Dispatch: China's Approach to Social Harmony
Video Transcript:
China Director Jennifer Richmond examines the ways China's leadership is exerting control over its economy and society.
Editor’s Note: Transcripts are generated using speech-recognition technology. Therefore, STRATFOR cannot guarantee their complete accuracy.
Two announcements this week on China are critically important for understanding their main policy of addressing social instability. The first came from Zhou Yongkang -- who is China's intelligence chief -- who reiterated his call for social control. The second announcement came from U.S. Commerce Secretary Gary Locke -- who is also tipped to be the next ambassador to China -- who criticized Beijing for its policies against foreign investment, discouraging foreign investment and promoting domestic industries. These two issues highlighted Beijing's policy toward maintaining social harmony or in Chinese, hexie shehui.
In the run-up to the 2012 transition and in light of economic troubles and issues of social instability, China has started to tighten control on both its economy and society. This is a two-pronged approach, which is a) to raise the standard of living and b) to re-establish its informal security sector to protect national stability. In order to establish their first objective, the central government has become much more involved in economic decision-making. This gives its state-owned enterprises preferential treatment, which discourages foreign investment. At the same time, they also give their state-owned enterprises massive subsidies which make it hard for foreign investors or foreign companies to compete on international projects since the Chinese companies offer a seriously discounted cost.
On their second objective, the state has become much more aggressive in re-establishing an informal security sector that encourages individuals and organizations to report on any indications of dissent. This is in addition to their massive spending on their formal security sector. This is a shift from the past few decades where more freedoms were tolerated except for in crisis situations such as Tiananmen Square in 1989. The informal security sector is meant to operate as a backstop to the formal security sector as a preventative measure penetrating all layers of society from labor unions to the press, corporate organizations to grassroots communities.
In addition to the domestic challenges that China faces, there are also growing external challenges. The Strategic and Economic Dialogue with the United States that is set to start next week will underline the United States' concern over China's preferential economic policies. And after the death of Osama bin Laden there is also the fear that an accelerated U.S. withdrawal from the Middle East and South Asia could leave the U.S. government and its military more bandwidth focus on China.
