NEW YORK—Nearly 10,000 people from 53 countries gathered near the United Nations at Dag Hammarskjold Park on May 13, in a rally supporting Tuidang, a large grassroots movement in which Chinese people renounce their affiliation or support with the Chinese Communist Party.
“China, without communism, is good for the stability of the Chinese society and the peace of the world,” said Yi Rong, organizer of the rally and president of the Tuidang Center, a non-profit organization that solicits and catalogues the renunciation statements. “This rally is to support those who have cut ties with the Chinese regime.”
In addition to Yi Rong, the rally featured speeches by Alan Adler, chair of Friends of Falun Gong, and Manyan Ng of the German International Human Rights Association. A Taiwanese human rights lawyer and the heads of the Falun Dafa Associations in both Taiwan and Hong Kong also spoke. Falun Dafa, most commonly known as Falun Gong, is a traditional Chinese practice of meditation; the Associations of the practice in various countries are voluntary groups that coordinate the public activities of practitioners.
The movement to quit, or renounce, the Chinese Communist Party, called ‘Tuidang’ in Chinese, began shortly after the Chinese-language Epoch Times published the editorial series “Nine Commentaries on the Communist Party.” The series aimed to shed light on the use of violence and propaganda as key tools of Party rule since the founding of the regime.
David Tompkins, spokesperson of the Tuidang Center. (Frank Fang/Epoch Times)
The Tuidang movement, instead of calling for revolution or protests, “is about persuading Chinese people, one at a time, to understand that what they have experienced is indoctrination, and that the path to freedom for them is to quit the Party,” said David Tompkins, the spokesman for the Tuidang Center.
“We are not against the Chinese people, we are actually for the Chinese people,” he added.
The organization holds a rally annually in May, coinciding with the celebration of Falun Dafa Day on May 13. Tompkins believed the number of Chinese people who have renounced the Party, currenting standing at 237 million, will reach 240 million within a couple of months. The daily number of people quitting is 115,000, he said.
The numbers are based on the figure of renunciation statements registered at tuidang.dajiyuan.com (dajiyuan is the Chinese version of this newspaper) and is publicly verifiable. Tompkins says that volunteers at the Tuidang Center vet the statements received for their veracity.
One of the participants who took place in the rally was Pan Kaixiang, former assistant psychology professor from China’s Zhejiang University, who came to United States a year ago, after quitting the Party in 2005. He was thrown in jail because he was a practitioner of Falun Gong, a spiritual practice that has been the target of persecution by the Chinese regime since July 1999.
Pan Kaixiang, former psychology assistant professor in China. (Frank Fang/Epoch Times)
Pan decided to come to support the rally because he believed the Tuidang movement was a sign of “spiritual awakening of the Chinese people, as well as moral awakening.” Pan said that his greatest trauma while in prison was how the regime tried to “change his free-will and soul” with lies, threats, and brainwashing.
A highlight of the rally was when four men and two women stepped to the podium and announced their withdrawals from the Chinese Communist Party.
“I believe the Chinese Communist Party not only pollutes the environment, but it’s behind the greatest pollution of all—the pollution of people’s spiritual environment,” said Jiang Yu from Heilongjiang Province. “Falun Dafa, on the other hand, precisely solves this spiritual pollution.”
The practice teaches slow-moving meditative exercises as well as the principles of truthfulness, compassion and tolerance.
In an interview with New York-based New Tang Dynasty Television (NTD), Jiang said that he often used Freegate to access the websites of Epoch Times and NTD, both of which are censored in China. Freegate is an anti-censorship software that allows users to circumvent China’s Great Firewall.

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While China saw the lowest growth of its military budget for the last six years, amidst a slowing economy and tensions in the South China Sea, it has increased its spending on public security by 5.3 percent, to reach a total of 166.8 billion yuan (about $25.6 billion).
The announcement was made in a report entitled “About the Central and Local Budget Implementation in 2015 and the Draft of Central and Local Budgets for 2016” which is set to be reviewed soon by the National People’s Congress, the Chinese regime’s rubber stamp legislature. Last year, domestic security spending stood at 154.1 billion yuan (about $23.6 billion) after an increase of 4.3 percent from the previous year.
The money is being spent on China’s vast network of security organizations, facilities, and personnel, including the paramilitary police, uniformed and secret police, courts, jails, and more.
In 2013, it was widely reported that the Chinese regime spent more on public security (769 billion yuan) than on the the People’s Liberation Army (740 billion yuan). Since then, however, the regional budget on public security has been concealed from the overall expenditure, according to Radio Free Asia.
“The Chinese regime is committing crimes with taxpayers’ money. What can they possibly accomplish?” said Shen Yanqiu, a petitioner from Shanghai in an interview with Radio Free Asia (RFA). “What’s unique about China is that it has a petitioning system, which is not seen anywhere else in the world. But when people petition, they get arrested and persecuted.”
Petitioning refers to the process of individuals traveling to Beijing or their provincial capitals in an attempt to gain redress or justice for abuses they say they suffered in their cities of residence.
Beijing authorities have continued to run so-called black jails, locking up petitioners who come to the capital to air their grievances. These individuals often face torture or other mistreatment while incarcerated, and they face other potential persecution once sent back to their homes.
Ni Yulan, a well-known activist on the rights of disabled people to housing, said the increase in public security spending goes hand-in-hand with an increase in repression.
“I believe there are more petitioners, more people whose homes have been forcibly demolished, or lands been forcibly taken away,” said Ni. “So the Chinese authorities need to hire more people to maintain stability.”

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During a session in a prominent Chinese Communist Party annual political meeting that opened recently, a Chinese official seized the national spotlight to trump up the dangers of Western ideology. The latest threat? Disneyland.
“I suggest that we shouldn’t allow too many Disneyland theme parks to be built,” said Li Xiusong, a representative from China’s eastern province of Anhui to the national Chinese People’s Political Consultative Congress (CPPCC), according to state mouthpiece China Youth Daily on March 3. The CPPCC is a political advisory body that serves the purpose of demonstrating the supposedly inclusive nature of one-Party rule in China.
Li Xiusong was likely referring to the upcoming opening of the Shanghai Disneyland Park on June 16.
Disneyland, Li explained, would be hugely appealing to children, but the theme park also disseminates a foreign culture. “If children are exposed Western culture when they are little, they end up embracing Western culture as grownups, and show apathy towards Chinese culture.”
In order to resolve this “huge problem,” Li continued, the Chinese people should “establish a strong foundation” in Chinese culture so that they would be able to distinguish which aspects of Western culture are suitable and which would be detrimental to the Chinese people, China Youth Daily reported.  
Attacking the straw man of Western values and ideology is a favorite strategy of Communist Party propagandists. But often, when Party officials seem to be promoting Chinese culture, they are usually code words for re-interpretations of tradition made to serve the interests of the regime, not an unadulterated presentation of China’s long Confucian heritage.
On Sina Weibo, China’s Twitter-like service, netizens took stabs at both Li Xiusong and the political meeting, the so-called Two Sessions. One netizen from Beijing wrote: “Disneyland conveys the virtues of friendship, compassion and happiness. Are any of these in conflict with oriental culture?” Another netizen going by the name “Carrie_Pak” from Guangdong wrote: “Chinese cartoons are filled with violence while Disney teaches people about truthfulness, compassion and beauty. As parents, which will you choose?”
“You worry too much! Committee Member, why don’t you take a rest!” wrote a Beijing netizen with the moniker “Da Dou Dou.”
A netizen from Fujian wrote: “The Two Sessions is truly the showcase of our representatives’ intelligence.” Another netizen from Shaanxi added “The traditional intelligence competition takes place at a certain hall in Beijing every March … congratulations to Li Xiusong for winning.”
Every March, thousands of Chinese officials, businessmen, and even celebrities gather in the Great Hall of the People in Beijing for the annual meetings of the CPPCC and the National People’s Congress, the Party’s rubber stamp legislature, two of the biggest political meetings in the year. Better known as the Two Sessions, the various influential Party cadres often seize the opportunity to air their thoughts on national issues during official sessions or on the sidelines.

