Intrinsic uncertainty and instability – China

Updated  25th March, 2014

Both China and India suffer from serious internal tensions.

For China the main sources are the unrest amongst Tibetans and Uighurs who are not happy with Han domination; added to economic issues arising from the dominance of growth against everything else it seems, plus official corruption; and social and human rights issues, including the imbalance between the sexes and the rapidly aging population.

Unlike India, China’s internal tensions are far more significant than its external tensions, though recently its disputes over maritime claims with neighbours have become more serious.


China’s internal tensions

There are three main sources of tensions: ethnic, economic and social.

Ethnic tensions revolve round Tibetans and Uighurs. Tibetan mostly reside in Tibet to the south west and in some areas of Sichuan, Qinghai, Gansu and Yunnan provinces. The latter mostly in Xinjiang to the far west.

Various accusations such as cultural genocide, ethnic marginalisation through mass inward migration of the majority Han and religious repression have been made at the Chinese government. The reality is different. Several learned papers have not found support for these accusations. Nevertheless, there is great tension, periodically surfacing in the form of anti-Han riots.

The truth of the matter is that both Tibetans and Uighurs are being pushed into the 21st century from a pseudo-
feudal, ‘middle ages’ culture. Many of the young Tibetans and Uighurs are torn between today’s materialism and creature comforts and their traditional customs and norms. This is not to deny pro-Han policies, not least in language. But there is no overt religious suppression that some western media would like to portray. The Chinese government is hoping that as economic prosperity continues, and the older generation dies out, the tensions will reduce and perhaps even disappear.

In the case of Tibet, China is looking forward to the day when his holiness the Dalai Lama will pass from this world and they can appoint his successor. That is likely to be the trigger for another round of violence as the traditionalists will insist on searching for his re-incarnation in the accepted manner and will not accept any Beijing-supported successor.

In the case of Uighurs, China is wary of any link with Muslim extremism. They know they have to tread ever so cautiously. Any over-reaction is likely to push moderate Uighurs into the arms of the extremists.

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Economic tension is an underlying phenomenon. It was the disparity between the rich capitalists and landowners, and the poor peasants and factory workers that enabled Mao and his fellow revolutionaries to establish a foothold and with the defeat of the Japanese, fight the KMT and takeover. The Chinese leadership is keenly aware that unless the majority of Chinese can enjoy a minimum level of living standard, unrest is not far below the surface. It was therefore with great relief that China found that millions of economic migrants who lost their factory-based urban jobs were able to move back to their rural hometowns without any major incidents. This avoidance was partly achieved through major injection into capital infrastructure projects that one analyst estimated at absorbing over half the displaced workers.

So the continuing policy is to help improve the economic conditions of the rural citizens. Fortunately, some of the great leap forward in urban economic levels has been distributed to rural communities through the thrift of the workers and the tradition of remitting as much as they can afford to the families back home, often by living frugally and foregoing luxuries of any sort. But economic disparity between rural and urban populations and between the affluent coastal regions and the interior continue and some believe is widening. This is epitomised by the c250m migrant workers who lack various basic rights as citizens.

Several reforms are underway in 2014 to redress the disparity:

Other economic tensions include:

  • Paradoxical shortage of ‘blue collar’ workers exacerbated by the migrant worker situation; and increasing difficulty for graduates to find ‘white collar’ jobs.
  • Excruciatingly slow move from an investment-led (manufacturing, building, mining, infrastructure and export) economy to a consumer-led (service based) one. Encouraging consumers to spend more and save less: http://www.mckinsey.com/insights/china/unleashing_the_chinese_consumer
  • Similarly very slow if any move from State Owned Enterprises  (SOE) to private initiates. There are signs that the trend may even be in reverse –  http://www.reuters.com/article/2013/11/12/us-china-reform-idUSBRE9AA0YB20131112
  • Implicit property ‘bubble’ with large numbers of vacant properties built and bought for investment rather than for living in.
  • Unsustainable debt held by provincial and district authorities, often used to finance these vacant properties or sometimes for ill-thought through factories.

Some industries are still sub-standard. Mining is a prime example with frequent accidents that are rare in developed nations with health and safety laws. Many industrial plants are also sources of serious pollution. Despite central government efforts at curbing pollution at source, local authorities often connive with factory owners to avoid anti-pollution schemes in the cause of productivity or profit. At regular intervals when serious incidents occur, the public have taken to the streets. Steps are being taken to improve industrial safety - http://chindia-alert.org/2014/01/05/china-to-launch-nationwide-safety-overhaul-xinhua-english-news-cn/

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Social tensions and human rights issues are on the rise in China. No longer is the citizen willing to accept the State’s dictat without question. This new-found rebelliousness is helped along by the Internet and mobile phones. The authorities are finding it increasingly difficult to control the flow of information and the media is no longer the only way people find out what is happening. ‘Slum’ clearance – eviction issues, pollution problems, corruption by officials are all finding their way into the public domain, often triggering local incidents that increasingly get picked up by some of the national media.

