Is China really as stable as we've been led to believe? Recent events make it seem likely that Beijing is going to get kicked in the teeth by the worldwide financial crisis. And the strikes and protests now occurring throughout the country suggest that China's authoritarian political system is in for a real challenge.
For years we've heard the narrative in the United States that China was going to have a smooth ride to superpower status. A report from the Carnegie Endowment for International Peace earlier this year predicted that China would overtake the US economy by 2035. A few weeks ago, the New York Times suggested in an editorial that China's economy might be the one engine that could drag the world out of its current rut. The LA Times, noting that China possesses a world-high $2 trillion in foreign exchange, predicted that at last weekend's economic summit, China would wield "a big stick."
Underlying these narratives was an assumption that China's political system was stable. Political scientists even came up with a new name for China's mixture of a free-wheeling private sector and massive state-run sector all dominated by a one-party state. It was "resilient authoritarianism," with the emphasis on "resilient."
The problem with this assumption is that it took root during the 1990s when China's political system essentially faced no significant tests. Things were a little rocky during the Asian financial crisis of 1997-98. But China pretty much insulated itself from those problems; and the Western economies (whose purchases account for more than 30 percent of China's economy) kept buying.
Well, I'd wager that the real test of a political system is not when all the graphs are pointed skyward; it's when things start to shake a bit. And right now things are shaky in China. As Josh Kurlantzick put it in a smart piece for the New Republic: "While, in the U.S., a financial failure would simply mean another dent in George W. Bush's reputation, in China it could mean the breakdown of the entire political order."
The main reason for China's current troubles is that Western economies -- caught in their own recessions -- aren't buying like they did before. Some 10,000 factories are shuttered in southern China. Factory bosses are jumping over walls and fleeing China and their debts. More than 1 million people have lost their jobs over the last few months in one province of the country alone.
But there are other reasons, too. Many Chinese are fed up with country's endemic corruption and the sense that "social contract" that their now dead leader Deng Xiaoping hashed out for them after he engineered the June 4th crackdown in 1989 -- you all have a fair shot at getting rich as long as you don't challenge the party's authority -- is breaking down.
Protests, some of them violent, are erupting throughout the country. State-run media, which usually ignores these things, has taken to reporting a number of them. To me that signals not that state-run media has suddenly turned professional but that the problem is of such proportions that ignoring it would be more laughable than acknowledging it.
The most recent examples were a taxi strike in the vast western megalopolis of Chongqing and a riot this week in Gansu province.
Now China does have some arrows in its quiver. It has announced a $586 billion stimulus package. It's trying to jack up the property and stock markets. But it has its work cut out for it: in the past year the Shanghai stock market has dropped 70 percent. (More than 100 million people invest in stocks in China. They are not happy.)
Now, for years, we've also been witness to another narrative about China -- encouraged, of course, by the government. It's this: young Chinese kids don't care about politics. I've read countless pieces, invariably employing a worldly-wise Chinese woman as the centerpiece, that quote her and her text-messaging buddies as saying the Chinese version of: "Democracy is so last year. We just live to par-teh."
Democracy may be so last year, but jobs aren't. Now she and her cohort of the urban hip aren't finding work: unemployment among college grads is around 20 percent, according to research by Chinese social scientists. That's bad for stability.
One final thought. The demonstrations of 1989 were primarily sparked by economic troubles. In that case, inflation. China's leadership knows it. As the country limps into 2009 with a weakening growth rate and an economy that is still dependent on the West for a big chunk of its GDP, we should remember that, too.