China: When Veterans Protest

Armed police were called in to break up a rally held by disgruntled army vets over the weekend.

Every reform creates winners and losers. But in the case of military overhauls, the losers sometimes command the loyalties of men with guns.

More than a thousand veterans of China’s People’s Liberation Army from several provinces took to the streets in protest over the weekend in the Chinese city of Zhenjiang. The outpouring of discontent appears to have been triggered by an incident earlier in the week, when security personnel reportedly assaulted a veteran outside the local government office after he tried to submit a petition asking for greater pension and health care benefits for vets. By June 24, hundreds of armed police had arrived in the city and reportedly dispersed the rally without major incident. It’s doubtful that the issue has been resolved altogether.
The Zhenjiang protests are just the latest bout of unrest involving disgruntled PLA vets. Since 2016, China has seen periodic protests by veterans, including a smaller demonstration in Henan province in May and, two weeks ago, a protest in Sichuan province sparked by rumors of another incident of police brutality against a veteran. Most notable, in February 2017, thousands of veterans staged a peaceful sit-in outside the headquarters of the Communist Party’s anti-corruption watchdog in Beijing – China’s largest protest by veterans since the founding of the People’s Republic of China in 1949. The initial protests compelled Beijing during its massive overhaul of the government this spring to launch a Ministry of Veterans Affairs to dole out benefits. But the problem facing Beijing isn’t of the sort that goes away with a quick bureaucratic fix.

There are 57 million and counting ex-military personnel in China. In 2015, Chinese President Xi Jinping announced that the PLA would be cut by at least 300,000 troops by the end of 2017, shrinking the force to around 2 million troops. (The troop cuts are still a work in progress.) This was China’s 11th round of troop cuts in the past half-century. In 1980, the PLA was more than twice as large as it is now.

When Xi took power in 2012, the PLA had become bloated and corrupt. (Two of the highest-profile tigers netted in Xi’s sweeping anti-corruption campaign were top generals previously seen as untouchable.) Xi’s goal has been to build a nimbler, higher-tech and depoliticized force that takes its marching orders solely from the Communist Party. Preceding the troop cuts, in 2013, Xi overhauled the PLA’s command structure, in part to break up deeply ingrained patronage networks and centralize Beijing’s control over the force. Xi also sidelined longstanding obstacles to a transfer of resources from the manpower-intensive army to the other increasingly important and expensive forces. China, of course, needs a PLA ready to fight, not to cash in on personal connections. Corruption, political risk and bureaucratic inertia in the military were acting as very real headwinds on China’s rise as a modern power.

By most accounts, the reforms have been broadly popular with the rank and file and younger generations of officers, who see a more meritocratic path for advancement opening up and a more professional fighting force taking shape. In March, Beijing gave PLA personnel a hefty pay raise and backdated the bump by eight months. Notably, a circular issued earlier this month by the all-powerful Central Military Commission said that a yearslong process of phasing out profit-making contract work activities by the military will be completed by the end of this year. But the changes haven’t worked out for everyone – especially not for those who were cut.

This terrifies the CPC leadership because a loyal PLA is the ultimate guarantor of its continued rule. If the PLA splits along factional lines, all hell breaks loose. This is partly why, in tandem with Xi’s PLA reforms, the CPC has been tightening control over the People’s Armed Police, a paramilitary force whose historical tasks have included preventing mutinies from within the military.

It also speaks to the broader challenge in Beijing of balancing reforms that will inevitably work at cross purposes from time to time, particularly where those reforms risk at least an initial surge in unemployment. And China’s military and economic reforms have become somewhat intertwined. In 2015, the CPC tried to satiate those PLA personnel made redundant by nudging state-owned enterprises to offer preferential hiring to retired soldiers. (SOEs were already required to reserve at least 5 percent of their vacancies for veterans of the PLA.) Traditionally, Beijing has also asked local and provincial governments to shoulder the burden of ensuring that former service members received pensions and health care benefits.

But most major Chinese SOEs are bloated, swimming in debt, and not designed to function as social safety nets on the government’s behalf. (They’ve increasingly been playing that role, however, as Beijing tries to cut back on industrial overcapacity, shut down high-polluting factories and carefully deflate real estate and credit bubbles without putting too many people out on the streets.) And some local governments are even worse off, carrying some $2.5 trillion in debt and few tools with which to raise funds. Local governments also have a long history of frustrating Beijing’s reforms; echoing complaints that have become common in veteran demonstrations, some protesters in Zhenjiang blamed local corruption for the lack of benefits. Meanwhile, China’s pension system is coming under increasing strain as China’s demographic crisis unfolds. According to the Chinese Academy of Sciences, the system’s surplus will sink into a deficit by 2023 and, by 2050, face a $118 trillion shortfall, absent major policy changes.

So far, we have not seen any overt signs of instability within the PLA, and the riskiest phase of the reforms has already passed. Still, it tells us only so much that Xi could oust powerful generals protected by powerful members of the Politburo Standing Committee without sparking a backlash from those who had grown rich off their wide-ranging patronage networks. Keeping the grassroots content is an altogether different challenge – and one more likely to catch the CPC leadership off guard. Putting a dedicated agency in place to ensure veterans get what they’ve been promised can’t hurt. But there’s only so much money to go around. China’s looming economic crunch will make it increasingly difficult to paper over any cracks in the foundation underpinning CPC rule.

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