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HONG KONG—Falun Gong practitioners held a rally in Hong Kong to support a campaign of lawsuits against former Chinese dictator Jiang Zemin, who started the persecution against Falun Gong in 1999.The rally took place on Dec. 10, International Human Rights Day, which commemorates the proclamation of the Universal Declaration of Human Rights on Dec. 10, 1948.
On July 1 this year, civil groups in Taiwan and Hong Kong co-sponsored the activity of collecting signatures to support suing Jiang. Jiang, the former leader of the Chinese Communist Party (CCP), is being sued for launching and sustaining the now 16-year campaign of violence against the Falun Gong spiritual discipline.
Hong Kong Falun Gong practitioners rally to support the campaign of lawsuits against former Chinese dictator Jiang Zemin, on Dec. 10. (Epoch Times)
By Dec. 10, a total of 1,009,784 signatures were collected from Taiwan, Korea, Japan, Hong Kong and Macao, Singapore, Malaysia, Indonesia, and other Asian countries and regions. The largest numbers came from Taiwan (466,775), South Korea (381,561), and Japan (63,682).
All seven countries and regions have received acknowledgements of reception from mainland China’s Supreme People’s Procuratorate and Supreme Court. Statistics show that the Supreme Procuratorate received at least 388,148 reports against Jiang, and the Supreme Court received at least 322,741 reports.
The Asia coordinator of the activity, lawyer Theresa Chu, spoke at the rally through the internet. She said that since Jiang initiated the genocide persecution against Falun Gong practitioners in 1999, Falun Gong practitioners have gone through 16 International Human Rights Days.
Chu said the international community and the Chinese people have gradually come to understand the atrocities Jiang Zemin has committed against humanity.
She indicated that the joint report of more than one million people was exceptional in the history of human rights, both internationally and in China.
“For the first time there are one million people of different nationalities, races, and cultures expressing their appeals to the highest judicial institutes of China in the form of criminal reports against Jiang, asking to bring him to justice. This can be called the greatest accomplishment of the international community in defending universal values since the beginning of this century, which indicates that human rights have no borders.”
Hong Kong Signatures
Hong Kong Falun Dafa Association spokesman Kan Hung-cheung speaks at the rally on Dec. 10, 2015. (Epoch Times)
Since July, 50,128 signatures have been collected in Hong Kong to support the campaign to sue Jiang.Chow Wai-tung, the coordinator of suing Jiang in Hong Kong, said that more than 50,000 upright Hong Kong people have expressed their demands to bring Jiang to justice as soon as possible.
“Among the 50,000-plus signatures, 38,514 have been sent to the Supreme People’s Procuratorate in different batches. Of these, more than 20,002 have received acknowledgement of receipt,” Chow said.Hong Kong Falun Dafa Association spokesperson Kan Hung-cheung said the wave of suing Jiang has been showing a magnificent trend, and that it “continues to have global participation and support, asking to stop the persecution and to bring Jiang to justice.”
He said that bringing the persecutors to justice would not only stop the CCP’s persecution of good people, but also uphold social righteousness and revive the moral conscience of the country.Several Falun Gong practitioners at the rally shared their experiences of filing complaints against Jiang. Some shared the touching stories of Hong Kong people who enthusiastically signed to support the campaign to sue Jiang.
LegCo Members
LegCo member Leung Kwok-hung speaks at the rally on Dec. 10, 2015. (Epoch Times)
Several members of the Legislative Council of Hong Kong (LegCo) attended the rally and showed their support for the lawsuits.
LegCo member Leung Kwok-hung spoke at the rally. He said that Falun Gong practitioners’ efforts to stop the persecution have lasted a decade, and the CCP’s lies—including the Tiananmen Square self-immolation hoax, a propaganda video intended to defame Falun Gong practitioners—are doomed to fail.
He criticized the CCP’s inhuman suppression of Falun Gong. “Live organ harvesting is one of the crimes against humanity that absolutely cannot be accepted at all,” he said.
LegCo member Wu Chi-wai said, “The fact that so many mainland people have participated in the reports against Jiang reflects the seriousness of the crime committed by Jiang. It also indicates the commendable courage of the public in the course of pursuit of justice.”
“No matter what type of autocracy, you cannot stop people’s efforts to pursue righteousness and justice. This will encourage more mainland people to step forward,” Wu said.
LegCo member Leung Yiu-chung said one million signatures is a very large number, and it takes courage to bring accusations against the CCP’s former leader. Leung said the CCP has been using high-pressure methods on people, especially religious suppression.
Leung said that so many mainland Chinese people have come forward to sue with a spirit of sacrifice; it is a good inspiration to others.
Translated by Susan Wang. Written in English by Sally Appert.

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This news analysis was originally dispatched as part of Epoch Times China email newsletters. Subscribe to the newsletters by filling your email in the “China D-brief” box under this article.
Imagine for a moment how the world would react if the United States spent $2 billion to purchase 16 Eurofighter Typhoon fighter jets. It would likely draw immediate speculation that U.S. development of the F-35 and F-22 jets had somehow failed.
This speculation should also hold true for a very real arms purchase that happened on Nov. 19, when the Chinese regime announced its $2 billion purchase of 24 Russian Su-35 fighter jets, at $83 million each.
On the surface, the purchase seems a bit odd. The Su-35 is a 4.5 generation fighter jet. The Chinese regime already has several 4.5 generation fighter jets it can build domestically (the JF-17, the JH-7, the J-10, and the J-11), and it’s currently developing two fifth-generation jets (the J-20 and the J-31).
The purchase should raise the question of why a country would purchase foreign jets, when it could allegedly build more powerful jets by itself.
The simple answer is that Chinese fighter jets have more problems than they’d like the world to think.
As a bit of background, the Chinese regime’s interests in the Su-35 aren’t new. Russia started negotiating in 2011 to sell the jets to China, and the negotiations were stalled for a while since the Chinese Communist Party (CCP) wanted the jets to be built in Chinese factories.
I reported in 2013 that history is repeating itself with the CCP’s interests in the Su-35. It mirrors what happened with the Chinese programs to develop the J-10 fighter jet.
The CCP began developing the J-10 in the 1980s, put out a prototype in the 1990s, and then in 1992 it purchased 50 Su-27s from Russia. The CCP’s purchase of the Russian jets was viewed as a sign that the J-10 programs were failing.
To this day, Russia remains the main supplier of China’s fighter jets and bombers, and many domestically-built Chinese planes still rely on Russian parts.
It wasn’t until 2006 that the CCP completed the J-10, and to this day, the jet relies on Russian parts—including Russian engines.
The CCP’s development of jet engines has been a blunder of its own. It announced in 2010 that it would start building its own jet engines—using the WS-10A, which was still a knock-off of a Russian engine. Just one year later, however, it went back to ordering Russian jet engines.
In this same light, the CCP’s purchase of the Su-35 jets could mean that it lacks faith in its own production of modern-generation fighter jets, including its J-20.
Behind the rhetoric, there are some serious problems in the CCP’s state-run jet companies. A manager at Shenyang Aircraft Corp. revealed some of these problems to Epoch Times in an interview last year, and exposed rampant corruption and faulty production methods.
The manager said four company executives were embezzling close to 100 million yuan ($16 million) a year. The manager claimed that key components in the J-8 fighter jet were built by temporary workers from eight factories—and noted these companies lacked training, certifications, and work authorization.
The manager also revealed there are hidden problems in the Chinese jets, which requires Shenyang Aircraft Corp. to have specialized repair teams on standby whenever the CCP’s air force operates its jets.
China Central Television (CCTV), one of the main mouthpieces of the CCP, aired some of these shortcomings in a recent video. It showed precision parts of the J-15 fighter jet being manually polished at Shenyang Aircraft Corp.
Chinese netizens were quick to poke fun at the broadcast, pointing out the components being hand polished are controlled at three micron precision, or about 0.0001 of an inch. One user wrote, “Nowadays advanced [computer numerical control] can completely achieve precision of two micron. The technician in the report would have to be a superman to be as precise as three micron.”
Also, while most news outlets were quick to trump up the Chinese purchase of the Su-35 jets as a kind of power shift that could challenge the U.S. fighter jets, they won’t do much to change the balance of power in the Asia-Pacific region.
The Su-35 is close to the capabilities of the Boeing F/A-18E/F Super Hornet. The United States also has several 4.5 generation fighter jets, including the F-14 Tomcat, F-15 Eagle, and the F-16 Fighting Falcon.
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The planes also don’t give CCP too much of an edge over its neighbors. As far as 4.5 generation fighter jets go, India has the HAL Tejas, South Korea has the FA-50, and Japan has the F-2. India has also provided 12 of its FA-50s to the Philippines.
The other reality is that the Chinese regime’s development of fifth generation fighter jets is on the clock.
India, South Korea, Indonesia, and Japan are all developing fifth-generation fighter jets. India is developing the HAL Advanced Medium Combat Aircraft and the Sukhoi/HAL Fifth Generation Fighter Aircraft. Japan is developing the Mitsubishi ATD-X. Indonesia and South Korea are co-developing the KF-X/IF-X.
All of these programs are expected to be completed by the early-to-mid 2020s. If the CCP’s fifth generation fighter jets stay on track, it expects its J-20 to be operational by 2018 and its J-31 by to be operational by 2020.

