China’s Fault Lines: Challenges, Instability, and Response

Posted on Tuesday, July 25, 2017 by Project2049Institute

(Villagers Staging a Protest in Wukan, Guangdong Province, China in June 2016. Source: Getty Images)

Watch a video of the conference here.

By Ian Burns McCaslin

Chinese leaders have projected an image of the People’s Republic of China (PRC) as an inevitable regional and global leader. However, controls on information, assembly, and capital outflows suggest the Chinese government and the Chinese Communist Party (CCP) are paying closer attention to domestic concerns than the projected image would lead one to believe. The Congressional Executive Commission on China's (CECC) 2016 annual report detailed the anger and discontent felt by many Chinese citizens, who are increasingly calling for more government accountability, transparency, and justice. With the CCP’s 19th National Party Congress on the horizon, it is crucial to assess the CCP’s underlying instability and the key threats to the regime’s long-term resilience. 

Expert Conference on China’s Fault Lines

On March 30th, 2017, the Project 2049 Institute hosted a conference titled "China's Fault Lines: Challenges, Instability, and Response." The conference brought together a distinguished group of experts to address China's challenges and sources of instability, as well as Beijing's potential response to both. It was followed by two panel discussions on how China's current challenges will impact U.S.-China relationship. Based on these factors, participants also examined how the U.S. and its allies could more effectively engage with China in the future.

(Senator Cory Gardner, Chairman of the Foreign Relations Subcommittee on East Asia, the Pacific, and International Cybersecurity. Source: The Project 2049 Institute)

Senator Cory Gardner: Beijing Must Put Pressure on North Korea and Follow Its International Legal Commitments Abroad

Senator Cory Gardner called on China to use its leverage with North Korea to bring the regime back in line with international norms and laws, especially in regard to its nuclear and missile programs. Senator Gardner emphasized that “China must work beyond a mere articulation of concern” and truly push North Korea to denuclearize. China must implement existing U.N. sanction agreements such as Resolution 2270, which covers cargo, aviation fuel, and rare minerals, and Resolution 2321, that sets restrictions on coal, iron, and iron ore. The Senator called on the Trump administration to enforce the North Korea Policy and Sanctions Enhancement Act, which calls for secondary sanctions on any Chinese entities aiding Pyongyang. He also singled out Beijing’s decisions to establish an irregular ADIZ and to create militarized, artificial islands in the East and South China Seas as destabilizing actions that must stop. 

In order to support U.S. national interests, the Senator discussed the “Asia Reassurance Initiative Act” (ARIA). ARIA aims to strengthen U.S. security commitments with allies and build partner capacity, promote economic engagement, and secure U.S. market access. It will also enshrine the promotion of democracy, human rights, and transparency as key U.S. policy objectives in the Asia-Pacific region. If the U.S. becomes divorced from its allies, regional stability and prosperity will suffer, and China will make further inroads at the expense of both the United States, and international laws and norms.

China’s Domestic Fault Lines

A Checkup on the CCP

As Xi Jinping completes his first term in office as General Secretary of the CCP, President of the PRC, and head of the Central Military Commission (CMC), it is pertinent to look back on the policies implemented during his tenure. China’s economy continues to grow, albeit at a slow rate, and more people than ever have joined China’s burgeoning middle class. However, some policies implemented under Xi have been disruptive to people’s daily lives. The anti-corruption campaign has netted large numbers of officials, yet while some commentators continue to laud Xi for going after ‘tigers and flies,’ others point to the use of the campaign as a tool for Xi to remove his potential political rivals.

The anti-corruption campaign has created a tense environment for the bureaucracy. Quite a few officials have pulled back from performing their duties as usual out of fear that the ‘old way’ (corrupt or not) is no longer politically correct. Foreign—especially American—companies are also feeling pressure; not just from the anti-corruption campaign netting business partners and regulators, but from the increasingly nationalist atmosphere that the CCP and PRC government have been propagating. These companies are increasingly pessimistic about their future in China as economic espionage, coerced technology transfers, and legal discrimination has grown. The 2017 American Business in China White Paper revealed just how pessimistic American companies in China have become, with 80% of those surveyed saying they were less welcome in China than before. 

(Left to Right: Piper Stover, Sheena Chestnut Greitens, Kaoru (Kay) Shimizu, Sarah Cook, Megan Fluker, and Rachael Burton. Source: The Project 2049 Institute)

The ‘World’s Economic Growth Engine’ Is Not What It Used to Be

Even using China’s notoriously unreliable official statistics, the trend toward a "new normal" of lower economic growth is undeniable. All types of firms—domestic and foreign, private and public—are facing slower growth in the Chinese market. 

