Five paths to Chinese democracy

opinion February 14, 2013 00:00

By Minxin Pei
The Diplomat

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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 experience in democratic transitions (roughly 80 countries hav

Proponents of a theory of predictable regime change in China point to two main causes. 

First, there is the logic of authoritarian decay. One-party regimes, however sophisticated, suffer from organisational 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 maximise 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. 
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. 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 to 15 years, when the CCP will reach the upper-limit of the longevity of one-party regimes.
Second, the effects of socio-economic change – rising literacy, income and urbanisation rates, along with the improvement of communications technologies – greatly reduce the costs of collective action, de-legitimise autocratic rule, and foster demands for greater democracy. 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, 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. China is well into this “zone of democratic transition” because its per capita income is around $9,100 (PPP) today. In another 10 to 15 years, its per capita income could exceed $15,000 and its urbanisation rate will have risen to 60-65 per cent. 
The more interesting follow-up question is, 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:
1. “Happy ending” would be the most preferable mode of democratic transition for China. Typically, a peaceful exit from power starts with the emergence of a legitimacy crisis, which may be caused by many factors (poor economic performance, military defeat, rising popular resistance, unbearable costs of repression, endemic corruption). Recognition of the 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. They start a process of liberalisation 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 centre 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. The current transition in Myanmar 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.
2. “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 unfavourable economic, social, and political trends (falling economic growth, 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 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. Amid political chaos, the regime suffers another internal split, similar to that between Boris Yeltsin and Gorbachev, with the rise of a radical democratiser 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 or spontaneous seizure of power by the opposition.
3. “Tiananmen redux” is a scenario that could unfold if the party continues to resist reform even amid signs of political radicalisation and polarisation in society. The same factors that contribute to the “Gorby scenario” will be at play, except that the trigger of the collapse is an unanticipated mass revolt that mobilises 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 pro-democracy Tiananmen protest and the “Jasmine Revolution” in the Middle East. But “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).
4. “Financial meltdown” could 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: politicisation, 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 recognised. 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 liberalisation 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.
5. “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. 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 mobilisation 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.
Minxin Pei is a professor of government at Claremont McKenna College and a senior fellow at the German Marshall Fund of the United States.