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It’s official now. The Chinese Communist Party Central Committee organization department under Zeng Qinghong not only issued a warning, but also made it available to the interested public, that difficult days lie ahead. Even though official and released for whatever intra-Party maneuvering we may never know, the paper is a healthy antidote to all the straight-line projections from Wall St. to the CINC-PAC think tank of China’s growing power.
Daily news reports, limited as that may be by the still formidable suppression of a totalitarianistic regime and less than adequate Beijing foreign press reporting, have made it apparent for months that China is entering a period of great stress.
In a word, almost everything is up for grabs in China.
The list of China’s woes and their interplay is almost too long and complicated to outline.
They have been obscured by the unprecedented decade of economic growth in key coastal areas, the massive export drive — particularly to the American market, and an inflow of foreign investment from the U.S. and other developed countries, including Taiwan, with all that promises by way of transfer of technological and managerial resources.
But at the very moment U.S. Trade Representative Robert Zoellick announced in early June at the Asia Pacific Economic Cooperation (APEC) meeting China was hosting in Shanghai an accommodation with Beijing on conditions for its entry into the World Trade Organization, the man who must make China’s economy work was wringing his hands. Prime Minister Zhu Rongji told a university audience worsening economic conditions was forcing a “slowdown” in reforms.
Zhu acknowledged that rural/ agricultural incomes were still dropping — a crucial hurdle in U.S. trade negotiations which like other foreign producers was demanding China’s food markets be opened. Promises of reform made only in March that rural taxation, increasingly a source of corruption and oppression and the cause of peasant violence, now are to be shelved. Provincial experiments in educational reform, urban social security benefits, vehicle to fuel taxes turnovers, etc., which were to be transferred nationwide are shelved.
Just when Beijing was announcing audacious plans to sell off the debt/assets of the huge bankrupt state enterprises, Zhu postpones the whole privatization of these behemoths. No wonder. A rationalization of the bankrupt government sector would throw tens of thousands of the most politically potent workers on the labor market with literally millions already moving into the cities off the overburdened farmlands. All this comes as Beijing braces for a fall in its exports to the US because of the American downturn.
Hanging over all this are the political questions. Jiang Zemin is to move on and out, at least in theory, and while he has a nominated heir in Hu Jintao, one must recall that Communist China has never had a successful leadership transition without violence. It seems unlikely that the host of real issues with their constituencies inside and outside the Communist mandarinate is not in play along with the personalities. At a time when Marxist-Leninist orthodoxy has been abandoned for concepts as amorphous [and ludicrous] as “market socialism”, no holds would be barred [as they have not been in the past] for a grab at power.
None of this is made any easier by the difficulty in gauging exactly where the policy of the new Bush Administration lies, or equally important to Beijing, what is the intention of the Japanese under the new, mercurial Japanese Prime Minister Koizumi, and his rambunctious foreign minister Ms. Tanaka. The general flux in East and South Asia — the possibility of rapid movement between the two Koreas, Indonesia on the razor’s edge, nuclear rivalry between China’s ally Pakistan and its longtime rival, India — in all of which China has a great deal at stake — presents the Beijing leadership with a host of decisions.
The Chinese — whether Communist or more traditional — have always been very adept at using their exotic reputation in the West to mask weakness and intent. And at the moment, Beijing is continuing to perform in that tradition. But as economic interest forces China into more contact with the outside world, such problems as how to control communications [the effective use by the religious organization Falun Gong of the Internet is a good instance] daily become more difficult.
That is why the Chinese puzzle is more than ever difficult of discernment — and certainly of prediction. The one thing that seems certain is that scenarios painted by some Western observers which rest on assumptions about the inevitability of China’s growing trade and exposure to the outside world modifying its internal and external behavior for an increasingly cooperative role in world affairs is less than assured. The Chinese puzzle is still a conundrum.
Sol W. Sanders, (solsanders@abac.com), is an Asian specialist with more than 25 years in the region, and a former correspondent for Business Week, U.S. News & World Report and United Press International.
He writes weekly for World Tribune.com.