Amidst the economic downturn in China, two developments that are not “in the human interest” stand out: rising unemployment among workers in state-owned enterprises (SOEs), and repression of criticism of the party-state leadership. China, no different from any other large country, has a multitude of domestic problems, but those two are especially worrisome in that they have the potential for significant unrest. And for the Chinese leadership, social instability always raises red flags.
China’s breakneck economic expansion has finally slowed, as it surely had to after so many years of double-digit growth. During that span, the leadership has largely delivered on increasing income, alleviating poverty, opening overseas markets, allowing people to get rich, and widening the circle of private enterprise. But at the same time, these dramatic changes in post-Mao economy have also produced large-scale official corruption at every level of government, widening household income gaps, worsening of air and water quality, a huge influx of rural people into cities, and reduced employment opportunity for educated young people. (See my Post #98.)
In the economic reform era, SOEs have been a weak link—often too big to fail, but also too expensive to keep subsidizing. Now that official thinking has turned to a version of supply-side economics, steel and coal SOEs are a prime target. Overproduction is being met by substantial layoffs—estimates run anywhere from 2 to 3 million workers—and reduced or withheld wages www.nytimes.com/2016/03/17/world/asia/china-premier-li-keqiang-economy.html). Other inefficient, debt-burdened SOEs may face new restrictions on their activities, though closing them down is as much a political as an economic issue. Strikes and labor protests are already accelerating; in 2015 they reportedly doubled (to around 2,700) compared with 2014, leading the government to actions designed to disrupt labor organizing. (See the link to the chart at the end of this post.)
Simultaneously, Xi Jinping has also further concentrated power in his hands and spread his words and image far and wide—so much so that some people believe he is styling himself after Chairman Mao, whose cult of personality dominated Chinese politics for over a quarter century. (See Post #69.) Elevating the great leader has been accompanied by a crackdown on lawyers and journalists, jailing or house arrest of prominent online critics, censorship of newspaper articles deemed offensive to the party leaders (e.g., www.nytimes.com/2016/03/09/world/asia/china-censorship-caixin-media.html), and warnings about embracing Western ideas. Xi recently paid a personal visit to the three major state-run news outlets to insure conformity with the party line (www.nytimes.com/2016/02/23/world/asia/china-media-policy-xi-jinping.html). As the China Times intoned, “it is necessary for the media to restore public trust in the party.”
The two trends are closely connected in that the legitimacy and longevity of the party-state depend above all on maintaining social stability—wei wen. As Deng Xiaoping said, “stability overrides everything.” “The stability maintenance regime is China’s hybrid approach to suppress undesirable elements in the social order,” Dali Yang has written (in “China’s Troubled Quest for Order,” Journal of Contemporary China, forthcoming). But wei wen can be risky when the economy is being deregulated, as the strikes and protests show. Cracking down on critics of the regime on charges such as “provoking trouble” and “illegal content” makes a mockery of the official commitment to the “rule of law” and raises fears of a return to the era of “democratic dictatorship.” And if high-profile people with well-connected backers are among the victims of a crackdown, party leaders could find themselves in a serious predicament.
“Where there is oppression, there is resistance,” Mao once said. And so there has been, though not of the sort that threatens regime stability. A prominent financial newspaper, Caixin, publicized the fact that one of its articles had been censored. When a real estate tycoon with millions of followers of his blog came under party assault for his sharp criticism of the party’s authoritarianism, and had his blog account expunged, a number of prominent journalists and scholars jumped to his aid (www.nytimes.com/2016/03/19/world/asia/china-ren-zhiqiang-weibo.html). An employee of Xinhua, the official news agency, wrote a letter protesting that “the public’s freedom of expression has been violated to an extreme degree.” The letter got plenty of attention online before the authorities, of course, took it down (www.nytimes.com/2016/03/12/world/asia/china-censorship.html).
Xi Jinping’s evident effort to build his reputation as a no-nonsense leader may win applause in foreign affairs—such as the tough line he has taken on the South China Sea dispute—but at home it seems destined to meet with a rising backlash. Chinese politics isn’t freewheeling like Taiwan’s, but neither is it the tightly controlled society of Chairman Mao. Workers and professionals alike have more room than ever before to express their discontent. While “forbidden zones” remain and party apparatchiks function as usual, China is now a wired society, and everything from ordinary complaints to mass protests can go ballistic in an instant. China is a long way from falling apart; but enforcing “stability” is likely to prove increasingly difficult.