There have been many examples of recent Chinese jitteriness
regarding political dissent, and any display of it has prompted a swift
response. Examples of these have taken place on the internet where new
regulations have been put into effect. On October 26, the Xinhua News
Agency published a report, by the Sixth Plenary Session of the 17th CPC
Central Committee which stressed the need to strengthen the management
of social networks and instant messaging tools. Judging from the
language of the communiqué and its policy recommendations, it is safe to
assume that the Chinese cyber sphere has grown to unmanageable levels
for the vast amount of government censors to handle, and more
self-censorship is being demanded. A word of warning was also extended
to the executives of social media companies, so they realize that they
are not immune to the reach and power of the communist party. This
warning is to make sure they understand that their corporate survival
and business model will only be guaranteed, by their ability to control,
keep track, and allow government censors access to what information
gets into the chat rooms. They were even brazen enough to warn members
of the foreign media to become more Chinese in their reporting, and
practice self-censorship.
What developments have contributed to
all of this edginess? Some are external and others are internal. On the
external international front there seems to be an anti-china backlash
result of its foreign policy and international trade tactics. On the
internal domestic front, challenges remain due to its politico-economic
schizophrenic system of governing , where it is very clear to the
ordinary citizen that the communist ideology, exists in name only.
Parts
of the developments that have contributed to the anxiety of the
communist party elite include events taking place in the Arab world. An
example of these events is that in less than 10 months; it has become
harder for the Chinese government to do business, as they seem to keep
picking the losing side in every recent conflict. Just like their policy
regarding the conflict in the Sudan, in the Arab countries the Chinese
government has picked dictatorship over democracy, murderers over
reformers, and plunderers over nationalists. In the Libyan case they
were even willing to support and offer the Khadafy regime arms sales
during the last vital signs of a dyeing regime. In Syria they are still
supporting a regime that even the Arab league has turned their backs on.
Nowhere else is this complete disregard for international norms of
decency been more clearly displayed than in the case of Iran. In the
Iranian case they have not only gone against the rest of the world by
supporting an illegitimate regime, but have consistently opposed the
future use of sanctions as deterrence to the Iranian nuclear program. In
very Machiavellian faction, in order to ensure that they have
unfettered access to Iranian and Venezuelan oil, they have made their
'Big Brother' electronic surveillance system their ultimate and most
recent product for export. In Syria they have managed, and engineered
communication eavesdropping equipment that ironically, displays Chinese
efficiency in the hunting down of political dissent and any expression
of free speech. By putting money over principle, they have once again
become virtual accomplices in the last gasps of another dyeing regime on
its deathbed.
This system of oppression and electronic network
monitoring is in the process of becoming extinct in the rest of the
civilized world, and even countries like Myanmar have seen the folly of
continuing on this road. It is for this reason that the Chinese central
committee has been ridiculed by the rest of the world, by stating that
they are members of a select group comprising of countries that share a
dubious distinction; political oppression. These countries are China,
North Korea, Cuba and Iran in what a micro blog in mainland China refers
to mockingly, as the 'New Four Ancient Civilizations.' These four
countries still restrict Internet access, implementing network controls ,
and for this reason its new name alludes to the fact that all other
countries have accepted modern civilization, but those four remain
'ancient.' As growing Chinese technological imports grow more numerous, I
would also include Venezuela, as part of this selective group.
On
the internal domestic front the situation is reaching crisis levels.
During the economic crisis of 2008, while the rest of the world
concentrated on boosting internal consumption, China due to its export
oriented model and fearing political instability engaged in an
unprecedented pre-emptive strike by investing billions of Yuan in
state-owned enterprises. These investments promoted state and private
spending on fixed investment, creating a situation where fixed
investment now accounts for nearly half of China's growth. Some of this
investment has also contributed to a further concentration and
consolidation of the domestic sector. Right now Chinese citizens are
paying the highest tax rate in the world and instead of transferring
wealth from the state to Chinese households, as Premier Wen Jiabao has
said is necessary to maintain political stability, the opposite has
taken place.
