BY JOHN GARNAUT
Two years ago, one of China's most successful investment bankers broke
away from his meetings in Berlin to explore a special exhibit that had caught
his eye: "Hitler and the Germans: Nation and Crime." In the basement
of the German History Museum, He Di watched crowds uneasily coming to terms
with how their ancestors had embraced the Nazi promise of "advancement,
prosperity and the reinstatement of former national grandeur," as the
curators wrote in their introduction to the exhibit. He, vice-chairman of
investment banking at the Swiss firm UBS, found the exhibition so enthralling,
and so disturbing for the parallels he saw with back home, that he spent three
days absorbing everything on Nazi history that he could find.
"I saw exactly how Hitler combined
populism and nationalism to support Nazism," He told me in an interview in
Beijing. "That's why the neighboring countries worry about China's
situation. All these things we also worry about." On returning to China he
sharpened the mission statement at the think tank he founded in 2007 and
redoubled its ideological crusade.
He's Boyuan Foundation exists
almost entirely under the radar, but is probably the most ambitious, radical,
and consequential think tank in China. After helping bring the Chinese economy
into the arena of global capital through his work at UBS, He now aspires to
enable Chinese people to live in a world of what he and his ideological allies
call "universal values": liberty, democracy, and free markets. While
the foundation advises government institutions, including leaders at the
banking and financial regulators, its core mission is to "achieve a
societal consensus" around the universal values that it believes underpin
a modern economic, political and social system.
The challenge for Boyuan is that
"universal values" clash with the ideology of the Communist Party,
which holds itself above those values. "Boyuan is like the salons that
initiated and incubated the governing ideas of the French revolution,"
says David Kelly, research director at a Beijing advisory group who has been
mapping China's intellectual landscape. "They explicitly want to bring the
liberal enlightenment to China."
The 65-year-old He is at the forefront
of an ideological war that is playing out in the background of this week's epic
leadership transition, where current Chinese President Hu Jintao officially
yielded power to Xi Jinping. At one pole of this contest of ideas are He's
universal values; at the other, the revolutionary ideology of the party's
patriarch, Mao Zedong. This battle for China's future plays into the
decade-long factional struggle between Hu and his recently resurgent predecessor, Jiang Zemin. Jiang's
ideological disposition has evolved in chameleon fashion but in recent years he
has hinted that if the party remains inflexibly beholden to
Mao Zedong-era thought and Soviet-era institutions then it faces a risk of
Soviet-style collapse.
When He Di stepped down as chairman of
UBS China in 2008 -- after leading the investment banking capital raising charts
for four straight years --UBS gave him an office, a secretary, and a salary
with no minimum work requirements. He continued to find UBS lucrative deals,
capable princelings to hire (such as the son of former Vice Premier Li Ruihuan)
and introductions to wealthy private banking clients. The Swiss bank also gave
him $5 million to inject into Boyuan, just weeks before the 2008 global
financial crisis, without any strings attached except the appointment of a UBS
representative on his board, according to Boyuan representatives. He tipped in
$1 million of his own as he redeployed his resources to build a platform for
ideas. "One
day I picked up the phone and called potential board members." he said.
"I called 6 or 7 ministers or vice ministers, without any
hesitation."
Boyuan's Beijing headquarters is an
elegantly renovated courtyard home on the north side of the city. Behind He's
desk is a wall of books on history, philosophy, and reform. Over a simple lunch
of braised vegetables and endless cups of tea, he told me how his commitment to
liberal values is rooted in a strand of Communist Party tradition that
flourished in the 1980s and has since been subordinated but not entirely
vanquished. "My grandfather and father were all fighting to establish not
dictatorship, not feudalism, but so that people at the grassroots could enjoy a
good life." He's grandfather was a vice-minister in the Kuomingtang
government that ruled China until the Communists defeated it in 1949; he was
beaten to death during the Cultural Revolution.
He's father was an influential
agricultural minister in the reformist 1980s, a talented agricultural scientist
respected for his integrity who helped guide China's peasants to shed
the communal owning of land. This was China's moment of enlightenment, He says,
where the revolutionary veterans respected the judgment of peasants and
entrepreneurs alike to choose what to plant, what to make, and how to take it
to market. The trick, as anylaissez-faire bureaucrat knows, was simply to get
out of the way. "At that time, the top leaders really understand the
concept of so-called ‘universal values,' which means human rights and allowing
the people freedom to choose what they want," says He. "They
respected the abilities of the people, reflecting a universal value not
necessarily coming from the West but based on human beings basic needs."
He had originally intended the Boyuan
Foundation to be a retirement pursuit, a project of collective
self-enlightenment with close childhood friends. His worries grew as he watched
a fellow princeling, Bo Xilai, breathe new life into the spirit of Mao and whip
up a popular frenzy in Chongqing, the inland mega-city Bo governed. "I had
seen exactly how Hitler combined populism and nationalism to support Nazism,"
said He. As he watched Chinese citizens embrace modernity and the party-state
slide back toward the revolutionary ideology of his childhood, his ambitions
turned from supporting China's modern evolution to saving it.
