By Minxin Pei
Rapid economic growth hasn’t been able to stem the rising tide of discontent in China. Even as the economy has soared, the number of protests has jumped. So what’s really wrong?
The outbreak of spontaneous mass protest against corruption and abuse of power in China is showing no signs of abating. In the latest instance, which received sustained Western press coverage, thousands of villagers in Wukan, a farming community in Guangdong Province, “occupied” their village for nearly two weeks before successfully extracting important concessions from the provincial government, which had to dispatch a deputy party secretary to negotiate with the villagers. The specific trigger for this unusually large mass protest is a common scourge plaguing Chinese farmers: the theft of their land by local officials. Although farmers in China have, nominally at least, 30-year leases on their state-owned land, local officials often sell leases, for a huge profit, to commercial developers without bothering to consult the affected farmers. The lion’s share of proceeds from such illegal transactions go into the coffers of local governments and the pockets of corrupt officials, with the farmers, now landless and without income, receiving a pittance.
The villagers in Wukan are among millions of the victims of this widespread practice in China. Illegal land seizures (along with forced evictions in urban areas) have become the most common cause of collective protests and riots in China these days. Estimates by Chinese scholars suggest they account for roughly 60 percent of the so-called “mass incidents” recorded by Chinese authorities. Unlike the villagers in Wukan, who have won a promise from senior Guangdong officials to review the illicit land deals, the majority of farmers whose land was stolen have received little help from the government.
Because of the size, duration, and outcome of the protest in Wukan, analysts of Chinese politics are tempted to view this incident as a harbinger of things to come. Perhaps this incident will encourage aggrieved farmers elsewhere to organize and protest in a similar fashion? Perhaps the soft handling of Wukan’s protest suggests the Communist Party will behave differently in responding to social unrest?
One shouldn’t read too much into one incident. The most probable reason for the peaceful settlement of this incident had to do with succession politics in Beijing, as the party secretary in Guangdong, a hot contender for a seat on the nine-member Politburo Standing Committee, could have endangered his own chances had the protest ended in a bloodbath. Unusual political circumstances forced local officials to behave with rare prudence and restraint. Nevertheless, the Wukan incident should worry Chinese Communist Party leaders.
In the short term, China is most likely entering another period of high social unrest. Indeed, the most senior party leader in charge of domestic security recently sounded a dark warning about rising social instability. The specific cause he cited was the expected economic slowdown in China, which faces falling export demands, a deteriorating real estate market, and mounting bad loans in the financial system. While it’s true that poor economic performance will dent the legitimacy of the party and rising unemployment will swell the ranks of the disaffected, the causes of social protest in China aren’t cyclical, but structural. In other words, ordinary Chinese citizens revolt against local authorities not because of temporary economic hardships, but because of systemic and pervasive abuse of power and petty despotism perpetrated by the agents of the one-party state.
To see why this is the case, one simply needs to plot the growth of the Chinese economy alongside the increase of reported mass protest incidents. The number of mass protest rises irrespective of China’s growth performance. In fact, the rate of growth in mass protest exceeds the rate of China’s GDP growth. In 1993, the authorities reported 8,709 such incidents. In 2005, 87,000 such incidents were reported. Perhaps in denial of this grim reality, Beijing has since then simply stopped releasing official data. However, Chinese sociologists estimate that the number of mass incidents reached 180,000 last year. What’s notable about this set of numbers is that, if anything, economic growth fuels social discontent in China. The size of the Chinese economy has more than doubled in the last decade. The number of mass incidents rose roughly four times in the same period.
This counter-intuitive observation brings us to another soul-searching question: why is economic growth making an increasing number of ordinary Chinese people upset? Three answers come to mind.
