January 25, 2012 7:20 pm

Food security: Dampened prospects

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Farmers use plastic sheets to cover themselves by rain on a rice field in Rajpur India


Bangladeshi women farmers in rainbow-bright saris survey their flooded rice paddies with dismay: the rains have drowned the tender seedlings and, with them, their livelihoods. Climate change, ill-judged policies, protectionism, urbanisation and plain greed have all conspired to reignite Malthusian prophesies of a growing world population unable to feed itself.


Come 2050, the UN predicts earth will be home to another 2bn people; in order to feed us all, production needs to increase by an estimated 70 per cent. That is a big task, not least since the land that humans have so long been tilling is itself facing a revolution. Agriculture, which provides a livelihood to an estimated 2.5bn people, is lagging behind population growth.
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To reverse that course, many experts say anothergreen revolution” – the yield-boosting transformation of farming in the 1960s and 1970s by the use of better science – is required, entailing superior seeds, husbandry and technology. It could include genetically modified crops, a technique that – just like nuclear power for the world’s energy needs – to its champions forms an integral part of the solution, but to its critics represents a threat to human and environmental well-being.



The prospect of more starving people as staples become unaffordable has put the question of food security firmly on to the top table of global policymaking. Nicolas Sarkozy, the French president, made it a central plank of his country’s presidency last year of the Group of 20 leading industrialised and developing nations; Mexico, this year’s G20 chair, is taking up the baton. At the World Economic Forum in Davos this week, several sessions are devoted to the topic.


Yet these discussions will take place against a backdrop that is not just far removed from the regularly ravaged crops of Asia and elsewhere, but is also one of commodity prices that are in retreat from the peaks of recent years. Amid fears about the health of other parts of the global economy – such as banking and public financesfood security is in danger of being overshadowed.


This is anathema to those urging action. “The fact that prices have come down does not at all change the long-term picture: that in 2050 we will have 9bn-plus people to feed,” says Kostas Stamoulis of the UN’s Food and Agriculture Organisation.


“The issue is here today already,” adds Paul Polman, chief executive of Unilever, who will be discussing food security at Davos. Every six seconds a child dies of hunger. More people are going to bed hungry now than two to three years ago, before the crisis.”


Governments, industry and civil society across the globe are scrabbling to come up with solutions. India, home to the largest number of starving people in the world, last month secured cabinet approval for a landmark bill guaranteeing heavily subsidised grain to poor families. The measure aims to underpin the health and life chances of more than 60 per cent of India’s 1.2bn population, although sceptics question whether providing grain but not other nutrients can eradicate malnutrition.


Across the developing world, industry is also pitching in. Companies such as Unilever, Nestlé and PepsiCo are helping farmers with the provision of seeds, fertilisers and even microfinancethereby gaining what SABMiller, the emerging markets brewer, calls a “licence to trade” and helping to secure their own supply of raw materials.


Non-governmental organisations carry out similar activities. But whether private sector or charitable, all these efforts remain piecemeal. “We need to scale up faster and bigger by working together,” says Mr Polman, who chaired the Food Security Working Group set up under the business subgroup of the G20.


For one, he proposes an aid transfusion of $70bn-$80bn to compensate for years of declining investment in agriculture. As the World Bank and other lenders and donors retreated from the field, the buoyant growth in yields unleashed by the green revolution sputtered. Bill Gates, the software billionaire philanthropist, is one who says it is time to reboot that revolution.


“In the last decade we backed off,” he told BBC radio before travelling to Davos. “And now we realise that was a mistake, so we need to get back in there and fund that.”


However, to get more food from the same (or, given trends such as urbanisation, less) land requires more productive crops. But India illustrates why agricultural investment is only part of the solution. Production of food grains in the world’s second most populous country are at record highs and on track to reach 245m tonnes in the year to March, comfortably enough to meet demand of about 220m tonnes.


The same is true on a global scale. Today, supply is not a problem,” argues Shenggen Fan, director-general of the Washington-based International Food Policy Research Institute. Rather. Or as Gary Markham, director of agriculture at accountants Grant Thornton, says: “Food is in the wrong place.” While parts of Africa starve, warehouses in China are overflowing – as are western dining tables, one-third of whose food ends up in household or restaurant bins.