(Forecast of specific sectors' industry's market growth. Source: AmCham China, Bain & Company)

This change is already having a ripple effect with Chinese firms warning of potential layoffs; this has even extended to workers in state-run firms in strategic sectors, such as steel manufacturing and coal. A lower rate of wage increases is another new reality, frustrating workers who have been accustomed to double-digit raises. Businesses and the working class are facing challenges associated with limited access to unemployment insurance and coverage, and contribution to other social insurance mechanisms remain too low to effectively deal with the likely increase in unemployment.

Another challenge is a lack of options for workers seeking collective action via unions. In China, the only legal union, the All-China Federation of Trade Unions (ACFTU), is controlled by the CCP, which severely weakens the union's ability to advocate on behalf of its members. While about 20% of the population are members, the union operates more on behalf of labor management, the Party, and the government, than it does workers. Its failure can be seen by the drastic rise in the number of strikes and worker protests, which the Union discourages, that doubled from 2014 to 2015. Amidst these issues, the "new (economic) normal" will force Chinese authorities to make hard choices, and confront challenges that can no longer be papered over.

Growing Religious Repression

The religious revival in China is being attacked by an increasing campaign of repression by the government. At least 100 million people―1/3 of the total estimated believers in China―belong to groups facing high or very high levels of persecution, while about 250 million experience relatively low levels of interference in their day-to-day religious activities. Tibetan Buddhists, Protestant Christians, and Hui and Uyghur Muslims have experienced a particular increase in repression. The ways in which religious repression has manifested itself has also grown.

(Levels of religious persecution in China by province or special administrative region. Source: The Battle for China’s Spirit: Religious Revival, Repression, and Resistance under Xi Jinping by Sarah Cook)

In Muslim-majority areas, authorities increasingly respond to incidents with excessive force in comparison to non-Muslim majority areas. Due to a downturn in sales, as more people gave up alcohol and cigarettes for religious reasons, authorities began to promote ads for these goods in Muslim villages. In Xinjiang, state media has provided heavy coverage of a beer festival and drinking competition to “squeeze the space for illegal religious promotion.” There have also been restrictions on the ability of children to participate in religious practices, as seen in Uyghur communities. Acts of repression against Christians now regularly include the arrest of lawyers who represent Christians, and the obstruction of religious celebrations, such as Christmas. Even state sanctioned churches, at times, have been victims of violent suppression.

Yet, efforts to persecute religious groups out of existence are broadly failing. Believers have responded with courage, using creative ways to keep their faith. For example, the Falun Gong protested their persecution by using letter-writing campaigns to detail their positive experiences with their faith. The level of persecution experienced by religious groups has not been uniform across China, though. Some local authorities appear to have chosen not to persecute Falun Gong residents as they once did. Other local authorities have taken to warning churches about upcoming raids so they can be prepared.

Although the persecution of religious groups has worsened, those suffering have endured in their faiths, responding to restrictive laws with creativity and determination. Despite this resilience, however, the central government continues its religious crackdown.

Doubts on the Reputation of China’s Infamous Domestic Security Budget

In order to carry out its various campaigns of repression, the government has had to increase its domestic security budget.[i] Yet, misperception and misconception of China’s domestic security budget has hampered informed discussion of said budget. Regular headlines paint that budget as being massive, and larger than the military's, but these numbers are misleading. In the final budget total, some items are regularly counted twice or are excluded outright. Some expenses that are considered to be a domestic expense, such as the People’s Armed Police (PAP), are, in fact, commonly put in the defense budget. On the other hand, the domestic security budget often includes the maritime law enforcement vessels that operate outside of China’s internationally recognized borders to enforce control over disputed claims. The decisions behind the allocation of items for inclusion in either budget are due to the Chinese leadership’s conception of their uses. For example, Beijing views the use of the maritime law enforcement vessels as a ‘domestic’ issue in the case of the disputed claims in the South China Sea, because it demarcates those areas as part of the PRC; however, such use is not in conformity with international law.

While there has been an increase in repression, there is more nuance to the domestic security budget than the idea that an increase in resources directly equates to an increase in human rights abuses. While China’s budget as a whole has been growing exponentially for years, as a percentage of the national budget, the allocation for domestic security decreased from 2007-2012 (the last years for which such information is available). When the domestic security budget is broken down, usually about 60% of it goes to average ‘beat cop’ police work, courts, etc. This means that an increase in this portion of the budget does not necessarily equate to more resources going towards repressive 'police state' items.

