SPECIAL REPORTCHINA2 now, however, Mr Xi does not appear to be spoiling for a fight.China cosies up to America’s rivals, most notably Russia, but italso sees its economic interests, and hence its strategic ones, asclosely linked with America’s.It is developments inside China, in real cities, that shouldworry the outside world more. Urbanisation, especially over thepast decade, has handed Mr Xi a daunting legacy. When his predecessor,Hu Jintao, came to power in 2002, urban China was farless of a challenge. <strong>The</strong> country was recovering well from theAsian financial crisis of<strong>19</strong>97-98. Its north-east had been wrackedby large-scale protests by workers laid off during the massivedownsizing of the state sector from the <strong>19</strong>90s, but Mr Hu kept theregion largely quiet by directing dollops ofcash to it. <strong>The</strong> internetwas still the preserve ofa small urban minority.A harder place to run<strong>The</strong> picture today is very different. Economic growth isslowing. As this special report has explained, rapid urbanisationhas spawned two huge new social forces: a middle class and anunderclass. Both are much bigger than they were a decade ago;both are suspicious of, and sometimes hostile towards, each other;and both often distrust the Communist Party.Just in the past five years social media such as Sina Weiboand WeChat have connected hundreds of millions of Chinese ina conversation held in near-real time, much of it less than flatteringabout the party. More than 60% of urban residents now usethe internet. <strong>The</strong> shoots of civil society are beginning to grow;small, scattered groups are working on everything from helpingHIV/AIDS sufferers to cleaning up the environment. <strong>The</strong> securityapparatus keeps close tabs on them but rightly worries that urbanChina may be changing too fast for it to keep up.Double-digit growth for much of this century has not onlymade many ordinary Chinese betteroffbut bestowed breathtakingriches on the families of some members of the political elite(including some ofMr Xi’s extended family). This has proved impossibleto cover up. Mr Xi’s anti-corruption efforts risk causingstrife among political clans eager to protect their privileges. Hemay be China’s strongest leader since Deng Xiaoping, but urbanisationhas fuelled the growth of other, often countervailing,powers too: large state-owned enterprises that have gorged onproperty and commodities, local governments bloated by recklessborrowing to build ever bigger cities, and an internal securi-Huang Bo’s modest needsty apparatus that now spendsmore than the army, most of iton policing cities.Mr Xi and his team havecorrectly identified the need fora better approach to urbanisation:one that will help ease socialtensions which have builtup over the past decade, bringlocal governments into line andmake big SOEs contribute muchmore to welfare and share moreof their markets with the privatesector. <strong>The</strong>y have been makingencouraging noises about theneed to reform the iniquitoushukou system, strengthen farmers’property rights and makecities more “liveable”.But Mr Xi needs to gomuch further. <strong>The</strong> party stillcannot bring itself to talk of a“middle class” (too unsocialistsounding),much less acknowledgethat its aspirations aremore than just material ones. InJanuary a famous actor, HuangBo, introduced a new songabout the “Chinese dream” onstate television’s most popularshow of the year, the Spring Festivalgala. It was called “MyOffer to readersReprints of this special report are available.A minimum order of five copies is required.Please contact: Jill Kaletha at Foster PrintingTel +00(1) 2<strong>19</strong> 879 9144e-mail: jillk@fosterprinting.comCorporate offerCorporate orders of 100 copies or more areavailable. We also offer a customisationservice. Please contact us to discuss yourrequirements.Tel +44 (0)20 7576 8148e-mail: rights@economist.comFor more information on how to order specialreports, reprints or any copyright queriesyou may have, please contact:<strong>The</strong> Rights and Syndication Department20 Cabot SquareLondon E14 4QWTel +44 (0)20 7576 8148Fax +44 (0)20 7576 8492e-mail: rights@economist.comwww.economist.com/rightsFuture special reportsInternational banking May 10thBusiness in Asia May 31stPoland June 21stCyber-security July 12thPrevious special reports and a list offorthcoming ones can be found online:economist.com/specialreportsNeeds Are Modest”. <strong>The</strong> middle-class fantasy it described (withoutnaming it as such) was an advance on the usual calls for selflessdevotionto the nation, butitwasstill politically sterile: “I canearn money, and still have time to go to Paris, New York and theAlps. I stroll through the shopping mall and go skiing in themountains. Days like these are so carefree.”Optimists still wonder whether Mr Xi might eventually allowa little more political experimentation. At the party’s <strong>19</strong>thcongress in 2017, five of the Politburo Standing Committee’s sevenmembers are due to step down, leaving only Mr Xi and Mr Li,the prime minister. Of the replacementsexpected to join them, at least two arethought to have liberal(-ish) leanings. Butfew observers are holding their breath.In <strong>19</strong>97 China’s leaders set a goal ofmaking China “moderately well off” by2020, just in time for the party’s 100thbirthdaycelebrations the following year.Judgment on whether this has beenachieved will be passed while Mr Xi isstill in office. As long as China’s GDPkeeps on growing at about 7% a year (as isplausible, possibly even making China’seconomy bigger than America’s by then),it will not be hard for him to tick off theeconomic targets. But the party has saidthat “moderately well off” also means amore democratic China, and one that respectshuman rights. Ignoring those aspectsrisks antagonising the constituencythat has become most vital to sustainingthe party’s power: the urban middle class.Mr Xi would do so at his peril. 716 <strong>The</strong> <strong>Economist</strong> <strong>April</strong> <strong>19</strong>th <strong>2014</strong>
