Will China go the way of the Soviet Union?

Will China go the way of the Soviet Union?

By S.P.SETH

China’s ruling oligarchs are afraid of their own shadow. Otherwise, they wouldn’t be engaged in a harsh crackdown of the country’s dissidents who simply want the political system opened up.
These dissidents and human rights activists are the mirror that reflects China’s reality. And what the rulers see is not at all pretty. Indeed, it is downright ugly. Hence, they want to smash the very mirror that reflects this ugliness.
Take the case of Ai Weiwei, China’s famous artist. He has disappeared since he was arrested on April 4 as he tried to board a plane to Hong Kong. His family has no information about his whereabouts.
The Chinese authorities are now defaming him by filtering out cooked up information about fathering an illicit child, pornography, tax evasion and so on. His real “crime” is that he spoke in favor of reforming the country’s political system.
In a recent newspaper article, the celebrated writer Salman Rushdie says, “These accusations [about Ai] are not credible to those who know him. It seems that the Chinese regime, irritated by the outspokenness of its most celebrated art export, whose renown has protected him up to now, has decided to silence him in the most brutal fashion.”
Rushdie then goes on to list some other prominent Chinese writers and artists who have been silenced by the Chinese authorities with long prison sentences or have simply disappeared.
Comparing such disappearances with what happened in the Soviet Union, Rushdie opines: “We needed the samizdat truth tellers to reveal the ugliness of the Soviet Union. The government of China has become the world’s biggest threat to freedom of speech, and so we need Ai Weiwei, Liao Yiwu and Liu Xiaobo.”
This is precisely why the Chinese regime wants them behind bars, so that they won’t reveal the ugly truth.
But just as the Soviet Union failed to crush the spirit of its dissidents and writers that significantly contributed to its collapse, China’s communist oligarchy might also be headed in that direction.
A country of China’s size and population can’t sustain a top-heavy political system of monopoly power, more so in this age of information explosion--despite the regime’s concentrated efforts to censor, control and suppress “undesirable” information and political views.
China has drawn wrong lessons from the collapse of the Soviet Union. Its rulers believe that the Soviet Union collapsed because of Mikhail Gorbachev’s perestroika (political restructuring), leading to the erosion of the Communist Party’s power.
And they seem determined not to let it happen in China. The Tiananmen massacre in 1989 was a forewarning to China’s people that a challenge to the Party’s political monopoly will not be tolerated, even if it meant killing people.
In other words, the Party’s monopoly power is a prerequisite for perceived social stability and economic growth.
And Deng Xiaoping’s successors are following his script quite faithfully.
Indeed, they have come to fear that the country’s dissidents, activists, human rights champions, and democracy promoters might become the vanguard of China’s own “jasmine” revolution on the lines of Tunisia and elsewhere in the Middle East.
At some deeper level, they are afraid of their own people, despite all the propaganda that the Party and the people are one.
Indeed, the ongoing crackdown on dissidents has been widened to include those Chinese Christians who refuse to conform to officially-approved religious practice.
On top of it all, the Tibetans in China are once again being rounded up after some monks in a monastery have fallen foul of the authorities.
There are so many blemishes in the mirror that China’s oligarchs are starting to see phantoms everywhere.
The Soviet Union is the only large communist country that might offer some explanation for this phenomenon.
Contrary to the belief among China’s leaders, the Soviet Union didn’t suddenly collapse because of perestroika. It collapsed largely because the system hollowed out from inside---starved of the oxygen of life for a political system.
After Brezhnev, his successors died one after the other in reality as well as metaphorically.
And by the time Gorbachev came to rescue the system, the state and the system had already reached a terminal point.
In a collegium of a handful of top leaders (with the Party Standing Committee at the top of the pyramid) deciding the nation’s destiny without any reference to people, a limited political gene pool is bound to lose its vitality and renewal.
This is also true of many of China’s economic corporations run by the sons and daughters of the Party leaders at different levels.
There is an incestuous connection between China’s politics and economy, which doesn’t bode well for the country in the medium and long term.
It is true that China’s economic growth is a plus point.
But it is misdirected and unbalanced favoring industry over agriculture.
As Lester Brown recently wrote in the Washington Post, “As old deserts [in China] grow, as new ones form and as more and more irrigation wells go dry, Beijing is losing a long battle to feed its growing population on its own.”
He adds: “Enter the United States---by far the world’s largest grain exporter. It exports about 90 million tonnes of grain annually, although China requires 80 million tonnes of grain each year to meet just one-fifth of its needs.”
The point to make is that China’s economic growth has its limits creating sectoral imbalances within manufacturing as well as between manufacturing and agriculture, a widening rural-urban divide, inflationary pressures, real estate bubbles, misallocation of resources, top heavy control of the economy, lack of co-ordination, environmental damage (some of its major rivers are polluted) and so on.
On top of it all, the rampant corruption in the country is further skewing an already difficult situation.
No wonder, China’s oligarchs are afraid that the Middle Eastern contagion of popular upsurge might catch on and reach China too.
Since China’s ruling dictatorship has no other way of dealing with its critics and people but to use the sledgehammer, even this approach is unlikely to work over a period of time, as all the dictators in the Middle East are finding out to their cost.

