Fwd: China

["Macdonald Stainsby" <mstainsby@xxxxxxxxxxxxxxx>]

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>STRATFOR.COM
>Global Intelligence Update
>October 20, 1999
>
>Chinese Stability Masks Socio-Economic Tensions
>
>
>Summary:
>
>Disgruntled investors held demonstrations for a second day Oct. 19
>in Chongqing, China. The demonstrations were in response to a
>government announcement concerning a waiting period for
>reimbursement from illegal investment schemes shut down by the
>government. The social unrest generated by these schemes - schemes
>the government originally pushed - raises a serious issue for
>China. While the government focused on maintaining stability during
>this year's sensitive anniversaries, the underlying socio-economic
>instability continues to mount.
>
>
>Analysis:
>
>A group of 500 investors demonstrated in Chongqing for the second
>day Oct. 19, according to the Information Center of Human Rights
>and Democratic Movement in China. The protests followed larger
>demonstrations a day earlier when 1,000 to 3,000 investors blocked
>railway stations and demonstrated in front of government offices.
>
>The protests were sparked by a government announcement Oct. 17
>declaring that it would take up to three years to reimburse lost
>investments from illegal investment companies that the government
>was shutting down. In addition to protesting the lengthy process of
>refunding, demonstrators accused the local government of taking
>part in the original establishment of the funds and delaying
>notification that the investment schemes were illegal.
>
>China has been beset with low domestic spending and high savings,
>something the central government has been working to reverse by
>urging domestic investing. This, and the local Chongqing
>government's participation in the funds start-up, only adds to the
>protestors' anger. The investors believe the government is
>complicit, perceiving the delay in returning the money as a move to
>keep the booty in the government's own coffers as long as possible.
>
>The protests in Chongqing show the ongoing potential for
>economically generated social unrest in China. Throughout the year,
>there have been several demonstrations sparked by unemployment,
>unpaid pensions and other financial issues. Despite these localized
>displays of social unrest, the government has largely maintained
>stability during this year of key anniversaries and events. In
>fact, maintaining stability in the face of such events as the 10th
>anniversary of the June 4 Tiananmen Square incident and the 50th
>anniversary of the founding of the People's Republic of China has
>been a major government priority.
>
>Oct. 1 passed smoothly, but what now? As the Chongqing protests
>demonstrate, the government, while maintaining overall social
>order, has not addressed the underlying economic and social
>stresses in China. Despite maintaining relative stability by moving
>from key date to key date, it is questionable whether this short-
>term strategy will remain effective in the long run.
>
>
>(c) 1999, Stratfor, Inc.
>__________________________________________________

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