China Pursues Frugality Campaign

An analysis by Michael Lelyveld
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china-hongqi-h7-feb-2014.jpg A Hongqi H7 of FAW is displayed at a dealership in Shanghai, Feb. 27, 2014.

In a curious commentary, China's official press has urged citizens to heed the concerns of U.S. President Barack Obama as it promotes the environmental benefits of a new frugality campaign.

The unusual admonition from the official Xinhua news service followed the launch of a frugality drive by the publicity arm of the ruling Chinese Communist Party's Central Committee and the National Development and Reform Commission (NDRC), China's top planning agency, on May 27.

"Thrift is a traditional Chinese virtue as well as a core socialist value," said an official statement, calling it "vital to improving society and the environment, and ... a healthy lifestyle among the public."

Since taking office last year, China's government under President Xi Jinping and Premier Li Keqiang has cracked down on extravagance and corruption among officials and party members, but the statement is part of a wider effort to spread the values of austerity to the public at large.

The commentary cited President Obama's environmental concerns with excessive energy consumption, voiced in a 2010 interview with Australian television, saying that "if over a billion Chinese citizens have the same living patterns as Australians and Americans do right now, then all of us are in for a very miserable time."

"The planet just can't sustain it," Obama said.

China's new campaign could mark a turnaround from its long-standing position that its rapid economic growth should not be restrained or blamed for climate change and pollution, since industrialized Western countries had already fouled the global nest.

"Developed countries shall take responsibility for their historical cumulative emissions and current high per capita emissions to change their unsustainable way of life," the NDRC said in a policy paper before the failed Copenhagen climate conference in 2009.

But during the U.N.-sponsored negotiations, China argued that it should not be asked to set similar limits on its own development for the sake of carbon cuts.

"Developing countries will, in pursuing economic development and poverty eradication, take proactive measures to adapt to and mitigate climate change," the NDRC said, sticking to its formula of "common but differentiated responsibilities" that put China's economic growth first.

Years of environmental damage may have softened China's position and persuaded it that all countries will have to curb carbon emissions if reductions are to be achieved.

"High consumption patterns and extravagance are simply not ... a suitable path for China. Instead, they will impose an unbearable weight on this most populous of countries," said the Xinhua commentary, crediting Obama with "an element of truth in what he said."

Even so, the appeal for frugality stands in contrast to the pro-growth fervor of the past three decades since the former Chinese leader Deng Xiaoping is rumored to have said, "To get rich is glorious."

Sustainable growth

The suggestion of a new direction comes as the government continues to struggle with the challenges of slower economic expansion and attempts to put China on a more sustainable growth course.

Xi and Li have been trying, so far with little success, to clean up pollution, control energy consumption and trim industrial overcapacity.

It is unclear whether the frugality campaign will be a trial balloon or a turning point, but the rationale is an effort to connect several of the government's key themes, said Daniel Gardner, a China scholar and history professor at Smith College in Northampton, Massachusetts.

"Here, the editorial is tying together, however inelegantly, what the leadership knows to be the three major sources of public dissatisfaction and the three major threats to the party's legitimacy—official corruption, the wealth gap and environmental degradation," Gardner said.

Since the start of the crackdown, the government's anti-graft drive has netted scores of officials, some for outright bribe-taking and others for vague violations of "party discipline" and "moral corruption."

Lavish banquets in private clubs, misuse of public funds, spending on official cars and hoarding of hidden wealth in multiple residences have all been targeted.

In the first quarter of the year, investigators pursued 8,222 cases of bribery or corruption, and 2,245 cases of dereliction of duty, Xinhua reported, citing China's Supreme People's Procuratorate (SPP).

In a widening of the net in January, the Communist Party's Central Commission for Discipline Inspection said it had banned promotions of "luoguan," or "naked officials," a term used to describe office-holders whose families have emigrated overseas.

Such officials are seen as a high risk for absconding with illicit wealth, whether they have actually committed crimes or not.

After the Communist Party found over 1,000 "naked officials" in southern Guangdong province, 866 were disciplined with demotions or "position adjustments," state media reported this month.

Under the broad umbrella of his "mass line" campaign, Xi has also called for reforms of official "work styles" to eliminate "formalism, bureaucracy, hedonism and extravagance."

While the scope of the official doctrine keeps expanding, the frugality initiative may represent the first attempt to create a philosophical construct that will cover both officials and citizens, encompassing social, political, economic and environmental goals.

"Instead of being a mere advocator of frugality, it is more effective to turn everyone into a practitioner of it," said the official commentary. "Young people must be taught to stay frugal," it said.

Wealth gap

But after decades of boosting economic growth and wealth formation, the government is likely to find frugality indoctrination a formidable task.

"Assumed here is the long-held belief, since the time of Confucius at least, that it's the responsibility of officials and the elite to set an example for the people, to model behavior that will promote widespread social and political harmony," Gardner said.

Openly corrupt officials have set a poor example with their imported cars, blatant lifestyles and ill-gotten gains, but the campaign has now moved on to deal with public resentment of wealth among those who have benefited more than others from China's growth and development policies.

Gardner said the government is trying "to persuade the rich to stop flaunting their privileged status and enormous wealth."

"Why? Because such display highlights the enormous wealth gap in Chinese society today and serves as a constant reminder of the great chasm between those who have profited under economic liberalization and those who haven't," he said.

"The government fears, rightly, [that the wealth gap] has the potential to become the source of widespread social unrest," Gardner said.

On its face, the frugality campaign appears to conflict with the government's announced goal of creating a consumption-led economy rather than one driven primarily by investment.

But Gardner said he suspects that the point of the editorial is that "the consumption-led economy promoted by Li Keqiang should be built on consumption of Chinese-manufactured products," not foreign cars, French wines and Swiss watches.

As an example, Gardner cited an announcement in May by the People's Liberation Army (PLA) that it has removed foreign auto brands from its procurement list and has taken delivery of over 1,000 Chinese-made Hongqi (Red Flag) sedans from the state-owned FAW Car Co. instead.

"Choosing self-developed automobiles is a strict but basic standard in military vehicle reform," said a PLA procurement official, commenting on the decision to replace Audis with the recently-revived Chinese nameplate, according to the official English-language China Daily.

It is unclear whether the switch is strictly economical, however.

The Hongqi H7 models chosen by the PLA cost from 299,800 to 479,800 yuan (U.S. $47,973 to $76,776), the paper said.

At the high end, the H7s can be equipped with rear seat massagers, said Gardner.

"Frugal? Hardly. But at least not foreign," he said.


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