The whole world is suffering from an economic crisis. Some in the West, like a
desperate drowning man clutching at a straw, have said the Chinese
Government has a lot of money, let us beg them to save us from the crisis.
But they do not realise that the Government in Beijing does not know how to
China has a $2 trillion foreign currency reserve but it also suffers from a
huge disparity between the rich and poor: while 0.4 per cent of the people
hold 70 per cent of the wealth of the country, a fifth of the population -
more than 300 million Chinese - have daily incomes of less than one dollar.
This extreme concentration of wealth is a serious problem for the Chinese
Government and threatens its grip on power.
First, it means that there are too few consumers to sustain a domestic market.
So “the workshop of the world” is particularly reliant on the fortunes of
the world economy. The Chinese Government announced yesterday that exports
had fallen at their fastest rate in a decade, declining by 2.8 per cent in
December, on top of a 2.2 per cent year-on-year fall in November. China's
exporters are collapsing, pulling down other businesses with them. The
Government claims that unemployment is running at 4 per cent in urban areas;
but the official figures cannot be believed. According to some serious
statisticians, the unemployment rate may have already passed 20 per cent.
This makes the severity of the economic crisis in China much sharper than in
the US and Europe.
Second, growing unemployment and stagnant wages will stoke the rising
resentment against the super-rich, threatening the position of the ruling
class. The Government regards the tens of millions of peasant workers who
will return to the cities after the Chinese holiday season to closed
factories and no jobs as an urgent threat. Chinese peasants have a long
tradition of rebellion.
Following in the footsteps of the US Government, the Chinese Government in
November announced a four trillion yuan ($600 billion) public spending
package to get the country out of the slump. But this won't work in China.
Because China's Government is not elected by the people its policies are run
on behalf of the bureaucratic-capitalist class. Instead of acting in the
interests of ordinary Chinese, it will try to save the big business
enterprises of the ruling elite. But the owners of these big businesses will
simply move their assets to safety outside China.
The evidence can already be seen: from Los Angeles to the shores of Lake
Geneva, China's super-rich are anxiously snapping up real estate, paying
with cash. The more turmoil there is - as unemployment shakes the social
order - the more capital will flee China. This will exacerbate the vicious
So the Chinese Government is trapped by a terrible dilemma. It can act to help
ordinary Chinese (in the manner of Roosevelt's New Deal in the 1930s) or the
bureaucratic-capitalist class. But it cannot do both.
If the Chinese Government does not take a New Deal approach, it risks the
Chinese people revolting and overthrowing those in power. Across the country
there is mounting evidence of popular discontent turning to violence.
According to the Chinese Government there were more than 80,000 “sudden
incidents” - its euphemism for protests - in 2006; it is now thought that
last year the figure rose to 100,000. This rising tide of discontent is
Chinese history repeating itself - the end of each dynasty was marked by a
crescendo of violence.
Military suppression cannot work. Soldiers are the relatives of the peasant
workers who have lost their jobs; the families of the military officers will
also suffer through the economic crisis. But if the Chinese Government does
act to protect the ordinary Chinese, the ruling class of big businessmen and
bureaucrats will overthrow it, and replace it with a Government that will
protect its interests.
The first scapegoat will be Wen Jiabao, the Prime Minister. While his tears,
most famously seen after the Sichuan earthquake, could fool the average
person, they will not fool the bureaucratic-capitalist class. His end is
set, except for the timing of his departure.
China has seen many political coups within the ruling class. The most recent
examples are from the 1970s. Lin Biao failed in his coup against Mao Zedong
in 1971; while Hua Guofeng overthrew the Gang of Four and ended the Cultural
Revolution in 1976. A political coup within the Communist Party could
provide the temporary stability necessary to solve the economic crisis.
But if a solution is not found then the Government will fall. In a democracy,
the end of a government is a normal event. However, in a dictatorship it is
a matter of life or death. Since Hu Jintao, the President, and Wen took
power, changing officials has become bloodier. As part of the political
struggle for power more and more officials have been executed or sent to
prison - usually under the cloak of punishing corruption. The internal
conflict between the various vested interests within the Communist Party is
getting bigger with each wanting to make the rival factions scapegoats.
From what I hear from people of all backgrounds from inside China they
believe, 20 years on from the anniversary of the Tiananmen Square massacre,
that time is up for the regime - they believe that in 2009 or 2010 the
Chinese will reach the limit of their toleration for the Communist Party.
One particular case sums up this mood of discontent: Yang Jia, a man who was
executed last year for the murder of six policemen he killed as revenge for
being beaten, became a symbol of resistance to many Chinese. He was hailed
as a hero on many blogs, pro-Yang grafitti appeared across the country and
crowds turned up at court to support him during his trial. The popularity of
this man illustrates vividly the rebellious mood of the Chinese people. The
intensity of this feeling far surpasses the resentment that was directed
against Mao's Government in the 1970s or the corruption of the 1980s.
The people of modern China are different from their ancestors: they no longer
expect a wise emperor and fair judges to rule over them. They know that only
democracy will guarantee what they want: prosperity, security and fair
treatment. The Chinese ruling class think this too - that's why they already
send their children and their money to the West.
Wei Jingsheng was imprisoned by the Chinese State in 1979-93 and 1994-97
for his human rights activism. In 1997 he was deported to the United States.
He was awarded the Sakharov Prize for Freedom of Thought and the Robert F.
Kennedy Human Rights Award in 1996