2. The Actual Problem

Robert D. Kaplan, writing in the Atlantic Monthly, sets the historical context:

The Ming and Qing Dynasties both collapsed because population growth led

to worsening poverty among merchants and landowners: the peasants revolted

against their poverty, and the wealthier stratum revolted against imperial

control and taxation. The same vulnerability persists today...Jack A. Goldstone

...at the University of Toronto, writes, >The combination of forces revealed in

the Tiananmen Square Uprising...A coalition of merchants, entrepreneurs,

urban workers, students and intellectuals, with some support from within the

regime...is quite similar to that of past patterns of Chinese revolt.=

The lessons that China=s leaders learned from Tiananmen Square were from

their own history. They knew that, as in the past, many of the demonstrators

were more concerned about economic conditions than about freedom per se.

They also knew that anarchy in former times, from the Ming rebellions to Mao

Zedong=s Great Cultural Revolution, cost millions of lives...for China=s leaders

chaos and instability have never been abstractions. Deng Xiaoping, China=s

ruler in 1989, lived with the memory of his son=s having been forced to jump

from an upper-story window by a crowd during the Cultural Revolution. (1)

More current events are characterized by Minxin Pei as follows:

While the Deng era saw the most dynamic economic growth and rapid social

change in modern Chinese history, the same period witnessed rapid decay of

the political institutions of the old regime...The basic cause of the governability

crisis in China...lies in the fact that the erosion of the...country=s political

institutions has not been adequately offset by new institutions... (2)

The crisis of governability has manifested itself in a variety of ways. One of these is actual insurrection. The most serious areas are those in which the Han Chinese are distinct minorities: Xinjiang and Tibet. Jeffrey Tayler informs us that

While China has been experiencing much-vaunted economic growth and social

stability over the past decade, Xinjiang has suffered increasingly frequent bouts

of separatist violence, much of the provoked by the spread of Islamic fundament-

alism and Turkic nationalism...and at times the army has been called in to suppress revolts.@ (3; See also 4, 5, 6 & 7. October adds 8, 9 & 10)

He also advises us that Beijing wants to keep the area because of its great coal and oil reserves, its strategic location, and as lebensraum for the growing population.

Prognosis for China, Page 5, The Actual Problem (Continued), Rev. 4

Tibet is a more dramatic case. According to Melvyn C. Goldstein,

Deng Xiaoping=s rise to power in 1978 produced a new initiative to resolve

the Tibet question. Deng invited the Dalai Lama to send fact-finding delegations

to Tibet and said that apart from the question of total independence all other

issues could be discussed and settled. The Dalai Lama responded by sending

three fact-finding delegations to Tibet in 1979-80, but...these visits revealed

impoverished conditions and strong feelings of Tibetan nationalism...Beijing=s

external strategy...was paralleled by a new internal conciliatory policy in Tibet

...The first...making the Tibet Autonomous Region...more Tibetan...by fostering

a revitalization of Tibetan culture and religion...Second was...rapidly improving

the standard of living of individual Tibetans...While all this was taking place,

the Chinese government and the Dalai Lama held secret talks in Beijing, once in

1982 and again in 1984. However, these proved fruitless. The exiles were

unwilling to accept a solution that did not allow Tibet to operate..under a

Western-style democracy and notwithstanding Deng=s earlier comment, the

Chinese were categorically unwilling to consider permitting any entity other than

the Communist Party to run Tibet...The Dalai Lama responded to the collapse of

these negotiations by launching an international campaign in 1987 to secure

increased political support and leverage...(11)

He goes on to explain how this campaign and demonstrations in support of it by monks in Lhasa resulted in a series of riots:

...a fourth riot broke out in Lhasa on March 5, 1989. Beijing decided Tibet was

out of control and declared martial law...In Beijing, it was hard for moderates to

refute the contention that China had to stop coddling Tibetans before matters got

completely out of hand. (12)

The crux of the matter is that Tibetans are unlikely to sit by for much longer

watching Beijing transform their homeland with impunity. Nationalistic

sentiment combined with desperation and anger make a powerful brew, and

there are Tibetans, inside and outside Tibet, who favor a campaign of focused

violence. (13)

This appreciation appears to have come to pass. (See also 5 again, 14 & 15. October adds 16, 17 & 18.)