Mr Fan points to the distortions created by countries’ stockpiling – “We don’t know how much China has, it could easily be 50m-300m tonnes of grain” – as an issue for governments to resolve through improved transparency and information.


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For India and much of Africa, the bigger issue is access and waste. New Delhi reckons that every year up to 40 per cent of Indian fruit and vegetables rots in the fields or on the way to market. Thousands of tonnes of grains such as wheat and rice are also rendered inedible because of a lack of rodent-free cool storage.


The cost of this wastage rings in at almost $20bn, according to government estimates. It is one reason why many welcomed recent – and still falteringplans to open up the country’s retail sector in the hope that big supermarket groups would establish better supply chains.


Then there are the government policies and market forces that, some argue, exacerbate the supply situation. Chief of these are biofuels. While the US has withdrawn fiscal support for ethanol and biodiesel, other parts of the world continue to encourage such productionviewed by critics as taking food out of bellies to put fuel into motors.


The issue illustrates the bigger policymaking challenge of balancing the sometimes conflicting need for food and for jobs, while also reducing environmental damage. “A hungry world is a dangerous place – it causes rioting,” says Mella Frewen, director-general of FoodDrinkEurope, a trade grouping. But so is a world without adequate work.


“It’s a huge social dilemma,” says Mr Markham, pointing to EU proposals that would link support payments to employmentmeaning more people on farms rather than efficient mechanised farming.
Equally, more bountiful crops do not necessarily translate into a more abundant mother nature.


Rampant fertility can also harm the soil and the livelihoods of those who till it. Vandana Shiva, an environmentalist currently advising the king of Bhutan to make the Himalayan nation wholly reliant on organic farming, claims the green revolution has ravaged the world’s ecosystem. “It has eroded farming soil, waterlogged deserts, pest-infected crops and indebted farmers,” she says.


John Beddington, chief scientific adviser to the UK government, prefers to see the two problems dovetailing into one solution: “Agriculture has the potential to mitigate climate change,” he says. That means looking at ways to increase productivity while reducing greenhouse gases, instead adopting practices that sequester carbon dioxide – such as ploughing legumes into the soil that put back essential nitrogen.


Away from the fields, blame is also meted out to self-interested governments and banks – and they too must be brought to heel, critics argue. That means ending protectionism and export bans, such as that imposed by Russia in 2010 after a drought devastated crops and wildfires spread across the country. It also means stamping out the speculation that, critics contend, sometimes goes hand-in-hand with government edicts to cause spikes in commodity prices.


Glencore, the world’s biggest commodity trader, last April admitted to a speculative bet on rising wheat and corn prices in the early stages of the previous summer’s drought – while simultaneously, senior traders publicly urged Russia to impose a grain export ban. When Moscow did just that a few days later, grain prices rallied.


Mr Sarkozy has been blunt on the subject of speculators, saying an unregulated market is “a lottery in which fortune smiles on the most cynical”. He also wants a central crop database and limits on export bans.


But while he has supporters among some governments, much of industry and most NGOs, many concede that getting powerful operators – be it Goldman Sachs’ commodities trading desk or officials in a ministry in Beijing – to be more transparent would be a tough ask.


The tensions in securing cross-disciplinary global agreement are one reason why the food and drink industry and NGOs have taken matters into their own hands, at least at a micro level, by supporting farmers from whom they buy produce. Banks and commodity traders are also slowly getting in on the act. Rabobank of the Netherlands, for example, has launched a barter programme in Brazil. Under this, fertiliser suppliers are paid with crops, which they in turn sell to traders.


But the job is bigger than they can hope to fill.Individual governments have responsibility at the end of the day to have their people properly fed,” says the FAO’s Mr Stamoulis. “But we think experience shows a coalition of government, private sector, local communities, farmers and civil society in general [is required].”


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There are moves on the demand side too. Government health campaigns are “nudging Britons to throw out less food. Elsewhere, campaigns advise citizens to, say, go vegetarian for a week or stick to sustainable produce.


More radically, Ifpri’s Mr Fan calls for a tax on meat to reflect the “social costs” of climate change, water and healthcare. Take it all into consideration and beef will probably be 10 times more expensive,” he says.


That may prove tough to implement. Governments have already been attacked for introducing far milder taxes on sugar and fats.


