China takes a lick and keeps on ticking

By Ian Bremmer 

Some readers will be surprised to see that Eurasia Group’s list of top risks for 2009 (reprinted below) doesn’t include China. Doesn’t that country face a serious threat of destabilizing social unrest? It’s clear that the global economic downturn has had an impact; thousands of manufacturers have shut down in the past few months as demand for China’s exports falls in the United States and across Europe. That puts large numbers of unhappy people on the streets. And this is a country that already faces tens of thousands of protests each year over a broad range of public grievances.

So why didn’t China make the cut? Because nationalism and pride in the very visible achievements of the Chinese system are now conspicuously more intense than at any time since I started traveling to China. I experienced this phenomenon again and again before, during, and after the Beijing Olympics last August. For millions of Chinese, those Games were their Games, their opportunity to command the spotlight on the international stage. The Communist Party delivered on promises of a great show.

It’s not just the success of the Olympics, of course. It’s decades of heady economic growth that continues to create opportunities for ever-larger numbers of people. There’s no evidence at this point that a significant number of Chinese citizens hold their government responsible for the developing slowdown in the Chinese economy. In fact, there’s an often expressed feeling in the country that American misdeeds and the western free-market system are to blame. If anything, many Chinese probably believe that it’s China’s over-reliance on the West that needs to change.

It’s true that demonstrations have erupted across the country over the past year, reflecting deep public anger over a startling diversity of heart-wrenching issues — from infants dying from poisoned milk to schoolchildren crushed to death inside shoddily constructed schools during the Sichuan earthquake to disputes over property rights to all kinds of other local economic problems. But the overwhelming majority of these demonstrations are targeted not at the Communist Party leadership in Beijing but at local officials, bureaucrats, and business interests.

Still, when it comes to social stability, the Chinese government takes nothing for granted. The leadership has spent considerable time and resources on efforts to stimulate growth and to create new jobs. That will help keep displaced workers off the streets. For those who do protest, the party elite has again demonstrated a determination to quell social dissent by any means necessary. Both commitments will probably help limit the turmoil produced by any large-scale and coordinated public protest in 2009.

Longer term, the risk of social instability is obvious. The party leadership is well aware that the country’s vast range of environmental problems and their impact on the lives of ordinary Chinese create enormous potential for trouble. Nor is it at all clear that China can continue to generate the 10 to 12 million jobs needed to sustain longer-term economic growth-particularly jobs that require highly-skilled labor. That will prove a growing problem as tens of millions more people in search of opportunity emigrate from the countryside into China’s fast-expanding cities.

The party’s ability to maintain its monopoly hold on political power depends on its ability to continue to generate prosperity. But it has earned enough political capital over the years that the authoritarian system is unlikely to face regime-threatening protests at the first sign of a slowdown-even a serious one. China is an enormous, dynamic economy with more systemic flexibility than many people realize, and it’s likely to emerge from the global financial crisis in better shape than most of the world’s other emerging markets.

That should be enough to keep the most dangerous risks at bay…at least for 2009.

Photo: MIKE CLARKE/AFP/Getty Images