China's leaders face stark
challenges By Billy Tea
After years of being groomed, Xi Jinping,
unsurprisingly, was named to succeed Hu Jintao as
General Secretary of the Chinese Communist Party
(CCP) last November, and is set to replace Hu as
Chinese president in March. Many analysts have
described the CCP's Politburo Standing Committee
as a "conservative line up". In addition, the
Politburo Standing Committee has shrunk from nine
to seven members.
In theory, this smaller
group will streamline the decision-making process,
consolidate actions to promote economic
development, and be able to act faster to both
prevent and manage conflict as issues arise.
China's main priority is to bring stability within its
boundary and to prevent
civil protest against its government.
China's population is reaching 1.4 billion
people and its need for fossil fuel is constantly
increasing. As experienced in the Middle East,
North Africa region last year, if the basic needs
of the population are not met, it could spark
social unrest leading to the fall of the party.
This is what China fears the most.
Therefore China must ensure the
"healthiness" of its society by responding
adequately to social issues that are threatening
the government's legitimacy and credibility to
provide for and protect its people. There are six
main domestic challenges that the new leadership
will have to face in the next decade:
First, to secure access to natural
resources: China's development and prosperity
depends on its access to natural resources. Even
with a slowdown in the world economy, China is
expected to grow about 9% in 2013. (A government
think-tank, the National Academy of Economic
Strategy under the Chinese Academy of Social
Sciences, this week forecast 2013 growth of around
8.5%).
Fu Chengyu, chairman of top Asian
oil refiner Sinopec Corp, told Reuters that he
expected Chinese oil demand to hold steady.
"Global oil demand is unlikely to grow strongly
due to the economic outlook, but China will see
sustainable growth next year, similar to this
year." [1]
Moreover, it is estimated that
China's compound annual aggregated oil growth will
be 6.7% until 2015. [2] China's oil demand this
year thus far has amounted to more than half of
the global incremental demand, according to the
International Energy Agency. It is estimated that
by 2025 China will import three-quarters of its
oil needs. Guaranteeing access to natural
resources is a basic requirement that has to be
fulfilled both for the stability of its society
and to maintain its economic growth.
Second, to reform the pension system:
according to a 2010 census, the number of people
over 60 grew to 13.26% of the population, up 2.98%
from 2000, and the number of people under 14
declined to 16% of the population, down 6.29% from
2000. [3] Today, there are 180 million people who
are over 60 years old, and that number is
estimated to double to 365 million by 2030.
As a result of the one-child policy, there
are 10 million fewer births a year, therefore
making six workers per pensioner today. By 2030,
there will only be two workers per pensioner. This
imminent population crisis combined with a
shrinking work force and the soaring number of
elderly people will have a detrimental effect on
the economy and domestic stability. [4]
Third, to close the gap between the rich
and the poor: according to an NGO, China has
reached "dangerous levels of wealth inequality".
China scored 0.438 in 2010 on the Gini Index by
the Institute of Urban Development. The Gini Index
measures inequality of income on a scale of zero
to one (zero being totally equal and one being
totally unequal); it suggests that a country with
a figure higher than 0.4 has dangerous levels of
wealth inequality.
The report explained
that there are risks of instability such as the
increasing gap between the rich and poor, which is
associated with reform and liberalization. [5] In
times of economic hardship, the poor are the most
vulnerable socioeconomic group. The simple sight
of the elite living in excess during these times
could trigger immense resentment leading to riots.
Fourth, to fight corruption: this year's
Bo Xilai case is just one example in a long series
of pointers to this serious problem in Chinese
society. Corruption is present at various levels
of society, including the education system, food
industry, and government officials. Every year
there are about 130,000 to 160,000 cases of
corruption but only 6% of them end up with any
kind of criminal prosecution and out of that 6%
only half of those prosecuted go to jail. [6]
This year, according to Transparency
International's Corruption Perception Index, China
slipped down to number 80 from 75 in 2011, to join
the company of Serbia and Trinidad and Tobago. In
addition, more than one-third of Chinese people
said they thought the government was ineffective
in the fight against corruption and 46% said
corruption had increased in the previous 12-month
period based on a survey in 2010/11. [7]
Corruption delegitimizes the government's
authority, power, and image. The consequences of
the loss of faith in the system or authority would
symbolize the start of chaos.
