Volatile China

The following editorial appeared recently in the Kansas City Star.

After the violent end of the 1989 Tiananmen Square protests, many experts believed China could be close to realizing its centuries-old fear of coming apart. The ruling party had turned the guns of the People's Army upon the people and party legitimacy was in tatters.

But the social contract merely narrowed. The unspoken deal was more economic freedom, but continued tight political control. If the party delivered prosperity, that control would continue.

Beneath the surface, popular discontent remained, awaiting some catalyst that, like the self-immolating Tunisian fruit vender, might expose growing internal stress. Which is why experts have been riveted in recent weeks over protests against newspaper censorship in Beijing and the southern city of Guangzhou.

These demonstrations, and brief strikes by journalists, have largely waned after party officials in Guangzhou - but not Beijing - gave a bit of ground. But these events could be an ominous sign for China's stability.

That's because they coincide with worries about China's economic future. Beijing has been working to boost growth of late, and indeed the economy accelerated in the last quarter of 2012. But at the same time, China is slowly losing its advantage in low-wage manufacturing. The Wall Street Journal reports that last year, for the first time since the 2009 financial panic, foreign direct investment in China fell.

Much of that capital is going to places like Thailand, Vietnam or Indonesia, where producers can avoid China's rising wage rates and strike threats.

How new chief party leader Xi Jinping handles the media-censorship issue will reveal much about how he intends to proceed in the future. What the protests show, however, is that ordinary Chinese are less willing to put up with the chronic afflictions of political repression, cronyism and corruption. If the "prosperity" part of the implicit post-Tiananmen deal begins to fade, the anti-censorship protests could well prove to be the beginning of something much bigger - something Washington must closely watch.

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