By Nicholas Consonery and Willis Sparks
For China's top leaders, this is not a good time for confrontations with the neighbors. The country's once-a-decade leadership transition is expected to unfold this fall, and neither outgoing nor incoming officials want uncertainty or ugly international headlines to interfere with the official choreography.
Thus the worry that Asian governments like the Philippines and Vietnam, emboldened by a commitment from Washington to maintain a robust strategic presence in the region, are pushing more aggressively to assert territorial claims in the South China Sea. More worrisome still, China's leaders face patriotic pressures from within for a forceful response.
China and its neighbors could be working together on joint oil and gas exploration in these disputed waters. Proven and undiscovered oil reserves in the South China Sea are estimated to be as high as 213 billion barrels, according to a 2008 report from the U.S. Energy Information Administration. If accurate, that's larger than the proven oil reserves of all but Saudi Arabia and Venezuela. But territorial disputes continue to block efforts to prove these estimates, and the potential for open hostilities in the area is growing, threatening to disrupt trade flows and stoking regional tensions.
The most recent conflict is the impasse
between the Philippines and China over the Scarborough
Shoal, a small island 100 miles off the coast of the Philippines
claimed by both countries. In April, Philippine naval vessels discovered
Chinese fishing boats in a lagoon of the Scarborough Shoal, provoking a three-month
standoff in which Beijing used trade barriers to pressure Manila, which called
on Washington for help. Though the standoff seemed to have been resolved in
June, there are still Chinese fishing boats in the shoal.
Manila is pressing the issue both to stoke national pride at home, to justify greater defense spending, and to draw the U.S. deeper into territorial disputes. Vietnam has similar motivations, though Hanoi appears to have less appetite for tension than Manila at the moment. Neither Chinese neighbor wants to punch toe-to-toe with Beijing, and cooler heads are always likely to prevail. But confrontations at sea can spin beyond the control of state officials back on shore.
There is a similar problem in Beijing. When Chinese officials discuss how best to manage territorial claims in the South China Sea, there are lots of negotiators seated around the table. Local leaders, maritime police, customs and border officials, as well as representatives of national oil companies and the Chinese Navy each have their interests to assert. Any of these actors can play to increasingly hawkish public opinion to operate outside the limits set down by senior leaders.
That's why, though the leadership would like to put a lid on territorial tensions, China has been making so much South China Sea news in recent weeks. Two weeks ago, the state-owned China National Offshore Oil Company (CNOOC) opened nine blocks for exploration in waters also claimed by Vietnam. Not long after, a spokesperson for China's Defense Ministry announced that the navy was conducting combat-ready patrols in the area.
In months to come, China's top leaders will do their best to strike a delicate balance-to appease belligerent voices at home and within the government while reassuring outsiders that China is not becoming more aggressive. But each time one of the neighbors makes another provocative move, Beijing's balance becomes a bit harder to maintain.
Nicholas Consonery is an analyst in Eurasia Group's Asia practice. Willis Sparks is an analyst in the firm's Global Macro practice.
HOANG DINH NAM/AFP/Getty Images
By Carlos Ramirez
At first glance, the Institutional Revolutionary Party (PRI) is the clear winner of Mexico's July 1 presidential election. But a closer look at the results reveals a more muddled picture. On the surface, the PRI certainly came out ahead: After 12 years in opposition, Mexico's once-hegemonic power reclaimed the presidency and engineered a strong congressional coalition. Also, when Enrique Pena Nieto is inaugurated on December 1, the party will have governors in place in 22 states and control of a majority of state legislatures. Meanwhile, the PRI's main rival, the currently ruling National Action Party (PAN), fielded a third-place presidential candidate, lost control of the key states of Jalisco and Morelos, and saw itself reduced to the third-largest party in the lower house of congress.
The PRI's pick-ups and the PAN's failure to retain the presidency were largely predicted in the weeks preceding the election. What came as a surprise was Pena Nieto's inability to reach the critical 42 percent threshold of total votes, which translated into a weaker performance for the PRI in the congressional races. The party failed to achieve working majorities in both chambers, and the outcome fell far short of the PRI's expectations-especially in the senate, whose members are elected every six years. So in a dramatic turn of events, Pena Nieto will assume the presidency but will have to depend on legislative support from the PAN to secure his agenda.
The electoral outcome has damaged the center-right PAN, but it does have this one lifeline. As a pivotal party in congress, it will be the only powerbroker with which the PRI will be able to negotiate structural reforms. This is the inverse result of the 2006 election, which may provide some consolation to PANistas who watched the policies of outgoing president Felipe Calderon repeatedly held up by the PRI over the past six years. This time, it is the PRI that will be tied to the PAN for the entirety of the Pena Nieto administration.
This ironic turn of events clearly was not part of the PRI's plan. Pena Nieto intended, after winning by a double-digit margin and capturing both chambers, to propose moving forward on many long-stalled reforms, to secure congressional approval with or without PAN support, and to avoid having to undermine the vested interests that make up his constituency. The goal was to demonstrate the PRI's effectiveness from the outset and achieve solid results. The Mexican public, in turn, would see 12 long years of obstructionism and stalled reforms quickly vanish. But that plan collapsed last weekend.