Gordon Chang, author of The Coming Collapse of China,
said that Beijing authorities have put more money into state-owned
enterprises and state-funded infrastructures, which means that private
companies get less. He adds that "... this investment is impeding
China's social development because as the enterprises get more powerful,
they start colluding among themselves, or restricting access to China's
markets. This hurts not only foreign enterprises that are doing
business in China; it also hurts the private sector, and the private
domestic sector. And this sector has been the thriving force in the
Chinese economy for the past three decades." Of the 42 Chinese companies
listed in the 2010 edition of the Fortune 500, 39 were state-owned
enterprises, and three quarters of China's 100 largest publicly traded
companies are government controlled.
This explosion into fixed
assets has resulted in a unprecedented growth in residential and
commercial real estate creating a lending bubble that it is starting to
resemble those in the western world, but with a lot less transparency.
There have been reports in the Hong Kong media that land finance
specialists, bank credit institutions, and real estate developers formed
economic alliances, where through political coercion, citizens were
forcibly removed from their land to make room for housing developments.
These were facilitated through the bribing of government officials
driving the price of residential and commercial developments into the
stratosphere.
Srinivas Thiruvadanthai analyst for the Levy Forecast agency commented on a recent article in Barrons Magazine,
on the explosive growth of China's shadow banking system. In China, he
points out, banks "are effectively an extension of the government, which
in the past has shown a willingness to absorb enormous losses" and to
manage any necessary credit expansion. The meteoric rise of shadow
banking, which includes a hodgepodge of underground types, from loan
sharks to informal lenders, represents a significant weakening of
Beijing's grip on the credit machinery." Srinivas goes on, "Although
much of the shadow-banking activity" is done via entities that are
state-owned, "the complex and opaque web of linkages between banks,
trusts, underground lenders, property developers, households and
real-estate speculators" makes it tough for the commanders of the
command economy to keep tabs on the condition of the property market. He
asserts that this is an ideal set-up for shadow lending to one of these
days trigger a real-estate panic with all the dressing: the drying up
of mortgage credit, a severe hit to household wealth, and businesses
going belly up.
At the social level, there is also ample room for
concern for the communist leadership. As the residential and commercial
real state bubble starts to deflate, new pressure has been exerted on
the regional governments. These regional bureaucrats have become
accustomed to high tax revenues, and as these dry up, they are starting
to look for new places to tax, and getting creative in obtaining
revenue. He Junjiao, a mainland china business enterprise observer,
pointed out in an interview that the recent real estate regulations,
where the Chinese government has tried to deflate the bubble, have
decreased local government land revenue, therefore local governments
were recently allowed to issue bonds to bring in revenue. He added that
"I am very much worried. With such power (the power to issue bonds), he
questions what kind of development policies local government are going
to implement? And more importantly howthey are going to pay back the
money? I really don't have much confidence."
The issuance of bonds
by regional governments without the eye of any ratings agencies to help
investors discern fact from fiction is creating another opportunity for
a small elite to prey on the rest of the people. This is not only
endemic to the bond market, but it is common practice in the Chinese
stock market. It has been widely known in China that collusion between
officials; businesses as well as insider trading are widespread
phenomena in China's stock market. As recent scandals concerning Chinese
stocks trading in the United States show, brilliantly exposed by the
Muddy Waters Research group, to invest in Chinese stocks is not for the
faint of heart. If you are not willing to travel to china, and make sure
that what they say it is true, and it is really there, you can find
yourself in a world of hurt.
As Chinese regional governments
increase their tax base and find ways to obtain fiscal revenue, ordinary
citizens are starting to feel the pinch. According to a Forbes Magazine Survey
the Chinese mainland ranked second in a list of countries or regions
with the harshest tax regimes in the world, following France. In
September 2011, the Ministry of Finance released the latest statistics
on China's fiscal revenue in the first eight months of 2011, which show
that about 80% of revenue came from taxes, up 30.9% compared with the
same period in 2010. These high tax regimes coupled with a 40-50% drop
in real estate prices, and high unemployment worsening as the European
and American economies re-enter into recession mode, you have all the
necessary ingredients for political instability.
