As China booms, so does popular unrest

In the quarter-century since the crackdown on student-led demonstrations in Beijing's Tiananmen Square, China's economy has thrived and presented the world with an historic milestone: an agrarian state's transformation, in a matter of decades, into a world power.

But at what costs to its people? The market reforms begun in the post-Mao years by Deng Xiaoping -- the leader who also authorized the brutal suppression of the Tiananmen demonstrations -- helped lift hundreds of millions of Chinese out of poverty and many into the middle class. For many Chinese, access to a better financial lifestyle also came with a string attached -- to stay out of politics.

While Chinese authorities are doing their best to ignore the 25th anniversary of Tiananmen, analysts are using the event to measure where the nation and its people stand, both economically and politically, and to forecast where the People's Republic is heading.

One factor appears certain: China is losing its status as "the world's factory" as its export-oriented economy matures and it finds itself challenged by emerging economies with even lower wage scales and production costs.

As its breakneck growth slows to a mere gallop, China's leadership is working on the next phase of the nation's economic evolution. An ambitious new urbanization plan is expected to move tens of millions of Chinese out of rural areas and into the cities by 2020.

At the same time, many Chinese municipalities, faced with worker shortages, have been raising their minimum wage rates in an effort to avoid turnover.

But for all the economic advancements, social unrest in China is still a very real part of the national landscape. A 2012 report by the European Union-funded Europe China Research and Advice Network (ECRAN) noted that so-called "mass incidents" in China -- public protests, demonstrations, group disruptions or riots -- rose from 8,700 in 1993 to somewhere between 180,00 and 230,000 by 2010.

ECRAN also quoted official statistics showing that in 2011, China's government spent more on internal security ($111 billion) than on national defense ($106 billion). It also noted that, unlike in other countries, this unrest is "not the result of an economic downturn," nor does it appear to have a negative impact on the legitimacy of the Chinese Communists' one-party rule.

Chris Tilly, director of UCLA's Institute for Research on Labor and Employment, said China's economic success has been very unequal as millions of Chinese still struggle and are cut off from prosperity.

"Economic inequalities, over the long run, undermine a country ... economically, politically and socially," he said.

"I think the challenge is, for a country this big, it can't endlessly be about just selling to the rest of the world, it can't endlessly be about export orientation," he added. "It really does have to be about building a large internal market, a middle class."

China's economic rise has also had a global impact, Tilly noted. Developed nations, he said, "have propelled the Chinese market, the export market, and Chinese market has in turn propelled ... the markets of Latin America and increasingly Africa because of the demand for raw materials and so on."

So, whether China remains governed by an authoritarian, one-party system or eventually introduces democratic reforms, its economy is an important part of the global financial landscape.

"Democracy or no democracy," Tilly said, "if (China) becomes a highly economically polarized society, that's going to have ripple effects on everybody on earth."