More palatable are some of the small agricultural steps aimed at boosting supply and ensuring fewer people go to bed hungry. Take rice: thanks to funds and scientific help from overseas, some of the Bangladeshi rice farmers have been able to disprove Malthus’ gloomy prognosis. So-calledscuba rice” can survive up to two weeks of being submerged and still send its green shoots upwards when the waters clear.


Biplob Sarker, one smallholder, says he “gave up hope” after 17 days of flooding. “But, to my surprise, the seedlings grew green again after the flood. Still I can’t believe I have got 18 mauds [672kg] of paddy from there.” The challenge for the world is to multiply that surprise.


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Genetic modification: resistance even among the poor


It is the technology that dare not speak its name. Genetic modification roughly translates – in Europe and many of the poorer countries that receive its aid – as Frankenstein tomatoes: an unnatural means of playing God that may have us all sprouting extra limbs. So politicians see few votes in advocating GM, even though it can be used to engineer crops that are more disease- or drought-resistant or grow more abundantly, write Louise Lucas, James Fontanella-Khan and Alan Rappeport.


Even as Monsanto of the US on Wednesday abandoned plans to sell an insect-resistant maize in France, European scientists and government officials are starting to test the waters. UK research trials on wheat modified to repel aphids began this year, although officials insist their crop is not for human consumption.


The US, where farmers have been planting genetically engineered crops since 1996, is less squeamish. Still, big US food companies that use the produce have come under attack. Critics complain the food is unsafe and criticise Monsanto, the GM seed provider, for its aggressive treatment of farmers. But such criticism did not stop BASF of Germany from recently transferring its biotechnology unit, which researches GM crops, to Raleigh, North Carolina.



Food and drink makers, who stand to benefit from GM, are generally in favour. Can it be right that people in the Horn of Africa have been starving because food can only be transported through Kenya, whose politicians are being put under pressure by the EU not to handle anything GM?” asks Paul Polman, chief executive of Unilever, who chaired the food security working group set up by the World Economic Forum and the Group of 20 leading nations.


But even in countries where famines occur, public resistance is firm. India, which briefly flirted with GM aubergines, backtracked in 2010 when Jairam Ramesh, then environment minister and now in charge of rural development, put a moratorium on GM crops. “There is no hurry to introduce Bt brinjal [GM aubergines] on the pretext of food security,” Mr Ramesh said at the time.


Vandana Shiva, an Indian environmental activist, goes further, claiming the use of GM cotton has had a devastating impact on farmers who have become dependent on seeds produced by large foreign-owned corporations. That has killed diversity, she argues, and – since Monsanto bought out most Indian competitors – has forced farmers to buy its seeds rather than buy from the government at subsidised prices.

Copyright The Financial Times Limited 2012.


China

The paradox of prosperity

For China’s rise to continue, the country needs to move away from the model that has served it so well

Jan 28th 2012
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IN THIS issue we launch a weekly section devoted to China. It is the first time since we began our detailed coverage of the United States in 1942 that we have singled out a country in this way.


The principal reason is that China is now an economic superpower and is fast becoming a military force capable of unsettling America. But our interest in China lies also in its politics: it is governed by a system that is out of step with global norms. In ways that were never true of post-war Japan and may never be true of India, China will both fascinate and agitate the rest of the world for a long time to come.


Only 20 years ago, China was a long way from being a global superpower. After the protests in Tiananmen Square led to a massacre in 1989, its economic reforms were under threat from conservatives and it faced international isolation. Then in early 1992, like an emperor undertaking a progress, the late Deng Xiaoping set out on a “southern tour” of the most reform-minded provinces.


An astonishing endorsement of reform, it was a masterstroke from the man who made modern China. The economy has barely looked back since.


The party’s instinct, born out of all those years of success, is to tighten its grip. So dissidents such as Yu Jie, who alleges he was tortured by security agents and has just left China for America, are harassed. Yet that reflex will make the party’s job harder. It needs instead to master the art of letting go.

China’s third revolution


The argument goes back to Deng’s insight that without economic growth, the Communist Party would be history, like its brethren in the Soviet Union and eastern Europe. His reforms replaced a failing political ideology with a new economic legitimacy. The party’s cadres set about remaking China with an energy and single-mindedness that have made some Westerners get in touch with their inner authoritarian. The bureaucrats not only reformed China’s monstrously inefficient state-owned enterprises, but also introduced some meritocracy to appointments.



