China Watch | Next 5 years may not be smooth for China, says Mary Gallagher

Mary Gallagher, a Professor of Political Science at the University of Michigan, Ann Arbor, is a leading scholar on China

Note to readers: China’s ruling Communist party (CCP) holds an important meeting every five years that has analysts and diplomats parsing for clues into the country’s future. The 20th party congress is due to be held in Beijing. Here is the third of a series of interviews with Chinese experts and watchers in the run-up to the conference.

The 20th Congress of China’s Communist Party (CCP) scheduled for October 16 in Beijing will indicate what China’s relations will be with the outside world in future. However, the new leadership in China will also have to deal with a host of challenges at home that range from a slowing economy, to declining birth rate, environmental degradation and rising income and wealth disparities.

Mary Gallagher, a Professor of Political Science at the University of Michigan, Ann Arbor, is a leading scholar on China. She was director of the Lieverthal-Rogel Centre for Chinese Studies at the university, and is currently the Director of its International Institute. Professor Gallagher was a foreign student in China’s Nanjing University in 1989 and taught at the Foreign Affairs College in Beijing from 1996-1997. She was also a Fulbright Research Scholar at the East China University of Politics and Law in Shanghai.

Prof. Gallagher spoke to Pranay Sharma on the set of domestic challenges China is likely to face in the coming days. Edited excerpts of the interview:

What does a record third term for Xi Jinping mean for ordinary Chinese people and society that is already facing a host of internal challenges?

China is facing serious structural problems related to its development model, aging society, and incomplete reforms to improve labour mobility and social security. China's Zero-Covid policy has limited the number of COVID-19 deaths, but it has severely impacted the economy and employment.

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Will this impact Xi’s image and popularity?

It is possible that Xi Jinping is still popular among the people because other countries' failure to mitigate COVID-19 is widely disseminated in China by the official media. Growing global economic and political instability, not to mention the effects of Russia’s invasion of Ukraine, may also lead to a general desire for strongman rule and stability in China.

But there must be concerns too, about his tough measures and policies to deal with the internal challenges?

Intellectuals and China's economic elite are concerned about another five years of Xi rule. He has clamped down on dissent, academic freedom, and the media. He has hounded entrepreneurs and destroyed value in important technology sectors. It is not assured that the next five years will be smooth for China.

The media is accused of sustaining China’s authoritarian rule but people’s grievances often get reflected in social media. How much has the internet eroded the party’s control over political communication?

Social media can still play a role in reflecting grievances and crises, such as the Shanghai lockdown, the beating of a woman by a gang of men, and the death of Dr Li Wenliang in Wuhan at the onset of the coronavirus pandemic. However, the CCP has many tools to control social media and to use social media effectively to disseminate pro-regime messages, guide public opinion, and censor critical voices.

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Studies within China have shown there is growing income disparity. How serious is it?

China's income and wealth inequality has been a pressing problem for at least two decades. China's GINI coefficient remains stuck at a high level and various reforms to reduce disparities between urban and rural China have gone incredibly slowly, especially for the large coastal cities where many rural people live and work in for decades with no chance of becoming permanent legal residents. Changes to China's "hukou" policy (household registration system) are needed to improve labour mobility and rural access to better healthcare, education, and employment.

Is this likely to happen soon?

China's decentralised system of governance provides strong disincentives for local governments to take on the burdens of these new residents. So instead, hundreds of millions of rural residents in China can temporarily work in cities, staffing factories, restaurants, and construction, doing the dirty and dangerous work that urban people despise, but they have very little chance to enjoy the benefits of urban life.

How has China’s rapid economic growth affected the workforce? Does the iron rice bowl guarantee still exist?

The iron rice bowl (guaranteed job security) still exists in some state-owned enterprises and local government offices, but for most Chinese workers who are employed in the private sector, the iron rice bowl has never existed. This is especially the case for workers who lack local hukou (residency) because they will have trouble getting access to critical public goods, such as healthcare, education for their children, and housing.

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China’s industrialisation has also led to serious environmental degradation. Since air pollution, water contamination, etc. affect the lives of millions of people, how does the party react to these issues?

Since 2012, the Chinese government has done quite a lot to improve air pollution. However, there is still coal dependency in China that makes China's environmental goals hard to reach. This has been complicated by rising energy prices globally.

Though life expectancy has gone up in China, the birth rate has declined in the past decades. How does the party deal with this challenge?

China's working population (aged 16 to 65) is already in absolute decline and the dependency burden is increasing. The overall population will decline rapidly during this century as women desire fewer or no children. The Party has tried to do a lot recently to increase the birth rate, but so far, nothing has worked.

The rapid economic growth and prosperity had strengthened people’s support for the party. Will it remain as robust if China fails to revive its double-digit growth?

It will be a big adjustment in China for people to accept both slower growth and declining real estate prices, which will affect the overall wealth of households. This is when people's expectations are rising, not falling. People want increasing wealth, but also desire clean air, good schools, and a responsive government.

How does this affect the government?

I expect the dissatisfaction with the government to increase as these shocks become more permanent trends. Also, if China moves quickly from Zero-Covid to reopening, a large increase in the death rate from COVID-19 could undermine support for the government.

Is another Tiananmen Square-like movement in China possible?

I do not think another Tiananmen Square will happen. I think if the Party uses indiscriminate force and violence against its own population, it will never recover legitimacy and support from the people.