The Fat Years

of years later, the external situation suddenly changed again, when the world economy entered a new period of crisis that was certain to unleash long-suppressed internal contradictions. Added to that was the party-state’s imminent change of leadership in 2012, and that was the period when the Communist Party’s mettle was most severely tested.

From 2008 onward, a whole series of incidents took place: a riot in Wan-an in Guizhou Province of over ten thousand people accusing the police of covering up the death of a young girl; the July 2009 riot of over ten thousand Tonghua Iron and Steel workers in Jilin Province, against a takeover by a privately owned company; the June 2009 Shishou City riot in Hubei Province due to the suspicious death of Tu Yuangao, a chef at the Yonglong Hotel, and to widespread anger at alleged drug trafficking and official corruption. Government-reported “large-scale collective public security incidents” of over five hundred people had risen to over a hundred thousand a year. All these incidents made He Dongsheng realize that local governments were very weak in the face of collective protest riots. In Wan-an, the government and police simply threw down their weapons and ran away; and in Tonghua, if the central-government machine had gone into action, it would have had to suppress industrial workers. If the Communist Party suppressed industrial workers, what would become of its legitimacy?

After these incidents, He Dongsheng was assigned to a top-secret small group in the central government tasked with drawing up contingency plans for any future large-scale disturbance. They came up with a number of proposals. At the same time, Party Central held a series of joint planning meetings with the military, the Public Security police, and the special armed police, a force organized in the wake of the Tiananmen Incident. They also brought several thousand county-level Party secretaries and leading Public Security Bureau cadres to Beijing to undergo intensive training.

In 2009, He Dongsheng was already clearly aware that the world economy was going to experience another crisis even greater than the one before. If the Chinese government handled it properly, though, it might actually present just the right set of circumstances for China to find a solution to its long-unresolved internal problems, and turn a danger into an opportunity. He Dongsheng even believed that whether or not China could enter an era of ascendancy earlier than expected depended on only two things: the international situation, and the appearance of some stroke of luck in China’s internal situation that would allow the government to take full advantage of the opportunity to bring order out of chaos, and complete all the unfinished business of the last thirty-plus years of “Reform and Opening.” What he meant by a stroke of luck was, to put it frankly, a major crisis. Only a major crisis could induce the ordinary Chinese people to accept willingly a huge government dictatorship.

There were two major reasons that could induce the Chinese people to accept the Chinese model of one-party rule: it would promote social stability, and it would concentrate resources to accomplish “big things.” That is to say, the preservation of social stability would be only a necessary condition of the party-state’s legitimacy. This is because democratic systems are not necessarily unable to maintain stability themselves. Take Taiwan, for example: we ridicule them for their democratic chaos, but they carried off a peaceful transition of power and their political situation remained quite stable. Thus, just saying we can maintain social stability is not enough. We have to prove that our one-party rule can accomplish big things that democratic systems are unable to accomplish. If we cannot do this, the value of maintaining our one-party rule will be open to challenge.

He Dongsheng was just waiting for a major stroke of luck that would allow for the accomplishment of big things. Privately his plan was known as the “Action Plan for Ruling the Nation and Pacifying the World.” This title followed the old neo-Confucian slogan, but no matter how many sleepless nights he spent thinking about it, with its echoes of imperial Confucianism, he just couldn’t come up with a new name.

If a major crisis didn’t occur in a timely fashion, the transition from the then ruling group to a new ruling group would be fraught with danger. On the one hand, the Communist Party’s transfers of power have always been dangerous-full of fierce power struggles between various inner-party factions. On the other hand, there have certainly been many problems during the past few years, starting with the 2008 financial tsunami. Contradictions in Chinese society have intensified, Party officials have been shown to be at fault at every turn and have indeed grown extremely weak; they have given their enemies much food for criticism. If things continued like that right up to the next Party Congress, the ruling group would certainly have had to step down. He Dongsheng was not a member of the ruling group’s inner circle; at the time, he was merely a major figure who had served consecutive Party leaderships. He had a pretty good idea, though, who was slightly less reprehensible, and who was much more unscrupulous. He rather preferred to support the empowerment of some of those technocrats who had little family background to recommend them. Be that as it may, he didn’t want to be dragged into a power struggle between various factions; he didn’t want to see China’s political situation thrown into greater turmoil due to transfer of power within the Party.

