Economic Downturn and Instability in China: Time for Political Reform?

Ray Yep of the Brookings Institute writes on political uncertainty in a time of increasing and fomenting :

[…]The 24% increase in public expenditure this year has to be financed by a deficit of 950 billion yuan ($139 billion), the largest since the founding of the People’s Republic of China in 1949. Yet, for the Party, this is an expensive but effective strategy of governance. For the Chinese leaders and the CCP, the unabated economic growth and steady rise in living standard over the last 30 years provided a new lease of life following the ideological bankruptcy of the 1970s; economic growth is the proven way to placate the people and preserve the Party’s legitimacy.

Political reforms that may help strengthen the administrative competence of the Chinese bureaucracy or contribute to a more business-friendly environment are deemed as relevant and thus welcomed by the regime. Political liberalization, as advocated by vocal intellectuals and dissidents in exile, is not. History tells us that those in power may contemplate sharing power when popular pressure for change has reached the boiling point and there is a threat of violent takeover. Social tension in China may have been rising and grievances against rampant corruption and social injustice are growing fast, but – given its tenacity and because success in delivering economic progress has remained by and large intact – it is debatable whether the Communist Party has already lost the mandate to rule and is prepared to concede to pressure for fundamental . Realistically, an opening for political reforms will only emerge when the Party feels comfortable with its power position and is confident of its ability to control the pace and direction of those reforms. The turbulence and adversity inherent in the current global financial meltdown hardly seem conducive to these sentiments.

The Chinese translation of this article is here.

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