By Zhengxu Wang.

Governing the very dynamic and complex Chinese society and economy has become increasingly difficult for the Chinese Communist Party. Challenges to governance abound, so much so that many are wondering whether the large number of “crises in governance” have already resulted in a real crisis in the Party’s legitimacy.

A wide range of international and domestic factors made last year especially challenging for the leadership in Beijing. The Arabic Spring generated very high level of anxiety in Beijing as it worried that similar protest movements would take place. The fall of authoritarian regimes in North Africa and the Middle East, especially the fall of Kaddafi in Libya, the Russian public’s protests again Putin, and the death of the North Korea leader Kim Jung-Il are often seen by liberalists in China as warning signs to the Party on its hold to power.

Domestically, long-term structural problems in the economic development model have resulted in serious imbalances that are threatening social stability. Household income growth has slowed relative to GDP and government’s fiscal revenue, income inequality has exacerbated, and the political and economic elite is becoming increasingly less self-restrained in abusing its power and wealth. They lead to increasing unhappiness and discontent. Large-scaled protests by villagers in Wukan of Guangdong, for example, took place toward the end of 2011 against local government corruption that seriously harmed the villagers’ interests.

What complicates matter further is that the current leadership is on its way out. With the next Party Congress scheduled for the autumn of  2012 the leadership has no incentive to introduce new policies to address the structural and systemic problems. Inflation, for example, has been on a high level since the second half of 2010, fuelling public anxiety and grievances. But for the better part of 2011, the leadership was reluctant to take essential measures, as tightening money supply would harm the interests of powerful groups and organizations. The same applies to leadership’s handling of rocketing real estate prices.

Important reforms are desperately needed to increase household income, expand channels for public expression, and contain power abuse and corruption, but they are postponed. Liberal voices are calling for political reforms to address such problems, while ‘radical elements’ call for democratization or stage protests.

As the task of governing China gets more difficult, the Party has resorted to a two-handed approach. On the one hand, it tries to build up institutions that can better penetrate and monitor social groups as well as co-opt activists. 2011 saw a number of major efforts to build up the government’s capacity in “social management”. On the other hand, the Party continues to use heavy-handed measures to deal with rebellious elements in the society. While Liu Xiaobo, the author of Chapter 08, was formally sentenced to 17 years in prison for “inciting subversion of state power”, other outspoken regime critics such the artist Ai Weiwei, the writers Liao Yiwu and Yu Jie, and the lawyer-activist Chen Guangcheng, and many others, were either harassed, detained, tortured, silenced, or forced to leave the country.

This two-handed approach is likely to continue in 2012 and beyond. The Party is hoping goodies delivered to the public, such as better coverage and effectiveness in its social welfare programs, increased household income, and improved environment (such as better air quality), as well as China’s enhanced status as a global power, will generate enough public support for the Party to stay in power. At the same time, it will not shy away from tough measures in containing and crashing radical challengers to the regime.

Dr Zhengxu Wang is Deputy Director of the China Policy Institute and Lecturer at the School of Contemporary Chinese Studies, University of Nottingham

Opinions expressed in the CPI blog do not represent the views of the China Policy Institute or the School of Contemporary Chinese Studies at the University of Nottingham. They are the personal views of the bloggers/authors.


  1. With the current leadership on the way out, why does it not take the approach that it has ‘nothing to lose’ and therefore introduce the necessary policies to address the structural and systemic problems?

    1. That’s it! That’s due punishment of the obsessed; the theme of the towering work in literature, Crime and Punishment of Dostoevsky. But some of my Chinese acquaintances have often ignored what does the “due” mean: when they hear of someone being cursed for example they read it rather superstitiously: they are much unaware of that, the curse is a due: when one is evil for instance he is cursed at the same time!

      I do not feel sure of that, “the current leadership’s on the way out”; I feel perhaps NOT! For I myself dare not ignore the power of the currents of the deep waters, the deeps of the bottomless pit!

    2. I think it is because that it has too much to lose so it prefers to leave the burden to the next one inline…

  2. I suppose that whenever there is a change of leadership, there is always period of paralysis around that period. However, one suspects that the new leaders will also try to avoid any radical political change and hope to continue to ‘muddle through.

  3. It’s true: no wonder the one originally from Shanghai was finally chosen as the top official in China in 1989 because he had culturally professionally, successfully, and shamelessly muddled everything into a state that others could not figure out who was who that any success made was therefore conclusively due to his leadership.

  4. It’s very true, the sweeping dropping of bombs from high is the “iron birds laying eggs,” as the Chinese proverb, of old, says, as is the case in Libya; consequently, Kaddafi had more than “won first prize in the aviation lottery”, religio-philosophically speaking. Furthermore, should the inflation, “on a high level since the second half of 2010,” be turned into, to be such as the “bomb” … Oh, the Arabic Spring, come! I say and I pray. For I’ve been in the netherworld for too long.

    PS: “Chapter 08”, unheard of! I’ve only heard of that he was sent therefore to a place “safer”, “On grounds of international security”.

  5. A complement to Zhengxu’s blog might be to read the previous issue of The Economist, which had a special report on State Capitalism. As brought out in various articles of the special report, the problem of the triumphal adoption/adaptation of capitalism to powerful state interests in China, Russia and elsewhere is the question of governance, not simply of the huge state-owned firms, but of society more broadly. And this comes down to voice, or the lack of it. While party apparatchiks and acolytes pocket huge fortunes and monopolise power over resources, most citizens are disempowered and increasingly, I suspect, disenchanted with the conspicuous appropriation of wealth. China is more effective at squashing alternative voices than Russia and others, but that is not necessarily an inevitable or sustainable future.

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