NEAL CONAN, HOST:
This is TALK OF THE NATION. I'm Neal Conan in Washington. Chinese Vice President Xi Jinping's visit to the United States last week focused attention on China's leadership and politics and how little we actually know about the inner workings in Beijing.
So far, China's explosive economic growth has masked the frustrations of a growing middle class that may want more rights and more of a voice than the communist government will be willing to extend. There are contradictions that could raise questions about what's really going on behind the scenes, the direction of Chinese policy and even the stability of the government of world's second-largest economy and growing military power.
If you have questions about China's road ahead, give us a call, Our phone number, 800-989-8255. Email talk@npr.org. You can also join the conversation on our website. That's at npr.org. Click on TALK OF THE NATION.
Later in the program, Dahlia Lithwick of slate.com denounces a proposed ultrasound law in Virginia as an abomination. But first, Rob Gifford, the China editor for The Economist magazine, formerly a foreign correspondent for NPR, he joins us now from the BBC studios in Oxford, England. Rob, nice to have you on the program.
ROB GIFFORD: It's good to be back, Neal.
CONAN: How's the new job working out?
GIFFORD: It's going very well, thank you.
CONAN: We have to ask questions: It all looks like a completely smooth transition of power, another smooth transition of power as Vice President Xi wound up his visit to the United States and returned to, I gather, good press coverage back at home. And yet we keep hearing reports, intelligence reports, of rumblings inside the - inside Beijing.
GIFFORD: Yes, it's true. I mean, when you look at the two nations for a moment, if you look at the United States, and everybody's screaming on the surface, and the whole political atmosphere just quite poisonous and looking very unstable, but underneath actually very, very stable indeed. And the pillars of government are in place. It wouldn't matter if one or both of the parties disappeared off the face of the Earth tomorrow; some people might applaud, even.
China is exactly the opposite. China, it all looks rather smooth on the surface, but it's seething underneath, and so as you so rightly say, state visits like this are very well-choreographed, and this one went very smoothly. And indeed, of course, as we know, there is much to applaud in China.
There are - is amazing growth. There are many millions of people whose lives have been improved by the - what has gone on over the last 30 years economically. But there are many, many problems, as well, and some of those problems are now starting to bubble to the surface even more, and I - we can't go so far as to say threaten to derail any kind of transition because they don't at all, at least we don't think they do, but they are really causing problems, causing headaches for Beijing.
CONAN: Well, we know - and we'll get into some of these structural problems in just a minute - but some are raising questions about the mysterious affair of the vice mayor, this a character from Chongqing, who appeared and spent a day at the U.S. consulate there, apparently asking for, maybe, political asylum, we don't know that for sure, but apparently raising all sorts of questions about who's in charge and who's going to be in charge.
GIFFORD: Absolutely. I mean, this was an extraordinary incident earlier in February. He was the head of police and the deputy mayor in the massive city of Chongqing. It actually covers a whole load of rural hinterland, as well, but city plus countryside some 30 million people. People talk about it as the biggest city that no one's ever heard of.
And sometimes it's called the Chicago on the Yangtze. And it's this amazingly massive city. He's the chief of police. He's been heading up the strike-hard campaign against crime, against corruption. He's the right-hand man to one of the big rising stars, one of the men - the other man who, if anyone even follows Chinese politics slightly, is up there with Xi Jinping, the man who Americans have just seen in Washington meeting President Obama.
So what happens is suddenly this right-hand man, the chief of police, shows up on the doorstep of the American consulate in Chengdu, a nearby city, and he stays inside the consulate for 24 hours. The diplomats there are staying very tight-lipped. We don't really know what was going on. And as you can imagine, there's a huge amount of speculation as to what happened during that period.
Two main theories are that the mayor - the party chief himself, a man called Bo Xilai, he according to some reports wanted to go after his right-hand man because they had had a falling out. And the other theory is that there are people at the center who are going after Bo Xilai.
Bo Xilai is a very interesting character because he, in Chongqing, has started this campaign of going back to, sort of, Maoist values - of valuing the working class, supporting state-owned enterprises - just as everyone else is moving towards the middle class. But he's trying to make use of this wealth gap and the gap between the new middle class and the urban poor in order to raise his profile.
