07/13/2017 12:45 EDT | Updated 07/13/2017 14:19 EDT

China’s Grand Bargain: The New Social Contract

The Chinese middle class is in a state of cognitive dissonance. They absolutely loathe the corruption of power, but they desire to join those at the top.

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Pedestrians walk past a Chanel outlet in Hong Kong, China.

The summer of 1989 was unbearably hot. The unusual scorching heat in May would soon become an ill omen for what was to come in the early weeks of a June that would change post-Cultural Revolution China forever.

I was six years old. As we watched on TV, the PLA (People's Liberation Army) soldiers moved into Tiananmen Square, fired rounds of shots and dispersed the protest. In the morning after June 4, a common view was summed up amongst people: "China is looking into the abyss of coup, counter-coup and civil war."

This sentiment of apocalypse was also shared by the man in charge back then. Deng Xiaoping ran continuous op-eds in the People's Daily, the state-owned newspaper, telling people how important it was to crush the rebels with an iron fist. He praised the army on their swift action that saved China from going into another civil war.

Andrew Wong / Reuters
Chinese police monitor a march by tens of thousands of pro-democracy protesters in the special economic zone of Shenzhen in southern China on May 22, 1989. Hundreds of people were killed in Beijing on June 4, 1989 when Chinese troops crushed month-long pro-democracy demonstrations which attacked government corruption.

China's modern history pivoted on that fateful night. There is no denial in who is still in charge. But after nearly 30 years of relative stability, more Chinese are trying to get their assets out of China. More Chinese are trying to immigrate abroad. It is still wise to be cautious about the cohesion of Chinese politics under the rule of president Xi Jinping.

There were some rifts within the party. Some felt the party shouldn't have allowed the protest to happen in the first place. Others felt if the army had moved in sooner to remove the students from the square, maybe there would have been no casualties at all. The hard liners in the party wanted China to reverse some of its liberal economic policies. To everyone's surprise, Deng kicked off Xiaoping's Southern Tour to drum up support for a new round of economic liberalization reform. He proved all his foreign and domestic critics wrong. Instead of falling into the doomsday chaos, China entered the new age of consumerism. Ambitious infrastructure projects such as the high-speed train network connecting rural cities with urban centres have lifted millions of people out of poverty.

A new generation of Chinese born after the 1980s either know very little about the bloodshed in 1989 and the Cultural Revolution, or they simply do not care.

However, the ruling Communist party hasn't moved very far in the realm of political reform. If the '80s was a decade of liberal ideas, reform and pluralism, then the crackdown in 1989 killed any hope of China's democratization process. Commemorating June 4 in China is forbidden. Most vigil services happen overseas.

The Communist party has been very successful in terms of diverting people's attention from social woes to economic development. It has also been extremely effective with its "memory eradication" campaign. Today, a new generation of Chinese born after the 1980s either know very little about the bloodshed in 1989 and the Cultural Revolution, or they simply do not care. Having lived through ongoing political turmoil in the '60s, '70s and 1989, most people in China would agree that the past 30 years have been relatively stable and prosperous in recent Chinese history.

Many scholars and China experts in the West commonly believe that the emergence of a vibrant middle class in China will lead to democratic reform. The imprisonment of China's Nobel Peace Prize laureate Liu Xiaobo and the arrest of human rights lawyers (although many were later released) did not draw the kind of outrage or mobilization they have predicted.

Research on China's middle classes repeatedly demonstrates not just the lack of political opposition to the regime, but also a degree of support for a party-state operating under difficult conditions. Where there is criticism, it is a desire for greater efficiency and social justice within the current system, not a change of regime. The Chinese middle class is in a constant state of cognitive dissonance. On one hand, they absolutely loathe the corruption of power. On the other hand, they express a deep desire to join those who are at the top. The middle class has formed a primum non nocere ("first, do no harm") social contract with the party.

China has experienced slumps before. A research paper done by the Mainland Affairs Council of Taiwan shows that, on average, civil unrest has tripled in recent years to a record high of 590,000 incidents countrywide. But these incidents are not unmanageable. Problems include the income gap between the rich and the poor, graft and white-collar crimes by the high-ranking politburo and their entourage. Unaffordable housing prices and fewer opportunities for young college grads are further triggers that could push the country right into volatility. The protest in 1989 was partly due to high inflation and corruption. President Xi Jinping's whirlwind anti-corruption campaign has made him very popular among the poor. It also made him some bitter enemies.

The Communist Party will survive. It will continue its grip on power for the next 30 years. The party has always had a history of tackling crisis since 1989. But without a comprehensive political reform within the party, the risks are growing. They can only rely on the people of having short memory span. And the people do. If June 4, 1989 is China's spiritual holocaust and many people believe it's the Communist party's unforgivable sin, then many more have simply moved on.

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