That mix of political control and market reform has yielded huge benefits. China’s rise over the past two decades has been more impressive than any burst of economic development ever. Annual economic growth has averaged 10% a year and 440m Chinese have lifted themselves out of poverty—the biggest reduction of poverty in history.


Yet for China’s rise to continue, the model cannot remain the same. That’s because China, and the world, are changing.


China is weathering the global crisis well. But to sustain a high growth rate, the economy needs to shift away from investment and exports towards domestic consumption. That transition depends on a fairer division of the spoils of growth. At present, China’s banks shovel workers’ savings into state-owned enterprises, depriving workers of spending power and private companies of capital. As a result, just when some of the other ingredients of China’s boom, such as cheap land and labour, are becoming scarcer, the government is wasting capital on a vast scale. Freeing up the financial system would give consumers more spending power and improve the allocation of capital.



Even today’s modest slowdown is causing unrest. Many people feel that too little of the country’s spectacular growth is trickling down to them. Migrant workers who seek employment in the city are treated as second-class citizens, with poor access to health care and education. Land grabs by local officials are a huge source of anger. Unrestrained industrialisation is poisoning crops and people. Growing corruption is causing fury. And angry people can talk to each other, as they never could before, through the internet.


Party officials cite growing unrest as evidence of the dangers of liberalisation. Migration, they argue, may be a source of growth, but it is also a cause of instability. Workers’ protests disrupt production and threaten prosperity. The stirrings of civil society contain the seeds of chaos. Officials are particularly alive to these dangers in a year in which a new generation of leaders will take power.


That bias towards control is understandable, and not merely self-interested. Patriots can plausibly argue that most people have plenty of space to live as individuals and value stability more than rights and freedoms: the Arab spring, after all, had few echoes in China.


Yet there are rights which Chinese people evidently do want. Migrant workers would like to keep their limited rights to education, health and pensions as they move around the country. And freedom to organise can help, not hinder, the country’s economic rise. Labour unions help industrial peace by discouraging wildcat strikes.


Pressure groups can keep a check on corruption. Temples, monasteries, churches and mosques can give prosperous Chinese a motive to help provide welfare. Religious and cultural organisations can offer people meaning to life beyond the insatiable hunger for rapid economic growth.

Our business now

China’s bloody past has taught the Communist Party to fear chaos above all. But history’s other lesson is that those who cling to absolute power end up with none. The paradox, as some within the party are coming to realise, is that for China to succeed it must move away from the formula that has served it so well.


This is a matter of more than intellectual interest to those outside China. Whether the country continues as an authoritarian colossus, stagnates, disintegrates, or, as we would wish, becomes both freer and more prosperous will not just determine China’s future, but shape the rest of the world’s too.


Unrest in China
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A dangerous year
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Economic conditions and social media are making protests more common in China—at a delicate time for the country’s rulers
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Jan 28th 2012 | CHENGDU, DONGGUAN AND WUKAN VILLAGE

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IN AN industrial zone near Chengdu, the capital of Sichuan province in south-west China, a sign colourfully proclaims the sprawl of factories to be a “delightful, harmonious and happy district”. Angry steelworkers must have winced as they marched past the slogan in their thousands in early January, demanding higher wages. Their three-day strike was unusually large for an enterprise owned by the central government. But, as China’s economy begins to grow more sedately, more such unrest is looming.


China’s state-controlled media kept quiet about the protest that began on January 4th in Qingbaijiang District, a 40-minute drive north-east of Chengdu on an expressway that crosses a patchwork of vegetable fields and bamboo thickets. But news of the strike quickly broke on the internet.


Photographs circulated on microblogs of a large crowd of workers from Pangang Group Chengdu Steel and Vanadium being kept away from a slip road to the expressway by a phalanx of police. Word spread that police had tried to disperse the workers with tear gas. In the end, as they tend to—and undoubtedly acting on government ordersfactory officials backed down, partially at least. The workers got a raise, albeit a smaller one than they wanted. Managers’ wages were frozen.
Strikes have become increasingly frequent at privately owned factories in recent years, often involving workers demanding higher wages or better conditions. Private firms, like state ones, are usually strong-armed by officials into buying off strikers. The thinking is that capitulating keeps a lid on news coverage and helps to prevent unrest from spreading. Yet the explosive growth in the use of home-grown versions of Twitter has made it easy for protesters to convey instant reports and images to huge audiences. The Communist Party’s capacity to stop ripples of unease from widening is waning—just as economic conditions are making trouble more likely.



