Re-thinking Chinese Stability

As I’ve mentioned before, the Party’s greatest concern is stability. It’s a phrase used so often when glossing over corruption, censorship, and human rights abuses, that it’s almost become a joke for those of us who spend far too much time reading the People’s Daily.

In the after math of the Egypt protests the People’s Daily ran a flurry of stories about Egypt’s lagging economy caused by a lack of stability. The message was clear, the Party brings stability, and that stability brings GDP growth.

For decades all China has had to do to maintain this growth was keep moving workers from the farms to the factories, but now that the wealth gap has grown beyond even American levels of inequality, China has brought back two old tools of Communism: nationalism and sacrifice-for-the-greater-good-ism.

I was talking with a friend the other day who observed that China had managed to indoctrinate many of its people to the point that they were unable to differentiate between a criticism of the gov’t and a personal attack. This, she argued, was why many Chinese nationals are so offended when a foreigner simply points out the stinky smog that occasionally blankets the cities.

I would argue that it is this mentality of being but an undifferentiated speck in the mass that is China, which has given China the cohesion it needs to continue its economic rise. It has allowed even rural teachers, who make less than $150 a month, to promote the idea that some will get rich first, and they will get rich later.

At the same time, China is struggling to reinvent its economy, from being dependent on foreign demand to expanding domestic consumption.

The only way to achieve this goal is to promote a consumer culture. Which Beijing has been trying to encourage, without making the wealth gap too painfully clear (although the Louis Vuitton exhibit in the National Museum isn’t helping).

On the wealthy East Coast you can see that this trend is growing. Since starting at the hospital I’ve yet to meet a doctor with a watch that cost less than $200, and regularly hear stories of shopping sprees for designer hand bags (4 purchased in one trip is the current record). Not to mention the endless stream of Audi’s, BMW’s and Porsche SUV’s that you see rolling through Nanjing. At the moment, if you have an apartment and your child is in a good school, the rest of the money seems to be earmarked for conspicuous consumption.

I think this consumer culture will lead to the kind of individualism that could undermine the conformity that sustains China’s stability. At this moment China is beginning to struggle to maintain the curious balance between these two opposing ideologies. They have increased factory worker wages throughout the country (to the point that they are seen as too high by some industries) as well as limiting the use of words like “luxury” and “royal” in property advertisements. These are temporary fixes to what is likely to be a long term problem.

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About T

I have been working in China for nearly five years now. I have traveled to more than 30 cities and towns, and have lived in 3 provinces. I am interested in issues concerning development in China and the rest of the world. I hope to provide a balanced look at some of the issues facing China as it continues its rise to power.
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12 Responses to Re-thinking Chinese Stability

  1. Chopstik says:

    And did you see the comments by Nouriel Roubini on the likelihood of a Chinese crash? http://www.reuters.com/article/2011/06/13/us-roubini-idUSTRE75C1OF20110613

    I can guarantee that is a future that seriously worries many in the Party.

    • Tom says:

      I did see the comments from Nouriel Roubini, I’m not sure why they were just coming out yesterday in the news, Foreign Policy magazine printed a similar story at least a month ago. I think he makes several excellent points, that this kind of development can continue for awhile (who knows how long), but that there are several issues that need to be addressed to avoid problems down the road.

  2. NiubiCowboy says:

    These ideas seem to be mutually reinforce one another. GDP Growth is seen as necessary to maintain stability, and stability is seen as necessary to maintain previous high levels of GDP growth. If the end goals are growth and stability for growth and stability’s sakes, where do social, political, and personal development and reform fit in to the Party’s path for the country? Do they expect it to just sprout up spontaneously after half a century of repression once they’ve declared it safe for consumption?

    Interesting point your friend made regarding criticism against the government. I feel as if that inability to differentiate between criticism and personal attacks has bled into people’s personal lives as well. Any criticism, constructive or otherwise, is viewed as a personal attack against that person. I saw this at my old workplace quite often and quickly had to learn how to sandwich my suggestions between comfortable, cliched platitudes that barely gave any indication that there was an element of that employee’s work that needed improvement.

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  5. M. says:

    Taiwan, Hong Kong, and the other Asian Tigers have consumer cultures, but that hasn’t done anything for its culture of conformity. As far as I can tell, the causes are 85% cultural, and 15% educational.

    Moreover, I suspect saving is also cultural. Hong Kong and Taiwan are very culturally similar and have a variety of social safety nets, but their savings rate is still approximately equal to the Mainland’s. While better healthcare, education, lack of perceived need for “gifts,” etc. may help Chinese people in many ways, I’m not sure it’ll help that much when it comes to increased expenditures.

    • Tom says:

      I would argue that even though Singapore, Hong Kong, and Taiwan are consumer cultures, they don’t have the same level of conformity as the mainland (perhaps naked listener could speak to this). In HK I saw people actually publicly questioning the gov’t.

      Mainlands saving rate is very high, and people do not buy stocks or other investments that help drive the economy as lack of regulations make them far riskier. People instead prefer commodities and real estate, which can both lead to bubbles.

      • Tim Corbin says:

        The gov’t really wants to get that savings rate down. Over the past 40 years China’s saving rate has increased, while consumer spending has decreased, not a recipe for a success in a (striving to be) non-export-based economy.

        How do you convince people to save less when there are virtually no social safety nets? The gov’t is trying to improve the health care system, which they hope will free up some disposable income, but really the task is massive and (as usual) I’m not optimistic. I’ll ask my wife what she thinks.

      • Tom says:

        As you know I work in a hospital, I can tell you that there are few of us optimistic about reforms in the system just yet. The gov’t doesn’t really give us enough money to provide even decent care for a reasonable price (crappy care is cheap and abundant).

      • Kev says:

        Mainland Chinese play the stock market like they are gambling. They don’t bother researching companies because invariably they feel that most of the information will be false or a bare faced lie. They buy, sell, buy, sell…ad infinitum like playing roulette.
        As for their views on realestate, mainlander’s who have apartments actively abuse those who don’t. The rich hoard their money because it makes them “special” and are blatant about keeping the poor as poor as possible. They sit in a burning building and ignore the flames.

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