Of China’s 1.2 billion people, 850 million live in
the countryside. Heavy taxation, corruption and
nepotism have resulted in a breakdown of trust
between peasants and the party. In the 1980s and
early 1990s John Gittings, one of the best-
informed China-watchers, made several journeys
into the interior, far from the burgeoning ‘special
economic zones’ and coastal cities. His findings
have been collected in a remarkable book, Real
China, in which he describes the chaos caused by
China’s rapid development particularly in its
impact on the peasantry. Some 80 million peas-
ants, driven by poverty, migrated to the cities
where they form a virtually inexhaustible cheap
source of labour; those who don’t find work
aggravate the many urban social ills, especially
vagrancy and crime. In the countryside unem-
ployment remains the most serious problem; here
the directives from Beijing were often ignored by
local officials, and the peasants resorted to massive
protests and riots. In 1993 alone 750,000 ‘inci-
dents’ were officially reported. Under such con-
ditions the response of the Chinese leadership
appeared almost reckless. It was given at the
Fifteenth Party Congress by Jiang Zemin,
president of China since 1993, who emerged as
China’s strongman; backed by the Politburo, he
seemed set to follow in the footsteps of Deng.
China plans to accelerate the pace of market
reforms and to privatise the 17,000 medium and
small state-owned industries that were creating
huge deficits. Those that could not be made to
pay their way would be shut down. Only a
number of large key industries, such as those
manufacturing military hardware, would remain
in state hands. Millions of workers will be thrown
out of work and join the unemployed, a recipe
for unrest that will test the iron hand of state
control. The hitherto unswerving support of the
army, which is to be reduced in size but mod-
ernised, will be a critical factor.
China’s policy of rapid economic development
also depends on access to world markets on equal
terms and on the continuing inflow of Western
investment and technology. China had not yet
been accepted as a member of the World Trade
Organisation, not granted permanent ‘most
favoured nation’ status by the US; the annual
renewal of this concession requires congressional
approval, which meant that China’s human rights
record and its role in assisting Pakistan’s nuclear
weapons programme (despite having signed the
Nuclear Non-Proliferation Treaty in 1992) could
be called into question. Clinton was prepared to
be helpful. Eager to promote trading opportuni-
ties for American companies, he believed in
engaging China rather than isolating it. In 1994
he had already uncoupled threats of trading sanc-
tions from the issue of human rights. When, three
years later, in September 1997 Jiang Zemin paid
an unofficial state visit to the US, the first made
by any leader since the Tiananmen Square mas-
sacre, a deal was struck. Jiang Zemin gave no
ground publicly on human rights; he undertook
only to supervise more carefully the export of
nuclear materials and missiles. Such assurances fell
short of prohibition, but Clinton achieved his
objective of winning an order for fifty Boeing jets
and authorised the profitable sale of American
nuclear reactors to China.
Authoritarian China was ready to master, if
necessary by force, the dislocations caused by its
dynamic industrial development. The party main-
tained its controlling role. After the Tiananmen
Square killings any thought of political reform,
which was limited in any case to creating more
separation between the government and the
party, has quietly been dropped. The party
derived its legitimacy from bettering living stan-
dards and economic growth. Deng’s path of eco-
nomic liberalisation, the gradual move toward a
market economy was continued and internation-
ally China is opening to global competition. An
important step forward was joining the World
Trade Organisation. The huge country with its
ethnic minorities and disparities of wealth
between the booming coast and the interior
where two-thirds of the population, 1.2 billion
people, live faces the risks of instability not least
from the economic course chosen which has
created 25 million unemployed as inefficient state
industries shed workers.
In China personal freedoms have increased as
long as they do not challenge the party. That
material aims and dry Marxist dialectic was not
enough, however, was demonstrated by the aston-