1.5.1 Origins of the Institutional Genes of the RADT System

The institutions of contemporary China are inextricably linked to those of the former empire. To comprehend the genesis of the institutional genes underpinning China’s contemporary system (as depicted in Figures 1.1 and 1.2), we need to examine the institutional genes of China’s imperial system (Figures 1.3 and 1.4). A comparison of Figures 1.1 and 1.3 reveals striking resemblances between the institutional genes underpinning the power structures of both the imperial era and the present day. Subsequent chapters of this book will delve into the specific parallels between the institutional genes of ancient and modern China, the factors contributing to these similarities, and the mechanism facilitating their transmission.

Figure 1.3

The trinity of institutional genes comprising the governance structure of China’s imperial system.

Figure 1.4

Institutional genes of China’s junxian bureaucracy since the era of the Sui and Tang dynasties.

At the center part of imperial China’s trinity of institutional power, as depicted in Figure 1.3, was the bureaucratic system established under the Qin dynasty (221–206 bce), known as the junxian 郡县 (prefecture-county) system.¹¹ The judiciary was always an intrinsic part of the bureaucracy. In this top-down bureaucracy, bureaucrats appointed by the emperor replaced the aristocrats’ rule over local areas during the Zhou dynasty. The judiciary was also inherently embedded within the bureaucracy. The primary threat to imperial authority was the potential rise of a new nobility from within the imperial system itself. Since the aristocracy that might arise within the imperial system was the greatest potential threat to challenge imperial power, the empire had to prevent that from happening whenever possible. The imperial land system,¹² as shown in the lower left box in Figure 1.3, instituted since the Qin dynasty, served to eradicate the aristocracy.

However, the amalgamation of imperial land control and bureaucratic systems proved insufficient to prevent the emergence of a hereditary, de facto nobility, who often intended to be independent of the emperor. The imperial examination system, formally established during the Sui and Tang dynasties (with an earlier version introduced during the Han dynasty, though it was not fully institutionalized), as shown in the bottom right box of Figure 1.3, served as a critical personnel strategy that disrupted the intergenerational transmission of power among senior officials. It was an instrument of personnel control that safeguarded the emperor’s absolute authority over the bureaucracy. Simultaneously, it also served as a tool for ideological control, ensuring that all individuals entering the bureaucracy were properly indoctrinated with loyalty to the monarch. Upon the consolidation and refinement of this institutional trinity during the Song dynasty (960–1279), the emperor’s and the imperial court’s powers were effectively solidified. This robust institution of imperial rule remained unchallenged by any internally emerging powers for the subsequent millennium.

Establishing effective rule at the local level is a critical priority for any empire. Figure 1.4 illustrates the structure of local control within the Chinese imperial system, delineating the institutional genes of the junxian system. By juxtaposing Figures 1.2 and 1.4, the remarkable similarity between the junxian system and today’s RADT becomes readily apparent. Chapter 12 examines how China’s institutional genes have localized the foreign totalitarian institutional genes, which has led to the formation of China’s contemporary institutional genes.

Figure 1.4 depicts the core functions of the imperial court, which were divided among Six Ministries that were responsible respectively for personnel, finance, examinations and rites, the military, judiciary (mostly penal affairs), and public construction. Each was headed by a minister appointed by the imperial court. At the local level, the expansive empire was administrated by prefectural and county authorities, or by provincial, prefectural, and county authorities, each of whom was under officials directly appointed by the imperial court. Faced with the trade-off between ensuring absolute imperial rule and the effectiveness of that rule, along with the logistical limitations in terms of communication and transportation, the empire delegated all administrative functions to officials at varying levels of local governments while maintaining strict control over the officials themselves. Each level, from the imperial court to the county, housed offices for imperial personnel, finance, examinations and rites, the military, judiciary, and public construction. These offices mirrored the functions of the Six Ministries, with a magistrate overseeing these functions at the county level. The functional structures at intermediary levels followed the same pattern, although they are not depicted in the diagram.

The institutional genes depicted in Figures 1.1 to 1.4 evolved and were refined during 2,000 years of the empire, tenaciously self-replicating at the core of the imperial system. Whether it was a dynastic change due to a peasant uprising or a dynasty ruled by invading foreign powers, these institutional genes continued to be replicated. Even after the collapse of the imperial system, these institutional genes continued to dominate the path of China’s institutional evolution through the choices of reformers and revolutionary elites.

1.6.1 The Genesis of Totalitarianism in Soviet Russia

Russian Bolshevism was the world’s inaugural totalitarian system. Despite Marx’s assertion that a proletarian revolution could only emerge in the most developed capitalist economies, not in a backward place like Russia or China, the Bolsheviks claimed to be Marxist and labeled their revolution as proletarian. Why then was Russia the birthplace of totalitarianism? This question is directly related to an understanding of the emergence of totalitarianism in China and the future of China. The explanation in this book focuses on how the institutional genes of Tsarist Russia contributed to the creation of the Soviet totalitarian system.

Some authors describe the establishment of Soviet power by the Bolsheviks as a collection of coincidental events or the emergence of Soviet totalitarianism in Russia as the result of conspiracy, cunning, and brutal violence. Each narrative reflects important aspects of history. However, such large-scale implementation of violence requires many people to execute it voluntarily, even creatively and fanatically. The incitement, fanaticism, organization, and brutality of the Bolsheviks required a highly intense incentive mechanism.¹⁴ So, history cannot be accounted for purely because of a gang of conspirators’ atrocities. These same traits characterized the strain of Bolshevism that later arose in China with the support of the Comintern. The tragedies of China’s Land Reform movement, Campaign to Suppress Counterrevolutionaries, Anti-Rightist Campaign, and Great Leap Forward, followed by the Cultural Revolution, all demonstrate the enthusiastic and active involvement of millions of zealous followers, guided and motivated by totalitarian leaders. The revolution spearheaded by the CCP generated incentives potent enough to unite the entire nation, despite Sun Yat-sen’s description of the Chinese people as being as disjointed as “a sheet of loose sand.” So, what incited this unity? The emotional resonance and organizational discipline of the party cannot be solely ascribed to coincidence. If it was not purely accidental, what was the underlying mechanism?

