The rise of Japan’s new Prime Minister Naoto Kan, and lessons for China

Unless China shifts its policies toward more democracy and tends to the interests of the rising urban middle class, it risks ending up in the same cul-de-sac as Japan.

Yuriko Nakao/Reuters
Japan's new Finance Minister Naoto Kan (c.) leaves his first news conference, at the Finance Ministry in Tokyo on Thursday.

The rise to power of Japan’s new prime minister, Naoto Kan, holds important lessons for Asia’s development model, particularly rapidly urbanizing China.

More than anyone else in Japanese politics, Prime Minister Kan has led the democratic revolt of the urban consumer and citizen against the powerful bureaucracy allied with the old rural politics of the Liberal Democratic Party that ruled Japan for decades. That alliance, which once fostered the “Japanese miracle,” ended up strangling the nation’s potential and miring it in stagnation because it didn’t adapt to the very conditions of prosperity it had produced or to a world transformed by globalization.

Back in 1999, when the Democratic Party of Japan had first gained a majority in the upper house of the National Diet (Japan’s bicameral legislature), I sat down for a long talk in Tokyo with Mr. Kan. In those days, he was hailed as Japan’s “Tony Blair” because of his “third way” approach that embraced globalization and sought to reform the overbureaucratized state.

“What Japan needs is a party of the consumer and taxpayer,” Kan said then, “not one whose power rests on the rural constituencies and big construction companies and then is subordinate to the bureaucracy. It is the politicians that are elected who should govern, not the bureaucrats.”

I asked if he agreed with Taichi Sakaiya, who headed Japan’s Economic Planning Agency, that it was time to end the system of “administrative guidance” that had built Japan into an industrial giant because such a system was not flexible enough to compete in the globalizing economy.

Kan went further than agreeing with Sakaiya. He agreed with Japan’s chief foreign critic. “I have long agreed with Karel van Wolfren’s book, ‘The Enigma of Japanese Power’ that criticized the shadow power of the bureaucracy and the lack of a center of political accountability,” Kan said controversially. “Eighty percent of the policies in Japan are made by bureaucrats and only 20 percent by elected political leaders. In our current system, a minister, including the prime minister, has no final power. Can you even call that a government?”

Unlike Japan, China does have a powerful political center: The Communist Party Politburo that directs the bureaucratic elite from its Forbidden City compound of Zhongnanhai. But is a strong, one-party center in China that lacks accountability any different in the end from Japan’s unaccountable bureaucracy?

Will this modern mandarinate that has competently moved China from a peasant economy to the factory of the world be able to transcend its Maoist roots and respond to the new conditions and constituencies it is creating any more than did Japan Inc.’s Ministry of International Trade and Industry? Unless it shifts its policies toward more democracy and tends to the interests of the rising urban middle class, it risks ending up in the same cul-de-sac as Japan.

To be sure, China’s rural population remains massive. But China is urbanizing at a speed and on a scale never seen before. In Mao’s time, only 20 percent of the population lived in cities. Today it is 40 percent and is predicted to reach 80 to 90 percent in the coming decades.

With more than a billion inhabitants, yet lacking less arable land than India and short on energy, China has embarked on a colossal effort to organize its immense population into megacities with tens of millions of people. The McKinsey Global Institute projects at least 15 such megacities with 25 million residents – each the population size of a major country.

Since the revolution concentrated land ownership in the hands of the state, the Chinese authorities have vast leeway in shaping these cities that must accommodate so many people, planning the urban infrastructure with high-speed connecting trains, state of the art airports, deep subways, industrial parks, universities, and seas of skyscrapers.

“Although politics in China will change radically as the country urbanizes, “ said Singapore’s foreign minister George Yeo, “the core principle of a bureaucratic elite holding the entire country together is not likely to change. Too many state functions affecting the well-being of the country as a whole require central coordination. In its historical memory, a China divided always means chaos.”

Because of its lack of a center of political accountability, Japan was unable to prevent its formidable momentum from morphing into inertia as Japanese society and the world around it evolved. That is what has made change so difficult. “Even if we want change, where is the lever?” Kan asked a decade before the Democratic Party of Japan finally pushed the Liberal Democratic Party from power last September.

Will China be different?

“When working properly, the mandarinate is meritocratic and imbued with a deep sense of responsibility for the whole country,” Yeo said hopefully. And, certainly, there is a kind of systemic accountability of the Communist Party since its legitimacy is anchored solely in keeping economic growth going.

But without the civic software that complements the infrastructure hardware, will the Chinese bureaucratic elite be responsive enough to the needs, expectations, and aspirations of its burgeoning, ever more prosperous urban masses?

The mandarinate is already being tested on many fronts, from the need to raise domestic consumption as American demand for Chinese exports weakens, to endemic environmental crises, to the striking workers at Honda, to the suicides at Foxxconn Technology Group this year.

For the first time in its postwar history, Japan has a vigorous system in which two major parties alternate power. Kan now possesses a tenuous lever to hold the bureaucratic elite accountable so Japan can change course.

China’s authorities are unlikely to adopt Western-style parliamentary democracy as a means of greater accountability. But they nonetheless need some meaningful feedback mechanisms to effectively negotiate China’s transition from the world’s shop floor to a society with a large, globally integrated, urban middle class. Administrative guidance from the top alone cannot work as such a society grows more complex. At the lowest levels of government China is experimenting with democracy as a useful check against abuse by local officials. How far up the ladder democracy will climb is the big question now.

Economists used to liken the export-driven development model in East Asia to the V-shaped formation of a flock of geese, with Japan showing the way and others following. Japan is demonstrating to the rest of East Asia today just how hard it is to change once the course has been set by an unchallenged bureaucratic elite. China should be paying close attention once again to the lead goose.

Nathan Gardels is editor in chief of the Global Viewpoint Network of Tribune Media Services. His most recent book, with Mike Medavoy, is “American Idol After Iraq: Competing for Hearts and Minds in the Global Media Age.”

© 2010 Global Viewpoint Network/ Tribune Media Services. Hosted online by The Christian Science Monitor.

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