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Is China cracking up?

In March David Shambaugh published an op-ed piece in The Wall Street Journal under the headline, "The Coming Chinese Crackup." "The endgame of communist rule in China has begun," the article continued, "and Xi Jinping's ruthless measures are only bringing the country closest to a breaking point." With this opening proclamation, Shambaugh certainly got our attention.

Though predicting the Communist Party's collapse might be counterintuitive, David Shambaugh is not the first China watcher to imagine the worst. In 2001 Gordon G. Chang published The Coming Collapse of China. in which he argued that the end of Communist Party rule was inevitable. He wrote, "As time passes, the underlying problems fester. Economic dislocations become social ones, with dark political overtones. At some point there will be no solution. Then the economy, and the government will collapse. We are not far from that time." Over the last decade, Chang has been updating his timetable without altering his prediction. He is still convinced the communist system will collapse in the near future. His most recent article in Forbes is entitled, "China: Did We Just Hear The Death Rattle Of The Economy?"

But this prediction is different. Chang is a lawyer, columnist and television commentator. Professor David Shambaugh is a respected scholar not given to hyperbole. He is one of the heavyweights among China hands: director of the China Policy Program at George Washington University and a non-resident scholar at the Brookings Institution. Over the past thirty years he has published nineteen highly regarded academic books on China. (See my review of China Goes Global: The Partial Power in the February 2014 issue.) In fact, just recently China Foreign Affairs University (CFAU is part of the Ministry of Foreign Affairs) named Shambaugh as one of the two most influential American experts on China. (Have heads rolled at CFAU since?)

Five "Telling" Indicators

Shambaugh cites five "telling" indicators that point to a coming collapse. The first is the rising number of defections of those who have profited most from the present regime: Party officials and private entrepreneurs. Shambaugh says, "First, China's economic elites have one foot out the door, and they are ready to flee en masse if the system begins to crumble." Many have noted the startling outflow of capital from China and the increasing numbers of affluent Chinese students traveling abroad. Shambaugh cites a survey by the Hurun Research Institute in Shanghai which showed that 64 percent of China's wealthiest individuals were either emigrating or planning to do so. "Wealthy Chinese are also buying property abroad at record levels and prices, and they are parking their financial assets overseas, often in well-shielded tax havens and shell companies."

The amassing of great wealth has become a major pastime among China's political and business elites. "China is the world's fastest-growing source of new billionaires," notes Evan Osnos. "Several of the new plutocrats have been among the world's most dedicated thieves; others have been holders of high public office. Some have been both." Recently the government published with great fanfare a list of one hundred Chinese fugitives who are accused of large-scale corruption. (Forty are reported to be living in the United States, which has no extradition treaty with China.)

Second is the increasing political repression directed toward any form of opposition to the regime. Shambaugh notes, "The targets include the press, social media, film, arts and literature, religious groups, the Internet. intellectuals, Tibetans and Uighers, dissidents, lawyers, NGOs, university students and textbooks." In other words, anyone in China who will not sing in Party harmony and instead marches to a different drummer. Political oppression has risen and ebbed over decades of Party rule. Susan Shirk points to increasing repression in recent years. "Party censorship tightened in the lead up to the 2008 Olympics and never relaxed after that," says Shirk. "Reporters and editors have to tiptoe around taboo topics, including anything regarding high-level national leaders." This has only increased since Xi Jinping came to power. In February 2014 a seventy-nine-year-old Hong Kong book editor named You Mantin was arrested on a trip to the mainland and sentenced to ten years in prison for allegedly smuggling seven cans of paint. His real crime: his publishing house was about to release an unflattering biography of Xi by the exiled writer Yu Jie.

Censorship has also increased in China's troubled universities. Shambaugh points to a recent Central Committee directive, Document 9, which orders educational institutions to ban discussion of Western ideas, including universal values, civil society, rule of law, freedom of the press and constitutional democracy. The education minister, Yuan Guiren, explained the policy as part of an ongoing culture war. "Young teachers and students are key targets of infiltration by enemy forces," Yuan said. "We must, by no means, allow into our classrooms material that propagates Western values." The hypocrisy of this directive was self-evident in the large number of Party functionaries who send their children to study abroad. Even president Xi's daughter recently graduated from Harvard!