He needed Heaven’s help. If, about a year before the scheduled transfer of power, a major crisis occurred and the Politburo decided to scrupulously follow his “Action Plan for Ruling the Nation and Pacifying the World”-with that, He Dongsheng believed, China would certainly be saved. Of course, future generations would never know how much blood, sweat, and tears he, He Dongsheng, had contributed to the perfection of this strategy. They would never know that his plan was his own ingenious design to preserve Communist Party rule in China forever. All the credit would go to the existing party-state leadership.

He Dongsheng had grasped very early on the imminence of another crisis in Western capitalism. His own investment strategy was to bet against the U.S. dollar. He had been in Zhongnanhai for so many years, and at first, like all the other high officials, he spent as much as possible of his Chinese renminbi in purchasing dollars. About ten years earlier, he became less confident about his dollar assets. At that point, he exchanged his American currency for Canadian dollars, to pay for his only son’s school fees overseas. He also purchased a mansion in an old bourgeois neighborhood called Shaughnessy in Vancouver. With the remainder of his American funds, he bought into gold, petroleum, and other mineral and energy stocks with the intention of hanging on to them long term. Even more importantly, he decided to retain a good deal of renminbi and invest them in the Chinese real estate market. He didn’t play the Chinese stock market because he couldn’t spare the time, didn’t like the duplicity and lack of transparency of the whole game, and didn’t want to appear greedy. Over these past few years, his anti-American investment strategy had returned a hefty profit, and confirmed him in his view of international economics.

The 2008 financial tsunami caused him to reflect deeply on his economic theory, to reconstruct his mental image of the world economy and China’s road to development, and cleverly to incorporate his further ideas into his “Action Plan.”

He saw that the American-led developed countries, due to their two-party or even multiparty democratic political systems, had neither the ability nor the resolve to tame the monster known as globalized finance capitalism. America’s elected politicians were beholden to a plethora of interest groups: Wall Street, big business, the arms industry, local power groups, the churches, labor unions, and various public-relations lobbies; they also had to take care of popular and media opinion. So when it was necessary for them to unite to accomplish something big and important, all they could do was look around, to the left and right, and fight meaningless little battles; they didn’t dare to cut to the bone and heal the body politic, and were even less likely to take bold and decisive action. American market fundamentalists and the right wing of the Republican Party constantly dragged their feet and added to the confusion; they were completely out of touch with reality and could certainly mess things up, but they could not make any positive contributions. He Dongsheng was completely discouraged by Western representative democracy; he didn’t have the slightest hope for it. He was even less hopeful that those government financial decision-makers, with their multifarious connections to Wall Street, had the cojones to make correct decisions that would save the world economy. On the contrary, he was more and more convinced that China’s vast post-totalitarian government really did have the ability to manage and direct this historical stage of globalized finance capitalism-that is, if China had the correct understanding of the globalization of capital.

He Dongsheng realized, however, that in the Chinese system, merely having a correct understanding of any situation was not enough. This was because every level of the party-state-government was under the excessive control of interest groups and corrupt officials, and they would distort or reject even the most correct policy if it didn’t profit them directly. Thus, He Dongsheng thought that only a major, unprecedented crisis would permit the current ruling group to implement a genuine dictatorship, guarantee action at the bottom on every order from the top, and build a firm foundation for China’s Golden Age of Ascendancy that was just waiting to blossom out of the nation’s growing power.

He Dongsheng had never imagined the 2008 global crisis would happen so soon. Nor had he imagined that on the first frenetic day, the Chinese Politburo would set in motion a completely new plan for tackling the situation. The