The Lies And Limits Of China's Propaganda Machine
Behind the Chinese government's easy shows of strength is a rising sense of insecurity within the regime.
BEIJING — It's perhaps all too perfect. China has demonstrated unparalleled skills in strategic communication. Every message it sends reinforces the same narrative of a nation whose power is in full bloom, where the people only grow richer, even as the authorities' ultimate goal is mostly about stability and keeping the public calm.
Chinese communication operates on multiple levels. To the outside world, Beijing gets noticed with unprecedented demonstrations of financial largesse. A few billion here to finance the "New Silk Road," a few billion there to fund development banks for infrastructure and emerging economies — shocking the planet with what is ultimately a challenge to the Bretton Woods institutions that seem to be growing brittle in this new century.
At the same time, from within its borders, the public and analysts appear enthralled by the recent economic miracle. The Shanghai Stock exchange has seen 130% growth over the past year, a phenomenon that allows normal people to get richer as if by magic.
For Chinese society, the propaganda machine is always turning. When the Eastern Star passenger boat collapsed with 456 people aboard last week, the incident was (tragically) telling. The authorities ensured that high-level ministers were seen on all fronts, be it at the bedside of a survivor or supervising the rescue. The media shared only tales of heroic rescue. Meanwhile, the loved ones of the 440 casualties are ordered to please pass their grief in silence.
It's incredible to think that earlier that same week Beijing had published a public document saying they had arrived at a number of "important revelations" regarding human rights. Nevermind that imprisoning journalists, lawyers, and artists is making a decisive comeback.
Nothing seems to be able to hold back the triumphalism of this regime, which seems to be at the height of its powers and in full control of its image. So far the policy seems to be working, and the people appear genuinely enthusiastic about their new president.
But there's something troubling about these easy shows of strength. For one, it fits poorly with Chinese tradition, going against Sun Tzu's prescription in The Art of Warthat one should always appear weaker to one's enemies than one actually is. China's revolutionary and great reformer Deng Xiaoping always advised China to hide its strength and wait for its hour to come. Has the Chinese government really come to believe that their hour of incontestable domination has arrived?
In reality, Beijing's persistence in showing its power could reveal mounting insecurity. This seems obvious regarding the ferry crash: only a system where the powerful are profoundly unsettled would deploy such energy into locking down the narrative around what is really just simple tragedy.
This applies equally to the economy: on this point, there is little doubt that the country's trajectory is worrying. The numbers all point to a pronounced slow-down in growth — industrial production, real estate, investment, trade, and inflation. Something is clearly jammed in the Chinese machine. As years of over-investment catch up to them, the country should be directing its surplus to reinventing itself. In this context, the irrational exuberance of the Shanghai Stock Exchange might look like an expensive strategy of distraction at the moment when growth is dialing back to a level unseen since 1990.
It can be difficult to verify that Chinese authorities are actually going to implement the economic reforms they've been touting. Certainly, they deserve credit for expanding the initiatives to fix their financial system. In time, we can hope to see capital being allocated more effectively in a system that was, to present, inefficient.
At the same time, the policies show that Chinese authorities remain incapable of accepting the inevitable in any economy. As a slowdown becomes clear, the authorities have backed off monetary reforms. Little is being done about the risks of a new surge in credit, nor to confront hypertrophic investment and the persistent weakness of household consumption. The government is backpedaling on brave measures announced just last year. City governments, however dangerously indebted, have been authorized to take out a new round of loans using various middlemen. And — even more worrying — the banks have been told to keep lending to these groups, even when they are insolvent!
No political system enjoys an economic crisis. But in China, the impossibility of political turnover adds even more anxiety to the situation. If Beijing is putting so much effort into showing their strength, perhaps it's because they are obliged to reveal, more discretely, one of their deepest weakness. Backed into a corner over the threat of slowdown, the fear of political instability is taking precedent over the need to reform. Meanwhile, the headlong rush into deeper debt continues unabated.