Gao Yu, the seventy-one-year-old journalist who reported on this confidential directive, was arrested for "revealing state secrets" and sentenced last month to seven years in prison. She is the latest in a long string of recently jailed journalists. Last December, the Committee to Protect Journalists reported there were forty-four reporters in Chinese jails, more than anywhere else in the world. But repression is not limited to journalists. Evan Osnos reports, "In 2014, the government arrested nearly a thousand members of civil society, more than in any year since the mid-nineteen nineties." That is, more arrests than at any time since the aftermath of the Tiananmen Massacre.

Third is the growing disaffection of even party regulars with the regime's uninspiring message. As the Central Committee ratchets up its propaganda machine, its slogans fall increasingly on deaf ears. Shambaugh describes a high-powered academic conference he attended in 2014. Though the subject was President Xi's much-touted idea of the "Chinese Dream," everyone seemed to be simply going through the motions. "But it was evident that the propaganda had lost its power, and the emperor had no clothes."

In the six decades since the founding of the Chinese People's Republic, the nation has experienced hammering waves of ideological revolution. "Mao's Cultural Revolution destroyed old belief systems, but Deng's economic revolution could not rebuild them," notes Evan Osnos. "The relentless pursuit of fortune had relieved the deprivation in China's past, but it had failed to define the ultimate purpose of the nation and the individual. The truth now lay in full view: the Communist Party presided over a land of untamed capitalism, graft, and rampant inequality."

Osnos concludes, "There was a hole in Chinese life that people named the jingshen Kongxu--'the spiritual void'--and something was going to fill it." Xi Jinping has tried to fill it with his "China Dream": a cocktail of Maoism and Confucianism that promotes economic reform, national renascence and Party revitalization. But Xi's nationalist rhetoric cannot paper over the jingshen Kongxu. Indeed, the campaign to root out attractive Western ideas from Chinese universities indicates the extent of the Party's dilemma and the poverty of its current ideology. He Weifang, an outspoken law professor who has been attacked by the regime, points out the ludicrous nature of the anti-Western campaign. "Many colleagues working on civil law and that sort of thing have a large portion of their lectures about German law or French law," says He. "So, if you want to stop Western values from spreading to Chinese universities, one thing you'd have to do is close down the law schools and make sure they never exist again."

Then there is the major problem of ubiquitous corruption. "Fourth, the corruption that riddles the party-state and the military also pervades Chinese society as a whole." Everyone agrees that corruption extends into every corner of Chinese society, from army generals to party officials and business executives. "The trouble for China is that the public knows only too well that corruption is not simply a by-product of the system," says John Sudworth. "It is the system." A video briefly displayed on the internet showed local reporters questioning a group of children on their career ambitions. When asked what he wanted to be when he grew up, one six-year-old boy said, "I want to be an official." What kind of official? he was asked. "A corrupt official," he replied, "because they have lots of things."

Reliable estimates place corruption at 3 per cent of GDP, an enormous figure. Moreover, endemic corruption contributes to the skewing of the entire economy, creating the growing inequality between China's few rich and many poor. (Evan Osnos explains, "The difference in life expectancy and income between China's wealthiest cities and its poorest provinces is the difference between New York and Ghana.") According to a Peking University survey, in 2012 the richest 5 per cent earned 23 per cent of China's total household income while the lowest 5 per cent earned 0.1 per cent. No wonder there is a popular saying in China: "If we don't root out corruption, the country will perish; if we do root out corruption, the Party will perish."

The Xi regime has responded by launching a far-reaching purge of corrupt Party officials directed at both "tigers" and "flies." "Mr. Xi's anticorruption campaign is more sustained and severe than any previous one, but no campaign can eliminate the problem," argues Shambaugh. "It is stubbornly rooted in the single-party system, patron-client networks, an economy utterly lacking in transparency, a state-controlled media and the absence of the rule of law." Moreover, cynics point out that the targets of the purge are often potential opponents of Xi's policies. Few of the accused come from the narrow circle of President Xi's natural allies: the privileged children of the first generation of heroes of the Revolution who survived Mao's regular purges. "Another problem," says Shambaugh: "Mr. Xi, a child of China's first-generation revolutionary elites, is one of the party's 'princelings,' and his political ties largely extend to other princelings. This silver-spoon generation is widely reviled in Chinese society at large."

