The Magazine

Thirty Years of Reform in China

Economic collapse may soon bring political crisis.

Dec 22, 2008, Vol. 14, No. 14 • By GORDON G. CHANG
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Yet even if the party could solve each and every one of these problems in short order, which it cannot, the country's rulers would face a seemingly insurmountable challenge. Those who are optimistic about the future of the People's Republic point to all the growth and progress of the last three decades since Deng Xiaoping grabbed power. China has indeed come a long way, but that is precisely why the one-party state is in such jeopardy.

Sustained modernization undermines authoritarian systems. Unimaginable societal transformation has taken place in China at unheard of speed thanks in large part to Deng's reforms. One of the results of this rapid social change has been the widespread defiance of authority. At this moment, one of the country's most popular heroes--executed at the end of last month--is a man who entered a police compound in Shanghai and killed six officers while wounding four others on July 1, the anniversary of the founding of the party. Outside his trial, middle-class Chinese chanted "down with the Communist party" and carried banners emblazoned with "Long Live the Killer." Even among the relatively well-to-do in the important coastal cities, the country's ruling organization is losing legitimacy.

After abandoning ideology, the party's primary source of legitimacy became the delivery of never-ending prosperity. It should therefore come as no surprise that recent economic troubles have coincided with an extra-ordinary wave of protests. Starting this summer, citizens in various locations have ransacked government offices, attacked police, and burned official vehicles.

Unemployed workers in the Pearl River Delta, moreover, have been taking to the streets and engaging in sit-ins in their factories to demand back pay. At first, the protests were small, as only marginal factories went out of business. The larger demonstrations--numbering in the thousands--came when the "big ship" toy manufacturers began to fail two months ago amid declining orders from major toy companies such as Mattel and Hasbro.

Labor unrest has since spread throughout China, but especially in Guangdong province, where many of the country's toy manufacturers are located. Even factory owners, facing the prospect of closure, have demonstrated against the government. Protests are bound to become larger, more frequent, and more violent as the economy continues to weaken and as workers begin to feel safety in numbers. Chinese workers--even poor migrants--are starting to think they can get what they want by defying the authorities, because governments have tried to buy off protesters with small payments. Yet with the accelerating failure of industry--more than half of China's toy factories went out of business in the first seven months of this year, for instance--local officials have fewer resources to fund benefits to those who have suddenly lost their livelihoods.

The protests by laid-off workers, as unsettling as they are, cannot be the most worrisome development to the Communist party. Beginning in early November and continuing into this month, taxi and bus drivers have gone on strike in a dozen major cities. Beijing, which has always felt confident about controlling one-off demonstrations, realizes the risk to the regime when citizens across the country act together.

The Chinese Communist party has remained in power by preventing competitors from banding together to form nationwide organizations. Yet today on the Internet and in other forums, the Chinese people are having national conversations for the first time in their history. As a result, citizens with common grievances are beginning to act in unison, posing a challenge of the first order to the regime. Mao consolidated his power by dividing the Chinese people into small units and isolating them from each other. Now, in a modernizing society, they are putting themselves back together. This is perhaps the most important legacy of 30 years of reform--and what Mao feared most.

Gordon G. Chang is the author of The Coming Collapse of China.