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This news analysis was originally dispatched as part of Epoch Times China email newsletters. Subscribe to the newsletters by filling your email in the “China D-brief” box under this article.
The Chinese regime wasted no time after the Nov. 13 terrorist attacks in Paris to call on the world to support its own brand of “counterterrorism” by helping it suppress the Uyghur minority group in Xinjiang, also known as East Turkestan.
The Chinese regime is stepping up its suppression of the region, mainly for business. Its new “Silk Road Economic Belt” that will build a trade route into Europe will pass through the region.
After the Paris attacks, Xinhua, the official state mouthpiece, quoted Chinese diplomat Wang Yi saying “China is also a victim of terrorism,” and that “Cracking down on the ‘East Turkestan’ terrorist forces” should become “an important component of international counterterrorism.”
While his statements went largely ignored in political circles, where the Chinese Communist Party’s (CCP) abuses of Uyghurs are generally known, some news outlets got caught in the stream of propaganda that has followed.
The most glaring example is a feature in TIME about the “Men and Women Who Fight China’s Shadowy ‘Anti-Terrorist’ War.” The odd piece says that after the Paris attacks, members of the CCP’s special forces spoke with TIME and started writing on social media about “their own battles.”
TIME goes over many of the questionable “terrorist attacks” China has faced, and while the piece notes some of the uncertainties around some of the incidents, it still comes off as a promotional piece for human rights abuse.
It shares the same news element as an official Xinhua piece, saying that police in Xinjiang arrested a group of 28 alleged terrorists they say killed 11 people at a coal mine. It seems to be part of a larger propaganda push, which has seen glamour shots of “anti-terror” Chinese soldiers and police forces posing together.
The TIME carries this same element with many heroic-sounding quotes from people carrying out the CCP’s harsh suppression in Xinjiang. Among them is a self-proclaimed member of the Chinese “anti-terror” police force who wrote on social media he’s fighting “Religious radicals and separatists are trying to alienate the Uighur from the Han people.”
He also claims “Some foreign forces, such as the Turkish and American democracy foundations, are also supporting the radicals and separatists.”
While the information may sound convincing on its face, a bit of research shows what’s behind these statements.
The CCP has what it calls the “three evils” of extremism, separatism, and terrorism. While fighting terrorism may sound fine to us in the West, in China its implications are much different. The main push in the CCP’s campaign isn’t to fight terrorism. Instead, it’s designed to stop terrorist elements from taking root in Xinjiang.
The “three evils” phrase brands a desire for cultural independence as “separatism” and calls any forms of resistance “extremism” and “terrorism.” Western leaders have broadly not acknowledged incidents involving Uyghurs as terrorist attacks.
According to the 2015 annual report from the U.S.-China Economic and Security Review Commission, the CCP’s campaign against the “three evils” has “manifested in a heavy-handed security apparatus and led to the adoption of a repressive approach to Islam in Xinjiang.”
“As in Tibet, many residents of Xinjiang do not culturally or politically identify with China, and some Uyghur groups advocate for greater autonomy or full independence for Xinjiang,” it states, noting that the CCP “views the existence of these groups as a threat to China’s sovereignty and security.”
The CCP’s solution to this issue has been integration policies, yet as the report states, “Chinese integration policies in Xinjiang are often violently repressive, alienating Uyghurs and fueling ethnic tensions.”
Xinjiang is home to 21.8 million people and 13 major ethnic groups, according to the report. An estimated 46 percent of them are Uyghurs, and the Sunni Islam is the main religion.
The CCP has used a “multi-tiered system of surveillance, control, and suppression of religious activity aimed at Xinjiang’s Uyghurs,” according to Human Rights Watch.
“At its most extreme, peaceful activists who practice their religion in a manner deemed unacceptable by state authorities or CCP officials are arrested, tortured, and at times executed,” it states, adding that on the routine level, “many Uyghurs experience harassment in their daily lives.”
“The Chinese government has instituted controls over who can be a cleric, what version of the Koran may be used, where religious gatherings may be held, and what may be said on religious occasions,” it states.
In recent years, the CCP has also banned long beards and Islamic veils. It has also prohibited Muslims from celebrating Ramadan, and at one point even organized a beer festival in a Muslim town—since Muslims aren’t supposed to drink alcohol.
The CCP’s harsh suppression of the region has likewise led to several protests and riots. The most visible was in the Xinjiang capital of Urumqi in 2009. Chinese police responded to the riots using live ammunition. CCP sources claim 197 people were killed, while World Uyghur Congress says the death toll was closer to 600.
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There were similar riots in 2013 and 2014. The congressional report states, “China invariably refers to such incidents as acts of terrorism. Some undoubtedly are, but in many cases it is nearly impossible for outsiders to assess the veracity of the Chinese government’s accounts of ‘terrorist’ incidents, which likely exaggerate the ‘three evils’ threat to justify crackdowns. “
The report cites Andrew Small, transatlantic fellow at the German Marshall Fund of the United States, giving his take on “terrorism” in Xinjiang.
Small says the CCP has the “tendency to attribute almost any act of violence in Xinjiang to ‘separatists,’ to claim malevolent intent behind even the most peaceful of protests, and to criminalize political groups.”
He said this “leaves the line between the terrorist, the activist, and the aggrieved citizenry permanently blurred.”

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The agency responsible for disciplining wayward Chinese Communist Party cadres is investigating a senior Beijing official, the first from China’s capital to be probed in the three year-long anti-corruption campaign led by Party general secretary Xi Jinping.
Lü Xiwen, 60, was investigated for “serious violations of Party discipline,” a charge that has become synonymous with corruption in recent years. She held the post of deputy Party secretary in Beijing’s municipal committee, and also headed Beijing Administrative College, a branch of the Central Party School. The school imparts ideological indoctrination and professional training to Party cadres.
Lü is the second female Party official at the provincial level to be purged. The first was Bai Yun, a former standing committee member of Shanxi Province’s Party committee and minister of the provincial United Front work department. The United Front and its tactics of political subterfuge and social infiltration and manipulation is a Soviet-era creation, and one that the Chinese Communist Party has developed over its nearly seven decades in power.
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Hai Tao, a reporter with Voice of America, said that the arrest of Lü Xiwen shows that Xi Jinping’s “anti-corruption campaign will continue; and the depth and the scale of the campaign will be wider and deeper than before.”
Hai continued: “Why is that? If the purging stops that means you take a step back. And once you take a step back, you cannot control the previously purged tigers. And even if you want to maintain the current stalemate, the [anti-corruption campaign] must continue.”
Chinese political commentator Shi Jiutian told Chinese language Epoch Times that it would take time to know whether the arrest of Lü was an indication of a wider purge of a Beijing clique, like the political networks in the coal-rich Shanxi Province and the prosperous coastal region of Jiangsu.

