China’s Rise Spells Turbulence

By S.P.SETH

China’s communist rulers put up a big show to celebrate the sixtieth anniversary of their revolution. But the show was not open to the people of the People’s Republic of China, except on TV screens.

The residents with houses and balconies with the parade view were barred from looking out. The hotels were barred from having guests.

This says a lot about the regime that doesn’t trust its own people while celebrating the country’s achievements over a sixty-year period. What are they afraid of?

Obviously even after China’s impressive economic growth and growing military might, the regime still worries about its popular legitimacy.

They don’t seem quite sure if the implied social contract they have made with the people for legitimacy, based on economic growth, is working or not.

China’s communist oligarchy seeks legitimacy for monopoly of power indefinitely, without popular participation. The exclusion of people from the sixtieth anniversary celebrations is a classical example of both arrogance and paranoia.

There are two elements to China’s strategy to keep people on its side. The first is continuing economic growth to absorb the growing pool of unemployed people. The recent economic slowdown has put a damper on it despite the large economic stimulus package.

The hastily-packaged stimulus spending is creating further distortions in an economy already lopsided to fuel real estate and stock market fluctuations as well some shoddy infrastructure spending.

The government is now reining down some of it for fear of fueling inflation. But with so much dependent on maintaining economic momentum to contain social instability, it seems like the government is all the time trying to plug a leaking boat which might flounder some where along the line.

And since there are no measurable yardsticks of popular support like democratic elections and supportive institutions, the government is always second-guessing its people.

There is widespread social unrest across the country. The government has stopped publishing annual statistics of such protests because the situation is getting worse.

This is not to suggest that there is an imminent threat to the Party’s power but there is a steady, though scattered, groundswell of frustration and anger.

And this is coalescing around corruption. At its recent party meeting, the leadership admitted that the corruption has “seriously damaged the party’s flesh-and-blood bond with the people and has seriously affected the solidity of the party’s ruling status.”

Corruption is everywhere in the country. The Transparency International, an anti-corruption watchdog, has reportedly listed China as the second worst country in bribery out of 22 in its 2008 report.

Corruption now is institutionalized and because it involves all levels of the Party and government, it is becoming increasingly difficult to root out.

And even when some big fish is snared occasionally and punished severely, it is generally attributed to political vendetta.

And this general sense of malaise and corruption is not helped when the sons and daughters of top party leadership control some of the biggest business conglomerates in China.

For instance, the former president and party general secretary Jiang Zemin’s son is reportedly the country’s telecommunications tsar. Li Peng’s family is controlling the power sector. Zhu Ronji’s son is into banking. And President Hu Jintao’s son recently sold automated ticket machines to Beijing city government.

All these princelings might be shrewd businessmen and women in their own right, but it is only fair to ask if they would have made it to the top business league but for their political connections?

No wonder that corruption and nepotism have become the focus of people’s frustration and anger against the system.

And because the problem is systemic and entrenched at the highest levels in some form or the other, there is lack of concerted action to deal with it.

Therefore, despite impressive economic growth as an exercise in legitimacy, the Party is not so sure about its rapport with the people.

At the same time, the rural masses of the country have largely missed out from economic growth, with resources mainly directed to China’s industrial economy.

Indeed, they have been subsidizing industrial growth through diversion of rural land, water supply, relatively depressed prices of rural products and export of cheap labor to work on urban construction and industrial sites.

There is widespread paranoia at the Party’s top level about danger lurking everywhere, evident in the exclusion of people from official celebrations.

Which manifests itself even more severely when dealing with ethnic minorities like the Tibetans and Uighur people.

Indeed, the Party is not averse to using mainstream Han population against these marginalized minorities to whip up national hysteria, inside and outside the country. This was evident at the time of the Beijing Olympics.

At the same time, there is a deeply felt sense of historical humiliation inflicted on China during the 19^th century, as well as the Japanese invasion and atrocities of the last century.

Therefore, when Mao declared China’s liberation and the inauguration of the People’s Republic of China on October 1, 1949, he also proudly announced that this was the moment when ‘China has stood up’.

In other words, China’s “liberation” was essentially couched in nationalist terms.

However, Mao got distracted with his power plays leading to purges, disastrous experiments of economic and social engineering like the Great Leap Forward culminating in the lost decade of the Cultural Revolution.

It was only after Mao’s death that China’s leadership got a clear sense of direction under Deng Xiaoping about building up the country into a modern and powerful state. And to achieve this it was imperative to create a growing and modern economy.

The only successful model for this was to harness aspects of capitalism to build up China.

Apart from economic growth, nationalism (increasingly as xenophobia) is another important plank in the Party’s exercise in popular legitimacy.

The sixtieth birth day military parade, with China’s armed might on display, was intended both to rally people around the Party as the architect and builder of China’s national power; as well as to serve notice on the world that China really means business when it comes to defending and promoting its perceived national interests.

And these national interests are not static but expanding with its global power.

Deng Xiaoping advised that China should bide its time while getting on with the task of building a strong and powerful nation.

Today’s communist leaders believe that China is now in a position to flex its muscles but without going overboard as it still has quite some way to go to attain military parity with the United States.

But the upcoming generation of new communist leadership material is quite jingoistic in terms of China’s national interests.

Wang Xiaodong, an influential leader of the China Youth and Juvenile Research Centre, for instance, is quoted in the Australian newspaper (in a report from its China correspondent) to say that the younger generation “will globalize its [China’s] national interests, and this will affect not just our close neighbors but the whole world. It [China] must gain the capacity to protect those interests.”

The process of expanding China’s national interests, and to secure them with greater projection of its military power, has already begun evidenced from the scramble for resources.

Its stark manifestation was the jostling of a US ship in the South China Sea, and similar incidents of lesser intensity.

Communist China’s 6oth birthday was a massive display of its power, with obvious message for the world.

And if the Party comes under pressure from increased social unrest (as seems likely), the temptation to turn up the nationalist heat to rally people around the flag might be irresistible.

And this is not what the world looking for from a rising China.