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The End of the “End of History”

In China and beyond, liberalized markets aren't fostering democracy — they're undermining it.

Terry Gou, founder and CEO of Foxconn Technology Group, speaks at the Fortune Global Forum in Guangzhou, China in December 2017. FORTUNE Global Forum / Flickr

In the late 1990s, with the fall of the Soviet Union, the explosion of pro-capitalist euphoria, and the post–Cold War hubris of American empire, Bill Clinton promised that China would become democratic once its citizens had tasted the freedom of the market. He used that pitch to press Congress to pass Permanent Normal Trade Relations with the country in 2000.

Nearly two decades later, as Chinese leader Xi Jinping installs himself president for life, even the most starry-eyed neoliberal optimists have to acknowledge that China has shown capitalism and authoritarianism are perfectly compatible, even complementary. Forget substantive democratic arrangements meant to foster popular participation. In China and countless other countries around the world, modest demands for electoral democracy and basic civil liberties are beyond the pale.

If anything, the Chinese state is significantly less democratic — and certainly more powerful and confident — than it was twenty years ago. Through a variety of means, the ruling Communist Party (CCP) has fractured, suppressed, and co-opted social resistance from workers, farmers, liberal and radical dissidents, and ethnic minorities. The promising wave of worker actions a few years ago now seems like a dream. Chinese capitalism, meanwhile, has continued along its impressive ascent. And with ambitious projects like the multi-country “One Belt One Road” infrastructure initiative racing full steam ahead, the Chinese state is projecting greater economic and political power abroad.

Looking today at the world’s largest country — and soon to be largest economy — we could reasonably invert Francis Fukuyama’s famous “end of history” thesis: the market is actively undermining possibilities for democracy. Since the Tiananmen massacre of 1989, capitalism has clearly buttressed the power of a Chinese state that at the time appeared fragile. Global capital would clearly fall in the line behind the CCP if it faced any significant democratic challenge — and likely pressure foreign governments to do the same.

Mainland China appears devoid of any democratic stirrings or insurgent movements. Only at the periphery do ordinary people have enough breathing room to demand greater political and economic democracy.

Open for Business, Closed for Democracy

When Chinese leader Deng Xiaoping embarked on his famous “Southern Tour” in 1992, he intended to send a clear message: the suppression at Tiananmen was not a retreat from post-Mao marketization. China was still very much open for business. Less than a decade later, China proved its ironclad commitment to global capitalism by joining the World Trade Organization. There was no going back to the command economy.

By 2011, China had become the world’s largest recipient of foreign direct investment, an astonishing feat for a country that received almost no foreign investment just thirty years earlier. (The United States has since recovered the title.) While a number of factors spurred this avalanche of investment, a lack of democratic rights proved decisive. Foreign capital rushed to a polity in which peasants have no meaningful say in how their land is used and workers are denied the right to freely associate, bargain, and strike. Maintaining a positive investment environment became the top priority for growth-obsessed officials, as cheap land and labor were offered for the taking.

Multinational corporations — democratic change agents in Clintonian fantasies — took to this rights-free zone with gusto. American behemoths like Walmart and Apple outsourced production to China-based suppliers, allowing them to expand to a previously unimaginable scale. No other country could produce the volumes, at the right quality, and as quickly or reliably as China. The scale was underwritten by mass land dispossession (how else to acquire enough space for a Foxconn facility with hundreds of thousands of workers?), while the rights-free workforce could be disciplined in a way not possible elsewhere.

In short, countless American and European brands recognized as the standard-bearers of free market entrepreneurship enjoyed years of healthy profits not despite, but because of, the absence of democracy in China. While companies inevitably expressed shock and dismay every time gross labor and human rights violations were discovered in their supply chains, the best they’ve ever mustered in response are minor tweaks to a still brutal production regime. Raising deeper questions about democratic rights is unthinkable — inimical to their interests as corporate managers.

Foreign companies have increasingly come to depend on China not just as a manufacturer, but as a consumer. Chinese elites, conscious they have the upper hand, have used this market-based leverage to assert their political will. A few recent examples illustrate the dynamic.

In January, the government decided to crack down on foreign companies that listed Taiwan as a separate country in online forms. Marriott was the first to come into the state’s crosshairs after the company sent a questionnaire to customers that referred to Taiwan, Hong Kong, and Macau as “countries,” and a US-based employee liked a social media post advocating Tibetan independence. The government subsequently shut down Marriot’s website and apps in China for one week and demanded an apology.

Marriott complied immediately, issuing a statement from its CEO affirming that the company “respects and supports the sovereignty and territorial integrity of China.” Perhaps more ominously, his letter also stated, “we will be taking the necessary disciplinary action with respect to the individuals involved, which could include termination.” Shortly thereafter, the CEO followed through on his threat and fired Roy Jones, the hapless employee in Nebraska guilty of liking the offending tweet.

