June 13, 2000

June 13, 2000 | Lecture on Asia

Challenges as China's Communist Leaders Ride the Tiger of Liberalization

The People's Republic of China has more than 20 nuclear warheads capable of hitting the United States today, making this country a major concern for many Americans. Furthermore, Chinese military officers have made veiled threats against the United States if America were to intervene should China use military force against Taiwan. Beijing's threats are indeed serious, especially in light of the fact that its military, the People's Liberation Army (PLA), is becoming more powerful, buying new weapons in order to modernize and create a more effective armed force.

Yet amid all the talk of China's military purchases and of the PLA's threat to Taiwan, there has been little discussion of the volatility of China's internal security and the effect it has on China's military. While the Chinese Communist Party (CCP) and the PLA appear to be unassailable monoliths, the reality is that both face many internal problems that could explode.

Right now, while the economy is stable, so is the population of China. But masses of disgruntled workers or farmers could quickly become volatile. In 1989, for instance, democracy protests in Tiananmen Square rapidly turned violent.2 Television cameras fixed observers' eyes on the involvement of students in the uprising, but there were plenty of workers out there, too, including many who had been encouraged to be there by Communist Party organizations.

Recent examples of the internal military and security stresses faced by the Chinese Communist Party abound. In February, some 20,000 mine workers faced down the People's Liberation Army to protest job losses,3 but the PLA acted to stabilize the situation. Some time later, a similar incident took place in Liaoning, where factory workers protested and stood up to the PLA. These incidents have the potential to grow in size and seriousness, threatening the grip of the CCP.

Until recently, Beijing was always certain of the military's support in quashing internal unrest. Today, however, domestic conditions have put a great deal of stress upon the military, making its responses to unrest less predictable. If Beijing pursues its nationalist agenda and takes action against Taiwan, it may discover that the PLA, despite its modernization efforts, is not up to the task. Its failure would further undermine the legitimacy of the Communist Party leadership and the stature of the PLA as a force of repression.

The potential for civil unrest is large. Imagine the equivalent of two or three divisions of infantry, each 10,000 men strong with tank and artillery support, in rebellion in each of China's major cities because they are dissatisfied with government policies. Add to that some rebellious mobs forming from the 100 million unemployed people concentrated in major industrial areas who are dissatisfied with the government and have basic military training. Factor in several hundred million reasonably well-off but volatile peasants on farms who are sick and tired of being gouged by illegal taxes on land, crops, and even machinery by Communist Party cadre unchecked by a legal system. This vision haunts the leaders of the Chinese Communist Party when they gather in their secret meetings to decide policy at party headquarters in Zhongnanhai or at their annual August summer retreat at the seashore in Beidaihe.

In sum, all is not well in the Middle Kingdom. The communist dynasty, however, seems but dimly aware of its problems because of its isolation and elitism. It has been surprised by events in China, whether it was the Falungong practitioners, the protesting miners and farmers, or the effects of the Internet.

The Chinese leadership faces many challenges, and reforming the Communist Party and the socialist economy will not solve them all. Serious legal and structural reform of the government is required, and a stable growing economy is the necessary condition for such reforms to be carried out. The "first principles" of Leninism to which the Communist Party leaders are dedicated4--such as democratic centralism, leadership by a single "vanguard party," and socialism--limit their ability and desire to carry out the necessary and fundamental reforms.

To ensure his regime's stability, Jiang Zemin, Chinese President, Communist Party General Secretary, and PLA Central Military Commission Chairman, will most likely take a cautious course both in reform and in threatening Taiwan. At the same time, the military will pressure him to be more aggressive internationally and to emphasize nationalism domestically.5 These decisions, however, will mean that the economic reforms that the United States would like to see take place in China will proceed slowly.

CHANGING DEMOGRAPHICS

Communist Party leaders are sitting on a demographic time bomb. That is, the proportion of the elderly population dependent on working adults to support them will have increased from 11 percent in 1990 to 22 percent in 2025.6 This places a heavy burden on the populace and will affect the economy, but it will be even more serious if the government tries to shift the burden of support to families.

This trend will also have a profound effect on the military. The demographics of an aging population leave a smaller manpower pool available for military service, a problem exacerbated by the one-child policy. Moreover, if the government is not providing the expected social and health safety net for the elderly, leaving the burden on families in the older Confucian tradition decreases the incentive for young persons, particularly males, to go into the military. After all, military pay is barely sufficient for sustaining the soldier, let alone a family, and military service takes the child away from the family. Finally, even those who end up in the military will have a strong incentive to engage in corruption to supplement low pay and to take care of family elders.