Anger at the bottom


At a cheap restaurant in Qingbaijiang, opposite a dormitory compound for Pangang employees, grimy steelworkers complain that the government’s promise of an extra 260 yuan ($41) a month is hardly enough. Many of the lowest-paid earn as little as $190 monthly. But the workers know that the steel industry is struggling—and that vengeance on persistent troublemakers can be fierce. A police notice warns of legal action, including imprisonment, against any strikers who continuedisrupting public order”. Security agents follow your correspondent in an unmarked car.


All this is partly a result of the curb on China’s stimulus spending and carefree (reckless, many would say) bank lending in the wake of the global financial crisis of 2008. There are fewer new construction projects; demand for steel has flattened. Pangang’s plant in Qingbaijiang is running at a loss. The number of steel firms in the red rose from nine in September to 25 a month later. Even though the government is less worried about inflation now than it was a few months ago, and is releasing the economic brakes a little, the steel industry is expecting a lean period. Some firms might have to close.


Overall economic growth is still looking robust. In the final three months of 2011 China’s economy grew by 8.9% compared with the same period a year earlierenviable by almost anyone else’s standards, though still the slowest since the second quarter of 2009. The slowdown has so far been gentle, and in line with government efforts to prevent overheating. But this does not stop officials worrying that the coming year could be unusually difficult..



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Europe is the biggest buyer of Chinese products—and the euro zone’s travails have plunged many manufacturers into despair. Depressed demand in both Europe and America has taken its toll on factories. The steelworkers’ strike was one of many in recent months, most of them in China’s export-manufacturing heartlands near the coast (see map).


Chinese exporters do not face as big a shock now as they did in late 2008, when the financial crisis caused a sudden collapse in demand and the loss of as many as 20m migrant-labour jobs. But that time China’s recovery was rapid, helped by stimulus spending of 4 trillion yuan (more than $630 billion at today’s exchange rate), as well as developed economies’ own stimulus projects. The impact on migrant workers was further mitigated by the coincidence of the worst of the downturn with the lunar new-year holiday, when most migrants go home for lengthy periods.


This time exporters face protracted slow growth in developed economies, and the risk that the euro zone’s difficulties might worsen. China’s policymakers do not want another lending spree that might burden the financial system with more bad debt, on top of the borrowing accumulated during the previous binge. The country’s relatively low budget deficit (about 2.5% of GDP in 2010) gives it room to spend more on social housing, social security, tax cuts for small firms and consumer subsidies. These could help promote private consumptioneventually.


Nerves at the top


The long-term plan is for China to wean itself off its reliance on exports and investment projects such as roads, railways and overpriced property developments, and for domestic consumption of goods and services to play a much bigger role in fuelling growth. But this rebalancing will be a long, hard slog. Officials do not want shock therapy because it could threaten the jobs of many of the 160m migrants who come from the countryside to provide the cheap labour behind China’s exports.


This economic quandary has become more acute at what is a delicate political moment for the Communist Party. Later this year (probably in October or November), the party will hold its five-yearly Congress, the 18th since its founding in 1921, at which sweeping changes in the country’s top leadership will begin to unfold.


The Congress will “elect” a new 300-member central committee (in fact it will be hand-picked by senior leaders). This will immediately meet to rubber-stamp the appointment of a new Politburo, a body that currently has 25 members. All but two of the Politburo’s nine-member inner circle, the Politburo Standing Committee, will be replaced. Two appointments are all but certain: Vice-president Xi Jinping to take over from President Hu Jintao (as party chief after the Congress and as president next March); and Li Keqiang to replace his boss, the prime minister, Wen Jiabao, also next March. There will be much jockeying for the other slots.


It is a decade since China experienced a leadership changeover on this scale—and the first time since the late 1980s that the advent of a new generation of leaders has coincided with such a troubled patch for the economy. The previous time, in 1988, an outbreak of inflation threw Deng Xiaoping’s succession plans into disarray, giving conservatives ammunition with which to attack his liberal protégés. The party’s strife erupted into the open the following year as students demanding greater freedom gathered in Tiananmen Square.