Chapters 7 and 8 analyze the emergence of three institutional genes in the Tsarist period which led to the totalitarianism of the Soviet Union: the secret political terrorist organizations of late Tsarist Russia, the Eastern Orthodox Church, and the institutions of imperial rule under the tsars. From the outset, the Bolsheviks were markedly different from other Marxist parties in their organizational principles and methods, which were inherited from the secretive terrorist political organizations prevalent in Russian society. When Lenin founded the Bolshevik wing of the Russian Social Democratic Labor Party (RSDLP) in 1903, its foundational principles closely mirrored those of the Narodnaya Volya, or People’s Will, a prominent political terrorist organization of that era. Lenin’s brother, who was executed following a botched assassination attempt on the Tsar, was a local leader of the Narodnaya Volya and several of the early Bolshevik leaders had strong connections with the organization. Even leading figures of the international communist movement at that time, such as Karl Kautsky and Rosa Luxembourg, criticized Lenin’s Bolsheviks as a terrorist organization and asserted that the Soviet regime would bring a reign of terror.¹⁵

However, the totalitarian party vastly outstripped the secret political terrorist organizations in capability. The biggest difference lies in its systematic, highly appealing ideology, extremely strong incitement, and extensive, religious-like ability of mobilization that permeated society. The roots of this extraordinary mobilizing capacity can be traced back over a thousand years through the history of Christianity and the Church (see Chapter 6).

In his later years, Engels wrote about the origins of communism and socialism in early Christianity (Engels, Reference Engels1895). Kautsky also explored the origins of communist thought in the Bible, pinpointing the medieval Reformation as the genesis of the earliest communist movements. Characterized by extreme zealotry and brutality, these movements – some carried out on a significant scale – were a characteristic feature of the Reformation in certain regions of Europe (Kautsky, Reference Kautsky1897, pp. 12–17). They were evident in several towns and cities across Central and Western Europe, and sometimes in established short-lived communist societies, such as the Hussites in Bohemia and the Münster Commune in Germany. Many other aspects of Marxist thought, including the idea of historical inevitability, the downfall of the old world and the rise of a new one, belief in a savior and redemption, and martyrdom, have their roots deeply embedded in Christianity (see Chapter 6). In many ways, the international communist movement led by Marx and Engels resembled a second Reformation but with historical inevitability, communism, Marxism, and Das Kapital replacing God, Heaven, Jesus, and the Bible. Chapter 6, based on historical evidence from Europe, explains the Christian origins of a secular religion, that is to say, communist totalitarianism. It also explains how this institutional gene made communist totalitarianism the most influential ideology and institution at one point. This is the intellectual starting point for understanding fanatic communist movements in Russia and China.

Just as the Roman Empire’s greatest contribution to Christianity was its establishment as the state religion, the Bolsheviks’ primary contribution to the communist movement was the creation of a secular totalitarian caesaropapism founded on Marxist ideology. Regarding ideology and mobilization, the institutional genes for totalitarianism in Russia originated from the branch of Christianity dominant in Tsarist Russia: Russian Orthodoxy, which had permeated the population of the land long before the existence of the Russian Empire. Whether by design or inadvertently, the Bolsheviks appropriated the Orthodox Church’s well-established mechanisms of propaganda, organization, and punishment to mobilize, appeal to, and govern for centuries. Through these inherited characteristics of the Orthodox Church, the Bolsheviks infiltrated and exerted control over Russian society, from ideology to organization and power structures. While it may be coincidental that Stalin received a formal education at an Orthodox seminary, the Bolsheviks’ successful emulation of the Orthodox Church was more than mere happenstance. In this political religion,¹⁶ Marxism-Leninism’s classics supplanted the Bible, revolutionary martyrs displaced Christian martyrs, and communist society emerged as the new heaven. Mirroring the methods of the apostles in disseminating the news of Jesus Christ, the Bolsheviks established a cult of personality around their leader, elevating him to the status of a saint and savior. Revolutionary heroes and martyrs were canonized, their exploits commemorated, and temples erected in their honor. The religious custom of mass rituals was replicated, while penance to God was transformed into penance to the party. Liu Shaoqi coined the corresponding phrase “criticism and self-criticism” for use in China, a country devoid of a comparable religious tradition, in his 1939 book How to Be a Good Communist. Under Stalin’s regime in the Soviet Union, classic Marxist works served as the Old Testament, while Stalin’s History of the Communist Party of the Soviet Union (Bolsheviks): Short Course (Stalin, Reference Stalin1975), supplemented by Lenin’s work on Bolshevism, constituted the New Testament. Mao Zedong adopted this blueprint, converting volumes of rehashed history into China’s uncontested “classics” and presenting himself as the “Great Savior of the Chinese People.”

Upon seizing power, the Bolsheviks soon dominated every facet of Russian society by controlling the government and all resources. The institutional genes for totalitarianism, in terms of practical control, originated from the Tsarist Empire. These include the Tsar and his court’s monopoly over political, economic, military, and judicial powers, the highly monopolized power structure of the system, control over the Church, and the social consensus (legitimacy) supporting the monopolization of power through violence. On this basis, the Bolsheviks developed a totalitarian system with a total monopoly of power and property rights that was unprecedented in human history, controlling all aspects of society wholly and comprehensively.

Marxist theory, echoing the Christian theme of salvation, posits that the international communist revolution can only triumph once everyone in the world achieves liberation.