Fifth, to
respond to the long standing problems with China's
Tibetan and Uyghur minorities: only a few years
ago in 2009, the deaths of two Uyghur factory
workers in Xinjiang triggered a riot that left
more than 150 dead, as Uyghur and Han Chinese mobs
battled in the streets. More recently, on October
31, 2012, days before the 18th Party Congress,
four Tibetans set themselves on fire to protest
against Chinese rule. [8] Since 2009, dozens of
Tibetans have set themselves on fire to call
attention to the ongoing oppression of their
people. [9] If the Chinese government does not
come up with a suitable long-term solution, these
long-standing conflicts could further segregate
the Chinese population and lead to greater
internal conflict within ethnic groups.
Sixth, to manage the conflict both in the
East and South China Seas: the potentially
resource-rich areas combined with the
modernization of naval forces and
internationalization of the conflict have limited
the ability for parties to negotiate toward a
peaceful resolution, especially with the presence
of state-sponsored nationalist movement.
Last September, Japan and Taiwan fired
water cannons over the disputed territory only
days after another naval confrontation between
China and Japan. Moreover, this Japan-Taiwan issue
puts the United States in a difficult situation,
as it is an ally of both countries. Also, at the
last meeting of foreign ministers of the
Association of Southeast Asian Nations (ASEAN), in
July, the Philippines' vocal stand against China
in the maritime dispute combined with China's
close relationship with Cambodia led to a division
within ASEAN members, as demonstrated by the
inability to provide a joint communique. This was
a first since the organization's inception in
1967.
One issue that might need to be
addressed rapidly is the question of fish stocks.
The South China Sea is home to 300 million people
who are dependent on this resource both in terms
of nutritional needs and economy. Fish are the
cheapest form of protein and it can be a large
part of economies such as in Vietnam and the
Philippines.
Moreover, most of the
maritime altercations involve fishermen,
coastguards, and navies. Food security is of the
utmost importance and people will go to great
lengths if they are unable to eat adequately or
provide food for their families. More generally,
the East and South China Seas are strategically
located with high economic potential making it of
the utmost priority not just for China but for the
whole region.
Since the end of the
Cultural Revolution, China has achieved great
economic and social development. However, this
fast economic growth has come with its own baggage
of problems that if left uncheck will undermine
the new leadership and delegitimize the party.
No one denies China's past achievements,
but in order to pursue its economic development
and rise as a regional if not global power, China
will have to first resolve its domestic and
regional issues. These six issues will be crucial
to the new administration, and consequently it is
in China's interest to prevent, manage, and
resolve these conflicts because failure to do so
could mark the start of its decline.
At
the 18th Party Congress, the Chinese government
seemingly demonstrated a strong will to tackle
these issues. However, it is up to the newly named
leader, Xi Jinping, to confront these issues
during his term, thus demonstrating that China is
not simply talking the talk but is walking the
talk.
Billy Tea is a
Research Fellow at the Pacific Forum CSIS. His
research interests include conflict prevention,
conflict management and regional cooperation;
Chinese foreign policy in Asia; and security and
defense relations between Asia, Europe and the
United States. He holds a BA in Political Science
from UMASS Amherst and a MA in War Studies from
King's College London.
Head
Office: Unit B, 16/F, Li Dong Building, No. 9 Li Yuen Street East,
Central, Hong Kong Thailand Bureau:
11/13 Petchkasem Road, Hua Hin, Prachuab Kirikhan, Thailand 77110