The threats to the party today are very different, but fear of large-scale unrest still haunts the leadership. The past decade has seen the emergence of a big middle classnearly 40% of the urban population, as some Chinese scholars define it—and a huge migration from the countryside into the cities. The party takes no chances. Large numbers of plainclothes police are on permanent watch in and around Tiananmen Square. (Since 2008, visitors to the vast plaza have had to undergo airport-type scanning and searches.) Early last year, when anonymous calls began circulating on the internet for citizens to gather in central Beijing in sympathy with the uprisings that were breaking out in the Arab world, the location specified was not Tiananmen but Wangfujing, a shopping street nearby. The police responded by flooding that area with officers too.


In the Pearl River Delta, which produces about a third of China’s exports, there are plenty of signs of malaise. Outside a Taiwanese-owned factory in Dongguan, a dozen or so police officers wearing helmets and carrying clubs watch a small group of angry workers complain that the owner has run away. The factory (which makes massage seats) is unable to pay its debts. They are afraid that, this time, after the lunar new year break they will have no jobs to come back to. A plainclothes policeman tries to silence them. Then a uniformed officer moves in with a video camera, and most of the workers retreat, keeping a prudent silence.


Others in the delta have been less reticent. In November thousands of employees at a Taiwanese shoe factory in Dongguan took to the streets in protest against salary cuts and sackings, purportedly caused by declining orders. Protesters overturned cars and clashed with police. Photographs of bloodied workers circulated on the internet. There have been further protests in recent weeks.


Guangdong province also saw a wave of strikes in 2010. At that time workersmainly in factories supplying the car industry—were demanding only higher pay and improved conditions. Most of those disputes were quickly and peacefully settled, and rarely involved action on the streets.


The latest spate of confrontations looks different. The steelworkers at the state-owned factory near Chengdu wanted a raise; but, these days, rather than bidding to improve their lots, workers are mostly complaining about wages and jobs being cut. The strikers seem more militant.


A report published this month by the Chinese Academy of Social Sciences (CASS) says that, compared with those in 2010, the strikes of 2011 were better organised, more confrontational and more likely to trigger copycat action. Workers are not willing this time to accept that they have to make sacrifices for the national good because firstly they have already made enough sacrifices, and secondly, fewer are willing to just pack up and go home,” says Geoff Crothall of China Labour Bulletin, an NGO in nearby Hong Kong.

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Where the heart is

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The government hopes that jobless migrants will return to their home villages, where they or their families still enjoy a tiny land entitlement on which they can subsist, or find work closer to their hometowns. Many will: job opportunities in the interior have grown in the past few years, thanks to a surge of government investment in central and western areas, aimed at evening out economic growth.


Last year Chongqing, a region in south-west China which had long exported large numbers of workers to the coast, for the first time employed more of its surplus rural workforce locally than it sent to other areas. Chongqing’s party chief, Bo Xilai, is believed to be a contender for the Politburo Standing Committee. He has been trying to turn Chongqing into a model for the absorption of rural labour into cities, a project that has involved vast spending on low-cost housing to accommodate the region’s migrants.


But rising numbers of migrant workers in big citiesmore than 60% according to the National Bureau of Statistics in 2010—are themselves the offspring of migrants and have no experience of agricultural life. They regard themselves as urbanites, even if they are excluded from many of the welfare benefits to which city-dwellers are entitled. They are better educated than their parents’ generation, and more assertive. A riot by migrants last June in Dadun, another factory town in Guangdong where many of the country’s jeans are produced, hinted at the problems China could face if second-generation migrants lose hope. The manhandling of a pregnant woman by security guards prompted two days of violence, with thousands of migrants setting fire to vehicles and government buildings. Strikes in coastal factories now mainly involve second-generation migrants, according to the report by CASS.


Such unrest is not about to topple the party. As Chinese officials nervously digest the implications of unrest in the Arab world, demonstrations in Russia and an easing of repression in Myanmar, they draw comfort from the consistency of Chinese opinion polls. These appear to show high levels of trust in the central leadership and of optimism about the future under party rule. Many ordinary Chinese are contemptuous of local authorities, but still believe that leaders in Beijing are benign.


