Shopkeepers in Shenzhen. Pork sellers in Nanning. Factory workers in Dongguan. All across China’s southern industrial belt, the working class is under pressure — and so is President Xi Jinping.
A protracted U.S. trade war, protests in Hong Kong, soaring food prices and the slowest economic growth in decades are among the many problems facing China’s leader as he prepares to celebrate 70 years of Communist Party rule.
On the surface, things look fine: streets have been cleaned and security increased before the Oct. 1 holiday, when Xi will preside over a military parade and deliver a speech celebrating the strength of China and the party.
But the mood on the ground is less celebratory, especially in a stretch of southern China that runs from the Vietnamese border to the Pearl River Delta. The area includes the manufacturing hub of Dongguan, being reshaped by American tariffs. There’s Shenzhen — home to Huawei Technologies Co. and just across the border from Hong Kong’s protests — and also Nanning, which started rationing pork this month as a swine fever epidemic ravages hog stocks.
Interviews this month across these locations showed how livelihoods are getting harder and why Beijing should be concerned.
“Xi is faced with a multitude of difficult domestic and international problems,” said Dennis Wilder, former senior director for Asia on the National Security Council who’s now at Georgetown University. “Any one of these problems could become a full blown crisis and thus, while he maintains a tight hold of power, he cannot afford to celebrate too gleefully as he reviews the grand parade.”
In 1949, the Communists booted out a government wracked by foreign interference, runaway inflation and the perception that officials were lining their own pockets before they helped their people. Xi’s party is in a much stronger position now, overseeing the world’s second-biggest economy and increasingly asserting its influence around the globe.
But staying in power with a political system that was almost wiped out in the late 20th century makes it essential to constantly ensure the masses have no desire to kick them out. In interviews with more than 50 people across three cities in the south this month, concerns about cost of living dominated conversations.
Many people spoke of the increased difficulty of getting by day-to-day while avoiding open criticism of the government, which could lead to more trouble in a nation that regularly locks up dissidents. And right now, perhaps nothing is a bigger source of discontent than rising pork prices.
At the Weizilu wet market in Nanning, a city in Guangxi, controls put in place to combat the rise in prices mean vendors are losing money to stay open. The market is one of 10 where emergency rationing was employed in early September, and limits remain on how much meat can be sold, and at which prices.
“The sellers don’t like the policy, but it’s good for regular people,” said one seller with the surname Huang who estimates she loses 200 yuan ($28) on every pig. Vendors have been told that subsidies are coming, but they haven’t seen them yet, she said.
The swine fever outbreak has caused havoc for consumers, pushing up the price of pork — a staple on Chinese dinner tables — almost 50% in August. The spike is making other food more expensive and may last well into next year: Even importing all the pork traded around the world wouldn’t be enough to offset China’s shortage of 10 million tons, Vice Premier Hu Chunhua said earlier this month.
“If pork prices continue to rise too fast, it will seriously affect the lives of urban and rural residents, especially low-income people, and affect the joyful atmosphere when celebrating the 70th anniversary of the founding of New China,” Hu said.
Aware that runaway prices could trigger public discontent, Chinese officials have looked for ways to boost supplies: from releasing pork reserves during the upcoming national holidays to turning to “fine pig sperm” from Northern Europe to bolster breeding. Multiple high-ranking bureaucrats have addressed the pork crisis at home, acknowledging that cover-ups by local governments made things worse, and assuring citizens that prices will be brought under control.
At the border with Hong Kong, authorities in Beijing have taken steps to isolate the mainland from the protests and control the flow of information to avoid inspiring similar unrest in China. Domestic media coverage has portrayed the city as beset by chaos and violence, with local journalists dispatched to Hong Kong in an effort to better control the narrative.
The tensions have made Chinese nationals reluctant to enter Hong Kong through Shenzhen, and agents are more closely scrutinizing travelers and searching personal devices. Citizens like Li Zhi, who runs a small stall selling mobile phone accessories near the customs checkpoint, are against the protests even though they’re aware many in Hong Kong support them.
“There’s no one here, business has been really bad,” said Li, 34, who moved to the city bordering Hong Kong 10 years ago from a smaller city in Guangdong. “It’s not just bad for business — it looks bad for China as the 70th anniversary approaches.”
Another cloud looming over the celebration is Xi’s trade war with U.S. President Donald Trump, with pressure increasing on both sides to cut a deal as the tensions take a toll on the world’s two biggest economies. Working-level talks have resumed as both sides look for an agreement that could ease the immediate economic pain, even if it doesn’t solve every issue.
Domestic concerns constrain Chinese leaders’ ability to compromise in such international disputes, said Susan Shirk, research professor and chair of the 21st Century China Center at the University of California San Diego and a former deputy assistant secretary of state.
“They have to look strong in the eyes of the domestic public, but they want to do it in a way that doesn’t provoke a damaging conflict with the United States and other countries,” Shirk told Bloomberg Television. “And they haven’t really found that sweet spot. Certainly, Xi Jinping hasn’t.”
Any trade resolution is still far off, and conflict with the U.S. is set to remain even if a deal is signed. In Hong Kong, demonstrations show no signs of abating, despite Chief Executive Carrie Lam’s decision to scrap the legislation that sparked the protests. And while Beijing has some control over pork prices, it’s at the mercy of factors outside of its control such as a collapse in the number of viable breeding sows.
In a Sept. 3 speech, Xi framed the challenges as long-term issues that need long-term solutions, and rallied party members to “cultivate and maintain a strong fighting spirit.” Throughout the year, he has called on cadres to protect political stability. It’s a lesson he learned from the Arab Spring, telling then-U.S. Vice President Joe Biden privately that the Communist Party must avoid losing touch with its citizens at all cost.
“Xi is facing the most challenging time since he took over the party,” said Trey McArver, co-founder of Beijing-based research firm Trivium China. So far the approach is to be “relatively pragmatic and measured,” he said. “He’s very clear to everyone that things are tough but he’s very clear in the midst of that in calling for greater party unity and loyalty to the center.”