How China’s slowing growth may derail its volatile marriage of one-party rule and economic liberalization

By Derrick Gozal – Global Economic Forum

On June 4, 1989, the People’s Liberation Army of China converged on Tiananmen Square, intent on dispersing a student-led pro-democracy protest that had gone on for several weeks. As the army advanced, rifles were loaded and shots fired. Live ammunition was used. This event was a watershed moment in modern Chinese history. After Tiananmen, the Chinese Communist Party would adopt a platform which married two seemingly opposing concepts: party monopoly over political control and economic liberalization. While the party crackdown at Tiananmen as well as the influx of wealth from the opening up of China’s economy may have swept the sense of discontent that ignited the protests under the rug, the deceleration of China’s economy may cause a resurgence of such discontent that may disrupt the system that has steered China for twenty-five years.

Throughout the years following the crackdown of the Tiananmen protests, the Communist Party’s monopoly on power in China has always been closely linked with the country’s economic fortunes. The tightening of social controls by the Communist Party in the aftermath of the Tiananmen crackdown was closely followed by radical economic liberalization. Indeed, China’s post-Tiananmen policies spurred rapid economic growth and development that has persisted for the past twenty-five years. In some ways however, this economic liberalization has smothered the concerns that initiated the Tiananmen protests. Despite the fact that issues such as corruption and political controls that sparked the Tiananmen protests linger and have in fact increased, there has been no public unrest on the scale of Tiananmen during the past 25 years. As China’s populace basks in the mass influx of wealth entering the country, concerns over such issues begin to fade into the background. While this may seem baffling to outsiders, it was simply a matter of self-preservation and political apathy for most Chinese. Is it any surprise that many would lose their appetite for politics after their attempt to participate in it was met with violence from their own government? Much better to take advantage of economic opportunities and focus on getting rich than risking one’s life opposing the party and possibly ending up shot or in jail. In such a context, wealth and economic prosperity became one of the party’s main claims to legitimacy after it essentially gunned down the very people it claimed to serve and continued to tighten its monopoly on government. “Leave the politics to us and we’ll make you rich” might well have been the party’s slogan. As China’s economy slows and opportunities to make money dry up however, these issues may find themselves thrust in the limelight again as social unrest mounts and the pursuit of wealth becomes increasingly untenable. [1]

In 2015, China’s GDP grew by 6.8%, the lowest since 1990, the year after the government crackdown on the Tiananmen protests. Projections set that this year’s GDP growth is likely to be even lower than last year’s. As the economy slows down and unemployment rises, labor unrest begins to grow throughout the country. In the coal-mining regions of Jiangxi, unemployed workers protested over a salary cut to a meager  $70 a month on February 29-March 1, 2016. The government’s decision to cut 1.8 million jobs from the state-run coal and steel sectors would likely further inflame such protests. According to China Labor Bulletin, a Hong Kong-based watchdog, around 2,774 strikes and protests erupted around the country in 2015, more than double the figure for 2014. In a country where strikes are illegal and mass protests often lead to incarceration, the increasing frequency of protests highlights the deepening social unrest as well as the desperation of those hard hit by the slowing economy. [2][3][4]

As the riches of economic liberalization begin to wane and dissatisfaction with the ruling party grows, social concerns that had for the past twenty-five years been left in the shade begin to re-emerge. It is no coincidence that China’s current leader, Xi Jinping, has made anti-graft efforts a central part of his tenure. Indeed, a common grievance that often acts as the spark for many of the protests that have engulfed China is the collusion of corrupt officials with developers to sell off land without giving tenants proper compensation. As Xi himself states, “the worse corruption becomes, the only outcome will be the end of the party and the end of the state.” [5][6]

For twenty-five years after the Tiananmen incident, China’s dazzling economic growth and the promise of wealth it offered overshadowed the many concerns that sparked the Tiananmen protests and continue to plague China to this day. Economic prosperity became one of the major pillars holding aloft the party’s legitimacy as the sole governing body of China. As China’s economy slows and this lofty pillar begins to weaken however, the Chinese Communist Party increasingly finds itself in a world where those who had once swallowed the Party’s actions for the sake of wealth may find themselves once again questioning the Party which has led China for sixty-seven years. [5] 

     

 

[1] http://time.com/73594/china-tiananmen-square-25-years-later/

[2] http://time.com/4286397/china-labor-social-unrest-strikes-pingxiang-coal/

[3] http://www.nytimes.com/2016/10/19/business/international/china-economy-slows-impact.html

[4] http://www.nytimes.com/2016/01/19/business/international/china-gdp-economy.html?action=click&contentCollection=International%20Business&module=RelatedCoverage&region=Marginalia&pgtype=article

[5] http://www.reuters.com/article/us-china-politics-graft-idUSBRE8AI03A20121119

[6] http://www.bbc.com/news/world-asia-pacific-15032458

(Meagre is preferred in most parts of the world, however meager is used in the United States)

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