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Latest Country Blogs: China
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Global economy can forget China 'rescue'


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Sleeping giant threatens rule of China's corrupt elite

China is in the grip of a profound social, political and economic crisis. The evidence is there in corruption scandals, a fading economy and a rising tide of desperate resistance by ordinary people.

Several senior staff at GlaxoSmithKline's China operation are under arrest for bribery. They gave doctors and officials billions of yuan's worth of foreign travel, supplied prostitutes and handed over cash in return for boosting GSK products. More arrests are said to be imminent.

The trial has begun of former Communist Party (CPC) high flier Bo Xilai, accused of taking bribes, embezzling money and buying sex. He is the politician whose wife faces life imprisonment for allegedly murdering British businessman Nick Heywood. Similar charges were proved against former railways minister Liu Zhijun who was given a suspended death sentence.

That these two officials are on trial and not others, is only because they are losers in continuous in-fighting in the CPC. The fact is that they are all at it.

Users of Weibo, the social network popular in China, are more and more taking their courage in their hands and publishing hundreds of accusations. Particularly disgusting are the stories of mass abuse of women. It seems the CPC has reintroduced the feudal crimes of concubinage and forced prostitution.

The impossibility of getting any redress through the courts or government is leading people to acts of total desperation. This month alone:

Driving this social and political upheaval is a deepening economic crisis. Growth continues to slow and exports fell 3.1% in June compared to the previous year, the highest monthly fall since the global crash. The price Chinese firms can get for their products on the global market fell for the 16th successive month.

The government is trying every way, from enforced retraction to Keynsian investment to fiscal measures, to shore up growth. Banks have been told to stop lending to businesses in sectors where there is oversupply, particularly industries making materials for construction. Local authorities have been instructed not to give land or planning permission to any new ventures in these sectors.

A collapse in tax revenue from falling consumer sales has added to the sense of crisis. The government has responded by lifting credit controls, to encourage people to borrow to buy consumer goods.

The government has pledged to keep unemployment below 5% and to improve its image. A commission is trying to convince people they are now "down-to-earth, honest and upright", and to regenerate support for nationalism and what they call, without irony, "the Chinese dream".

Hong Kong's relatively independent Oriental Daily News concludes that:

If the ruling authorities cannot reverse social injustice, narrow a rich-poor divide, eliminate bureaucratic officialdom and combat judicial malpractice to create a fair and equitable social environment where the weak have hope and where most people can live in equality and dignity, cases like the fatal stabbings on the streets of Beijing and the Xiamen bus explosion will not stop.

An increasingly confident working class is demanding and getting better wages and conditions. As a result, firms are moving out of China to even lower-wage countries. The CPC bureaucracy knows that they are facing a sleeping giant which when roused will shake the rule of the corrupt elite of oligarchs and local tyrants.

Penny Cole
25 July 2013

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