When life gives you lemons (Chinese government style)…

In Chengdu, China, the municipal government was facing the prospect of large protests on Saturday, May 4th. The date represents an anniversary of a student movement in the early 20th century as well as the 5th anniversary of protests against an oil refinery 25 miles away.

The government was worried about any tainting of the city’s reputation in the lead-up to the Fortune Global Forum that will be held in Chengdu in June. Apparently, they weren’t too worried about how their reaction would affect the city’s reputation. In an Orwellian, truth-is-stranger-than-fiction, type of turn, NPR reports that the government decided to:

1. Change the calendar so the weekend was no longer the weekend.  Students were ordered back to school, and government employees to work, on Saturday.  Meanwhile, the weekend was temporarily moved to Monday.

2. Declare a “virtual combat exercise” on Saturday.  At the same time the protests where supposed to go down (and at the same location), at least 5 different security forces were out patrolling, including paramilitary police in trucks and anti-riot police in full gear.

3. Make the woman who forwarded the text message about the protests issue a formal apology on TV.

4. Place 10 dissidents under house arrest or make them “go on holiday” (that sounds ominous and not at all holiday-like).

5. Threaten to fire any government employee that attends the protest.

I have to give Chengdu’s government an A for effort and creativity for effectively shutting down the protest, but I question whether this model is going to continue to generate growth.  China has an aging work force, huge environmental problems, and its economic growth is predicated on extremely high levels of investment.  How much longer can China keep posting high growth rates based mostly on factor accumulation instead of innovation?  In my opinion, China’s inability to allow freedom of expression will eventually stifle growth and ironically bring about the government’s demise as well.

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