Wednesday 1 October 2014

The Chinese Communist Party's Last Stand?

It is 65 years this very day that the Chinese Communist Party (CCP) seized Beijing (Peking as it was then known to Westerners) in a bloody civil war and exiled the Kuomintang Chinese Nationalists to Taiwan- now a separate, democratic country. This, if historical trends are observed may suggest that the CCP leadership may want to make the most of these celebrations because they certainly won't be witnessing anymore- most definitely not a centenary in 2049. The Hong Kong protests are of a very different manner but their thirst for democracy cannot be quenched by ignorance from Beijing. Mainlanders (those who don't live in HK) are not stupid. They know what is going on and they too, particularly the young (the offspring of the Tiananmem generation) want change too. Change will happen but will it be done cooperatively from top to bottom or a violent revolution?

Looking at the maths and experiences from other counties shows us what to perhaps expect:

Soviet Union: 1917-1991(74 years): not until 1924 did the new government essentially gain any kind of control and by the 1980s the state was crumbling. The USSR's transition was relatively peaceful- Gorbachev is considered a traitor in Chinese Communist Party circles.

Mexico: 1929-2000 (71 years): another revolutionary mess like Russia and China in the 1920s pre-one party rule. Economic realities started to bring the Institutional Revolutionary Party to an end (although not completely) in the 1980s and 1990s.

Cuba: 1959-present (55 years): this is the anomalie here but the scale of economic reform in Cuba has essentially assured that the country is on a path to change. Not until the death of Fidel Castro will the country be allowed to mourn and move on.

The patterns of two of the main former Communist one party states, the Soviet Union and Mexico under the IRP shows that their lifespans are around 70 years. According to trends, the Chinese Communist Party has about a decade left. A decade of their own managed decline? A decade of transition? A decade of renewal? The new Chinese president- Xi Jinping recently declared the Party would live for a thousand autumns and ten thousands generations. There is certainly worry at the top of Chinese politics. 

The economy of China needs to be stressed here. Either way it goes- change is coming. If the economy continues to experience rapid growth then living standards will increase, the middle classes will expand, the people will look for change. If however, as some economists have predicted, the economy slows and perhaps even slumps into a recession of some sort, this will be destructive for the CCP. As seen in Mexico and the USSR, economic meltdown after a boom results in people blaming the current government and administration. The CCP is the most corrupt political party in the world and whilst many are prepared to tolerate this as of now, it will not be tolerated in an economic slump. These middle classes will not simply go away, they are enjoying their Western living standards and will not give them up without a fight. The amount of Chinese students attending Western universities continues to rise and the exposure to social media, freedom of speech and a cultural awareness cannot be erased from their minds like robots when they return to China. 

The problem with many students and like minded individuals which we have seen in Hong Kong this week is that there is no concered opposition in China because they have been systematically stamped out by the government. The big problem if some form of revolution occurs is that there may be nothing to replace the current system and instead they could end up with what we have seen in Russia today or even Egypt. After all, they will be governing over 1.3 billion people. This can either be done by federalism or absolute dictatorship. If they go for the former, then regions such as Tibet and the Muslims of the North West may demand greater control of their affairs or maybe even independence. 

Demographics are rapidly changing in China too. Around 10% of China's 1.3 billion inhabitants are over 65 years old. This coupled with a very low birth rate will result in an decreasing labour force each year well into the 2030s. There is also a serious gender imbalance too with more males than females- resulting in less future births- unless millions of men decide to have a sex change, the population is expected to decrease over the century. 

To complete this blog- I'm not suggesting the upcoming disintegration of China itself but I am forecasting big change in China over the next decade and perhaps in the coming years. For now, let us see how the Hong Kong protests pan out. The current status quo is unsustainable and China needs it's Gorbachev. The Communist Party knows this and it is either going to have to get on board or be forced out on the plank.