China’s white paper on defense
By Sushil Seth

China’s new white paper on defense makes the usual points that its defense policy is “defensive in nature”, and that it “will never seek hegemony, nor will it adopt the approach of military expansion now or in the future, no matter how its economy develops.”
But this doesn’t square with its assertion lately of a fairly outright, even outrageous, twenty-first century Monroe doctrine.
For instance, its assertion of sovereignty over the South China Sea, ignoring earlier promises of a peaceful dialogue amid competing claims to some of the island chains by its neighbors, was hardly a defensive exercise.
By declaring territories and seas as its sovereign domain and then backing it up with the projection of force and/or diplomatic coercion, is not exactly defensive. It is provocative and aggressive.
And to keep on harping that “China will never seek hegemony” frankly becomes dangerously tedious.
At the same time, a double-digit increase in military expenditure of nearly 13 per cent (on top of similar increases in the past) to estimated $92 billions, doesn’t inspire confidence in China’s “peaceful rise”.
China concedes that the situation in Asia-Pacific region is generally stable but worries about the regional flash points, like the Korean peninsula.
It is important to realize that the instability in Korea is due to the dangerous antics of China’s neighbor and ally, North Korea, for two reasons.
First: Pyongyang’s nuclear policy has introduced a highly combustible element in a regional environment still unresolved since the 1950s Korean War.
Second: to compound it further, North Korea is continuing its policy of dangerous brinkmanship against South Korea.
This is not to suggest that China’s is encouraging Pyongyang on this course.
However, it is not effectively using its considerable leverage with North Korea by way of its political and economic dependence on China.
And unless this is done as part of a strategic consensus between regional powers, including the United States, Korean peninsula will continue to be a dangerous flash point.
The white paper also identifies Tibet, Xinjiang and Taiwan as challenges because of “separatism”. The first two are self-inflicted.
The unrest in Tibet and Xinjiang arises from China’s harsh policies to obliterate the ethnic and cultural identity of these regions.
It is doing this by changing the ethnic mix in these regions by settling a large number of Han Chinese in these regions.
And it is disallowing or curtailing their language, religious beliefs and practices.
At the same time, Beijing has turned upside down the economies of these regions, with local people denied new economic opportunities.
In other words, China can’t blame the local people for fighting against injustice; even when the odds are so heavily stacked against them
The situation in Taiwan is entirely different. Taiwan is a sovereign state and has sought to forge its destiny as a democratic political entity.
And it has managed to continue on this course despite threats from the mainland, including the targeting of 1000 or more missiles at Taiwan.
China’s insistence that Taiwan is part of China is indeed at the root of all the problems between the two countries. Once China accepts the reality of Taiwan’s separate existence, there will be enormous scope for development of relations on both sides of the Taiwan Strait.
An encouraging feature in the white paper, particularly after the discord of last year due to China’s aggressive regional posture, is that Beijing is undertaking to pursue a policy of greater military dialogue with the United States.
Senior Colonel Geng Yansheng reportedly said at a news conference: “China attaches importance to its military relationship with the United States…The Chinese military is now taking steps to advance exchanges with the US military this year.”
The relations with the United States had taken a dive after its decision to sell weapons to Taiwan. Beijing retaliated by suspending military exchanges with the United States.
The relationship deteriorated further over a whole range of issues last year; including the US-South Korean joint naval exercises in the Yellow Sea.
The problem is that China has come to regard the Asia-Pacific region and its waters as either its sovereign territory or sphere of influence.
Therefore, it is not happy with the United States continuing to assert its political, economic and strategic interests in the region along with its allies.
With China so keen to assert its regional primacy, the US’ determination to maintain a strong commitment to the region, doesn’t square well with Beijing’s ambitions.
This is what Colonel Geng Yansheng apparently meant when he reportedly said at a news conference that “there is no denying that in developing military relations [with the U.S] we still face difficulties and challenges.”
Indeed they do because the United States is not likely to make it easy for China to create a new Middle Kingdom in Asia-Pacific.
Beijing has to realize that a cooperative relationship between the United States and China is a prerequisite for regional stability and prosperity.
The problem, though, is that China has come to believe that the United States is a declining power.
At the same time, they also believe that China is a rising superpower and there should be no compromising on this goal.
Beijing might entertain tactical shifts to better advance their ultimate goal but without losing sight of it.
If that were the case, the US-China relationship is unlikely to enter a cooperative phase except for China’s tactical reasons.
China might be over-reaching itself in seeking to edge out the United States from Asia-Pacific.
It has tremendous internal problems and contradictions. The way it is engaged in rooting out dissidence—the most prominent recent example being the detention of the famous artist, Ai Weiwei—and censoring all access and reference to the Middle Eastern popular uprisings, is indicative of the fragility of the regime.
Beijing might, therefore, be well advised to spend more energy on political reforms at home than crafting an expansive defense policy to assert its dominance.

