The turbo-capitalist dragon has to come to terms with sharp social inequalities and the skeleton of Mao Zedong leaps out of the cupboard.
An article on the 1st of July in the English-language newspaper China Daily acknowledges that the problem exists:
economic prosperity "has also created social problems of inequality and widening income gap, prompting more and more people to yearn for the "good old days" of Chairman Mao ."
The task of finding a middle way between Mao the "great leader" and Mao the "authoritarian ruler" is thus left to historian Xiao Yanzhong, who goes over the Great Helmsman's errors – the “Great Leap Forward”, the “cultural revolution” – and successes: the establishment of the People's Republic (1949), the appointment of successors who guaranteed reforms after his death and the idea of a "permanent revolution", which, by mobilising the masses, prevented the ossification of power – represented by party officials and intellectuals.
And he concludes: "People talk about Mao not because they want to go back to the economic stagnation and the political frenzy of those times. What they want is a society that guarantees equal rights and offers equal opportunities in contrast to the egalitarianism of Mao's time and rich-poor polarization of today ".
Practically, this is the “harmonious society” political line launched by president Hu Jintao, and is to be read as the umpteenth appeal for it to be implemented.
But is China going in that direction?
In recent times, perhaps the most heated politico-economic debate beyond the Great Wall has been on the “property tax”. Currently, only transactions are taxed. There is no levy on what people own, and some Chinese people own a lot.
Imposing a local tax on some properties (presumably luxury ones) would be an act of social justice and, at the same time, a life-line for municipalities and provinces whose budgets are often in the red.
And not only that; a measure of this kind would also slow down the property price boom that is driving up inflation.
Paradoxically, the idea of a property tax came from Shanghai, the city which, more than any other, pressed on the accelerator for economic development unfettered by social considerations in any form.
And, just as paradoxically, the order to halt came from central government in Beijing, led by the “harmonious” Hu. Only the executive has the power to impose the tax. Period.
What is happening?
According to Adam Wolfe, an analyst from "Roubini Global Economics" specialising in Chinese politics, this situation is the result of a conflict between local power bases. In recent years, the rise to power of Hu Jintao has coincided with the gradual marginalisation of the “Shanghai gang”, associated with the previous head of state Jiang Zemin. A process which, in 2008, resulted in an eighteen-year prison sentence for Chen Liangyu, the local CCP secretary.
Now, Jiang's heirs are back on the attack, embarrassing central government over the question of social equality, although without losing sight of the interests of the metropolis at the mouth of the Yangtze.
Shanghai has run too fast and is now hypertrophised. It has no more land to sell to raise revenue. A property tax would allow it to monetise previous concessions to private owners.
And Beijing? The capital is concerned about the party officials. How many of them have accumulated real estate by making it easy for property developers to obtain permits? The tax would put them in difficulty and, above all, it would make public the private wealth accumulated through politics. And corruption is the most exposed nerve of the current Chinese nomenclature.
So – the central government seems to be saying – we are tending towards the harmonious society, but without getting too far ahead of ourselves. And, above all, without fomenting further social tension, which is already causing thousands of “accidents” a year.