Protestors shout slogans during a rally against a pro-Beijing official who was appointed as chairman of Hong Kong University’s (HKU) governing council, in Hong Kong on Jan. 3, 2016. Fears are growing over political interference in the city’s education system. (Anthony Wallace/AFP/Getty Images)Protestors shout slogans during a rally against a pro-Beijing official who was appointed as chairman of Hong Kong University’s (HKU) governing council, in Hong Kong on Jan. 3, 2016. Fears are growing over political interference in the city’s education system. (Anthony Wallace/AFP/Getty Images)

Research shows that the political ideology of communism restricts innovation, today’s panacea for economic growth and long-term prosperity.

In broad strokes, the communist tenets of state ownership of business and property with strict government supervision lead to a risk-averse culture working in an environment that discourages ambition and creativity. This could not be further from the building blocks that innovation needs to thrive.

The 2017 International Intellectual Property Index, recently published by the Global Intellectual Property Center (GIPC) of the U.S. Chamber of Commerce, ranks the two bastions of communism, Russia and China, No. 23 and No. 27 respectively—behind the smaller economies of Malaysia, Mexico, and Turkey, for example.

The report associates stronger intellectual property (IP) protection regimes with more innovative economies and conversely, weak IP protection as hindering long-term strategic innovation and development.

“A robust national IP environment correlates strongly with a wide range of macroeconomic indicators that fall under the umbrella of innovation and creativity,” according to the GIPC report.

The leading countries in IP strength are free market, capitalist economies such as the United States and United Kingdom. First-world democratic countries of Europe and Asia also rank highly.

The key to whether China can become a country of innovation is tied to the respect of property rights and the rule of law.

— Ma Guangyuan, Independent Chinese economist

The report states that Russia’s protectionist moves—local production, procurement, and manufacturing—work to restrict IP rights. Russia also suffers from persistently high levels of software piracy.

For China, the report singles out historically high levels of IP infringement.

China and Russia are the “usual suspects” of cyberespionage. Theft of IP, the infrastructure for innovation, is one way these communist nations try to stay competitive globally.

Melbourne, Australia-based agency 2thinknow has been ranking the world’s most innovative cities for the past 10 years. In its latest rankings published Feb. 23, the most innovative city in a communist country, Beijing, ranks No. 30, and Moscow ranks No. 43.

Blunting Universities’ Effectiveness

According to the Organisation for Economic Co-operation and Development (OECD), not a single Chinese university ranks among the world’s top 30 in terms of most-cited scientific publications.

Universities are breeding grounds for young, innovative minds. Within their walls, ideas are born and debated, companies are formed, and research is conducted. They are key components of a healthy innovation ecosystem.

Harvard Business School professor William Kirby wrote about the strict limitations within Chinese universities on what faculty could discuss with students.

“Faculty could not talk about any past failures of the communist party. … They could not talk about the advantages of separation between the judicial and executive arms of the government,” Kirby stated in an article in the Harvard Business Review (HBR) in 2015.

“It is hard to overstate the impact of these strictures on campus discourse and the learning environment,” Kirby wrote.

Communism is known for its corruption and cronyism. A Science editorial noted that the bulk of the Chinese government’s R&D budget is allocated due to political connection rather than merit based on the judgment of independent review panels.

Communist Interference

McKinsey’s 2014 report “The China Effect on Global Innovation” noted that the impact of innovation on China’s economic growth declined to the lowest level since about 1980.

China has a massive consumer market and a government willing to invest huge sums of money—nearly US$200 billion on R&D in 2014—and its universities graduate more than 1.2 million engineers each year.

Communism as a political ideology is as bankrupt as ever.

— Garry Kasparov, former world chess champion

Clearly, China has so much potential, but it is the United States that has taken the lead in technological dominance.

“The country [China] has yet to make an internal-combustion engine that could be exported and lags behind developed countries in sciences ranging from biotechnology to materials,” according to McKinsey.

“While almost all western technology giants have R&D labs in China, the bulk of what they do is local adaptation rather than developing next generation technologies and products,” wrote Anil Gupta and Haiyan Wang in a 2016 article in the HBR. Gupta and Wang are co-authors of the book “Getting China and India Right.”

Excessive government involvement often leads to waste and excess—overbuilding and overcapacity. China’s real estate bubble and steel mills are two such examples.

Lately, the Chinese government has been trying to spur an onslaught of startups by providing them with generous subsidies. But it doesn’t have the savvy to pick winners and losers. Instead, a more efficient use of capital comes from knowledgeable and discerning venture capitalists. Most startups are meant to fail after all.

Why China Can’t Innovate,” a 2014 article in the HBR co-authored by Kirby, noted that the Chinese Communist Party requires one of its representatives to be associated with every company of more than 50 employees. Larger firms must have a Party cell, whose leader reports directly to the Party at the municipal or provincial level.