So all sorts of machinations going on, and on top of this, you know, 10 years ago, 15 years ago certainly, no one would have even heard of this. Now, you've got websites that are buzzing with this and Chinese microblogs. Three-hundred million people are on the Chinese equivalent of Twitter, and you can bet that they were tweeting about the intrigue, about what's going on, is he defecting, who's up, who's down, who's in, who's out. It's real palace intrigue in Chin at the moment.
CONAN: And is there - is this evidence that there is a - well, as you suggest, a neo-Maoist element within the party but also a more doctrinaire part of the party that s a challenge to the - what we generally describe as the reformist wing, headed by people like Vice President Xi?
GIFFORD: I think there is, actually, and there is - it's very interesting because since 1989 and the killings in Tiananmen Square, what we've had in China is really a very united leadership. What happened in '89 was that the standing committee of the politburo, the top seven, now it's nine, men split and - into the reformers and the hard-liners.
The reformers under Zhao Ziyang did not want to shoot the students. The hard-liners under Li Peng and Deng Xiaoping did, and that is eventually what happened. Since then, the Chinese leadership has been very, very united. Now just - we're just seeing after more than 20 years just a slight hint of some kind of division of the way in which China should go.
The wealth gap is a massive, massive issue. The urban poor and the rural people in China, hundreds and hundreds of millions of people, many of them are now feeling that they are being left out. Bo Xilai, the man who runs Chongqing, the party chief, his model is more to go back to those working-class roots.
Xi Jinping and perhaps more in the front is a man called Wang Yang, down in Guangdong Province, which is neighboring Hong Kong, he - this group are still pushing the much more let's create more middle class, let's create - the middle class will drive this. We need to bring the poor into the middle class with all the problems and the fallout that that brings.
Many get rich, and many get wealthy, but many fall by the wayside. So I'm not saying it's not - I don't think most observers feel this is an all-out struggle within the central party leadership in Beijing, and let's face it, Bo Xilai, the leader of Chongqing, this rising star who's very a urbane, sophisticated man, although he's something of a populist - his son, guess where he was educated? Harrow School, where Winston Churchill went in North London, Oxford University, not far from where I'm sitting, and the Kennedy School at Harvard.
So we're talking about rather interesting characters here who are not just out of the old cookie-cutter, Maoist mold when we talk about Maoist in relation to someone like Bo Xilai.
CONAN: Some of those structural questions, though, there are internal contradictions of having capitalist success, as you suggest moving all those people up into the middle class, which causes, well, all kinds of problems, as you also suggest in terms of the environment and many other places. But it also creates people who are suddenly empowered, who want things that they would not have wanted before, could not have been within their aims before.
And China's government has not been - no one-party bureaucracy can, by its nature, be responsive to this.
GIFFORD: That's right, and we just have to remember the scale that we're looking at here. You know, 1.3, 1.4 billion people. It is on an unimaginable scale. You know, this is - one province in China is 90 million people, Hunan Province, 85 million, I think, Sichuan Province. These are the size of large countries in Europe like Germany or France or large states in the United States.
I mean, they're bigger than most states in the United States. So the scale of what they're trying to do is absolutely phenomenal, and I think it's very, very important within this debate to make the point that what they have done is incredible. It's never been done in the history of the world. There are many, many problems, and as you say, it's a very, very difficult thing.
It's one thing if you're Taiwan, 22 million people. It's one thing if you're South Korea, 40-something million people, to bring the peasants in from the field and create a new middle class. In fact, in those two places it took a generation, a bit more, perhaps, and then those people started to push for more political reform.
It's another thing to do that with a population of 1.3 billion. And what they've done is they have brought 300 or 400 million into the middle class, there are 300 or 400 million relatively happy stakeholders, people who have benefitted from this. The problem is that as those people are moving towards, perhaps with their microblogs and their new cars and their new apartments and their foreign vacations, perhaps wanting to push - we're not sure that really that many of them are quite yet - but they may want to start pushing for something a bit more in terms of accountability, in terms of some kind of political participation.
At the same time, you've still got 700 or 800 million people in the countryside who have yet to be brought up into that middle class. So it's almost like the communist party has got to keep those middle class in the city happy, keep them, you know, inside the tent, if you like, while it tries to bring the other people, 150 million people, of whom still live on less than two dollars a day.
So it is a feat of quite staggering scale, and it's important to remember that as we analyze the problems that are going on there.
