China's Content Consumer Class

With the twentieth anniversary of the Tiananmen protests less than a week away, many would have thought that conditions are better now for political reform in China than ever. Yet, no one in the still bustling shopping malls of Beijing seems to care. In fact, the Chinese Communist Party has been a lot smarter than they are often given credit for. While China’s rising economic elites have been busy making money, Chinese leaders have been planning for the next stage of authoritarian consolidation.

Prior to reforms in 1979, China's private sector produced less than 1% of output. There are now 30 million private businesses in China producing over 70% of its national output. There is now a middle class of 100-200 million people, depending on your definition. Yet, political reform has stalled.

Importantly, the overwhelming majority of China's elites - entrepreneurs, professionals, intellectuals, students, journalists, and so on - have lost interest in political reform. When pressed, most express support for the political status quo and are even critical of the 1989 Tiananmen protests.

In fact, these elites are the fastest-growing groups seeking membership in the Chinese Communist Party (CCP). Almost a quarter of the 70 million party members are professionals and skilled workers. One third are college students, and another third are businesspeople. These elites, who were meant to lead the push toward democratization, have become the party's newest and strongest supporters.

It was not meant to be this way. Back in 1989, the most widely distributed photograph from the Tiananmen Square protests was that of the unknown rebel, "Tank Man." Dressed neatly and modestly in dark pants and a white shirt, and carrying his shopping bags, Tank Man stood meters from an advancing tank. As the tank swerved right, Tank Man moved to his left to block the vehicle. When the tank moved left, Tank Man moved right. As the tank stopped, the young man appeared to remonstrate with and wave the tank away. He climbed on to the vehicle and had words with the soldier driving the tank. He was then swiftly pulled away by anxious onlookers and absorbed into the crowd.

Tank Man's courageous actions came soon after government troops had killed hundreds, if not thousands, of protesting students, workers and professionals. Tank Man may have been one of the students or just a worker passing by. Although his identity was never known and the countrywide protests were eventually quelled, it didn't matter.

The Tiananmen protests gave the world the impression that it was just a matter of time before the system would break. The common mistake made in the west is to assume that while China's society and economy is rapidly changing, its authoritarian political institutions remain static. Those too quick to proclaim democracy on the horizon in China have underestimated the determination, capacity, and resourcefulness of the regime in its efforts to remain in power.

Authoritarian regimes cannot afford to be made irrelevant by other forces. To preserve its economic relevance, the Chinese regime has gone to extensive efforts to maintain control of the major levers of economic power. This control is the heart of an economic structure that entrenches the role and position of party members in Chinese economy and society. Around a dozen key segments of the economy - including banking, construction, infrastructure, media, and telecommunications - are dominated by state-owned enterprises (SOEs). The state still owns a majority of the country's fixed assets and receives over three quarters of the country's capital.

The CCP has conducted a tireless and largely successful campaign to co-opt, and in many respects create, the rising educated and economic classes. By remaining the key economic player as well as overseeing an extensive system of awards, promotions, and regulation, the government continues to control and dispense a dominant share of the most valued economic, professional, and intellectual opportunities.

This means that entrepreneurs are better off doing business as a "partner" of the state. Intellectuals and academics favored by officials are granted generous research grants, are fast tracked into senior positions, and given personal perks. Journalists have little choice but to work for media outlets that are still subsidiaries of party organs. These are the contented middle classes emerging in China today. Far from being an independent class, why would these middle classes want to move toward a more democratic system when it could lead to their own dispossession?

The CCP's hold on power remains vulnerable to a profound economic shock, such as a continued and significant downturn in economic growth. Only then will the social compact between the middle classes and the government be fatally broken. This would impede the regime's continued capacity to co-opt and appease.

But while the Chinese economy grows – and all efforts have been made by the government to ensure that it does - a Chinese middle class that looks and acts the same as we do in the west might nevertheless think very differently when it comes to democracy and the future of the country. June 4 might well be another shopping mall day in Beijing.