Recent statements
from China's new leadership suggest a growing
awareness of serious economic and political
problems. The era of relative political stability
garnered through rapid economic growth may be
coming to an end. A rising tide lifts all boats,
but structural problems in the world's second
largest economy have the potential to dam the flow
of increasing prosperity. Concrete reforms must
accompany the promising slogans if the Communist
Party is to maintain its monopoly on political
power.
Xi Jinping, the newly minted
General Secretary of the Chinese Communist Party
(CCP), spoke some of the harshest and most dire of warnings to date
about the threat that corruption poses to China.
Xi reminded the Politburo:
In recent years, the long pent-up problems in some countries have led to the venting of public outrage, to social turmoil and to the fall of governments, and corruption and graft have been an important reason... A mass of facts tells us that if corruption becomes increasingly serious, it will inevitably doom the party and the state. We must be vigilant. In recent years, there have been cases of grave violations of disciplinary rules and laws within the party that have been extremely malign in nature and utterly destructive politically, shocking people to the core. [1]
China's leaders have denounced
corruption for thousands of years while corruption
has run rampant in Chinese society. The Communist
Party is no exception to this historical trend.
However, Xi's warnings go beyond previous
platitudes in that he specifically cautioned that
increased corruption would "inevitably doom the
party and the state". Furthermore, Xi's rather
direct reference to the Arab Spring demonstrates a
growing awareness of the very immediate threat
that entrenched corruption poses for contemporary
rulers. This warning also contains a clandestine
suggestion for the possibility for serious
economic difficulties in the People's Republic of
China.
A recent study by the Pew Research Center found that the largest perceived problem in China is inflation. Concerns over corrupt officials were a close second - fully half of the Chinese population views corruption as a major problem, up from 39% four years ago. [2] Worries about the growing gap between rich and poor are also higher than they were in the previous survey.
What this polling reveals is the increasingly widespread nature of economic insecurities in China. Economic concerns represent a greater potential source of instability than anger over corruption. China's current rulers gain much of their popular legitimacy through improving the material conditions of their people. The last three decades of Chinese economic growth have seen the greatest reduction in extreme poverty in world history. Some degree of graft has been tolerated so long as the rising tide of economic development lifted all boats. However, if the majority of Chinese people do not receive direct improvements in their quality of life from the governing system, then the system itself will face an existential crisis.
Xi Jinping's warnings on corruption contained a fairly obvious reference to the ongoing revolutions in the Middle East. Indeed, there are two important parallels between the situation in many Middle Eastern countries and contemporary China - the autocratic nature of their governments and entrenched corruption.
However, the general economic trajectory of the two regions could hardly be more different. While corruption was of course a factor in the popular Arab revolutionary outbursts, lack of economic opportunity was the defining motive for the mass movements of the Arab Spring.
Doctor Ali Kadri, the former head of the Economic Analysis Section of the United Nations in Beirut, pins the blame for the Arab Spring revolutions squarely on economic underdevelopment. According to his research, the overall per capita GDP growth in the Arab world was negative between 1971 and 2000. [3] Furthermore, the very genesis of these movements occurred in Tunisia when Mohamed Bouazizi burned himself to death in response to a situation of individual economic despair.
If trapped in a condition of economic hopelessness, individuals have little stake in their contemporary socio-economic order. Revolutions are most often carried out by young and desperate people with little to lose. This scenario is very much in contrast with the Chinese situation in recent decades. China has sustained double-digit growth for most of the past 30 years, and real average wages have increased more than sevenfold since the reforms of the late 1970s.
However, the era of breakneck growth in China may be coming to a close. China's heavily export-dependent economy has suffered both from the prolonged global slowdown and the ongoing rise of Chinese wages. Many labor-intensive industries are relocating to areas with cheaper workforces, such as Vietnam and Cambodia. The current rate of economic growth in China has slowed to an annual rate of 7% - the slowest since 1989.
