How China is Weaker Than it Looks

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How China is Weaker Than it Looks

China could yet become a superpower. But a surging economy can’t mask social strains that only political reform can address.

There’s an old Chinese fable that was the inspiration behind Andrew Nathan and Robert Ross’s 1990s book, The Great Wall and the Empty Fortress.

Centuries ago, a king whose city was about to be attacked decided the only thing he could do to save it was to order the gates be flung open. He then told the attacking force that the city was empty and that they were welcome to enter. Suspicious that the king’s words were a trick to tempt them into an ambush, the enemy forces decided to move on and the king’s empty city was saved.

These days, many looking at China from the outside see its towering economic statistics and assume that this growing wealth isn’t just about money—that it’s about power as well. After all, a country with growth rates in excess of 10 percent per annum that’s now the world’s second-largest economy, the largest holder of foreign reserves, the largest exporter and largest consumer of energy—surely it’s also a geopolitical powerhouse?

But take a look inside the gates, beyond the headline economic figures, and two points emerge that cast doubt on this notion of overwhelming strength.

One is the amount of money that’s being spent on internal security. According to its official budget, China spent about $80 billion on defence in 2009 (although the United States and others would argue that even this massive figure underestimates the true scale). But more remarkably, it spent almost as much—$75 billion—on internal security.

Keeping the lid on Xinjiang and Tibet has clearly required massive amounts of central government cash, as has policing China’s restless provinces and dealing with public unrest. Indeed, those who venture outside the grand cities of Shanghai and Beijing see a country with surprising levels of fractiousness and casual violence. On a recent visit to the central city of Xian, for example, I was intrigued to see an enormous sign over a side street bearing the words (in English and Chinese) `Centre for Receiving Petitions.’ It seems there are enough disgruntled citizens in the city and the surrounding areas to warrant a whole street to deal with them.

The second indicator of trouble ahead is the way elite leaders themselves are speaking. Yes, it’s true that Politburo members and their local equivalents fill their public pronouncements with rosy statistics. Like their Maoist and Dengist forebears, they live in a world still infected with Utopianism—things will always get better, the harvests will get bigger, the heaven on earth promised under Marxism (albeit now called Socialism with Chinese characteristics) will be realised one day (even if that day has to be pushed further and further into the future).

Yet even with these relentlessly on-message leaders, a gloom still sometimes manages to push its way through. In fact, no less a figure than Premier Wen Jiabao appears to be taking a lead in urging caution, reportedly declaring in the southern city of Shenzhen in August that without political reform, the Communist Party’s days in power could be numbered.

These comments follow an admission in a government report earlier this year that corruption, disputes and inequality were forming a deadly cocktail that could jeopardise the country’s prosperity. Lower level officials are even more candid, talking of their puzzlement over why the world is making such a fuss about China’s rise when all they can see around them are the awkward choices that will need to be made to ensure more balanced growth.

Indeed, while the rest of the world watches anxiously as China demonstrates an increasingly assertive streak in its dealings with its neighbours and the United States, the key slogan of the current government isn’t about a ‘peaceful’ rise or how China hopes to create a better global environment. Instead, the focus is very much inward, on `harmonious development.’ China looks strong from the outside, but internally there’s a potentially devastating minefield of environmental problems, inequality, ethnic tensions and social imbalances.

Travelling around China, it’s impossible to escape the sense that the environment, for one, is at a breaking point. Enormous cities sprawl over arid northern plains where the rain hardly ever falls. Beijing seems increasingly like an artificial and parasitical aberration, feeding on the constant stream of coal trucks entering the city along the north-eastern highway while sucking surrounding Hebei Province dry of water. Shanghai, too, with its 20 million-plus population, is placing a huge burden on the surrounding areas. And, while the plan to balance the country’s population by having a string of mega cities running along the eastern coast looks good on paper, these places are increasingly subject to violent weather conditions.

So how is China responding to the environmental challenge? Up until last year’s Copenhagen climate change summit, officials stuck doggedly to their position that environmental problems originated in the developed world, and therefore the developed world had the main responsibility for tackling them. Officials played hardball, avoiding targets and managing to alienate almost everyone else by insisting that the United States, EU and others take the lead in cleaning things up.