A MOBILE LABOR MARKET AND PROBLEMS WITH MILITARY RETENTION

Demographic changes will affect not only the military and the social network, but also the labor market. The World Bank projects that by 2020, the typical Chinese worker will not be a self-employed farmer or working family land, but instead will be some form of wage worker in the industrial or service sector.7 These changes will require a flexible labor market and rural-urban migration, as well as improved education, as parts of China transition to a knowledge-based economy. Changes in the labor market are already occurring as a result of domestic and external forces in China, even in the absence of legal and economic incentives, which accounts for the so-called floating population of workers.8

Increased labor mobility and educational attainment will limit the communist government's ability to control people as completely as it had in past years, and it will increase the chances that dissenting groups can organize against the Communist Party. Even the most positive projections of labor mobility still predict strong negative effects on internal security and China's military.

To be sure, the increased labor mobility is presenting problems for the military.9 Low salaries in the military compared with those in the private sector, marketable skills taught by the military, and conscription quotas are standing difficulties for the PLA in terms of retaining soldiers. The military's meager pay discourages Chinese citizens from enlisting voluntarily: Junior soldiers make as little as 120 Yuan ($15) a year, and few young soldiers make more than 300 Yuan ($36) a year. By contrast, the average urban worker in the "floating labor" market may earn this salary in one month, enabling him to send money home and to return home for several months a year.

Once in the People's Liberation Army, there is little incentive to stay; soldiers often learn skills that are transferable to civilian jobs, where the pay is better, and many soldiers are given the chance to move to another area of China. When they are released from active duty, some veterans often choose to stay in the new location to take advantage of better economic opportunities and to dwell among the new friends they have made.10

Conscription in the People's Liberation Army is still run on a quota system; quotas are managed by local (county or municipality) People's Armed Departments. Because of the insufficient pay, there is little incentive for people with families that might require their financial help or labor to enlist. The "floating population" of labor primarily is made up of workers from small farms,11 and family members that leave the family farm often migrate to the urban labor market and thus avoid military service. This places great stress on the populace, the Communist Party, and the government, which still must somehow make up the required conscription quota for each locality.

The Military's Loss of Luster
Thirty years ago, the average peasant family encouraged its sons and daughters to enter military service when conscripted. At that time, however, families did not own the land they tilled or the businesses in which they worked. The "iron rice bowl" of the communal system was still providing food, medical care, and some form of social security, so children were not required to care for their parents. In addition, because of the pervasive influence of the Communist Party, putting a child into the military was a good thing to do politically.

In the past 30 years, however, China's "self-defense" attack on Vietnam in 1979, market reforms, and loss of governmental legitimacy have undermined the appeal of military service. The People's Liberation Army literally "wasted" perhaps 50,000 lives in attacking Vietnam 20 years ago. That war was a clear reminder for fathers and mothers that military service in China can be a deadly option.12 Meanwhile, the economy improved after the market-oriented reforms were introduced. With a more flexible labor market and more wealth available in the private sector, sending a son or daughter into military service became a poor economic choice as well.

Then, 11 years ago, on June 4, 1989, the PLA and the People's Armed Police (PAP) killed and injured thousands of people during democracy demonstrations in Tiananmen Square and other Chinese cities. Since then, entering the PLA has become a distasteful option. Furthermore, as the Communist Party has lost its mantle of legitimacy in the eyes of the Chinese people, any work for the party or state organs of power has increasingly become a meaningless political choice.

A Labor Force with Military Skills
The military's problems with retention and loss of legitimacy have consequences beyond the immediate impact on its active forces. The demobilized soldiers leave the PLA with military skills and training. For Beijing, this means that there are citizens throughout China who have been trained to apply violence in an organized way--and perhaps could use these skills against the government.

For example, the level of military training within the general working populace was evident during the pro-democracy demonstrations surrounding the Tiananmen Square buildup in May and June 1989. Workers and students had established and manned roadblocks. At these roadblocks, organized groups of people were ready to fight the PLA troops with Molotov cocktails and to break the tracks of the PLA's tanks and armored personnel carriers. Even in the agricultural villages in Beijing's surrounding counties, organized groups of peasants blocked the military's access to the cities and prepared to do battle. The protesting workers in Beijing almost uniformly had military training, and the demonstrating farmers either had seen military service or had militia training. At a roadblock on the northeast side of Beijing, for example, one of the young men leading the resistance, holding bottles full of gasoline stuffed with rags hanging in bags from his shoulders, told standers-by, "the PLA taught us to conduct `People's War' and we're going to show them what `People's War' is about."