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On Oct. 29, the Chinese Communist Party’s (CCP) Fifth Plenary Session of the 18th Central Committee published its bulletin of seven key points. The first point on the list is “allowing all families two children.” This is to appease the public. It has little to do with supporting aging populations or labor supply. With economic downturn being unstoppable, they have thrown people a bone to maintain social harmony.
Will the new policy help maintain social harmony? I would say yes, but only to a limited extent. The reason is, only medium- and low-level employees in government or Party institutions and white-collar workers who live in urban areas can actually benefit from this policy. These are the people who could not afford the enormous fines for having a second child. They also worried that they would lose their jobs if they violated the one-child policy. Therefore they had to restrict themselves to only one child.
Who Will Have More Babies?
People in most rural areas already have two or more children. The policy to allow a second child if the first child is a girl was implemented in rural areas a long time ago. In fact, many couples in rural areas have a second child, or more, even when their firstborn is a boy.
Among mid- and senior-level officials, many have more than one child with their lovers. Most famous is the case of Ling Jihua, former director of the CCP Central Office, who has seven mistresses and five illegitimate children.
Wealthy people are not subject to scrutiny for promotion at work, and they have more freedom in general. They are able to pay to have more children, such as movie director Zhang Yimou who paid a fine of nearly 7.5 million yuan ($1.2 million) for his three children born out of the plan. They may also send their wives or mistresses to give birth in the U.S. or Canada. These children then have foreign citizenship and do not need Chinese citizenship.  
On the other hand, people working at government agencies and educational institutions did not dare to have more children. Yang Zhizhu from China Youth University of Political Studies was punished for having a second child. He became a famous petitioner for the unplanned child, and his life has been severely affected.
Thus, allowing all families to have two children can only be regarded as overdue fairness.
Not a Fix for Aging Population Crisis
One of the main stated reasons for allowing Chinese couples to have a second child is the imminent aging population crisis. The solution, according to statements made by the government and many scholars is, more labor supply.
This statement is wrong for two reasons. First, even if young Chinese couples “work hard” at having more babies from here on out, new labor supply will not emerge for another 20 years.
Second, if the aging crisis were really due to a labor shortage, then China should not have such a serious unemployment problem right now. However, the tragic fact is that China is experiencing an excess labor force in all fields. Workers with low-level education as well as college graduates, including those with master’s or higher degrees, have difficulties finding jobs. Many white-collar workers employed by foreign enterprises also lost their jobs.
China’s unemployment rate is estimated to be at least over 300 million people. Former Prime Minister Wen Jiabao declared in March 2010, while attending China Development Forum that China had 200 million unemployed people. At the World Economic Forum in Davos, in January 2015, the economist Justin Lin said China will lose 124 million manufacturing jobs. Currently China’s working age population is 940 million. With the unemployed population reaching 300 million, the real unemployment rate is in the range of 32 percent. Chinese media reported that unemployment reaches across foreign enterprises, export processing enterprises in Dongguan, steel companies, coal and other resource-based enterprises.
The Chinese people should demand that their government return to them the right to decide how many children they want. There is no need for the government to talk about the “demographic dividend” disappearing when the current unemployment crisis cannot even be resolved. It is ludicrous to expect that labor, 20 years from now, will ease the pension crisis.
Abandon State-Enforced Family Planning
Social conditions are ripe to abandon state-enforced family planning. The Chinese government should shift from family planning to people’s own, voluntary birth control. In other words, give the right to control family size back to the people, instead of having the government control it.
In the course of implementing family planning policies, China’s family planning organizations have become an interest group relying on income from fines. Couples have suffered all kinds of inhumane treatment, leading to resentment from the entire society and criticism from the international community.
Despite the policy being retracted, it’s unclear what impact it will have. In cities and relatively developed rural areas, Chinese know that the future of children is associated with the costs to raise them. According to a March 19, 2015 report by Shanghai Women’s Federation, only 15.1 percent of women surveyed said they intend to have a second child. More than half clearly indicated that “one is enough.” The economic cost of raising children was the top reason for women not wanting more.
The survey is an indication that there will not be a baby boom in Chinese cities or developed rural areas after implementation of the two-child policy, because people worry about the cost of raising children and their quality of life. As for poverty-stricken areas, we can only trust in people’s ability to adapt.
This is an abridged translation of He Qinglian’s article posted on Voice of America Chinese on Oct. 30, 2015. He Qinglian is a prominent Chinese author and economist. Currently based in the United States, she authored “China’s Pitfalls,” which concerns corruption in China’s economic reform of the 1990s, and “The Fog of Censorship: Media Control in China,” which addresses the manipulation and restriction of the press. She regularly writes on contemporary Chinese social and economic issues.

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Beijing and Shanghai may lie almost 1,000 miles apart, but their metro riders share one thing in common. Each morning, commuters hunch over smartphones or tablets to watch the latest Chinese or Korean TV drama or Hollywood movies downloaded from the internet.
Chances are, those videos are downloaded or streamed for free—via legal means or pirated.
But that may be set to change. Internet and media giants are making massive bets in content and technologies, aiming to disrupt China’s longstanding culture of free web entertainment.
Their goal: encourage people to pay for content.
Appetite for Videos
China’s online video market is expected to reach RMB 36.8 billion (US$5.8 billion) in 2015, a 50 percent increase from 2014, according to iResearch, a Chinese internet consultancy. Around RMB 15.2 billion of that figure comes from online video advertising, with the remainder consisting of subscriptions and purchases.
While that’s seems high, online video is still a small portion of the RMB 209 billion (US$32.9 billion) Chinese internet users expect to spend in overall online entertainment, which includes music and games.
This fragmented environment cemented China’s reputation as a market where copyrights go to die.

The gap is apparent when taken into context with how users spend their time online. As of June 2015, Chinese Internet users spent 33 percent of their time on the web on online videos. That’s by far the biggest chunk of time spent on online entertainment activities—social networking was 10.6 percent, and online gaming was only 5.9 percent. The remainder was spent on non-entertainment online activities.
In other words, revenues from online videos aren’t commensurate with usage demand. China has more than 650 million internet users, and monetizing the online video market has become an arms race between domestic internet giants.
Wild Wild West
The question is, how to convince millions of Chinese web users to pay for content?
In the United States, Hollywood movies generally follow the same distribution model. Films are shown in cinemas first, followed by DVD, Blu-ray, and streaming/on-demand platforms. Netflix, Amazon.com, and Hulu are the major players in online paid streaming video.
Media and entertainment giants view China as the new frontier. And in many ways, it’s still akin to the “Wild Wild West.”
No specific distribution channel is customary for domestic Chinese movie releases. Studios may choose to debut films and TV shows on any number of distribution channels including online and mobile. Legal streaming services are numerous and fragmented, coexisting with a number of sites streaming low-quality pirated content.
This fragmented, free-for-all environment encouraged the rampant piracy that has plagued Chinese entertainment industry in recent decades, and cemented China’s reputation as a market where copyrights go to die.
Arms Race
There are new sheriffs in town. The impending culture shift is led by the “BAT,” China’s big three internet giants of Baidu, Alibaba, and Tencent.
Their strategy is to create online platforms with libraries of high-quality and desirable content in high definition, able to be streamed or downloaded on-the-go. With a compelling product, they—and Hollywood studios—hope some users would move from illegal sites to these paid platforms. The services will be promoted alongside the internet giants’ existing products—think Taobao, WeChat, and QQ—which already dominate the social lives of Chinese internet users.
“The generation of users born post 1990 understands the value of content. They are cash-rich, but time-poor. They are willing to pay for the convenience of accessing quality without having to go through the complications of finding illegal content,” Yang Xianghua, senior VP of iQIYI, said in an interview with Variety magazine.
Alibaba, which runs e-retailer Taobao and its namesake internet wholesaler website, is spending billions in this effort. On Nov. 6, Alibaba agreed to pay around US$4.4 billion to purchase the remaining stake of Youku Tudou it doesn’t already own. Youku—a Chinese cross between YouTube and Hulu—hosts a number of well-known video bloggers, has a huge user base, and can drive traffic to Alibaba’s more lucrative online video ventures.
One service standing to benefit is Tmall Box Office, a streaming service launched by Alibaba earlier this year. Similar to Netflix, it requires monthly or annual subscriptions and offers a mix of Chinese and foreign movies and TV shows. Payments (around US$6 for the monthly plan) can be conveniently made via—you guessed it—Alipay, the company’s online payment service.
Taking a page out of Netflix’s playbook, Alibaba is also turning itself into a movie studio. Hong Kong-based Alibaba Pictures was launched in March 2015 to produce Chinese-language TV shows and movies. It also invests in large-scale Hollywood productions—in June Alibaba signed a deal to invest an undisclosed amount in the next “Mission: Impossible” film. Last year the company obtained rights from Lionsgate to broadcast and stream movies such as “The Twilight Saga” and TV shows such as “Mad Men” and “Weeds” in China.
Baidu, China’s No. 1 search engine, also built its online video platform iQIYI into a major player in content streaming. Last month, iQIYI signed an agreement with Comcast Corp. to become the exclusive online distributor of Universal Studios’ new and existing films in China.
comc, which owns China’s biggest social media platforms QQ and WeChat, reached an agreement last week to become the exclusive online distributor of Paramount Pictures’ future releases including “Star Trek Beyond,” set to debut in 2016. The company also acquired online distribution rights to Metro-Goldwyn-Mayer’s James Bond franchise, including the newly released “Spectre.”
It already has a war chest of popular western films. Tencent owns online distribution rights to Walt Disney’s “Star Wars” franchise, Time Warner’s HBO properties, and recently acquired an equity stake in the upcoming movie adaptation of video game “Warcraft.”
For Hollywood studios, China has long been a flawed market. Studios frequently face off against Beijing’s censorship police, which demands content alterations before release. Even after films are approved, box-office receipts are the only material form of revenues for studios. DVD and Blu-ray sales are virtually nonexistent due to rampant piracy.
To make up for this gap, U.S. studios see digital distribution as a potential new revenue stream in China. Timing will largely follow the U.S. distribution model. For example, MGM’s latest Bond film “Spectre” will be