1.6.2 The Rise of Communist Totalitarianism in China

The Comintern sent representatives to China soon after its creation but its delegates discovered that China was 500 years behind the advanced economies. According to Marxism-Leninism, such backwardness could only be peripheral to the Comintern’s operations. Yet, paradoxically, China emerged as the Comintern’s most significant success, if not its only success. As elucidated in Chapters 8–10, China’s institutional genes bore a striking resemblance to those that engendered Bolshevism, whereas they were distinctively different from those in the West. Of the three institutional genes that gave rise to Soviet totalitarianism, two similar ones were present in China: the imperial system and a tradition of secret societies. The monopolization of power, stringent controls, and the overall institutional stability of China’s imperial system were more pronounced than those of Tsarist Russia. Furthermore, China’s secret societies, such as the White Lotus Sect, the Green Gang, the Heaven and Earth Society, the Triads, and the Brotherhood Society, had a more extended history and were potentially more organizationally sophisticated than their Russian counterparts. This shared lineage of institutional genes facilitated the creation of a Bolshevik system in China and the launch of incentive-compatible communist totalitarian movements there.

However, one institutional gene that was crucial in the genesis of totalitarianism was absent in China: an Eastern Orthodox tradition. The emperors had curtailed the influx of Christianity and other Western ideologies into China. There was no widespread belief or consensus regarding a monotheistic God, God’s Truth, or a Savior, nor did any Church hold a national authoritative position. This absence limited the potential for generating totalitarian ideas in the vein of Marxism and Leninism and made it challenging to manifest such an ideology in the form of totalitarian institutions capable of penetrating and controlling society. Therefore, creating a totalitarian system in China necessitated direct involvement from an external force, such as the Comintern, to cultivate and support various aspects, including promoting beliefs, unifying thoughts, launching propaganda, and establishing organizations.

The largest insurrection in China’s late imperial period, the Taiping Rebellion, which spanned from 1850 to 1864, borrowed elements of Christianity. Certain Christian tenets were utilized to legitimize the uprising and proved highly effective in mobilizing the masses. However, Western missionaries and Western powers refused to support the Rebellion when they discerned that it was Christian only in name. In subsequent years, both Sun Yat-sen and Mao Zedong took Hong Xiuquan, the Rebellion’s leader, as a role model. Unlike the Taiping Rebellion, the Comintern directly introduced a new ideology into China, erected novel institutions, and actively endeavored to modify China’s institutional genes. As Mao Zedong declared, “The salvoes of the October Revolution brought us Marxism-Leninism.”

In 1920, the Comintern dispatched representatives to establish its branch in China. From the official establishment of the CCP in 1921 until the Comintern’s dissolution in 1943, the CCP functioned as a branch of the Comintern and identified itself as Bolshevik. All major decisions of the CCP had to be approved by the Comintern, which provided financial and material resources and selected the party’s top leaders. In 1931, under the Comintern’s guidance, the CCP founded the Chinese Soviet Republic, China’s first rudimentary totalitarian regime. From 1931, when Mao Zedong joined the CCP leadership, to 1938, when he ascended to the party’s highest-ranking leadership, he leaned heavily on the Comintern for recognition, direct support, and supervision. The party’s Yan’an Rectification Campaign in 1942 was a Stalinist purge with Chinese characteristics, after which Mao Zedong was elevated as the unchallenged leader who had full control over the CCP. From then on, the CCP became an independent Bolshevik party with a blend of institutional genes from both Imperial China and the Soviet Union, hence constituting a new and unique Chinese institutional gene.

After the Second World War, the CCP, with assistance from the Soviet Union, emerged victorious from the Chinese Civil War and subsequently established total control over China. From 1949 onwards, with the party serving as the linchpin of the regime, Soviet totalitarianism was comprehensively transplanted into China, encompassing diverse domains such as the economy, politics, law, military, education, and scientific research, among others. Even the inaugural constitution of the PRC was formulated under pressure from Stalin and with the assistance of Soviet experts; Stalin personally reviewed the final draft.

In places where totalitarian systems have developed, they often demonstrate significant strength in their early stages. Totalitarian parties employ methods such as incitement, violence, and coercion to generate extraordinarily potent incentives that result in the formation of the “masses.” These masses are manipulated into becoming formidable forces that dismantle the “old world” and construct a “new world” that paradoxically subjugates them in the end. Consequently, totalitarian parties seem to possess the capacity to establish systems that fundamentally contradict the incentives of the majority of individuals in society.

Unlike the establishment of totalitarian regimes, stable and long-term incentive-compatible systems that have emerged in human history have evolved slowly. This evolution is the process of synthesizing a large number of competitive, seemingly random short-term changes or events. In such an institutional evolutionary process, leaders and participants on all sides of the competition are mostly focused on short-term, local goals. For a conventional political party, including the early Social-Democratic parties within the communist movement, long-term objectives that were not incentive-compatible were unfeasible due to their lack of appeal for electoral support.

But a totalitarian party is an ideologically dominated, tightly controlled organization with iron discipline (internal factions are banned). The tight top-down organization and iron discipline of these parties enable them to promote highly seductive and inflammatory ideologies that conceal the truth and achieve their ultimate goal of eliminating competitors and gaining total control over society through a step-by-step plan. Ideology provides legitimacy for their totalitarian goals and step-by-step implementation is their strategy. Chapters 8 and 10–13 use historical evidence to analyze how the Bolsheviks and CCP decomposed their incentive-incompatible grand goals into multiple, often contradictory, short-term incentive-compatible goals, which were systematically and violently achieved through a divide-and-conquer approach.