First, the benefits of economic growth in China aren’t being equitably shared, with the economic and political elites gaining the most. As in the West, inequality in China has risen dramatically in the last twenty years. Today, income disparity in China is approaching Latin American levels. More important, because political connections and corruption are critical to economic success in China’s crony-capitalist autocracy, most ordinary people view wealth amassed by the elites as illegitimate. This creates a social environment in which resentment against the rich and the powerful can readily find expression in protests and riots.
Photo Credit: Maerten32
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Godfree
Mass protests (and their grownup cousins, rebellions) have been a feature of Chinese life for 3,000 years. The Wuhan demonstration was a healthy political statement that was handled in a healthy way.
The task of administering a country as vast as China is beyond the comprehension of all Westerners and most Chinese. That’s why the Chinese people do not “talk politics” so much. They know, for example, how difficult it is to hire and train 60,000,000 honest, competent civil servants.
The Chinese people are enjoying more democratic participation in their government than ever in their long, proud history. That participation is slowly growing. In the meantime, 85% of the Chinese people trust their government and its media (Edelman) and approve of the Government’s policies and general direction (Pew).
Given the manifest failures of our own governments’ policies, it is high time we Westerners began seizing every opportunity to shut up when it comes to criticizing the Chinese Government. It’s time we started learning from them.
Lin
Protests like this are not “healthy”. It makes me wonder if you know a whole lot about the life of Chinese peasants? It also makes me wonder, do you think protests like June 4th are “healthy”? How about the “health protests” in Lhasa in 2008 in which many have “disappeared” now. Sounds very healthy. Do you know 陈光诚? Hows about 艾未未? Do u even know them? I wonder if you can call their situation “healthy”?
Next, protesting in China is more like protesting the King of France or the Emperor of Russia. Question his authority and generally you rot in dungeon. This is not a special characteristic of China as propaganda wants us to believe. China is changing for 3000 years, not always the same, do not think there is mystical thing about our place that just keeps happening for thousands of years. This thinking also holds back change.
You speak so easy about “the task of administering a country as vast as China is beyond the comprehension of all Westerners and most Chinese.” Is this good? Poor chinese government, pity it! Their job is so rough. This sounds like the words “chinese government needs praise for lifting people out of poverty”. It was the government the created starvation and poverty in my parents lifetime of the 50 and 60s, now this government makes money and stops controlling small parts of peoples lives, and technology from Bill gates, steve jobs and so on make life better. But all credit goes to the government. the words you say have same feeling. how pitiful the government has it!
I also want to know exactly how we Chinese people are enjoying more democratic participation in their government than ever in their long, proud history? Where? In the secret meetings where things are chosen? or maybe you confuse china with taiwan, where most young people dont even like to be called chinese anymore……
Drive by
Why protests have to be a bad thing to the Chinese government? They expose the problems and catch the attention of the central government, so regulations, and eventually laws, will be amended to better protect the civil rights. This is how society progresses. The Chinese are establishing a civil society via these protests. They eventually make the government more stable. Only a narrow minded propagandist like the author think otherwise.
Liang1a
Quote from the article:
First, the benefits of economic growth in China aren’t being equitably shared, with the economic and political elites gaining the most. As in the West, inequality in China has risen dramatically in the last twenty years. Today, income disparity in China is approaching Latin American levels. More important, because political connections and corruption are critical to economic success in China’s crony-capitalist autocracy, most ordinary people view wealth amassed by the elites as illegitimate. This creates a social environment in which resentment against the rich and the powerful can readily find expression in protests and riots.