“These requirements compromise the proprietary nature of a firm’s strategic direction, operations, and competitive advantage, thus constraining normal competitive behavior, not to mention the incentives that drive founders to grow their own businesses,” according to the article.

The system of “parallel governance” constrains the flow of ideas. China’s innovation largely comes through “creative adaptation,” which can mean a lot of things including foreign acquisitions, partnerships, but also cybertheft.

Capital Flight

Communism is against private ownership of property. This puts a damper on innovation.

“The key to whether China can become a country of innovation is tied to the respect of property rights and the rule of law,” wrote Ma Guangyuan, an independent economist in China.

In his blog, Ma cites renowned U.S. investor William Bernstein’s writings, which discuss property rights as being the most important of four factors needed for rapid economic growth. Guangyang wrote, “Entrepreneurs live in constant fear of punishment,” due to the questionable business practices in China, an environment that leads them to lose trust in a viable long-term economic future.

Capital flight out of China is one symptom of the problem; another is the preference of wealthy Chinese to send their children overseas for higher education. The loss of entrepreneurs like Li Ka-shing and Cao Dewang is a sign that greener pastures lie abroad.

Former world chess champion Garry Kasparov, a Russian, wrote: “Communism as a political ideology is as bankrupt as ever.”

In his blog, he went on to say: “It is no coincidence that the values of the American century are also the values of innovation and exploration. Individual freedom, risk-taking, investment, opportunity, ambition, and sacrifice. Religious and secular dictatorships cannot compete with these values and so they attack the systems founded upon them.”

The authors of the HBR article “Why China Can’t Innovate” recognize the nearly limitless capability of the Chinese individual, however, the political environment in China acts like a choke collar on innovation.

“The problem, we think, is not the innovative or intellectual capacity of the Chinese people, which is boundless, but the political world in which their schools, universities, and businesses need to operate, which is very much bounded,” they wrote.

Follow Rahul on Twitter @RV_ETBiz

Communism is estimated to have killed at least 100 million people, yet its crimes have not been compiled and its ideology still persists. Epoch Times seeks to expose the history and beliefs of this movement, which has been a source of tyranny and destruction since it emerged.

See the entire series of articles here.

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January 11, 2017

A ceremony at the Great Hall of the People in Beijing on July 1, 2016. (Wang Zhao/AFP/Getty Images)A ceremony at the Great Hall of the People in Beijing on July 1, 2016. (Wang Zhao/AFP/Getty Images)

China has the world’s second largest economy and one of the biggest stock exchanges. Modern high-rise skyscrapers dot the skyline in Beijing, Tianjin, and Shanghai. All makes of cars can be found on public roads, and Chinese citizens carry the latest model of smartphones.

Surely the People’s Republic of China is a modern capitalist state and merely communist in name?

The Chinese Communist Party has adopted some aspects of capitalism, but China remains a textbook communist country: The Party controls the commanding heights of the economy and all land; it maintains strict controls on speech, assembly, and belief; and the Chinese regime’s political structure is a classic Leninist dictatorship.

China would not have been able to enjoy stretches of double digit GDP growth in recent years if the Party under paramount leader Deng Xiaoping had not turned away from pure socialism and experimented with economic reform starting in 1978.

Over the decades, the Party slowly relinquished some control over the means of production, and allowed private enterprise and entrepreneurs. The top Chinese leadership now refers to its five-year plans as “guidelines” in recognition that the Party no longer oversees a classic command economy.

But the Party runs what could be termed a “neo command economy.”

State-owned enterprises may make up only 3 percent of all companies in China today, but they produce an estimated 25 to 30 percent of the total industrial output. The Party maintains command over the economy by having top Party officials or family members own several key industries. For instance, Jiang Mianheng, the son of former Party leader Jiang Zemin, is known as China’s “Telecommunications King” due to his sizable interests and control over the industry.

China’s impressive GDP growth figures are widely known to be manipulated. Li Keqiang, the current Chinese premier, told a U.S. official in 2007 that official figures are unreliable and he instead looks at railway cargo volume, electricity consumption, and new loans disbursed by banks to better gauge China’s economic growth.

Many top Chinese businesspeople are Communist Party members who serve on the regime’s rubber stamp legislature or its political advisory body. Part of the reason is a Party policy to co-opt Chinese business elites, but businesspeople join up anyway because Party membership guarantees business advantage.

And in line with textbook Marxist teachings, the Party is the only true landowner in China; the Party leases land to the Chinese people.

Chinese society continues to be tightly controlled by the Party.

The Party employs over two million internet police to censor public opinion, and maintains a powerful internet firewall to keep out the global internet within China’s borders. Population control officers force Chinese women to stick to the state mandated child limit, and carry out forced abortions and sterilizations against women who don’t conform.