Violence is an inherent component of totalitarianism. However, the resources available for violence are intimately tied to the totalitarian regime’s mobilization capacity. The violent upheaval of revolution, through which totalitarian systems are forged and refined, relies upon the mass mobilization of a substantial societal elite and working class, rallying them to the revolutionary cause.¹⁷ In China, the CCP effectively garnered mass support by leveraging China’s institutional genes to transform interim objectives into revolutionary acts or campaigns that aligned with the short-term incentives of a large populace. For example, it promised democratic freedoms to the elite and made commitments to secure land and property rights for the poor rural population. However, the CCP reneged on all of these promises, backed by coercive forces, within just a few years (see Chapter 11). Furthermore, these CCP actions were like a repetition to those of the Bolsheviks (see Chapter 8).

By strategically designing a mechanism for continuous revolution, inherently incentive-incompatible objectives can be decomposed into a series of short-term, seemingly incentive-compatible stages. This was the approach adopted by the Bolsheviks and the CCP extended this strategy to its extreme, with each stage of the revolution meticulously pre-planned. Ideology, proclaimed as “theory” by the party, provided a semblance of legitimacy for frequently self-contradictory initiatives such as the Land Reform movement and agricultural collectivization. In some instances, campaigns that served the established and long-term objectives were launched in response to specific events. One such instance was the Anti-Rightist Campaign, which was initiated in response to the “episodes” of the Hungarian Revolution of 1956 and Khrushchev’s secret speech to the 20th Congress of the Communist Party of the Soviet Union (CPSU). Crucially, each short-term, incentive-compatible step in the process weakened or eradicated a segment of the political or social forces resisting revolution, including those within the party itself, thereby nudging the party closer to its incentive-incompatible totalitarian objectives.

The overwhelming majority of individuals, including many within the ranks of the CCP elite and leadership circles, would likely not have opted for totalitarianism had they been aware of its true characteristics in advance. With each stride towards complete totalitarianism, the system’s long-term incentive-incompatibility became more apparent to a greater number of people. The reason why a totalitarian system can still be established and solidified under such conditions is that the elimination of resistance and the establishment of totalitarian tyranny are advanced in a phased strategy. Every step along this trajectory involves the deployment of totalitarian organizations and collectives against individuals. At each stage, the party designs revolutions or movements that align with the short-term incentives to mobilize as many people as possible, aiming to gradually suppress or even eliminate dissenting individuals or groups in a piecemeal manner. At every juncture, the party harnesses sufficiently potent resources, reinforced by violence, to suppress or eradicate the targets of revolution specific to that stage. Individuals, recognizing their insignificance and helplessness in the face of this violent system, either surrender or even participate in the purging of others, thus becoming complicit in perpetuating the system. As this process repeats, the system amasses enough power to suppress any dissent towards the leader. Faced with a choice between obedience or purges under the threat of severe penalties, people generally opt for obedience, even if it entails participating in the purging of others. This forms the equilibrium of the totalitarian system under the tyrannical incentive-compatibility condition.

Although China’s imperial system was, arguably, the most centralized imperial system in human history, the modern totalitarian system is still far more centralized. In a totalitarian system, all means of production are owned by the state. The party, organized and controlled from the top down, uses ideology, personnel, and the armed forces as the basic means to take complete control of the government, the nation’s politics, economy, judiciary, ideology, armed forces, and every corner of society. In terms of the economy, along with thousands of Soviet experts and numerous Soviet-assisted development projects in the 1950s, the comprehensive operation of a Soviet-style totalitarian system also entered China. In this central planning system, the central ministries ruled the entire economy from the top down, a system that Mao described as a “vertically aligned dictatorship” (tiaotiao zhuanzheng 条条专政).

1.6.3 Institutional Genes: Regionally Administered Totalitarianism

While the personal role of Mao was important in transforming the totalitarian system in China from a classical one to one with Chinese characteristics, a much more important factor was China’s institutional genes. The most direct part of that was the local power pattern in the liberated areas before the CCP seized national power. And that in itself was a sort of extension of the institutional genes of the imperial junxian system. Before the CCP fully controlled China, the liberated areas were governed similarly to the imperial junxian system. Political and personnel matters were highly centralized, yet the regions maintained substantial self-rule in the administrative and economic spheres. The process of establishing a totalitarian system was a process of transforming China’s institutional genes with external totalitarian institutional genes. However, the “vertically aligned dictatorship” model of Soviet-style totalitarianism, introduced wholesale into China in 1950, proved to be significantly incentive-incompatible with the local power base of the CCP. Both the Great Leap Forward and the Cultural Revolution, launched in 1958 and 1966, respectively, were attempts to discard this Soviet model and forge a totalitarian system that delegated more authority to regional administrations. Given that the transition towards RADT involved the reinvigoration of the imperial institutional genes inherited from the imperial era, there was a certain degree of truth to Mao’s self-proclamation in 1958 as a blend of Karl Marx and Qin Shi Huang, the first emperor of China.

The launch of the Great Leap Forward as a round of institutional changes first and foremost enhanced the paramount leader’s political powers, while simultaneously undermining or eliminating the already weak checks and balances that existed within the party and government. The powers of the central ministries were drastically curtailed and swathes of executive functions and resources were delegated to local governments. Newly empowered local governments were motivated to compete in loyalty to the leader, with regional competition supplanting central planning. Local governments were encouraged to experiment with new systems and strategies to expedite development towards communist totalitarianism (officially referred to as the transition to communism). Official propaganda declared that China should endeavor to be the first within the international communist movement to enter communism. The People’s Commune system was an invention of local governments during experimentation, while local competition was the mechanism for the rapid promotion of this system nationwide. In the process of dismantling Soviet-style totalitarianism and instituting RADT, however, the Great Leap Forward and the People’s Commune movement devastated the economy and sparked a famine on an unprecedented scale.