Europe<strong>The</strong> <strong>Economist</strong> <strong>April</strong> <strong>19</strong>th <strong>2014</strong> 41Also in this section42 French politics42 Turkey’s prime minister43 Italian politics43 Culture wars in Ukraine44 Charlemagne: Putin’s populistfriendsFor daily analysis and debate on Europe, visit<strong>Economist</strong>.com/europeGreek politicsRemaking the political landscapeATHENSA new burst ofoptimism about the economy is not yet luring many voters back tothe two mainstream partiesGREECE’S chances of recovery after sixyears of misery are improving. Its firstbond offering in four years, seen as a test ofconfidence, did much better than expected.Tourists are flocking in for Easter; hotelierspredict a record <strong>19</strong>m visitors will comethis year. One long-blocked resort projecton Crete seems poised to go ahead, raisinghopes that foreign investment may flowinto otherindustries such as electricity andports. Angela Merkel, the German chancellorand often one of Greece’s harshest critics,spoke encouragingly to young Greekentrepreneurs during a quick visit to Athenson <strong>April</strong> 11th.Yet the new optimism does not seem tobe trickling down to most voters. Unemploymentfell slightly in January, but stillstood at 26.7%. <strong>The</strong> social safety-net isstretched so thin that only one in ten oftheunemployed gets any benefits. Private-sectorworkers complain of being paidmonths in arrears. An estimated 35% ofGreeks now live in poverty, according tosocial workers and charities.No wonder Greece’s clientelist politicalsystem is in tatters. It was once a politician’sresponsibility to find jobs in the publicsector for his (rarely her) constituents.Ambitious MPs extended their patronageto the private sector. “Myapplication foranassistant supermarket manager’s job waspicked on merit, but it wasn’t approved bythe local MP—he wanted someone else,”says Simos, a 28-year-old economics graduatenow working in Germany.Angry voters used to shout “Thieves,traitors” outside parliament as lawmakerswaved through a string of unpopular reformsdemanded by Greece’s creditors.<strong>The</strong> centre-right New Democracy (ND) andthe PanHellenic Socialist Movement (Pasok),partners in a fractious coalition withonly a two-seat majority in parliament, arenow widely blamed for the collapse of thepatronage system that they built during 30years ofalternating in power.Some voters have switched instead to“anti-systemic” fringe parties that advocateextreme solutions to Greece’s woes. Atnext month’s European elections, beingheld at the same time as local elections,two new moderate centre-left parties, Elia(Olive tree), led by a group of academicsand former ministers, and To Potami (theRiver), led by Stavros <strong>The</strong>odorakis, a televisionjournalist, are trying to plug the gapopened up by Pasok’s slump.Many on the left now backSyriza, a radicalleft-wing party led by Alexis Tsipras, afiery 39-year-old who scares Greece’s businessmenwith talk of imposing a wealthtax and suspending debt repayments.Evangelos Venizelos, the Pasok leader (andforeign minister), is fighting attempts byGeorge Papandreou, a formerprime minis-ter, to reassert authority over the partyfounded by his father Andreas, Greece’sfirst Socialist prime minister. Mr Venizelosbacks Elia, but Mr Papandreou refuses tojoin him, prompting speculation that heseeks a political comeback to stop his dynasticparty disappearing.ND has proved Greece’s most durableparty, surviving several changes of leadership.Yetitsvotersprovide much ofthe supportfor the neo-Nazi Golden Dawn, a homophobic,anti-immigrant party whose 18deputies are accused ofrunning a criminalorganisation. Embarrassingly for AntonisSamaras, the prime minister and NDleader, a leaked video showed his chief ofstaff, Takis Baltakos, telling Ilias Kasidiaris,Golden Dawn’s spokesman, that the publicprosecutor had found barely a shred ofevidence against him. Mr Baltakos quit;and the affair has had little impact on ND’spoll rating. Mr Samaras is far ahead of MrTsipras as “most suitable prime minister”.Opinion polls nevertheless give a slightedge to Syriza over ND, with both partiesconsistently on 18-20%. Pasok has sunk toaround 3.5%, and could fail to win anyEuropean seats. More than three-quartersof Greek voters would like Mr Papandreouto retire from politics. Golden Dawn hasfallen from 11% to about 8%, but it couldbounce back on a sympathy vote if Mr Kasidiaris,who is running as Golden Dawn’scandidate for mayor of Athens, is placed incustody before polling day on May <strong>25</strong>th.Elia is polling around 5% but is seen bymany as a dull and outdated revamp of Pasok.But To Potami has picked up voters atdizzying speed, moving into third place,with 11-15%, within three weeks of itslaunch. <strong>The</strong> 50-year-old Mr <strong>The</strong>odorakis,wearing a T-shirt and trainers and carryinghis trademark backpack, tours the country 1
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