Apparently,
Xi Jinping and the Twelfth People’s Congress have decided to take
as their model for China’s future rail system one of the worst examples of
privatised rail in the western world, which an
overwhelming majority of British voters want undone.
To
be clear, the Wenzhou
rail crash was truly a tragedy, and its aftermath indicated a strong need
for reform of the existing system. But, even though it is taken as an article
of blind faith among many in the Western press and expat community, it is
highly unclear if privatisation will do anything to help prevent future
accidents, or indeed anything at all, except the bloat of the state and the
profit of the newly-created corporation (undoubtedly to be owned by a family
member of someone on the State Council), at the particular expense of the
migrant workers who depend on the rail to get to their jobs, and to get back
home to their significant others and their children.
To
this effect, two economics professors in the US and three graduate students
have sent an open letter to the People’s Congress, expressing their concerns.
The original has (perhaps unsurprisingly) been censored out of existence from
the Sina blogs, but I have translated it in full, and provided the original
here:
Open letter to the 12th National
People’s Congress, regarding our views of the State Council reform plan
Esteemed delegates:
We are professors and
doctoral students of economics; all of us are Chinese citizens. On the occasion
of the first meeting of the Twelfth National People’s Congress, we wish to
provide you, for your earnest consideration, some of our views on the issue of
the railway management system.
According to news
reports, the State Council’s institutional reform programme will be considered at
the National People’s Congress; the content of which includes both the
revocation of the Ministry of Railways and the chartering of new railway
companies, to facilitate the introduction of private capital. We are deeply
concerned about this reform programme, and must not be remiss in exercising our
responsibilities as citizens to express our views.
The Ministry of
Railways was founded in the early days of the People’s Republic. For the past
60 years, the employees of the Ministry of Railways have worked tirelessly to
bring about socialist economic development and contribute to the national
defence. Since reform-and-opening, railway construction has developed
tremendously, has aided the development of each of the national economy’s
various sectors, and has met the long-distance transportation needs of the vast
majority of the Chinese populace (particularly those in the middle and working
classes).
Currently, the volume
of China’s rail business has reached second place in world rankings, with the
volume of electric and high-speed rail business having reached first place.
Looking at the statistics, from 2000 to 2010, China’s rail system transported
thirteen billion passengers, with a death rate from serious accidents of only
two passengers per hundred million. Contrast this with Japan’s death rate from
serious accidents of nine passengers per hundred million over the same period,
and India’s death rate of nine-hundred twenty passengers per hundred million;
it is clear that China’s rail system is comparatively safe when compared with
the performance of other systems internationally.
It is common knowledge
that our nation’s ordinary passenger rail service is affordable, and in the 18
years since 1995, to meet the transportation needs of China’s many struggling
labourers, the rail prices have never risen. For the high-speed rail services
which cater primarily to middle- and upper-class passengers, the average
high-speed rail fare per kilometre is equivalent to 4 euro cents. By contrast,
the average high-speed rail fare per kilometre in Germany is 27 euro cents; in
Japan, it is 22.
These facts demonstrate
that the current rail management system basically aligns with the actual goals
of China’s economic and social development. Our nation’s railway growth and operational
conditions are the pinnacle of those in the developing world, and even surpass
those of some developed nations.
Based on these facts,
we believe that the State Council, having failed to account for the full range
of views on the topic and particularly having failed to consult the
broadly-held views of the vast majority of the Chinese people, and lightly
advocating the repeal and privatisation of the Ministry of Railways under their
institutional reform plan, are being completely careless and irresponsible.
Firstly, the full
argument must be set out publicly: what important, tangible benefits (as
opposed to benefits supposed by academic conjecture) the repeal of the Ministry
of Railways, establishment of a private rail corporation and introduction of
private capital will have for the vast majority of the Chinese people, should
be clearly stated to them. The opposing view should also be accorded the full
opportunity to be published and to be heard.
Conversely, will the
repeal of the Ministry of Railways, establishment of a private rail corporation
and introduction of private capital have any great risks and heavy costs? Rail
is hardly a cutting-edge industry; every country on earth has plenty of
historical experience with rail to draw upon. In comparing our railways with
those of capitalist nations - which experiences were successful, and which
failures we can take lessons from - there is a great wealth of empirical data
for each. And the lessons of the failures of rail privatisation in many other
nations of the world are painful. Do we wish to learn from these painful
lessons? Is the State Council prepared to avoid these failures? If these
preparations haven’t been made; if institutions are lightly changed; if the
fundamental well-being of 1.3 billion people is made into a plaything; how is
this not careless and irresponsible behaviour?
The [proposed] railway
corporation will be organised according to market principles, with the
acquisition of profit as its goal. Train tickets will no longer be affordable.