Such a "People's War" is the Beijing leadership's greatest fear. The improved economy and the flexibility in the labor market have ensured that each city in China has a large group of people who know how to use violence and manage force in an organized way.

Military Willingness to Act Against the Populace
Further compounding the problem of organized, well-trained former soldiers outside of official military bodies is the PLA's "closeness" to the Chinese people. In particular, the PLA includes a paramilitary internal security force called the People's Armed Police,13 whose loyalty may not lie with the CCP in case of internal unrest. The PAP's ties to local communities make its members less willing to fight and to use force against protesters.

Conscription for the PAP is run much as it is for the PLA, by quotas for townships and counties. Service in the PAP, however, is generally far more comfortable, interesting, and rewarding than PLA service. Basic military training for both the PLA and the PAP is tough, but after training, most PAP troops are stationed in places where their duties take them off the barracks area. They are able to mingle with locals and often develop close personal relationships with men and women in the vicinity of their garrisons. These relationships often lead to marriage. In contrast, the PLA units remain far more cloistered and isolated from local citizens. PLA troops may have to wait a full year before getting a real break in town.

In 1989, when the Tiananmen uprising broke out, the PAP units were perhaps the least effective groups in responding to and managing widespread unrest. PAP units generally avoided direct clashes with protesters, did little to assist the PLA's forced entry into Beijing, and in my observation were reluctant to use force against the populace. Accordingly, the PLA was brought in to subdue dissent. The PAP troops would probably be equally ineffective now if faced with similar decisions in response to widespread popular unrest.14 They simply could not be relied upon to control mobs of their neighbors.

To counter this problem, the Communist Party's Central Military Commission has taken whole divisions of the PLA and converted them to People's Armed Police. Some were moved into cities to replace or augment other PAP units, but most of these new PAP units remain in their old, isolated PLA barracks in rural areas. The soldiers rarely get out and have little contact with the populace against which they are targeted. During the last reduction in force in the PLA, in 1995-1996, many PLA units were converted to PAP units rather than releasing the soldiers into the labor market.

Today, as the PLA faces another reduction in force, I suspect that a good percentage of the soldiers will be transferred from the PLA to the PAP. Thus, the Communist Party's leadership hopes that, if it once again becomes necessary to suppress large segments of the population, it can depend on the new, isolated PAP units.15

But what would really happen if it again became necessary to suppress large segments of the population? Think of what the People's Armed Police garrisoned in rural areas might face in a general crisis: Not only mobs of workers with some form of military training would likely oppose them, but so too might other urban PAP units who sided with their protesting neighbors. In the countryside, the PAP units garrisoned outside cities may have to face organized farmers, as the PLA did in 1989.

This is a volatile and unstable mixture. Other governments have fallen when faced with similar circumstances--take, for instance, Romania in 1989. This mixture portends that the People's Liberation Army will again be the force of last resort in case of widespread civil unrest, as it was in 1989.

THE MILITARY AND STATE-OWNED ENTERPRISES

A strong military presence inside China's 300,000 state-owned enterprises (SOEs) is another concern. The SOEs are a serious financial burden on the economy of China. These outmoded industries employ between 100 million and 120 million people16 but are operating at a loss of about 1 percent of China's gross domestic product (GDP) each year.17 Westerners often see examples of such weak industries in coastal or eastern China, but this problem is even more serious in the old "third line" defense industrial base in central China.18

The problem of unemployment and bankruptcy in state-owned enterprises is critical and potentially explosive. Some SOEs still pay industrial workers in kind for their work, expecting the workers to sell the products on the open market. Others pay some workers only part of what they are owed, while still other SOEs do not pay workers at all. These enterprises allow their workers to keep their housing on the enterprise grounds but tell them to look for other jobs. Worst of all, some tell workers to dip into their savings and purchase shares or bonds in the industries to help keep them afloat or to pay back a non-performing bank loan.

At the same time, the military has a strong presence in the SOEs. The more than 1 million soldiers and officers in reserve forces of the PLA work primarily in state- or collectively owned enterprises. For example, Baoshan Iron and Steel in Shanghai has an infantry division-sized unit. In Beijing, Capital Iron and Steel (Shougang) has a division-sized unit with vehicles, tanks, and artillery. This division, about 10,000 strong, was pressed into service against the populace to support the PLA during the Tiananmen Square crisis. Its vehicles were burned in the middle of the road a few miles from the factory; no one yet knows whether the soldiers did it or members of the popular resistance.