The Cultural Revolution, inaugurated in 1966 and spanning a decade, marked Mao’s second major attempt to advance the RADT system. Facilitated by a system that encouraged regional experimentation, the CR ignited a surge of Red Guards, Revolutionary Rebels, and Power-Seizing Movements nationwide. These forces, driven by personality cults and fueled by the mandate for perpetual revolution, wrought profound changes to China’s political landscape. Officials deemed inadequately loyal were brought down. All powers related to politics, personnel management, and ideology were concentrated in the hands of Mao and his associates. Central ministries and commissions were largely incapacitated and several were permanently dismantled. The administrative and economic responsibilities of the central government devolved almost completely to local authorities on a scale even surpassing that observed during the Great Leap Forward. By the early 1970s, China had morphed into an RADT economy characterized by multiple self-sustaining economies at various levels. The provinces and municipalities primarily functioned through self-sufficiency. The central party-state authority had to rely on local entities to implement its directives, thus transforming the so-called central planning into a task of coordination among local economies. Mao called this a “horizontally coordinated dictatorship” (kuaikuai zhuanzheng 块块专政).

In 1975, the principles and guidelines of RADT were officially incorporated into the constitution. Compared to classic totalitarianism, the primary shift this prompted was in the relationship between the central and local governments. The central–local governance structure inherent in the institutional genes of RADT is illustrated in Figure 1.2. As previously noted, in terms of the central–local relationship, RADT bears a striking resemblance to the institutional genes that governed the relationship between the imperial court and local jurisdictions under the traditional imperial system, as shown in Figure 1.4. While the disasters induced by the Great Leap Forward and the CR have been extensively studied, this book seeks to illuminate how these calamities established the groundwork for the transformations in China during the post-Mao era.

1.6.4 Changed and Unchanged Institutional Genes during the Post-Mao Reform

The chaos inflicted by the CR on the CCP party-state precipitated changes in the post-Mao era, during which the party shifted its focus from class struggle and proletarian revolution to economic growth. Following in the footsteps of the Eastern bloc, where economic reforms had been in progress for over a decade, the CCP embraced market socialism and perpetuated a groundless claim that Deng Xiaoping was the originator of market socialism.

Since the late 1960s, the Eastern bloc countries commenced a series of economic reforms to counteract their stagnating economies in order to maintain communist rule. In totalitarian regimes, however, economic resources are entirely under the control of the party-state and its bureaucratic machinery. Thus, the extent, form, and agents of change are inherently tied to the interests of the party-state bureaucrats. These bureaucrats may resist reform passively through uncoordinated collective inaction or they may even actively resist if reform threatens their vested interests. Thus, addressing their incentive problems is a prerequisite for the success of any reform and economic growth. If their incentive issues are not adequately resolved, the reform program will stagnate, regardless of the theoretical soundness of the proposed blueprint. Consequently, addressing the incentive issues for bureaucrats at all levels becomes one of the most crucial tasks in implementing reform. However, this presents a formidable challenge for any reform in a totalitarian state, including China.

The economic reforms in the FSU-EE were never able to overcome the fundamental political, ideological, and institutional shackles of totalitarianism, nor did they resolve the foundational incentive issues, leading to their failure. After more than two decades of attempted reform, the entire FSU-EE system collapsed between 1989 and 1992. In contrast, China embarked on its path of reform later than the FSU-EE countries but managed to make more significant progress in preserving the regime. The most crucial difference was that private enterprises grew from scratch to become an engine of the economy in China, driving rapid development during the reform. Along with the growth of the private sector, there was a short-lived shift from a totalitarian system to a somewhat relaxed authoritarian system. However, since 2012, the basic components of totalitarianism have been reinstated, making China’s successful reform temporary and preventing it from diverging from the trajectory of the Soviet and European reforms. Chapter 13 scrutinizes the evolved and unchanged parts of China’s institutional genes and their roles in driving the institutional evolution.

Two primary factors account for why China’s early reforms outpaced those in the FSU-EE countries. First, during the early stages of reform, China’s approach to interregional competition and experimentation, based on decentralized totalitarianism, was relatively effective in addressing incentive challenges across all levels of governance. There was a gradual shift towards the market replacing central planning, mirroring the direction of reforms in Eastern Europe. These alterations provided local officials with justification to tolerate, and even facilitate, the emergence and growth of private firms, even though technically they were not legal. Second, in order to reverse the devastating impact of the CR, the post-Mao period saw large-scale personnel changes throughout the party-state apparatus, with bureaucrats who favored economic development replacing those who favored class struggle. These sweeping changes at the top levels reduced resistance to reform and paved the way for progress across the board.

When the Cultural Revolution ended and reforms commenced, China was among the world’s poorest nations and the gap with rich nations was widening further which threatened the legitimacy of CCP rule. Under these extraordinary political and economic circumstances, the CCP pivoted towards economic development in lieu of class struggle. In the top-down regional tournaments of the RADT system, the competition target was shifted to the GDP growth rate. Motivated by the robust incentive of competition and encouraged to innovate to achieve higher growth, local governments tolerated and even fostered the private sector, facilitating substantial growth from the ground up of the private economy in many regions. A wave of private enterprises subsequently engulfed the nation, significantly reinforcing the reforms and propelling economic development. Private property rights were acknowledged and safeguarded under the constitution, while non-government organizations expanded alongside the burgeoning private sector. This evolution towards limited pluralism, encompassing the emergence of private enterprises, private property rights, non-government organizations, autonomous communities, and diverse beliefs nurtured the seeds of new institutional genes in China.¹⁸ In certain aspects, China’s governing institutions gradually transitioned from decentralized totalitarianism to decentralized authoritarianism.