Vice Premier Li Keqiang, Xi Jinping's second-in-command, alluded to these difficulties in a recent speech at the State Council: "It is hard to maintain double-digit growth, but 7% will be enough to achieve an affluent society by 2020." [4] This rather blunt dampening of economic expectations may signal a governmental awareness of impending structural problems for the Chinese economy. Beyond the previously mentioned concerns over a slowdown in exports, there is the very real fear that China's inflated housing market may be a bubble waiting to burst.
If and when China faces serious economic difficulties, these issues can quickly transform into political instability. The greatest crisis to face Chinese leadership since the era of reform began in the 1970s was the widespread protest movement that formed in 1989. These protests, which ended with the crackdown at Tiananmen Square, were originally sparked by popular concerns over rapid inflation.
Furthermore, the current potential for widespread political dissent is rooted in changing demographic realities. Just as Xi Jinping and Li Keqiang represent a new generation of Chinese leadership, the wider demographic nature of the Chinese nation is undergoing momentous changes.
The older generation of Chinese, who remember the widespread hunger and universal poverty of the 1950s and 1960s, are too pleased with the relative prosperity of modern China to wish to destabilize the current system. The younger generation - those born in the boom times of the 1980s and 1990s - will be less patient with blatant corruption and political autocracy.
Xi's warnings on the existential threat posed by entrenched corruption reveal an increased awareness of the vital necessity of meaningful changes to China's political system. Given the opaque and autocratic nature of the Chinese state, deep and lasting reforms will be necessary to combat corruption. China's new rulers must make concrete efforts to enact reforms before economic concerns and political impatience begin to pose real threats to the Chinese state.
China leaders must also take concrete and politically risky measures to crack down on corruption and stimulate continued economic growth if they hope to maintain their political monopoly. Recent moves to promote domestic consumption by implementing universal medical coverage are a step in the right direction. However, in the current globalized economy, no government policies, no matter how far-sighted and practical, can guarantee sustained and rapid economic growth.
Political reforms will be increasingly vital as the growth rate of the Chinese economy slows. The patience of the Chinese people is only assured so long as their material and political circumstances continue to improve.
Notes: 1. New Communist Party Chief in China Denounced Corruption in Speech, The New York Times, November 18, 2012.
2. Growing concerns in China about Inequality, Corruption, Pew Global Attitudes Project, October 16, 2012. 3. How the economic policies of the corrupt Arab elite caused the Arab Spring, The New Statesman, June 7, 2011.
4. Li calls reforms key to sustaining development, China Daily, November 23, 2012.
Brendan P O'Reilly is a China-based writer and educator from Seattle. He is author of The Transcendent Harmony.
(Copyright 2012 Asia Times Online (Holdings) Ltd. All rights reserved. Please contact us about sales, syndication and republishing.)
A recent study by the Pew Research Center found that the largest perceived problem in China is inflation. Concerns over corrupt officials were a close second - fully half of the Chinese population views corruption as a major problem, up from 39% four years ago. [2] Worries about the growing gap between rich and poor are also higher than they were in the previous survey.
What this polling reveals is the increasingly widespread nature of economic insecurities in China. Economic concerns represent a greater potential source of instability than anger over corruption. China's current rulers gain much of their popular legitimacy through improving the material conditions of their people. The last three decades of Chinese economic growth have seen the greatest reduction in extreme poverty in world history. Some degree of graft has been tolerated so long as the rising tide of economic development lifted all boats. However, if the majority of Chinese people do not receive direct improvements in their quality of life from the governing system, then the system itself will face an existential crisis.
Xi Jinping's warnings on corruption contained a fairly obvious reference to the ongoing revolutions in the Middle East. Indeed, there are two important parallels between the situation in many Middle Eastern countries and contemporary China - the autocratic nature of their governments and entrenched corruption.
However, the general economic trajectory of the two regions could hardly be more different. While corruption was of course a factor in the popular Arab revolutionary outbursts, lack of economic opportunity was the defining motive for the mass movements of the Arab Spring.