A post-Dalai Lama blueprint for Tibet

By Sushil Seth
The Dalai Lama recently announced that he would be relinquishing his political role as head of the Tibetan government-in-exile based in the Indian hill town of Dharamsala.
The Dalai Lama is the spiritual and political head of the Tibetan people. While he will still continue to be the spiritual leader, a new elected prime minister will soon take over the political role.
Obviously, the Dalai Lama is conscious of his mortality and is taking steps to split the two roles to ensure that the struggle for Tibetan identity doesn’t live and die with him.
This move will upset China, even though Beijing might ignore it on surface.
The next step probably will be the anointment of a new Dalai Lama, who will take over as his successor.
The formality of finding one after his death in the traditional way might have to be dispensed with because Tibet is under Chinese rule
Indeed, Beijing is waiting for the Dalai Lama to die, enabling them to find a new one to fit into their mould.
The Dalai Lama is acutely aware of this, which explains why he would be keen to make arrangements for his political and spiritual succession.
This is important because his successors, both in their political and spiritual roles, will carry his enormous moral authority.
China obviously hopes that with the passing away of the Dalai Lama in the not-too-distant future, the Tibetan issue will fade away and eventually disappear.
They believe that as China continues to grow in power, the Tibetan cause will have fewer and fewer supporters among the comity of nations for fear of offending China.
And it will help when the Dalai Lama is no longer on the scene.
His charisma, charm and sincerity have kept the Tibetan issue alive and kicking.
China, therefore, believes that Tibet will lose whatever appeal it might still have with people all over the world when the Dalai Lama is not around.
Which is shortsighted. Indeed the Dalai Lama has sought, over the years, to resolve the issue of Tibet’s status peacefully by seeking autonomy, not independence.
Through many hours of fitful talks over the years between his representatives and China, his demand has been for internal autonomy with Beijing in control of its foreign and defense affairs.
With internal autonomy, Tibetans should be able to maintain their ethnic and cultural identity.
Which is not too much to ask, and Beijing shouldn’t have problem with it.
But it does.
First: they don’t trust the Dalai Lama as he seeks some political and cultural space for his people without challenging China’s sovereignty.
Beijing simply wants submission with the right to define and regulate how the Tibetans should and would live within their own territory. This is precisely what they are doing now.
Because the Dalai Lama seeks better terms for his people, he is denounced as a ‘wolf in sheep’s clothing’.
Therefore, China has never been serious about talks with the Dalai Lama’s representatives to resolve the Tibetan issue.
Indeed, a solution on the basis of genuine autonomy will be a lasting one with the imprimatur of the Dalai Lama’s moral authority and acceptable to the Tibetan people.
But China is not concerned with the moral and popular dimensions of the Tibetan cause. They have been busy all these years to cut at the roots of such considerations.
For instance, they have sliced and spliced Tibet, with parts of it joined to the neighboring Han-dominated provinces. Thus, Tibet proper is now a shrunken area.
Its population of 6 million is now scattered around, to reduce the Tibetan potential to create ‘trouble’.
What is left of Tibet is now mixed up with the Han Chinese, settled there in large numbers with incentives.