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School children leave their elementary school at the end of classes in Beijing on March 13, 2012. A six grade child in an elementary school in China abusing power as the class leader to extort money from classmates, according to state news media on May 8. (Mark Ralston/AFP/Getty Images)School children leave their elementary school at the end of classes in Beijing on March 13, 2012. A six grade child in an elementary school in China abusing power as the class leader to extort money from classmates, according to state news media on May 8. (Mark Ralston/AFP/Getty Images)

BEIJING—China’s ruling Communist Party announced Thursday that the country will start allowing all married couples to have two children, abolishing an unpopular policy that has limited many urban families to only one child for more than three decades.

The decision is the most significant easing of family-planning policies that were long considered some of the party’s most onerous intrusions into family life and had been gradually relaxed in recent years. The restrictions led to an imbalanced sex ratio because of a traditional preference for boys, and draconian enforcement that sometimes included forced abortions.

The news elated 36-year-old Su Weihua in Guangzhou, who said she now plans to get pregnant next year and is eager for her 8-year-old daughter to have a sibling.

“I have looked forward to this for so many years — even had dreams about it! I cried every time when I woke up and realized it wasn’t yet true. I thought it was so unfair,” Su said. “I do not care if the second child is a boy or a girl, at my age, as long as he or she is healthy.”

A statement from the party’s Central Committee carried by the official Xinhua News Agency said the decision to allow all couples to have two children was “to improve the balanced development of population” and to deal with an aging population. Xinhua said the proposal must be approved by the top legislature before it is enacted, which is essentially a formality. It gave no indication of when that would happen.

The move may not spur a huge baby boom in part because fertility rates are believed to be declining even without the policy’s enforcement. Previous easings of the one-child policy have spurred fewer births than expected, and many people among China’s younger generations see smaller family sizes as ideal.

Real estate agent Zhang Linghui reacted to the news in downtown Beijing by saying the policy change was a “sign of respect toward the people.”

“You should be able to choose how many kids to have,” she said.

The statement followed the panel’s meeting this week to chart the country’s economic and social development through 2020. In recent years, it has been unusual for such plenary sessions to result in major decisions. They generally focus on economic topics and there was no indication that this one would take action on the one-child policy.

China, which has the world’s largest population at 1.4 billion people, introduced the one-child policy in 1979 as a temporary measure to curb a then-surging population and limit the demands for water and other resources. Soon after it was implemented, rural couples were allowed two children if their firstborn was a girl. Ethnic minorities are also allowed more than one child.

Chinese families with a strong preference for boys have sometimes resorted to aborting female fetuses, a practice which has upset the ratio of male to female babies. The imbalance makes it difficult for some men to find wives, and is believed to fuel the trafficking of women as brides.

Couples who broke the rules have been forced to pay a fee in proportion to their income. In some cases, rural families saw their livelihood in the form of their pigs and chickens taken away.

In November 2013, the party announced that it would allow couples to have two children if one of the parents is a single child, the first substantial easing of the policy in nearly three decades.

The decision announced Thursday removes all remaining restrictions limiting couples to only one child.

The government credits the one-child policy with preventing 400 million births and helping lift countless families out of poverty by easing the strain on the country’s limited resources. But many demographers argue the birthrate would have fallen anyway as China’s economy developed and education levels rose.

Moreover, the abrupt fall in the birthrate has pushed up the average age of the population and demographers foresee a looming crisis because the policy reduced the young labor pool that must support the large baby boom generation as it retires.

“The good news is, it is here. The bad news is, it is too little, too late,” said Cai Yong, a sociology professor at the University of North Carolina at Chapel Hill.

“It’s better late than never,” said Willy Lam, an expert on Chinese politics at the Chinese University of Hong Kong. “It might serve to address the current imbalance in the sense that if they do not boost the growth rate then very soon, within 20 years or less, the working population will be supporting four aged parents.”

 

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Rupert Hoogewerf (R), best known as Hurun, announces China’s richest list in Beijing on Oct. 19, 2012. (Wang Zhao/AFP/Getty Images)Rupert Hoogewerf (R), best known as Hurun, announces China’s richest list in Beijing on Oct. 19, 2012. (Wang Zhao/AFP/Getty Images)

Nine of the top ten on an independent list of China’s wealthiest have ties with the Chinese Communist Party, according to a recent report by Chinese state media, further underlining the interwoven nature of business and politics in China.

The state-run Beijing Youth Daily reported on the political participation of the ten richest men in China after the release of the Hurun Report, an annual survey of China’s wealthiest, on Oct. 10.

Despite the slowdown in the economy, China’s richest have defied gravity, recording their best year ever, and creating more wealth than any country has ever done before in a year.

— Rupert Hoogewerf, Hurun Report chairman and chief researcher

Wang Jianlin, the property and entertainment magnate who topped the Hurun list, is a member of the Chinese People’s Political Consultative Conference (CPPCC), a political advisory body. Wang, Internet giant Baidu’s Robin Li, China Oceanwide Holdings Group’s Lu Zhiqiang, Zhang Jindong of Suning Commerce Group, China’s largest retailer, and Red Bull rights holder Yan Bin all attended recent sessions of the CPPCC.

Representatives of the National People’s Congress, the Chinese regime’s rubber stamp legislature, include: Zong Qinghou, the head of Hangzhou Wahaha Group, the largest beverage producer in China; Pony Ma, the head of Internet company Tencent Holdings; Lei Jun, the founder of new smartphone company Xiaomi Technology; and Lu Guanqiu, head of automotive components company Wanxiang Group Corporation.

Two in China’s richest list—Wang Jianlin and Lu Guanqiu—had the honor of joining sessions of the National Congress, a five-yearly event in Beijing where pre-arranged political appointments to top Party offices are put to vote and formally sanctioned.

While Yan Hao, China’s sixth wealthiest individual, doesn’t have a high political rank or is a member of the above consultative groups, the founder of China’s biggest private construction company, Pacific Construction Group, is currently the deputy director of the state-run China Private-Owned Business Association and deputy executive director of China Private Economy Research Society.

