The final few months of the year saw a gradual intensification of China bashing among global media. There was a widespread conception of a “China threat” among journalists and politicians, suggesting that China has hurried to exercise its newfound political and socioeconomic power after the 2008 financial crisis. However, the discourse of a “China threat” overlooks several variables that continue to constrain the Chinese Communist Party’s top leadership’s ability to maneuver in international and domestic politics next year.
First, there is an irreconcilable gap between the ruling elite and popular perceptions of China’s rising power. While there is a sense of public confidence about China’s strengths, the Communist rulers are deeply worried about various sources of uncontrollable grievances and instabilities.
On the economic front, the gravest challenge is the vulnerability of the nation’s financial industry. The Chinese government has long been reluctant to empower private entrepreneurs and financial professionals. The princelings and local authorities have appropriated state-run commercial banks to drive growth while hiding non-performing loans and distorting the value of these banks’ financial assets. Therefore, the most pressing crisis facing Chinese President Xi Jinping (習近平) is how to liberalize the financial sector and restructure the top-down command economy.
Because of the economic slowdown, the state-led model of capitalism has run its course. Over the past few years, many private enterprises and factories in the Pearl River Delta have gone bankrupt because they lacked political connections to secure bank loans to resolve the cash-flow problem. Dongguan City is now in a painful state of transition from a once flourishing manufacturing hub into a ghost town. The days of China’s economic miracle are numbered. Its economic growth is slowing down and popular grievances are rising. To ensure long-term growth, Beijing has no choice but to encourage domestic consumers to purchase more homemade goods and services. Instead of increasing public expenditures on infrastructure and giving more loans to state-owned enterprises, Beijing should transfer massive wealth from the state to citizens to boost consumption at home.
Second, the Communist state has displayed an intense hostility toward community activists, lawyers and intellectuals taking a moderate pro-US line. The top leaders worry about the effects of a dangerous economic slowdown. So far, most of the social and economic conflicts remain localized and the central government has prevented these grievances from developing into a nationwide movement; as what happened in the spring of 1989. However, faced with escalating domestic discontent, the leadership has to appear politically strong. The maritime sovereignty disputes in the South China Sea and the ongoing anti-corruption campaign have made it hard for many reform-minded officials to experiment with developmental policies.
Third, the regime has yet to get to grips with the democratic and liberalizing effects of social media. What worries the ruling elite is the way that some dissidents might use the Internet to mobilize the masses and organize nationwide protests.
For the time being, Beijing has contained challenges posed by online intellectuals and journalists. It has outsourced the Internet control mechanisms to the market and relied on service-providers to keep online chat rooms under control. Its huge Internet police has institutionalized an environment of self-censorship in which online users feel they are being watched by Big Brother all the time.
Nevertheless, changes in sociocultural norms and communications technologies have promoted online and offline activism among an increasingly frustrated public. The changing cultural norms among young people are beyond the one-party state to co-opt. This trend of development has validated the attitudinal and behavioral openness in society and led to a new sense of civic engagement among rural and urban populations. Such activism has not only redefined the meaning of citizenship, but also presented a new possibility of grassroots mobilization inside and outside the state organs, a new phenomenon with strong implications on China’s governance.
Finally, geopolitical conflicts have undermined China’s longstanding diplomatic reassurance toward neighboring countries. To any rising power, the formulation of a coherent geostrategic vision is as important as its precise implementation. The administration of US President Barack Obama has come to terms with a rising China and has been trying to channel China’s enormous energies toward maintaining the US-dominated regional order. When China rejected a US request to resolve the maritime sovereignty disputes through a multilateral framework, Washington bypassed China to form an informal alliance with several East and Southeast Asian nations to safeguard freedom of navigation across the South China Sea. This created a sense of fear among the Chinese political and military leaders about being encircled by US allies. The US is clearly prepared to pursue alternative agendas if China chooses not to cooperate.
A rising China will always face crises on its frontiers. The failure of an inter-agency coordination within the gigantic Communist bureaucracy has made it difficult for the top leadership to respond effectively to new and old crises. Consequently, China has outraged many neighbors with aggressive rhetoric and policies. Next year, China should launch some corrective measures to reassure neighboring states of its peaceful rise.
China’s future is still fraught with tensions and conflicts. The best solution to these internal and external challenges will not be the old way of authoritarian governance.
Joseph Tse-Hei Lee is a professor of history and co-director of the bachelors’ degree program in global Asia studies at Pace University in New York City.
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