But the tragic floods in Gansu and the searing heat and prolonged drought in the north and north-east of the country this summer underscored a point made recently by Hu Angang, a government advisor and economist at Qinghua University: the main victims of global climate change will be inhabitants of developing countries, and of these, Chinese citizens will likely bear the brunt of these effects. This reality will at some point force change, and the Five Year Programme due to come into effect next year will no doubt outline further energy efficiency targets and other measures.

But while there seems to be inexorable pressure for a shift on the environment, the prospects for political change are less clear.

Since as far back as the 1970s, the Communist Party’s leadership has recognised that there needs to be a fundamental readjustment in the structures of power and administration of the country. Indeed, since 1978 they’ve been promising to spell out more clearly the divisions between Party and Government.

In the meantime, they’ve striven to introduce some kind of rule of law, moving gradually closer to an independent judiciary, while on civil society they have, if nothing else, created an enormous grey area where non-government organisations can at least operate (even if they lack legal status and safeguards). So, while innovation might be risky, it’s not completely taboo—there are even some wild ideas being floated about having special political zones along the lines of the Special Economic Zones, where new ideas could be tested to see if they deliver.

The trouble for the Chinese leadership is that it might not have as long as it thought it would to implement such changes. Why? Because China is a victim of its own success.

The country’s economy has rocketed ahead of the forecasts, making even the apparently rosy projections delivered in the late 1990s seem reserved. It’s ironic that leaders once accused of being too optimistic were, in hindsight, being far too coy. China in 2010 is perhaps a decade ahead of where it was thought to be heading back in 1999.

But this success means that Communist Party leaders once certain that they’d have two or three decades more of economic reforms to go before getting down to political changes have found themselves confronted with the need to do something far more quickly than expected.

China is on target to become a middle income country by as early as 2020. But while this transition may be welcome, it’s also a stage in any country’s development when various elites—whether business or political—will likely start to experience far sharper disagreements with each other. Lawyers and civil society groups, as the colour revolutions in the former Soviet bloc states show, start to gain much greater social traction, while entities that look and act like an authentic political opposition start to appear.

So far, the Communist Party has fallen back on tried and tested methods to keep a lid on things. Repression, albeit on a much more focussed scale than in the past, has been used against problematic groups, including signatories to Charter 08, which is championed by jailed Nobel Peace Prize winner Liu Xiaobo. Other activists have been cowed into silence or detained. The case of lawyer Gao Zhisheng, who disappeared, briefly resurfaced, and was then silenced again, highlights Chinese censorship at its very worst.

It’s not all bad. On some issues, the Communist Party has in fact made some modest changes, allowing more information about government out into the open while carefully experimenting with some forms of elections, particularly at the grassroots level. But on the big issues—the legal status of civil society groups, judicial independence, proper elections for township level officials and above and fiscal restructuring between the centre (which is still immensely powerful) and the provinces—it’s clear there’s no elite consensus.

The problem they have is a belief that reform in any one area will mean that the other issues will also need to be addressed at the same time. This all-or-nothing approach heightens the risk of mistakes and, for a Politburo and elite that’s naturally cautious (and which lacks the political capital of some of its predecessors), such boldness is a tough thing to call for. Indeed, there’s a growing appearance of a leadership that’s simply tolerating the status quo, hoping the country can muddle along until the propitious moment when any necessary changes can be made in a single swoop.

Of course, this is theoretically possible. But the problem is that stronger courts, greater civil society action and greater public participation are all necessary prerequisites for the future economic reforms that all know are also necessary.

And it’s unclear how much longer these demands can be resisted. China is already suffering high levels of internal discontent—one estimate has put the annual number of mass protests at 90,000, while a spate of killings at schools earlier this year indicates a worrying level of social alienation and anger. Meanwhile, the 12 million individual petitions filed since 2005 suggest the courts are simply being buried by civil cases.

If China can manage its transition well, then it will almost certainly become, along with the United States, one of the dominant global powers of this century. But it’s a big if, and if its leaders mishandle this tricky transition—and an angry and frustrated population—the repercussions will be felt far beyond its borders.

China has every right to celebrate its successes and achievements. But the backslapping should be tempered by the reality that the complex problems arrayed in front of its leaders need tackling—quickly.


Kerry Brown is a senior fellow with the Asia Programme at Chatham House in London.