All over China, the major SOEs have military reserve units embedded in them. In the city of Mianyang and throughout the Mianyang area in Sichuan Province, many of the reserve units are in old nuclear-related industries. In Manchuria, in the city of Mudanjiang, not far from the North Korean border, a major state-owned tire factory houses a reserve unit.

Within these unprofitable SOEs, the potential for labor unrest is high. If several military divisions within the SOEs were to turn against the government in protest over their poor economic conditions, it would be a huge crisis for the CCP. This scenario undoubtedly frightens China's central leadership and is a strong incentive for them to keep funds flowing into the state-owned enterprises.

BROAD DISCONTENT

Today, millions work in China's increasingly vibrant private sector. In 1995, there were 350,000 private companies in China and 11 million sole proprietorships. In 1998, the gross value of industrial output of China's private sector was $250 billion. As a result, the Chinese people are less and less committed to communism, the Chinese Communist Party, and its leadership.

While economic reforms have created more choices for the Chinese people, they have also led to job dislocation in the state-owned business sector. Furthermore, widespread corruption and unemployment have triggered pervasive discontent. According to the South China Morning Post (SCMP), in 1999 "there were more than 2,000 cases of farmers staging riots and other violent demonstrations against rural authorities."19 It was not a religious group like Falungong seeking peaceful self-expression that caused these demonstrations, but a strong dissatisfaction over excessive taxation and corruption among government officials and Communist Party cadres.

In his SCMP article on the miners' demonstrations in February, Willy Wo-Lap Lam characterized the problem as "a time bomb" and estimated that rural unemployed labor could be as high as 200 million. According to the article, local governments require farmers to pay levies and contribute to road building, infrastructure projects, waterworks, schools, and social welfare. Peasants are also required to subsidize the local militia and police. The widespread corruption and abuses by party officials have decreased the legitimacy of both the CCP and the PLA.

Corruption is widespread within the military. Since conscription requirements for local areas are allocated by quota and certain forms of military service provide more opportunities than others, the system lends itself to increasing corruption in an already corrupt system. My own experience, based on conversations with PAP soldiers and officers, is that the families of young men and women are bribing local officials in the People's Armed Departments at the time of conscription so that their children will be assigned to the PAP instead of the PLA.

Those who do opt to go into the PLA may give a "little gift" in order to receive an assignment to the Air Force or Navy, where more marketable high-tech civilian skills can be learned. This level of corruption indicates that the government and its military have lost their traditional place of respect and influence in society. It also means that an ethic of service to the nation or state, or even the Communist Party, is not driving the average soldier in the People's Liberation Army or the People's Armed Police.20

CONCLUSION

The national, provincial, and local governments of the People's Republic of China are failing to fulfill the basic functions that governments generally manage--education, maintenance of order, and maintenance of an economic and transportation infrastructure. This failure to meet the core responsibilities of government is a major factor feeding the widespread civic unrest, and it has undermined the legitimacy of the Communist Party as well as of the People's Liberation Army.

Combined with demographic trends, a mobile labor market, military veterans in the private sector, potential insubordination within the PAP, economic failures within the state-owned enterprises, and broad discontent with economic conditions and state corruption, the Chinese leadership could face extensive insurrection. In the case of such unrest, the CCP does not really know if the military will act resolutely to put down protests.

In the past, the CCP has always been able to call on the People's Liberation Army to suppress unrest. And in the near term, it probably still can count on the PLA. The PLA, however, is increasingly less committed to the Communist Party leadership, and the Peoples Armed Police and reserve units are becoming increasingly less reliable as well.

How would the PLA fare if it faced parts of the PAP and its own reserve divisions? Would the generals and the soldiers put down insurrections with conviction or with hesitation? In a crisis, would there be a general breakdown of government? This is the dilemma China's communist leaders face today, and economic liberalization is only increasing the stress. By clinging to their Marxist-Leninist ideology, China's leaders are further undermining the communist government's legitimacy. Beijing is trying to ride the tiger of liberalization but will fail if it refuses to abandon its discredited ideology. How it handles this tiger will determine how well it manages its transition to a market-based economy and to a society that respects human rights and the rule of law.

Dr. Larry M. Wortzel, is Director of the Asian Studies Center at The Heritage Foundation. He served as the Assistant Army Attaché in China during the Tiananmen massacre and in 1995 returned to China as the Army Attaché. He also has served on the international security policy staff of the Office of the Secretary of Defense. Before joining Heritage, Colonel Wortzel was Director of the Strategic Studies Institute of the U.S. Army War College in Carlisle, Pennsylvania.

 

Endnotes

1. This lecture was delivered originally at a meeting of the Asia-Pacific Center for Security Studies in Honolulu, Hawaii, on February 25, 2000. It has been updated and revised.

