Getting the China story right

Once, China could do no wrong. Now, China is going bust. Modern China has become a set of caricatures in mass media and public imagination.

Does China have an alternative to the US consumer? | Cartoonist - Joe Heller, from Green Bay Press-Gazette on 12/1/2011 12:00:00 AM; source & courtesy - caglecartoons.com | Click for a larger source image.

Caricatures all

Indian government and media has long promoted the image of an aggressive, expansionist China – which is strictly not based on facts. Piecing together the Chinese jigsaw becomes a time-consuming and intricate exercise in history and politics.

While global media was busy with the Euro-currency crisis, some interesting data from China government has received little attention.

Especially, in India – China biggest and near neighbour.

Velvet fist inside an iron glove

Belief that the Chinese Communist Party has an iron grip over China, ruling over a cowering populace is misplaced. China’s occupation of Tibet keeps Tibetans on the boil. Xinjiang erupts periodically. Capital Beijing went through a Tiananmen bloodletting a little over two decades ago in 1989.

Not surprisingly,

This year, the (Chinese) government plans to spend 624.4 billion yuan on public security, a 13.8 percent increase from 2010, and 601.2 billion yuan on defense, a 12.7 percent increase, according to the Finance Ministry. The announcement comes days after hundreds of police deployed in cities across the country following an online call for rallies inspired by uprisings in the Middle East.

Like national defense, China spends less on its police than the U.S. Federal, state and local governments spent a combined $213.7 billion on police, prisons and the judicial system in 2005, the last year figures are available, according to the Bureau of Justice Statistics of the Department of Justice.

U.S. spending on the justice system in 2005 was 1.7 percent of that year’s gross domestic product. China’s announced 2010 spending on public safety was 1.4 percent of 2010 GDP. (via China’s Spending on Internal Policing Outstrips Defense Budget – Businessweek).

Reuters confirms these figures and the source.

* To spend $95 bln on public security, $92 bln on military

* Security spend includes police, jails, state security

China’s spending on police and domestic surveillance will hit new heights this year, with “public security” outlays unveiled on Saturday outstripping the defence budget for the first time as Beijing cracks down on protest calls.

The 13.8 percent jump in China’s planned budget for police, state security, armed civil militia, courts and jails was unveiled at the start of the annual parliamentary session, and brought planned spending on law and order items to 624.4 billion yuan ($95.0 billion).

By contrast, China’s People’s Liberation Army budget is set to rise 12.7 percent to 601.1 billion yuan ($91.5 billion).

“This would be the first time that the openly announced domestic security budget has surpassed military spending”, said Xie Yue, a political scientist at Tongji University in Shanghai.

He called the figure a gauge of China’s spending on what officials call “stability protection.”

“This shows the rising costs of maintaining internal control,” said Xie, who studies China’s domestic security policies and spending. “This system is very sensitive to any instability or contention.” Many foreign experts believe China’s real military budget is much bigger. Xie, the Shanghai professor, said spending on “stability maintenance” was also far higher than official data. (via UPDATE 2-China internal security spending jumps past army budget | Reuters).

If China was indeed so much in command over its provinces, why do they have such a large ‘internal security’ budget.

If China was indeed so much in command over its provinces, why do they have such a large 'internal security' budget. | Cartoonist - Riber Hansson, Sweden - 2/18/2010 12:00:00 AM; source and courtesy - caglecartoons.com | Click for larger source image.

Submissive Chinese?

The expenditure on policing and imprisonment is in itself proof of a disturbed populace.

Chinese population is not a cowering lot – and Chinese reports suggest that, indeed there is a significant protests volume.

The surge in public security spending comes as so-called mass incidents, everything from strikes to riots and demonstrations, are on the rise. There were at least 180,000 such incidents in 2010, twice as many as in 2006, Sun Liping, a professor of sociology at Beijing’s Tsinghua University, said in a Feb. 25 article in the Economic Observer. (via China’s Spending on Internal Policing Outstrips Defense Budget – Businessweek).

Widely cited, sometimes quoted wrongly (probably based on a typo), this figure gives a window into Chinese administration and its acceptance. However, this figure of 180,000 mass incidents while a Chinese figure, may not give the complete picture.

Readers of the international press could be forgiven for thinking that China is a cauldron of social unrest on the brink of boiling over. Reports of riots or protests invariably cite the growing number of official “mass incidents” to emphasise the point.

