The Challenge for China's New Leaders
The Dangers of Allowing Inequality to Worsen
Article Summary and Author Biography
In recent years, Beijing had plans to balance equality with rapid economic growth. But rigid government controls over land and labor have instead exacerbated divides, and in turn, social tensions. Now a new set of leaders taking power this year will have to fight the party system. The problem is that they could lose, and set the Middle Kingdom on a path to another decade of unequal growth.
YUKON HUANG is Senior Associate at the Carnegie Endowment for International Peace and a former Country Director for China at the World Bank.
Response
China’s rise is overstated, and its financial problems are massive, argues Derek Scissors. Arvind Subramanian disagrees, claiming that Beijing already calls the shots in the global economy.
In Tiananmen Square, Beijing. (stoicviking / flickr)
When Deng Xiaoping opened up the Chinese economy three decades ago, he did so on the premise that economic liberalization would precede political liberalization. For an impoverished generation that was still coping with the excesses of the Cultural Revolution, the chance at a better material life far outweighed the need for political expression. That trade-off held for many years; as recently as 2008, China topped the list of 24 countries included in the Pew Global Attitudes survey for its citizens' satisfaction with their nation's economy.
Recently, however, talk of a political transformation in Beijing is showing signs of renewal. A growing, newly socially conscious middle class has taken to the streets to decry the government's response to the 2008 tainted milk scandal, to the 2008 Sichuan earthquake, and to the harsh working conditions for migrant laborers in factories such as the electronics manufacturing firm Foxconn, which was the subject of a globally publicized inspection just last month. These instances of unrest -- and they are but a few of many -- expose a growing discontent with three fundamental facets of China's modern rise. For one, Beijing's distinct economic management style has created vast inequality. Second, the economic system has led to almost intractable disputes over a finite resource -- land. And third, the Chinese system relies heavily on migrant workers, who are stripped of many rights and protections, and therefore all the more likely to protest.
These problems reflect the failure of Beijing's reform agenda in recent years. There were plans to strengthen the fiscal system to address social equality and distribution imbalances during a time of rapid growth. Rigid controls over the use of key resources such as land and labor have created distortions that exacerbate social tensions. And this leaves a question for the next generation of leaders to be ordained later this year: Are they willing to tackle the many vested interests that have impeded change thus far and set China on a sustainable path into the future?