In this way, the Tibetans will soon become a minority in their own geographical space, if it hasn’t already happened.
As it is, there are severe restrictions on their cultural space to limit the learning of their language, practicing their religion and observance of their traditions.
It is hoped that, over time, they will cease to be a distinct entity except for ceremonial purposes when the state wants to exhibit them as part of China’s “harmonious” society.
The character of Tibet’s economy has changed so drastically that, short of assimilation, they will remain marginalized to live a miserable existence.
They are now subject to so much surveillance, both electronic and through the massive presence of security forces, that they live in fear.
China’s leadership tends to resort to over-kill, both figuratively and metaphorically, when they fear rupture of their so-called “harmonious” society.
And they have an aversion to peaceful dialogue to sort out national issues.
They fear that such an approach will open a Pandora’s box of unresolved issues with their people.
Which explains their paranoia of the people’s revolution in the Middle East overtaking China, if people were exposed to the news from that part of the world.
Tibet has been at the receiving end of this paranoia for many years.
China’s oligarchs believe that if they decide that a problem doesn’t and shouldn’t exist, it bloody well will be swept away by the brute use of power.
But with Tibet, the unrest continues to erupt in big or small ways despite all the repression in that region. It keeps coming back to haunt China.
As Pico Iyer has quoted the Dalai Lama in his article for the New York Review of Books: “Manpower, military power, monetary power, that is already there in China.”
What is lacking, though, “is moral power, moral authority”.
And without that, at a deeper level there is a big vacuum. And that is where the old Tibetan Buddhist traditions could help.
But try telling this to the Chinese leadership, especially associating it with the Dalai Lama.
China’s leaders are drunk with power. They have no time for morality and tranquility.
Tibet for them is just a sideshow.
But they don’t realize that sideshows too can occupy centre stage when the central authority is weakened, as happened so often in Chinese history.
The replacement of the Dalai Lama’s political power by a secular democratic government will become a legitimate organ of channeling Tibetan identity both among the exiled Tibetans and those at home.
And once, he has also designated his spiritual successor, the struggle for Tibetan autonomy will be set for the post-Dalai Lama period.
On surface, China might prefer to ignore it.
But arrangements for institutional succession are important for Tibet, especially when they carry the Dalai Lama’s imprimatur.

A post-Dalai Lama blueprint for Tibet

By Sushil Seth

The Dalai Lama recently announced that he would be relinquishing his political role as head of the Tibetan government-in-exile based in the Indian hill town of Dharamsala.

The Dalai Lama is the spiritual and political head of the Tibetan people. While he will still continue to be the spiritual leader, a new elected prime minister will soon take over the political role.

Obviously, the Dalai Lama is conscious of his mortality and is taking steps to split the two roles to ensure that the struggle for Tibetan identity doesn’t live and die with him.

This move will upset China, even though Beijing might ignore it on surface.

The next step probably will be the anointment of a new Dalai Lama, who will take over as his successor.

