Features Australia

Cracks in the wall

Après Xi Jinping, le déluge?

1 August 2020

9:00 AM

1 August 2020

9:00 AM

Located on the Yangtze River, China’s Three Gorges dam was officially completed in 2006. Apart from being the world’s largest hydro- power project, its primary purpose is to protect millions of people from the periodic flooding in the Yangtze Basin. Now, following rains not seen in 70 years, Chinese social media is questioning its safety.

Dam disasters in China are not new. The collapse of the Banqiao dam in 1975 resulted in some 230,000 fatalities. Outside of the top party leadership, this catastrophe went unreported. Former Premier Zhu Rongji warned many dams and flood dykes on the Yangtze River were as ‘flimsy and porous as tofu dregs’, while a 2011 government report claimed more than 40,000 dams in China were at risk of breach.

These days, criticism of the Three Gorges project is forbidden. Chinese authorities maintain the dam is structurally sound and, as its design, construction, and quality inspections were all carried out by the same group, who’s to argue? However, after repeated denials, Beijing recently admitted the wall has ‘leaked, moved and distorted’. A break would spell China’s Chernobyl moment.

It is plausible because during construction there were nearly a hundred reported instances of corruption, bribery and embezzlement, including 16 cases directly related to construction. The dam’s principal sponsor, former Premier Li Peng, used his position to appoint relatives to senior positions in the construction company. On completion and, with several hundred thousand forcibly relocated inhabitants denied their full resettlement entitlements, Li’s family ended up controlling 15 per cent of China’s power generation industry.

With examples like that, it’s not surprising that a government which preaches, ‘From each according to his ability, to each according to his needs’ is distrusted. In the latest United Nations-sponsored World Happiness Report, where higher personal and institutional trust is a critical factor, out of 150 countries, China is 93rd, down thirteen places in two years. The United States is 18th.

But then, happiness and police states make poor bedfellows as Wuhan residents know only too well. As they struggled to bury loved ones and watched medical workers in overwhelmed hospitals beg on social media for protective gear, Beijing, determined to hide the truth of the Covid-19 outbreak, despatched censors to ‘strengthen the guidance of public opinions’.

When a Wuhan whistleblower doctor was arrested and subsequently died, social media erupted in outrage, with claims that the authorities had covered up the virus’s seriousness. With an ageing population, and with the elderly most at risk, the Chinese people felt betrayed.

Economically, the epidemic has hit at a bad time. Beijing had already called for local governments to ‘go to all lengths to prevent massive job losses this year’. But slowing world growth and a concerted international effort to lessen dependence on Chinese exports have made this impossible.

Meanwhile, the current catastrophic floods which have damaged nearly five million hectares of crops and severely affected 45 million people in 27 provincial regions, is another blow. Economic losses are estimated to be at least $20 billion and climbing.

President Xi Jinping must realise he has few options. Total debt is dangerously high at 320 per cent of GDP and, after decades of profligacy and corruption, previously concealed bad debts are putting the financial sector at risk of collapse. Too much productive capital is locked away in illiquid, stranded assets. These are primarily held by more than 70,000 government-dependent zombie companies.

But Xi’s biggest problem is China’s declining population. From 2027 it will become an ever increasing burden on the economy. The Belt and Road Initiative won’t offset a shrinking and disgruntled workforce. Despite lifting the ‘one-child’ policy, the birthrate is at its lowest in 70 years.

No doubt this grim situation and the political danger it poses to him and the party is behind Xi’s recent decision to strengthen his authority by ordering the People’s Armed Police to come under the Central Military Commission, which he chairs. This gives him the highest degree of control over China’s primary instruments of coercive power since the Cultural Revolution.

He has also imbedded political apparatchiks in every business enterprise, dismissing the risks this poses to investment and innovation. Xi Jinping is suspicious of markets and rejects claims that the basic elements of market economics adopted by former Paramount Leader Deng Xiaoping are behind China’s dramatic economic performance.

Indeed, Xi believes empowering individuals is a ‘bourgeois fallacy’. Free speech, equality under the law and other rights, must be ‘delayed’ or ‘controlled’ until his ultimate goals are reached. Only he is capable of steering the nation to the promised land. Critics are targeted as ‘saboteurs’ and ‘wreckers’.

Meanwhile, the Western media is so obsessed with Donald Trump and America’s social divisions it misses the bigger Marxist-Leninist story unfolding inside the Forbidden City. With his nation groaning with rigidities and excess capacity, President Xi must worry that, like the Soviet Union, 70 years may be the life expectancy of socialist experiments. As he considers his options, it seems he hopes to disarm threats at home by creating trouble abroad. Beijing’s moves on Hong Kong and its territorial claims over more than 80 per cent of the South China Sea are extremely provocative. It is also responsible for repeated violations of maritime rules. These are prone to miscalculation with unpredictable consequences.

The Three Gorges project is a fitting metaphor for today’s China. Full of promise and fanfare at the time, it has failed to deliver the key objective of flood mitigation. Xi may cling to Marxist-Leninist teachings and rule like an emperor with the Mandate of Heaven of ‘Old China’, but he cannot deny since the 1970s, China’s wealth gap has increased by more than 50 per cent and continues to widen. This breach of trust between the Chinese Communist Party and the Chinese people, leaves Xi Jinping, like the dam, on shaky ground.

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