Why China Looks Less Stable the Closer You Get

Opinions about events beyond our borders.
Sept. 20 2012 8:02 AM

Chinese Secrets

Can a country that trades so heavily on rumors and gossip ever really be stable?

152333383
Defense Secretary Leon Panetta (left) and Chinese Vice President Xi Jinping in Beijing on Wednesday

Pool photo by Larry Downing/Getty Images.

BEIJING—In Beijing last week, every conversation ended the same way. You could start off talking about art, or the stock market, or food. You could be sitting at a formal banquet or in somebody's house. You could be chatting with a businesswoman in a chic dress or a bureaucrat in a gray suit—but sooner or later she or he would lean over and ask: Have you heard anything?

And no one had. Or, at least, no one had heard anything remotely credible about the disappearance of Xi Jinping, the man designated to be the next leader of China. Days before my arrival, Xi had abruptly canceled meetings with Hillary Clinton, the Danish prime minister, and others. No public explanation was given, so the rumor mill produced dozens: back trouble, a heart attack, an assassination attempt, a Politburo dispute, a corruption scandal. Even after he was photographed at a Beijing university last Saturday after two weeks of unexplained invisibility (and, indeed, met with Leon Panetta on Wednesday), the rumors didn't stop. "Ah," said a skeptical acquaintance, only half joking, "But was it really him?"

The absence of information about the health and welfare of the soon-to-be most important man in the country comes as no surprise to anyone in China, where many aspects of public life remain mysterious. Xi is expected to assume leadership at the next Communist Party congress, for example, but while hotels in Beijing are booked up for mid-October, there's no official word on when that congress will begin. Once it does, other senior officials might also change jobs, but nobody knows exactly which ones or what the selection of one person over another would mean. When several Chinese central bankers—among the most important and influential economists in the world—switched jobs this summer, nobody knew if that meant policy changes, either. "Those who know, don't speak," one Beijing resident told me. "And those who speak, don't know."

Advertisement

Everybody keeps talking anyway: Although the strict taboos on public discussion of high politics are carefully observed by the print and broadcast media, they are broken constantly on the Chinese equivalents of Twitter and Facebook. Meanwhile, outside of politics, information about everything else flows remarkably freely. "We don't worry about high politics," one Chinese journalist told me. "We can't write about our leaders anyway, so why bother? There are so many other subjects." Investigative journalists working for newspapers and magazines do indeed produce stories about corruption, about buildings with dubious ownership, about shabby infrastructure. Of course when such stories lead back to senior party members, as they invariably do, journalists tread cautiously. There is a method: They write, then wait for a reaction. If no reaction comes, they write some more. If a party official calls up to complain, they switch subjects.

The result is an endless conversation about what can and cannot be said and who can and cannot say it. One also spends a lot of time in Beijing arguing over basic facts. Is the economy really growing at 7.5 percent annually, as officials say? Or has the rate of growth secretly sunk to 4 percent, as some perfectly legitimate economists claim? Without reliable information from the government, it's impossible to discuss critical problems—the supposedly deep indebtedness of Chinese banks, say, or the allegedly large budget deficits of provincial governments—let alone find ways to solve them. Conspiracy theories breed in the vacuum, sometimes inspiring not just gossip but also riots like the one that damaged the U.S. ambassador's car on Tuesday.

It's not what one expects: Since at least 2009, many in—and outside—China have touted their system as stable and predictable; an alternative to the United States, where squabbling politicians might lead the country over a fiscal cliff; and an alternative to Europe, where elected officials postpone tough decisions and bureaucrats resist reform.

But close up, China's system looks less stable than it seems from far away. The combination of silence and rumor must create real uncertainty for investors. Economic forecasting is a lot harder if no one knows the leadership's plans. Meanwhile, there is no lack of squabbling, indolence, corruption, and bureaucratic obstructionism in China. It's just that, unlike us, the Chinese don't openly berate themselves about it. China's opacity keeps critics guessing. But does it mean the world's second-largest economy is better-run?