The Chinese government has long feared that the increasing freedoms that many Chinese citizens have enjoyed over the past few decades of economic liberalization would come back to bite them. Like Russia, China has launched a massive stimulus package (relative to GDP) as a result of a lack of FDI inflows, stock market losses, a financial freeze, and a real estate bubble. While thus far the Chinese government seems to have directed the stimulus far better than the Russian government, Beijing is facing mounting pressure from the rising number of unemployed and slowing growth rates. This morning’s Washington Post writes:
Rural protests, often led by impoverished farmers angry over land seizures that leave them unable to feed their families, have occurred sporadically over the past decade. But richer, more educated Chinese are behind the recent strikes, which have disrupted life in China’s cities. The success achieved by the drivers in Chongqing has inspired work stoppages elsewhere.
In the past 30 years of economic liberalization, younger Chinese have come to see these things [higher education, vacations, cars, and restaurant dining] not as a luxury of modern life but as a right.
With growth rates and investment falling, unemployment and dissatisfaction with government policy rising, will the Chinese government be able to hold on to their power monopoly if the worldwide economic downturn continues?
Published Date: December 17, 2008