The cost of stability

Posted: February 2, 2012 in Politics
Tags: , , , ,

One of the great misconceptions from people who’ve never been to China is that Chinese long for western-style freedoms. More often than not, when I talk with Chinese friends about the enormous problems facing China and the desperate need for political reform, I get a similar response:

“Most Chinese people don’t care about things like freedom of speech. They just want stability and food in their stomach. Things have gotten so much better in the past 20 years, so these chaotic freedoms would be a stupid risk.”

To them, “freedoms” are totally abstract and irrelevant to their lives. I counter by saying, “You’ve never been totally screwed with absolutely no recourse.”

Imagine your town’s party secretary said your home would be demolished to make way for a public water park. You have the option of accepting cash worth far less than the market value of your home or taking a worse apartment several miles out in the boonies.

After demolition, it’s announced that the water park plan will be scrapped and expensive luxury apartments will be built instead. You and the residents cry foul and seek help from local courts and media only to find they’re under the thumb of the same person who took your home.

So some people try contacting Hong Kong’s Phoenix TV, where they’d seen corruption exposés before. Days later, Phoenix TV’s service is cut from the whole city. You consider going to the provincial capital or Beijing to petition. You seek advice from friends in other cities but they retell stories of people getting fired, harassed, detained or even killed for trying to do this. You decide giving up is probably the smartest choice.

For all the attention we foreigners call to instances like this, relatively few Chinese actually experience them. Most go on normally with steadily growing incomes, so it’s understandable that they don’t want a political shake up. I recently talked about this with my girlfriend’s father – an admitted laobaixing (commoner) – who agreed that freedoms and political reforms are luxuries too risky to trifle with.

This wouldn’t be surprising except that a few years ago he and his neighbors went through the exact situation I just described.

I asked how he of all people could still be averse to political reform. He replied that he had indeed been screwed, but if the kinds of freedoms I was talking about were allowed, the Communist Party would collapse and there would be chaos. If things ever do get really terrible, THEN the government can make reforms. But for now, it’d be a pointless risk.

This attitude is pretty common among laobaixing and, it seems, the government too. I’d compare it to saying global warming isn’t worth addressing until there’s some sort of major environmental catastrophe. It’s already hurting a small minority, but most are living the best quality lives anyone ever has. So why slow down this rocket ship before its engine blows? That’s exactly what’s happening right now in China economically and politically. Let’s look at some ways how:

The Stability Bicycle

 

Scenario 1: Local party cadre takes bribes, levies illegal taxes and uses his power to favor businessmen he has guanxi with. Everyone below him knows this but he doesn’t care. He’s elected from above and has control over the town’s police, courts and media. He knows that less than 3% of corrupt officials go to jail, because even if his superiors catch wind of his transgressions, they’d just assume not dirty their hands unless they’re backed against a wall. Indicting him could be an indictment on themselves and the system that feeds them.

Other government workers see this cadre getting rich and it makes them envious. The local factory inspector decides he too will take bribes. Now those who aren’t getting rich are losing face and opportunities to attract good wives. So everyone starts seeking out and abusing any kind of authority so they don’t get left behind. Those at the very bottom bear the heaviest burden of all this corruption and become increasingly resentful. Eventually, even honest business owners have to cut serious corners just to stay afloat. This leads to…

Scenario 2: Local factory poisons a river. Local party secretary (who has perhaps been bribed by the factory) prevents local media from reporting it in order to keep his job and city stability. Stability is indeed maintained and, operating on the precedent of impunity, the factory continues to pollute the river. Commoners are getting sick and some are dying. Perhaps they connect the dots and take to the streets. Perhaps they don’t.

True story

Very plausible ending to the story: The national government lets some egregious cases get reported, but they bury most small scale incidents like this (if they even find out) in order maintain public confidence and stability. People therefore see very few examples that might help them connect the dots in their own local situations.

This happens repeatedly up and down the river and many others for several years to the point that the water is now unsafe to even touch; much less drink. China’s Ministry of Environmental Protection has acknowledged this is already the case with HALF China’s lakes and rivers. Similar circumstances unfold with medicine, food, infrastructure safety, air pollution, and deforestation. Try as they might to stop it with their “iron fist,” the central government’s internal policing is about as effective as fighting a cornfield mouse infestation with a baseball bat.

Cases like Sanlu that are patently obvious to the whole country get wide attention, but most situations fester slowly out of the public view until they’re well beyond the point of no return. Eventually these things compound and millions get screwed, thirsty, hungry or poisoned. As people often do when they’re screwed, thirsty, hungry or poisoned, they revolt and the government’s attempt to keep social stability has backfired tremendously.

Scenario 3: In the wake of the 2008 financial crisis, the national government wanted to ensure social stability by keeping high investment and GDP growth, so it pushed down interest rates and engineered a lending boom that expanded the country’s money supply by two-thirds. Keeping money in the bank became pointless for the rich since interest rates are below inflation rates. Many people (especially those who’ve come into their money illegally) stash their money by buying multiple apartments. Thus there is huge demand for high-value real estate.

So we return to local party secretary who needs some quick money; maybe for himself, but maybe just to achieve the kind of raw economic growth demanded of him by national leaders who see 8% annual growth – no matter what – as the key to keeping stability. So he does this the easiest way he knows how: tearing down old cheap apartments and selling the land to developers to build luxury apartments nobody will ever actually live in.

