China issues law-and-order warning over economy

The Chinese leadership’s law-and-order chief is warning that China is ill-prepared for social unrest generated by changes in the economy, in the latest sign that the government is worried about the consequences of flagging growth.

The government needs better methods for dealing with “the negative effects” of the economy, Politburo member Zhou Yongkang told provincial officials.

Zhou called for innovative approaches to social management – a euphemism for a clutch of policies as diverse as stepped-up policing and unemployment insurance meant to dampen unrest.

“Especially when facing the negative effects of the market economy, we still have not formed a complete mechanism for social management,” Zhou said. How to do so, he said, “is the great and urgent task before us.”

Zhou’s remarks underscore growing government uneasiness about an economic slowdown and the social unrest it might bring. In the past week, a much-watched index showed manufacturing contracting sharply, and the government lowered controls on bank reserves to encourage more lending.

Meanwhile, strikes and other job actions have increased recently as factories retrench to confront higher labour costs and reduced demand for exports from Europe.

Zhou urged provincial officials to eliminate wasteful spending that has contributed to the mass protests, riots and other unrest that have proliferated in recent years.

In another instance of frayed tensions, Xinhua reported that hundreds of people overturned four police and government cars on Friday in the central city of Xi’an after a truck hit and killed a girl and police did not arrive at the scene for two hours.