Monday, May 7, 2012

There is an untold crisis story in China, and it concerns other countries too

Something is happening in China that could have an impact on its future course and on neighbours like India. Internal unrest in the large and diverse country is nothing new, but things hit what looked like a climax of sorts a month ago, in the midst of preparations for the scheduled leadership change later this year.

The problems began on the economic front. The pace of growth following Deng Hsiaoping's reforms was literally world-shaking, but it also led to rural poverty, urban over-development, land disputes and environmental destruction causing dislocation of populations. India is familiar with these very problems, but Indian people have outlets for venting their anger and even scoring a victory or two, like they did in Nandigram.

No such safeguards existed for the Chinese. In 2006 villagers protested in Dongshan, southern China, against seizure of their land for a power plant project. Police firing killed at least 20 villagers and the power plant was duly built. Urbanisation eliminated some 135 million rural jobs in the first two decades of reform. Massive exodus from village to city created not only ghettos in cities, but also social tensions. Rural folks were no more welcome in the cities than Biharis were in Raj Thackeray's Mumbai.

Liaoning in the industrial north-east saw large-scale privatisation of state-owned companies. In almost every deal government officials took bribes and passed on functioning factories for a pittance. Locals turned against the Government, their resentment fuelled by tens of thousands of people becoming unemployed. Liaoning continues to be a centre of popular protests against the authorities.

Ethnic disturbances added to the agonies of growth. Xinjiang, China's largest province, is as good as a Central Asian territory with Muslim Uighurs making up 45 percent of the population. (Han component has risen to 40 percent thanks to the official policy of population transfer). Tibet, the second largest province, has also been taking in large numbers of new Han settlers. But both provinces are standing up to ruthless suppression, putting Beijing in a dilemma.

In the end, it was a political problem – not economic or ethnic – that plunged China into its most serious, if also secretive, crisis since Mao. The centrepiece of the puzzle is Bo Xilai, who was China's most powerful provincial leader, a member of the Politburo, and poised to join the 9-man committee that rules China. In March he was dismissed.

A month earlier, Bo's police chief in his province of Chongqing, Wang Lijun, went to the US embassy with documents to say that Bo's wife was involved in the murder of a British businessman with whom she had illegal financial transactions. There has been no word about Bo nor Wang since then; both are presumably under some kind of arrest.

The important point of this drama is that Bo Xilai had dared to float a political philosophy of his own based on “core socialist values” and a “red culture movement”. That was threatening enough for Prime Minister Wen Jiabao to warn against a new Cultural Revolution. Coup rumours spread across China and internet sites and blogs were restricted or banned. Tension prevails.

Does the removal of Bo Xilai mean also the removal of the policy threat he posed? Deng Hsiaoping himself was turned into a non-person by Mao. But there were enough leaders who secretly agreed with him that Mao's excesses were alienating the people. They were right and Deng rose again.

The pendulum has swung to the other side now. Instead of socialist excesses, China today reels under the excesses of crony capitalism. China's new leadership will have to admit that these are times when even America and Europe are witnessing popular uprisings against the greed and exploitation that capitalism breeds. There should be vast sections of people in China who would welcome some kind of “core socialist values” checkmating the freebooters and fatcats. In China, US or India, the ultimate question about growth is: Do the people feel fairly treated or do they feel cheated?