MCLC: Tiananmen, then and now

[Denton, Kirk]

MCLC LIST
From: timothy pi <timothy.pi at epochtimes.com>
Subject: Tiananmen, then and now
***********************************************************

Source: Sinostand (11/27/11):
http://sinostand.com/2011/11/27/parallels-between-now-and-the-prelude-to-
tiananmen/

Posted: November 27, 2011 in Politics, Economics	

Parallels between now and the prelude to Tiananmen

When haphazard attempts to start a Jasmine Revolution failed comically in
Beijing early this year, discussion over whether or not China is ripe for
revolution was popular. The conclusion by most was that it's not. But it
seems that in just a few short months the situation has changed somewhat.
While an uprising doesn't look to be imminent, there seems to be many
similarities between circumstances unfolding today and those that preceded
the Tiananmen Square rebellion of 1989. So I want to look at some key
parallels between then and now:

Corruption

Then: There was always corruption in the PRC, but Reform & Opening Up made
it much easier and much more visible. In the 80's, many price controls
were lifted, but not all. The shortages of some goods allowed people with
the right connections to buy at the artificially low prices and sell at
market rates for huge windfalls. So naturally, the already-powerful became
even more powerful. The inequality of opportunity and obvious abuse of
power were two things immediately visible to those affected and were
direct causes the Tiananmen protests.[1]

Now: You can click here
(http://upload.wikimedia.org/wikipedia/commons/0/01/Gini_since_WWII.svg)
to see a visual approximation of China's Gini Coefficient wealth
inequality over time (0 means perfect equality, 1.0 means one person has
all the wealth). In 1989 it was hovering around 0.36. It took a dip that
year but has since soared to over 0.47 ˆ well past the 0.40 danger level.
China's crony one-party capitalism and massive economic growth since
Tiananmen have only increased the amount of capital involved with
corruption and allowed the powerful to get exponentially wealthier.

This is perhaps best felt when local officials make illegal,
undercompensated land grabs to raise capital for their city (and often
take kickbacks from developers). A recent survey found the number of
disputes over these land grabs is at an all-time high. Favoritism, graft
and inequality of opportunity are in some ways better than the Tiananmen
era, but in many ways much worse.

The Media

Then: The Chinese media of the 1980's covered issues that had never been
touched in the PRC previously; even dabbling in corruption cases. Single
essays or TV programs could stir up fiery political discussion on college
campuses. A documentary called River Elegy played on CCTV in 1988, which
subtly criticized Chinese culture and sparked nationwide debate. When the
protests themselves started, the press covered them extensively and even
portrayed the student protestors sympathetically. These factors shined a
light on many issues intellectuals were concerned about and brought
together like-minded activists.

Now: Though the official press was reigned in after 1989 -- where it's
more or less stayed ever since -- new avenues of disseminating information
have sprung up. Mobile phones, blogs and microblogs have put reporting in
the hands of those directly affected -- shining a light on things never
before seen by most common people. Shrewd online political commentary on
these issues by bloggers like Han Han may be playing a role similar to
programs like River Elegy in the 80's.

Education Failure

Then: After the Cultural Revolution, universities re-opened and were a sure
ticket to a better life. However, with further reform and opening of the
markets in the mid-to-late 80's, many college students graduated to find
their education gave them no real advantage in the new business landscape.
In 1988, the system that assigned college graduates jobs was also amended
To where private companies could reject those top students assigned to
them in favor of those who had connections inside the company.[1]

Now: Educational prospects improved after Tiananmen, but now the situation
is coming to resemble 1989 again. An overabundance of college graduates has
left one-fourth of them unemployed without any better prospects than those
who didn‚t go to college. Many have also criticized the university system
As useless, largely focusing on theory and failing to give students useful
practical guidance. With labor wages rising China needs to move up the
value chain in order to keep its people employed. Some think the
innovation and collaboration needed to achieve this won‚t be possible
under the current intellectually repressive atmosphere.

Inflation

Then: Inflation was at an astounding 18.5% in 1988 because of panic
withdrawling and buying on rumors of what relaxing price controls would
mean.[2]

Now: Inflation is sitting at about 5.5%, down from a high of 6.5% in July.
Not nearly as bad as pre-Tiananmen, but food is getting less affordable
and housing is off the charts. With a roughly 32 million surplus of
marrying age men, great pressure is being put on those who need to buy a
house (and often a car) to compete for potential wives. And the poorest of
the poor are having to cut food from their diet in order to stay on top of
their finances.

Competing Party factions

Then: In the lead up to Tiananmen there was an obvious rift in the party
between progressives like Zhao Ziyang and Hu Yaobang and hardliners like Li
Peng. This rift was absolutely apparent in the days leading up to the
crackdown. The protestors saw this split and sniffed weakness; which
emboldened them further.

Now: After Tiananmen the party learned to present a united front in public
and keep disputes between factions -- or even the existence of factions --
behind closed doors. That era seems to have ended now though with Bo
Xilai's left wing and Wang Yang's right wing both making very public
criticisms of each other's models. The bulk of the Chinese public has yet
to express an interest (or knowledge) in this feud, but that could change
as factions push harder for influence and citizens begin to take sides.

Banking System Cracks

Then: In the late 80's Chinese banks flooded the market with loans. As
Could be expected, a great deal of them went bad and an estimated 1/3 of
factories were unprofitable.[1] The government brought this to an abrupt
halt in 1988 by cutting the cash flow -- a kind of austerity measure many
didn't take too kindly to.

