Can Economic Dynamism and Political Stability Survive China’s Battle against Freedom?

An unstable China is in no one’s interest.
July 24, 2015 • Commentary
This article appeared on Forbes on July 24, 2015.

Beijing—China’s capital looks like an American big city. Tall office buildings. Large shopping malls. Squat government offices. Student‐​filled universities. Police and security barriers. Political monuments. Luxury retailers. Lots of cars. Horrid traffic jams.

The casual summer uniform is the same: shorts, athletic shoes, skirts, t‐​shirts, sandals, blouses. Even an occasional baseball cap.

It is a country which the Communist revolutionaries who ruled only four decades ago would not recognize. It’s not just the availability of McDonald’s, Pizza Hut, and KFC. As I sat in a German restaurant featuring steins full of beer and platters covered with sausages listening to a Chinese band cover American pop songs I had to remind myself that I was only a short drive from Tiananmen Square, Mao’s mausoleum, and Zhongnanhai, the Communist Party’s leadership compound.

True believers still exist. One yesterday spoke to me reverently of Mao Zedong’s rise to power and service to the Chinese people. She said people today viewed him as “kind of a god, a Buddha.” However, she is the exception, at least among China’s younger professionals. Few Chinese I meet much think about “the Great Helmsman,” as Mao is known, despite the fact that his image remains common in the People’s Republic of China. When I looked at a Mao souvenir, the vendor told me the infamous dictator was “a bad man.” Certainly no one who realizes that his madcap reign caused the deaths of tens of millions of people identifies with him.

Indeed, younger educated Chinese could not be further from Communist cadres once determined to create a socialist state. The former increasingly emphasize individuality: They are socially active, desire the newest technologies, and worry about going to good schools and getting good jobs. Cynicism about corrupt and unelected leaders is pervasive. Last year a student told me, in front of his classmates, how much he preferred America’s system of electing the national legislature. A couple days ago a female high school student told me that the government was “cruel.”

If there is one common belief, it is hostility toward the government’s Internet controls. Students have complained to me in class about their inability to get to many websites. They don’t like restrictions on what they can see and say. Virtual private networks are routinely shared and irritation with state barriers to access is readily expressed.

But such opinions are not held only by the young. Adults who lived through the Cultural Revolution are only too aware of the mercurial horror of past Communist rule. A high school student told me that his father urged him to study in America because of the restrictions on freedom.

While Chinese from all walks of life are comfortable telling foreigners what they think about their lives, leaders, and nation, sharing those beliefs with other Chinese is problematic. The media, of course, is closely controlled; errant journalists are silenced and fired while publications are suspended and closed. Internet sites are blocked, deleted, and revamped. Unofficial intimidation, legal restrictions, and even prison time await those who take to social media and blogs to criticize Communist officialdom.

But increasingly globalized Chinese are acutely aware of their online disadvantage compared to their peers in the West. Forget any website which encourages dissent, offers specific criticism of Chinese officialdom, and or could aid dissidents. Google, YouTube, and Twitter are verboten. News sites come and go, sometimes without obvious reason. Today Bloomberg and the New York Times are beyond reach. In contrast, the Washington Post loads without incident; perhaps not coincidentally, the Postpartners with China Daily.

Even news sources considered generally acceptable face censorship for specific reporting which hits too close to home. Particular stories can lead to a temporary ban, on and off line. Articles detailing the newly announced prosecution of Ling Jihua, a top aide to former President Hu Jintao, for corruption showed up without incident. But as BBC television began to detail the larger question of official abuse my TV went blank. There was no problem with CNN, including its more limited report on the Ling case. A couple minutes later BBC was back, after the special report had finished. Later CNN was the victim of similar treatment for a different story.

While it’s obvious that internet and media restrictions have not prevented rapid economic growth, they put the Chinese at a disadvantage in an increasingly globalized world. Preventing the PRC’s best and brightest from entering the information world also is likely to dampen innovation and entrepreneurship. It’s not just a lack of access. Those denied their full freedoms are more likely to leave home. Moreover, an authoritarian system unbounded by the rule of law drives people overseas: since 2000 roughly 91,000 wealthy individuals have resettled elsewhere, at least some to escape the arbitrary risk of arrest.

