China: the fuse between inequality and demographics

China has guarded the secret to its success, its dual growth-stability.  It protects the country from crisis and dangers, proving wrong those who believed the first would have inevitably undermined the second.  Among the two, growth can dip, but they won’t lower their guard over stability.  The “GDP obsession”—so called by Xi Jin Ping, suggesting its slow-down—is not duplicated for internal security.  Beijing finds itself facing many threats it’s not willing to negotiate on.  The Arab Spring’s contagion was contained upon its inception; the web’s democracy was censured with the exclusion of the most delicate sites capable of mobilizing awareness; minorities’ claims were answered with an iron fist, even when they didn’t trespass in terrorist activities.  Until now, police action has had the upper hand, and there are no crises on the horizon.  In any case (frequently spontaneous) protests are growing in the countryside, in factories, and in urban warehouses.  People demand higher wages and humane working conditions; they complain about the brutality of repression and the management’s arrogance.  It’s an indistinct jumble, with no organization, but maybe because of this it’s less decipherable and easy to control.  Inequality is fueling protests, which have reached unprecedented and intolerable levels.  The Gini Coefficient, a measure of wealth concentration, places China among the large countries with the worst rankings.  In fact, China is “more unequal” than the United States.  The disparities grow when the poor realize as much—with the availability of modern communication means—or when they have the tools to reclaim their redemption.  The latter is the case in Thailand, where the latest elections rewarded the Thaksin family’s populist rhetoric.  All of the winning campaigns leveraged the needs of the poor, of farmers that didn’t intercept the advantages of industrialization.  Bangkok’s urban bourgeois, the emerging classes, and intellectuals enjoy a definitively superior standard of living.  Promises of free medicines, energy subsidies, and funds for temples have taken hold in villages.  The contrasts between the rich and the poor, and between progressive and conservative campaigns exploded first in the ballot box, and then in bloody battles.  The Thai dynamic cannot be applied mechanically to China.  In any case, in the absence of electoral alternatives, the claims of the poorest are taking less controllable forms.  The people work in silence, but their effects can be devastating.  In 2012, for the first time in its history, China’s urban population surpassed its rural population.  However, of the 700 million people that live in cities approximately one third lack rights.  Their rights are formally constrained by hukou, the system that detains residents in the same city from the cradle to the grave.  Change is possible but lengthy, and without the certainty of success.  Farmers were necessary for China’s development; they provided an affordable, disciplined, and inexhaustible labor force.  They were the soldiers in China’s incredible production army.  Their rights didn’t grow like China’s GDP or corporate profits.  Wages remained low, but most importantly, they were not granted residence in the cities where they worked.  This made 250 million Chinese people into unprotected semi-illegal immigrants, easy targets for abuse.  The differences in income and status are enormous.  The “Chinese Dream’s” integration is still viscous, and social disparities are tremendous.  Frequent calls to reform the hukou system are frequent, but without results.  The costs would be astronomical, mainly due to wage claims that would arise.  The excluded groups could, in any case, breathe life into consumption and revitalize the slowing economy, but the government prefers to not take risks and keep them as second-class citizens.  Managing complex situations is not a specialty of the Chinese bureaucracy.  In the absence of elections, social issues are contained, fragmented and sterile.  Smoldering resentment and protest, which if not directed toward democracy, will find fuel in the demographics.

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