The party's new social contract

Asia Times

BEIJING - At its 16th Congress this year, the Chinese Communist Party will choose once more to swing toward liberalization, but the ability to enforce its wishes will not be completely in the party's hands. Certain conditions will be required.

The first condition is US support and assistance. In China, the process of democratization and modernization has a clear Western spin - if the United States becomes embroiled in a tough confrontation with China, then Chinese leaders will have a difficult time pursuing what will amount to a pro-Western policy of democratization. However, this first part of the equation could be easy as long as good, clear lines of communications are maintained between the two powers.

More difficult is a guarantee of overall stability. Mounting unemployment and growing income gaps could contribute to social instability. This could take the form of popular protests but, given the present Chinese social fabric, will more likely swell the ranks of criminal organizations or cults. And even purely popular protests could contribute to the rebuilding of a new organization with strong communist, populist tenets, with the idea of starting a new revolution that in turn would bring China back to square one, where it was at the beginning of the last century.

Here the biggest threat does not come from urban dwellers but from newly migrated peasants. The settled urban population, even though some are unemployed or semi-employed (xia gang),, has good reasons for satisfaction. Most of them now own a house or a small apartment that is tradable in the free market. They have in other words for the first time some capital, and there are many opportunities at hand, especially for their children.

They are de facto a new class of petty bourgeoisie who feel, and actually are, better off than the millions of migrants flowing to the cities. They now feel they have something to lose in an uprising: their small capital of real estate and the hope of social betterment for their children. They will need time to come to the conclusion that the burden of paying for their children's schooling and medical care might outweigh the benefit of their newly acquired property.

At the same time, the millions of migrants feel happy with the new opportunities of the cities, for urban life looks glamorous compared with life in their home villages. They, similarly, will need time to recognize and reject the notion that they are only second-class citizens in the cities, despised by those who are legitimate urban dwellers and without much access to the wealth glittering in the neon-lit roads.

The question then is: How much time does the leadership have to tackle these problems? Given Chinese social culture, it is quite possible that disillusion with the present gains for poorer urban dwellers and urbanized farmers will come with their children's difficulties. If their children are not able to acquire good jobs because schooling is not affordable, or if health care is too expensive for the children's elderly parents, discontent will quickly rise and spread throughout society. Similarly, if farmers find out that their children live in a no-man's land, neither urban dwellers nor any longer peasants, both parents and children will feel betrayed.

Thus we have to think in terms of the time it takes for these children to grow up and look for a job, a period of some 20 years. As the process of urban migration started a decade ago, we can reckon that the first strong signs of dissatisfaction could emerge in five to 10 years. In a period of 10, 15 or 20 years, the sons of unemployed urban dwellers, who started losing their jobs in 1997, might join the fray. In other words, the leadership can safely count on about five years of relative social stability, but after that it must have in place some social buffers that must be in full swing within 20 years at the latest.

The social buffers are not just control of the income gap. Here it is possible to intervene, but it is also difficult. China needs the newly rich for two reasons: They are the driving force of economic development and they are the main supporters of the ruling class and the present reforms drive. To restrict them, by exacting higher taxes for instance, would slow economic development and social and political support for the present drive to reforms. In return for this intervention the leaders could hardly be sure of gaining larger support among the less fortunate.

Rather more feasible is concrete intervention on the issues on which people suffer directly and more: schooling, health care and migration to the cities.

On all these fronts the government is already moving with a variety of schemes. It is expanding access to higher education, is trying to hold down school fees, is providing all kinds of financial support to students, and has also passed a law that since last October 1 allowed migrants from the countryside to apply for permanent residence in middle-sized cities. Health care is also in the process of being reformed to reduce the burden for everybody.

All these issues are extremely complex and technical, but the government appears determined. It is being careful to look for new solutions that won't burden the state coffers heavily like the European welfare system, but which also won't leave the poor to complete destitution as happens sometimes in the United States. The issues here are not of principle, but of economic and social chemistry. The reform of the education system is, for instance, of paramount importance for the moral, political, and economic future of the country.

Furthermore, China should also consider ways to slow migration into urban centers. Farmers should gain the support of the banking system in their effort to build new wealth and new enterprises. These enterprises would ultimately transform the villages into towns which would serve as a buffer against the overexpansion of the cities.

All these daunting tasks will be on the table for the next lineup of leaders and to accomplish their goals they will need both US support and social peace. Confrontation with America or new social protests of the Falungong kind will change priorities and slow down reforms, thus making every new step difficult.

The question is: will America go along with it? (2002-01-04 Asia Times)


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