Fifth, there is the overriding problem of reforming a vulnerable socioeconomic system as it pivots from an export-driven economy to a domestic economy driven by Chinese consumerism. We all know that China has become the second largest world economy measured in total GDP. But its per capita GDP is only 88th in the world. Consequently, the Chinese are great savers rather than spenders because they must be ready for the proverbial rainy day in a society without a systemic safety net. "Finally, China's economy--for all the Western views of it as an unstoppable juggernaut--is stuck in a series of systemic traps from which there is no easy exit," says Shambaugh. "Yes, consumer spending has been rising, red tape has been reduced, and some fiscal reforms have been introduced, but overall, Mr. Xi's ambitious goals have been stillborn."

So there you have it: elite defections, political repression, ideological indifference, endemic corruption and a vulnerable economy. "The endgame of Chinese communist rule has now begun, I believe, and it has progressed further than many think. We don't know what the pathway from now until the end will look like of course," Shambaugh concludes. But it will probably not be pretty. "Communist rule in China is unlikely to end quietly. A single event is unlikely to trigger a peaceful implosion of the regime. Its demise is likely to be protracted, messy and violent."

Between Apathy and Adaptation

What is stunning about this prognosis is that it comes from such an unlikely source. David Shambaugh is a cautious scholar not given to apocalyptic outbursts. In 2008 he published China's Communist Party: Atrophy and Adaptation, an in-depth study of China's response to the collapse of the Soviet Union. Shambaugh described the Party's dilemma in the new post-Soviet reality as being caught between atrophy and adaptation. "It is an inexorable dynamic in which the party is simultaneously proactive and reactive, and is only partially in control of its own fate." According to Shambaugh, the Party undertook a comprehensive analysis that extended over thirteen years, culminating in an official decision taken at the Sixteenth Party Congress in 2004.

In 1989, the epochal year of the Berlin Wall and the Tianamen Massacre, liberal Party Leader Zhao Zayang was deposed and placed under house arrest. He was replaced by conservative Jiang Zemin, the Mayor of Shanghai. Under Jiang's leadership (1989-2002), the CCP followed a flexible course, preferring pragmatism to ideology. "This is probably the single most important conclusion the CCP reached during its postmortem of the USSR's collapse: that a certain recipe for collapse is an ossified party-state that has a dogmatic ideology, entrenched elites, dormant party organizations, and a stagnant economy and that is isolated from the international community." Shambaugh believes that in these years, the Party took small but positive "adaptive" steps to reform itself. But under Jiang's successor, Hu Jintao, the Party gradually tightened its control again, partly in response to growing unrest in Tibet and Xinjiang in 2008. This tightening has accelerated since Xi Jinping's assumption of power in 2012. Shambaugh sees Xi's increasing inflexibility providing the ingredients for "a certain recipe for collapse."

Not surprisingly, Shambaugh's article has proved controversial. Many China watchers rejected his argument out of hand. Shambaugh's "indicators" were an old story and Xi Jinping has demonstrated decisive leadership. "Don't find Shambaugh's collapsism persuasive," wrote one respondent. "Xi way more popular than Hu." Another responded: "if it was anyone else writing one would dismiss it out of hand. It's so unusually definitive (and dare I say, intemperate)." A third said, "I think he is wrong but anything is possible here." Perhaps the most interesting reaction came from another scholar. "It has been fascinating to watch what strikes this observer, at least, as a certain betrayal of anxiety in the efforts of some of those who have rushed to take Shambaugh down, or at least refute and discredit his arguments," wrote Howard French. "The notes have ranged from 'how dare he?' to 'who does this person think he is?' to, in some of the more breathless reactions, attacks on his motives: he is a pawn or at least an unwitting agent of this or that occult force."