(Categories of Internal Security (IS) spending as Proportion of Budget. Source: Sheena Chestnut Greiten, “Assessing China’s Coercive Capacity: De-Mystifying the Domestic Security Budget” Presentation, March 30, 2017)

Ordinary crime has been rising for years, and China still has one of the lowest police per capita rates in the world. Many local areas, such as the central and western regions of China, lack the fiscal base to fund increased policing. Additionally, tough terrain and poor infrastructure make monitoring expensive and difficult.  In all, there are far more complexities to China’s domestic security situation than is often discussed in the public domain.

False Dichotomy: Human Rights or Security 

(Left to right: Ely Ratner, Randy Schriver, and Dan Blumenthal. Source: The Project 2049 Institute)

The speakers illustrated that the narrative commonly touted of China’s government as a monolithic entity that is a paragon of efficiency, economic growth, and control is false. The less than ‘picture perfect’ reality in China reveals another important fact; human rights are inextricably tied to traditional security. In recent years, the U.S. government has pulled back from giving human rights a prominent place in engagement with China. This conference emphasized that this is a mistake, given that human rights are critical to traditional security, and are an important part of U.S. global leadership. For the U.S. government to ignore human rights would be to ignore one of the most critical tools available to it, which has been missing from its recent China policy. Disregarding human rights only strengthens China’s authoritarian government, the CCP’s protected status, and the repression of huge swaths of people both within China and abroad.


As this conference by the Project 2049 Institute demonstrated, beneath the surface façade of social harmony in China lie deep fault lines that are challenging the Party, government, and society. Given the increasingly interconnected nature of the world, China’s challenges and how it chooses to respond to them will have impacts that reverberate across the globe. In particular, its response will inevitably influence the foreign policies of the United States in the coming years. Gaining an improved understanding of these challenges presents new opportunities for countries to interact with, and potentially influence, the Chinese leadership as well.

Ian Burns McCaslin is an Intern for the Project 2049 Institute where he focuses on the PLA and Chinese influence operations. He received his MA from the National University of Singapore. 

[i] Sheena Chestnut Greitens, “Rethinking China’s Coercive Capacity: An Examination of PRC Domestic Security Spending,1992-2012,” The China Quarterly, July 3, 2017, at

1984 with Chinese Characteristics: How China Rewrites History

Posted on Wednesday, July 19, 2017 by Project2049Institute

(Source: Indian Express)

Watch video of conference here
By: Emily David

General Secretary Xi Jinping’s ‘China Dream’ is rooted in principles of “socialism with Chinese characteristics” with the goal of building a culturally strong and prosperous China (People’s Republic of China or PRC) under the guidance of the Chinese Communist Party (CCP). To achieve the ‘China Dream’ it is essential for the Party to be a critical part of both China’s past and present to successfully usher China into the future. As such, the CCP has actively dominated the narrative of China’s modern history, politicizing the very nature of the PRC’s struggles and successes. In April 2013, the Central Committee of the Chinese Communist Party issued the “Communiqué on the Current State of the Ideological Sphere,” also known as ‘Document No.9,’ which identified seven existential and political threats to the Party including constitutionalism, civil society, historical nihilism, universal values, and the Western view of media. The document rejected any attempt to undermine the legitimacy of the Party through the questioning of its historical narrative, and demanded strict adherence to the Party line. Yet, China’s effort to control and politicize history is hardly new; rather, it has been a consistent thread throughout the life of the Chinese Communist Party. As the PRC’s military and economic prowess continues to grow, concern mounts over how the CCP’s ideology may influence the current international rules-based, liberal, world order. Understanding and assessing the CCP’s manipulation of China’s political history is critical in understanding the role China’s leaders intend to play in shaping norms and in creating an internal and international environment conducive to protecting their core interests.

Expert Conference on How the CCP Rewrites History

On February 23rd, 2017, the Project 2049 Institute hosted a conference titled “1984 with Chinese Characteristics: How China Rewrites History.” The conference brought together expert panels to address the costs and implications of the CCP’s deliberate distortion of key moments in China's past. The conference hosted two sessions. The first focused on “Problems on the Periphery” and the impact of the CCP’s involvement in Tibet, Southeast Asia, and Korea. The second discussed China’s domestic historical revisionism, emphasizing how the modern reform era beginning in the 1980’s has resulted in a stronger and more defiant CCP today.

