China's social instability

From National Post:

China fears meltdown over social instability

Richard Spencer

The Daily Telegraph

Tuesday, August 23, 2005

BEIJING - Tensions caused by the growing gap between rich and poor in China risk a social meltdown within five years if left unaddressed, a government report warned yesterday.

The report, commissioned by the labour and social security ministry, warned that the country is in a "yellow-light'' zone, the second-most-serious indicator of "social instability."

"We are going to hit the red-light scenario after 2010 if there are no effective solutions in the next few years,'' said the report, carried in the state-owned China Daily.

As if to bear out its warnings, police admitted rioting had broken out in a town in the eastern province of Zhejiang, the latest in a wave of violent protests in the region.

Buildings and police cars were set alight in clashes led by parents who accused a battery factory of causing lead poisoning in their children.

Such unrest is now common in many Chinese towns, often triggered by protests against the mixture of corruption and environmental degradation caused by China's frantic economic boom. The increased publicity given the protests is a sign of growing government anxiety.

The national leadership, under President Hu Jintao, which came to power two years ago, made the plight of the poor its rallying cry and announced the abolition of rural taxes.

But it has proved unable to prevent the exploitation of China's manufacturing boom by local officials eager to bolster both their standing and their bank balances.

Han Dong-fang, a Chinese labour-rights activist in Hong Kong, said Beijing's prophecies of doom appear only to have exacerbated local corruption.

"For the moment, the officials have positions and economic power,'' he said.

"They feel they have to hurry up, because otherwise they will lose their last chance to grab what they can.''

In the 25 years since China's market-oriented economic reforms were launched, the old Maoist notions of equality have steadily disappeared. China today has developed a large urban middle class and a smaller upper class -- complete with luxury cars, large houses and golf club memberships -- alongside hundreds of millions of rural dwellers who remain largely untouched by the growing prosperity.

Ironically, standard measures of wealth disparity now rank Communist China as far more unequal than its old adversary, capitalist Taiwan.

The National Bureau of Statistics says rural incomes last year averaged about $450 a head, less than a third of average urban incomes. And the wealth gap appears to be widening. Figures released on Monday showed that while China's gross domestic product grew by more than 9% last year, rural incomes rose by only 4% to 5%.

In the latest local protest, up to 70 people in Mei-shan, Zhejiang, were reported injured after police waded into protesters with batons and tear gas. When police later returned to arrest ringleaders, some locals went on a rampage, setting fire to a battery factory, breaking into government offices and burning police cars.

The Public Security Ministry recently admitted there were 74,000 protests of this sort last year, up from 30,000 the year before. Ominously, Chinese authorities announced last week the setting up of special riot squad units to counter local protests, which officials coupled with terrorism as an enemy of stability.

© National Post 2005

Update: Will China collapse soon? Not according to 清闲客. Here is his tongue-in-cheek analysis.

He also said that China will not become a superpower in the next while. That’s about right to me, too.