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Cover Story


The contrast is stark. Chinese authorities continue their crackdown on dissenting voices and put security forces on alert in Tiananmen Square. At the same time, in the grimy central city of Wuhan, a professor is bringing a new concept to China's heartland: the rule of law. Armed with a Yale Law School degree and a team of young associates, Wan Exiang runs China's first public-interest legal center. From his bustling offices, Wan takes on government officials--including members of the much-feared national police, the Public Security Bureau (PSB)--who have long riddenroughshod over individual rights.

Increasingly, Wan is winning. In one recent case, his Center for the Protection of the Rights of Disadvantaged Citizens came to the defense of an entrepreneur from Hangzhou who left his job as a technician at a state-backed company to start his own business. Accusing the man of taking company patents, police put him in detention, ransacked his home, and confiscated all his belongings. After a plea from the man's wife, Wan dispatched two lawyers to represent him. They won--and got the PSB to pay damages of 500 yuan--the equivalent of six weeks' salary. Altogether, the center, which is funded in part by the Ford Foundation, has received 1,600 requests for help.

As the June 4 anniversary of the 1989 Tiananmen massacre approaches, President Clinton is poised to make the politically costly decision to renew China's most-favored-nation trading status (page 102). He is doing so even though China has been cracking down hard on its most vocal dissidents. It has re-arrested Wei Jingsheng, a leader of the "Democracy Wall" movement of the late 1970s. Beijing has imprisoned many other political activists and has rounded up religious and labor leaders.

But no matter what an increasingly jittery leadership does to repress and control, a quiet revolution is taking place. Across the Middle Kingdom, the glimmerings of a freer society can be seen in the actions of Chinese such as Professor Wan. China's contact with the U.S. and the rest of the world is helping make that happen. Although Clinton's decision was in part based on pure commercial reasons, it does reflect a growing view among experts that the annual debate about human rights in China has been overtaken by deeper, grassroots change in the world's most populous nation.

An explosion of information technology, for example, has allowed the Chinese to link up to the world with fax machines, telephone lines, satellite dishes, and personal computers. Thanks to market-oriented reforms, millions of Chinese can now decide where to work and live instead of being told. A growing local media, aligning with regional power brokers, is spotlighting tension between provincial authorities and Beijing. And workers and peasants are becoming more vocal about protesting corruption, layoffs, and taxes.

Two or three years ago, signs of people circumventing or undermining totalitarian rule could be dismissed as anomalies. But no longer. Just as China's economic boom has brought increased prosperity to millions, so too is life for ordinary Chinese becoming easier and freer. "There has been a substantial evolution--economic, social, and political--that makes the state less intrusive in people's lives," says Kenneth G. Lieberthal, a China expert atthe University of Michigan.

Indeed, the central judgment that Deng Xiaoping made 15 years ago now appears to be proving faulty. Deng reckoned that by opening the door to the outside world, China could absorb foreign investment, trade, and technology while spurning the cultural and political influences, or "bourgeois liberali-zation," that would challenge Communist Party rule.

But years of double-digit economic growth are transforming Chinese society itself, loosening Beijing's control over 1.2 billion people. In Guangdong, workers angered by dangerous factory conditions have formed more than 800 illegal trade unions. In Beijing, live talk shows allow radio listeners to discuss once-taboo subjects, from urban pollution to extramarital affairs. In a Shanghai factory, the subject at mandatory Communist Party meetings is bonuses, not politics. And in coastal cities and interior villages, attendance at underground churches is soaring. Virtually no one accepts the ideology called communism anymore.

SHIFTING SANDS. Many of these grassroots changes have frightened the Communist Party leadership, which is already rattled by Deng's deteriorating health and an inevitable power struggle. Yet the earth continues to shift under the leadership's feet. Beijing must encourage growth to stay in power, but that only increases the potential for greater individual freedom. Only a few years ago, the government could dictate where citizens lived and worked, when they married, and when they could have a child. But today, a rising middle class is quietly challenging centralized control. "Change is happening from the bottom up, regardless of what happens with the Communist Party," says David S. Goodman, a fellow at Murdoch University's Asia Research Center in Perth, Australia.

That doesn't mean China's transition to the post-Deng era will be smooth. The party still maintains its monopoly on power. Moreover, the state controls the media and arrests whomever it wants. In Tibet and Xinjiang, ethnic minorities face severe repression. Meanwhile, the tumultuous move to a market economy has created a political and social powder keg. The economy grew 12.7% in the first quarter, barely cooling off from its 13% pace in each of the past two years. Inflation is 24.6% in the big cities, and corruption among officials is widespread. In 1989, that combination led to large antigovernment demonstrations. If similar unrest breaks out after the death of 89-year-old Deng, the leadership may once again call in the troops.