Business and politics are inextricably linked in communist China. Having a Party membership and friendly ties with the Party elite helps businessmen secure top projects and investment in China’s hugely competitive business environment.

In turn, the Party co-opts these businessmen into their political meetings and events to give a sign of inclusiveness. For instance, four members of the Hurun top ten list—Robin Li, Lu Guanqiu, Jack Ma, and Pony Ma—were part of the group of Chinese businessmen who accompanied Party leader Xi Jinping on his first formal state visit to the United States.

Even individuals who appear to be unconnected with the Party publicly prop it up. In a speech at Columbia University in 2011, Jack Ma, CEO of Chinese e-commerce conglomerate Alibaba, said Google should “respect the government” if it wished to succeed in China. Ma also later acknowledged having spent “a lot of time” studying how the Party runs.

A July 2014 by the New York Times found that four Chinese companies investing in Alibaba are helmed by either the sons or grandsons of former top Party officials.

Alibaba, however, was chastised by Chinese authorities in January for selling counterfeit goods and other violations. The attack on Ma’s company was viewed in some quarters as spillover from a fierce Party factional struggle. Alvin Jiang Zhicheng, grandson of former Chinese leader Jiang Zemin, has a 5.6 percent stake in Alibaba. Jiang, his family, and associates are the primary targets in current Party leader Xi Jinping’s anti-corruption campaign.

The Hurun Report on China’s richest was started by Rupert Hoogewerf, a chartered accountant, is considered to be a reliable bellwether of the ultra-rich in China.

The 2015 reports finds China with 596 billionaires as compared to 537 in the United States. These 1,877 Chinese citizens on the list hire over 1 percent of China’s 801 million workforce, and paid $100 billion in taxes.

Hoogewerf, the chairman and chief researcher of the Hurun Report, said: “Despite the slowdown in the economy, China’s richest have defied gravity, recording their best year ever, and creating more wealth than any country has ever done before in a year.”

The ten richest Chinese according to the Hurun Report follows:

1) Wang Jianlin, Wanda Group, $34.4 billion

2) Jack Ma, Alibaba Group, $22.7 billion

3) Zong Qinghou, Wahaha, $21.1 billion

4) Pony Ma, Tencent, $18.8 billion

5) Lei Jun, Xiaomi Technology, $14.4 billion

6) Yan Hao, China Pacific Construction, $14.2 billion

7) Robin Li, Baidu, $13.3 billion

8) Lu Zhiqiang, China Oceanwide Group of Beijing, $13 billion

9) Zhang Jindong, Suning Group, $12.7 billion

10) Lu Guanqiu, Wanxiang Group, $10.2 billion

10) Yan Bin, Reignwood Group, Reignwood Group, $10.2 billion

Frank Fang contributed to this article.

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Gordon Chang was a bit ahead of the time when he wrote the book “The Coming Collapse of China” in 2001.

He predicted the collapse of the Chinese economy and the downfall of the communist party within ten years and his prediction is four years overdue.

However, many of his arguments are still accurate today. And with China’s political economy becoming ever more volatile, Epoch Times spoke to Chang about China’s past and increasingly uncertain future. 

We are going to see leaderless revolution in China.

EPOCH TIMES: What about the economic reform that’s being talked about?

Mr. Chang: The only thing that possibly could work would be fundamental economic reform but they can’t do that in Beijing because the political consensus is against it. Xi Jinping, his idea of change is actually regressive, going back to the semi-command Maoist-type model.

When their last tools fail the economy will go into freefall and I think it’ll take the political system with it.

EPOCH TIMES: How does that work in practice?

Mr. Chang: The Chinese people, they may not be revolutionary in intent. Once they start taking to the streets the situation will just get out of control. People in China, I think, do not believe that a one-party system is appropriate for China’s modernizing society.

They may not oppose the Communist Party because they’re intimidated, because of the repressive mechanism, very coercive state. But when they see hope of change, I think things could change very very quickly.

So I think when the Communist Party starts to show signs of failure, people will actually demonstrate and those demonstrations, whether they have revolutionary intent or not, I think will just go beyond control.

EPOCH TIMES: Similar to what happened in Eastern Europe at the end of the 1980s?

Mr. Chang: If you go back to 1988, nobody—maybe one person—thought the Soviet system would fail. Then all of a sudden you have the problems in Hungary which radiated out to all of the satellites in Eastern Europe, you had the fall of the Berlin Wall. And still American policymakers were saying, “Well that’s Eastern Europe, but the Soviet system can’t fail.”

Indeed many Soviet citizens themselves couldn’t see how their government was going to fall. But these things are almost leaderless in the sense that you don’t have leaders in these revolutions, it’s not organized.

You know, Václav Havel [the former President of Czechoslovakia] said this, “Nobody can understand a society because what’s important is not the buildings, it’s not the repression from the state, but it’s really what is in people’s minds.”

The CCP has become one of the most corrupt organizations on Earth so it can’t survive.

People in Eastern Europe wanted something different. They may not have been able to articulate it, they may not have always been protesting, but they wanted the communist system out of the way.

I think it’s the really same way in China. Where you have people just sick and fed up, especially when the system is no longer delivering prosperity. When you have real serious economic problems, I think people are going to say, “I’ve had enough.”

Remember, the Communist Party’s primary basis of legitimacy has been that continual delivery of prosperity, that’s been from the days of Deng Xiaoping when he started to move toward a looser economic model and without prosperity the only remaining basis of legitimacy is nationalism. That’s probably not enough to keep the Communist Party in power and that’s why they’re so insecure.

Gordon G. Chang author of “The Coming Collapse of China,” in New York on Sept. 30, 2015. (Benjamin Chasteen/Epoch Times)

EPOCH TIMES: Why did you write the book?

Mr. Chang: One of the reasons I wrote the book is that I was practicing law in Shanghai. My clients would cruise into town, they’d stay at the Grand Hyatt that was in Pudong which is really one of the most spectacular hotels in the world and they would say “China’s not communist anymore.”

I said the same things when I arrived in China, but if you just sort of go to China for 3-4 days well of course that’s the view you’re going to have. I felt the system just wasn’t really going to work and that’s why I wrote the book, because I felt it was unsustainable and eventually it would fall apart.

We are seeing the first signs of a crisis and I don’t think the Communist Party has the ability to get out of this particular jam and we are going to see this as a final crisis for communism in China. Chinese people will figure out something, but it won’t be the Communist Party in control.

EPOCH TIMES: What about some other players who oppose the Communist Party, like Falun Gong practitioners?

Mr. Chang: These groups are really interesting. You talk to Falun Gong practitioners—and I’m not one—and you get a sense that they believe something, they really believe it and they believe it to the point that some of them, many of them, have given up their lives for their beliefs. You’re not going to find Communist Party members who feel that way.

That sense that the part had in the 1930’s and the 1940’s; it’s all gone. It’s become one of the most corrupt organizations on Earth so it can’t survive.

 

It’s big, it’s rotting, it might, because of inertia, take a long time to fail, and it has taken longer than I thought.

Nonetheless, it doesn’t have that sense and you see this not only among Falun Gong practitioners, but you see it among Tibetans and Uighurs. You see it among house Christians. People who are willing to give their lives because they believe in something.

All it takes is just for one person to change his mind.

The Communist Party, it has made enemies of all these groups. These groups didn’t start out by saying, “I want to bring down the Communist Party”, but the Party has forced them into opposition.

Practitioners of the spiritual discipline Falun Gong call for an end to the persecution of the practice in China, in front of the Waldorf Astoria in New York where Chinese Communist Party leader Xi Jinping is staying, on Sept. on Sept. 27, 2015. (Larry Dye/Epoch Times)

Practitioners of the spiritual discipline Falun Gong call for an end to the persecution of the practice in China, in front of the Waldorf Astoria in New York where Chinese Communist Party leader Xi Jinping is staying, on Sept. on Sept. 27, 2015. (Larry Dye/Epoch Times)

The problem for the Party right now is that they can prevail over Tibetans or whatever but it can’t prevail over all of these groups at the same time and at the same time that the economy is falling apart and people no longer believe in the communist system.

