way for social democratization in the future. Whereas, some may think that privatization can either be the first step, or a mere stepping stone towards what other people really want - a change in the political system. The idea of whether or not the change is good or bad remains arguable, but the certain thing is that the change impacted both economic and political spheres inside China.
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