But the accuracy of these numbers – which refer to anything from small, peaceful protests to the murderous ethnic riots that engulfed Xinjiang in 2009 – is questionable at best. Moreover, there is no evidence that social unrest poses an imminent threat to the Communist party’s grip on power.

Foreign reports typically cite a figure of 80,000-100,000 “mass incidents” in China per year. Yet the definition of a mass incident is so broad and the official reporting so inconsistent that these numbers have little clear meaning.

In practice, there is no agreement on the definition of a “mass incident”. Police generally use a wider definition which enables them to document how effective their enforcement is; government officials tend to use a narrower definition to minimise the apparent scale of the problem.

National statistics published by the Ministry of Public Security (MPS) show slow growth in mass incidents from 1993 to 1997 followed by a period of much faster growth through 2004. MPS only considered these data points “estimates” – numbers were rounded to the nearest hundred or thousand – and stopped publishing the data in 2005.

Journalists often cite a figure of 87,000 for 2005, which was published on the MPS website in early 2006. But this number refers to an even broader category of “public order disturbances”, that cover anything from riots and protests to participation in cults or organised crime, hacking, orgies, gambling, even insulting the national flag.

In early 2007, Liu Jingguo, the vice-minister of public security, told a press conference that mass incidents fell 16.5 per cent year on year in 2006. But there were no further statements on mass incident numbers until after the Olympics in August 2008.

After the Olympics passed and the media spotlight dimmed, the number of mass incidents mysteriously rose once again. Estimates by the China Academy of Social Sciences give a figure of “over 90,000” mass incidents in 2006 and further unspecified increases in 2007 and 2008.

Most analysts agree that anecdotal evidence, such as a steady rise in the number of petitions submitted to the central government protesting about local government misbehaviour, supports this trend.

The central government is adapting to the challenge, to some extent. Since most complaints are against local officials or businesses, the central government argues that the chief problem is petty corruption stemming from bad eggs at the local level rather than systemic flaws that would undermine the legitimacy of the regime.

Indeed, the sharp rise in petitions to Beijing about local abuses testifies to a widespread belief that the central government is more a potential solution to the problem, not its ultimate source.

But this belief may be changing. Anecdotal evidence over the last five years suggests a rise in “anger-venting” mass incidents – large scale, often violent, riots that erupt from seemingly minor incidents and reflect general discontent rather than specific rights violations. (via The accuracy of China’s ‘mass incidents’ – FT.com).

So, what makes the Chinese see red?

USA allowed Europe, Japan, Asian Tigers - and now China to use currency depreciation tool to export and grow their economies. | Cartoonist - Paresh Nath, from The Khaleej Times, UAE on 3/26/2010 12:00:00 AM; source & courtesy - caglecartoons.com | Click for larger source image.

Land grab by the State

A big reason for these protests – land grabbing by the State.

Most recently, was a ‘mass-incident’ at Wukan, Guangdong, that started after the death of a protestor and the arrest of three in September.

Land grabs and local corruption are serious challenges for China’s leaders, but Wukan demonstrates well why they are unlikely to prompt a revolution: the government is often ready to give protesters what they want. The villains in such stories are almost always local officials – low-level functionaries who have long since been passed over promotion and learned to spend their time selling favors to provide for their retirements. (via What Wukan Really Meant | The Diplomat).

Is Wukan an aberration, or a feature of Chinese administration?

a common scourge plaguing Chinese farmers: the theft of their land by local officials. Although farmers in China have, nominally at least, 30-year leases on their state-owned land, local officials often sell leases, for a huge profit, to commercial developers without bothering to consult the affected farmers. The lion’s share of proceeds from such illegal transactions go into the coffers of local governments and the pockets of corrupt officials, with the farmers, now landless and without income, receiving a pittance.

Estimates by Chinese scholars suggest they account for roughly 60 percent of the so-called “mass incidents” recorded by Chinese authorities. Majority of farmers whose land was stolen have received little help from the government.

In the short term, China is most likely entering another period of high social unrest. Indeed, the most senior party leader in charge of domestic security recently sounded a dark warning about rising social instability. The specific cause he cited was the expected economic slowdown in China, which faces falling export demands, a deteriorating real estate market, and mounting bad loans in the financial system. While it’s true that poor economic performance will dent the legitimacy of the party and rising unemployment will swell the ranks of the disaffected, the causes of social protest in China aren’t cyclical, but structural. In other words, ordinary Chinese citizens revolt against local authorities not because of temporary economic hardships, but because of systemic and pervasive abuse of power and petty despotism perpetrated by the agents of the one-party state.