Just a few weeks later, Mercedes became the next firm to self-flagellate to defend access to the China market. Its crime? Posting an utterly banal quote to Instagram (a site blocked in China) attributed to the Dalai Lama: “Look at situations from all angles, and you will become more open.” As soon as the company discovered the post, it expressed contrition, writing to China’s ambassador to Germany: “Daimler deeply regrets the hurt and grief that its negligent and insensitive mistake has caused to the Chinese people.”

These incidents of corporate groveling are certainly pathetic. But they aren’t surprising  — bending to the will of the Chinese state simply makes business sense. China’s blistering growth rates have produced a large population of high-consumption individuals — the 1 percent alone numbers an impressive 14 million people. Last year, China accounted for nearly 90 percent of global sales growth for nine of the top luxury automakers. It’s no exaggeration to say that Mercedes and other luxury brands would be in crisis were it not for their access to China.

Again, the Chinese leadership is well aware of foreign capital’s dependence, and the ease with which they can demand companies pass their shifting political litmus test. It’s not necessarily that they care about an innocuous Dalai Lama quote — they’re simply training companies to line up on the side of order and authority in the event of an actual bottom-up revolt. And if Mercedes happily cooperated with the Nazis, compromising the dignity of, say, the Tibetan people to maintain healthy profits is a non-question.

Sunflowers and Umbrellas

Since the 1980s, Taiwanese investors have benefitted immensely from deeper economic integration with China. Electronics giant Foxconn, headquartered in New Taipei, Taiwan, is just the most notable example. The fortunes of the country’s working class have been less rosy. The mass relocation of Taiwanese capital to China led to major deindustrialization and job loss beginning in the 1990s. More recently, Taiwan has been wracked with high levels of youth unemployment, skyrocketing housing costs, and shrinking purchasing power in part as a result of both new and ongoing processes of labor market segmentation. Economic woes, coupled with the overbearing presence of an increasingly confident China committed to “reunification,” have left Taiwanese youth in particular with plenty to worry about.

In 2014, that discontent bubbled over into protest in what become known as the “Sunflower Movement.” Early that year, the Kuomintang — a nationalist party and historic antagonist to the Mainland — rushed to pass a bill that would allow China greater latitude to invest in the Taiwanese service sector. President Ma Ying-jeou argued that deeper economic ties with China would strengthen the Taiwanese economy, an appealing possibility to many in a country plagued by years of sluggish growth and stagnating wages.

But in March of that year, protesters called a demonstration to oppose the opaque political process, which reminded many of the white terror days of KMT dictatorship. Hundreds of young activists entered and then occupied the Legislative Yuan for several weeks, setting off a deep political crisis. Following mass protests outside the Yuan and negotiations between the government and activists, the bill was tabled.

Later that year, an even more astonishing movement of mass rebellion shook Hong Kong’s political foundations. Since returning to Chinese jurisdiction in 1997, Hong Kong had been ruled under the principle of “one country, two systems” — the city was to retain its own legal, political, and economic institutions. Upset with a range of social and economic problems — including rising inequality, outrageous housing costs, and declining job prospects for young people — the city’s residents began demanding universal suffrage and direct election of their chief executive.

Many pointed out that electoral democracy had been promised as part of the 1984 Joint Declaration, a document governing the transition from British to Chinese rule. But Beijing had a different interpretation: their plan was to pre-select a small number of candidates for chief executive, after which the electorate could freely vote.

The old guard of the pro-democracy camp was brushed aside in September 2014, when a new generation of activists launched a wave of direct action to demand universal suffrage and direct elections. For most of the fall, activists held three mass occupations in heavily trafficked points around the city. They withstood police and gang violence and shrugged off threats from the local and Beijing governments, regularly mobilizing tens of thousands of people in mass rallies and earning the moniker the “Umbrella Movement.”

In Hong Kong, though, the outcome was much less inspiring than in Taiwan. An increasingly dictatorial CCP refused to make any concessions, and by December the occupations had all been all cleared. A few years later, with civil society, academia, and the media under increasing pressure from Beijing, prospects for democracy in Hong Kong appear bleak.

Unfortunately, the prospects for democratic change within China seem even dimmer. China’s liberals, already badly beleaguered since 1989, have seen their fortunes deteriorate further in recent years. Nobel Laureate Liu Xiaobo died in detention last year, and so-called “rights defense lawyers” have been rounded up en masse. Any whisper of competitive elections or a free press has been driven deep underground.

The regime has been equally brutal towards Marxists and other leftists. In November 2017, a number of student activists from a radical reading group in Guangzhou were arrested on trumped-up charges. Letters from some of the arrestees reveal the violent treatment they received in detention (as well as their principled defiance). Similar dynamics were at play in the December 2015 crackdown on labor organizations in Guangzhou, which effectively curbed the tiny space in civil society for worker activism.

