My latest column: Chinese officials' we-know-best parental mentality prevents market forces from playing a decisive role and affect investor confidence as they act like overbearing parents.

Main head: How can China’s reforms succeed when officials act like overbearing parents?

Subhead: The 'we-know-best' mentality prevents market forces from playing a decisive role and affects investor confidence

Back in 2022, when China was in the midst of strict zero-Covid controls, which involved frequent and sudden citywide lockdowns and stay-at-home notices, I met an overseas Chinese entrepreneur, whom I deeply respect, in Tianjin during one of the rare, blissful interludes. His conglomerate is one of China’s largest foreign investors, with businesses scattered across the country.

During our conversation, he offered an observation that has stuck with me. Fresh from lengthy meetings with local officials, he said he was genuinely touched by their selfless and tireless work ethic. He noted these officials had worked non-stop without weekends or holidays, which he believed could only happen in China.

Indeed, during those extraordinary times, local officials were known to have slept in their offices for weeks, even months, to ensure residents locked down in their homes had enough daily necessities, from groceries such as vegetables to medicine – a monumental task.

Even in normal times, officials at all levels are often portrayed as sacrificing their leisure time to serve the people. In many ways, they have been dutifully trained and encouraged to follow the “parental” magistrate system, which started more than 2,000 years ago. This system, based on the parent-child relationship, calls for officials to rule by treating their subjects as their children.

As China contemplates a new round of reforms and opening up to bolster its sagging economic growth, re-engineer its economy and embrace technology to steer it onto a healthier track, the obsession with the “parental” magistrate system has become one of the biggest stumbling blocks.

Before addressing that critical issue, some history of this system is in order. Western media often describe China’s style of governance as running a nanny state, where the government relishes giving too much advice, making unnecessary laws to interfere with people’s choices and regulating how they should live their lives. China’s “parental” magistrate system is much more than that.

While the term “nanny” evokes the impression of an intruding outsider, the parent-child relationship calls for running the government like running a family. Deeply rooted in Confucian philosophy, this relationship demands absolute filial piety from the people – parents can never be wrong and know best because they always have the best interests of their children at heart.

This means a “parental” magistrate can always invoke the greater good of the family to restrict the choices or freedoms of certain individuals or even all members of the family. Failure to comply or any challenge to the authority would invite immediate and often arbitrary punishment, as seen fit by the magistrates, who have little patience to explain their intentions or actions, just like any strong-willed parent.

In the era of Mao Zedong, this system was vividly illustrated by the fact that Communist Party members might need the blessing of party committees before they could get married. On many occasions, a party committee would arrange for a man and a woman to get married without really soliciting their opinions first, mirroring the feudal practice of arranged marriages.

Ironically, during the tumultuous 10 years of the Cultural Revolution (1966 to 1976), Mao upended the 1,000-year-old practice by encouraging young people to rebel against their parents, epitomised by the slogan “revolution is no crime and to rebel is justified”.

Since Deng Xiaoping launched the drive of reform and opening up in the late 1970s, China has greatly liberalised controls over the economy and people’s lives amid efforts to promote the rule of law. During certain years, state media commentaries even encouraged discussions that the people should be as the “parents” of officials, not the other way around.

Over the past 10 years, however, the “parental” magistrate phenomenon has made a strong comeback as the leadership repeatedly stated that the party should strengthen control over everything in the country, from politics to the economy and society. One key feature in this campaign is encouraging obedience to the party and the government in the name of patriotism.

This was very much evident in the three pandemic years during which, in the name of prioritising people’s lives above everything else, officials were mobilised to take whatever measures necessary to achieve the zero-Covid mandate.

This meant officials often ignored laws and regulations, largely relying on arbitrary rules, colloquially known as “family codes”, to execute lockdowns or stay-at-home orders. Many legal scholars in China believe Beijing’s efforts to promote the rule of law suffered a major setback during those three years.

It is within this context that one should look at the country’s governance, particularly the financial regulatory regime, which is widely seen as opaque, unpredictable, fickle and arbitrary in the discharge of its power – a major source of complaint among domestic and international investors.

In other words, regulators have little patience for market forces to play the decisive role as promised in official proclamations. The lack of respect for market forces has made it very difficult to improve transparency and consistency in the implementation of policies.

Even worse, under the constant pressure to strengthen the party’s control, regulators often act like overbearing parents, trying to lord it over the stock markets by demanding that fund managers or brokers buy or sell at certain intervals, for instance.

With Beijing keen to project confidence in economic growth, it is high time for the government to realise the urgency and importance of modifying its behaviour and learning inclusive parenting skills.

Reprinted from today’s South China Morning Post.

https://www.scmp.com/opinion/china-opinion/article/3284893/how-can-chinas-reforms-succeed-when-officials-act-overbearing-parents?module=top_story&pgtype=section