One State, Two Peoples: China and the US

(The Global Crisis in Confidence, 25 Jul 2012)

Joseph Ataman ·

February saw the green lawns of 1600 Pennsylvania Avenue play host to a meeting of two world leaders — two men in whose hands will soon rest the balance of world power. And yet, while the world’s media crowded the pristine grass, the true significance of the visit went largely unnoticed.

For all the attention paid to all that was said, little was really paid to who was actually doing the talking. Behind their titles the two men, Barack Obama and Xi Jinping, bear a striking similarity of background. A similarity that stems not from mere coincidence, but from an awareness of the staggering changes in the global political sphere induced by recent events.

This relative similarity of background, above all other factors, has been instrumental in their respective ascents to the apex of world power. I refer not to their exceptional educations or lengthy unblemished careers in the public service, but to their very identities. Obama is the first black man to have called the White House home and the first politician since Martin Luther King Jr. to have brought so much of the ‘black vote’ back to the ballot box and the political sphere. Xi is a ‘Crown Prince’ of the Communist regime and a politician with strong links to the military and civil service, qualifications that have been overlooked in favour of his rural roots. Xi was raised in the fields of Shaanxi province as a son of the Cultural Revolution, a fact the state machinery has been more than keen to publicize as almost a guarantee of rural support.

Why the sudden desire to pander to the tastes of the poorest demographics? For decades they have been ignored, why should this need be felt in two nations of such polar-opposition?

As will be shown, both China and the US have been converging on a course of widespread dissent across all but the top percentiles of their populations. A more representative choice of leader may be a short-term cure but the underlying grievances of both nations’ lower and growing middle classes must be addressed.

“We’ll fight them in the fields… and in the classroom?”

In two nations that pride themselves on their supposed social mobility, the reality is a harsh contrast. Furthermore, it is increasingly a discriminatory access to education that is the cause of this.

China is a country of two peoples. The repressed poor of the rural interior, increasingly forced into a migratory limbo and the lucky, educated few of the urbanite middle class. In 1990, the politburo spent a mere 2.1% of GDP on education. By 2003 this had barely reached 3.4%, an embarrassment for a nation viewing itself as a world leader, 0.6% behind the developing world average. Unlike its brother nation, Vietnam, where policy is geared towards income redistribution social welfare, in China education is still seen by many as a private benefit that enables individuals to improve their lives. But this policy is beset by double standards. While urban municipalities subsidize upwards of 60% of education costs, rural schooling receives a mere 13% leaving parents to cover the expense of maintenance and even higher wages when teachers strike for more pay.

Yet more galling is the open bias against such students who are expected to attain higher university entrance marks than their urban counterparts. This is despite an undeniably poorer quality of education and opportunity. New social bounds are being set by the cost and location of education, a situation mirrored in the US. A reality not lost on America’s new disenfranchised and one that grows on the minds of China’s poor as controls slacken.

On America’s ‘golden shores’, education and opportunity are now the reserve of the well-placed and well-off, no longer the birthright of the masses. For the first time ever, young Americans are worse-off than their parents, in terms of income and future prospects. Debt-ridden, poorly educated and stuck in a financial system that has grown to exploit the marginal, Americans have lost the pioneering spirit that long-defined them. While previous generations were happy to uproot in search of work and opportunity, today’s America is a sedentary one. For many, a college education is now viewed more as a burden than a dream.

“Manufacturing builds goods, finance builds dreams.”

The middle classes have just as much reason for their anger. More is asked of them to support a system that neither recognizes their contribution nor directs the profit from their wealth to those that need it most. The citizens of China’s East coast differ little from those of the United States’. They drive the same car, iPhone in hand, dream of the same future and are exploited as ruthlessly as each other. All that may differ between them is how long their patience will last.

Even in a world of future Oriental dominance the future looks bleak for Chinese graduates with jobs as scarce as ever. State frameworks are incapable of dealing with the growing labour-surplus as millions of graduates fight tooth and nail for the few jobs her nascent service industry can provide. This pressure will only mushroom as the nation reaches the final stages of development. Major policy changes are all that will accommodate this transition. Especially so, as with every passing day the burden of the ageing population they must support grows.

In a society where familial ties are as strong as they are in China, welfare for the elderly has largely been overlooked. A national Ponzi scheme has been constructed upon the legacy of the one-child policy, leaving the young to support a disproportionate number of elders with an ever-increasing life expectancy. The Chinese bear this without much complaint at present, silenced by the ancestral duty so important to Eastern cultures. However this cannot be relied upon to stem protest. As the burden grows, the back of the Chinese will break.

Similar issues exist in the ‘West’ as migrant populations swell and in times of austerity taxpayers question the value of their money being spent on harbouring idle or new populations. Governments have to act to re-invent the welfare state not as a means of subsistence and free handouts but as an insurance for the unfortunate and a support to the most needy. Leaders have a duty of care not only over their people, but also over the money they contribute towards their homelands. For too long have the desires of the largest contributors to public funds been the least acknowledged.

The economic crash, the exposure of the flagrant arrogance of the finance industry and the consequent protection endowed upon the industry by the state have let loose a storm of protest from the America middle classes. It was their money in pension funds and savings that was, and still is, gambled on a daily basis with flagrant regard for the consequences. Western governments were largely seen to have failed their peoples in allowing and encouraging such behaviour within their favoured industry: finance. More so as it was the taxpayer that has funded the revival of the very banking culture that led to the crash. The benefits of which are purely for the enjoyment of the executives who engineered this ‘platinum protection’. Private gains have come at public loss.

This has led to the ‘Occupy’ movements, stealing back political space for the masses but while this is seen as a typical ‘protest’ movement little is likely to come of it. Only through positive action on the part of the professional classes, through the voices and votes of the middle classes will noticeable change occur.<

“Mirror, mirror on the wall…”

China and America have long averted this issue coming to light through increasingly unsustainable means. China has repressed endlessly, not only through force in the fields of Guangdong and the crowds of Tiananmen but by removing those tools of change used so effectively in the Arab Spring. Facebook and Twitter, the new windows of the world have been boarded up. America has done the same through the poverty that blights its shores, starving its poorest of opportunity and equality.

America has distracted its people with a lifestyle of want. Just as the consent of Chinese urbanites is guaranteed by their GDP’s inexorable 8% growth, the American people have rested satisfied in their society of consumption. The very society that rested on the foundations of debt that finally collapsed in our recession.

Trying a long-trusted method, it seems as if China is looking to military success to continue its campaign of appeasement. With its eyes set on the Pacific Ocean amid a vast program of military expansion this may represent a contingency against the difficulties that the Chinese authorities foresee in maintaining the all-important status quo.

“The professional proletariat”

It is the hidden anger of the middle classes that will determine the future path that these nations take. The bourgeoisie won revolutionary France and it is only this professional power base that has the political sway to force a new focus for the future. The poor have long been ignored and, I believe, will long continue to be treated thus. As China struggles to sustain economic growth while moving towards a ‘green’ economy and America fights to maintain its global hegemony the potential for change and instability will only increase. How this opportunity or risk is managed will depend on the actions the ‘squeezed middle’ of these two great nations.

For Obama and Xi the choice is simple, act to avert this or suffer the unpredictability of the ensuing instability. Create a fairer, more equal, stronger society and placate the discord that threatens us with a future of unknowns.