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Why China Won't Collapse

Why China Won't Collapse

Despite the proliferation of doomsday theories, China is more durable than it seems.

The biggest threat to stability in China is not a hard, soft or crash landing—it’s greater prosperity without reform. A slowing economy will not rain revolution upon China in 2012, especially if Beijing’s underrated reforms continue.

China is said to be headed for collapse for several reasons, any and all of which might combine to overwhelm its increasingly expensive repressive apparatus. Within this supposed house of horrors is corruption, exorbitant housing prices, costly education, an antsy middle class and college graduates with dreams deferred—not to mention frustration stemming from China’s shortage of females, dubbed China’s “bachelor bomb.”

But those reasons take a narrow view of political change, assuming dissatisfaction will morph into regime change. For a more nuanced perspective, economic analysis has to give way to political analysis.

One well-articulated China-collapse theory comes from Gordon Chang, who says that the country is enjoying the tail end of a “three-decade upward supercycle” spurred by Deng Xiaoping’s reforms, globalization and demography. Chang’s analysis might be entirely on point, but it doesn’t suggest a dramatic collapse.

For one thing, although China is slowing, a hard landing is looking less likely. But Chang has more than economic arguments. And that’s where his case weakens severely; he foresees economic weakness aggravating deep-seated tensions in Chinese leadership and society, tensions which in turn will bring conflict among decision makers and general discontent among the masses. It’s a plausible picture, but the evidence behind it is lacking. We must ask: How exactly could an economic crisis destabilize China? That is, how do graphs and pie charts become chaos in the streets?

Charting Revolutions

The textbook example of a similar change might be Iran’s 1979 revolution, widely thought be propelled by a dramatic fall in global oil prices. But the Chinese economy is no oil-addicted dictatorship, and China has no Ayatollah Khomeini antagonizing it through sermons on scratchy cassette tapes. Contrary to the banal collapse theories, there are reasons to believe that a slowing Chinese economy will bring a chill of calm to the simmering cauldron of society.

China is a modern, complex polity with an adept, agile government. In his landmark work Political Order in Changing Societies, Samuel Huntington argued that violence is a mark of modernizing societies. To Huntington, modernity meant three things: the government gains recognition as the legitimate wielder of force; the division of labor is divided between military, administrators, scientists and the judiciary; there is mass political participation, by which Huntington meant all forms of participation, be it democratic or totalitarian (as in the Cultural Revolution).

By Huntington’s standards, the PRC is a quite modern polity, one he would deem “civic” because its institutions are developed beyond its level of political activity. In short, the system can withstand economic pressure.

 

Indeed, Beijing is well-prepared to confront, divert or grant concessions to popular discontent. With firm institutions established, a state is less susceptible to economic vagaries, something Chang’s argument doesn’t consider. By proactively heading off economic distress, the PRC might even stand to gain trust and legitimacy in the eyes of its citizens.

After all, as Western governments rushed to ease the liquidity crunch of 2008–2009, baffled and nervous citizens said nary a word of protest as unelected bureaucrats worked their money-printing and bailout magic. Only after the crisis, years later, did diverse Occupy Wall Street movements include this as a minor detail in their failed campaign against capitalist excesses.

 

A faltering economy does not necessarily cause disorder, even when effective institutionsare absent. A recent New York Times editorial opposing Western sanctions on Iran broaches this notion, arguing that the Iranian people might stand up to oppression once well-fed and prospering. The same very well could be true for China.

Reform in China

There are hundreds of thousands of conflicts between the Chinese people and the state every year. But putting aside egregious land-grab cases like the one in the southern Chinese village of Wukan last year, they rarely rise to the level of violence—much less regime-change—as many such events are simply labor disputes. The participants have little notion of a future democratic China, unlike some of their middle-class counterparts, who in contrast have few material incentives to protest but much to lose.