As the years after Tiananmen have shown, however, the People's Liberation Army isn't interested in turning back the clock. It's making too much money in its lucrative businesses, ranging from toys to tourism. Likewise, the party can be counted on to beat back outright challenges to its rule, but its members are also making money in China's rush to get rich.

NEW SUITS. Where once the party and central government could dictate just about anything, now they must compete for power with provinces, cities, giant quasipublic corporations, and even workers and peasants. As a result, China continues to evolve away from the totalitarian model of the Maoist era and the authoritarian regime of the Deng era. "The system is losing its central control," says M. Scot Tanner, an expert on Chinese politics at Western Michigan University. He argues that China is gradually becoming a "soft authoritarian" regime like Taiwan or South Korea in the early 1980s.

An unlikely arena for this clash of interests is the nation's rudimentary legal system. As in Wuhan, a new set of laws and property rights is evolving throughout China. In a country where the rule of law has long been subordinate to guanxi, or personal connections, the Chinese have started to turn to the judicial system to resolve business and personal disputes.

Chinese citizens are suing almost everyone--from local enterprises to the police. For instance, Zheng Chengsi, a slender, bespectacled professor in Beijing, brought suit against two of his former students last year after discovering they had plagiarized more than 60,000 words from his work on--of all things--intellectual-property rights. Zheng's lawyers filed the case in Beijing's East District court last year. The defendants tried, in vain, to persuade Zheng to settle. But he insisted he didn't want damages. "My rights were violated," he says. "I wanted these things to be published." In August, Zheng got his wish: The judge ordered the defendants to publish details of the case in nationally circulated newspapers.

Like Zheng, most Chinese plaintiffs are involved in disputes with other civilians. But some citizens are challenging government officials in court. In 1992, Liu Benyuan, an entrepreneur in Sichuan province, sued local cadres who tried to take away his mineral-water bottling plant. They were upset because Liu refused to pay them off. Besides his bottling plant, they also closed his chemical and printing factories. Liu fought back. Last February, a court ruled in his favor, giving him back his businesses.

China's legal system is ill prepared to handle the growing clamor for justice. As claims multiply, the number of lawyers is expected to quadruple, to about 200,000, by the year 2000. Many citizens continue to distrust the system's impartiality, since local officials often treat courts as arms of their governments. And when the courts do act independently, they often have great difficulty enforcing their judgments. That led editors of the official Legal Daily newspaper on May 23 to issue a daring call for an independent judiciary. "The idea of economic rights is spilling over into other areas such as individual rights," says Helena Kolenda, a Beijing-based lawyer with the New York law firm Paul, Weiss, Rifkind, Wharton & Garrison. "It has sparked a consciousness."

BUBBLING CAULDRON. The demand for more rights is moving beyond individual lawsuits and sparking organized, large-scale protests. Two groups recently staged sit-down strikes in front of the Shanghai municipal building, protesting government secrecy and consumer ripoffs. The unrest has also spread to the countryside, where 75% of China's population lives. Last year, about 4,000 Guangdong villagers conducted a demonstration on a main thoroughfare. They were upset that local cadres had sold off prime farmland to Hong Kong real estate developers.

More worrisome to Beijing, unrest is spreading in factories, where workers increasingly are organizing. That has spooked the government, adding to worries that dissidents and intellectuals are reaching out to disgruntled workers. But as state-owned enterprises lay off employees, workers throughout China are going on strike. In March, there were 270 strikes in Liaoning, Shaanxi, and Sichuan provinces, several lasting as long as 40 days and involving 10,000 workers. In Tianjin last fall, laid-off workers marched on a state-run factory, carrying signs asking: "How can we feed our children?" Says Trini Leung, Chinese labor expert at the University of Hong Kong: "Labor unrest is bubbling very hot, and the authorities are worried."

Like peasants in the countryside, urban Chinese workers are furious about the rampant corruption and lawlessness among some well placed officials. One day last fall, a Shanghai bus driver found his way blocked by parked limousines in front of a karaoke bar frequented by government and Communist Party officials. When the bus driver told the chauffeurs to move, a group of men fatally beat him. Shanghai's bus drivers responded with a wildcat strike, refusing for several days to drive on the busy route.