(Left to Right: Miles M. Yu, Amy Chang, Li Jianglin, and Kelley Currie; Source: The Project 2049 Institute)

The Rewriting of History and Implications for Chinese Foreign Policy

For the authorities in Beijing, a central tactic for maintaining legitimacy is the shaping of historical narratives to serve political objectives. This has been the case since the founding of the Party, but has intensified considerably under the leadership of General Secretary Xi Jinping. Xi, himself, is very troubled by historical nihilism, which he defines as an argument made against China’s―and the Party’s―official record. Both Imperial China and the PRC have maintained an official record depicting China as a victim of Western imperialism. One component of this narrative includes an expansionist rewriting of history, in which all the largest conquests of previous dynasties (Han and non-Han) are considered fundamental elements of the Chinese race and identity. These interpretations of history, then, become part and parcel of a discourse of territorial expansionism. While all countries rewrite history, China’s revision of history is uniquely Party-driven. This has critical implications for modern Chinese foreign policy; with Xi at the helm, the CCP propagates its artificial historical accounts to dominate the region in its aims to restore its prior global preeminence, and to legitimize a return to Imperial China’s illustrious past. The Party’s desire to present China’s history as a glorious era compliments Beijing’s strategy to demonstrate its ‘win-win’ policies, and magnanimous and beneficent nature. By this logic, Beijing refutes any opposition to Chinese hegemony as ‘anti-China’ and serving an imperial (or Western) interest that seeks to contain China. Such opposition poses an existential threat to the legitimacy of the Party’s leadership, which creates the potential for dangerous future consequences.

Problems on the Periphery: Korea, Southeast Asia, and Tibet

The Korean War with Chinese Characteristics

The PRC’s involvement in the Korean War left a lasting impact on the way in which the people of China view the United States’ involvement in Korean issues today. China draws from its interpretation of the Korean War as part of an ongoing narrative of American aggression. The CCP interprets the United States’ involvement in the Korean War as continuous acts aimed to subvert the Chinese communist system. The Chinese narrative asserts that the United States is the most dangerous threat to the Party’s ideological system. Since China views the Korean War as a failed attempt by the U.S. to undermine the CCP, China exploits this narrative to argue that the United States continues to be an enduring and persistent threat. Given that China believes the collapse of the North Korean regime would be the most advantageous way for the United States to penetrate China’s borders and undermine the CPP, this encourages China to bolster support for maintaining the status quo on the Korean Peninsula.

CCP History of Modern Tibet

China has constructed a campaign to paint the CCP occupation of Tibet as a period of liberation and reform, whereby the CCP freed Tibetans struggling under Buddhist feudal “slavery” or serfdom. The CCP’s rewriting of history in Tibet is comprised of three major periods. The first (1950-1951) is known as the “Peaceful Liberation of Tibet,” which was actually quite brutal. In a settlement, signed under duress, known as the ‘17 Point Agreement,’ Beijing claims to have driven away imperial forces, returning Tibet to the 'great motherland.' The second period (1951-1959) was “Implementing the 17 Point Agreement,” described as the cultivation of a “United Front of Patriots,” whereby the CCP established Party affiliated groups in Tibet. This “United Front,” however, was actually used to monitor the territory and people in an attempt to bring the Tibetans under CCP control through forced allegiance to the Party. The third period (1959-1962) is known as the “Democratic Reform” era. The CCP claims this was a process of Tibetan democratic and socialist revolutions, yet this actually was a time of severe suppression of Tibetan uprisings against the CCP, and widespread famine due to CCP collectivization policies. Through the overarching narrative of ‘Tibetan liberation,’ the CCP has attempted to propagate the perception that the CCP’s “benevolent acts” have actually rescued Tibetans from a dismal alternative to CCP rule. The Party has further exploited this distorted historical narrative to justify China’s territorial claims. Yet, despite Tibet’s “Special Autonomous Region” status, legitimate historical analysis reveals that the CCP has continuously persecuted Tibetans in their efforts to subsume Tibetan society.

China’s Support for Communist Insurgencies in Southeast Asia

Another prominent element often found in PRC narratives is the insistence that China has never invaded nor interfered in the internal affairs of other states. Yet, this ignores the fact that since the Mao era, the CCP has made an effort to promote communist insurgencies throughout Southeast Asia.[i] As the representative to Stalin’s communist front in Asia, Mao Zedong and the CCP sought and created opportunities to support work with indigenous communist movements abroad. For Mao, supporting revisionist and anti-colonial movements in Asia was both ideologically necessary and essential to China’s security interests. To understand China’s involvement in Southeast Asia today, it is useful to assess China’s actions in Burma. Despite the CCP’s avowals of support for the current Burmese government, China’s furtive encouragement of communist insurgency in Burma has had a long-term, negative impact on the politics and development of Burma as a country; on the whole, China’s involvement has engendered ongoing turmoil and political conflict. Currently, groups whose roots derive from the Communist Party of Burma (CPB), which was created by China’s revolutionary export program, continue to ferment instability and serve as a major source of illicit narcotics and trade. These groups, and China’s engagement with them, are a source of great consternation to the first democratically elected government in Burma, which has been trying to establish a nationwide peace process. Even in the face of their official “no conflict, no confrontation” rhetoric, China continues to harness these groups to extract resources and exploit Burma as a strategic lever in the region.