Now: Take that same situation and multiply the figures involved to equal
more than seven times China‚s entire 1989 GDP. In the wake of the 2008
financial crisis, China pumped $586 billion into the economy as a stimulus.
This is part of an overall $2.7 trillion Chinese banks have extended in
loans over 2009 and 2010. Up to now that stimulus has looked pretty good in
economic recovery terms, as it always does∑until the loans start going bad.

The Street recently had a piece that said, "Economic-related news coming
from China is a page-turning thriller. Ponzi schemes, zombies,
off-balance-sheet reporting, subprime and mafia-style lending; rising
inflation, declining asset values, slowing growth -- it's all there. Add in
government meddling in market mechanisms and official denials and China
sounds like it has the makings of a perfect economic storm."

Wenzhou has recently had dozens of bosses flee bad debts -- something
that's being read as a preview of larger things to come. Tsinghua
economist Patrick Chovanec has said he's not sure if China can make it
through next year's power transition before a major banking crisis hits.

Key differences between Tiananmen era and now

Nationalism and affluence

Since Tiananmen the government has pretty successfully educated nationalism
into the youth and trained them to regard any talk of democracy or human
rights as a western ploy to make China implode. The relatively well-off
youth of today also seem far more interested in video games and pop stars
than politics anyways. And the population as a whole is undeniably better
off than they were in 1989 (though some studies suggest they‚re not any
happier). Most have a lot more to lose than they did at that time.

A paranoid and highly technological government

The technological improvements may work to the Party‚s advantage more than
any would-be revolutionaries. The government has the capability to monitor
and immediately clamp down on dissent ˆ a capability that improves by the
day. If they were truly threatened by a spontaneous movement, they could
temporarily shut down cellphone service, microblogs like Weibo, or even the
entire internet ˆ as they did in Xinjiang in 2009. And as the Beijing
attempt at a Jasmine Revolution earlier this year demonstrated, the
government will come down hard on any threat ˆ real or imagined. And
they're very careful not to allow any large gatherings that they can't
fully control; as the turnout for Hu Yaobang's funeral in 1989 was the
final spark for the Tiananmen Protests.

Conclusion

Given the vast similarities between now and 1989, another go at a
Revolution seems possible. If history is any indicator, an iron fist can't
succeed by itself if grievances are too great and you have the right
catalyst to bring the disenfranchised together quickly.

Probably the only leader popular enough to create this Hu Yaobang-like
catalyst in death would be Wen Jiabao. But again, if that happened the
party would be overly cautious; and it probably wouldn't be enough
anyways. It would have to be something big that directly affected a huge
number of people.

A large scale disaster that could be linked to corruption or official
incompetence might do it. The Wenzhou train crash earlier this year and
Shanghai fire last year made a lot of people angry and concerned for their
safety. They weren't big enough to spark an uprising, but they were two of
many small aggravators that are slowly ebbing away people‚s patience with
corruption and government cover-ups. If something like a nuclear meltdown,
a mass public health incident or a large dam collapse happened, that just
might break the camel's back. In 1975, the Banqiao Dam in Henan collapsed
killing 171,000 people. And if you think that's something relegated to the
incompetence of the Mao-era, an average of 68 dams still collapse every
year in China, according to one official.

But an even more likely scenario would be a poorly timed financial crisis;
one like the aforementioned banking crisis that many are predicating. Life
is already getting rough for the post-80‚s/post-90‚s kids who grew up
spoiled taking economic security for granted. The job market is shrinking,
their time/money intensive education is often useless and the gender
imbalance is leaving many men hopelessly single. To make matters worse, the
2010 ratio of five workers for every elderly person will drop to 3-to-1 by
2020 in what Time Magazine has called „China‚s Demographic Time Bomb.‰ For
many only children that means completely supporting two parents financially
and physically amid some of the least affordable housing prices in the
world.

If a housing bubble burst robs these people of the investments they‚ve
become slaves to, they might all-of-a-sudden take a very keen interest in
politics. And if there‚s a banking crisis, it would likely cause a run on
banks and panic buying similar to what caused the massive inflation of
1988. Fitch has estimated there's a 60% chance of such a crisis by
mid-2013. If it comes any earlier than that, it would be right during the
leadership transition when the party is at its most vulnerable.

I'll give my standard disclaimer for any internet police or fenqing that
might be reading: An uprising isn't something I'm hoping for. It's not even
something I'd venture to predict. Predications of a CCP collapse have a way
of making you look like a fool (See: Gordon Chang). And even if an
uprising did happen, it doesn't mean the party wouldn't survive it. But
there are many cracks beginning to show -- financial, political and
social; figurative and literal. The Beijing Consensus of authoritarian led
economic growth has delayed the Party's need to address their legitimacy
shortfall for a solid 22 years, but one way or another that growth
eventually has to slow and the legitimacy issue has to be addressed. If I
were in charge I'd focus a bit less on the iron fist and a bit more on the
root problems distressing and disenfranchising those without financial and
political influence.

Non-linked sources

[1] Silenced Scream: a Visual History of the 1989 Tiananmen Protests. Donna
Rouviere Anderson, Forrest Anderson. p. 1

[2] Dingxin Zhao. The Power of Tiananmen: State-Society Relations and the
1989 Beijing Student Movement‚‚. Chicago: University of Chiacgo Press,
2001. ISBN 0-226-982600-2. pp.127.