RADT differs from classic totalitarianism at the operational level but fundamentally, they are both totalitarian systems. If, in the process of reform, the new institutional genes formed under the RADT (or RDA) system prove to be robust enough and if China’s communist totalitarian system undergoes sustained and gradual erosion as a result, then China might embark on a relatively smooth path of institutional transformation. However, the communist totalitarian system is not only highly alert to the risks of peaceful evolution but also deeply rooted in the RADT institutional genes. Due to the CCP’s strong resistance to fundamental totalitarian institutional reform, the “reform dividend” accrued in the early stages of reform quickly evaporated, barring China from becoming an anomaly among all communist totalitarian regimes. Ultimately, China will succumb to the same pattern that doomed institutional reform attempts in the FSU-EE countries.

The crucial reality is that even during periods when the CCP tolerated limited pluralism, it consciously preserved the fundamental elements of totalitarian rule. Deng Xiaoping, the paramount leader, underscored this in his Four Cardinal Principles, repeatedly stating that the CCP must remain China’s unchallenged ruling party and that the dictatorship of the proletariat must be maintained.

In practice, the party’s monopoly of and dependence on the secret police and armed forces have never weakened. The party consistently seeks to control every business and organization in the country, despite the fact that private enterprises have become the backbone of the Chinese economy. It maintains control over the media, even during brief periods of a loosened monopoly and fleeting spells of pluralism.

While the CCP has somewhat relaxed its grip on ideology, allowing for a degree of divergent thought as the intensity of ideology-related persecution has lessened, its domination in the ideological sphere remains unaltered. Additionally, it maintains control over all banks and the majority of the country’s financial resources. The complete state ownership of land not only remains unchanged but it has become even more crucial for the party-state’s local operations.

In the following chapters, we will delve deeper into the nature of the emerging institutional genes and their relationship with China’s pre-existing institutional genes. We will also examine the CCP’s monopoly of power and resources and its capacity to safeguard its own interests. By maintaining absolute control over society and relying on deeply ingrained totalitarian institutional genes, the CCP is capable of reverting to a totalitarian system, even after selectively loosening its control and encouraging a degree of limited pluralism.

In the early stages of reform, when China was not yet industrialized and still extremely impoverished, the reform was able to benefit the majority of the population. During this period, the incentive mechanism of local competition provided a strong motivation for bureaucrats, propelling economic growth and reforms closely tied to this growth, as long as these reforms did not threaten the totalitarian political-property structure. As a result of this reform, private enterprises began to emerge and grow throughout China, introducing nascent institutional genes related to private property rights, civil organizations, autonomous localities, and various beliefs.

China’s situation would have been quite different if the CCP had not insisted on maintaining its totalitarian rule, which, of course, would have been incentive-incompatible with the CCP’s interests. Under that scenario, during the window of opportunity when the regional competition mechanism was effective, if relevant institutional reforms had been promoted, if the rule of law had been developed in the direction an independent judiciary, if the community and grassroots self-governing organizations had been allowed to develop more freely, and if state assets had been significantly reduced, it might have been possible to fundamentally transform the role of government and allow new institutional genes to take root and flourish. Such changes could have potentially paved the way for the establishment of constitutionalism in China.

However, the CCP has been vigilant in preventing the “peaceful evolution” induced by private businesses. The period of emergence and development of new institutional genes was concentrated only in the late 1990s and early twenty-first century, when the Chinese economy was facing serious challenges. After joining the World Trade Organization (WTO) and experiencing relatively smooth economic development, the power of the old institutional genes quickly seized the opportunity to reorganize and grow significantly once again. The phenomenon of “the state advances, the private retreats” soon became overwhelming. The power of the old institutional genes overwhelmed the budding new institutional genes. As China became a middle-income country and conflicts over land resources between the government and the public intensified,¹⁹ the negative effects of the regional competition mechanism became more pronounced, causing the window of opportunity for using this mechanism to drive reform to be completely lost.

Just as China’s reform was facing a critical juncture, the global financial crisis struck. China’s institutional problems were overshadowed by the financial crisis. The government took this opportunity to implement a massive fiscal stimulus, highly dependent on the mechanism of regional competition, encouraging local governments to borrow heavily and to invest in infrastructure construction. This sparked an opportunist rush to develop high-speed rail and motorway and airport projects across the land, creating an economic “miracle” on the surface, while also sowing the seeds of deep problems, for example, the uncontrollable expansion of debt of local governments and state-owned enterprises (SOEs). The biggest problem is not the high debt itself but the expansion of a soft-budget constraint-producing institution that creates unstoppable borrowing. This institution is a common cause of the failures of economic reforms in all communist totalitarian countries.

With the underlying RADT institutions and the malfunctioning mechanism of regional competition, China’s politics and governance reverted to a vicious cycle of “chaos when loosened and death when tightened” that has been repeating itself for over half a century. The operating model for local government since the beginning of the reforms has been replaced by an increasingly centralized system during the Xi Jinping era. Local governments have lost their default limited power to manage administrative, social, and economic matters, including emergencies. The central authority issues orders and evaluates and monitors the performance of local governments. However, it was precisely this type of governance mechanism, along with other factors, that led to the quagmire of the FSU-EE countries. This mechanism was at the heart of the Soviet Union’s inability to solve various problems of reform, particularly those related to the economy and society.

From the outset, the ultimate aim of the CCP’s reform and opening-up has been to maintain, consolidate, and strengthen the party’s complete rule over Chinese society. The importance of economic growth lies in its ability to provide legitimacy for party rule; everything is done for the sake of party rule, which determines the primary character of the CCP’s post-Mao reform. The so-called beginning of the reform was at the same time the end of the CR, which had lasted for ten years. The devastation caused by the CR triggered a period of active political dissent more intense than any other in the history of the PRC, with participants ranging from ordinary members of the public to top CCP leaders such as Hu Yaobang. On the one hand, it provided an impetus for the cause of the reform but, on the other hand, it also challenged the totalitarian system in various aspects, including ideology and organization.