(Left to Right: Randy Schriver, Robert Suettinger, Louisa Greve, Cao Yaxu; Source: The Project 2049 Institute)

Domestic Historical Revisionism: China’s Modern Reform Era
Deng Xiaoping and the “1981 Resolution”

The Chinese Communist Party’s main strategic goal is Party preservation. Domestically, this has led to a major effort by the CCP to redefine its history, especially since the time of China’s modern reform era. During that period, Deng Xiaoping used the “1981 Resolution” to continue pursuing the Party’s aim of revolutionizing the greater evolution of the Chinese state. Deng also utilized this document to cement his preeminence over other political rivals following Mao’s death in 1976. Regardless of some severe consequences from Mao’s policies, and in spite of the mounting opposition to Mao Zedong Thought and the ousting of the ‘Gang of Four’, Deng employed the “1981 Resolution” to consolidate Mao Zedong Thought as China’s guiding principle in an effort to stymie debate and solidify his place at the top. Since China’s modern reform era, the CCP’s approach has been based upon personal power in leadership. To maintain the Party’s control on power, a central leader must guide the way. Mao was a core figure; Deng was a core figure, and today Xi Jinping asserts himself in the same manner. Thus, the CCP has chosen to rewrite the Party’s history because China’s political system has operated on personal power processes and mechanisms that include the manipulation of history for individual gain and the preservation of the Party state.

40 Years of Personal Repression

The Chinese Communist Party has erected a narrative that the U.S. government is collaborating with groups in China to instigate a ‘color revolution.’ These groups, called the “New Five Black Types,” include human rights groups, dissidents, Internet opinion leaders, religious believers, and disadvantaged groups. As such, the CCP feels justified in the practice of rewriting history to discredit these five groups in order to delegitimize the United States’ alleged efforts to subjugate China. Personal stories of people affected by China’s revision of history throughout the past 40 years detail patterns that elucidate the calculations behind the Chinese government’s acts of repression. Just four of countless examples include: 1) the purge of a journalist reporting on social injustices; 2) the persecution of pastors attempting to create an open church; 3) the closure of an NGO that worked to aid disadvantaged women; and 4) the oppression of a grassroots-level people’s representative. The CCP’s distortion of facts suggests that the desire to ‘save face’ ultimately motivates the Party’s harsh policies. By shifting the focus of the narrative off of the Party’s oppressive acts, China successfully hides its own transgressions behind a larger enemy— the United States.


The CCP’s rewriting of history offers important insights into the CCP’s interests and the potential consequences of China’s constructed historical narratives. Randy Schriver, the President and CEO of the Project 2049 Institute, notes the significance of understanding why Beijing conducts assaults on historical truths as it allows us to decipher the CCP’s true domestic and global intentions. Overall, the cases examined demonstrate China’s desire to be portrayed as a powerful, yet benevolent, global leader led by the Chinese Communist Party. However, when analyzed closely, the CCP’s detachment from reality, and stringent strategy of historical reconstruction, indicates a fearful state that is grasping for control to conceal the truth whenever reality does not align with its interests. The result is the CCP’s forceful effort to maintain dominance and strengthen Party rule within China, and its greater willingness to counter perceived threats and assert Chinese power beyond its borders.

This conference was held by The Project 2049 Institute as part of a program to study the history of the Chinese Communist Party (#CCPhistory). In support of this program, the Project 2049 Institute has commissioned four research papers that analyze crucial elements of the CCP's history including, “The Logic of Historical Nihilism: Analyzing the PRC Orthodoxy on the Origins of the Korean War,” “Dangerous Truths: The Panchen Lama's 1962 Report and China's Broken Promise of Tibetan Autonomy,” “The People's Republic of China and Burma: Not Only Pauk-Phaw,” and “Negotiating History: The Chinese Communist Party’s 1981.”

Emily David is a Fellow at the Project 2049 Institute where her research focuses on the Chinese Communist Party, cross-Strait relations, and U.S.-Taiwan relations. She recently completed her Master’s degree in Chinese Politics, Foreign Policy, and International Relations at Tsinghua University in Beijing, China.

[i] The Ashgate Research Companion to Chinese Foreign Policy, (Surray, England: Ashgate Publishing Limited, 2012), p. 115.

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