An insight into the state of democracy in Red China

BBC NEWS | World | Asia-Pacific | China urged to review Tiananmen:
"China is facing calls to reassess its suppression of the 1989 student protests after the death of purged Communist Party leader Zhao Ziyang."

The BBC informs us that Zhao had been continuously under house right up until his death, never being seen in public since his tearful request on May 19, 1989 for the demonstrators to leave Tiananmen Square. His secretary, Bao Tong, who served seven years in prison and is still under police surveillance, was among those calling for democratic reforms in the wake of Zhao's death. The government, leaving nothing to chance, has suppressed news of Zhao's death and increased security at his home and Tiananmen Square to discourage any memorial demonstrations.

As has been mentioned before in this space, these are turbulent days in Red China. Demonstrations, riots, and arson - sometimes involving civilian casualties and even fatalities to members of the security forces - have increased in frequency in recent years. These things make the authorities nervous, and anxious to distract the attention of the masses from this embarassing subject of democracy.

Being materialists, communists should believe that people are motivated solely by material forces. Yet, in practice, they learn to distract people from their economic troubles with appeals to family, tradition or imperial glory.

The opportunities to raise the living standards of the people are limited by the Party's insistence on maintaining their currency pegged to the dollar so that, no matter how low the dollar falls relative to the euro, pound or gold, there is no pressure to abate the US-China trade imbalance. Moreover, the rising pile of dollars in the hands of the central bank while foreign exchange remains tightly controlled assures that the Party controls the relative investment in production for domestic use vs. that for export in a manner which limits improvement in living standards.

The answer for the regime is a mix of restoring the national honor by becoming more of a player on the world stage and public works projects. China is in desperate need of improved road, rail and power infrastructure to bring jobs to the interior of the country and remove some of the pressure on the coastal cities which have been inundated with rural people seeking jobs with consequent strain on housing and other municipal services. There is also the strategic value of dispersing industrial facilities and population.

The Daily Reckoning, a financial newsletter, in a recent issue, noted that China accounted for over one half of the world's consumption of cement last year. China also consumes 40% of the world's steel output and a fifth of its copper and aluminum. And that pace is likely to continue.

In 1989 China had less than 200 miles of modern highways, but had raised that total to 18,500 by 2003 and plans to reach 51,000 miles by 2008. (That compares to about 46,000 in the US Interstate highway system.) China also plans to build 27 new nuclear power stations in the next 15 years. And its needs for expanded rail and air transport are similarly urgent. They are busy electrifying railways, building gas pipelines, expanding irrigation of farmland - in short, they are trying to do in about two generations what took nearly two centuries in the rest of the developed world. It has taken the US 50 years to build our present Interstate highway system and China expects to complete a larger system in only 20 years.

What sort of place will this new and more powerful China be? Will it be a typical democratic monstrosity absorbed with providing bread and circuses for its masses? Or will it continue to be a Communist Party dictatorship combining the old communist dream of a world-wide dictatorship with the desire to restore China to her mythic place at the center of the universe? From where I sit, my money is on the latter.