This is provocative title of Mark Leonard's most recent book promises more than it delivers.  But, it does make a very important point, which is that there is a very open policy debate in China.

China is not a monolithic communist dictatorship.  China's political system may indeed have changed just as much as its economic system.  According to one Chinese academic, "As long as you don't write that the Communist Party should be overthrown immediately, you can write what you like".   

There are big debates among intellectuals in leading universities and think tanks in China about the what model of capitalism China should follow (there are more think tanks in China than in Europe).  The New Left is in favour of a softer form of capitalism which pays attention to the environment, fighting corruption, workers' rights and income inequality.  They believe that the state is presently too weak, not too strong.  The New Right worry that the current leadership has succombed to a new form of populism which will slow economic growth.  Some intellectuals argue that democracy and the rule of law do not need to go together.  Countries like Hong Kong and Singapore have adopted the rule of law without democracy.　　 

The 1980s debate between the conservtives and the reformers has been won by the reformers, and the issue now is the relationship between the state and the market.  The role of the state has evolved into what Leonard calls deliberative democracy.  The one party state is bolstered by all sorts of experiments with polls, focus groups, open media and public consultations, which allows the government to remain in touch with public opinion.

So politics has evolved dramatically, but not in the direction of liberal democracy.  It is now a very consultative process of collective government.  The old days when senior leaders like Mao Zedong or Deng Xiaoping would make major decisions alone are long gone.  China's politics has not been in deep freeze for the last 30 years.

The New Left and the New Right are reflected in two gangs within the Communist Party, and constitute a sort of democracy inside the Party.  For example, when it came to elections to the Politburo's Standing Committee at the five-yearly Party Congress in October 2007, the two factions got roughly the same number of votes and President Hu Jintao failed to get his protege Li Keqiang annointed as his successor.  The annointment of Shanghai Party boss Xi Jinqing as the frontrunner to become Hu Jintao's successor was determined by a secret poll of Communist Party officials in which Li Keqiang was roundly defeated by Xi Jinping.   

Some critics argue that intellectuals of left and right have been merely co-opted by the state, and do not capture the divisions on the ground.  In reality, little progress has been made in addressing China's very real problems of corruption, environmental damage, and income gaps between rich and poor, which contribute to widespread popular unrest across the country. 

Also, Leonard's book is very much focussed on the political/intellectual scene in Beijing.  The reality is that much of the country is now beyond Beijing's control, with economic and political power very decentralised.  We should not of course forget the big stock of dissidents (both overseas and within China) who have not been co-opted by the Beijing government.

All that said, the current global financial crisis has brought American-led globalization and politics into disrepute.  It will thus increase the appeal of the Chinese model of deliberative dictatorship -- particularly as such this model is being encouraged in the developing world through China's trade, investment and development assistance activities.

Reference:

http://markleonard.net/