Deng Xiaoping’s Four Cardinal Principles represented the reaction to these challenges even before the reform started, the crux of which emphasized the paramount necessity of upholding the unassailable leadership of the CCP.²⁰ To preserve the party’s dominance, Deng initiated purges within the party and stringent suppression of political dissidents. These movements included the campaigns against “spiritual pollution” and “bourgeois liberalization” in 1983 and 1985, respectively, and the brutal suppression of peaceful demonstrations in and around Tiananmen Square in 1989, leading to the imprisonment and house arrest of thousands of dissidents. Since then, all discussions of political reform have been stifled, rendering the topic forbidden. After Deng, the Four Cardinal Principles, underscoring the party’s supreme role in society, gained increased prominence, superseding even the law. At the CCP’s 17th National Congress in 2007, this political legacy was formally written into the CCP’s constitution. Xi Jinping has taken this still further. At the CCP’s 19th National Congress in 2017, Xi officially incorporated Mao Zedong’s Cultural Revolution-era principle of asserting party rule over everything under the sun (“The Party exercises overall leadership over all areas of endeavor in every part of the country”) into the party’s constitution. Reviving the core aspects of the old institutional genes in this way is a direct response to the challenges of the new institutional genes that emerged from China’s reform.

The most significant new institutional-gene components to emerge during the first three decades of the post-Mao reform were private enterprises, non-governmental entities, and limited ideological pluralism. The launch of the reform relied heavily on a comprehensive repudiation of the CR in the ideological realm. Some reformers, both within and outside of the party, conspicuously but quietly undermined the party’s absolute control over ideology and the absolute dominance of Marxism-Leninism-Mao Zedong Thought in the realm of ideas, which was previously enforced by violence. As reform progressed, social science subjects that had been officially criticized and only sporadically acknowledged within Chinese academia under labels such as “Western economics” and “Western political science” gradually became acceptable as they contain necessary knowledge for operating a market economy. University courses resumed, relevant literature was published, and the media reported on them systematically. An orderly limited pluralism of ideas emerged. But the cardinal principle or the fundamental restriction has never been relaxed: no one may challenge the dominance of the CCP and its ideology. No one may establish political parties or even political organizations.

As the purpose of the CCP’s post-Mao reform was to preserve and strengthen its rule, the economic development and reform had to serve this goal without undermining the party’s power. The massive erosion of the role of the state sector in the economy was an inevitable unintended consequence of the reform. Following in the footsteps of the Eastern European communist parties, the CCP began reforms after the end of the CR, focusing all attention on SOEs and issues related to incorporating the market into the planned economy. Rural land reform was driven wholly by local initiatives to resolve essential matters of survival in poverty-stricken rural areas. Under the constraints of prohibiting privatization, the SOE reform experienced a series of setbacks. By the late 1990s, the entire state sector was on the verge of crisis. The privatization of massive quantities of SOE assets at the end of the 1990s and the start of the twenty-first century catalyzed wholesale improvements in business efficiency throughout China. Yet, privatization was rebranded as “restructuring” to align with the communist ideology while concealing its essence as a shift in ownership.

At the peak of privatization, the CCP’s main focus was on strengthening large SOEs to preserve and reinforce party rule, a policy known as “grasping the large and letting go of the small.” The State-owned Assets Supervision and Administration Commission (SASAC) was established at that time with the same purpose in mind. The CCP leadership put forward the concept that “SOEs are the foundation of party rule,”²¹ in principle linking privatization with undermining party rule. Soon, even internal policy debate on privatization became a political taboo.²² The notion that SOEs were the foundation of party rule was enshrined in CCP regulations,²³ setting political, economic, and ideological boundaries for the reform. In due course, the consequential role this played in reversing the trajectory of reform demonstrated the enduring depth and resilience of the institutional genes established in China during the 1950s.

The deeply entrenched existing institutional genes cannot be automatically supplanted by newly emergent institutional genes, nor will they allow new variants to erode the foundations of their power. The most integral component of these traditional institutional genes is the Leninist party which exerts control over all aspects of society. The foundation of any operational totalitarian system lies in the establishment, sustenance, and development of a party capable of permeating and governing the entirety of society. Without such a party, it is impossible to establish and maintain a totalitarian system.

From the inception of the Bolshevik Party, Lenin viewed the continuous recruitment of professional revolutionaries and the establishment of new branches as vital to the party’s survival. This type of work, referred to as “party construction” was later termed “party-building” within the lexicon of the CCP. This principle distinguishes Leninist parties from common political parties and was a primary cause for the schism between Lenin and the Second International. Since its establishment by the Comintern, party-building has been a fundamental principle for the CCP. After a century, it has become a firmly ingrained institutional gene of the regime in China. To most CCP members and cadres, the significance of party-building is so self-evident that the vast majority erroneously consider it a Chinese characteristic, often attributing its invention to Mao Zedong.

But this basic principle, the institutional gene of party-building, is in direct contradiction with the new institutional genes that emerged from the post-Mao reform. As private firms and non-government organizations flourished during the early twenty-first century, they accounted for the bulk of China’s urban employment. However, most of these companies and organizations did not have CCP cells. Meanwhile, the development of the real estate market has led to most urban residents living in private housing. These newly developed “neighborhoods” are basically devoid of party organizations. Although party branches are still nominally active in rural areas, the large-scale migration of rural residents to cities and village elections have greatly weakened the role of the township and village party branches.

As the twenty-first century began, CCP’s party-building significantly declined in terms of new member recruitment and the establishment of new branches. In the private sector, where most people worked, party branches were either missing or not actively functioning. For a period of time, the party lost its capacity to penetrate and manage every corner of Chinese society. This indicates that the nature of the Chinese system had for a time evolved from totalitarianism to authoritarianism, from RADT to RDA in particular, although unintentionally. If private enterprises were allowed to flourish, new institutional genes were permitted to grow and thrive, and old institutional genes were allowed to continue to decline, then not only might totalitarianism be completely eradicated but China could also progress from a more relaxed form of authoritarianism to constitutionalism and even a democratic system.

