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WSJ: Chinese Government Not as Stable As it Seems

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    Author Gordon Chang on the strength and unity of China’s government.

  • Duration 4:14
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-- we take news reports coming out of China without a degree of skepticism.

But take a look at this headline from the Wall Street Journal yesterday can you believe they used the would it coup in the same sentence as China.

Let's bring in -- China watch -- Gordon Chang.

Gordon when I think of the would coo I think a bunch of guys in uniforms storming the palace shooting up the president and taking power off.

That's not what's going on in China now is it.

-- on Monday afternoon when I heard the rumors of their true it only took me a couple hours to realize they were not substantial but there is an issue of the obedience in the military.

Just last week President Hu Jintao had to publicly reminded generals and admirals that they were subordinate to the Communist Party.

And we've got to remember that this is not the first set of cool rumors this year it's about the third.

You know when there's a lot of smoke there's usually a fire something they use of the would -- In connection with the world's second largest economy any major -- -- you think that's a legitimate use of the -- who really.

Well there are probably some junior officers may be in the air force who have ideas of what to do.

But you know essentially they didn't get a coup on Monday -- there was no attempt to -- -- -- Communist thinking if Aussie Communist dictatorship that's that strong but what are these junior officers wanted to.

Well I think there is erosion of civilian authority and the military has become much more powerful the Chinese political system.

And so they operate almost independently of civilian control these days on a number of issues.

So there really is concerned about the obedience in the loyalty of some.

Generals and then maybe some junior officers as well I'm I wanna talk about the economy from China because we've got a lot of reports recently that it's really.

Not not falling flat but it is slowing down dramatically.

-- -- -- Yes if you look at the numbers for January and February which are usually aggregated to avoid to eliminate the -- of effects of Lunar New Year were sometimes falls in January sometimes in February.

It's clear the economy is growing in low single digits that's a substantial.

Slowdown from double digit growth.

And -- and the first numbers out for march indicate a really troubled economy because march is when the Chinese economy usually picks up after the beginning of the year.

But how much of it is we know we all know the Chinese want to actually make their economy slower on purpose.

Is it that they've overreached fair or in other words they were afraid of inflation and growth defense of the locomotive.

They thought they get tap on the brakes to slow down.

As to how much -- this deliberate how much of it is out of their control.

Well you know they didn't want -- slow down the economy as you mentioned they took money out of the money supply.

But they didn't really intend to go down to 345%.

Which is probably where they are now and clearly this march.

HSBC purchasing managers index number was just really stunned global markets they did not intend that -- Talk about a little bit Gordon about the connection between the politics and the economy in China you talk about the rise that the military now there's a real succession -- struggle.

Coming up all of these leaders are very distracted how -- impacting economic growth.

You know when all is optimistic assessments of the Chinese economy that usually comes -- to the point where Beijing will re stimulate.

But right now the political system is in paralysis because of this succession struggle as the fourth generation leaders give way to the fifth you have premier Hu Jintao of the -- -- -- about who is the chief economic officer.

He's busy fighting his political adversaries and he's giving these increasingly dire warnings about another cultural revolution in China.

So he's not thinking about the reserve requirement ratio or raising interest rates at this time you paint a picture of -- chaos that doesn't seem like that for for us here in America looking over them children.

Back.

Why -- -- you say chaos but nonetheless we see sort of the erosion of civilian authority.

We see paralysis in the political system because of things that we'd expect them to do they're not doing they're not acting decisively on the economy which is what they were doing in 2008 when they actually moved very fast to counteract the global downturn.

This time.

It you know.

Yes Charles they are trying to slow down the economy but you don't see them taking the steps that you would normally expect them to -- be implementing -- Gordon Chang you know you're talking about and we appreciate you being with us today thank you very much.

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