5 Ways China Could Become a Democracy, East AsiaPoliticsRegionTopicChina, February 13, 2013


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Few have seriously thought about the probability and the various plausible scenarios of a regime transition in China — until now.
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Speculating about China’s possible political futures is an intellectual activity that intrigues some and puzzles many.  The conventional wisdom is that the entrenched Chinese Communist Party (CCP), so determined to defend and perpetuate its political monopoly, has the means to survive for an extended period (though not forever).  A minority view, however, holds that the CCP’s days are numbered.  In fact, a transition to democracy in China in the next 10 to 15 years is a high probability event.   What stands behind this optimistic view about China’s democratic future is accumulated international and historical experience in democratic transitions (roughly 80 countries have made the transition from authoritarian rule to varying forms and degrees of democracy in the past 40 years) and decades of social science research that has yielded important insights into the dynamics of democratic transition and authoritarian decay (the two closely linked processes).
To be sure, those believing that China’s one-party regime still has enough resilience to endure decades of rule can point to the CCP’s proven and enormous capacity for repression (the most critical factor in the survival of autocracies), its ability to adapt to socioeconomic changes (although the degree of its adaptability is a subject of scholarly contention), and its track record of delivering economic improvement as a source of legitimacy.
To this list of reasons why the Chinese people should resign themselves to decades of one-party rule will be a set of factors singled out by proponents of the theory of predictable regime change in China.  Among many of the causes of the decline and collapse of authoritarian rule, two stand out.
First, there is the logic of authoritarian decay.  One-party regimes, however sophisticated, suffer from organizational ageing and decay.  Leaders get progressively weaker (in terms of capabilities and ideological commitment); such regimes tend to attract careerists and opportunists who view their role in the regime from the perspective of an investor: they want to maximize their returns from their contribution to the regime’s maintenance and survival.  The result is escalating corruption, deteriorating governance, and growing alienation of the masses.  Empirically, the organizational decay of one-party regime can be measured by the limited longevity of such regimes.  To date, the record longevity of a one-party regime is 74 years (held by the former Communist Party of the Soviet Union).  One-party regimes in Mexico and Taiwan remained in power for 71 and 73 years respectively (although in the case of Taiwan, the accounting is complicated by the Kuomintang’s military defeat on the mainland).   Moreover, all of the three longest-ruling one-party regimes began to experience system-threatening crisis roughly a decade before they exited political power.  If the same historical experience should be repeated in China, where the Communist Party has ruled for 63 years, we may reasonably speculate that the probability of a regime transition is both real and high in the coming 10-15 years, when the CCP will reach the upper-limit of the longevity of one-party regimes.
Second, the effects of socioeconomic change –rising literacy, income, and urbanization rates, along with the improvement of communications technologies — greatly reduce the costs of collective action, de-legitimize autocratic rule, and foster demands for greater democracy.  As a result, authoritarian regimes, which have a relatively easy time ruling poor and agrarian societies, find it increasingly difficult and ultimately impossible to maintain their rule once socioeconomic development reaches a certain level.  Statistical analysis shows that authoritarian regimes become progressively more unstable (and democratic transitions more likely) once income rises above $1,000 (PPP) per capita.  When per capita income goes above $4,000 (PPP), the likelihood of democratic transitions increases more dramatically.  Few authoritarian regimes, unless they rule in oil-producing countries, can survive once per capita income hits more than $6,000 (PPP).  If we apply this observation and take into account the probable effect of inflation (although the above PPP figures were calculated in constant terms), we will find that China is well into this “zone of democratic transition” because its per capita income is around $9,100 (PPP) today, comparable to the income level of South Korea and Taiwan in the mid-1980s on the eve of their democratic transitions.  In another 10-15 years, its per capita income could exceed $15,000 and its urbanization rate will have risen to 60-65 percent.  If the CCP has such a tough time today (in terms of deploying its manpower and financial resources) to maintain its rule, just imagine how impossible the task will become in 10-15 years’ time.
If this analysis is convincing enough for us to entertain the strong possibility of a democratic transition in China in the coming 10-15 years, the more interesting follow-up question is definitely “how will such a transition happen?”
Again, based on the rich experience of democratic transitions since the 1970s, there are five ways China could become democratic:
“Happy ending” would be the most preferable mode of democratic transition for China. Typically, a peaceful exit from power managed by the ruling elites of the old regime goes through several stages.  It starts with the emergence of a legitimacy crisis, which may be caused by many factors (such as poor economic performance, military defeat, rising popular resistance, unbearable costs of repression, and endemic corruption).  Recognition of such a crisis convinces some leaders of the regime that the days of authoritarian rule are numbered and they should start managing a graceful withdrawal from power.  If such leaders gain political dominance inside the regime, they start a process of liberalization by freeing the media and loosening control over civil society.  Then they negotiate with opposition leaders to set the rules of the post-transition political system.  Most critically, such negotiations center on the protection of the ruling elites of the old regime who have committed human rights abuses and the preservation of the privileges of the state institutions that have supported the old regime (such as the military and the secret police).  Once such negotiations are concluded, elections are held.  In most cases (Taiwan and Spain being the exceptions), parties representing the old regime lose such elections, thus ushering in a new democratic era. At the moment, the transition in Burma is unfolding according to this script.
