Risk #2: China vs. information

Note: Today is the second in a series of posts that detail Eurasia Group’s Top Risks for 2013.

As their people grow bolder in their quest for information, China’s leaders will only tighten the restrictions they place on cyberspace. China is, in fact, embarking on a worrying experiment: It is the only major power that is attempting to preserve an authoritarian system in the information age. This gigantic task will demand a great deal of leaders’ attention, raise tensions among the Chinese people, and reverberate outside of China’s borders through the country’s foreign policy.

China’s Great Firewall and unpredictable censorship regime have more or less enabled its leaders to manipulate the information accessible to its citizens. But these tools are fast becoming insufficient, a fact made clear by strikes at a major Chinese newspaper this week. China’s internet users stand at more than half a billion and counting. Growing demands for transparency and information leaks that embarrass the government are inevitable, as evidenced by the public’s growing awareness of high-level corruption scandals.

The Communist Party appears poised to implement a new phase of information control that is part reactive and part proactive. On the reactive side, the government has begun to disrupt virtual private networks used by many foreigners, and even some Chinese, to circumvent the country’s firewall. The government will proactively attempt to capitalize on technological tools by using the internet and social media such as Weibo (China’s version of Twitter) to convey its own messaging.

The friction between the government’s attempts at self-preservation and the population’s desire for more transparency will be the greatest political challenge for China in 2013. While the stability of the government is unlikely to be shaken in 2013, this internal conflict will distract leaders and encourage them to deflect public anger outward. Finding foreign scapegoats is a time-honored tactic that the Communist Party is likely to repeat this year.

There are plenty of foreign targets to turn to. Territorial tensions are high and are only exacerbated by the U.S. pivot to Asia, which has emboldened countries such as the Philippines to more aggressively push their interests. The largest risk is an increase in nationalism from China toward Japan, especially given the growing tension surrounding outstanding territorial disputes between the two countries.

Ultimately, though, China’s attempts to limit information run counter to its stated desire to develop an innovative economy. How can China’s handful of vibrant IT firms and internet giants become global competitors while operating under a regime that restricts online information? How can China become a dominant player in the global economy if it is disconnected from the global information society? These are inherent contradictions that the new Communist Party leadership will have to resolve.

On Monday, we’ll profile Risk #3: Arab Summer.