People and Party

The motivations of China’s emerging middle class are streaked with contradictions; consequently, so are its attitudes toward, and expectations of, the Communist Party. Despite an ambivalence among this group toward the central government, burgeoning incomes will not trigger abrupt change due to a co-dependent relationship between rulers and ruled. The former craves control; the latter craves stability. The result is ultra-slow-mo political evolution.

China’s consumers, while boldly ambitious and desperate to climb the hierarchy of success, are insecure. Their wealth is new and incomes are still limited. Nothing comes easily.

Often, economic interests are not protected by institutionalized, enforceable law and property rights are still an abstraction to date. Top earners are dependent on the Party’s continuation of a pro-growth agenda, one over which they exert little direct control. Corruption is rampant and the system is biased in favor of state-owned enterprises to the detriment of entrepreneurs.

More broadly, they exist in a competitive dog-eat-dog arena in which universities pump out more than six million fresh graduates every year while guarantees of cradle-to-grave subsistence have been smashed. The middle class is forced to conform to narrowly defined standards of success, all mandated by the power structure.

Many Westerners might expect economically empowered Chinese to push the government toward significant political reform. They see anger as the natural response to newly granted economic interests remaining precariously undefended by impartial civic institutions.

Order before chaos

But the Chinese are, first and foremost, reliant on the Communist Party to maintain order. It must "stabilize" the platform on which continued economic progress rests. 

China, a Confucian society that defines government’s primary role as advancement of national interests rather than protection of individual rights, applauds the skill of technocratic cadres.

In Chinese eyes, these are mandarins who have connected the country with the outside world, promulgated a long-term development strategy and built a national infrastructure from scratch. Capital has been funneled into industries such as telecom and autos, ones that provide well-paying white-collar jobs. China’s economic miracle is appreciated by its beneficiaries as a top-down phenomenon.

This belief in the prowess of the Party as a unifying force is why quintessentially Chinese imperial displays – such as an operatic, testosterone-fueled 60th National Day parade – are met with little resistance, despite staggering cost and questionable quantifiable return.

However, a middle-class acceptance of Beijing’s autocratic inclinations does little to stem growing ambivalence. Individuals look toward the government to protect hard-earned (and easily lost) economic gains.

They expect the Party to become more responsive to the people as they pursue traditional hallmarks of middle income identity. By most measures this is not happening.

The government, attuned to escalating middle-class demands, knows it must evolve into something more responsive and flexible. But structural reform will be slow, ruthlessly incremental, and imperceptible to foreign eyes.

Given growing incomes, the gap between the needs of sophisticated middle-class consumers and the government’s inability to provide for them will first become apparent in service industries. Despite nominal adherence to WTO timetables, this sector – most conspicuously, health care and financial services – will remain highly regulated for many years to come.

Well-off individuals will not be free to invest or care for family members as they wish. Quality standards within state-owned providers will remain mediocre. Bureaucratic in-fighting will trump consumer choice. Surgeons will still be bribed by patients’ relatives to ensure adequate care. Medical equipment will still be manned by inadequately trained and poorly compensated staff.

Local banks, while dependable for low-end transactions, will offer no investment alternatives beyond basic savings and high-risk, opaque mutual funds. The needs of young urban professionals planning for retirement or a child’s education will remain unmet.

Why will the service sector fail to liberalize con brio, despite the avowed imperative of stimulating consumer spending? Yet again, in a bid to retain control of what the Party labels "strategic interests," social and political stability outweighs the development of institutions – in this case, a transparently regulated private sector – that protect individuals.

An eye to progress

Still, middle-class citizens regard the state as the lynchpin that holds society together. For all their desire for institutional reform, they would rather continue with the status quo than revolt against it. Despite Party failings, they also see the enormous progress that has – inch by inch, step by step – been made over the past decades. They are confident that things are getting better, enabled by a "modernization framework" designed by Party autocrats who, when push comes to shove, still rule with an iron fist. Personal freedoms have expanded exponentially. Lifestyle options have multiplied stunningly. Career options have blossomed.

The Chinese people have only just begun their journey toward a middle-class higher ground. The government has time – decades, not years – to morph into something it currently is not: a modern, non-corrupt, self-correcting entity. The question, however, is: Does it have the confidence in itself, and the wisdom of its subjects, to begin its own gradual metamorphosis?

The bet is still far from a sure thing.