2. The author was Assistant Army Attaché at the U.S. embassy in Beijing from 1988-1990. In this capacity, he witnessed events leading up to the Tiananmen Massacre on June 4, 1989, and the advance of People's Liberation Army and People's Armed Police units into the city of Beijing.

3. James Kynge, "Chinese Miners Riot over Severance Pay," Financial Times, April 3, 2000, p. 9; Willy Wo-Lap Lam, "PRC Rural Discontent Seen as `Time Bomb,'" South China Morning Post, February 9, 2000, p. 9; John Pomfret, "Politics Stirs Crackdown in China," The Washington Post, January 3, 2000, p. A23.

4. Regarding claims that there are no more communists in China or that the CCP is really no longer communist: As long as the central tenets of Marxism-Leninism are espoused and practiced by the leadership of China, I believe that the CCP remains a communist party, even if it has realized that the economic policies of Marxism-Leninism and centralized state planning have failed. The core beliefs--democratic centralism, false consciousness on the part of the people (that is, the people are incapable of knowing their interests), and that the "leadership of a vanguard party" is needed for society--in my view are what define a communist party. These beliefs are also what make a communist party so dangerous to civil society.

5. An article in the PLA newspaper emphasized new military tactics and training for the "sacred mission" against Taiwan. Ren Yanjun, "Jundui De Shenming De Rensu," Jiefang Junbao, April 12, 2000, p. 1; Taiyangpao, May 1, 2000, at http://www.the-sun.com.hk.

6. The World Bank, China 2020: Development Challenges in the New Century (Washington, D.C.: The World Bank, 1997), pp. 51-53.

7. Ibid., p. 44.

8. Kam Wing Chan and Zhang Li, "The Hukou System and Rural-Urban Migration in China: Processes and Changes," The China Quarterly, No. 160 (December 1999), pp. 818-855.

9. Deng Fuyou et al., eds., Gao Jishu Zhangzheng Zhengzhi Gongzuo [Political Work in High Technology Warfare] (Beijing: Junshi Kexue Chubanshe, 1999), pp. 93-97, 112-113.

10. This seems to be the case in such remote areas as Tibet, Xinjiang, and Qinghai in the author's experience. Although the PLA is accused of encouraging a form of ethnic cleansing, many soldiers and their families chose to stay in Tibet and Inner Mongolia because of what they perceived as business opportunities in the new area, however different it was.

11. World Bank, China 2020, p. 41.

12. The death toll in the PLA from its "self-defensive counter-attack" was probably about 50,000. See Harlan Jencks, "China's Punitive War on Vietnam, A Military Assessment," Asian Survey, Vol. 19 (August 1979), pp. 806-815, or King C. Chen, China's War with Vietnam: Issues, Decisions and Implications (Stanford, Cal.: Hoover Institution Press, 1987).

13. The People's Armed Police is a paramilitary arm of the PLA and is controlled by the Central Military Commission of the CCP. The PLA and the Ministry of Public Security command the PAP jointly.

14. Larry M. Wortzel, "The Tiananmen Massacre, A 10th Anniversary Reappraisal: Public Protest, Urban Warfare and the PLA's Action," paper prepared for the U.S. Army War College, May 1999.

15. In minority areas such as Inner Mongolia, Tibet, and Xinjiang, the PAP is as effective as the PLA, albeit more lightly armed, because PAP soldiers are mainly Han Chinese and do not have strong connections with the local populace.

16. Yeh Chang-mei, "Reform of State-Owned Enterprise in Mainland China Since the CCP's Fifteenth Congress," Issues and Studies, May 1998, pp. 52-78.

17. China's GDP in 1998 was $963.281 billion in U.S. dollars. John T. Dori, ed., U.S. and Asia Statistical Handbook, 1999-2000 Edition (Washington, D.C.: The Heritage Foundation, 2000) pp. 48-49.

18. Larry M. Wortzel, China's Military Potential (Carlisle, Pa.: Strategic Studies Institute, 1998), pp. 18-22.

19. Willy Wo-Lap Lam, "PRC Rural Discontent Seen as `Time Bomb.'"

20. Even the chief of intelligence of the PLA, Major General Ji Chengde, has been arrested and put on trial for corruption. See "Intelligence Chief Reportedly Removed over US Scandal," Hong Kong Standard, June 13, 1999, p. 5.

About the Author

Larry M. Wortzel, Ph.D. Visiting Fellow
The Kathryn and Shelby Cullom Davis Institute for National Security and Foreign Policy