Regime dissenters, as well as religious communities and ordinary members of civil society, live under the constant threat of being declared political enemies by the Party and then “invited to tea,” code for being interrogated by dreaded public security officers. Dissidents are abused, tortured, and frequently made to carry out forced labor in detention centers.

The regime secures an almost perfect conviction rate against its political enemies in the courts, which it controls. Prominent dissidents find themselves under house arrest the moment they complete their often lengthy jail stints.

The Chinese constitution guarantees freedom of belief, but the Party ignores its own laws. For instance, former Communist Party general secretary Jiang Zemin forced through the unpopular persecution of the Falun Gong spiritual practice in 1999, and created an extralegal organization to ensure that the regime’s law and security apparatus to carry out Jiang’s policy.

Politically, China is still run by a Leninist Party obsessed with control.  

The Chinese Communist Party has been the only governing political party since 1949; other parties exist under a “united front,” but are not independent of the communists.

The Party’s leader or general secretary doesn’t run a cabinet, and is instead part of a Political Bureau, a collection of top officials that make all the top decisions in the country. He is also handpicked by Party elders and elites, not democratically elected.

These days, the leaders of China may have traded in their grey, five-button, Mandarin-collared Mao suits for dark business suits. But as long as the hammer and sickle remains in the Great Hall of the People, communism hasn’t yet been relegated to the dust heap of history in China.

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This narrative, edited and abridged, is a recollection of the open yet orderly atmosphere that characterized three weeks in May 1989 when Beijing enjoyed a brief respite from Party control. Author Chen Gang, a college student during the iconic events, recalls his personal experience from the student demonstrations that involved millions of people.
There are concerns that China, removed from the one-Party state’s dominance, would suffer great chaos. As a matter of fact, we in Beijing enjoyed some twenty days of peace and order in the spring and summer of 1989—outside the grip of the Chinese Communist Party.
Starting May 13 of that year, college students from many of the Chinese capital’s institutions flocked to Tiananmen Square to take part in the demonstrations and hunger strike in support of human rights and to protest the corruption of Party officials. Ordinary residents as well as students, spontaneously joined in the events, making a peak of of three million people across Beijing.
It was from this day on that the Communist Party began to lose control, and anarchy seemed to loom over the capital.
Spontaneous Order at Tiananmen
At the time, I was a junior in college. On May 16, I went with my fellow students and professors to Tiananmen to support those on hunger strike. Every day, thousands upon thousands of Beijingers of different class backgrounds swarmed into the square or marched in parades around the area.
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The police—those managing traffic, public security officers, and military police—had all left their posts at Tiananmen and in the general vicinity. But there was no chaos at all. Rather, students simply occupied the empty positions to maintain order. I was at the square every day, and I neither saw nor heard of any theft or violence.
To support the students, people from all over the capital sent a wide variety of food, drink, and other goods to the square. The supplies piled up in mountains. We immediately began a sincere effort to share the responsibilities of distribution. As firstcomers, we did not abuse our privilege. We instead handed out the food and supplies to others before seeing to our own needs. And those who came took just what they needed.
Hundreds of thousands of Chinese gathering in Tiananmen Square demanding democracy despite martial law in Beijing on June 2, 1989. (Catherine Henriette/AFP/Getty Images)
It was an emotional moment: I had never expected that the communist slogan of “Assign the abundant material goods to the people according to their need” would be first realized there at a Tiananmen Square—freed of the Party organization.
The patriotism of the students’ movement was a great motivator. The people set aside their selfishness and put their hearts to the future of the state and our nation. Among the students were no lack of beautiful girls from around the country. I was very young and without a girlfriend, and indeed there were many opportunities for me to find a like-minded young woman there on the square. Yet, for fear of blaspheming this great patriotic undertaking, I dared not be moved by any personal desires. I never asked the names or hometowns of those pretty girls standing next to me side by side.
Without the Party
On May 20, seeing power and personal privilege slipping from their hands, the Communist Party leadership declared martial law. Hundreds of thousands of soldiers from the People’s Liberation Army were deployed outside Beijing and prepared to suppress the students and “resume normal order” despite the fact that it had never been lost and that the millions of Beijing residents were working and living in peace.
And it was with peaceful disobedience that hundreds of thousands of people blocked the People’s Liberation Army formations marching into the capital from all directions. The Beijing government, all but paralyzed, fell out of Party control. The capital’s higher institution set up autonomous students’ and workers’ associations, all without Party leaders.
Beijing magistrates in their court uniforms join workers demonstrating in Beijing streets on May 18, 1989, in support of student hunger strikers gathered at Tiananmen Square. (Catherine Henriette/AFP/Getty Images)
Fully-armed soldiers arriving in combat vehicles were at a loss when they saw what the capital looked like. On May 21, I went to the Gucheng Street in Shijingshan District, which was near my home. I saw only a long column of military vehicles snaking through the street, stopped in place by a human chain of residents.
The troops had been fooled by the authorities, who claimed that there was “turmoil in Beijing” and that order needed to be restored. Locals surrounding the soldiers spoke to them about the truth of the circumstances, that the students were protesting against corruption, that Beijing was in good order, and that the PLA was not needed to restore anything. The only request was for the patriotic students and citizens to be spared bloodshed.
Everywhere the people of the capital used their bodies to halt the army vehicles. The words of a middle-aged lady stuck in my mind: “Why doesn’t the United Nations send peacekeeping forces to protect us here in Beijing?”
Pro-democracy demonstrators applaud students from Beijing University standing on People’s Liberation Army (PLA) armored personnel carriers in Beijing on May 21, 1989, trying to convince the soldiers to defy the Martial Law which was proclaimed the previous day. (Catherine Henriette/AFP/Getty Images)
No police, military police, or soldiers occupied Beijing proper or its outskirts. The capital was simply out of the Communist Party’s domain. Not wanting to give the authorities any excuse to suppress the demonstrations, the students cooperated to institute a meticulous regime of social law and order, starting with directing traffic.
At that time, there was no “riot,” and even thieves renounced stealing. Beijing police statistics showed a visible decrease in all crimes during those events. Traffic accidents reached an all-time low. Commercial activity continued without interruption.
Pro-democracy demonstrators surround a truck carrying People’s Liberation Army soldiers on their way to Tiananmen Square in Beijing on May 20, 1989. (Catherine Henriette/AFP/Getty Images)
Common Hopes
Normally, under the Party’s