“Chinese people generally do not have revolutionary intentions,” Gordon Chang recognizes. But reform is another story. No Chinese citizen goes unaffected by the government’s heavy-handedness—the paternalistic, technocratic, socialist or vulgarly utilitarian blemishes in its laws and administration. That means there’s a lot to fix.

Unfortunately, important domestic-reform initiatives often receive comparatively little attention from Western media, fostering the perception that China is a radically illegitimate oligarchy powered by the blood of its treasured working class. This is a distorted picture that panders to democratic, wishful thinking about Chinese society. The truth is that however slowly and ham-handedly, the Chinese Communist Party (CCP) has accrued political capital by improving the lives of its people in ways many bygone regimes could not.

In late February, the World Bank issued a report entitled "China 2030.” Its suggestions for China’s economic health include decreasing state ownership of major industries, establishing protections for society’s most vulnerable citizens, as well as calls for tax reform, reduced carbon emissions and green energy. Lost in the foofaraw of a lone Chinese man interrupting a bank press conference to defend state-owned enterprises (SOEs) was the fact that the PRC’s State Council coauthored the report. A Chinese government body signed off on prescriptions counter to the interests of SOE monopolists—a milestone for the development of civil society there.

SOEs have been criticized in China as price manipulators and as magnets for rent seeking. For example, oil companies like Sinopec have stymied fuel-quality regulations and refused to supply petro to stations, running them out of business. Often shielded by nationalistic sentiment, SOEs have now come under assault by academics and newspaper editorials that echo the World Bank report, identifying SOEs as special interests, distinct from public interests.

Elsewhere in China, regional governments are having a crack at mending the controversial hukou system, which threatens to fragment China into two entrenched groups: legally recognized urbanites and migrant workers, the latter of whom generally enjoy no entitlement to medical care or education in the cities where they’ve come to toil. In a country of peasants, internal migration is not just a matter of civil rights. It’s a matter of economic transformation, as those former farmers have settled into cities and long forgotten tilling a field. As China’s population urbanizes, policy makers have proven adaptive and willing to experiment.

The CCP has demonstrated a concern for China’s social fabric. Beijing has decreed that television programming, including wildly popular dating shows, avoid the depths of crass sexual and material indulgence. Obviously, such policies might be in the ultimate interest of self-preservation (especially given Hu Jintao’s less than subtle warning about Western culture’s ideological penetration of China). And it’s debatable whether traditional, native values are what China or any country needs for stability or prosperity.

Granted, on some reform proposals, like liberalization of criminal law, conflict has emerged. But do these disagreements reveal cracks in the party leadership, as Chang implies?

Probably not. First, these are practical differences among technocrats who are after the same thing: stability via steady growth. Second, policy disputes are also a sign that China’s decision making is more consultative and decentralized than before. As the hukou example above illustrates, once delegated certain powers, provinces and municipalities can innovate on a smaller scale than the central government, as in the U.S. federal system.

Finally, interest groups and factions are nothing new to Chinese politics. Thus, it’s unrealistic to think factional tension could paralyze party leadership, military and police at the same time that protesters agitate and show potential for violence and greater lawlessness. What’s more, scholarly work on factional politics over recent decades, often with a focus on China, has shown how factions can coexist and even thrive by nearing some sort of competitive equilibrium. This may explain the relative quietude of Chinese elite politics since 1989.

Why China Won’t Fall

The political must be analyzed alongside the economic. China’s institutions are still significantly ahead of the demands of its society. Beijing’s apparent influence by Huntington’s theories is not surprising, as his works are popular among the PRC-establishment intellectuals, especially those on the government payroll.

Meanwhile, the authoritarian CCP junta keeps the trains running fast and on time. This means a lot to the swaths of China’s massive, aging population. Hard landing or soft, don’t look for the Beijing to suffer any hits to the head in 2012. Collapse theories are rooted in idealism, but they’re no more likely to pan out because of it.

David Lundquist is a lecturer of Western philosophy at Tsinghua University in Beijing.

Image: Patrick Rodwell