Charter 08 and the threat of instability in China

An excellent analysis in ESWN of Charter 08, and how it may be being blown slightly out of proportion. Certainly I haven’t heard any Chinese colleagues mention it. On the other hand, to judge by some recent posts in Danwei, it has caused some movement on the blogosphere.

This leads to the question that is hovering over us this year: what are the risks of serious instability in China as a result of the recession? The major risk to China’s rise will for the time being be internal, and this recession is rightly being seen therefore as a crucial period. I am coincidentally reading the Tiananmen Papers right now. What emerges from there is that three things were crucial:

1. Widespread discontent and a generally flammable social atmosphere for several years before 1989. In particular, economic problems were long-standing, with inflation running very high for some time. Also, crime was quite rampant, and corruption very visible, particularly due to the small size of the economy.

2. Serious and deep divisions within the top Party leadership regarding the fundamental direction of reform and the fundamental question of Party control. This deep division manifested in vaccilation towards the protests when they began.

3. A spark : the unexpected death of Hu Yaobang. It required a political event to ignite the economic and social tensions.

How do those match up to today? Number 3 is inherently unpredictable but there is not a personality like Hu Yaobang around. When Zhao Ziyang died the popular reaction was muted. Without staged national elections, there isn’t a procedural catalyst on the horizon. So it’s difficult to see one, but not being Chinese I have difficulty gauging what will and won’t spur people to action.

Number 1 is complex to gauge against today, and many will say the widespread concerns about inequality etc. show that there is a flammable atmosphere. The fact base is the oft-quoted numbers on public incidents. However most of those have been related to very specific and local incidents. Crime is a problem but in the late 80s it was growing at 50% a year and that’s not happening. The inflation threat has also disappeared. So while there are certainly problems, they’re different in nature and severity to 1986-1989. Hence while I think the ‘grace period’ before economic problems become severe threats to the Party’s ability to rule is not going to be 3 years, it’s also not 3 months. My hunch is that it’ll take about a year – and the stimulus not working – before the Party’s legitimacy is under threat.

What is the upshot? First, the big trouble will come if the downturn persists into 2010. That doesn’t mean this year is risk-free, far from it. There could be some quite big incidents, but the Party will be very firm and able to clamp down on them. It’s if things are still bad in mid-2010 that events might start to escape their control. Hence also watch for the Party to ramp up the repression again this year. For example, June 2009 will be a risky period for anyone to go anywhere near Tiananmen. And University campuses etc. will be very closely monitored. I wouldn’t be surprised if they’re, say, doubling the size of the Internet censorship unit.

Finally, in 1988 a survey showed large parts of the population believed the only way to get ahead was with connections. Over the last few years everybody knows that connections helped, but you could still get a good job and do moderately well without them.  If we see a trend where Party insiders or the well-connected do significantly better than normal people during the downturn that could be a big problem. So if I were Wen and Hu I would be extremely careful and vigilant about how jobs are handed out through the stimulus package.

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