Internal tensions in China force the regime to search for external enemies, justifying repressions against its society
China faces long-term structural economic challenges as it has been unable to reach its objectives of economic growth; the country’s production output, domestic consumption and exports are declining, while unemployment is on the rise. Signs of crisis have been observed in China’s real estate industry, which contributes about a third of the country’s GDP. Due to certain aspects of state regulation, Chinese real estate developers fall behind their obligations, whereas residents who have acquired unfinshed properties with bank loans refuse to pay interest until construction companies have completed their works. This situation has been affecting China’s financial sector, with part of the banks now facing capital liquidity problems.
Due to the worsening economic situation and other controversial political decisions, China begins to face social unrest. In 2022, public protests broke out over the extremely strict COVID-19 restrictions, human rights abuses, and the regime censorship as well as defaults of banks and construction companies. Such protests are not a common phenomenon in Chinese society, where the CCP regime and its ideology have held a tight control over political and civil rights.
In an effort to prevent social unrest in the country, Xi focuses on the revision and expansion of China’s security apparatus. In 2022, after corruption scandals rocked the Chinese Ministry of Public security, which is responsible for counterintelligence, police work, and border security, Xi appointed his close associate, Wang Xiahong, as the new minister. Following the 20th CCP Congress, the heads of Chinese civil intelligence (Ministry of State Security) and the United Front Work Department, which is responsible for the spread of political influence abroad, were appointed to the Politburo, while a member of the commission for coordinating national security issues, Ding Xuexiang, was elected to the Politburo Standing Committee. These appointments indicate not only Xi’s readiness to counter internal threats but also to expand the mandate of intelligence services and other agencies responsible for influence operations.
It is highly likely that although social tensions in China will be fueled by slowing economy and unpopular decisions in the near and medium term, any manifestations of discontent will be suppressed with the help of China’s security institutions. As Xi has been increasingly vocal about the alleged threats to national security arising from external actors, ‘colour revolutions’, sabotage, disruptive activities, and promotion of separatism, Chinese political leadership is likely to use these arguments increasingly to justify the use of the country’s security apparatus against its citizens. Protests in China are unlikely to have major influence on the regime’s stability in short and near term.