The declining trend in party-building has the potential to fundamentally undermine CCP rule and further weaken the old institutional genes. To preserve totalitarian institutional genes, it is necessary to reverse the trend of weakening control over society and the decline in party-building. In a bid to maintain control without hampering economic development, the CCP began experimenting with methods to transform private businesses and non-governmental organizations into entities under the party’s control. Utilizing a mix of party-building and direct authority, the party aimed to modify emergent institutional genes into versions more akin to the older institutional genes, in a manner more conducive to its interests.

To promote the buyout strategy on a large scale, the CCP amended its party constitution and the state constitution in 2002 and 2004, respectively. The amendments officially recognized private property rights and introduced the “Three Represents Theory.” This theory aimed to attract entrepreneurs to join the CCP and to select loyal entrepreneurs as representatives of the party and the People’s Congress. Entrepreneurs who aligned themselves with the party received significant benefits and protections, including access to financial and land resources, regulatory support, market access, and law enforcement. This made entrepreneurs dependent on CCP power and obedient to CCP commands.

If the CCP had successfully controlled the majority of private enterprises and non-governmental organizations, the developments of the reform period would not have led to the emergence of new institutional genes. However, buying out the entrepreneurs proved to be extremely costly and private firms proliferated throughout the country. As private enterprises became the mainstay of the national economy and non-governmental organizations increasingly dominated grassroots society, relying on a minority to buy out the majority became unsustainable and impractical.

New institutional genes were also emerging in other fields. Parallel to the development of private enterprises and NGOs, along with the development of limited ideological pluralism, the calls to promote constitutionalism and democratic institutions have been growing since the very beginning of the reform. In order to maintain total control over society, the CCP has never abandoned the use of violence and coercion to force entrepreneurs, NGOs, and political dissidents to comply. Political dissidents and non-compliant business owners have continued to be imprisoned throughout the entire reform period. Around 2006, debates about universal values (the basic values of democracy and constitutionalism) spread among intellectuals and the upper echelons of the CCP. There were activists who put their demands into action, drafting a constitutional charter and collecting signatures to promote constitutionalism. Viewing this action as a challenge to the old institutional genes, in 2009 the authorities imprisoned Liu Xiaobo for drafting and promoting Charter 08 and kept him in prison until his death (Link and Wu, Reference Link and Wu2023).

In response to the increasing call for constitutional reform in China, soon after Liu Xiaobo was awarded the Nobel Peace Prize in early 2010, the Chairman of the Standing Committee of the National People’s Congress (NPC), Wu Bangguo, declared on behalf of the CCP that the ideology of constitutionalism must be banned and the CCP must remain the leader of socialist China (Wu, Reference Wu2011). Furthermore, the party sought to constrain, and even eliminate, private ownership and ideological plurality. Such shifts indicated that China’s earlier reform phase, characterized by a move towards authoritarianism, had reached its limit, and that party leaders were now orchestrating a comprehensive return to totalitarian rule.

The evolution toward authoritarianism has come to an end. Xi Jinping, who took office at the end of 2012, became the prime mover behind the next dramatic shift. After taking office, Xi promptly traveled to Shenzhen to deliver a secret speech in which he attributed the collapse of the Soviet system to the lack of a “real man” who could have maintained the rule of the CPSU (Buckley, Reference Buckley2013). This stance overturned the CCP’s previous conclusion from the 1990s that attributed the collapse of the Eastern bloc to failed reforms. It also suggested that political suppression had become a more crucial tool than economic reform for the party to retain power. A few months after Xi’s address, the General Office of the party’s Central Committee issued an internal directive officially prohibiting debates on seven sensitive topics: universal values, press freedom, civil society, civil rights, the party’s historical missteps, the privileged bourgeoisie (quangui zichan jieji), and judicial independence.²⁴ Journalists who disclosed the directive’s existence were jailed. In the spring of 2015, Wang Qishan, a member of the Politburo, clearly stated to Francis Fukuyama and Masahiko Aoki, who were then visiting China, that the party must control the judiciary and that judicial independence and rule of law were untenable in China (Tatsuhito Tokuchi, 2015).

Since 2013, Xi Jinping has launched a campaign to centralize power and suppress dissent in the name of anti-corruption. His approach has evoked memories of Mao Zedong’s Four Cleanups Movement (a prelude to the CR) and Stalin’s Great Purge. In association with the increasing political pressures created by this campaign, all private companies, foreign companies, and NGOs are required to establish party cells. Several attempts have been made to cultivate a Mao-style cult of personality around Xi but they have all been unsuccessful. The party has also demanded direct control over businesses, universities, and research institutes, regardless of their ownership.

It is evident that after decades of private business growth and China’s integration into the global economy, new institutional genes have not only emerged but also have become a fundamental part of Chinese society. People’s innate motivation to protect their own interests and the enlightenment gained from an open world have given vitality to these burgeoning new institutional genes. However, the existing institutional arrangements have ensured that the institutional genes of totalitarianism are never significantly weakened. As a result, the totalitarian party always has sufficient capacity to fully reassert itself. This is precisely what has happened in reality. Moreover, the party has been deploying cyber surveillance and artificial intelligence to control society to an unprecedented degree.

China’s future hinges on the interplay between the old and new types of institutional genes. Yet, under totalitarian rule, without potent exogenous shocks that could significantly weaken the totalitarian regime, it would be challenging for the new institutional genes to survive, let alone further develop. Conversely, even if the totalitarian regime were to collapse due to external forces, without sufficient development of new institutional genes supporting constitutional rule, China would still be unable to establish a constitutional democracy.