ROILO GOLEZ, Philippine National Security Adviser (2001-2004). The world and the Philippines as Roilo Golez sees it. With focus on national security, geopolitics, geo-security, economics, science and government.
Thursday, May 26, 2016
China’s Middle Class Is About to Demand Big Changes. Fortune.
China’s Middle Class Is About to Demand Big Changes
One of the puzzles about China is why its burgeoning middle class has been acquiescent to one-party rule. According to basic theories of democracy, sustained economic development leads to democracy, not the survival of dictatorship.
In the case of China, this rule does not seem to apply, at least up to this point. Depending on what estimates one uses, the number of middle class people in China varies from roughly 70% of the urban population (based on a McKinsey study in 2013) to 200 million people, according to an authoritative survey of 40,000 households conducted in August 2015. This fast-growing segment of the Chinese population is highly educated, well-traveled and informed, and tech savvy—all factors that should make them proponents of political change.
But, contrary to theory, China’s middle class has been politically passive. Perhaps the Chinese Communist Party (CCP) has somehow found a secret recipe for defying the law of history.
And yet, a closer examination of China’s socioeconomic development in general, and the political implications of a large and growing middle class in particular, should convince us that it may be premature to write off the Chinese middle class as a force for political change. On the contrary, the middle class is most likely on the verge of demanding dramatic change.
When we measure China’s socioeconomic development against that of comparable middle-income countries that have made the transition to democracy in the last four decades, Chinese income and education levels are exactly at the median, with a per capita GDP of $13,000 in purchasing power parity, and an average of 7.5 years of schooling for adults over 25.
This suggests that despite its tremendous growth, China has not yet become so prosperous and developed as to make it impossible for one-party rule to survive. In another decade or so, however, Chinese income and education levels will rise further and the size of its middle class should also grow. In other words, China’s social transformation in the coming decade will make its society far less hospitable to the continuation of one-party rule.
International experience also suggests that the CCP will find it increasingly hard to meet the rising aspirations of China’s middle class. In the 27 years since the Tiananmen crackdown, the party has been extraordinarily successful in delivering one type of improvement—material consumption. An average middle-class household has experienced a great leap forward in its consumption of basic necessities and ownership of housing and automobiles. For most members of the Chinese middle class, the memories of the material deprivations under the rule of Mao Zedong are still fresh. Any regime that can deliver such improvement deserves at least some credit.
However, one problem with the middle class—and with autocracies that depend on satisfactory economic performance to stay in power—is that the middle class keep raising their expectations, which autocratic regimes eventually cannot meet.
In the Chinese case, the aspirations of the middle class now center on the delivery of personal and social security, which will grow far more challenging for the CCP to pull off.
In terms of personal security, Chinese middle class elements want the protection of their rights. Such aspirations will be hard to meet for a regime that sees the rule of law as a lethal threat to its monopoly of power.
A series of recent incidents illustrate that China’s middle class are becoming increasingly sensitive to and vocal about their individual rights. One example was the national uproar that followed the death of a graduate student in one of China’s most prestigious universities in Beijing. The middle class student, Lei Yang, died mysteriously in police custody. Widely seen as the result of police brutality, his death has energized public opinion because many middle class elements feel that the same fate could have befallen them.
The challenge of providing social protection for China’s middle class will be no less difficult for the CCP. As China’s population ages, its middle class members require high-quality healthcare and income security. Both are expensive and require a much higher degree of regulatory and budgetary transparency than the CCP can or is willing to provide.
A healthcare system which the public can trust must have, at a minimum, clear and effective regulations, enforced by a credible legal system and a free media. As for ensuring the retirement income security of the middle class, dedicated taxes have to be raised and accounted for, thus greatly reducing the CCP’s ability to divert the country’s fiscal resources to its own use and priorities.
These are, of course, medium to long-term challenges. It is highly unlikely that the CCP can meet them while retaining the core features of one-party rule. The good news for the CCP is that it is not facing an imminent middle-class revolt. The bad news is that the writing is on the wall.
Minxin Pei is a professor of government at Claremont McKenna College and a non-resident senior fellow of the German Marshall Fund of the United States
People watch the 3D film "Transformers - Age Of Extinction" at a cinema on June 27, 2014 in Wuhan, Hubei Province of China. Photograph by ChinaFotoPress via Getty Images