An op-ed in today’s Japan Times describes a number of recent incidents of Chinese peasants and workers taking to the streets to express their growing anger against government officials in violent ways.
As you read the article it is worth remembering that China has experienced peasant revolts about every fifty years for the past 6000 years. They are 7 years overdue.
The Beijing government understands they must deliver rising living standards to keep this situation from boiling over. That means importing massive amounts of capital from the US, Japan, and Europe. They have accomplished this by systematically sweetening the terms for foreign investors. They will continue to do so.
Attempts by the US government to force the Chinese government to revalue the renminbi worsen the problem. To do so the government would sell dollars from their reserves, which would shrink Chinese bank reserves, reduce credit supplies, and slow the Chinese economy. There are 200 million itinerant construction workers in China today. Not good.
This also explains why it is imperative to preserve political stability in the Arabian Gulf. It is going to take $750 billion to develop the additional capacity to meet rising Chinese oil needs over the next decade. It won’t happen unless the Gulf is safe enough for investors to take the risk.
Below are some excerpts from the article:
In the industrial city of Chongqing in Sichuan province, 50,000 rioters laid siege to a municipal building in protest against bureaucratic abuses.
In Henan province, an ethnic clash erupted between members of the majority Han group and the Islamic minority group, causing heavy casualties.
In Shanxi province, scores of people were wounded, some fatally, in a bloody demonstration against an economic development project that would force hundreds of farmers to evacuate.
In Sichuan province, 100,000 farmers rallied against a dam construction project, inviting military intervention.
In Fujian province, peasants marched on City Hall in opposition to expressway construction.
In the city of Shenzhen workers staged street sit-ins to demand wage increases.
It appears that Beijing has a time bomb ticking in its midst: a surge of popular dissatisfaction.