——————————
Liang’s comment:
Many people think China’s economic development over the last several decades is nothing short of miraculous. If one looks at the GDP numbers, it is obviously impressive. But the raw numbers hide many errors. It is like a man claiming to have sold a diamond for $1 million. On the surface this is very impressive. After all, $1 million is a lot of money anywhere. But if it became known that the diamond actually worth $10 million then it is obvious the man is a fool for losing $9 million. This is the problem with the Chinese economy. Even though the Chinese people’s incomes have surged, yet China is selling its labor and resources much less than what they are really worth. Because China’s labor and resources are being sold for much less than their real value, China’s economic growth cannot be sustainable. China is already using some hundreds of millions of rural migrant labor in factories and China is also producing and consuming some 30% to 50% to even as much as 90% of the entire consumption of mineral resources of the world just to produce some $1.5 trillion of exports. For China to double its exports it would need to use hundreds of millions more cheap migrant laborers and double its consumption of energy and mineral resources. It is obvious to any thinking people that this is not sustainable. Therefore, China is locked to serious troubles if it cannot shift its economic engine from exports to domestic development geared to produce goods and services for the consumption of the Chinese people.
Since China’s exports depend on cheap labor, it follows immediately that labor cost must be kept low. This means the incomes of the Chinese people must be low. Therefore, even as the compradors got richer and richer the Chinese people must continue to be poor to sustain exports. Furthermore, to help keep exports cheap, the yuan must be excessively devalued compared to foreign currencies of importing countries. This has the effect of raising the incomes of the factory workers whose incomes are to some degree linked to the value of foreign currencies. But it also has the unfortunate effect of keeping the incomes of the farmers and non-factory workers even lower than the factory workers. This is why the income disparity between the rural regions and urban regions is more than 3 times.
The Chinese government in an effort to raise the incomes of the factory workers simply mandated that the factory workers should get a raise of some 25% to 50% over the last year. But the net effect of this is just inflation as money supply suddenly increased while the productivity of the people remains the same. I had explained this in my article “The Face of China’s Economic Engine” at the following link:
http://www.network54.com/Forum/238054/thread/1277846989/last-1277846989/The+Face+of+China’s+Economic+Engine
Therefore, in order to create an equitable society, the Chinese government must implement policies to shift from exports to domestic development based on the urbanization of the farmers and the indigenous advancement of technologies. Only if the people can increase their productivity steadily will they be able to get higher incomes commensurate with their increasing productivity without causing inflation. And only if the goods and services produced by the Chinese workers are consumed by themselves can they continue to produce at the maximal amounts. If China continued to depend on exports then investment opportunities will be minimized to at most a few trillion dollars equivalent. But if domestic development can grow to $100 trillion or more then there will be many investment opportunities that will make many Chinese investors rich and all Chinese workers earn incomes sufficient to give them the highest standard of living in the world. And as people at all social-economic levels become richer, China as a nation will become more powerful and secure. And the Chinese society will become stable and contented.
Leonard R.
It’s interesting that as economic growth rises, protests spread.
But I’m not sure they’re connected. Another interesting comparison
might be the growth in access to the internet compared to the number of protests.
Regardless, I expect protests to grow and not only in China.
Parts of the EU may soon become a powder keg. And Russia?
The CCP isn’t the only government on a hot seat.
It’s more dangerous and paranoid than most.
But a lot of nations have trouble on the horizon.
The US is looking pretty good at the moment.
yang zi
Historical perspective and big picture.
Everybody should remember this, anti or pro China.
China’s problem is not due to export, it is due to raw capitalism!
One of rationalization behind CCP’s reform is that according Karl Marx, communism is a product of advance capitalism, advanced capitalism comes from less advance and initial capitalism.
China’s current problems resembles 1930s of America. Don’t give me it is 21th century crap, China is poor and its economic system and average living standard is still last century by Western standard. America had way mor turmoil, strikes etc.
I fully expect Mr. Bo’s scheme to dominate China, more socialist leaning policies, hopefully adding democratic mechanisms. Narvana would be happy, I sense he is a left leaning idealist.
Wow
A very interesting observation, indeed. If you could please point me to some relevant sources for your various claims I would appreciate it. Thanks!
lin
Do you mean bo xilai? He preaches redness while cheating the people. he is a friend to the people already successful, that is sure, and fills them with nonsense like “remember how the good times were in the 60s” but he likes to forget “how good it was when students murdered their teachers and classmates they didnt like because mao said rebellion is justified to youth!”
if you are mentioning Bo xilai, i don’t see any plans to make things democratic. Maybe a few fake symbols here and there, but some people are hopeful without facts. Bo xilai is just as rotten as anybody else but he takes time to promote his image very well.