To see why this is the case, one simply needs to plot the growth of the Chinese economy alongside the increase of reported mass protest incidents. The number of mass protest rises irrespective of China’s growth performance. In fact, the rate of growth in mass protest exceeds the rate of China’s GDP growth. What’s notable about this set of numbers is that, if anything, economic growth fuels social discontent in China. The size of the Chinese economy has more than doubled in the last decade. The number of mass incidents rose roughly four times in the same period.

This observation brings us to another question: why is economic growth making an increasing number of ordinary Chinese people upset? Three answers come to mind.

First, the benefits of economic growth in China aren’t being equitably shared, with the economic and political elites gaining the most. As in the West, inequality in China has risen dramatically in the last twenty years. Today, income disparity in China is approaching Latin American levels. More important, because political connections and corruption are critical to economic success in China’s crony-capitalist autocracy, most ordinary people view wealth amassed by the elites as illegitimate. This creates a social environment in which resentment against the rich and the powerful can readily find expression in protests and riots.

Second, China’s economic growth, impressive in number, is actually low in quality. Expansion of the economy is achieved by undercutting social services (such as healthcare, poverty reduction, and education) and neglecting the environment. Deteriorating social services can stoke discontent among ordinary people, who rely on them much more than the elites. Worse still, environmental degradation, a direct result of Beijing’s blind focus on GDP growth, has now become a major cause of social protest. The Ministry of Environmental Protection admits publicly that mass incidents triggered by environmental pollution have been growing at double-digit each year (although it has withheld the actual numbers).

Third, social protest is an inevitable response by ordinary people to systemic corruption, repression and petty despotism that defines a one-party regime. In such a system, the agents of the regime wield enormous power but are subject to little accountability. Their use of coercion and violence against defenseless citizens is routine and habitual. In the case of the Wukan protest, the spark that ignited the mass incident was the death of a representative sent by the villagers to negotiate with local authorities. He was believed to have been tortured by the police. Because this system produces innocent victims daily, it should at least expect its victims to rise up in self-defense.

It’s therefore clear that mass social protest has become a permanent feature of the Chinese political system. Although such protest, by itself, won’t dethrone the Communist Party, it does weaken the party’s rule in subtle ways. Trying to maintain control over a restive population is forcing the party to expend ever-more resources on domestic security. Letting such routine protest – amplified by the Internet and microblogs – occur makes the party look weak and incompetent. Having tens of millions of disgruntled citizens also means that potential opposition movement can find political allies among China’s down-trodden masses. Worst of all, in a political crisis, these enemies of the regime could all rise in revolt spontaneously.

Perhaps Chinese domestic security officials should be even more worried. Today it’s Wukan. Could Beijing be next? (via Occupy Beijing? | The Diplomat).

Interestingly, the ‘free’ West does not have the kind of data and statistics that the Chinese are releasing about China.

Popular image of China is a set of caricatures drawn by the State and media. | Cartoonist - Nate Beeler, from The Washington Examiner on 12/7/2009 12:00:00 AM; source & courtesy - caglecartoons.com | Click for larger source image.

Story so far

There are many other elements to the Chinese puzzle.

Earlier posts examined the Chinese economy without the support of a cheap yuan that boosted exports for the last nearly twenty years. Will China go the Japan way? The mysterious manner in which the Buddhist monk has disappeared from Chinese movies is an ominous feature. Especially when the Buddhist monk has been replaced by gangsters.

Tibetan protests in the form of self-immolation by priests and nuns have unnerved the Chinese administration. Even in the past, in the 1965 and the 1971 India Pakistan Wars, China had maintained a distant attitude towards Pakistan. Indian Navy in the South China Sea, in alliance with Vietnam, is a significant counter-measure to posturing in the Indian North East by China.

Catching on and catching up on the emerging China picture.

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• Are China and U.S. to be enemies? (cnn.com)
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• China Tells Police to Better Address Citizens’ Complaints (businessweek.com)
• “Rationally handling group incidents” in China (blogs.mcclatchydc.com)
• China Seeks to Boost Consumption Amid Global Slowdown, Chen Says (businessweek.com)
• Chinese News Agency Warns Against US Moves – New York Times (nytimes.com)
• ANALYSIS | Will America take the knife to military spending? (cbc.ca)
• Chinese Currency Reaches All-Time High (huffingtonpost.com)
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