Inside China’s Iron Quadrangle, the Ultimate Crony Capitalist State Gets New (Old-Style) Management

Since President Obama was re-elected, it can be said that the most important shift in political power for the world in 2012 happened in Beijing. (Of course we still have a month and a half.)

A new, but pretty familiar bunch took the stage of the Communist Party cotillion last week, of which only 1 out of 7 was a “reformer.”

The Party, it appears, is increasingly concerned about it’s own existence given the rapid rise of the Chinese economy, coupled with what appears to be a rather nasty economic slowdown. Many of the “princelings” (the sons of the original Maoist leaders) have become fabulously wealthy and they would like to keep their comfortable stations. As such, they are interested in shutting down competition both in the economic sector and the political. That’s not generally a good recipe for a society.

(From Forbes)

Hu’s policy of closing the country down was popular inside Beijing for many reasons, but it became China’s new paradigm because it had the support of what David Shambaugh calls the “Iron Quadrangle,” state-owned enterprises, the security apparatus, the People’s Liberation Army, and Communist Party conservatives. “The coalition of these four power interest groups ‘captured’ Hu, who was too weak and disinclined to stand up to them, and they stalled reforms,” writes the noted George Washington University professor. Others define the constituent elements of the conservatives differently—many identify “powerful families” as being inside this circle of power, for instance—but it’s clear that entrenched interests now dominate politics in the Chinese capital.

Click here for the article.