But for China, the probability of such a happy ending hinges on, among other things, whether the ruling elites start reform before the old regime suffers irreparable loss of legitimacy.  The historical record of peaceful transition from post-totalitarian regimes is abysmal mainly because such regimes resist reform until it is too late.  Successful cases of “happy ending” transitions, such as those in Taiwan, Mexico, and Brazil, took place because the old regime still maintained sufficient political strength and some degree of support from key social groups.  So the sooner the ruling elites start this process, the greater their chances of success.  The paradox, however, is that regimes that are strong enough are unwilling to reform and regimes that are weak cannot reform.  In the Chinese case, the odds of a soft landing are likely to be determined by what China’s new leadership does in the coming five years because the window of opportunity for a political soft landing will not remain open forever.
“Gorby comes to China” is a variation of the “happy ending” scenario with a nasty twist.  In such a scenario, China’s leadership misses the historic opportunity to start the reform now.  But in the coming decade, a convergence of unfavorable economic, social, and political trends (such as falling economic growth due to demographic ageing, environmental decay, crony-capitalism, inequality, corruption and rising social unrest) finally forces the regime to face reality. Hardliners are discredited and replaced by reformers who, like Gorbachev, start a Chinese version of glasnost and perestroika.  But the regime by that time has lost total credibility and political support from key social groups.  Liberalization triggers mass political mobilization and radicalism.  Members of the old regime start to defect – either to the opposition or their safe havens in Southern California or Switzerland.  Amid political chaos, the regime suffers another internal split, similar to that between Boris Yeltsin and Gorbachev, with the rise of a radical democratizer replacing a moderate reformer.  With their enormous popular support, the dominant political opposition, including many defectors from the old regime, refuses to offer concessions to the Communist Party since it is now literally in no position to negotiate.  The party’s rule collapses, either as a result of elections that boot its loyalists out of power or spontaneous seizure of power by the opposition.
Should such a scenario occur in China, it would be the most ironic.  For the last twenty years, the Communist Party has tried everything to avert a Soviet-style collapse.  If the “Gorby  scenario” is the one that brings democracy to China, it means the party has obviously learned the wrong lesson from the Soviet collapse.
“Tiananmen redux” is a third possibility.  Such a scenario can unfold when the party continues to resist reform even amid signs of political radicalization and polarization in society.  The same factors that contribute to the “Gorby scenario” will be at play here, except that the trigger of the collapse is not a belated move toward liberalization by reformers inside the regime, but by an unanticipated mass revolt that mobilizes a wide range of social groups nationwide, as happened during Tiananmen in 1989.  The manifestations of such a political revolution will be identical with those seen in the heady days of the pro-democracy Tiananmen protest and the “Jasmine Revolution” in the Middle East.  In the Chinese case, “Tiananmen redux” produces a different political outcome mainly because the China military refuses to intervene again to save the party (in most cases of crisis-induced transitions since the 1970s, the military abandoned the autocratic rulers at the most critical moment).
“Financial meltdown” – our fourth scenario – can initiate a democratic transition in China in the same way the East Asian financial crisis in 1997-98 led to the collapse of Suharto in Indonesia.   The Chinese bank-based financial system shares many characteristics with the Suharto-era Indonesian banking system: politicization, cronyism, corruption, poor regulation, and weak risk management.   It is a well-known fact today that the Chinese financial system has accumulated huge non-performing loans and may be technically insolvent if these loans are recognized.  In addition, off-balance sheet activities through the shadow-banking system have mushroomed in recent years, adding more risks to financial stability.  As China’s capacity to maintain capital control erodes because of the proliferation of methods to move money in and out of China, the probability of a financial meltdown increases further.  To make matters worse, premature capital account liberalization by China could facilitate capital flight in times of a systemic financial crisis.   Should China’s financial sector suffer a meltdown, the economy would grind to a halt and social unrest could become uncontrollable.  If the security forces fail to restore order and the military refuse to bail out the party, the party could lose power amid chaos.  The probability of a collapse induced by a financial meltdown alone is relatively low.  But even if the party should survive the immediate aftermath of a financial meltdown, the economic toll exacted on China will most likely damage its economic performance to such an extent as to generate knock-on effects that eventually delegitimize the party’s authority.
“Environmental collapse” is our last regime change scenario.  Given the salience of environmental decay in China these days, the probability of a regime change induced by environmental collapse is not trivial.  The feed-back loop linking environmental collapse to regime change is complicated but not impossible to conceive.  Obviously, the economic costs of environmental collapse will be substantial, in terms of healthcare, lost productivity, water shortage, and physical damages.Growth could stall, undermining the CCP’s legitimacy and control. Environmental collapse in China has already started to alienate the urban middle-class from the regime and triggered growing social protest.  Environmental activism can become a political force linking different social groups together in a common cause against a one-party regime seen as insensitive, unresponsive, and incompetent on environmental issues. The severe degradation of the environment in China also means that the probability of a catastrophic environmental disaster – a massive toxic spill, record drought, or extended period of poisonous smog– could trigger a mass protest incident that opens the door for the rapid political mobilization of the opposition.
The take-away from this intellectual exercise should be sobering, both for the CCP and the international community.  To date, few have seriously thought about the probability and the various plausible scenarios of a regime transition in China.  As we go through the likely causes and scenarios of such a transition, it should become blindingly clear that we need to start thinking about both the unthinkable and the inevitable.

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