The power of weibo


But according to Victor Yuan of Horizon, a polling company in Beijing, citizens’ satisfaction with their own lives and confidence in the government, though high, experienced a “big drop” in 2010 and didn’t recover last year. Confidence in the government has fallen by about 10 percentage points, to around 60%.
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Mr Yuan says the rapid spread of microblogs has contributed to this decline. By the end of last year, weibo, as Chinese versions of Twitter (itself blocked in China) are known, were used by nearly half of the 513m Chinese who had accessed the internet in the previous six months (see chart).


This was slightly more than the number who used e-mail and a rise of nearly fourfold over the year before, according to the government-affiliated China Internet Network Information Centre. Li Chunling of CASS estimates that 90% of urban internet users under 30 are microbloggers.


Weibo have transformed public discourse in China. News that three or four years ago would have been relatively easy for local officials to suppress, downplay or ignore is now instantly transmitted across the nation.


Local protests or scandals to which few would once have paid attention are now avidly discussed by weibo users. The government tries hard, but largely ineffectively, to control this debate by blocking key words and cancelling the accounts of muckraking users. Circumventions are easily found. Since December the government has been rolling out a new rule that people must use their real names to open accounts. So far, users seem undeterred.


In the build-up to the 18th Congress, China’s leaders will become especially anxious to prevent embarrassment to the party. Weibo are likely to make their lives a lot more difficultat least that was the lesson from a ten-day stand-off in December between police and residents of the coastal village of Wukan in Guangdong.


The villagers’ protest was typical of thousands that roil the Chinese countryside every year: a complaint about the seizure of agricultural land by local officials for private redevelopment. Unusually, however, in Wukan citizens took control of their village and drove out party hacks and police. Officials were alarmed by images that circulated on weibo of triumphant residents rallying in the centre of their village, like students in Tiananmen Square 22 years ago (see the picture at the start of this piece). They tried, unsuccessfully, to stop news spreading by ordering a block on the village’s name and location.


The villagers gave up their protest on December 21st after a rare, high-profile intervention by the Guangdong party leadership, which promised to look into their complaints. Remarkably, on January 15th the protest leader, Lin Zuluan, was appointed as the village’s new party chief (the previous one having disappeared, it is thought into custody). Even the party’s main mouthpiece in Beijing broke its silence on the issue, saying it showed that local officials should stop treating citizens as adversaries.


Wang Yang, Guangdong’s party chief, who is believed to be a contender for a senior Politburo position this year, said the incident demonstrated how people’sdemocratic consciousness” was getting stronger. He called on officials not to ignore citizens’ concerns.


Few regard the Wukan episode as a turning point for the party. At least one protester on Tiananmen Square has since been seen being dragged away by police in the usual fashion. But it has stirred debate, online at least, about how the party should respond to protests and other forms of public pressure. And villagers in Wukan warn that they will not be satisfied until they have reclaimed their land. One protest leader says there could be another, “even bigger uprising.
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Not everyone has a home to go to


The new leadership that will take over after the upcoming Congress will quickly face tests of its ability to handle social unrest. Even if the country does not appear on the brink of an Arab-style upheaval, many Chinese academics say the next few years could see burgeoning instability, exacerbated by slower economic growth and a widening gap between rich and poor. China’s outgoing leaders have tried to suppress debate about ways of reforming the political system to allow the public to voice their grievances more freely. But many analysts believe there is a pressing need for such reform. Today’sChina model”, as some in China and abroad were tempted to call it after Western economies fell into disarray three years ago, appears increasingly unsustainable.

Chinese roulette


An intriguing glimpse of how at least some in the party elite might see things was offered last April when Zhang Musheng, a prominent intellectual, published a book calling for a revival of the one-time Maoist goal of building a “new democracy”. General Liu Yuan, the son of Liu Shaoqi who was China’s president during the Mao era, openly backed the idea. Mr Zhang (himself the son of a late senior official, as are several of the new leaders-to-be) said a new democracy would involve continued party rule but with much greater freedom.


Few of China’s liberals believe there is much chance of any leader pursuing this idea in the near future. But Mr Zhang’s description of China today has struck a chord (and has been circulated widely by weibo users). A well-known economist, Wu Jinglian, picked up a phrase of Mr Zhang’s in an essay in Caijing, a Beijing magazine, in which he attacked the notion of a “China model” and called for political reform. The phrase of Mr Zhang’s that made an impression was one describing China as “playing pass the parcel with a time bomb.”