A Premature End to China’s Peaceful Rise?

Andrew Wood
Class of 2011
College of Arts and Science

Give Beijing some credit; it hasn’t been easy concealing their delight in the surprising aftermath of the 2008 global financial crisis. Prior to the crisis, it was a widely-held opinion that China’s meteoric rise dating back to 1979 was just one major Western financial crisis away from collapse. Instead, stoked by a 4 trillion yuan stimulus package, China rolled on to 9.1% growth in 2009 following the near collapse of world credit markets, and is forecast to expand at an even more impressive 9.9% this year even as the government enacts tightening measures. Two years later, the PRC’s historic sprint towards development looks more unstoppable than ever.
In 2010, the PRC will for the first time in its history overtake Japan to become the second largest economy in the world, trailing only the United States. However, the PRC, and the Chinese Communist Party in particular, do not have the luxury of allowing their astronomical growth numbers to falter. Unlike the economies of Japan and the United States, China’s economy must support a population of more than 1.3 billion. In 2009, this meant that that GDP per capita in China was less than 1/10th that of Japan and 1/12th of America. The party fears that growth below 8 percent could trigger discontent among the throngs of lower and newly middle class workers, undermining the party’s strongest argument for continued authoritarian rule. As far as the party is concerned, discontent could quickly manifest itself into widespread domestic instability, which would then jeopardize both China’s continued development and the very structure of the People’s Republic. It has consistently (and quite successfully) utilized this fear as a tactic to brush aside concerns that Beijing’s movement towards political and economic reform seems to have ground to a halt. In the developed world, this approach has often been regarded as one of diversion. However, the growth and stability versus chaos argument has gained considerable traction domestically, where the party has been able to attach itself to the notion of economic growth, inextricably tying its own success to that of the economy.
The concept that a developing economy requires strict government regulation and intervention in opposition to more typical Laissez-Faire doctrine has come to be known as the “Beijing Consensus”. It must be noted that the party is extremely adept at using the ‘consensus’ as a tool of oppression, clamping down even further on Internet use and freedom of assembly, speech, and the press. India’s raging economic growth notwithstanding, the party continues to claim that these actions are necessary to maintain the path towards growth and development in such a large country. Reading between the lines, it is not hard to determine that the party is increasingly insecure about its ability to remain in power as China becomes richer, and that perhaps its greatest fear is its own people. Since the events leading up to the Tiananmen Massacre of 1989, when the party was by many accounts at death’s door before it decided to activate the “People’s Liberation” Army against its own people, it logically follows that the CCP has been acutely aware of its tenuous hold on the vast Chinese population.
Considering the deluge of international criticism regarding the party’s continued oppression of freedoms, the CCP has found itself in the awkward position of attempting to maintain normalized relations with the developed world while stoking nationalism domestically. One must look no further than the party’s decision making in recent incidents such as the imprisonment of Australian businessman Stern Hu, the continued and ongoing failure to allow the Yuan to rise naturally, and the virtual manhandling of Japan’s legal system during the Senkaku Islands row to illuminate the tightrope on which it now treads.
In the case of Australian citizen Stern Hu, the government arrested four executives of Australian mining firm Rio Tinto right at the climax of an impasse in negotiations between the firm and Chinese state-owned aluminum producer Chinalco. The coincidence of such a monumental decision (Hu is now serving a ten year prison sentence), casts considerable doubt on the state of “Rule of Law” in China, and should be a taken as a warning to a number of other foreign companies doing business in China. When Australia expressed concern about the opacity and harshness of Stern’s sentence, China responded with the typical call to respect its sovereignty in so-called “domestic” affairs. Ironically, it would be just over a year before China would throw its growing might behind a forceful attempt to free one of its own citizens from another “sovereign” territory, Japan. The Japanese, though, would buckle under increasingly heavy-handed pressure from the PRC in the release of the Chinese sea captain charged with deliberately crashing into a Japanese Coast Guard vessel, but not before China had once again exposed its hand to the world. In late September, China began to deny exports of rare-earth metals, necessary in the production of a number of high-tech goods, to Japan. Though the policy was officially denied by the CCP, it became ostensibly clear that China was becoming increasingly willing to throw its economic weight around in order to achieve whatever objectives it sees fit.
More recently, the party has shown signs that it will assert this will even in the face of global economic imbalances. Despite China’s gigantic economy, it remains reticent to allow its currency to decouple from the embattled United States dollar. The Yuan-manipulation, which has been an ongoing policy for years, is basically an export subsidy meant to keep Chinese goods cheaper than they would naturally be. Again, though it is widely agreed that the Yuan must be allowed to float freely if China is to be a more equitable partner in the global economy, the CCP refuses to act accordingly, asserting that it will not cave to what it predictably defames as “Western pressure.” Domestically, the party disseminates editorials via state controlled media inaccurately blaming Japan’s lost decade on American pressure to allow the Yen to rise in the late 1980’s to again instill irrational fear in its citizens.
Such behavior indicates that the party may indeed fear more for its domestic legitimacy than its international relationships. But China would be wise not to forget Deng Xiaoping’s 24-character admonition, which reminded the party that it must “bide [its] time and conceal [its] abilities.” Increased unilateral assertiveness against developed powers that are becoming more willing to treat China as a new partner in the international system, at a time when China has still not yet fully arrived, might effect a premature end to the “Peaceful Rise,” if the party continues to expose its lust for power. Such an outcome could spell calamity not only for the Chinese people, but for the party itself.

References:

http://www.uschina.org/statistics/economy.html

https://www.cia.gov/library/publications/the-world-factbook/geos/ch.html

http://www.eastasiaforum.org/2010/03/28/the-chinese-legal-system-and-the-stern-hu-case/