The worrying news from China is that the country appears headed toward an economic and political crash sometime in the next five years, if current trends continue. The somewhat better news is that a large part of the elite grasps that danger, and is talking fairly openly about the far-reaching change that will be needed to prevent it.
In eight days of meetings with Chinese academics, economists, journalists, businessmen and government officials this month, I encountered little of the rising-superpower hubris that might be expected from a country perceived in most of the West as an unstoppable juggernaut. Instead, I heard considerable anxiety about a slowing economy and an uncertain political transition this year, and even greater worry about the problems the incoming leadership team under Xi Jinping will likely face over time.
Most people I met during a tour of Beijing, Shanghai and the interior city of Changsha thought China would avoid an economic “hard landing” this year, despite a sharp slowdown in growth during the last few months. But many were concerned about whether the new leadership could manage the restructuring needed to keep growth going beyond the next couple of years — a shift from export industries and infrastructure investment to consumption and services for a rising middle class.
Similarly, few people seemed to think that Xi’s ascension this fall would be derailed by the power struggle reflected in the recent purge of populist Chongqing governor Bo Xilai — possibly because, like most of the world, they don’t know what is happening behind the leadership’s closed doors. But a surprising preponderance of my sources talked about the necessity of political reform and improvements in human rights to preserve China’s stability as its economy slows and shifts. (My trip with several other journalists was sponsored by the private China-U.S. Exchange Foundation, which is chaired by former Hong Kong chief executive Tung Chee Hwa).
“China is at a crossroads,” said Zhu Yinghuang, the former editor of the China Daily newspaper. “After 30 years of economic reform, we have to get to political reform.”
So what would that change look like? Not surprisingly, no one expects China to become a liberal democracy anytime soon. But I heard a lot of ideas for how the new leadership group could begin to open up the political system. Chief among them was local reform: Several people said that the case of Chen Guangcheng, the blind dissident who was held captive in his home by local security forces until he escaped to the U.S. embassy in Beijing, demonstrated the need for top leaders to force town and village authorities to abide by China’s own laws — including those mandating democratic elections for village leaders.
The Chen case “will give different levels of government a lesson that it is better to accelerate the reform of governance, so that such cases will be dealt with at the regional level rather than at the top level, and in a rule of law way rather than a diplomatic way,” said Chen Dangxiao of the Shanghai Institute for International Studies.
Victor Yuan, who established China’s first private polling firm, said average Chinese cite “enforcement of the rule of law” as a first priority for reform. Another first step, he said, would be “greater social mobilization,” in the form of more independent social service groups and NGOs at the local level. Those organizations could spawn new leaders to challenge entrenched authorities in village elections and eventually compete for places in the National People’s Congress, China’s formal legislature.
Inevitably a process of political change will have to tackle China’s most taboo subject — the suppression of the Tiananmen Square reform movement in June 1989. After requesting that he not be quoted, one academic argued that the best way for the regime to revitalize its political legitimacy would be to apologize to the families of those killed. “This is our burden, our baggage, that has to be dealt with,” he said.
So far there is scant evidence that China’s leaders are considering such steps; repression of political dissidents has increased in the last year and censorship of expression on the Internet was recently tightened. But outgoing premier Wen Jiabao said in March that the country “has come to a critical stage” in which “without successful political structural reform . . . new problems that have cropped up in China’s society will not be fundamentally resolved.” That has encouraged hopes for liberalization — and, I suspect, accounts for much of the talk I heard.
“This is the time to do something, and to do it incrementally,” said Shen Dingli, the dean of the Institute for International Studies at Fudan University. “If you reform, you have immediate challenges. But if you don’t reform, you will have even bigger challenges. The top leaders all know this.”