Perhaps when Chinese leaders began to speak over the past several years about a new “Beijing Consensus” and the triumph of the “China Model,” that was a warning that the bubble was about to burst. And we’re seeing that hubris play out now, as China’s leaders struggle with the greatest internal crisis since the Tiananmen Square protests of 1989.
This time, the political machinations have mostly been behind the scenes among the Communist Party elite. The headline event was the purge of Bo Xilai, the ambitious party chief in Chongqing province. But the corruption investigation of Bo has sent shock waves across the system. Bo’s network of friends and cronies was so wide that many senior party and military officials fear they might be affected.
Because China works so hard to conceal the workings of its political system, outsiders get only glimpses of the turmoil. The Financial Times reported last weekend that Zhou Yongkang, one of Bo’s key backers on the Politburo’s standing committee, had been forced to give up control of China’s police, judiciary and secret police. The Wall Street Journal wrote Thursday that two senior Chinese military officials, Gen. Liu Yuan and Gen. Zhang Haiyang, had been questioned about their links to Bo. Such rumors abound, all impossible to verify.
Across China, there is said to be uncertainty as officials try to understand what’s happening and to protect themselves. It’s a nerve-wracking moment for a country where, as one longtime China investor privately observes, “the whole point of political office is to steal as much money as possible as fast as possible.”
The official line, conveyed by People’s Daily, is that the country’s leadership transition will go forward as scheduled this fall, with Xi Jinping expected to succeed Hu Jintao as president. But this brave front masks what China-watchers describe as a state of high anxiety. Though Bo has been attacked as a “princeling” son of the party elite, some of the Politburo members who ousted him are princelings, too, including Prime Minister Wen Jiabao and Xi himself. The full array of targets in the anti-Bo campaign is not yet clear, so the fallout is hard to predict.
What dynamics underlie this jockeying among the leadership? I put that question to Kenneth Lieberthal, a senior fellow of the Brookings Institution and perhaps America’s most respected Sinologist. He notes three factors that make the current moment so delicate:
●The Chinese leadership is rarely so clearly divided. The party rulers prize consensus and believe that it’s a key factor in maintaining stability. They learned long ago that if they don’t hang together, they risk all hanging separately. That essential consensus is now in question.
●The Chinese middle class, whose rise has buttressed political stability, appears disgruntled. Social media in China are alive with complaints about product safety, food safety, air quality (described by U.S. officials as “crazy bad”) and widespread corruption. A crucial social force is increasingly disaffected, and the spread of new social media amplifies this discontent.
●The Chinese elite worry about a huge migrant labor force, estimated at 300 million, who live mostly on the margins of the rich coastal cities. They represent a potential source of instability because they are denied full urban status, with its attendant benefits. If there’s one thing China is good at, it’s managing and suppressing internal dissent, so you’d have to bet that Beijing will keep the lid on. But it’s getting harder.
These problems would be worrying even if the Chinese economy were still in its mega-boom phase. But economic growth is cooling. China’s imports and exports have both slowed over the past year, and the country’s central bank just lowered its reserve requirements, for the third time in six months, to encourage banks to lend more money.
What does this wobbly Chinese transition mean for America? Lieberthal is surely right that there’s little the United States can do to shape events, in any event. China is too big and complicated a country for that.
For 40 years, the United States has seen a rising and stable China as being in its interest, and this core interest hasn’t changed. But if the Chinese leadership can’t contain the current turmoil, new political forces may emerge calling for a more open and democratic China. Americans are bound to be sympathetic, as they were to the Tiananmen protesters. But the process of change could be wildly unstable: An evolving China is better for everybody than an exploding one.