Underscoring the depth of the problems Chinese leaders face at home, a recent report by an authoritative state think tank says domestic law and order will face serious challenges in 2010. The Chinese Academy of Social Sciences’ “China’s Rule of Law Development Report No. 8” shows that in 2009 the number of criminal and public security incidents rose by 10% and 20% respectively, reaching a nine-year high. The report predicts illegal activity will continue to rise in 2010 due to the “societal contradictions” caused by unemployment pressure, widening income inequality, and “increasing numbers of relatively poor people.”
This is unfortunately not surprising to China observers, who’ve long noted that China’s double-digit economic growth of the last decade has been accompanied by increasing unrest. According to a 2009 report (partially translated here), in 1993 there were 8,700 “mass incidents,” the Chinese government’s favored term for protests, strikes, roadblocks, and other such occurences,
rising to 87,000 in 2005, and surpassing 90,000 in 2006. In 2008 the level of intensity of mass incidents surpassed that of previous years. Today social scientists claim mass incidents this year still maintain an increasing posture.
The government stopped publishing the yearly totals of mass incidents after 2006 reportedly due to concerns for public stability.
burned out government offices after a violent "mass incident" in a county in SW China in 2008
When you wrap your mind around these numbers, it is easier to understand why the Chinese government takes such an uncompromising stance on revaluing the renminbi. While most economists point out how the long-term economic benefits of RMB appreciation so obviously outnumber the downsides, they fail to appreciate how the one big downside -the temporary rise in unemployment caused by a decline in exports – might cause a shock to a public security apparatus that is already straining just to maintain control. Few outsiders really appreciate the precariousness of Chinese domestic stability, a reality that informs the beliefs of many hardline politicians in China.
"80% of people who are scammed are senior citizens:" a typical public service announcement warning against telephone scams
What the report points out and many observers may not fully realize, however, is the increasing pervasiveness of economic crime that goes on in China. Besides the ever-worsening problem of official corruption, the report emphasizes that black market lending, investment fraud and petty swindles are all expected to continue to increase. Especially in small-scale commerce or smaller cities, recent years have seen a proliferation of scamming that typically preys on the ignorance or powerlessness of average Chinese. The frustration and bitterness collectively caused by these phenomena are real and volatile, judging by how seriously China’s public security takes this issue: Beijing and many parts of China are saturated with public service messages warning people not to believe text messages purporting to be from their tax bureau that instruct them to deposit money in someone else’s bank account, or to otherwise succumb to similar scams.
UPDATE:
The excellent John Garnaut of the Sydney Morning Herald has a great piece out on this exact topic.
In contrast with the powerful, assertive and united China that is being projected to the outside world, [Party insider] Yu Jianrong said his prediction of looming internal disaster reflected on-the-ground surveys and also the views of Chinese government ministers.