We know how fragile it is because the Communist Party has become so much more coercive, so much more oppressive and that means so much more insecure. They wouldn’t be doing this if they felt that they had a long lease on power, but they know they don’t. That’s the important point.

EPOCH TIMES: They are losing the battle for the minds of the people.

Mr. Chang: Absolutely. This is a hearts and minds struggle. Although you have small groups of dissidents who don’t look like they can bring down the state, they can. We have seen this in so many different place and it’s not just Eastern Europe and the Soviet Union.

We saw this in the Philippines, we saw this in Peru, we saw this in so many different countries where people, when they get to the streets, they bring down governments. All it takes is just for one person to change his mind.

The best example might be in the Philippines. You had one person ten years ago who sent out a text: “Wear black, go 2 EDSA [People Power Revolution]”. The crowd just grew and grew and eventually President Estrada had to resign in the middle of his term because the crowds in the street were too large.

Chinese people will figure out something, but it won’t be the Communist Party in control.

Nobody organized that demonstration. The military, the Philippine military were judging how big the crowds were and eventually the crowds got so big and they looked like they were going to stay there for so long that the military just switched sides.

The political establishment in Manila just switched sides. Nobody organized this demonstration and I think that’s the model for China itself.

We are going to see leaderless revolutions in China. People say, “How can you have this? They’re dissidents, they’re not organized, they’re not funded.”

Political scientists don’t get it. That’s really the problem for the Communist Party. Yes, they have 80 million people in the Party but that’s not really a signal of their strength; they’ve got a weak Party right now. Very few are willing to give their lives for communism in China.

It’s just not there anymore. It’s a rotting, corrupt organization that will melt away like so many other Communist states have melted away.

You have a modern people who want something better, who are not as afraid of their government. You put that all together with economic failure and that’s a very combustible view for the Communist Party.

Gordon G. Chang is the author of “The Coming Collapse of China.” Chang holds an undergraduate degree from Cornell University and also completed his law degree there. Before becoming a writer Chang practiced law in the United States and China. 

This interview has been edited for brevity and clarity.

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Hong Kong tycoon Li Ka-shing at a press conference in Hong Kong on Feb. 26, 2015. (Philippe Lopez/AFP/Getty Images)Hong Kong tycoon Li Ka-shing at a press conference in Hong Kong on Feb. 26, 2015. (Philippe Lopez/AFP/Getty Images)

After Hong Kong billionaire Li Ka-shing, Asia’s richest man, recently moved his investments out of China, state media accused him of being unethical and ungrateful, fleeing China when the economy was slowing despite having profited handsomely in better times. He Qinglian, a noted economist, explores the tensions between power and capital in today’s China.

Li Ka-shing’s “escape” has sparked heated discussions in China. This debate should be understood as a war between power and capital; it reveals the tripartite dilemma of investing in today’s China.

The first dilemma: Hong Kong investment has always been regarded as “internal” capital with a foreign name.

From the time when Deng Xiaoping started the reform and opening policy, up until the 1990s, Hong Kong investment was the most important component of all foreign investment, followed by Taiwan. Hong Kong’s location and its special economic role were part of the political considerations that prompted the Chinese Communist Party (CCP) to treat Hong Kong as “foreign” investment.

The relationship between money and power has reached a state of hypertension.

Before that, when the CCP was facing a comprehensive blockade from the West, Hong Kong was China’s “international channel,” the channel of foreign capital and technology, as well as its import and export trade base.

China started reform and opening up in 1979. Hong Kong businessmen were not only the main body of investment, but also pathfinders and bridges to help China open up. At that time, Hong Kong accounted for 70 percent of foreign investment, followed by Taiwan and Japan.

After China joined the World Trade Organization in 2001, Hong Kong gradually lost its status as China’s trade entrepot. Its offshore financial business slowly weakened. Hong Kong became a base for Party officials to move their capital for further deployment abroad, their “money laundering garden.”

Between 1978 and 2001, out of political considerations, the CCP categorized Hong Kong investment as “foreign” capital as Hong Kong was yet to return to China, or had just been returned. After 2001, it was still in the CCP’s interest to treat Hong Kong investment as foreign capital in the economy. To interest groups, Hong Kong is an important channel for money laundering. Even now, top Hong Kong businessmen and Chinese investment in Hong Kong are closely tied to the Communist Party.

Money Is Allowed in, But Not Out

Second dilemma: There are limits to capital flows. Investment capital has been allowed to come in, but not allowed to leave.

The CCP forcibly interfered in China’s stock market decline this year. In the end it arrested people on accusations of “draining China.” This was generally regarded as inappropriate government intervention in the financial market and malicious restrictions on the free flow of capital.

Businessmen grow bigger and stronger by conducting their affairs in the “gray area” created through connections with officials.

International capital flows refers to capital transfers between countries or regions, including investments, loans, aid, buyer credit, seller credit, foreign exchange trading, securities issuance and circulation, etc. International cross-border capital flows can be divided into inflows and outflows. When China entered the WTO, key members of the WTO, such as the U.S. and European countries, requested that China open up its financial market and allow foreign capital in.

Among the WTO member countries, there is none that welcomes foreign investment while at the same time limiting capital outflows. The CCP’s regulation on capital flows has established a precedent. The WTO does not have countermeasures on this policy. This has caused one more layer of concern for international capital. What can they do if one day China restricts capital outflow? They therefore want China to implement full capital mobility rules: to not only welcome free capital to come in, but also to allow capital to leave.

The ‘Original Sin’ of Being Rich

The third dilemma: the personal safety of private investment capital owners in China is at risk.

Private capital in China has always been considered an “original sin.” There is an understanding in China that the majority of private enterprises rely on political power for backing. They grow bigger and stronger by conducting business in the “gray area” created through connections with officials. Their wealth is not clean. The government assumes that private sector “kings” make use of gaps granted them by the government, such as tax evasion and fraudulent bookkeeping. There are lots of gaps. Usually the government is not short of money. When private companies have good relationships with officials, these gaps do not pose an issue. But when the government is short of money, or the officials whom private companies rely on are jailed for corruption or retire, capitalists are no longer safe.

In 2014, “Guidelines to Deepen Reform of State-Owned Enterprises” was published, to mobilize private equity. Many private entrepreneurs worry that the hand of the CCP is reaching for them. They have started to leave. They have engaged in a large number of overseas investments. This caused a sharp reduction in foreign exchange reserves in recent months. Beijing painfully felt the shrinking of its foreign exchange reserves—about $600 billion in outflows, according to a Sept. 28 article by The Economist—and has hence increased control of foreign exchange. Dozens of security brokers were arrested for “draining China.” The relationship between money and power has reached a state of hypertension.

The Dilemma Trifecta

Li Ka-shing finds himself in all three dilemmas.

Why is Li Ka-shing being ostracized as an investment escapee? It is because of the nature of his investment capital.

Of all Hong Kong businessmen, Li Ka-shing is the most successful and has the closest ties to Beijing. He has met Party leaders on numerous occasions—Deng Xiaoping twice, in 1978 and 1990. This meant that his access in China was unimpeded, and his privileges surpassed any “princeling” (son or daughter of a top Party leader).

The article that attacked Li for leaving China said: “Given the nature of Li’s profiteering in China over the past 20 years, it is not as simple as just doing business… Real estate wealth does not come entirely from the market economy. He might not be able to leave as he wishes.”

Li Ka-shing’s capital was actually “internal” capital with a “foreign name.” It was provided by the Communist Party, with particular policies and special privileges. Therefore, Li’s money should “go down with the regime.” However, with China’s economic difficulties bursting open, Li took the money and left. This has greatly disappointed the regime.

What the Chinese media dare not say is that Li Ka-shing’s divestment signals the beginning of the collapse. Li Ka-shing is not the only Hong Kong investor leaving China. Sixty-five percent of all “foreign” investment is Chinese capital in Hong Kong. This investment capital has increased in a fashion similar to Li Ka-shing’s, with help from those in power.

