Civil unrest in China

A hallmark of totalitarian governments is the need to promote an image of their populace as tranquil and content under their leadership.  Such is the case with the government of China.  However the image belies the reality.

The rapid growth of the Chinese economy over the past 30 years has been driven by rapid urbanization and a never-ending supply of cheap migrant labor moving from the countryside to the cities.  According to the latest government figures, an estimated 153 million people have left their homes in the rural areas of the country and moved to the cities to work on construction sites, in restaurants and in factories just over the past 12 years.  The result has been widespread civil unrest, which has been a feature of life for years.  The unrest continues today, as numerous large and violent protests have broken out between the police and these migrant workers.

Per the Financial Times:

One side-effect has been the creation of a huge underclass of people that lacks access to basic social services in the cities and do not hold much of a stake in the modern society they have helped build.  These people are mostly not entitled to healthcare, education, housing support or social security benefits provided to their urban cousins.

What was once the biggest driver of Chinese growth has now become a huge potential source of social instability, especially in places such as Zengcheng, where more than a third of the 1.3 million residents are migrant laborers.

A government report, republished on Tuesday [June 14] warned that if the swelling ranks of migrant workers were not integrated properly into the cities then they could pose a serious threat to social stability.

The report forecasts that 9 million migrants will join the urban workforce each year between now and 2015 and less than 9 per cent of all migrants are likely to choose to return to the countryside.

Since 1980 the percentage of China's population now living in urban areas has increased from 20% to 50% (nearly 700 million now live in the cities)

The urban migrant unrest just one part of the cracking façade of the carefully painted Chinese image.  The governing class in the rural areas of the country continues their crackdown on dissent as many farmers are faced with arbitrary land grabs and jail in the name of reform.  Demonstrations and resistance are commonplace despite these hardships.

These riots in the cities and countryside are the result of market forces having been unleashed.  Yet an outdated and monolithic administrative decision making process combined with the size of the state skew economic forces.  Capital and resources are inefficiently allocated.  Manufactured goods and food are traded in the market, but land, labor and capital are controlled.  Thus wealth disparities grow amid rising discontent at the fortunes made by those with the right connections.   Further, within the legal system judges are told that the first priority is to strengthen the party, not to administer justice fairly.

Today the ruling class in Beijing and those who benefit from the present system and see its preservation as their mission have the upper hand.  That may serve their purposes for the time being.  But it will be a dangerous path blocking the evolution China needs, particularly if the regime's claim to deliver ever-increasing material well-being is hit by events such as a big drop in their exports, rising inflation (underway) or a food crisis.

The United States should not look at China with fear and apprehension.  The ticking time bomb that is the political and economic expectations of a Chinese population 4.5 xs larger than the United States will detonate at some point down the road and that point may not be far into the future.

Thomas Lifson adds:

Somebody tell Tom Friedman. The New York Times columnist is a big fan of China's authoritarianism. As usual, he is not as smart as he thinks he is.

A hallmark of totalitarian governments is the need to promote an image of their populace as tranquil and content under their leadership.  Such is the case with the government of China.  However the image belies the reality.

The rapid growth of the Chinese economy over the past 30 years has been driven by rapid urbanization and a never-ending supply of cheap migrant labor moving from the countryside to the cities.  According to the latest government figures, an estimated 153 million people have left their homes in the rural areas of the country and moved to the cities to work on construction sites, in restaurants and in factories just over the past 12 years.  The result has been widespread civil unrest, which has been a feature of life for years.  The unrest continues today, as numerous large and violent protests have broken out between the police and these migrant workers.

Per the Financial Times:

One side-effect has been the creation of a huge underclass of people that lacks access to basic social services in the cities and do not hold much of a stake in the modern society they have helped build.  These people are mostly not entitled to healthcare, education, housing support or social security benefits provided to their urban cousins.

What was once the biggest driver of Chinese growth has now become a huge potential source of social instability, especially in places such as Zengcheng, where more than a third of the 1.3 million residents are migrant laborers.

A government report, republished on Tuesday [June 14] warned that if the swelling ranks of migrant workers were not integrated properly into the cities then they could pose a serious threat to social stability.

The report forecasts that 9 million migrants will join the urban workforce each year between now and 2015 and less than 9 per cent of all migrants are likely to choose to return to the countryside.

Since 1980 the percentage of China's population now living in urban areas has increased from 20% to 50% (nearly 700 million now live in the cities)

The urban migrant unrest just one part of the cracking façade of the carefully painted Chinese image.  The governing class in the rural areas of the country continues their crackdown on dissent as many farmers are faced with arbitrary land grabs and jail in the name of reform.  Demonstrations and resistance are commonplace despite these hardships.

These riots in the cities and countryside are the result of market forces having been unleashed.  Yet an outdated and monolithic administrative decision making process combined with the size of the state skew economic forces.  Capital and resources are inefficiently allocated.  Manufactured goods and food are traded in the market, but land, labor and capital are controlled.  Thus wealth disparities grow amid rising discontent at the fortunes made by those with the right connections.   Further, within the legal system judges are told that the first priority is to strengthen the party, not to administer justice fairly.

Today the ruling class in Beijing and those who benefit from the present system and see its preservation as their mission have the upper hand.  That may serve their purposes for the time being.  But it will be a dangerous path blocking the evolution China needs, particularly if the regime's claim to deliver ever-increasing material well-being is hit by events such as a big drop in their exports, rising inflation (underway) or a food crisis.

The United States should not look at China with fear and apprehension.  The ticking time bomb that is the political and economic expectations of a Chinese population 4.5 xs larger than the United States will detonate at some point down the road and that point may not be far into the future.

Thomas Lifson adds:

Somebody tell Tom Friedman. The New York Times columnist is a big fan of China's authoritarianism. As usual, he is not as smart as he thinks he is.

RECENT VIDEOS