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Will China's Regime be the Next to Collapse?

As unrest spreads throughout the Middle East, western observers like Elizabeth Economy of the Council on Foreign Relations argue China’s government might collapse. The reasoning? Unhappiness over economic disparity. They also believe the demand for materialism is being replaced by desire for political plurality.

Chinese Premier Wen Jiabao pledged to tackle public concerns such as inflation, runaway growth, and corruption in an apparent bid to defuse a call for weekly rallies in 13 Chinese cities as similar issues touched off political convulsions in the Middle East and North Africa.
Peter Parks | AFP | Getty Images
Chinese Premier Wen Jiabao pledged to tackle public concerns such as inflation, runaway growth, and corruption in an apparent bid to defuse a call for weekly rallies in 13 Chinese cities as similar issues touched off political convulsions in the Middle East and North Africa.

Moves to restrict protests and Internet access, they argue, show that the government there is running scared. After all, no one predicted Mubarak’s collapse, so it could happen in China too. Are they right? Is China on the brink? Hardly.

Why? It is not because the government is ruthlessly rooting out dissent. The main reason is that, at the end of the day, most Chinese actually support the government. Sure, the system has shortcomings and continued reforms are necessary – corruption in particular is a significant problem area. But any unrest is more akin to the protests in Wisconsin than those in Tripoli.

People are far more likely to blame local governments than the central government. Many levels of society, from the military to the middle class to even the rising lower class, benefit from the status quo – no one wants a return to the chaos of the pre-opening up era.

Key in the survival of political systems is not democracy in the western sense but a diffusion of power over generations, a leadership that reacts to popular concerns, and room for upward socio-economic mobility. China has all of those.

Unlike in the Middle East, where strongmen and family dynasties who have ruled for decades on end have become the focal points of anger, there has been remarkable diffusion of power in China. None of the powerful families, like those of past leaders Deng Xiaoping, Ye Jianying, or Chen Yun, have had offsprings promoted above a certain rank in the Standing Committee of the Politburo.

That ranking is far more important than titles like Vice Premier or Minister. For instance, Prime Minister Zhou Enlai during the Mao era was ranked at number seven in the Party hierarchy in the 1970s. The offspring of political figures mostly enter business, as there is more money and personal freedom there.

Elite Middle Eastern families squirrel away billions by staying in positions of power and skimming. They buy mansions in Beverly Hills, yachts on the Riviera, and invest in Hollywood. In China, where salaries reach only several thousand US dollars a month for even those at the highest level, that does not happen. Once they retire, leaders are not allowed to travel globally without permission of the Party.

They get compensation through benefits like housing and cars, but are not allowed to hit the speaking circuit or take corporate advisory positions as Tony Blair has with JP Morgan, Henry Kissinger with Coca-Cola, or Robert Rubin with Citigroup. Their kids might join the jet set, but only if they stay out of politics.

In other words, there is no single family dominating the country and using state coffers as personal piggy banks in the same way the Mubaraks or Ghadafis have.

Moreover, the image in the West of the Chinese politburo as dour faced, bespectacled old men trying to maintain an iron grip power without caring for everyday Chinese is absurd. They do for the most part listen to the people. For most Chinese today, the biggest daily concerns are the safety of the products they buy, and access to affordable health care and housing, not Twitter access.

In response, during the recent National People’s Congress meetings the government announced that it would build 10 million units of affordable housing this year, increase food supply chain oversight, and reform the health insurance system to cover 90 percent of the Chinese population.

No, China is not going to follow the path of Tunisia or Egypt in the short-term. There are simply too many stakeholders who are happy with the status quo. Going forward, the government needs to continue to placate different levels of society.

The education and health care systems both need massive improvement to ensure the middle class remains content.

Shaun Rein is the founder and managing director of the China Market Research Group (www.cmrconsulting.com.cn) a strategic market intelligence firm, and is based in Shanghai. Follow him on Twitter at @shaunrein.