In addition to revolution for political independence or genuine autonomy, China is now facing worker=s and farmer=s revolts against corruption. For example, Matt Forney reported in the Far Eastern Economic Review AIn March [1997], Nanchong=s workers demonstrated in some of China=s worst labor unrest since the 1949 communist revolution...more than 20,000 besieged city hall for 30 hours...A bomb attack further unsettled Nanchong.@ (19, see also 20 & 21)

Prognosis for China, Page 6, The Actual Problem (Continued), Rev. 4


Another example is given by John Bryan Starr. He writes

Farmers bring their harvested crops to state purchasing depots where, instead

of cash, they are given... Agreen slips@...the money that would have gone to pay

the farmers is often invested by...officials in speculative ventures...These

unredeemed green slips are a major source of dissatisfaction in the rural

communities and have led on many recent occasions to demonstrations C

occasionally violent ones. (22)

Commenting on the massive demonstrations in China following the bombing of the Chinese embassy in Yugoslavia , the Weekly Standard reports

...Beijing fears unrest in the streets like that of 1989 and may therefore be

attempting to defuse and channel the free floating anger widespread in Chinese

society, and one must see the demonstrations across China C like those in

Indonesia a year ago C as signals that the regime is threatened. (23)

This month (September 1999) rail traffic was blocked between Beijing and Baotou by 5,000 miners demanding to be paid. (24)

Another dimension of the governability crisis is a rising crime rate. (5 again) In 1985 there were 542,000 criminal cases filed of which 78.8% were regarded as solved. By 1990 the number of cases filed had risen to 2,117,000 while only 57.1% were regarded as solved. (25) According to Kaplan, ADrug smuggling, gambling, prostitution, pickpocketing, and other criminal activities flourish. The issue is not how much control the Beijing regime has but how little.@ (26; See also 27) In China crimes are committed by government officials to an astonishing degree. (28 & 29) An article in Beijing Review dated August 30, 1999 is titled AAudit Reveals Shocking Extent of Corruption.@ (30) Another Amassive graft scandal@ in South China was announced on September 17, 1999. (31) Still another in East China was described on September 24, 1999. (32) Early October disclosures were probably worse. (33, 34, 35, 36, 37, 38, 39 & 40) Officials at the highest levels confirmed the problem again in November (41 & 42). There is a sense in which crime and official corruption are combined in Chinese police practice. Willem van Kemenade informs us

The police force is grossly understaffed and underpaid. In the interest of

keeping the peace, the police fraternize with the underworld, whose bosses

they consult about who will be prosecuted for which crimes...Late in 1993,

in the city of Jiamusi...136 prosecutors, judges and senior policemen C

59.4% of all employees in this sector C were purged, reprimanded or

transferred [!] because of their connections with organized crime...In parts

of southern Hunan Province, the judicial apparatus was found in 1996 to

be almost completely corrupt. (43)

Prognosis for China, Page 7, The Actual Problem (Continued), Rev. 4


He Qinglian, writing in the Wall Street Journal, advises us:

Embezzlement and corruption are rampant, characterized by the commercialization

of power and government actions. Government officials at all levels regard the

power in their hands as a rare resource, and see those who come to them with

requests as >clients= with whom they will strike various deals of >power versus

money.= Newspapers are swamped with stories of this kind.

The expansion of anti-corruption institutions...cannot keep up with the inflation

in graft and corruption. (44)

Still another problem is the environment. US News reports AAfter decades of breakneck economic growth, Beijing confronts an environmental disaster.@ (45; See also 46) It further reports A...the leadership in April made >jeopardizing the environment= a capital offense.@ (47) David M. Lampton, who seems to think many critics of China are wrong on just about every other subject, informs us

Many concerns with respect to China are exaggerated, but this one is

underestimated by most outsiders. The human and economic cost of air and

water pollution in China are staggering...The World Bank concluded that

>total air and water pollution costs are conservatively estimated at U.S. $54

billion a year, or roughly 8 percent of GDP=...suggesting a startling conclusion:

More than three quarters of China=s real GDP growth has been offset by the above costs since 1985. (48; See also 49)

The above observation leads us to the final dimension of China=s internal governability crisis: economics. This dimension of the problem is sufficiently worse than the others that a separate section (see Section 3) to examine it is warranted. We will only note here the firm conclusions that China is at least in deep recession. Unemployment is substantially in excess of 100 millions* and the economy is not generating enough jobs to take up the pressure on the regime. The economic crisis is compounded by the loss of control over China=s population growth. Jiang himself said AThe biggest problem I=m facing is the large population of China@ on October 18. (50) Mr. Kaplan states

AThe one-child policy collapsed more than a decade ago, and China=s population

may now be close to 1.5 billion. Population pressure on arable land has led to

scarcity and to farmer=s revolts against corrupt officials. As the amount of arable

land shrinks, the regime cannot prevent many millions of citizens from migrating

to urban areas. Yet...urban growth will only expand the numbers and the leverage

of the students and business elite... (51; See also 52 & 53)

* Karl Jackson, director of Southeast Asian policy studies at John=s Hopkins University, places the number of unemployed and underemployed at 300 millions. (54)

