Foreign Policy Blogs

How Many Chinas Are There In China?

Nine.  At least that’s what The Atlantic said last year.  In an effort to demonstrate that China is not as monolithic as it may sometimes appear, The Atlantic published an interactive map on its website dividing the People’s Republic of China into nine regions (the interactive feature doesn’t currently work correctly, but you can find the full text about each region here).

But perhaps the more useful answer to the question how many Chinas are in China is… two.  This is the model used by George Friedman in The Next 100 Years, in which he attempts to predict what will happen with China (and the rest of the world) over the next century.  He isn’t concerned with the rise of China as a serious long-term global competitor to the United States because, in his view, there are two Chinas – coastal and interior – with vastly different interests.  I will quote him at length:

Recall how China split into coastal and interior regions between the British intrusion and Mao’s triumph.  Businesses on the coast, prosperous from foreign trade and investment, gravitated to their foreign interests, trying to break free from the central government.  They drew in European imperialists – and Americans – who had financial interests in China.  Today’s situation is potentially the same.  A businessman in Shanghai has interests in common with Los Angeles, New York, and London.  In fact, he makes far more money from these relationships than he does from Beijing.  As Beijing tries to clamp down on him, not only will he want to break free of its control, but he will try to draw in foreign powers to protect his and their interests.  In the meantime, the much poorer people in the interior of the country will be either trying to move to the coastal cities or pressuring Beijing to tax the coast and give them money.  Beijing, caught in the middle, either weakens ad loses control or clamps down so hard that it moves back to a Maoist enclosure of the country.  The critical question is which outcome is more likely.

Adding to this model, David Black, blogging for the World Policy Institute, wrote earlier this month of the widely reported labor unrest in China this summer, noting “the divide between the way unrest is being handled in cities along China’s coast versus those in the country’s interior.”  Black wrote:

In short, there are two Chinas when it comes to manufacturing (though the country can be broken down much further). With few exceptions, manufacturing in provinces like Guangdong and Tianjin (just outside of major coastal cities Hong Kong and Shanghai) accounts for most of the higher-end consumer electronics and durable goods produced in China. It takes place in large chains of factories and compounds that are mostly foreign-owned, usually by big companies based in Taiwan, Japan and the United States. These companies (Foxconn, Honda and Flextronics are good examples for each respective country) are the ones whose managers gave in to demands for wage increases, and whose factories the Chinese government allowed the press to access. The official labor unions still side with the state over workers, but police brutality is unusual. In the end, after this round of unrest, nearly all of the workers in these factories enjoyed a wage hike.

Inland, in places like Henan province or the municipality of Chonqing, a different dynamic pervades. Factories are mostly state- or Chinese-owned, hardly any of them produce high-value-added goods and the presence of Western press is minimal. When strikes do occur, the state deals with them more harshly and with greater ease. At a domestic-owned cotton mill in Pingdingshan, a city in Henan Province, two to three thousand police cracked down brutally on the more resolute among 8,000 striking workers. Across the interior state-sponsored news outlets have reported that strikes like these were ‘resolved’ without pay raises—as occurred at a cheap electronics goods factory in Xi’an, Shaanxi province. The Western media, with one notable in the Toronto Star’s continued coverage, has been largely absent.

The strikes in China show the seeds of the factors of which Friedman warns, only instead of demanding wealth redistribution via taxing the wealthy east coasters, the people in the poorer interior region are demanding higher wages.  In response, the workers faced a stern crackdown, which will only aggravate the wealth disparity that Friedman predicts will lead to China’s downfall.  Ultimately Friedman prognosticates that “China [will fragment] along traditional regional lines, while the central government weakens and becomes less powerful.”

While pondering this, two very different political scientists come to my mind.  The first is Charles Boix.  In Democracy and Redistribution, Boix created a model to explain how populations decide whether or not to revolt to achieve redistributionist objectives and how governments decide whether to acquiesce or repress.  His model has three phases.  In phase one, we assume a situation in which the poor demand a more equitable redistribution of wealth and the rich decide whether to repress or redistribute.  If the rich decide to repress, we come to phase two, in which the poor decide whether or not to revolt.  If the poor revolt, we come to phase three, in which the poor either succeed and expropriate the rich’s capital or fail and no redistribution of wealth occurs.

So what determines whether the rich will decide to repress and whether the poor will decide to revolt?  One factor Boix examines is wealth inequality.  If wealth disparity is high, the wealth of the rich would be vulnerable, since there would be a lot of really poor people wanting a share of it, so the rich would really want to try to repress.  Also, the level of the organization of the poor would affect the decisions of both sides.  If the poor were not well organized, repression would be relatively easy, so would seem even more appealing to the rich.  Additionally, weak organization would dissuade the poor from revolting, since success would seem unlikely.

On both of these points, for China, signs point to repression.  Wealth inequality in China is high.  Earlier this year China’s Gini coefficient reached 0.47.  (The Gini coefficient measures wealth inequality on a scale of zero to one, zero signifying complete wealth equality, one signifying a situation in which one person owns 100% of the country’s wealth.)  As for the ability of China’s impoverished population to organize, the strikes of this summer indicate something positive, but the Chinese government retains many mechanisms of control, the media being one, as demonstrated by China earning the slot of 168 out of 175 on Reporters without Borders’ index of press freedom ranking this year.  For the time being, China’s government seems to be able to retain power over its poor interior region by repression.  But if the costs of repression rise, as do the incentives for wealth distribution.  Should the government choose someday to appease its interior region by wealth redistribution from east to west, we may see the political upheaval of which George Friedman warns.

This brings me to the second political scientist that comes to my mind, a very different one: Igor Panarin.  Panarin is the Russian Political Scientist who has been predicting since 1998 that the U.S. would split into six regions in 2010.  Panarin’s theory is quite similar to that of Friedman:

Panarin has been predicting for the past twelve years that since different regions of the U.S. have different economic interests, a financial crisis will lead to civil war and ultimately disunion.  As for the two factors that Boix notes, wealth inequality is on Panarin’s side.  The U.S.’s Gini coefficient is comparable to China’s.  Organization, though, works against Panarin.  Yes, the U.S. has been fairly successful in preventing mass mobilization of the less well off – U.S. unions are weak compared to Europe and third parties do not fair well in the electoral process.  But the U.S. is a freer nation than China, and the potential for organization is greater here than it is there.  Furthermore, why would the U.S. split now when it did not during the Great Depression?  In 1929, the estimated Gini coefficient wasn’t that much different than it is now.  So if that financial crisis didn’t lead to the end of America, why would this one?  Overall, I’d guess that the gut reaction of most Americans is that Panarin is crazy while Friedman may have a point.  However, given the similarity of their theories, I don’t think both of these things can be true.