The formality of finding one after his death in the traditional way might have to be dispensed with because Tibet is under Chinese rule

Indeed, Beijing is waiting for the Dalai Lama to die, enabling them to find a new one to fit into their mould.

The Dalai Lama is acutely aware of this, which explains why he would be keen to make arrangements for his political and spiritual succession.

This is important because his successors, both in their political and spiritual roles, will carry his enormous moral authority.

China obviously hopes that with the passing away of the Dalai Lama in the not-too-distant future, the Tibetan issue will fade away and eventually disappear.

They believe that as China continues to grow in power, the Tibetan cause will have fewer and fewer supporters among the comity of nations for fear of offending China.

And it will help when the Dalai Lama is no longer on the scene.

His charisma, charm and sincerity have kept the Tibetan issue alive and kicking.

China, therefore, believes that Tibet will lose whatever appeal it might still have with people all over the world when the Dalai Lama is not around.

Which is shortsighted. Indeed the Dalai Lama has sought, over the years, to resolve the issue of Tibet’s status peacefully by seeking autonomy, not independence.

Through many hours of fitful talks over the years between his representatives and China, his demand has been for internal autonomy with Beijing in control of its foreign and defense affairs.

With internal autonomy, Tibetans should be able to maintain their ethnic and cultural identity.

Which is not too much to ask, and Beijing shouldn’t have problem with it.

But it does.

First: they don’t trust the Dalai Lama as he seeks some political and cultural space for his people without challenging China’s sovereignty.

Beijing simply wants submission with the right to define and regulate how the Tibetans should and would live within their own territory. This is precisely what they are doing now.

Because the Dalai Lama seeks better terms for his people, he is denounced as a ‘wolf in sheep’s clothing’.

Therefore, China has never been serious about talks with the Dalai Lama’s representatives to resolve the Tibetan issue.

Indeed, a solution on the basis of genuine autonomy will be a lasting one with the imprimatur of the Dalai Lama’s moral authority and acceptable to the Tibetan people.

But China is not concerned with the moral and popular dimensions of the Tibetan cause. They have been busy all these years to cut at the roots of such considerations.

For instance, they have sliced and spliced Tibet, with parts of it joined to the neighboring Han-dominated provinces. Thus, Tibet proper is now a shrunken area.

Its population of 6 million is now scattered around, to reduce the Tibetan potential to create ‘trouble’.

What is left of Tibet is now mixed up with the Han Chinese, settled there in large numbers with incentives.

In this way, the Tibetans will soon become a minority in their own geographical space, if it hasn’t already happened.

As it is, there are severe restrictions on their cultural space to limit the learning of their language, practicing their religion and observance of their traditions.

It is hoped that, over time, they will cease to be a distinct entity except for ceremonial purposes when the state wants to exhibit them as part of China’s “harmonious” society.

The character of Tibet’s economy has changed so drastically that, short of assimilation, they will remain marginalized to live a miserable existence.

They are now subject to so much surveillance, both electronic and through the massive presence of security forces, that they live in fear.

China’s leadership tends to resort to over-kill, both figuratively and metaphorically, when they fear rupture of their so-called “harmonious” society.

And they have an aversion to peaceful dialogue to sort out national issues.

They fear that such an approach will open a Pandora’s box of unresolved issues with their people.

Which explains their paranoia of the people’s revolution in the Middle East overtaking China, if people were exposed to the news from that part of the world.

Tibet has been at the receiving end of this paranoia for many years.

China’s oligarchs believe that if they decide that a problem doesn’t and shouldn’t exist, it bloody well will be swept away by the brute use of power.

But with Tibet, the unrest continues to erupt in big or small ways despite all the repression in that region. It keeps coming back to haunt China.

As Pico Iyer has quoted the Dalai Lama in his article for the New York Review of Books: “Manpower, military power, monetary power, that is already there in China.”

What is lacking, though, “is moral power, moral authority”.

And without that, at a deeper level there is a big vacuum. And that is where the old Tibetan Buddhist traditions could help.

But try telling this to the Chinese leadership, especially associating it with the Dalai Lama.