Prognosis for China, Page 8, The Actual Problem (Continued), Rev. 4

The combination of crises inside the PRC have created political imperatives for the leadership. U.S. News concludes AAn attack on a sect reveals deeper worries...The campaign conjures memories of China=s Cultural Revolution...Today...China=s top leaders look out of touch and insecure...=This is not just one bad week,= says Columbia University China specialist Andrew Nathan, but >a range of deep-rooted challenges that are intractable.=@ (55) Another analysis concludes:

...The Tiananmen Square demonstrations...could have been ended peacefully

had the government been willing to make a political breakthrough. (In fact,

the government of Zaho Ziyang wanted to do just that, but was replaced, at

the order of Deng Xiaoping, by the current administration of Jiang Zemin).

Had that breakthrough taken place, China today would be close to achieving

what Japan managed a century ago: genuine political modernization.

But China may resemble Indonesia first. Beijing=s recent atavistic turn toward

street violence...suggests that the story will have a tragic ending. Chinese

governments have regularly beaten the anti-foreign drum, with catastrophic

results for themselves and sometimes their neighbors as well. If this is

happening once again, then Washington can forget about engagement and the

happy scenarios that accompany it. The task will be to work with our democratic

allies to keep the peace and weather any storm, while hoping that the Chinese, like the Indonesians, will finally embrace genuine political change. (56)

A more detailed analysis comes to a similar conclusion while offering a more detailed explanation of why Indonesia and China, dissimilar in many respects, went down a similar road in the past and may reach similar destinations in the future:

...The fundamental roles of both the... (PLA) and the ... (TNI) were originally the

same, to serve as the foundation of a regime governing a restive, multi-ethnic

populace engaged in building a cohesive nation-state...the armies in both countries

were designed to guarantee internal security...On the other hand, the army...was an

instrument of nation-building...The Chinese and Indonesian armies played similar

roles in controlling the social instability created by their charismatic leaders...Both

China and Indonesia moved cautiously toward engagement with the outside world=s

economic system. Both Deng and Suharto held the reins tightly on the process of

development. But as economic development began to accelerate...both Deng and

Suharto had to involve their militaries, not only to control the process but also to

facilitate it. In developing countries...the miliary...is frequently the most capable

of evaluating and adapting [technology]...as the largest integrated organization

in the country, the army has to some degree mastered the management and

coordination of large numbers of personnel in dispersed locations, cooperating

to achieve the same end.

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...Both the Chinese and Indonesian regimes depended on the loyalty of their

military to survive. If economic development was to take place, the officer

corps had to be permitted to participate in it. If...the officers were to see other

segments of society prospering while they were excluded, the inevitable

dissatisfaction would threaten the regime=s survival. It was simply good

politics to allow the military to participate in the economic development process.

Both...Indonesian nationalism and ...Maoist socialist ideologies lost relevance

during the boom times...All of this worked perfectly well until the bottom fell

out of the economy. Having abandoned ideology as a driver and national

security as a mission, what was left was private economic calculation. Officers

in both countries had become used to asking...@What=s in it for me?@...the

regime had to rely on the military for protection in the face of tremendous

resentment from the masses, who had never received anything but crumbs

during the boom. Having now realized that those crumbs were all they

would get, the bitterness was intense.

The Chinese responded by ordering the military out of businesses. This was

both politically and structurally absurd...disengagement would inevitably

increase the pressure on the economy, not to mention destabilize the political situation. Nevertheless, the regime clearly understood where the economy

was headed, and therefore knew it had to pre-empt the military...China has

renewed ideological campaigns...more important, the regime generated a

national security threat both domestically and from foreign sources. It is no

accident the regime happily went into confrontation with the United States. It

understood that the military...would resonate to patriotism and to foreign threats. Business has a corrosive effect on any military organization. The principles of

self interest and the principles of self-sacrifice are not compatible. A generation

of military officers has had self-enrichment as its primary mission. The economic

collapse has close off opportunities that these military men saw as their

entitlement. It is a tough sell.

Warlords are not alien to Asia. The Indonesian and Chinese cases are natural incubators for this phenomenon. In China it would be a reversion to a fairly

common social form...No one knows what direction things will go...Nevertheless,

signing an order banning the PLA from doing business and enforcing it are very

different things...it appears that China is flirting with the same disintegration we predicted for Indonesia two years ago. The very force that held China together,

the PLA, may now be in the process of pulling it apart. (57)

Prognosis for China, Page 10, The Actual Problem (Continued), Rev. 4

This analysis substantially concurs with Minxin Pei of the Carnegie Endowment for International Peace. He writes in Foreign Policy

The notion that China could go the way of Indonesia may seem preposterous. By

most measures, China=s political system is more robust than Indonesia=s. The

Chinese Communist Party (CCP) is a better-organized and more effective political

institution than Suharto=s military-dominated Golkar; its hold on Chinese society,

though eroded by two decades of economic reform, remains firmer than Golkar=s

grip on Indonesian society; Beijing=s collective leadership has more built-in

stability than Shuharto=s one-man show in Jakarta ever did; and the administrative

capacity of the Chinese state is also much stronger than that of Indonesia.

