by David Wolf
Dean Stavridis and Professor Brookfield correctly point out that a credit crunch and economic slowdown in China is more than just a matter for domestic concern in the People’s Republic: the PRC is now so integrated into the global political economy that the implications of such a crisis would be global, and possibly severe. With these facts in mind, it is now essential for us to ask how the effects such a crisis could be mitigated.
Mitigation begins with the Chinese people. A key factor in China’s political and economic resilience is the support of the wider populace for the government and the Chinese Communist Party. That support has been fairly consistent since “liberation” in 1949, and has been based on an implicit social contract between the people and the Party: allow the CCP to rule the nation in the manner it sees fit, and in return the Party will promise security, stability, and a rising standard of living.
But as the Dengist economic boom begins to fade, the Party is finding it more challenging than ever to deliver on the promise it has made for rising lifestyles and social mobility. The CCP and the Chinese government urgently need to buy themselves time to navigate the nation through a period of great uncertainty at best, and at worst, the crisis framed by Dean Stavridis and Professor Brookfield.
Beyond simply avoiding the worst, a key to passage through credit crisis and economic slowdown will be loosening the purse strings of the populace and convincing consumers to save less and spend more. If the people believe in the government’s approach to economic transition, they will treat an economic slowdown like an opportunity to buy on the cheap, placing the economy on the road to recovery and a more resilience. If, on the other hand, the people see the economic crisis as the lip of a maelstrom, the purse strings will tighten, deepening the crisis and postponing a recovery.
Safe passage through the crisis begins with resetting expectations among the Chinese people. That process will not be as simple as a speech in front of the National People’s Congress orchestrated by a vigorous campaign in state media. In an age of growing cynicism fuelled by systemic corruption and yawning inequality, an Internet-savvy populace will not be so easily led. The venerable art of Communist propaganda is no longer sufficient, and the Party must learn the craft of public influence.
The government must begin by rethinking its messages. Rather than rely on tired platitudes, it must carefully and openly explain to the populace that the nation’s extraordinary growth has placed it into uncharted territory. Without oversimplifying or needlessly complicating, leaders must explain that the nation must return to Deng Xiaoping’s formula of “crossing the river by feeling the stones,” transitioning to an economy that can stand on its own without dependence on foreign markets or foreign capital.
The government must also make this a shared quest, telling the people that the future can be built together only if all contribute, moving beyond frightened conservatism and enjoying the fruits of three decades of hard work. Finally, the nation’s leaders must make clear that this process will make the nation’s economy stronger, more resilient, and better able to sustain the nation’s economic miracle for years, if not generations, to come.
But the government and Party cannot depend on their own credibility to accomplish this. They must cultivate the support of trustworthy voices outside of government, and, indeed, from outside of China. The endorsement of experts whose integrity and independence are beyond question, and whom the most influential elements of Chinese society find convincing, will convince the people that it is both safe and desirable to part with some of their savings. The endorsement of these experts will also boost confidence in the economy and the nation.
Great messages delivered well and echoed by trusted voices are a start. The medium of public discourse must also evolve. Proclamations from the Great Hall of the People are inferior to more directly addressing the Chinese people. Social media like WeChat and Weibo, online video outlets like Youku and Tudou, and a host of other channels provide Chinese leaders with new and more powerful ways to engage with the nation. If engaged with the sort of frank openness inspired by former Premier Zhu Rongji’s annual press conferences, the nation’s leaders have a fighting chance at preparing the Chinese people for the challenges ahead.
For China’s leaders, engaging in this process is essential. For those of us watching China, it is a bellwether. If Xi Jinping and Premier Li Keqiang demonstrate to the world that they understand the key role that the Chinese people play in navigating this crisis, there is reason for optimism. If, on the other hand, the nation’s leaders try to muddle through without engaging popular support – or do so clumsily – China may find itself mired in a prolonged economic malaise, and the world along with it.
About the Author
David Wolf has done business in and with China for 27 years and lived in China for nearly two decades. One of China’s leading public relations strategists, he is currently the Managing Director of the Global China Practice at Allison+Partners LLC. David’s next book “PR in China: Building and Defending Your Brand in the PRC” is due out later this year from Palgrave.