China’s leaders are drunk with power. They have no time for morality and tranquility.

Tibet for them is just a sideshow.

But they don’t realize that sideshows too can occupy centre stage when the central authority is weakened, as happened so often in Chinese history.

The replacement of the Dalai Lama’s political power by a secular democratic government will become a legitimate organ of channeling Tibetan identity both among the exiled Tibetans and those at home.

And once, he has also designated his spiritual successor, the struggle for Tibetan autonomy will be set for the post-Dalai Lama period.

On surface, China might prefer to ignore it.

But arrangements for institutional succession are important for Tibet, especially when they carry the Dalai Lama’s imprimatur.

Could China become another Egypt?

By S.P.SETH

The People’s Power that has overthrown regimes in Tunisia and Egypt, and continues to create tremors elsewhere in the Middle East, is creating a debate of sorts about its ripple effect on China.

Here in Australia two prominent Sydney Morning Herald journalists hold different views, not about the repressive nature of the system in China but about its efficacy to prevent a popular upsurge.

Its international editor, Peter Hartcher, is inclined to think that the CPC, at the very least, is worried and nervous about the revolutionary upsurge in the Middle East and its possible impact on China.

Otherwise, they wouldn’t be putting in place filtering and censoring processes on the Internet to deny access to its people about developments in Egypt, and the “jasmine” revolution in Tunisia.

But the Internet censorship has its limitations as resourceful activists can breach them.

Already, there are calls on websites, many of which reportedly originating overseas and run by exiled Chinese activists, calling on the Chinese people to band together for demonstrations in major Chinese cities “to seek freedom, democracy and political reform to end ‘one party rule’ ”.

The Chinese government is already busy rounding up activists and dissidents to minimize the danger.

Hartcher quotes from a Twitter message from Ai Weiwei, a prominent human rights activist, “It only took 18 days for the collapse of a military regime [in Egypt] which was in power for 30 years and looked harmonious and stable.”

Ai added, “This thing [the Chinese government] that has been in place for 60 years may take several months.”

In a separate opinion piece in the same newspaper, John Garnaut has a different take on this.

He opines that a people’s uprising in China (like in Egypt) is “a practical impossibility [because]…the Chinese Communist Party is a more professional and well-resourced dictatorship.”

Which means that China’s oligarchs are doing a ‘better’ job of policing people and creating fear among them.

To say that a dictatorship is more secure because it is more repressive is to put logic on its head.

Any regime that seeks security through a repressive system, better resourced or not, is living on borrowed times.

Hosni Mubarak of Egypt had nearly perfected instruments of state repression, testified by 90 per cent plus results in elections.

Still a spark from a relatively small Tunisia brought down the whole house.

Of course, China has done well with its economic growth, while Egypt remained a basket case.

But China is experiencing serious problems with its economy, like inflation, unsustainability of continuing high growth rates, disproportionate dependence on export sector, sectoral imbalances, emerging bubble, especially in real estate and stock markets, and bad bank loans.

China needs to grow at a relatively higher rate just to keep up with unemployment in the country. If that can’t be sustained, growing unemployment will accentuate social discord.

Besides, economic growth by itself doesn’t create legitimacy and harmony, as evident from 90,000 “mass incidents” of unrest in 2009.

In a recent speech, President Hu Jintao himself reportedly acknowledged growing social unrest in China, and called on the Party and the government “to strengthen and improve a mechanism for safeguarding the rights and interests of the people.”

With growing chasm between urban and rural areas and huge gap in people’s incomes, China is developing into a very unequal society.

The situation is further compounded with widespread corruption and nepotism.

The “princelings”, (the children of party leaders) have their snouts in regional and national cookie jars.

In this sense, the situation in China looks very much like in Middle East where corruption and nepotism have been so rife for as long as one can remember.

The spontaneous eruption of People’s Power in Egypt and elsewhere also showed how shallow and shaky are the foundations of dictatorships; in the way the long ruling dictators in Tunisia and Egypt were overthrown once people were able to shake off their fear of these unpopular and illegitimate rulers.

