The Dynamics of China’s Social Crisis

China continues to impress the world with its high GDP growth, staggering trading volumes and surging consumption appetite. Most figures out of Beijing look remarkable, indicating a momentum that the Middle Kingdom is reclaiming its great power status at a speed faster than most forecasts. Yet evidence is mounting that the high-GDP-centered development paradigm is too costly to sustain: rural, urban and environment-related protest movements are moving from localized and isolated events to a widespread and serious social crisis.

What do statistics, or the lack of them, indicate?

Some may point to Beijing’s newly-revised GDP figures as proof of China’s successful modernization: its national strength is now 17 percent more than previously thought, leaping over Italy, France and Britain to become the fourth largest economy in the world; its economic structure seems to be more balanced with a much bigger service industry than previously reported; and China’s foreign trade grew by nearly a quarter in 2005 and its foreign reserves tripled. Yet other recently released numbers, which have received less coverage, indicate a troublesome trend.

As revealed by the China Human Development Report 2005, regional disparity is threatening the country’s growth potential, and the widening urban-rural distribution gap has reached a dangerous level. Compiled by a group of Chinese researchers for the United Nations Development Program (UNDP), the report demonstrates that in all major categories of the human development index (HDI)—from per capita income to life expectancy to literacy rate—regional imbalances are severe and growing. It concludes that China’s Gini coefficient, a measurement of a country’s income inequality, has increased by more than 50 percent in the past 20 years, with urban dwellers earning nearly four times that of rural residents. At 0.46, “China’s Gini coefficient is lower than in some Latin American and African countries, but its urban-rural income inequality is perhaps the highest in the world.”

The new GDP number only makes inequality worse, and when systemic factors biased against the rural population are included, China’s city-countryside income ratio is as high as 6:1. The result is that a person in richer cities enjoys a life expectancy of close to 80 years—the level of a middle-income country and 10–15 years longer than a farmer’s life span in Tibet or other remote provinces. The UNDP report also shows that the inland regions lag behind in education, especially among the female population [1].

Only two decades ago, China was one of the most equal societies on earth. Today, it ranks 90th in the UNDP’s 131-nation HDI. It is ironic that while 250 million people have been lifted out of poverty in record time—a proud achievement that no one denies—China is also leading the world in creating one of the most unequal societies in history.

How to measure social stability, or the lack of it?

The Chinese government has repeatedly told the world that it needs social stability to develop its economy, and Beijing claims to value economic and social rights more than political rights. The question is whether China’s traditional political control plus the new economic and social exclusion of the majority of its population can be accepted as a model of development by those who are now excluded from China’s growing prosperity.

Newly released reports from the Chinese government cite 87,000 incidents of “public order disturbances” last year, up 6.6 percent from the 74,000 figure in 2004; the number of events that “interfered with government functions” jumped 19 percent while protests seen as “disturbing social order” grew by 13 percent in 2005. Some say this is an alarming acknowledgement of the looming crisis in Chinese society that may soon tear China apart with unthinkable consequences. Others contend that the figure is not surprising and that it may not even be a new development: it reflects only that Beijing now allows more reporting of these protests that have existed for a long time. The Chinese government even puts on spin on reports of social disorder, claiming that China is now more democratic by allowing the protests to occur and then informing the public about them.

Despite the differences in assessment, the emerging consensus is that various grassroots protests are increasing in numbers, are better organized, and often turn violent when local officials are no longer seen as working to solve ordinary people’s legitimate grievances. Such protest movements are gaining wider social acceptance. Again, the UNDP report’s survey of Chinese public perception of income distribution gaps reveals popular demands for social justice and potential support for radical actions: more than 80 percent of those surveyed believe that China’s current income distribution is either “not so equitable” or “very inequitable.”

Meanwhile, a recent global study by the Pew Global Attitude Project seems to contradict such pessimism. It shows that the Chinese are the happiest that they have been in recent years in terms of improved living standards and the most optimistic about their future. Seventy-two percent of Chinese, the highest among 16 countries polled, expressed satisfaction with national conditions. Although the survey acknowledges that the “sample is disproportionately urban and is not representative of the entire country,” it does convey one important message that the pollsters failed to recognize: Chinese people have extremely high expectations about benefiting from the country’s ongoing economic expansion; if such high expectations are not met in the near future, their frustrations may turn to demands for equity and social justice.

From the 1950s–1970s, most Chinese were very poor but relatively equal, thus social protests were rare and the Chinese Communist Party (CCP) asserted control with little concern regarding large-scale grassroots unrest. Today’s China, after more than two decades of reform, is much more prosperous but at the same time a very unequal society. Historical experiences show that when a country is embarking on rapid economic growth, social mobility accelerates and people’s expectations for their own share of the prosperity increase. Yet at the same time, income distribution gaps widen and with few exceptions, only a small portion of the population enjoys the benefits of the country’s modernization drive. Such a paradoxical process often results in rising resentment among the populous and leads to large-scale protests for a more equitable distribution of wealth. China today is at such a crossroad of unprecedented prosperity, high, unmet expectations, and growing frustrations with perceived social injustice.

When will the “tipping point” come, if ever?

The current Chinese leadership headed by President Hu Jintao and Premier Wen Jiabao is keenly aware of the growing disparity and its serious consequences. After years of promoting Deng Xiaoping’s famous call, “to get rich is glorious,” the “harmonious society” seems to have become a central pillar of the Hu-Wen approach to easing China’s social tensions. Despite a number of measures—ranging from investment in remote regions to elimination of agricultural taxes to “hard strikes” against corruption—social unrest is on the rise. With some of the recent bloody confrontations between peasants and local authorities, many wonder if some kind of a “tipping point” for a social crisis will arrive soon—a potentially explosive situation where large scale upheavals shake the entire Chinese political, economic, and social establishment.

Revolutionary change, most evident in the Russian revolution of 1917, is precipitated by three conditions: first, the masses can no longer be governed; second, the ruling elite can no longer govern; and third, the social forces are fully mobilized under the leadership of a revolutionary party to overthrow the existing regime. By these standards, China is nowhere close to the “tipping point.”

Yet it would be a profound mistake to take comfort from such abstract conclusions. The first two conditions are progressively deteriorating in recent years: widespread social protests are increasing; the corruption of government and CCP party officials and the plight of ordinary citizens by local authorities have weakened the governance structure. A deadly combination of these two elements could lead to a widespread belief that the majority of the population is not left behind because of its own weakness in competing with others for a better life; rather, it is the corrupt officials and the privileged few who have enriched themselves through exploitation and at the expense of the masses. This perception may foster pressures that fundamentally reconfigure the existing social, economic, and political order.

This process may well be accelerated if the inevitable economic slowdown in the coming years and natural, environmental and other human-made disasters occur simultaneously. An externally-imposed, alternative political mechanism is unlikely, if possible at all, given China’s tightly controlled conditions. Yet a governance crisis of such magnitude is likely to trigger an internal split within the CCP ruling elite, with reform-oriented forces openly confronting hardliners who advocate total control by force. If history tells us anything about large scale social turmoil, a total breakdown of Chinese society may not necessarily solve China’s pressing problems. Thus the most challenging task for China and the world today is how to avoid such dangerous showdowns with reforms that effectively address the issue of income inequality, social injustice and lack of democratization.

Professor Wenran Jiang is the director of the China Institute at the University of Alberta, Canada

Notes

1. For more statistics and analysis on the social and economic cost of China’s modernization drive, see “The Cost of China’s Modernization,” China Brief, December 6, 2005.