The state hopes to prevent an explosion of labor unrest by encouraging laid-off workers to find jobs in the growing private and quasipublic sectors. But the unrest is not limited to the public sector. Workers at foreign joint ventures run by Taiwanese, Hong Kong, and other foreign investors have struck to protest abysmal working conditions. In Fujian province, where Taiwanese companies employ more than 400,000 people, workers often spend 16 hours a day on the job without overtime pay. Migrant workers in Guangdong joint ventures typically make $35 a month, less than half of what local residents make for the same work. Last fall, 149 workers died in fires at two factories run by investors from Hong Kong and Taiwan.

Even with its many problems, the private sector's growth has made it much harder for Big Brother to keep tabs on each citizen. Economic reform has vastly increased mobility for ordinary Chinese. That has undercut the dang an, or personal dossier, system. The dang an, which includes an employee's family background, political leanings, and class status, once was used by officials to retain workers, limit promotions, and even ruin careers. But now, Chinese are going into business for themselves, while foreign corporations don't care about such dossiers.

With the declining importance of the dossier, the party's stifling presence in the workplace has been drastically reduced. Party bosses are no longer the decision-makers. And the political meetings that were once mandatory are no longer held at wholly owned foreign ventures or at many joint ventures. Even at state enterprises, less time is spent mouthing Marxist mantras. At China Textile Machine Co. in Shanghai, political meetings have been pared from an hour a week to 20 minutes. "The empty talk is gone," says Zheng Bohua, the company's deputy general manager. "Now we discuss production."

U.S. companies, although anxious to defend their commercial interests in China, argue that they, too, are changing the thought processes of Chinese workers. Learning how to make individual decisions does leave a deep imprint. And working for a Western company almost automatically means a higher standard of living, with better pay and benefits. "If I were asked to go back to a state enterprise, that would be hard to deal with," says Ren Shouqin, 54, vice-president at China Hewlett-Packard Co. in Beijing. HP sent him to the Monterey Institute of International Studies for an MBA.

SOAPS AND CNN. At HP's headquarters in Beijing, well-heeled young women and men work at computer terminals, watch educational videos, send electronic mail, and read foreign magazines. In the Beijing area, 100,000 to 200,000 Chinese citizens work for foreign companies in offices that increasingly resemble the home office. Cai Ping, a 23-year-old manager in HP's personnel department, regularly communicates with HP staffers in Hong Kong and Palo Alto, Calif. "It's as if we're in the same building," she says. "Right now, I'm in touch with the trends of the world."

It's not just elite workers at foreign multinational corporations who are in touch with the rest of the world. In Guangdong, millions of people get their news from two Hong Kong television stations. With a satellite dish, moreover, they can get up to 18 other stations. Despite a ban on such dishes, they are common fixtures in the Guangdong urban landscape. Millions of Chinese who understand English will soon be able to watch Cable News Network.

Of course, the state-controlled media remain on a tight leash, and authorities still strike out at individual journalists who hit too-sensitive nerves. In April, Xi Yang, a reporter for a Hong Kong newspaper who had written about plans for an interest-rate increase, was sentenced to 12 years in prison for allegedly "stealing state financial secrets."

But commercial imperatives are creating the potential for more reliable news. TV stations in wealthy coastal cities have stepped up coverage of social and economic news. A recent protest in Shanghai was covered by one government station, despite efforts by city officials to black it out. Most of the time, stations stick to more popular fare to lure a broader audience--and advertisers. Taiwanese soap operas are now common, as are news stories about prostitution and corruption.

TALK RADIO. At the same time that local governments are opening commercial TV stations and newspapers, party organs are on the decline. The circulation of People's Daily dropped from 2.3 million in 1992 to 1.65 million last year. With the government cutting back on press subsidies, the fight is on for advertising dollars and for circulation gains. Some papers have responded by printing fewer political screeds and more alluring tales of sex and violence.

Economic change has emboldened the business press. As millions of Chinese have become stockholders for the first time, the business press has become more aggressive in shaking up China's corporations and shining a light on corruption. An increasingly influential business paper is the Shanghai Securities News. The paper warns of stock market shenanigans and covers civil lawsuits involving companies. A few weeks ago, the paper ran the first word of a lawsuit by a widow who sued a securities firm after her husband committed suicide. She claims the firm forced him to engage in illegal insider trading. "This paper really tells us the truth," says one investor.