Another striking commonality between the Middle Eastern and Chinese situation is a total absence of any moral foundation and vision for their societies.

For instance, ever since Deng Xiaoping sanctified greed as his country’s guiding philosophy, when he opened up the economy in the eighties, the country is bereft of any moral vision and ideological underpinning.

A country like China, with its long tradition of family and clan connections and Confucian ideology found itself in a moral and ideological vacuum.

Its most telling manifestation is the rootless existence of the migrant workers from rural areas into urban centers. Back home in their villages, they lived as part of a living organism of familiar social connections and traditions.

In the cities, working on constructions sites and in factories, they are an amorphous lot just living to eke out an income---however paltry or uncertain.

On top of it, they are also blamed, and get into trouble with the police, for the rising tide of crimes in the urban centers.

Even among the urbanites, people are living in a world of dog eat dog.

In other words, there is no discernible higher purpose in life except to become rich in all sorts of questionable and immoral ways.

And not everyone has the connections to do that. As result, the gap between those with connections and others (which is the majority of the people) without it, keep widening to the annoyance and frustration of people at the antics of the rich and powerful, a sure recipe for any kind of revolution.

It might take time, or might happen sooner rather than later, but the ground is ripe for a spark to kindle a mighty fire to engulf China’s rulers.

The coercive state apparatus is no insurance against the people’s anger when it wells up, as the Middle Eastern dictators are finding out to their cost.

The popular upsurge in Arab countries doesn’t mean that it will follow the same pattern in China.

Even in the Middle East, the local conditions differ in some important ways among different countries and the cost in lives in some will be heavier than in others to achieve liberation from their rulers.

The important thing is that the spontaneous rise of People’s Power there is becoming a metaphor for getting rid of decaying and decadent regimes that have long since outlived their expiry dates.

Another important feature is that the popular upsurge in Middle East is showing the world that people do not have to live in perpetual fear of their rulers’ coercive state power.

And if they can overcome their fear, they can also overthrow their oligarchs.

There is a strong message in this for CPC. Which is that unless the regime loosens its control and share power and prosperity with its people, it might become history like Hosni Mubarak and his ruling party in Egypt.

China’s rulers facing dangerous times

By Sushil Seth

At the height of the global financial crisis in 2008 and 2009, China won kudos for stimulating its economy to inject some fuel into the global economy. However, the injection of excess liquidity, with growth rate of 10 per cent plus, is creating serious problems for China.

First: there is growing inflation that is eroding people’s real incomes. Already, the divide between rural and urban incomes and between rich and poor is growing alarmingly. Official figures put rural incomes at less than one-third of urban areas.

As for the income disparity between the top and poorest 10 per cent, it favors the former to the tune of 23 times. And this official estimate is believed to be grossly understated.

The real disparity, according to a Chinese economist, is 65 times that of the poorest 10 per cent.

With such figures of rich-poor divide, inflation is not only an economic problem, it is also a seriously de-stabilizing social factor.

Even though the Chinese authorities have taken measures to mop up excessive liquidity by multiple interest rate rises and increasing the deposit requirements of banks, it remains a serious problem worrying the government.

At such times, there is always a tendency to blame others. And who better to blame than the United States.

It is all the fault of the United States because of its loose monetary policies.

Although, it might as well be argued that China is the real culprit both at home and abroad.

China’s breakneck rush to corner the market for crucial commodities, like iron ore, coal, oil, food etc, is pushing up prices of these and other items all over the world.

At the same time, by keeping its currency undervalued for export advantage, it is forcing competitive devaluation on other countries.

As Michael Spencer, chief economist for Asia at the Deutsche Bank, has reportedly said bluntly, “China’s loose monetary policy is imposing inflation on the rest of the world.”

He adds, “The rest of Asia feels squeezed because US interest rates are at a zero and China won’t appreciate.”

Spencer concludes, “I assume at the end of the day they’re not really interested in rebalancing [trade surpluses] because it’s a painful thing to do.”

And: “They’re hoping against hope that they’ll get a couple of years’ more [free] kick from the US.”

