China risks another Tiananmen tragedy in the coming years

China risks another Tiananmen tragedy in the coming years

Minxin Pei

@FortuneMagazine

MAY 31, 2014, 5:14 PM EDT

Relying on repression to maintain power may be the Chinese Communist Party’s undoing in the long run.

The Tiananmen Square tragedy of June 4, 1989 — a bloody suppression of a peaceful, pro-democracy movement 25 years ago this week — was truly a black-swan event.

By pure coincidence, the three ingredients of a revolution — division within the ruling regime, rapid mobilization of key segments of society, and international intervention — were present at the same time. Inside the Chinese Communist Party (CCP), the top leadership was bitterly divided, paralyzing crisis management and its repressive apparatus.

Protesters were emboldened by signs of disarray within the regime and became radicalized. Their actions, in particular the mass hunger strike by university students on Tiananmen Square, gained support from other segments of Chinese society (workers, professionals, and government workers), sparking mass protests in the Chinese capital and throughout the country.

International intervention took the form of a pre-scheduled Sino-Soviet summit by the then-Soviet leader Mikhail Gorbachev, who arrived in Beijing at the height of the protest. His presence, along with more than a thousand foreign journalists, tied the government’s hands and enabled the Tiananmen movement to gain momentum and international sympathy.

By the time Deng Xiaoping, then the CCP’s paramount leader, sent in tanks to crush the movement on June 4, the regime had come perilously close to collapse.

In the 25 years since Tiananmen, China’s regime has learned valuable lessons from its near-death experience and applied them effectively in preventing another revolutionary uprising. Among these lessons, the most important is that the party should focus on preventing similar mass protests. This requires the government to take immediate and decisive steps, however costly, to quash social protests at the earliest possible stage.

The CCP has spared no expense in the post-1989 era in building up the world’s largest and most effective apparatus of repression, which consists of networks of informers embedded in Chinese society (whose function is to provide intelligence and early warning), the Internet police (to monitor the web and control information flow), and well-equipped anti-riot paramilitary forces (dispatched to scenes of protest immediately to disperse crowds).

In addition, so-called “stability maintenance offices” have been set up at all levels of the state to respond to any signs of trouble. When a major protest occurs, the local party chiefs must take personal charge and coordinate suppression efforts. In dealing with mass protests, the CCP has also learned to use both carrots and sticks, giving concessions to some protesters while arresting and jailing protest leaders.

However reprehensible these methods may seem, one has to give the CCP some credit for its determination and resourcefulness in defending its monopoly of power. It is this system of sophisticated repression that has enabled the party to weather the post-1989 challenges from Chinese society and stay in power despite rising social tensions. Today, the number of sizable protests is estimated to be close to 200,000 a year, but they barely dent the regime’s protective armor.

So, in a narrow sense, another Tiananmen is extremely unlikely in the foreseeable future.

However, this does not mean that the party’s rule will last forever. There is a crucial difference between treating the symptoms of social tensions and political illegitimacy (by applying repression) and removing their underlying causes (by adopting reform).

At the moment, the CCP may have succeeded in preventing social discontent from mushrooming into a coherent and sustained opposition movement. But relying on repression to maintain power may be the party’s undoing in the long run.

Success breeds complacency. In the Chinese case, the party has become increasingly focused on repression while it neglects the causes of social discontent, such as corruption, inequality, environmental decay, and a lack of government accountability. As a result, the regime is creating ever-more enemies even as it busily deals with existing ones. As more members of Chinese society grow dissatisfied with the party’s rule and attempt to demonstrate their discontent through speech and action, the regime will have to resort to more repression. The costs of such repression will ultimately become unbearable.

These costs are not only economic, although they will become progressively unaffordable as China’s economy slows and generates less revenue for the state. The costs are moral as well. Escalating repressive efforts will alienate moderate segments of Chinese society, as they find the regime’s methods of maintaining power morally repugnant. Most crucially, the moral costs of repression will likely lead to division within the regime itself as its moderate members raise questions about the effectiveness and appropriateness of stomping out resistance.

In transitions to democracy in most authoritarian governments, division among the powerful over the moral costs of repression usually marks the opening stages of regime change.

If this takes place in China, then we may very well witness another Tiananmen, a democratic revolution ignited by moral revolt, in the coming years.

Minxin Pei is the Tom and Margot Pritzker ’72 Professor of Government at Claremont McKenna College and a non-resident senior fellow of the German Marshall Fund of the United States

 

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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