Saturday, August 29, 2015

Trading Freedom for Prosperity



A few years ago I was speaking with a very intelligent, educated woman. While she was living in the US, her heart and soul remained in China. Because of my background in journalism, sometimes I can't stop myself from asking leading questions. So I asked her about the cultural revolution in China and how it fit into history. (In the cultural revolution, Mao allowed student radicals to run wild, commit violent acts, demean important officials and set Chinese progress back by at least 10 years.)
Her response was instant and angry. "I don't think about such things. Why did you bring this up?"
My question was clearly looked on as an attack on China, and it was a question she never wanted to hear.
Over the past 20 years, Chinese have traded intellectual freedom for prosperity. As long as the Party increased  the amount people could earn and provide items they could consume, they ignored politics.
So what does the stock market rout and the quick devaluation of the yuan do to this relationship? Many Chinese are now frightened and worried about maintaining the good life they've received from the Party's management of the economy. While only 10% of the Chinese people participated in the stock market, many people are scared. What about the money invested in real estate, with some families owning three properties? There has clearly been the unspoken trade-off, "if we provide you with more wealth, you will be politically quiet."
For so many it's become a great deal. But what happens if the Party no longer delivers the goods?

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