What really makes the ordinary citizen mad is the corruption amongst officials that goes on at all levels, accompanied by extravagant conspicuous consumption well beyond the salary of an official. Despite regular purges and even executions, the rewards are so great that many an official will take the risk. Once again, the Internet is coming to the aid of the ordinary person in exposing corruption and not allowing local officials to sweep bad news under the carpet.

Anti-corruption and ‘mass line’ campaign are the most important reforms being carried out: http://www.bbc.co.uk/news/world-asia-china-22963994

Human rights and the rule of law are still not to standards in most developed nations.

China is becoming aware that human rights is not something being stirred up by visiting western leaders but a real issue that it has to deal with. Ironically, the more affluent people become the more they become aware of their rights!

For example, Ai Weiwei, a renowned artist, who helped design the Bird’s Nest Olympic stadium and several other activists were detained in Chengdu in August 2009 to prevent them attending the trial of a campaigner investigating schoolchildren’s deaths in the Sichuan earthquake of 2008. The subject had become highly sensitive because of allegations that shoddy construction, linked to corruption, was to blame for the high death toll in schools.

Ai said a policeman punched him in the head in that incident, leaving him with painful headaches, and he underwent surgery in Germany weeks later after doctors spotted internal bleeding. He lodged a formal complaint

On 10 August 2010, Ai went to Chengdu’s police department, to ask for a receipt of the complaint. But it refused and referred him to the police station at Jinniu. He said that as he arrived at the Jinnui police station he was surrounded by men who assaulted him and his assistant, and told him: “If you want justice, go back to the US.” Ai lived in America for several years but is still a Chinese citizen.

In 2007 a famous ‘nail house’ was demolished in Chongqing after months of stand-off when the owner refused to move until finally the authorities offered fair compensation. On the other hand, self-immolation seems to be on the rise and often in cases of forced removal.

Strikes, suicides and serious work- or environment-related illnesses are increasingly in the news. Workers at Honda went on strike. As one activist said: Workers are realising that their economic poverty is due to their political poverty. That, I am afraid, is beginning to change. Additionally, China seems to be changing its ‘no strike’ laws. Guangdong province is planning to experiment in 2010 a law that would allow workers to strike. If this does not cause major incidents, observers believe it will be rolled out across the country over the next few years.

Early in 2013, China issued a Human rights white paper: http://chindia-alert.org/2013/05/14/china-issues-white-paper-on-human-rights/ Presumably, if and when these are complied with, things will improve vastly.

Suicides forced Foxconn a major electronics contract manufacturer (Apple, Dell, Sony, etc) to increase wages by over 70%. Foxconn may be an extreme example of the factory-city model. It employs over 1 million workers in China across 16 huge city-like campuses with sports facilities and entertainment centres. But these are hardly used as the workers are too exhausted after their long shifts. The suicides at Foxconn is being studied seriously as some psychologists see it as symptomatic of the way young, poor rural workers are drawn away from their hometowns to live in cheerless, soulless dormitories, with wages that in theory should be enough to sustain some form of social life, but in practice with as much spare cash as they can afford being remitted to families back home, there is hardly any social life at all.

Serious health problems at Wintek who supplies Apples iPhone due to use of n-hexane caused Apple to audit their Chinese suppliers.  It found that 54% breached the 60-hour maximum weekly limit and 35% failed to meet wage and -or benefits requirements.

The net result is that in the medium term China will no longer be the low-cost manufacturing centre of the world.  And either prices will rise (which will be a good thing as it will slow down rampant consumerism and the ‘throw it away’ culture) or manufacturing will move to low labour-cost economies elsewhere.

Public healthcare was in decline after the market reforms following the Cultural Revolution, when previously medical care was free either in the communes or through local administration. However, the government realised the situation and in 2008 launched “Healthy China 2020” to set up a universal health service across the country, available to even the poverty stricken, rural segment of the population, not unlike the British National Health Service.

In January 2012 a non-government organisation has been allowed to bring a court case concerning cancer caused by pollution from a factory. This is unprecendented and is the first sing of opening up of courts to private litigation.

These are examples of various forms of lack of safety: food, manufacturing, mining safety, factory effluent, air and water pollution, etc.