There have
been other sources of discontent, for example shabby building
construction, infant formula poisoning outrage, environmental pollution,
and so on. But no other subject seems to get to the psyche of the
Chinese population as the government instituted, one child policy. There
have been reports of organized crime syndicates working with government
officials working in sync to remove children from families and selling
them to adoption firms working for companies in the West. This in
addition to other forms of government abuse has created a lot of
friction in the 'harmonious society'. Liu Kaiming a family activist
working for families has said that there is "Only one child for every
family and severe penalties imposed for unplanned births, these
practices go against the natural laws of population growth. Many
families had their properties confiscated, and their bank deposits
forcibly transferred, due to their violating the CCP's family planning
policy. These are all violations of peoples' basic human rights. In
particular, the CCP authorities forced many older women to abort,
resulting in a lot of tragedies. Instead, the CCP should work on
improving social security, so as to encourage people to plan their
children's births, rather than resorting to brutal means in order to
force people not to have more than one child". This one policy seems to
go against every human instinct and for this even if not voiced in
public, it is the one policy that may be creating a future catastrophe.
Many
Chinese are not waiting to see what happens, and they are voting with
their feet. There has been an alarming rate in the growth of money
leaving China and going into Western banks. There has also been an
increase of people wanting to leave China not seen since the days
preceeding the transfer of Hong Kong from British hands to the
communists. Hong Kong's Dongxiang Magazine Editor-in-chief Zhang Weiguo
mentioned this trend citing public statistics. He said, over 90% of
ministry-level officials of the CCP (Chinese Communist Party) have had
their children and wives emigrate. Even the CCP media itself has
reported about cases of corrupt officials using foreign passports to
flee the country. Mr. Weiguo pointed out that "In the past some
businessmen thought they could survive in China as long as they flatter
the CCP. Now they gradually realize that the situation is not good. If
they do not leave, they would follow this political system and die
together with the CCP. They had to escape from this sinking boat."
A
once-in-a-decade transfer of power will be taking place next year,
further requiring complete political stability. It is not yet clear that
with all of these developments taking place, this political stability
can be guaranteed and it may have contributed for the Chinese government
to be on edge. An example of this jitteriness is a report of four
soldiers leaving their army post. It has been reported that the
government treated the four soldiers not as just another AWOL case, but
instead as the beginning of a mutiny. Outside media sources have
reported that the soldiers were on their way to one of the soldier's
hometown, after finding out that his home had been demolished to make
room for one of these party-approved developments. Government soldiers
intercepted the car carrying the AWOL soldiers and killed three of them,
and mortally wounded a fourth. Notwithstanding the entire media
blackout regarding the incident, it still made a brief appearance in the
cyber sphere. It was reported how after the incident of the four
Chinese soldiers fleeing with guns, the local authorities of the Chinese
Communist Party (CCP) blocked all relevant information, prohibiting
media coverage. The news blackout did not stop netizens from revealing
that Yang Fan's home suffered forced demolition, and that his family
members were oppressed by local authorities. It was also clear in every
report that indicated that the army had instructions to shoot first and
ask questions later. Any reporting of the incident was severely
suppressed and any mention of it was eliminated from all media sources.
It was clear to all media sources that they were preventing any
information to reach the rest of China. They even went to the extreme to
go to the villages of the dead soldiers and take all of the family
members away, so no reporters may be able to reach them, possibly
extracting from them what could have been their motivation for going
AWOL. As we can see from this incident, the Chinese authorities were in
no mood to allow this information to reach the social sites. As I
indicated previously the communist elite is on edge, and they seem not
to be taking any chances.
No comments:
Post a Comment