CONAN: Rob Gifford, former NPR foreign correspondent, current China editor for The Economist, is our guest. If you have questions about China's future and its politics, give us a call, 800-989-8255. Email us, talk@npr.org. I'm Neal Conan. Stay with us. It's the TALK OF THE NATION from NPR News.
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CONAN: This is TALK OF THE NATION from NPR News. I'm Neal Conan. The middle-class population in China is burgeoning. Within a generation, it should number well over a billion people, according to an estimate from the U.N. Population Division and Goldman Sachs. That's if China's current explosive growth continues.
Middle-class households in China look a lot like ones in the U.S. in a lot of ways. The families can own their own apartments and cars, go out to dinner, take vacations. In other ways, they're different. They live in a communist society, to which they owe their fortune. It also limits their rights. And with a transition in power from President Hu Jintao to Vice President Xi Jinping coming up, the direction of Chinese policy and society is in question.
If you have questions about the road ahead in China, give us a call, 800-989-8255. Email us, talk@npr.org. You can also join the conversation on our website. That's at npr.org. Click on TALK OF THE NATION.
Our guest is Rob Gifford, China editor for The Economist, former foreign...
UNIDENTIFIED MAN: My question is - well, first of all, I'd like to make a point that, you know, I don't like communism. I think that always, the individual should be before the state. That was in the Rerum Novarum. My question was: What are labor rights there? What happens if somebody cuts their finger off at work? What goes on there? How does - how do they handle situations where workers get injured?
GIFFORD: Oh, great question, thank you very much for that question because that is really very much at the forefront of a lot of people's minds now because of course you've got upwards of 160 million manufacturing jobs, probably 200 million manufacturing jobs, along the coast and now in inland China. And they've been making the stuff that you and I have been buying for the last 20 years.
And what happened early on was basically, and still to many - in many ways now - is that there were very few labor rights, actually and never mind cut your finger. I have met, during my reporting trips in China when I lived there, many, many people missing limbs, you know, often missing a hand or missing an arm because of bad, old machinery and dreadful, dreadful labor standards.
What's happening now as part of this push and this empowerment, we - I think we simply must call it an empowerment. It's imperfect. It's not up to the standards of Western countries. But there is no doubt there is something of an empowerment coming through is that workers are starting to say they won't accept those conditions anymore.
And they are starting - we saw in the last 18 months, last two years, we've seen a lot more demonstrations down in the factory towns. And on top of that - and in fact you can read about it in The Economist this week - we're seeing a move - people who used to just go to those factories along the coast, they are deciding not to go to those factories where labor conditions are so bad. They're voting with their feet, if you like.
And so what is happening is that is forcing factories - in some cases, there are still many bad factories - to improve not only their working conditions but also their salaries with the impact, the knock-on effect that that has throughout the Chinese economy and indeed the world, as wages and other things, the cost of other things in China, rises.
So the little guy in China, you still just don't have the protections. You can still be in a factory where you can lose an arm, lose a hand, get paid off, get fired and basically cast aside. And the factory owners figure that it's cheaper just to pay off a man who loses an arm in your factory than to pay for new machinery. It's utterly brutal at the bottom level. But like many things in China, slowly, slowly things are starting to change.
CONAN: Jack, thanks for the call. Let's see if we can go next to - this is Jimmy(ph), and Jimmy's calling us from Cambridge, Massachusetts.
JIMMY: Hi there, Neal, love your program.
CONAN: Thanks.
JIMMY: I - my question is along the lines of where China's energy policy goes from here because of the enormous amount of energy that it would take to raise China's middle class, you know, to a level even comparable with our own energy usage. So did they adopt more of a clean-energy model, or does the prognosis look more along the lines of what we've seen so far.
GIFFORD: Another brilliant question and absolutely crucial not only for China but also for us, of course, because it's our ozone as well. It's the air that we breathe as well. And here we see another, yet another of these extraordinary contractions that seem - the tension of which is right at the heart of China's modern development.
China needs to shift away from its export model, away from fueling its economy through exporting stuff and indeed from investing, investment into infrastructure and things and needs to move towards a more consumption-based economy. It's trying to get these new middle class and indeed the rural and the urban less-well-off to spend money to become more like an American continental consumption-based economy.