Repression also stultifies China’s political evolution to a more mature and stable political order. Democracy has its own infirmities, of course, but it provides an important safety valve for popular dissent. Frustrated Chinese have little opportunity to legally demand peaceful change. While both the Chinese Communist Party and President Xi Jinping dominate today’s political landscape, their control is may not be as firm as often presumed.

With the revolution nearly seven decades in the past, the CCP’s role in creating modern China has faded in memory. The regime constantly attempts to remind people as to why they should be grateful to their political betters—museums typically exalt the role of the party and Mao, for instance—but the oppressive, enervating, frustrating establishment which most Chinese have faced for most of their lives is Communist.

Indeed, for many if not most party members, Communism is a means of personal advancement, even enrichment, rather than an opportunity to encourage social improvement. Thus, the CCP has lost any pretense of promoting revolution against greedy, oppressive, imperial rulers. For most Chinese, the CCP has become the source of new greedy, oppressive, imperial rulers. Mao governed as a modern emperor, and some wonder if Xi might be seeking similar control. Top officials today tend to be princelings, children (mostly sons) of past leaders. Which suggests at least an aristocracy if not monarchy.

With corruption seen as pervasive, public cynicism about political morals is equally ubiquitous. Xi’s anti‐​corruption campaign, including targeting top “tigers,” is popular, but is widely seen as politically motivated. Moreover, by changing the rules of power Xi may end up undermining the CCP. By one estimate some 100,000 party officials are under investigation, creating fear and paralysis within the state bureaucracy.

More important, Xi has abrogated the well‐​understood “deal” of the last four decades, that rulers can retire and be immune from future prosecution. It is widely believed that most officials have enriched themselves. Which means everyone, including presumably Xi, is vulnerable to retaliation by their enemies. Will incumbents so readily yield power in the future? The status quo may increasingly look a lot less satisfying to almost everyone in the political system.

Perhaps even more threatening for the CCP is the potential for an economic slowdown. In recent years the regime’s primary success is delivering economic growth. Hundreds of millions of people have risen out of immiserating poverty and a growing middle class is enjoying the good life. Young people expect to live not just better, but much better, than their parents.

However, overall growth appears to be slowing. Banks are overloaded with bad loans; the property boom seems unsustainable; bloated state enterprises continue to waste resources needed elsewhere. The Shanghai stock market crash could be merely the first economic bubble to pop. If so, popular anger is likely to flare against political officials. Already demonstrations and protests are common against local governments, which tend to be the most ostentatiously rapacious. What if that antagonism shifts against the center?

An unstable China is in no one’s interest. Certainly not for the Chinese people, rulers or ruled. And not for the rest of us. A poorer PRC means a poorer world: China is a major supplier and increasingly important source of global demand. Moreover, a politically unstable Beijing would have unpredictable effects on its neighbors: the PRC could use military confrontation in an attempt to shift popular attention from domestic economic problems.

Since Mao’s death in 1976, the PRC has changed dramatically—and dramatically for the better. But this second revolution has stalled. Economic liberalization remains incomplete. Political reform never started. Individual liberty has regressed.

The impact of this failure could run well beyond China. Instability is more likely as the Xi government cracks down on political dissonance. Closing off legitimate avenues of dissent increases long‐​term frustration and risks a political explosion. Moreover, hindering access to information reinforces growing negative trends in the Chinese economy. And an economic slowdown—or, even worse, stasis or decline—would raise the temperature of the PRC’s political pressure cooker.

The Chinese people deserve to be free. The Chinese nation would benefit from their freedom. The rest of the world would gain from a freer Chinese nation. Everyone desiring a peaceful and prosperous 21stcentury should hope for the successful conclusion of China’s second revolution.

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