Monitor | China crisis just wishful thinking
Many are longing to see the Communist Party overthrown, but social unrest caused by mis-sold investment products won't be how it happens
Beijing's ideological opponents - as well as those Westerners discomfited by the idea that Europe and North America could see their economic and political primacy usurped by Asia - love to forecast the fall of the Communist Party.
Encouraged by the speed with which the iron curtain crumbled at the end of the 1980s and the suddenness of the Arab spring in 2011, and heartened by the spread of social media in China and the growing number of local protests, they hope widespread unrest will soon coalesce into a popular revolution that will sweep the Communist Party from power.
For many, this is a seductive vision. But there is a problem with it. From land seizures to pollution, there are many reasons for Chinese citizens to be unhappy, but for the most part grievances are specific and localised.
As a result, those who long for a national uprising spend a lot of time looking for a single common cause to unify the discontents and trigger a popular revolution. Often they fix on China's financial system, and usually their script goes something like this: bank sales staff have persuaded legions of ordinary savers to buy high-yielding structured notes called wealth management products. According to Fitch Ratings, at the end of March there were more than 13 trillion yuan of these things outstanding, worth a quarter of China's gross domestic product.
Unfortunately they are a giant Ponzi scheme. Often the money from short-term notes goes to fund long-term local government infrastructure projects. Now, with trust companies and banks forbidden to issue new notes to repay the investors in maturing products, analysts expect an increasing number of wealth management products to blow up, leaving investors badly out of pocket. Savers, however, are unlikely to swallow their losses without complaint.
Beijing-bashers predict angry protests against the banks that sold the products. As rumours spread about the viability of financial institutions, they warn of bank runs as depositors attempt to withdraw their savings, degenerating into nasty riots when they find they can't get their money.