Related article: China highlights human rights issues in criminal law procedure

Finally, there is concern amongst sociologists about:

Sex disparity: The single-child policy combined with the desire for a son, especially amongst the rural community means that within a decade China will have a shortage of 30 to 40 million women for men between the ages of 20 and 45. Officials are promulgating “value your daughter” slogans. But whether the rural poor will listen is another matter. They are also trying to curb the adoption of baby girls by foreigners. But nobody has any idea how that scale of disparity between the sexes will play out. Only time will tell.

There are changes now to the single-child policy. Whether the public who have become used to having one child will embrace this change is another matter.

See also:

Aging population: Unlike India, China’s population will be aging and that China may well grow old before it has a chance to grow rich, at least on a per capita basis. By 2050, 1/3 of the population will be retirees! Storing up trouble for the next few decades.

In view of the two demographic ‘time-bombs’ China is slowly relaxing its one-child policy. For example, if at least one of the parents is a single child, the couple may be permitted more than one child. Similarly, in rural counties, if the child is a girl, a couple will be permitted a second child. However, many demographic experts believe these actions will not be in time to diffuse either of the time-bombs. Worse still, many of the young people interviewed have got used to the one-child policy and sees having more than one a significant burden and may not go for it even if permitted.


China’s external tensions

Putting to one side geopolitical issues such as the continuing pressure from the US to rebase the Renminbi (RMB) currency, global pressure regarding green issues, and the incessant search for more fuel and minerals to power the country and its industry, the main source of external tensions are China’s relationship with its neighbours.

China has gone to war with the UN in Korea, with India, Russia, Vietnam and Burma. With India and Russia regarding disputed borders. That with Vietnam was purportedly due to a growing series of anti-Chinese issues; and presumed to be closed though there is on-going tension regarding the Paracel Islands. rich in oil and natural gas. In 1956 there was a brief war with Burma which resulted with some northern Burmese territory ceded to China.

The disputes with Russia have been settled. In fact, recent press would have it that Russia is negotiating with China to increase its investment in some of its major state-held energy companies by c$29bn.

But that with India has still to be resolved.

In 2012, several disputes around islands in South China Sea have flared up, the most serious was with Japan. But several other countries are also involved.  In November 2012, at the ASEAN summit, a joint proposal for a Declaration of Conduct gained verbal support from China. The disputes with Japan include fishing rights and oil/gas rights. There are disputes with other South China Sea neighbours over fishing and mineral extraction rights.

In late 2012, these disputes erupted into some violence when Japan nationalise some disputed islands. The public was incensed and turned on Japanese products including burning down some Japanese car showrooms, so much so that major Japanese car firms showed a significant fall in sales in September and October.

Even pressure at the ASEAN conference in Cambodia did not move China. Unless these disputes are resolved soon, the tendency is for matters to accelerate and may well end up with multi-party military action. Especially as, at the end of 2012, Japan returned its right wing party back to power.

The other main source of tension is with Taiwan. On the one hand, not only is trade between the two very high and continues to expand, but many Taiwanese companies have opened both R&D and production centres in China, often dwarfing facilities in Taiwan itself. On the other hand, China believes that Taiwan is just another province and not an independent entity. As long as the Taiwanese government does not mention the i-word (independence) everything is hunky dory. But as soon as the i-word gets mentioned, China reacts violently and sometimes demonstrably so.Fortunately, Ma Ying-jeou, the incumbent won the 2012 presidential elections in Taiwan. He is pro-Beijing and will reduce tensions brought about by Obama’s declaration to strengthen its armed presence in the Pacific.

In the meantime, direct commercial flights were implemented in 2008, saving business people and tourists the long-winded journey via Hong Kong; also in 2008 a pair of 4-year old pandas were sent to Taiwan; and n June 2010 a significant trade accord (Economic Cooperation Framework Agreement) was signed that is equivalent to a free-trade agreement; and in September a culture agreement is being discussed by Cai Wu, the highest-ranking mainland official to visit the island in 12 years, with is Taiwanese counterpart. A most recent reconciliation move is the reunion of a Yuan Dynasty scroll that had been split in two in 1650: “Dwelling in the Fuchun mountains“. One fragment 50cm long lay in a mainland provincial museum, the other 6.4m long was taken across to Taiwan in 1949. They were reunited at the Taiwan National Museum in June 2011.

There is a solution that neither party wishes to entertain, that of a Special Administrative Region such as Hong Kong and Macau. China does not want to accept that, at least not at present; and to Taiwan, it will be a first step towards being ‘swallowed’ by China.

Nevertheless, early in 2014, the two sides met at the goveremental level for the first time since Liberation in 1949 – http://chindia-alert.org/2014/02/11/bbc-news-china-and-taiwan-in-first-government-talks/

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