Here's the problem, though: What happens if they do become consumers like us? You put your finger on it. The world cannot sustain that taking place. We can't have that. You know, we consume at shocking levels while we continue to criticize other countries, but Western countries are using energy, you know, in massive amounts of energy every day.
So China has a dilemma. It's trying to solve it by going into green, high-tech, green technology. And the government is pouring money into this because it knows that it's simply not sustainable. It's not possible to go on not only with consumption in all of these environmental areas, consumption generally, the balance is very difficult for it to keep.
But in environmental issues, it is trying to develop solar power, develop wind power, to develop - we saw the building of the Three Gorges Dam, the massive dam on the Yangtze, hydroelectric power. But in the end, they need the power, they need the energy. What do they always default to? Coal-fueled power stations. And that is the problem, how to wean them off those coal-fired stations and onto other forms of energy. That is not going to be easy at all.
CONAN: Jimmy, thanks very much.
JIMMY: Thank you, Neal.
CONAN: Let's see if we can go next to - this is Susan(ph), Susan on the line from Arlington, Virginia.
SUSAN: Hi.
CONAN: Hi.
SUSAN: Thank you very much for taking my question. I teach corruption, and I'm very interested in your views on how China can fight corruption given that it doesn't really consistently let people comment on corruption and monitor government.
CONAN: You teach corruption?
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GIFFORD: Yeah, you might want to rephrase that.
SUSAN: I teach a course for graduate students in looking at corruption in development and in governments.
CONAN: OK, so...
SUSAN: China isn't the worst of the worst, as Rob knows, but...
CONAN: I thought the call was coming in from Chicago, not just the Chicago on the Yangtze. But go ahead.
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GIFFORD: It's a massive problem, and it's a problem that, you know, affects - as you say, it affects all developing world countries and countries that do not have a very well-developed legal system and countries that don't have checks and balances like our own.
I mean, there's enough corruption in the United States and Western Europe, you know, to keep us going, and we have the checks and balances. So it's a massive problem and a massive cause of anger. And I have to say I'm not hugely optimistic on this one because where can they go? How can they put any teeth into any kind of supervisory bodies? You can't in a one-party state. Otherwise, you're basically signing your own death sentence. And they've shown that they're not, at this point, prepared to do that.
The thing is, the thing that will be the real acid test, I think, is when the economy does start to slow. People, and we've seen this throughout Asia, we saw it in places like Indonesia, people were prepared to put up with Suharto in the '90s because their lives were getting a little bit better all the time. They put up with the corruption. As soon as the economy really hit the problems, I mean massive problems in that case, you know, but China's not immune from massive problems, there was - I mean, people were on the streets within days, within weeks, and Suharto was gone. So it is a huge problem. The government knows it's a problem.
The thing at the moment, though, is that stuff gets done. It's not like African corruption where all the money for the road project goes into the pocket of an official. In China, the road still gets built, and lots of money goes into the pocket of the official.
So, you know, inasmuch as one can have levels, you know, compare corruption, say it's not as bad as, at least in China, stuff is getting done. That's no - that's no excuse, but I think there's no doubt, despite that, it's going to continue to be a massive problem. And the credibility of the government and the legitimacy of the government is called into question every single day by those people who are not participating in the boom.
And unless they do more about it in some way, which does mean moving towards more checks and balances, I think it could be a part of this growing anger that could cause the government many, many problems in months and years to come.
CONAN: Susan, thanks very much.
SUSAN: Thank you.
CONAN: You mentioned China not immune from economic problems. Both Britain and the United States in recent years experienced a terrible bubble in real estate that burst and caused tremendous problems, still does in this country. There are people who believe China is in the midst of a still-inflating real estate bubble that could cause enormous problems.
GIFFORD: Yes. The asset bubbles are a real issue for the Chinese and especially real estate. Again, you know, structural issues - you've raised the phrase several times, Neal. There are big structural issues, one of which it goes to the heart of the financial set-up, the way that interest rates are set. You simply can't get any return on money that is deposited in a bank, so money pours into the real estate market, they - as one of the only places that you can invest. The government is trying - is very aware of this. It knows that if there is a bursting of the bubble, those tens, hundreds of millions of new middle-class people who they cannot afford to be against them, they must keep them on side, on board with the whole project of Chinese economic development, they would get very angry indeed. So there are all sorts of ways in which the government is trying to let down this bubble very slowly.