Passerby
China has income distribution problems as a result of its opening up to the world and the natural side effects of crude capitalism. In fact, China is the only place where the crudest form of capitalism is being practised. I believe much of the solution to these problems lie in the transformation of the Chinese economy from export led development to internal consumption and social/infrastructure led development.
Export led development is absolutely essential for developing countries in the early stage of their development. In the case of China, those who benefited the most from her initial development, in order of high to low IMO are:
A) Consumers in the West, especially lower income consumers, as well as low income consumers in dirt poor countries all over the globe;
B) Multinationals that leverage China’s human and natural resources for profit maximization that benefit their shareholders and other large institutional investors;
C) The comprador class, inside and outside China, those who act as middle men between local manufacturers and corporate buyers in the West. In the case of China, the compradors are for the most part Hong Kong and Taiwanese businessmen. These compradors have benefited much more than corrupt officials, and yet they are largely invisible;
D) Corrupt officials;
E) The leisure class inside and outside China – entertainers and the intelligentsia; especially in the case of the intelligentsia, a whole industry has sprung up that consists of the somewhat naive but harmless “China is the future” proponents and the extremely ugly and downright racist anti-China antagonists;
F) Chinese workers;
G) Chinese farmers.
The solutions to these problems lie in creating economic policies and practices that reverse the orders of beneficiaries.
Reason
@passerby – How could your list miss off the CCP?
@Applesauce – all of the problems are exacerbated by the CCP’s oppressive polices masquerading as “serving the people” – The CCP is the root cause of China’s problems. These latest protest don’t openly call for an over throw of the government because they know that their primary concerns will then be steam rolled by the self-serving CCP – however, any movement that is able to gain traction will quickly target the CCP as the main cancer in China
Right now the CCP is holding on tight – but the Chinese bowl is cracked in many places.
Passerby
@Reason
(D) is part of the CCP.
Mind you that I don’t believe in revolution (in whatever colour) and I don’t believe in regime change. I believe in reforms from within. If I want to change the system, I will first try to get into the system and work from there. So I will not take the bait in your trying to trick me into demonizing the CCP.
Passerby
I missed listing the indigenous Chinese entrepreneurs. They should be listed after (D) and before (E).
Wow
I concur with all of the above, Reason =)
John Chan
Well said Passerby, I absolutely agree with you that “The solutions to these problems lie in creating economic policies and practices that reverse the orders of beneficiaries.”
BTW, Reason definitely belongs to class (E) – the extremely ugly and downright racist anti-China antagonists.
Alex
@John Chan
I fail to see how Reason’s post makes him “extremely ugly and downright racist” – this is a common cop-out and ad hominem used against anyone who tries to constructively criticize the deeply flawed Chinese economic model and the corrupt state that oversees it. Granted, a few in that group MAY be racist, but proving so is difficult in most cases, esp. in light of Reason’s exact words, which lack any definitive proof of such a position. Criticism =/= racism.
Also, Passerby’s list is ridiculous. The top beneficiary of China’s development, by far, is the CCP, which has in the course of 30 years, transformed itself from a creaky post-Maoist dictatorship into a quasi-respected “world leader.” Its responsibility for the growth is questionable; it has consciously stoked all of the classic catalysts of real estate bubbles and invest boom/bust cycles, but gotten away with it so far due to China’ size, as well as the prosperity of the West during that period (until at least 2008/9), which enabled its mercantilist approach to trade via the safe USD.