Doctor Ali Kadri, the former head of the Economic Analysis Section of the United Nations in Beirut, pins the blame for the Arab Spring revolutions squarely on economic underdevelopment. According to his research, the overall per capita GDP growth in the Arab world was negative between 1971 and 2000. [3] Furthermore, the very genesis of these movements occurred in Tunisia when Mohamed Bouazizi burned himself to death in response to a situation of individual economic despair.
If trapped in a condition of economic hopelessness, individuals have little stake in their contemporary socio-economic order. Revolutions are most often carried out by young and desperate people with little to lose. This scenario is very much in contrast with the Chinese situation in recent decades. China has sustained double-digit growth for most of the past 30 years, and real average wages have increased more than sevenfold since the reforms of the late 1970s.
However, the era of breakneck growth in China may be coming to a close. China's heavily export-dependent economy has suffered both from the prolonged global slowdown and the ongoing rise of Chinese wages. Many labor-intensive industries are relocating to areas with cheaper workforces, such as Vietnam and Cambodia. The current rate of economic growth in China has slowed to an annual rate of 7% - the slowest since 1989.
Vice Premier Li Keqiang, Xi Jinping's second-in-command, alluded to these difficulties in a recent speech at the State Council: "It is hard to maintain double-digit growth, but 7% will be enough to achieve an affluent society by 2020." [4] This rather blunt dampening of economic expectations may signal a governmental awareness of impending structural problems for the Chinese economy. Beyond the previously mentioned concerns over a slowdown in exports, there is the very real fear that China's inflated housing market may be a bubble waiting to burst.
If and when China faces serious economic difficulties, these issues can quickly transform into political instability. The greatest crisis to face Chinese leadership since the era of reform began in the 1970s was the widespread protest movement that formed in 1989. These protests, which ended with the crackdown at Tiananmen Square, were originally sparked by popular concerns over rapid inflation.
Furthermore, the current potential for widespread political dissent is rooted in changing demographic realities. Just as Xi Jinping and Li Keqiang represent a new generation of Chinese leadership, the wider demographic nature of the Chinese nation is undergoing momentous changes.
The older generation of Chinese, who remember the widespread hunger and universal poverty of the 1950s and 1960s, are too pleased with the relative prosperity of modern China to wish to destabilize the current system. The younger generation - those born in the boom times of the 1980s and 1990s - will be less patient with blatant corruption and political autocracy.
Xi's warnings on the existential threat posed by entrenched corruption reveal an increased awareness of the vital necessity of meaningful changes to China's political system. Given the opaque and autocratic nature of the Chinese state, deep and lasting reforms will be necessary to combat corruption. China's new rulers must make concrete efforts to enact reforms before economic concerns and political impatience begin to pose real threats to the Chinese state.
China leaders must also take concrete and politically risky measures to crack down on corruption and stimulate continued economic growth if they hope to maintain their political monopoly. Recent moves to promote domestic consumption by implementing universal medical coverage are a step in the right direction. However, in the current globalized economy, no government policies, no matter how far-sighted and practical, can guarantee sustained and rapid economic growth.
Political reforms will be increasingly vital as the growth rate of the Chinese economy slows. The patience of the Chinese people is only assured so long as their material and political circumstances continue to improve.
Notes: 1. New Communist Party Chief in China Denounced Corruption in Speech, The New York Times, November 18, 2012.
2. Growing concerns in China about Inequality, Corruption, Pew Global Attitudes Project, October 16, 2012. 3. How the economic policies of the corrupt Arab elite caused the Arab Spring, The New Statesman, June 7, 2011.
4. Li calls reforms key to sustaining development, China Daily, November 23, 2012.
Brendan P O'Reilly is a China-based writer and educator from Seattle. He is author of The Transcendent Harmony.
(Copyright 2012 Asia Times Online (Holdings) Ltd. All rights reserved. Please contact us about sales, syndication and republishing.)
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