The Harder They Fall

"Some Chinese argue that permitting the families of Communist Party leaders to profit from the country’s long economic boom has been important to ensuring elite support for market-oriented reforms."
--David Barboza, New York Times

November 7 (November 8 in China), the day after, maybe the very day the U.S. learns who its leader for the next four years will be, China convenes its 18th Communist Party Congress. A week later, we will know China’s leadership line-up for the next several years.

The Economist reports, “The party is particularly nervous this year as the country’s economic growth slows and members of the new middle class become more anxious about their prospects in the years ahead.” Here’s some of the evidence the Economist gathered:

• in Ningbo, a Zhejiang province port, thousands waging three days of sometimes-violent demonstrations successfully halted construction of a planned chemical factory. 

• a government-sponsored think-tank survey surprisingly found that only 1% of respondents said their quality of life had greatly improved in recent years, one-fifth said it had improved slightly, more than one-third said they felt no change, and more than 40% said their lives were worse. 

Elsewhere, the Economist reported:

• social media give China the next best thing to a free press, with China’s biggest microblog service, “Sina Weibo,” said to have 30 million “active daily.” 

• microbloggers expose injustices, attack official wrongdoing and high-handedness, and help scattered, disaffected individuals feel a common bond, with local grievances now discussed and dissected nationwide with a fervor that has startled officials. 

• widely circulated comments on microblogs share a profound mistrust of the party and its officials, while classified digests of online opinion gain Chinese leaders’ close attention. 

The Economist suggests this “rising tide of cynicism” is dangerous for the country’s stability, coinciding as it does with “growing anxiety among intellectuals and the middle-class generally about where the country is heading.”

At the top, leaders including Li Keqiang, who is expected to take over as premier, worry about a sudden economic slowdown that could “precipitate a fiscal and financial crisis” unsettling to social stability. They are looking at economic reforms, including loosening the state’s grip on vital industries such as the financial sector.   These “rightists” face opposition from old-line party leftists who fear the party will implode as did Communist parties in the former Soviet Union and eastern Europe, because it has embraced capitalism and forgotten to serve the people.

Below the top, the middle class--besides fretting about the environment and food contaminated with chemicals--is concerned about protecting its gains from the whims of law-flouting officialdom. They and the rest of the country have followed the downfall of the corrupt Bo Xilai, the ex-Chongqing party boss formerly in line for a place on the party’s standing committee. They have a feel for the existing assets of China’s next party chairman Xi Jinping and his family, reported in Bloomberg at over $760 million, including homes in Hong Kong.

But if Chinese learn of the New York Times’ David Barboza’s disturbing, in-depth report on the family wealth of Premier Wen Jiabao (picture)--estimated in the article at $2.7 billion--how much more will they be unsettled? Wen is a reformer, according to Barbosa, “best known for his simple ways and common touch.” In 2007, he called for measures to fight corruption among high-ranking officials, saying,

Leaders at all levels of government should take the lead in the antigraft drive. They should strictly ensure that their family members, friends and close subordinates do not abuse government influence.

Elizabeth C. Economy, China expert at the Council on Foreign Relations, says flatly that China’s reformers “have taken a serious hit,” and that Wen’s fall could harm the political prospects of other up-and-coming reformers. Yet she is hopeful that the evidence of “political rot within the system” will necessitate “fundamental political reform.”

Yeah, well maybe not. But to keep their current kleptocracy going, China’s leaders will have to insure continued economic prosperity that reaches hundreds of millions. They are “riding a tiger,” and they know it.