All these years, by subsidizing its exports through an undervalued currency, China has done well by doubling its economy about every 8 to 10 years.

The United States grumbled all through because of its increasing trade deficit.

But as China was buying its treasury notes and bonds with its trade surpluses, the US didn’t seem too bothered with easy and plentiful access to credit from China.

China’s mercantilist policy of creating a mound of trade surpluses (now around $2.4 trillion), helped with an undervalued currency, created global economic imbalances that are still playing havoc with global economy.

But China is keen to continue until it has rejigged its economy, over the years, to rely more on domestic demand.

For China the global financial crisis came at a wrong time. The recession in the US and elsewhere seriously affected its export industry, with initial job losses of about 20 million workers.

It was able to get over it largely by its economic stimulation program and the pick up in foreign orders for its export sector.

However, the stimulation program has created its own problems. It has created the twin (interrelated) problems of general inflation and asset price bubble.

China’s poor are the most affected, especially from a hike in food prices where they spend most of their income.

The economists quibble if it will be hard or soft landing for China’s overheated economy, even though most agree that the economy is having serious problems.

Despite all round concern about the economy, even within the government, there still is enough money going around. The banks keep on writing new loans. And much of it is going into real estate and construction.

As a senior executive of a property development company, Ni Yawei, has reportedly said, “People can either put their money in the bank, and get interest rates that are less than inflation, or they can put it in property and a ‘two-directional’ return from capital appreciation and rent.”

This thinking is very much reminiscent of what brought about the sub-prime housing market crisis in the United States. Which is that investment in property has only one way to go, and that is its upward trajectory.

This sort of thinking led people to overstretch beyond their means through unsustainable borrowings.

China appears to be going through the same process.

Another analogy is the Japanese bubble of the nineties brought about by steep price hikes in real estate and stock markets.

Will China go that way? It is quite possible, even though the Chinese government will do its utmost not to let things get out of control.

Because its sole claim to some popular legitimacy is based on economic growth.

If that falters, leading to stagflation and the bursting of the real estate and stock market bubble, China will be in for real trouble.

The ruling Communist Party is paranoid about social stability. And yet its economic policies might create the conditions for precisely what it fears--- social chaos and a threat to the Party’s monopoly power.

This is precisely the reason advanced by Premier Wen Jiabao against revaluation of Chinese currency. He fears that a revalued Yuan will cause large-scale unemployment in the country. Which, in turn, will lead to social instability, posing serious problems for China’s oligarchs.

The spontaneous eruption of people’s power in North Africa and the Middle East, seeking to remove its authoritarian and despotic rulers, should be an eye-opener for the communist rulers of China.

Indeed, according to the Guardian newspaper, Chinese authorities were “censoring references to the protests in Egypt as some internet users drew comparisons with China.”

Of course, the two situations (in China and the Middle East) are not identical.

But one important common thread is that in any society subject to authoritarian rule over a long time, people become frustrated with their unresponsive rulers addicted to feathering their own nests---be it political power or economic riches or both.

Such deep-rooted corruption, absence of transparency, intolerance of political opposition, and human rights abuses in China are fertile ground for a sudden social and political eruption, triggered by a small event like what happened in Tunisia.

In the case of Tunisia, for instance, it was the frustration of a young 26-year old fruit vendor not allowed to earn his living the only way he knew, that led him to set himself alight.

In the process, he also set alight the Tunisian regime, forcing the country’s president to escape to Saudi Arabia.

And the Tunisian uprising provided the trigger for Egyptian people and now people’s power is all over the Arab world.

The example of people overthrowing or seeking to overthrow their despotic rulers in one Arab country after the other can be quite contagious.

In China, for instance, Deng Xiaoping and his political progeny have now ruled for about 30 years. The frequent reports of small and big incidents of popular protests suggest that the regime is starting to weigh on people’s nerves.

And if the economy goes into a nosedive, such fragmented cases of unrest might easily coalesce into people’s power for a day of reckoning with their rulers.

You never know when people might pick up the courage to do just that.

Ask Tunisia’s deposed president, and Egypt’s Hosni Mubarak fighting for his political life.