The New Emperors

When I first encountered David Shambaugh's op-ed piece on the imminent collapse of the communist regime, I was reminded of something I had read recently. In The New Emperors, Kerry Brown describes his reactions to the coronation of Xi Jinping as the new Chinese leader. On the morning of 15 November 2012, the author finds himself sitting in the lobby of a five-star hotel in Beijing watching live coverage of the final day of the Party Congress when the new leadership will be unveiled. For Brown, it is a moment of high drama but nobody else in the busy lobby seems to care. He writes:

"The thing that struck me most powerfully in the hotel lobby which this drama was reaching its denouement however was the attitude of the people around me. Most of them were Chinese, some working in the hotel, some waiting for people to come, some passing through. The images beamed on the TV screen watched so closely across the world merited barely a second's attention from almost all the people around me. While I absorbed the line-up, revealed finally after so much speculation and analysis, I was surrounded by people who evidently felt the whole process so unimportant and disengaging that they didn't even glance at the attention-hugging screen, even though it was likely to impact on them directly. From their outward behavior, everyone around me regarded this as a major non-event."

As Brown points out, the momentous announcement of a new leadership only touched a tiny fraction of China's 1.3 billion population. Of the 40 million cadres running the country, only 1 percent constitute the leadership. Of these leading cadres, less than 3,000 are high level officials, many of them located in Beijing. "There is a clear conclusion to be drawn from these statistics," says Brown: "China is a vast country, run by a small group of people." Indeed, this group "is smaller than most villages in Europe."

The New Emperors is sub-titled Power and the Princelings in China. Brown is concerned with the very top of this village hierarchy: the seven members comprising the decision-making body, the Standing Committee of the Politburo. Here Brown makes a singular contribution to our understanding of Chinese politics by describing in detail the inner circle of the new insular leadership. We know, of course, something about President Xi Jinping and Premier Li Keqiang. But the other five members--Wang Qishan, Zhang Gaoli, Zhang Dejiang, Liu Yunshan and Yu Zhengsheng--remain in the shadows.

As Brown views the new leadership he is struck by their interchangeability: a line-up of middle-aged Chinese apparatchiks with dyed black hair. "They wore the same Western-style suits, with the same uniform black hair, and they looked around the same age. They were people of the same ethnicity and they were all male." He adds, "Most commentators regarded the line-up as risk-averse, based on age, and full of people whose outlook was highly conservative." But on reflection, there is more diversity than meets the eye.

First of all, the group of seven men presented at the 2012 Party Congress represent the first generation of leaders to be born after the creation of the People's Republic. Thus their connection to the grand revolutionary movement is not existential but historical. The great political experience of their childhood was not the heroic social revolution of the Thirties and Forties but the chaotic Cultural Revolution of the Sixties and Seventies. This critical experience had a profound impact on several of them.

Second, the seven men ascended the Party ladder in the years of Deng Xiaopeng's economic and social reforms. As beneficiaries of these reforms, they are more widely educated than their predecessors. Whereas the previous leadership was comprised of bland technocrats--mainly engineers--the new group come from diverse backgrounds, many in the social sciences. Li Keqiang is a lawyer, Liu Yunshan a journalist, Zhang Gaoli an oil executive, Zhang Dejiang an economist who studied in North Korea and Wang Qishan, a historian who worked in a museum in Xian and the Chinese Academy of Social Sciences in Beijing. Both Xi and Li have written doctoral dissertations.

Moreover, they are not as bland as they appear. Many were touched by controversy or tragedy. Several were humiliated as class enemies during the Cultural Revolution and sent down to the barren countryside to "learn" from the peasants. Xi Jinping's older half-sister committed suicide during this terrible period. Yu Zhengsheng has remarked, "Six or seven of my relatives died in that movement [including his sister]." Perhaps more traumatic: Yu's brother, a bureau chief in the Ministry of State Security, defected to the United States in 1985.

Even more important, their connection to the first generation of revolutionary heroes is often hereditary. They are part of what Brown calls the "Imperial Families." He explains, "The 'Imperial families' of the Party are comprised of the descendants of the 'Eight Immortals' who had managed to survive the early turbulent years of CPC history and hand on their legacy to their descendants." We may think of these descendants as princelings: a new aristocracy based on birth but not necessarily merit. Unsurprisingly, four of the seven Politburo leaders are princelings by birth or marriage.