Very plausible ending to the story: local party bosses across the country do the same thing until there are more luxury apartments than people can possibly buy. Prices crash and people who’ve already bought these homes lose their massive investments. Developers who haven’t yet sold their new buildings default on their loans en masse. This has a domino effect which causes much of the other $2.7 trillion in recent loans to go bad.

Rumors spread on the internet that banks are running out of money. Official channels deny this but people have long since stopped believing the stability-maintaining cheery propaganda. So commoners swarm to withdraw their savings and start hording goods. This causes even greater inflation and regular Chinese suffer worse than at any point during the 2008 financial crisis. The government’s attempt to keep social stability has backfired tremendously.

Scenario 4: In order to keep social stability and firm support, the government bases its education system on making students obedient. It teaches them to accept the material without challenging it. This material often includes subjective nonsense, so students are trained to think in a way to find the safe answer rather than the true or innovative answer. This begins with politics and history classes but spills over into other subjects. Students are afraid to express ideas beyond the status quo and teachers are afraid to teach them.

Meanwhile, international collaborative platforms like Twitter are blocked or heavily censored (in order to preserve social stability), so Chinese researchers are kept in a virtual cocoon. Manufacturing wages are starting to rise, so China’s economy needs to move up the value chain like Japan’s, Taiwan’s and Korea’s did before it. But because of the education deficit and lack of intellectual freedom, China isn’t equipped to do this.

Very plausible ending to this story: As this decade nears an end, demographic shifts put huge pressure on the young working generation as they must support aging parents. China’s best and brightest see the writing on the wall so they go overseas to get educated – where they mostly stay after graduation.

China’s “Indigenous Innovation” initiative relied more on protectionism and siphoning last year’s IP from foreign companies than it did on creating the right conditions to innovate at home. Under the standard policy of throwing money at a problem, several of the most brilliant Chinese minds manage impressive accomplishments in spite of the anti-intellectual atmosphere, but those exceptions are indeed exceptions. For the most part, Chinese companies stay perpetually one step behind their foreign competitors.

Scores graduate from universities to find their education was useless. Manufacturing positions are now fewer because of rising wages and technological improvement; and bosses don’t want factory workers with degrees anyways.

Like unemployed youth in the Middle-East did in 2011, young Chinese take to the streets. The government tried to avoid another Tiananmen by making sure universities didn’t become independent hotbeds for radical thinking. But their attempts to maintain social stability have backfired tremendously.

Conclusion

These scenarios aren’t just possible, they’re already happening. Many I speak to say these endings won’t happen because the central government will step in and prevent the worst. But in spite of what many Chinese and most foreigners seem to think, China has one of the weakest central governments in the world. It must oversee tens of thousands of local fiefdoms, so even when the top leaders try to do the right thing, their orders get diluted, reinterpreted or ignored through multiple levels of corrupted bureaucracy.

Like most groups throughout history though, the party is reluctant to give up any of its absolute power. It clings to the notion that it can use its power to launch internal crackdowns and scare corrupt officials straight. But this approach has been failing for decades. For every situation it rectifies, dozens more pop up.

Only by outsourcing its supervisory role to commoners and media empowered by a rule of law enforced from the top can China’s model become sustainable.  China is the frog in heating water and time is running out. Hopefully the laobaixing will realize stability at all costs is usually the most potent recipe for chaos.

Comments
  1. […] Fish quotes Chinese friends, Most Chinese people don’t care about things like freedom of speech. They just want stability and food in their stomach. Things have gotten so much […]

  2. Elijah says:

    Another brilliantly written article. Everyone over at my site loves your stuff.(links are always provided of course).

    People sneer at me or think I’m delusional because I tell them that the current model used in china cannot and will not work.

    They don’t believe me when I say that it will collapse in the next 5 – 10 years.

  3. FOARP says:

    ‘fraid I’m going to have to join the sneerers there Elijah. Firstly, getting rid of the CCP doesn’t mean China ‘collapsing’. Secondly, there’s no obvious catalyst for a nation-wide rebellion – sure, one could come along tomorrow, or ten years from now, or never, but there’s none around at the moment. Thirdly, the government’s been pretty good at getting its “it’s us or chaos” message across.

    Basically, I don’t believe that the CCP will fall without it becoming clear that the option is not between CCP stability and

  4. FOARP says:

    (ooops) . . . chaotic freedom, but between CCP chaos and self-determination.

  5. Elijah says:

    Ah, but you’ve falling into the dogmatic trap of associating china as a country with the ccp as a party or even the ccp government with the country as a whole.

    Trust me when I say that the efforts to put forth the illogical ccp = government = country = people argument have been immense and quite thorough in china. One of the tactics is like you said “us vs. chaos” even more popular is “us vs. them” (them changes whenever Oceania changes enemies)

    It doesn’t take much to see that ccp = government (not that a party should be the entire government), but ccp/government =/= country or people.

    I never said that china (the country) will collapse. I was quite clear about “the model used in china” aka ccp/government being unstable. It’s abundantly clear that there are not so much chinks in the armor, but massive chasms in the tectonic plates and it will end in calamity.

    100,000’s of “demonstrations” each year speak to that. Again, I agree that people need to see that it’s not the ccp preventing the chaos, but rather it’s the ccp causing it. People are learning… bit by bit.

    Just a matter of time.

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