Undoubtedly there will be grave consequences for the middle and working
classes, particularly for the vital well-being of migrant workers. Also, in
order to develop new railways in remote middle and western regions of China,
the railway corporation must receive state subsidies. With the introduction of
private capital into this railway corporation, state subsidies are no longer
used to meet the needs of the public, but rather become a disguised instrument
of corporate welfare. Take the United Kingdom for example. After private
capital was introduced into the railway system, UK train fares have become the
highest of any country in the world. Simultaneously, the government of the UK
is forced to acquire vast amounts of funding to subsidise private capital, ten
times what was required before privatisation. Since privatisation, not only has
the quality of rail transport not improved, but indeed has become
Europe’s most crowded. Also, the UK rail transport system’s has suffered one
accident after another, including the disastrous Hatfield accident in 2000 due
to inadequate maintenance.
Even though we are
unable to understand the decision-making process of the relevant departments of
the State Council, from all available news reports we were still able to learn
that those members advocating the dissolution of the Ministry of Railways hope
to thereby clear away all obstacles to full privatisation and marketisation of
the rail system. On the topic of planning and markets, Comrade Deng Xiaoping
said, ‘Planning and market forces are not the essential difference between
socialism and capitalism. A planned economy is not the definition of socialism,
because there is planning under capitalism; the market economy happens under
socialism, too. Planning and market forces are both ways of controlling
economic activity’. Obviously Comrade Xiaoping wanted to use the market as only
one of many methods of economic development, not as the only method, and
certainly not as the only form of a socialist economic system! If capitalism
can use [certain elements of state-directed] planning, socialism certainly can
also; further, Comrade Deng never advocated full privatisation, and never
believed that the people could be served only by the introduction of private
capital.
Over the past period
[of reform-and-opening], although China’s economic reforms brought great
achievements, they also incurred heavy costs in many areas. In these areas, the
one-sided emphasis on marketisation by the leaders of the reform caused de
facto privatisation for a large number of state-owned enterprises; the
results were an unprecedented wealth gap, a massive drain of state assets, a
deluge of political corruption, exacerbated environmental pollution; on top of
that, many people could no longer afford housing, medical care, education, or
even secure food for themselves - such were the ill effects. Thus can the
enormous social and environmental costs to this point in history be summarised.
The ill effects of the
blind marketisation of the past have not yet been fully accounted for or
diagnosed, let alone corrected one at a time, but [the government is] already
eager to launch new marketisations, especially in the domain of the national
and popular welfare (as the rail system is). When one day this causes massive
problems, who shall be held accountable, and how shall they exercise their
accountability? In front of the entire nation, who can possibly take this level
of responsibility?
Naturally, the rail
system and its management as they stand indeed have many shortcomings and
defects. Inside the Ministry of Railways there are problems of political
corruption, insufficient supervision, and so forth. Nowadays these problems
exist in varying degrees in every branch and every level of China’s government.
If our country’s leadership truly has the will and the ability, they should
strive to end or at least constrain political corruption and make the
government more efficient. In this way, even if we retain the Ministry of
Railways, the problems the Ministry of Railways has will naturally follow suit.
The Ministry will become better as the other branches of government do, thus
becoming transparent, honest and effective.
If the government has
no means of resolving the problems of political corruption and inept supervision,
please inform us: what problems will reorganising the Ministry of Railways into
a railway corporation solve? Can the government really simply discard its
responsibilities to supervise the railways by selling the Ministry of Railways
to private investors? If we cannot expect the government to resolve the
problems of the Ministry of Railways, what basis do we have to believe that the
government is capable of solving the problems associated with establishing a
new railway corporate office? Or those of the Ministry of Communications? Or
those of the State Council?
Of course the existing
railway system certainly has problems, but more important are the results it
has achieved. It has embodied the excellence of socialism, and its vast staff
have proven their merits. Whatever considerations ultimately led the relevant
authorities to this recommendation, it is inconceivable that a system our
nation uses, which has proven superior, should be discontinued; it is
inconceivable that we should not strive to improve on the basis of this system;
and it is inconceivable that we should not learn the lessons of systems which
have no advantage over ours and which have no shortage of failures.
Esteemed delegates, you
are the National People’s Congress: under our nation’s Constitution, you wield
the supreme powers of the state on behalf of the people. As ordinary citizens,
we earnestly hope that you are capable of taking seriously your powers of
representation, seriously consider the State Council’s reform plan, approve
those sections which are in the interest of the nation and her people, and
reject those sections which do not conform to those interests.
The eyes of the entire
nation are upon you.
Li Minqi - Associate
Professor, Economics Department, University of Utah
Xu Zhun - PhD,
Economics Department, University of Massachusetts-Amherst; Lecturer, School of
Economics, Renmin University
Li Zhongjin - PhD,
Economics Department, University of Massachusetts-Amherst
Chen Ying - PhD,
Economics Department, University of Massachusetts-Amherst
Qi Hao - PhD,
Economics Department, University of Massachusetts-Amherst
No comments:
Post a Comment