Staving Off Unrest in China

PRC Legislative Agenda

Xinhua is the official press agency of the People's Republic of China (PRC), and has been called "the world's biggest propaganda agency" by Reporters Without Borders. PRC legislators are beginning their annual meetings, so Xinhua reports on their primary areas of concern probably point towards at least some of the central concerns for the PRC government over the near-term future. A report datelined BEIJING, March 3 (Xinhua) lists "8 issues of public concern" for the legislators:

1. EMPLOYMENT: [T]he employment situation in rural areas remains difficult, with rural laborers continuing to migrate to cities in search of work
2. SOCIAL SECURITY: Only a small proportion of [...] people are covered by the country's social security system.
3. MEDICARE: 49 percent of [...] couldn't afford to see a doctor
4. EDUCATION: [The] nine-year compulsory education system, which is supposed to be free and to cover the whole country, does not yet reach all rural areas. In the cities, parents who want to get their kids into top schools find that they have to fork out extra money.
5. WORKPLACE SAFETY: While work safety is improving, the situation remains grim and compares badly with other countries.
6. INCOME GAP: The income gap is widening [and indicators of income distribution equality are] worse than the United States.
7. LAND EXPROPRIATION: More than 65 percent of rural "mass incidents" are linked to land expropriation issues.
8. ENVIRONMENT: 70 percent of [the country's] rivers and lakes are polluted and more than 300 million people have no access to clean water.

Themes & Commonalities

Modernization is a concept in the sphere of social sciences that refers to [a] process in which society goes through industrialization, urbanization and other social changes that completely transform the lives of individuals.
from Wikipedia article

Modernization is clearly a core problem running through many of the elements on their list. Modernization has been driving the "economic boom" and also the massive migration of rural laborers "to cities in search of work". Almost 22 million of those urban Chinese have no work, those who have work have little workplace safety, the income gap between the rich and the poor is widening, rural land is being expropriated for private profit, and the environment is degrading. What the PRC leadership fears above all is too-rapid social changes leading to social disharmony and weakening the Party.

The classic problem with rapid industrialization and urbanization is to manage the social changes. The list of problems above could have been written in about the same form about most countries in the developed world in their own periods of rapid industrialization. What the PRC government seems to feel it needs is continued economic growth through industrialization, which requires unrestricted energy and results in rapid urbanization.

As I pointed out in an earlier Newsvine article, the PRC President spent a big part of late 2006 touring oil-rich countries and signing trade treaties. They are making deals with anyone they can find who can supply energy for their industrialization push. They are riding the tiger of growth and change through rapid industrialization.

Given the long history of governments in the West mis-understanding PRC intent, the chances of conflict between East & West unintentionally erupting over access to energy resources seem dangerously high. I pointed out in another earlier article, the enormous trade deficits between the US and the PRC mean a dangerous dependence by the US on PRC financing. Given the recent experience of sneezing on the PRC stock exchanges leading to severe colds on Western stock exchanges, we can look forward to more jitteriness in the West every time there are market problems in the PRC. And make no mistake about it, markets in a huge nation going through rapid modernization are going to be relatively unstable.

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