At the same time, though, it's important to say China is still growing at quite a lick. You know, 8 percent or so - most Western countries would kill for that at the moment. It goes without saying. And the demand is there. Wages are going up. Wages are going up in these tier two, tier three cities, places likes Chongqing. Shanghai, Beijing have had these massive bubbles, but there are still a lot of space for growth in the property market in these inland cities because you're coming from such a low base. And so as the salaries increase and as wages do increase, which they have been by double digits in some places over the last few years, actually people - many people are still being able to afford real estate. But there's no doubt it's something - it's one of the real Achilles' heels in the Chinese economy at the moment. And the government is trying to deal with it very urgently.
CONAN: Rob Gifford, China editor for The Economist magazine. You're listening to TALK OF THE NATION from NPR News. Let's get Mark on the line. Mark with us from Pensacola.
MARK: Thank you very much. My question is concerning this new economic growth and the growth of the middle class. Is that more likely or less likely we'll see another drive for more democracy like we did in '89? And if there is some kind of demonstrations towards more freedom, would this new government, would they put him down in the same manner as Tiananmen Square?
GIFFORD: Yes. Well, that's a big question. I think that what we have now is a more mature society than we did in '89. I mean, for all the idealism of 1989, which, of course, many people supported in the West and in China, it was very unformed, and often people weren't even sure what the protests were for. What you have now is less actual sort of vocal on the street demand for some change in the political system, but more, more, I suppose, demonstrations and pushing the grassroots on specific issues.
So we often talk about how things in China have gone from - you don't talk so much about dissidents anymore. You talk about activists. There are more activists who are pushing on a specific issue - for instance, corruption or rural officials grabbing land from the peasants, issues like that, or on AIDS and the cover-up on AIDS that has - people who've got AIDS from government-sponsored blood-selling programs, things like that.
What you have also is this middle class, and the middle class is not about to come out on the streets at the moment to demand democracy. It's more of a sort of slow burn towards a more mature populous who are on the Internet, who understand different forms of government, which perhaps was not so much the case in the 1980s. So in some ways, actually, I think it's probably - it could be more dangerous for the government because all these people are on their microblogs as well, and they're all much more mature. They understand the world a lot better.
So yes, I think there is a danger there, and that is why the government has to keep the economy growing, to keep those people happy in the cities so they don't step outside the tent and start to push for more political, more political rights. What the government would do if that did happen, who knows? I mean, at the moment they're putting out the fires as when they can. And there are tens of thousands of incidents happening around China. But you have to question whether they would come out with the tanks now in the world and in the interconnected world that they're in. But on the other hand, would they be willing to allow all of this economic growth to fall by the wayside? Very difficult question.
CONAN: Mark, thanks very much.
MARK: Thank you.
CONAN: And let me ask about - we're talking largely about the giant center of China, which, of course, is itself is the center of the world, but there are problems on the periphery too. We see more and more monks immolating themselves in Tibet. There are continuing problems in the Muslim areas in the West, in Xinjiang. So the government doesn't seem shy about cracking down in those areas.
GIFFORD: That's right. And let's face it, the government is not shy about cracking down anywhere. Stability is still the watch word everywhere. My concern in looking at China now, first of all, is that all this emphasis on stability is actually - is it leading to more instability? You know, there is, of course, an argument for stability. Ask the people of the Soviet Union in the early '90s, and you know, some people would say, hey, ask the people of Libya.
Today there are many, many debates going on in China about whether their people would more of that political freedom, but would it lead to chaos? And it's a much more complex debate than perhaps it's sometimes framed in the West. But you're right, on the periphery there are all sorts of problems. The big question in my mind is, is there a tipping point coming where the dangers of reform, very real dangers - just ask Mikhail Gorbachev about those - are outweighed by the dangers of not reforming? And that may be the tipping point, the question that is now coming into the minds of the leaders of the Chinese Communist Party.
CONAN: Rob, thanks very much for your time today. Appreciate it.
GIFFORD: Thank you, Neal.
CONAN: Rob Gifford, China editor for The Economist magazine. Nice to hear him back on NPR. We'll talk with Dahlia Lithwick of Slate.com when we come back. This is NPR News. Transcript provided by NPR, Copyright NPR.
