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While China's nouveaux riches are living in luxury apartments and gated compounds, millions of migrant workers are subsisting in primitive conditions in crowded dormitories with few legal rights and no medical care. Despite China's dramatic growth, the poorest of the poor (those earning less than 50 cents a day) are actually becoming more numerous – and their incomes are declining. The number of workers who earned less than the equivalent of $100 a year rose by 800,000 last year.
Many analysts believe the Chinese Communist Party is facing one of its worst crises since its founding in 1921. Even its propaganda mouthpiece, the People's Daily, has warned that people are “losing confidence” in the party because of corruption and graft. In an internal report last month, the party's central committee urged “a stronger sense of crisis” because the “life and death of the party” could hang in the balance.
Mass protests are growing. There were 58,000 cases of “social unrest” or “mass incidents” in 2003, an increase of 14 per cent over the previous year, and 3 million people participated in those protests, according to official statistics. In the cities, hundreds of homeowner associations have been formed, and urban citizens are increasingly willing to launch lawsuits and collective actions to fight for their rights as consumers and property owners. Thousands of homeowners have engaged in bitter confrontations with urban officials and developers over the demolition of their homes without proper compensation.Beijing responds by talking of “intra-party democracy” and greater “accountability” and “supervision” of the authorities, but it never talks of the obvious solution: multi-party elections where the government would genuinely be accountable to the entire public. Party delegates are occasionally chosen by secret ballot in a few districts, but never at the provincial or national level. Elections at the lowest possible level, the village, have been allowed since 1987, yet they have never led to substantial democratic reforms. Only a few elections at the township level have been permitted.
Despite the rising discontent, there is less serious debate about political reform today than there was in the 1980s. The new Chinese leader, Hu Jintao, has shown little interest in real democracy, though he expresses vague support for the “rule of law.”
Even as it loses the revolutionary legitimacy that sustained it for a half century, the Communist government still knows how to crush and defuse dissent with a shrewd combination of iron-fisted repression (arrests, assaults, bans) and carefully controlled safety valves (the Internet, the courts, petitions).
Every democratic experiment is constrained by strict limits. Three independent candidates were elected in Beijing's local councils last winter, but one was swiftly arrested and silenced after he led homeowners in a battle with a property developer. Rural protest leaders are often jailed or beaten. In several villages, anti-corruption candidates who won local elections were imprisoned, assaulted or even killed by hired thugs.
“Nobody here has ever dared to protest,” said Mr. Huang, the veteran Communist member in Xinhua village. “People here are too obedient. Nobody ever dares to stand out from the crowd. Whoever stands out will be punished by those officials. If one person leads a protest, he is still an ordinary peasant and they are still powerful officials and it is the peasant who will suffer.”
China's economic boom has helped defuse the tensions. There is an implicit social contract that people can become affluent if they avoid political activism – “get rich and shut up,” as one writer noted. But the unrest could reach dangerous levels if the boom weakens. One of the biggest fears is a financial crisis, perhaps triggered by a collapse of one of the state-controlled banks that are already heavily burdened with bad loans. If the growth disappears at a time of rising expectations, the social tensions could escalate beyond the state's control.