Assessing China’s Situation and Challenges in 2019

Written by Joseph Yu Shek Cheng.

Image credit:  Olympic Spirit by Jose Maria Cuella /Flickr, license: CC BY-NC 2.0

The ongoing Sino-American trade dispute that began in 2018 demonstrate China’s deteriorating external and internal environment. It showed that the U.S. is very concerned with the rise of China; actually, most Western countries share this concern, though many of them are reluctant to impose direct sanctions. This concern will greatly exacerbate the significant challenges for China’s peaceful rise, as well as Xi Jinping’s attempts to establish a “new-type of major power relationship”, especially with the U.S.

The Sino-American trade war reveals the weaknesses of the Chinese economy and the danger of a financial crisis leading to social and political instability. In the longer term, maintenance of a healthy economic growth rate and improving the living standards of the people remain the principal sources of legitimacy for the Party regime and the foundation for social and political stability. Chinese leaders apparently understand the challenge posed by income disparity and their response has been to increase social development spending. Since the Hu Jintao-Wen Jiabao administration, the Chinese authorities have been working hard to cover the entire population with a basic social security net.

On the political front, there has been an absence of political reforms and a return to hard authoritarianism. In the Nineteenth Party Congress in October 2017 and the subsequent revision of the state Constitution, Xi Jinping managed to consolidate power, generating speculation that he may seek a third term in 2022 against the established political convention. After the Tiananmen Incident in June 1989, there have been no serious political reforms as the Party refuses to give up its monopoly of political power. In fact, since the Beijing Olympics in 2008, the entire political ecology had been tightened. In this atmosphere of increasing political intolerance, dissidents and the human rights movement, autonomous labour groups, and the underground churches have especially felt the pressure. The strengthening of political suppression was to some extent related to the difficulties in the domestic and international environment.

Xi Jinping obviously considers that the spread of liberal Western ideas and criticisms against the Party positions on important historical issues dangerous to its regime maintenance and, therefore, political stability. This harsh position has quickly led to strict control of the Internet and social media, as well as deliberations in university campuses. The deterioration in human rights conditions in China has caught international attention in recent years.

It appears that like Mao, Xi has been building his personality cult. The amendments to the Constitution in early 2018 added his ideological contributions, Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, to the preamble, a status previously only enjoyed by Mao Zedong.

The Sino-American trade disputes and the slowing down of the Chinese economy have given rise to some optimism regarding pressures on the Party regime. The international community has largely given up hope that China’s economic reforms will inevitably lead to political reforms and that economic growth will give rise to an expanding middle class eager to demand and support political reforms, as was the case in Taiwan and South Korea at the end of the 1980s.

Despite some suggestions of the downfall of the Xi Jinping administration and even the demise of the Communist regime in 2020 or so, to a considerable extent, the Party regime has been able to maintain legitimacy through economic growth, effective governance and providing a basic social security net covering the entire population.

Meanwhile, civil society is still developing under increasingly difficult conditions. It is in no position to confront the Party regime yet, and probably will not be able to do so in Xi Jinping’s second term. But the intelligentsia in China has become more and more exposed to the developments in the Western world. The latter’s appeal has been well demonstrated by middle-class families’ enthusiasm to send their children to elite universities in the U.S. and Europe. The weakness of the Party regime is also exposed when it can no longer hide that a substantial segment of the political elites has moved their families and wealth to the Western world.

Both the scenario of the fall of the Xi Jinping administration and the demise of the Party regime in the near future, and that of the Party regime being able to overcome its difficulties and set a successful model in the long term, are not very probable. The pro-democracy movement therefore has to face the third scenario, that of a gradual atrophy of the Party regime.

A common understanding of the severe challenges that pro-democracy groups outside Mainland China face, including those in Taiwan and Hong Kong, is that they have to fight a sophisticated united front machinery and a state security apparatus with ample resources at its disposal. Strengthening their unity is a must to rebuild the overseas pro-democracy movement’s appeal and influence. An all-groups annual conference arrangement and the establishment of a common Internet platform for publicity and exchanges of views and information are starting points worthy of consideration. It is a high time for self-reflection and reform.

Joseph Yu-shek Cheng is the retired Professor of Political Science and Honorary Rector, New School for Democracy. He publishes widely on the political development in China and Hong Kong, Chinese foreign policy and development in southern China.