The CCP clearly has no qualms about suppressing threats from its left or right — simply questioning the party’s monopoly on politics is anathema, regardless of the nature of the critique. A flourishing capitalist transformation, facilitated by the twin political exclusion and economic exploitation/dispossession of the working class and peasantry, has produced an increasingly powerful and confident state. Xi Jinping is in no mood to compromise with enemies, be they aggrieved workers in Guangdong, idealistic students in Hong Kong, or the CEO of Daimler. And increasingly, it seems he can get away with it.

Post-2014 Politics

Since the 2014 movement, politics in Hong Kong has become quite fractious. One unfortunate outcome of Beijing’s intransigence has been the strengthening of the “localists,” who are expressly anti-China and advocate Hong Kong independence. This kind of nativism is a dead-end for anyone with emancipatory aspirations.

Fortunately, in Hong Kong and Taiwan alike, movement-based political parties have emerged, advocating autonomy from China, political democratization, and broadly social-democratic economic aims, signaling a challenge to the established pro-democracy neoliberal parties and presenting an alternative to rank nativism.

The most significant political party to grow out of the Umbrella Movement is Demosistō, formed by prominent activists Joshua Wong, Nathan Law, and Agnes Chow, among others. The party is quite explicit about its goals: “Demosistō aims to achieve democratic self-determination in Hong Kong. Through direct action, popular referenda, and non-violent means, we push for the city’s political and economic autonomy from the oppression of the Communist Party of China (CPC) and capitalist hegemony.” This kind of language puts the new party significantly to the left of the old guard pan-democrats on economic and social issues, not to mention tactics. And not coincidentally, it’s raised the hackles of the Chinese state, which has taken extraordinary steps to disqualify one after another of its candidates.

So far, state repression has prevented Demosistō from making electoral inroads. If the party, and the democracy movement more broadly, are to advance politically, they will likely have to do so outside of, and increasingly in opposition to, the legislature and courts. Crucially, they will also have to redouble their efforts to connect with other social movements and the working class if they want to have a chance of wielding political power.

Taiwan, free from China’s direct control, maintains a functioning electoral democracy. In 2016, the KMT was voted out of office and the historically pro-independence Democratic Progressive Party (DPP) assumed power, with Tsai Ing-wen taking over the presidency.

More promising than the fundamentally neoliberal DPP capturing the government was the founding of the New Power Party (NPP). As with Demosistō in Hong Kong, the NPP emerged out of the 2014 upsurge and was organized around demands not simply for autonomy from China, but also for greater democratization of Taiwan’s political process. The NPP has positioned itself to the left of the DPP on economic issues — arguing in its platform that “all resources and the outcomes of economic development should be shared by all people” — and has backed a same-sex marriage bill that if enacted would be the first of its kind in Asia. Much to the chagrin of Beijing, the party has enjoyed a surprising amount of electoral success, capturing five legislative seats on its first try in 2016.

Prospects for Democracy

In both Taiwan and Hong Kong, democracy activists occupy a precarious position — wedged between the imperial powers of the US and China. Joshua Wong has met with Florida Republican senator Marco Rubio, who in turn nominated him, along with Alex Chow and Nathan Law, for the Nobel Peace Prize. Donald Trump’s decision to take a congratulatory phone call from President Tsai Ing-wen in December 2016 sparked cheers from democracy activists in Taiwan, who hoped that it indicated greater US commitment to their cause.

Yet Rubio and Trump care little about democracy, and any alliance between these movements and right-wing forces in the US would likely imperil their long-term aims. As if to underscore the point, Trump recently praised Xi Jinping for moving to abolish term limits. Unfortunately, many activists in Hong Kong and Taiwan have defended the pursuit of US financial and military support, suggesting that China poses a more immediate threat to their wellbeing.

On one level, this is quite understandable. In the absence of robust and principled anti-imperial movements globally, democracy activists in such places seem to have no choice but to ally with the US over Chinese empire. But even if the US is less of an immediate threat to Taiwan or Hong Kong, it is still the greatest threat to peace, substantive democracy, and socialist politics globally, a reality that those challenging Chinese authoritarian capitalism will have to reckon with. The notable silence of liberal democratic governments and the obsequiousness of Euro-American capital in the face of the CCP’s mounting authoritarianism should be a clear warning.

Can these glimmers of hope from Taiwan and Hong Kong spread to Mainland China? In the short to medium term, the answer is almost certainly no. The CCP has been very adept at depicting democracy activists on the periphery as “anti-Chinese.” And the marginal but noxious voices in these movements that are in fact anti-Chinese or anticommunist lend just enough credence to this cynical argument to make it credible with Mainlanders.

At the same time, it is the Chinese people themselves who have suffered most from the toxic combination of authoritarianism and brutal exploitation by local and foreign capital alike. Xi’s political regime cannot make the economy work for the vast majority of its citizens. That much is apparent. The answer, however, cannot yet be articulated.