Parties (A) and (B) on the list have benefitted nowhere near as much as the CCP. Those parties can pack up shop and take their business anywhere; the very fact that they are in China, after cutting jobs in the developed world, is proof of this. Developed world consumers are not at all beholden to developing world manufacturers; the massive unused industrial capacity in countries like the US could, in the event of a resolution to the currently mercantilist world trade environment, easily manufacture many of the products that consumers currently get from countries like China. Manufacturing isn’t all about wages; it’s also about workforce productivity and geographic location, both of which work against China vis-a-vis the developed West.
Compradors shouldn’t even be on the list, since much of the growth-related construction and investment is state-driven and has nothing to do with foreign multinationals.
Workers and farmers are the same class, esp. in light of how agrarian China’s economy still is. These parties have also benefitted far more than foreign parties, since at least their wages have increased significantly (albeit not as highly as one would expect against the backdrop of China’s overall GDP growth…tho this growth, too, may be overstated).
The real and only benefit to the West from China’s development will come when China becomes a major contributor to sectors such as intellectual property and scientific research. Cheap manufacturing is irrelevant and transitory.
Passerby
@Alex
“…Also, Passerby’s list is ridiculous. The top beneficiary of China’s development, by far, is the CCP, which has in the course of 30 years, transformed itself from a creaky post-Maoist dictatorship into a quasi-respected “world leader…”
For every one dollar that the CCP benefits from China’s openning up, it saves Western consumers tens of thousand units of pollution and resource depletion of all kinds, the so-called externality in economics which is the real cost of production. Remember, corruption is the cost of doing business, and the cost of doing business is only a part (about 10%) of the real cost of consumption that includes revenue (which includes cost of production plus cost of doing business plus profits) and externality (which is real but never counted).
65% of western economies (GDP) are consumption based, and if only a very modest 10% of this consumption base (10% x 65% = 6.5% GDP) is originated from China, you do the math and only then one would appreciate the enormous sacrifices that the Chinese nation (more specifically Chinese workers) have made and the extent that consumers in rich developed countries have benefited.
Alex, you have no idea how much the comprador class has benefited from China’s openning up. Harvard actually has done some studies on this topic.
Your response is totally coloured by your political bias against the CCP and is not based on cool, calm and impartial reasoning.
JohnX
John Chan wrote: “BTW, Reason definitely belongs to class (E) – the extremely ugly and downright racist anti-China antagonists.”
You need to prove that statement. Disagreeing with the CCP and certain Chinese actions is not synonymous with racism.
It may suprise you that many people disagree on issues that are political or economic and dont really care who makes them. They even disagree with thier own Governments positions but may do it in a different area.
In my case, I actually support some ideals and disagree with others. You John Chan with all your support for China against the imperialist Colanialist westpac are just experiencing what the USA has been facing for the last 50 years. They have had to grow thick skins to deal with the complaints that are made against them, its just that Chinese still have a thin skin.
I would also be careful when you use the word racism as it doesn’t always mean how its used for.
Lin
the people who benefit the most are cadres. don’t forget this. they benefit vastly more than a Walmart shopper in America.
But don’t wait for this god of consumption to fix things. how many years have people been repeating this word? Chinese government will convert economy to consumption. China government will convert economy to consumption. Now if i repeat 3 times will you believe??? The financial system is set up to promote people to put money nowhere besides banks, where you lose money to inflation. Banks give loans to privileged enterprises with connections to government or guanxi. Enterprises waste money however they want, but if paper statement of profit is good noboby cares. Government bails out banks when they are looking worse. Government profits by transferring money from bank deposits where interest rates are controled to be extremely low so you lose money so fast to inflation. This is what you call a trap. you expect china to become a consumer based economy ? good luck!
applesauce
It is important to note however that these protests are not against the central government the way it was in 89′ by all estimates the central government of china receives some of the highest support percentages of all the governments in the world. The local corruption and environmental damages are the real problems and that is what the ccp must work on to maintain stability. We are starting to see some work done on the environmental issue, its not a green revolution yet but its a start. Corruption on the other hand is far more difficult exactly for the reasons the author points out, vast powers and little control.