Is Brown exaggerating the importance of their lineage? I think not. Their sense of noblesse oblige is palpable. One princeling told a Western diplomat of their contempt for the previous plebian leadership. "The feeling among us is: 'Hu Jintao, Wen Jiabao, your fathers were selling shoelaces while our fathers were dying for this revolution." Being heirs of the revolutionary elite provides justification for assuming a proprietary political role in state affairs. But there is also their sense of privilege which allows these families and their associates to accumulate tremendous power and wealth. "In 2012, Bloomberg examined 103 descendants who had accumulated untold wealth," says Brown. "Beyond them are the 2,900 children of high-level officials. According to a study by the Chinese Academy of Social Sciences (2008) they had accumulated collective wealth of RMB 2 trillion."

Xi Dada

No one exemplifies this status better than Xi Jinping. He was born into an Imperial Family in Beijing in 1953. His father Xi Zhongxun was one of the original revolutionaries who fought alongside Mao Zedung. The elder Xi was China's propaganda minister in 1953 and rose to the rank of Vice-Premier in the late 1950s. Thus Jinping was destined to rule. But in 1967, during the Cultural Revolution, his father was arrested as a "class enemy" and detained in a military prison for years. After the demise of Mao and the Gang of Four, he was rehabilitated.

As the son of a disgraced high official, Xi Jinping was "sent down" to rural Shaanxi province. However, at the end of the Cultural Revolution he made a critical choice. Despite his family's humiliation, Xi tried to join the Communist Party's Youth League. Because of his father's questionable status, he says his application was rejected seven times. But Xi befriended a local official and he was finally accepted. His rise to supreme power had begun. His decision upset some friends who were astonished at Xi's turnabout. But Xi was not the only persecuted princeling to join the Party and rise through the ranks. For them, observed one associate, "the sense of ownership did not die. A sense of pride and superiority persisted, and there was some confidence that their fathers' adversity would be temporary and sooner or later they would make a comeback. That's exactly what happened."

When Xi Jinping rose to power in 2012 he quickly assumed control of the Party, the State and the Armed Forces, becoming, in the words of one observer, "the most authoritarian leader since Chairman Mao." The propaganda machine followed suit, calling him "Xi Dada" or Great Uncle Xi. Eight volumes of his speeches and writings have already been published, including "The Remarks of Xi Jinping" which bears comparison with Mao's ubiquitous "Little Red Book." In 2014 the cult of Xi Dada invaded the academy. Seven of the ten top awards in social science research went to studies of Xi's speeches or his "China Dream." But will Xi Jinping's cult status be enough to transform a moribund party and a skeptical populace?

Two Chinas

The immanent collapse of the CPC may not be here. But something else is going on. Recall Kerry Brown's description of watching alone the final day of the Party Congress in a Beijing hotel. A new national leadership was being announced but nobody was paying attention. It seemed that the party and the people live in two different worlds. And so they do. Rowan Callick, an Australian journalist, describes how insulated the Party leadership is from ordinary life: "Once elevated to join the twenty five members of the Politburo, a Chinese leader and his--it is almost inevitably his-- spouse will probably never again eat in a restaurant, stay in a hotel, fly in a plane or even drive on a road at the same time as any member of the public."

Another prize-winning journalist, Evan Osnos, describes something similar. In The Age of Ambition, Osnos depicts what happens to ordinary people in a rapidly changing China. While the newly rich live in gated communities and Party leaders reside within the walls of Zhongnanhai, other Chinese strive to create new lives outside the limits of privilege. "The Party and the people were now facing in opposite directions: Chinese society was becoming more diverse, raucous, and free-wheeling, and the Party was becoming more homogenous, buttoned-down, and conservative," says Osnos. "The longer I lived in China, the more I sensed that the Chinese people have outpaced the political system that nurtured their rise. The Party has unleashed the greatest expansion of human potential in world history--and spawned, perhaps, the greatest threat to its own survival."