Radio is also slowly moving away from the party line. Talk radio abounds in the large cities, where people's frustrations and desires anonymously spill out over the airwaves. On Guangdong radio, callers regularly criticize the government, sounding off on everything from police brutality to trade policy. On one recent evening, crime is the big concern, as listeners complain about robberies on buses, highways, and city streets.

American talk radio it's not. But this profusion of media outlets has created a forum for the country's various power groups to fight their battles. In the past, the powerful Propaganda Ministry could homogenize the country's newspapers. Now, as the decentralized economy has given more power to regional chieftains, various factions are vying for control. With conservatives and reformers wielding control of media outlets, China has not one official press but several. People's Daily, controlled by the conservatives, therefore reports on strikes and rural unrest to demonstrate the dangers of policies advocated by reformers such as Vice-Premier Zhu Rongji, while Shanghai papers report on successful reforms.

Even though China's media can hardly be called free, the emergence of divergent voices means the center's ability to control people's minds has vanished. The very values upon which communism was founded are shifting. Since so few Chinese believe in its ideology, the Communist Party's leaders have no option but to press ahead with economic modernization--even as it unleashes social changes. To justify its existence, the party has to deliver prosperity, not class struggle. These pressures can only mount as more Chinese accumulate wealth.

"the door is open." To contain the damage, Beijing's leaders have adopted a strategy of strategic retreats. By pulling back in certain areas, the leaders hope they can limit popular unrest and triumph in the end. But it's unlikely that 1.2 billion Chinese will be content with just the beginnings of a legal system, a freer press, and a trade-union movement. Having won those gains in the past few years, they are pressing for more.

Faced with these demands, the Communist Party will be confronted with tough choices. It can lash out, as it did in 1989. Or it can begin to transform itself, as did autocratic parties in Taiwan and South Korea. A violent crackdown would be a huge step backward and would be unlikely to work in the long term. As the years after 1989 have demonstrated, hard-liners cannot repress an entire society and still preserve economic reform.

No one is arguing that China is about to blossom into a multiparty democracy. The government's strategy is to co-opt potential pressure groups before they become independent political forces. The technocratic leaders who are gradually taking over the reins of power from the old-time revolutionaries are more willing to allow interest groups to express their viewpoints--but only as long as they remain within the confines of a single party.

For now, many Chinese say they are too busy making money to think about politics. Young Chinese, in particular, are learning that wealth means the freedom to travel, to buy foreign newspapers, to win a court case against a corrupt government official. "If you have money," says a taxi driver in Fuzhou, "then you can buy human rights." By this reckoning, the best thing Washington can do to nurture greater rights in China is to make sure its doors remain as open as possible to investment and ideas. "We have confidence about the future," says Aven Yang, senior manager for materials at Northern Telecom Ltd.'s joint venture in Shekou. "There is bread, and the door is open. We don't want the door to close." The rest of the world should make sure it doesn't.


Economic reform and years of double-digit growth have

begun to transform China's political and social life, looseningBeijing's iron grip on thecountry's 1.2 billion citizens.As a result, the glimmerings of a freer society have becomevisible, despite attempts by the Communist Party leadership to repress political dissent.


BEIJING'S STANCE: Worried about worker unrest, the government has arrested or deported prominent labor leaders. Products from prison factories continue to make their way to the U.S.

UNDERLYING CHANGE: As illegal unions grow, strikes are spreading in state factories. Angered by corruption, city dwellers and peasants are staging demonstrations.


BEIJING'S STANCE: The government continues to arrest whomever it wants. Party officials influence court proceedings, and judges often have difficulties enforcing their rulings.

UNDERLYING CHANGE: The Chinese are increasingly turning to the judicial system to resolve business and personal disputes. Individuals are suing government officials.Critics have begun openly calling for a judiciary that is free ofgovernment influence.


BEIJING'S STANCE: Deng reckoned the Chinese could absorb foreign investment and technology while spurning the cultural and political influences that would challenge Communist rule.

UNDERLYING CHANGE: As Beijing encourages more economic growth and more contact with the outside world, its citizens are demanding more rights.


BEIJING'S STANCE: The leadership has launched a harsh crackdown on press freedom, jailing dozens of reporters. It has banned use of satellite dishes in an attempt to control the airwaves.

UNDERLYING CHANGE: Commercial demands are creating the potential for reliable reporting. Business papers have become more aggressive, talk radio shows allow callers to criticize officials, and the satellite ban is ignored.Joyce Barnathan in Shanghai, with Pete Engardio in Guangzhou, Lynne Curry in Beijing, Dave Lindorff in Hong Kong, and Bruce Einhorn in New York

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