Li Ka-shing’s “escape” triggered a flood of responses that demonstrate the increasingly tense relationship between investment capital and political power and signals the end of China’s economic golden age.

This is an abridged translation of He Qinglian’s article published on Voice of America Chinese. He Qinglian is a prominent Chinese author and economist. Currently based in the United States, she authored “China’s Pitfalls,” which concerns corruption in China’s economic reform of the 1990s, and “The Fog of Censorship: Media Control in China,” which addresses the manipulation and restriction of the press. She regularly writes on contemporary Chinese social and economic issues.

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A Republic of China flag is seen at a campaign rally by Taiwan President and ruling Kuomintang (KMT) presidential candidate Ma Ying-jeou in Taipei on January 8, 2012. (Aaron Tam/AFP/Getty Images)A Republic of China flag is seen at a campaign rally by Taiwan President and ruling Kuomintang (KMT) presidential candidate Ma Ying-jeou in Taipei on January 8, 2012. (Aaron Tam/AFP/Getty Images)

Chan Koon-chung, the renowned Hong Kong-born author residing in Beijing, is to publish his latest novel, an alternate history scenario exploring the history of a China in which the Communist Party never came to power.

Titled “The Second Year of Jianfeng: A Uchronia of the New China,” the novel was published last week in a Hong Kong bookstore on Sept. 25. Chan’s previous work, including the dystopian novel “The Fat Years,” remains unpublished in mainland China.

“Uchronia,” drawing from the etymology of “utopia,” is a word describing an alternate or postulated reality.

Chan’s novel posits a Nationalist Party victory in the Chinese civil war, which followed on the heels of World War II and in our reality ended in communist occupation of mainland China in 1949.

From there, the novel builds a parallel history of China under the Nationalist leader Chiang Kai-shek. Writing from the perspective of people of multiple social and geographical backgrounds, Chan weaves a three-decade description of the alternate “New China” up to the end of the 1970s.

The scenario is one that has been gaining interest, even internationally, as China modernizes and gains in global relevance—and the drawbacks of its peculiar configuration of nationalism, Leninism, and singular attitude to the rule of law begin to be more acutely felt. Earlier this year, the Economist ran a speculative piece for those wondering how China might look were it not for the brutal and inefficient totalitarian policies executed by founding communist leader Mao Zedong.

Chinese Nationalist and communist leaders Chiang Kai-shek (L) and Mao Zedong in Chongqing, southwestern China, in 1946 during negotiations. (Public Domain)

Chinese Nationalist and communist leaders Chiang Kai-shek (L) and Mao Zedong in 1946 during negotiations. (Public Domain)

What Could Have Been

Chan Koon-chung believes that a China integrated with foreign markets would have had greater opportunities for economic prosperity and social progress much sooner.

“By 1979, China could have been very rich, at least it would have been so in the cities, due to exports, cheap labor, and light industry along the coastal regions,” Chan said in an interview with the Hong Kong media Initium.

The economic boom experienced by Japan, and other East Asian nations would have been less robust, as their places were taken by Chinese coastal cities such as Shanghai, Tianjin, or Guangzhou.

Hong Kong remains an ordinary port of little note other than its status as a British colony, through which easy trade of foreign goods promotes development in the nearby province of Guangdong.

“Even the Olympics would have been held in Nanjing,” Chan said. Nanjing, which served as Chiang Kai-shek’s capital before and after World War II, is still the seat of the Republican government in Chan’s novel.

Beijing, which literally means “The Northern Capital,” retains its Republican-era name “Beiping,” or “Northern Peace.” Tiananmen Square, which in our history underwent a massive expansion under the vision of Chairman Mao, would remain smaller.

The novel’s title “The Second Year of Jianfeng” refers to the onset of rule by Chiang Kai-shek’s son Chiang Ching-kuo, who adopts the courtesy name “Jianfeng.” (In our history, Chiang Kai-shek also has a courtesy name, Zhongzheng). In Chan’s book, as in real life, the elder Chiang passes away in 1975, and his son is “elected” president by the 1,200-member National assembly.

The second part of the book includes seven chapters from the perspectives of individual characters.

Sun Liren, a Nationalist Chinese general who served in World War II and was known as “Rommel of the East.” (Public Domain)

Nationalist China’s triumph over the Communist Party comes in April 1946, when general Sun Liren, known to his American allies as “Rommel of the East,” destroys the armies of opposing commander Lin Biao in Manchuria, where the communists had been consolidating their military and logistical base with Soviet assistance.

Chan’s alternate history also brings out the tragic loss of literary talent that China faced when the communists came to power, as he explores the unrealized potential of writers that was snuffed out due to the destructive political atmosphere. Some of his characters are Chinese writers who did exist historically, but were consigned to obscurity.

“I wrote about the first and second generation of writers. These names are all the names of real people, even though they may not be known widely,” Chan told Initium.

The Beijing author Lao She, who was driven to suicide in Mao Zedong’s Cultural Revolution, wouldn’t have faced political struggle under the Nationalists. Chan has him pen a million words instead of the mere 80,000 he dared write in our timeline. He and another well-known Chinese writer, Lin Yutang, end up Nobel Prize laureates.

Chinese writer with wife Zhang Zhao (Public Domain)

Chinese writer with wife Zhang Zhao (Public Domain)

Shen Congwen, a noted novelist who was severely persecuted by the communists, is another author who gets a break in Chan’s new China. While a mental breakdown and other trauma caused by the communists’ political campaigns reduced Shen to a man who would never again write fiction until his death in 1988, Chan has him pen the book “Survivor,” a masterpiece comparable to our universe’s “One Hundred Years of Solitude.”

“You have serious academic work to novels,” Chan said, describing the literature of his alternate homeland. “In a peaceful and prosperous China, these people could have produced good work.”

On the other hand, Chan chooses not to include the leftist writers who in our history became household names in mainland China. In his Nationalist victory scenario, these individuals escaped to the Soviet Union along with the surviving communist forces, who were given refuge in Crimea.

This appears to be a parallel to our timeline, which saw the retreat of Chiang Kai-shek’s Nationalist party to Taiwan. It is also a possible homage to “The Island of Crimea,” a novel written by Soviet author Vasily Aksyonov. While Crimea is in fact a peninsula, Aksyonov’s uchronia imagines the landmass detached entirely from the European continent. In this book, the White Russian government that fought Lenin’s Bolsheviks survives on the “island,” developing in isolation from the communist Russian mainland. “It should have been published long ago in Taiwan, but it hasn’t,” Chan Koon-chung said.

Of note is Chan’s character Zhang Dongsu, a liberal scholar from Hong Kong living in Beijing. He is an obscure historical figure in our reality. In a self-referential twist, Chan has Zhang envision how China would have turned out had the communists indeed been victorious. The work is called “Killing a Hundred Flowers After I Bloom: What If the Communist Party Ruled China?” and echoes the real-life communist “Hundred Flowers” campaign of the 1950s in which Chairman Mao encouraged intellectuals to openly criticize the Communist Party, only to mercilessly persecute them after they bared their true thoughts.

Despite the economic progress and cultural moderation, the Nationalists aren’t all roses. Chan makes it clear that, as was the case in our history’s Taiwan, republican China after World War II is still an authoritarian state that suppresses democratic voices.

Whether or not this China will liberalize and democratize, as Taiwan did in real life, is not explored in the narrative. Chan scoured diaries and records pertaining to the lives and activities of major Nationalist officials and statesmen, including Chiang Ching-kuo, Chiang Kai-shek’s son and successor.

Chan notes in his interview with Initium that the younger Chiang’s diaries stop after 1979, so the motivations informing his real-life policy that eventually brought democracy to Taiwan cannot be easily divined.

“Luckily, I don’t have cover that part,” Chan said.

The political cliffhanger is a dilemma that faces the ruling Communist Party of our own time: Can the Jianfeng president allow the primacy of his political party take a back seat to the needs of the country?

With reporting by Jenny Li

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