Harmony in the Middle Kingdom

Image: Wikimedia Commons

The four decades since Deng Xiaoping spearheaded “Reform and Opening Up” in China have seen growth on a scale unparalleled in modern history. Where hundreds of millions were once destitute, extreme poverty has been all but cast into the annals of history; the world competes to attract the wealth of China’s burgeoning middle and upper classes. Analyses of the country's explosive growth are aplenty. Real GDP has grown 64-fold, literacy is above 95%, and in a once Communist country the private sector, at least on paper, now accounts for 60 percent of economic activity. This piece, however, will look more at the stability of the country—while analysing potential economic factors underpinning this. A number of scholars predicted political and economic instability in China as nation rapidly became prosperous. Yet, in a country transformed, political and economic durability remain.

The Chinese Community Party continues to enjoy high levels of popular legitimacy; this has been, and will continue to be, critical in maintaining China trajectory. It is likely that this legitimacy stems largely from two factors: economic growth primarily, and government responsiveness secondarily. 

For decades, China’s government has staked its credibility on its ability to deliver prosperity to its people. It was a good bet. Since Deng Xiaoping’s “wealth is glorious” era, the Communist Party has taken pains to demonstrate that its core focus is creating a society that is better off—its annual GDP growth targets being a contemporary example—and that it is uniquely positioned to create wealth for its people. Indeed, scholars have noted that political legitimacy quickly accrues to the government if there is a broad increase in living standards. A middle class that believes its newfound economic status is a direct consequence of the CCP, and that the continuation of the Party’s policies is a requisite for further affluence, is likely to be satisfied with the status quo. 

The government has also proven adept at using economics “rents”—proceeds from highly profitable business activities requiring minimal additional investment—to redistribute the benefits from growth. This provides ordinary people with a stake in the Party’s continued rule, directly linking its power with private economic benefit. The state-owned sector still accounts for a very significant portion of the economy and job market, creating large potential for such distribution. Academics in the fields of institutional strength and development, such as Adam Przeworski and Fernando Limongi, have largely concluded that economic growth in general is strongly correlated with political stability across all regime types.

Notwithstanding this, there are risks in banking on growth for legitimacy. If China experiences a recession, or a similar economic shock, government credibility could be fatally undermined. That said, many observers are confident that the government can insulate its population against the vicissitudes of the market, and will be able to employ vast reserves and monetary policy to absorb risk within the financial system. The government has built up an impressive war chest of financial reserves, and has shown itself to be willing to deploy a swathe of measures to calm markets. With government guarantees, however, lurks the risk of moral hazard, so the situation is delicate: if people believe the government will always bail them out should things go wrong, the incentive to exercise caution is perilously compromised. 

As a separate issue, governments that do not rely on an entirely democratic process can face challenges in keeping a pulse on the needs of their citizens. This can be dangerous. Simmering discontent, particularly over tangible, daily issues like local corruption and bureaucratic mismanagement, can quickly boil over in a fundamentally destabilising way—as governments in the Middle East learned and other parts of the world have painfully learned. 

To its credit, the CCP is ever more cognisant of its need to be responsive and has taken strong steps to ensure that politically neutral daily woes—potential harassment from officials, inability to access basic services, and so on—do not manifest themselves in broader dissatisfaction against the political system. In establishing local watchdogs and complaints offices to tackle bureaucratic mismanagement and endemic corruption, the government has been able to address quotidian, yet deeply frustrating, dissatisfaction at its very root. 

As a significant added benefit, the further allows the Party to cast itself as an ally of the citizens in improving local governance, distancing the regime itself from possible failings at lower levels of government. This is an important mechanism by which to any acrimony toward the CCP is reduced. Chinese citizens can also sue government agencies, and they do: over 100,000 suits have been filed, with academic Andrew Nathan claiming that success rates can be as high as 40 percent. The popularity of these measures should play to the narrative that the Party is determined to improve the quality and ease of life. Naturally, this analysis suggests that the popularity of the government may be less certain if more systemic failures were to come to the fore in China—ultimately, the buck stops at the central government. The Party must remain wary, but so long as it can ensure that grievances can be addressed locally, stability should be maintained. 

Sturdy institutional foundations within the CCP will further serve to promote its rule. Regimes are frequently imperilled by factionalism during leadership transitions. The CCP, however, has taken strong steps toward an increasingly norm-bound succession, with plans laid out well in advance, and minimal room for overt factional control. This institutionalisation of the Party has severely diminished the ability for any individual, or set of individuals, to seize the reins of power in a way that could damage the party’s long-term prospects for smooth transition. 

Relatedly, since Deng Xiaoping’s “four transformations” in 1983, the party has made a concerted push toward making meritocracy, not factional loyalty, the basis of promotion. Together, these factors work to create strong morale within party officials, who view the path toward seniority as being fair. Importantly, this also boosts competency levels within civil service. This work to produce a government structure that is fundamentally durable. 

Some scholars also argue that cultural factors are important considerations in persistence of stability in China. The most relevant aspect is China’s historical grounding in Confucianism. Renowned political scholar Samuel Huntington writes that, in its traditional form, Confucianism inherently emphasises “authority over liberty”, maintains that “individual rights were created by the state”, and “merged society and the state”. In a country with strong Confucian values, government stability is culturally ingrained. 

Indeed, the Chinese government has demonstrated a growing interest in promoting Confucian thought and values in the country. In the decades past, the CCP once branded Confucianism as a “feudal” ideology. Now, the party under Xi has made lectures on Confucianism mandatory at the party’s training academy and has spearheaded a push for the teaching of Confucian values at schools. 

China has enjoyed an envious combination of political growth and economic stability. This article only scratches the surface on the literature surrounding these issue, but hopefully provides an instructive glance into how the Chinese government has managed to maintain institutional solidity despite the strongest doubts.