When He returned to Beijing after his
visit to Berlin in late 2010, he discovered that renowned scholars had
been investigating those same parallels, even if they could not publicize their
work. Shanghai historian Xu Jilin had traced China's leftward turn (leftists in
China are the more conservative, jingoistic faction) to the 1999 U.S. bombing
of the Chinese Embassy in Yugoslavia which grew into a "nationalist
cyclone," a moment when China's rising pride, power, and the political
phenomenon of Bo Xilai started to gain momentum. "Statist thinking is gaining
ground in the mainstream ideology of officialdom, and may even be practiced on
a large-scale in some regions of "singing Red songs and striking hard at
crime," Xu said in a recent talk delivered to the Boyuan Foundation.
"The history of Germany and Japan in the 1930s shows that if statism
fulfils its potential, it will lead the entire nation into catastrophe."
Xu's antidote is right out of the Boyuan mission statement: "What a strong state needs most
is democratic institutions, a sound constitution and the rule of law to prevent
power from doing evil."
"If you test how many Chinese
people really want to return to Mao's period, to become North Korea, I don't
believe it's 1 percent of them" he said.
He's adversaries -- which to a limited
degree really do believe China should return to a Maoist era -- are skeptical
of private capital, appalled by rampant corruption, and antagonistic towards
what they see as dangerous Western values. These adversaries, whose heroes
include the fallen political star Bo Xilai and the politically wounded
corruption-fighting general Liu Yuan, have a term for everything that He Di's
Boyuan represents: "The Western Hostile Forces." Luckily, He has the chips to
play in such a high-stakes game.
Besides his own princeling roots, which
protect him from the state, He has the backing of his foundation's chairman Qin
Xiao, who held a ministerial-level position as chairman of one of
China's top state-owned financial conglomerates. Boyuan's directors include
Brent Scowcroft, the former U.S. national security advisor. The Boyuan steering
committee includes the publisher of the path-breaking investigative magazine Caijing, a son of
one of the most important generals of the revolution (Chen Yi), and a group of
officials who, between them, manage the largest accumulation of financial
assets in the history of global capital.
He's childhood friends who have worked
closely with Boyuan include the governor of the People's Bank of China, Zhou
Xiaochuan, and Wang Qishan, the financial-system czar who is set to enter the
Politburo Standing Committee, China's top decision making body, this week.
They, along with several other princelings who have risen to the top of Chinese
finance, became close friends, ironically, when they were red guards, fighting "capitalist
roaders" in Mao's Cultural Revolution in the late 1960s.
Many of the protagonists at Boyuan have
levers of the state at their disposal, and are organizing and challenging the
party line in ways that would lead ordinary citizens to be branded as
dissidents. Further in the organization's background, offering clandestine
support, are members of some of China's most powerful families -- including
former security chief Qiao Shi, former premier Zhu Rongji, and former president
Jiang Zemin.
He traces China's spiritual and policy
drift to 2003, the year in which the team of then President Jiang and Premier
Zhu entrusted the party and government apparatus to their successors Hu and Wen
Jiabao. He says the administration moved away from "opening and
reform" -- former leader Deng Xiaoping's policy of bringing China in line
with the rest of the world -- and the resulting vacuum was filled with
counterproductive criticism of privatization and reform. Leaders are isolated
from their mid-level officials, each bureaucracy is siloed from the next, and
there is no framework to mediate their interests or debate the wider merits of
any particular proposal, he says. And once they started back down the old road
of central planning, high-ranking officials grew addicted to the power it
brought them. "The current leaders have really disappointed because I
don't know what they believe," says He. "They were educated by the
party, the old doctrines of Marxism, yet they lack growth experiences at the
grassroots. They are really engineers who still want to enjoy the dividends
from the previous generation leadership."
He believes in China's ability transform
itself but knows it might not happen easily. He thinks Mao was an aberration
who hurt his family's 100-year quest to bring China into modernity. Mao saw
peasants and workers as an undifferentiated mass to be organized and mobilized,
but not respected -- a man who represents China's past and used communism
instead of Confucianism as his doctrine of control. "Mao called himself
Qin Shihuang plus Stalin," He said, referring to China's first emperor.
"He used revolution to repackage China's despotic tradition and crown
himself emperor."
When Deng and his successors committed
to the market they also committed to the values that underpinned it, He says,
including the ideal of law. Hu, by contrast, eviscerated the integrity of the
individual, and his administration's combination of extreme nationalism,
extreme populism, and state capitalism means that history can repeat itself, He
warns.
And that's why the Nazi exhibit scared
him so.
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