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BEIJING—Bai Budan took a morning stroll on Tiananmen Square to find inspiration for a new series of satirical cartoons, an art form only barely alive in China.

He wondered about the sheer number of surveillance cameras installed on the square, opposite the iconic entrance to the Forbidden City with a huge portrait of Mao Zedong.
“These cameras are for whose safety? Are they for the safety of the ordinary people?” he asked.
He remembered the popular children’s song “I love Beijing Tiananmen” that he sang when he was young. He sketched the Mao portrait and made a note about updating the lyrics.
Back in his studio, he quickly drew two pink cupids pointing to three security cameras, with the Forbidden City as a background. The caption read: “I love the security cameras of Beijing Tiananmen.”
When he feels the work is finished, where will he show it? Who in China will see it? Those questions are fraught with risks.
Cartoons used as political satire have been rare in China since the 1949 Communist Revolution, though some began gaining notice about three years ago. In particular, single-panel cartoons from an artist known as Rebel Pepper were widely circulated on social media.
In December 2013, Chinese President Xi Jinping made headlines for stopping to have a simple lunch of steamed buns in a small Beijing restaurant, in an event staged to portray China’s most powerful man as one of the people. Rebel Pepper’s rendition showed Xi as steamed bun surrounded by other breakfast foods kowtowing to him as though he were an old-time emperor. Another cartoon, in October 2014, shows Xi Jinping in bed with a nationalistic blogger named Zhou Xiaoping; Xi had praised Zhou, though the young man had drawn attention for writing exaggerated negative claims about the U.S.
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Authorities abruptly closed social media accounts belonging to Rebel Pepper, whose real name is Wang Liming, and searched his house last year. He later went into self-exile in Japan. The crackdown was part of broader moves by the Chinese leadership to curb online discourse of intellectuals, lawyers and any groups pushing for societal change by working outside the Communist Party.
Bai avoids targeting leaders and instead takes aim at society in general, often using cute and irreverent cupid characters to make his point. Even so, his Facebook-style microblog account was terminated last year after he posted a cartoon of Tiananmen Square immersed in red ink. It looked like a possible reference to the 1989 massacre of pro-democracy students there by troops—still a taboo subject in China.
Bai says it is a challenge to show his cartoons to the public and that he often resorts to private exhibitions.
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“I have not exhibited many of my paintings publicly. My Weibo account was closed down last year. But I try not to think too much about the possible risks. I try to think about positive things, or try to be optimistic,” Bai said.
“Any career has risks attached. Right?” he said during an interview outside his home in Beijing.
“A normal society would have these types of artists,” Chinese art critic Li Xianting said in an interview. “If no one raises their voice, then of course that is not a normal society.
“There are fewer and fewer cartoonists in China. This is because there is no space for them to grow. They have no access to the public and there is no platform for them. In the past, newspapers and print media played a very important role.”
Bai is originally from Shanxi, a mining province in the east of China. He creates cartoons using ink and inkstone on rice paper, and also remarks on social issues through photography and documentaries.
“All the things happening in our society concern me,” he said. “I think about them and I paint them.”

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