Osnos shares David Shambaugh's concerns about Xi Jinping's increasingly authoritarian regime. But he parts company with Shambaugh on Xi's more "benign" predecessors. (This is not surprising: remember that Jiang Zemin authorized the brutal persecution of the religious sect, Falun Gong, resulting in thousands of incarcerations, hundreds of deaths, and an untold number of barbaric organ transplants.) But Osnos focuses on another crucial event. At an important Party Congress in 2002, Jiang unveiled his plan to transform Chinese socialism by incorporating the emerging entrepreneurial class into the revolutionary army of peasants and workers. At the same meeting, Osnos says, the Party made a crucial constitutional change: "it stopped calling itself a 'revolutionary party' and started calling itself the 'Party in Power.' China's rulers had altered their reason for being, by becoming the Party in Power, the former rebels who'd spent decades lambasting their enemies as 'counterrevolutionaries' turned themselves into such ardent defenders of the status quo that even the word revolution was now problematical." As Osnos notes, even the official Museum of Revolutionary History, which sits beside Tiananmen Square, changed its name and merged with the National Museum of China.

The genie was now out of the bottle. After its near-death experience in the disastrous Chinese Cultural Revolution, the Party declared its goal. The Tiananmen Massacre had exposed the real purpose of the PLA: to defend the Party and not the people. Now the declared goal of the Party was clear: to maintain power and not reform the nation. But will Xi Jinping's militant leadership be enough to lead the nation through its current crises? David Shambaugh thinks not. Many Chinese intellectuals agree. Zhang Lifan, a noted historian, believes the regime must begin "sufficient political reform" in the next few years or "it could miss the chance entirely." He Weifang, the controversial law professor, fears that the regime's inflexibility will lead to an irreversible political crisis. "If they refuse even these basic changes, then I believe China will undergo another revolution."

Final Thoughts

As a non-expert on China I'm not in a position to take sides in the academic controversy. But as someone who lived in China for nearly seven years I can recognize many of the symptoms that Brown, Osnos and Shambaugh describe. While remaining skeptical about the immanent collapse of the Party I am struck by another manifestation which may prove to be just as dangerous: the inexorable movement of China towards a system of two disparate nations living under one authoritarian system.

When we first visited China in 2001 I was struck by the openness of our new friends to new ideas and the optimism of my colleagues about their future. China seemed to be changing every day. Shanghai was in the midst of a colossal building boom that was putting up new skyscrapers daily, creating a new city out of the farmlands of Pudong, across the narrow Huangpu River from Puxi. (Acquaintances proudly compared this new metropolis to Manhattan; I didn't have the heart to tell them they were building Houston instead.)

By the time we left China a decade later, a new cynicism had taken root. "The longer I lived in China, the more it seemed that people had come to see the economic boom as a train with a limited number of seats," says Evan Osnos. "For those who found a seat--because they arrived early, they had the right family, they paid the right bribe--progress was beyond their imagination. Everyone else could run as far and fast as their legs would carry them, but they would only be able to watch the caboose shrink into the distance." Mounting problems of persistent corruption, air pollution, food contamination, traffic congestion, exorbitant housing prices, scarce job opportunities, a declining quality of life and an increasingly repressive atmosphere had changed the mood of many from hopeful optimism to thoughtful anxiety. No wonder so many of my best Chinese students are now pursuing their education in Europe and North America.

Since returning to Denmark in 2011, I often encounter overseas Chinese students who tell the same story: their parents, including well-placed Party officials, are encouraging them to study abroad ... and to stay abroad. Several students told me that their fathers feared for their future in China. Some confirmed that their friends were getting similar advice from their parents. Interestingly enough, the parents seem to be more worried about China's future than their children. Are the parents paranoid or do they know something their children don't know? I'm not sure. But during my talks with these puzzled students I remembered Brecht's famous remark: The man who laughs has not yet been told the terrible news.

Recommended reading:

Kerry Brown, The New Emperors: Power and the Princelings in China (I. B. Taurus, 2014).

Evan Osnos, The Age of Ambition: Chasing Fortune, Truth and Faith in the New China (The Bodley Head, 2014).

Evan Osnos, "Born Red," The New Yorker (April 6, 2015).

David Shambaugh, China's Communist Party: Atrophy and Adaptation (Woodrow Wilson Center Press, 2008).

David Shambaugh, China Goes Global: The Partial Power (Oxford University Press, 2013).

David Shambaugh, "The Coming Chinese Crackup," The Wall Street Journal (March 6, 2015).
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Author:Levine, Paul
Publication:American Diplomacy
Date:Jun 20, 2015
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