Book Review: The Party

I consider myself, possibly mistakenly, well versed in Northern Asia compared to the average Australian. I have many friends from across the region, travel there on a regular basis and have even spent many years attempting to verse myself in a local dialect, the Korean language. With limited success I must admit.

By doing so I learnt a lot about Northern Asian culture and history which made me realise 3 things. Firstly how little Australians learn about non-Euro/American history and culture at school. Secondly that the countries of that region have different cultures and fearlessly defend their own independence. Thirdly the fact I know basically nothing about China.

So when a friend of mine who is well versed in all things China suggests I read “The Party – The secret world of China’s communist rulers” I was intrigued.

This book was an interesting read and to someone with little knowledge of China and a fascinating insight into the party that runs the country. Richard McGregor certainly shows his intricate knowledge of China and seems to have had access to a large number of people to back up his underlying premise that the CCP is the invisible force that steers all parts of China, including everything economic.

The CCP is the largest political party in the world with a membership of 73 million. But that is not its most remarkable feat. While transforming the country into what is seen from the outside as a modern superpower the CCP has managed to maintain its grip of power over ever significant part of Chinese society. The CCP monitors and controls all aspects of the government, companies, universities, courts, military, media and religions.

China’s economic growth in the past decade has been incredible. As an outsider looking in the country seems to have undergone an amazing change in what can only be described as western industrialisation on steroids. However what is even more remarkable is that while many other communists countries have either imploded or disappeared from the world’s radar the Chinese Communist Party(CCP) has managed to transform itself over time to stay in control of the China Machine.

The Party presides over large, wealthy state-owned businesses, and it exercises control over the selection of senior executives of all government companies, many of which are in the top tier of the Fortune 500 list. The CCP is an inward facing deeply secretive organisation that is above any law except its own, yet decisions made by it have massive ramifications on the global economy.

The book has some excellent examples of the workings, and in some cases failings, of how the CCP pulls the strings within Chinese companies and how the party has adapted itself over time to stay in control of the country while allowing entrepreneurialism to be seen to be flourishing. Some examples given are of Chinalco, Rio Tinto , the corruption case of Chen Liangyu, the former party secretary of Shanghai, the case of milk contaminated with melamine after the Beijing Olympics. All are explained using multiple viewpoints from various sources from within the companies, the media and the government.

I certainly learnt a lot from the book. However, I came away feeling that I was still missing some key pieces of information, such as how the legal system actually functions.

Nonetheless, the book is well worth a read for anyone who is even remotely interested in understanding the political and economic drivers of China.

The Author, Richard McGregor, is an Australian who worked at the Sydney Morning Herald, followed by stints in Japan, Taiwan, Hong Kong and China for the ABC and then as the Financial Times China bureau chief. The book was banned in China almost immediately after it was published, so there is a good chance that a least some of its information is correct.

As a follow up to the book I recommend that you listen to the 1 hour podcast from the Lowy Instistute where Richard McGregor presented last year.


We are hoping to make this review section a semi-regualar part of MacroBusiness. So if you have a book or other economic resource review that you believe other readers of MacroBusiness would be interested in please let us know.

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Comments

  1. That is a very good book, although the protrayal of the Chinese Communist Party as this great evil mass is being a bit simplistic. Chinese rule has always been dictatorial. Tthe tension between the rich, coastal regions and the poor inner west is a major political faultline, which is why a huge amount of resources is devoted to quelling internal dissent. The lack of navigatable river inland had limited the economic opportunities of the inner regions. This is why China is building so much infrastructure : it’s a necessary step to political conherence.

    One thing most Westerners fails to appreciate is that when the Chinese leaders talk about ‘socialism’, it is something they genuinely believe in.

    • Crony Capatalism more likely…the wealh distribution in China has nothing to do with Socialism!

  2. This is a great idea DE – I’m happy to review my favourite book on trading/economics/finance – by the late great Benoit Mandelbrot. And others.

    Finally getting a Kindle so I’m on the hunt for some free e-books as well.

  3. I suspect that nobody outside of China really knows what’s going on there, and they will continue to defy and surprise all the Western experts making predictions about them.

  4. Suggestions for review:

    The Great Stagnation – Tyler Cowen’s eBook/pamphlet on how the low hanging fruits of economic growth have been harvested by western democracies, leaving future growth at lower levels.

    All the Devils Are Here – Joe Nocera. By far the best account of the underlying causes of the GFC I’ve read. Particularly good for a non-finance audience.