Although a swift and spectacular regime collapse may be less likely in China

than in Indonesia, at bottom the Chinese political system must contend with nearly

identical weaknesses: uncontrolled, systemic corruption and feeble state

institutions that are incapable of protecting property rights and resolving

conflicts either between the state and society or among the various institutions

within the state. The kind of economic and political crisis that hit Indonesia

and brought down Suharto could likewise strike China and its leaders C if they

fail to undertake...the necessary political reforms...and gradually liberalize and

democratize its political process. (58)

The window of opportunity for political reform will not remain open for long.

Experience has shown that the few autocratic regimes that reform from a position

of relative strength generally fare better than those forced to reform in crisis...

The cold and cruel logic of political reform C those who can, will not; those who

try when forced, cannot C has been tragically validated in all too many countries,

Indonesia included. (59)

He Quinglian notes

The past 20 years of reform in China have seen only a shift in property ownership

and ideology. Political reform has been limited...Ideology, too has remained little changed since reforms began...Blocking public opinion through censorship will

naturally invite false reports of severely distorted information. The result is that

the market does not work properly, nor does the local government, and the future

is bearing down on China rapidly. (60)

W.J.F. Jenner tells us

...the archaic party dictatorship is indissolubly wedded to economic backwardness.

In its very nature it has to repress independent and critical thinking and innovations

that harm vested interests and may sometimes destroy existing industries.

Prognosis for China, Page 11, The Actual Problem (Continued), Rev. 4

One of the most surprising aspects of the problem of how China is to get out of

dictatorship and the political culture that supports it is the remarkable weakness

of the Chinese state. This may seem like an absurd formulation...it clearly has the

power to repress internal dissent and keep out the foreigner. But there is more to

the state...then providing the machinery of dictatorship.

What modern states do and the Chinese one cannot, or does not, is raise the

taxes needed to provide the education, health, and other welfare services

without which security for the individual, civilized society and civil society

are not possible. Collecting 30% to 40% of economic output in the form of

taxes...requires a government strong enough to impose its will on its own

subordinate agencies and on society as a whole. (61; See also 62)

Mr. Quinglian and Mr. Jenner are correct that the nature of the regime Ais indissolubly wedded to economic backwardness.@ However, the regime has no intention whatever of trying

Ato get out of dictatorship and the political culture that supports it.@ The Hong Kong Standard analysis of September 26, 1999 is correct: AThe Communist Party still keeps a tight lid on dissent 50 years after seizing power, with the democracy movement, religious groups and ethnic minorities all feeling the wrath of the state. The 4 June 1989 Tiananmen crackdown left hundreds, if not thousands, dead and came as a brutal reminder that despite economic freedom and social change, the Communist Party was still an authoritarian regime that would brook no challenge to its rule.@ (63)

It appears that the crisis of stability and governability in the PRC at this time is acute. It has been exacerbated by unfortunate timing: the Asian economic crisis has dried up local markets at the same time that the consequences of environmental abuse began to exact a high toll; loss of control over population growth is producing intolerable pressures at the same time because China=s limited amount of arable land is fully occupied; the reduction in foreign investment capital and institutional restructuring are resulting in significant increases in unemployment at the very same time the economic downturn is preventing the generation of new jobs; and the credibility of the major governmental institutions has, because of the lack of elementary social justice, simultaneously reached a historic low. The leaders of the PRC are not irrational to fear instability. They have ample evidence it is significant problem. The measures they are taking to try to cope with this complex situation are increasingly desperate and counterproductive. It is already too late to avoid internal crisis. There no serious intention to reform the political system in the ways necessary to solve most of these problems. According to Bruce Gilley writing in Current History: AThe one outcome Jiang=s political changes do not entail is democratization.@ (64) Dr. A. James Gregor of the University of California Berkeley states AThe People=s Republic of China has massive internal problems that not only make its present rate of economic growth problematic but may threaten its very survival...At worst, domestic difficulties, thwarted expectations, and a sense of collective insecurity could fuel nationalist military adventure, leading to war and calamity.@ (65) This situation is likely to continue for the medium term, whatever foreign policy is adopted by Beijing, by Taipei or by Washington.