So why, exactly, is the outcome so bad for the PRI? From a business perspective, it seems reasonable that the PRI and the PAN would come together to enact needed reforms. According to Pena Nieto and his advisers, the PRI is pursuing the same reforms that the PAN tried (and failed) to pass during the Vicente Fox (2000-2006) and Calderon (2006-2012) administrations: fundamental changes in the areas of labor, fiscal policy, energy, and competition. The PAN has no deep-seated ideological opposition to any of these (unlike the other major party, the Democratic Revolution Party, or PRD). And it does not have strong ties to the groups with an interest in maintaining the status quo. Conventional wisdom, therefore, would say that Pena Nieto will find a way to get the PAN on board to pass the relevant legislation.
It is not that simple, however. If the PAN learns from its historic defeat, it will quickly come to terms with the fact that it now has a golden opportunity over the next six years to push for a much deeper transformation of Mexico's political and economic landscape. In particular, the PAN can offer support for the PRI's structural reforms in exchange for dismantling the vestiges of the old PRI-led corporatist coalition that survived Mexico's transition to democracy. (The PAN struggled against this coalition during its 12 years in the presidential residence.)
Accomplishing such a feat is a pretty straight-forward task, as there is no shortage of issues on which the PAN can seek concessions in exchange for supporting reforms. The list is large -- underscoring the many problems left untouched during the past dozen years-but certainly achievable. Here are some of the topics that could be up for negotiation:
There is no question that the PAN will support these structural improvements. After all, the party's only chance of returning to power relatively quickly is if Mexico breaks with its corporatist past and modernizes at a faster pace. The real question is whether Pena Nieto is serious about enacting real change-serious enough that he is willing to defy the rent-seeking coalition that backs him. If he is truly committed to advancing reforms (and is ready for the epic, vociferous resistance sure to emanate both from within his own party and from the PRD), then Pena Nieto might succeed in becoming the first president to usher in a historic transformation. In that scenario, the country will have undergone unprecedented economic reforms during his administration and will function in 2018 within a renovated institutional framework that empowers Mexicans to reach their real potential. If, however, Pena Nieto is not committed enough -- if he ends up preferring accommodation rather than transformation, and if the dead weight of the PRI's past prevails once again -- then Mexico will remain condemned to the same mediocre performance witnessed over the past decade.
The stakes for Pena Nieto are clear. Will Mexico's new president be transformational, or will he prefer to continue playing the role of a soap-opera actor? Like Mexico's famed telenovelas, the election had a surprise ending.
Carlos Ramirez is an analyst in Eurasia Group's Latin America practice.
By Daniel Kerner
Argentina is once again rattling the nerves of foreign investors. The country that has been struggling to move on after its 2001 default and checkered economic history has recently nationalized the country's largest private company, Repsol's YPF, without any signs of providing compensation. Additionally, there have been growing rumors and divergent signals that the government might "pesify" its debt obligations -- in other words, convert dollar-denominated debt into the less valuable local currency -- to contain the outflow of dollars.
Government officials have denied such rumors, knowing that debt is a very sensitive issue for its own voters. Indeed, the near-term probability of debt pesification seems low given that the government is, in part, imposing tough foreign exchange restrictions so that it has enough reserves to meet debt payments. That being said, the risk will probably increase over time. Economic dynamics will likely worsen in the next few months, and the government is likely to double down on interventionist measures even as economic distortions grow.
Argentina has experienced high rates of economic growth since 2003 (with the exception of 2009), but in a context of growing macroeconomic problems. Now, with economic growth faltering, and the central bank increasingly financing the treasury, Argentina seems to be headed toward a negative equilibrium of low growth and high inflation. But fear of following more orthodox policy prescriptions that, in the government's view, caused the last crisis (and Europe's recent troubles), may be generating the next economic crisis.
Financial investors clearly have a reason to be concerned. Argentina still has debt in default and has been tweaking official statistics in part to pay less debt. The paradox, however, is that the government is imposing trade and foreign exchange restrictions precisely to have enough dollars to meet its debt obligations. To some extent, this is because the effects and memory of the 2001 debt default are still alive. Fernandez de Kirchner's government is a product of the economic crisis, and during her presidency and that of her husband, the late Nestor Kirchner (2003-2005), the government was willing to take interventionist actions to service the debt for fear that financial troubles could cause them political troubles, even if these measures are now generating inflation and a sharp economic slowdown. In fact, the memory of the crisis can also be seen in the government's obsession with maximizing short-term growth and consumption, and in its reluctance to implement needed macroeconomic adjustments (especially if they are seen as orthodox measures).
At the center of the problems is rising inflation. Official inflation is at 9.9 percent, but the credibility of those figures has been questioned since 2007 (private estimates put inflation above 25 percent). Inflation first picked up following Argentina's 2002 devaluation and has been rising over the past few years due to expansionary fiscal and monetary policies. In contrast to most of its neighbors where independent central banks actively fight inflation, the government has been increasingly relying on the central bank to finance the treasury, and even reformed the bank's charter earlier this year to gain further support.
High inflation, and the government's reluctance to let the currency depreciate substantially, has led to a rapid increase in imports and capital flight ($21 billion in 2011), all of which have put pressure on the currency. Low investment in the energy sector, a result of low prices and interventionist policies, has led to ballooning energy imports (which increased by 113 percent in 2011). The government responded to the deterioration in the external accounts by restricting purchases of dollars, limiting imports substantially, and nationalizing the largest energy company, all measures that have aggravated the country's problems.
Argentina seems to be caught in economic limbo. It is aware that making its debt payments is of paramount importance, but is unwilling to adopt the economic policies that would make it easier to do so without causing more economic damage. Foreign investors are right to be experiencing flashbacks.
Daniel Kerner is an analyst in Eurasia Group's Latin America practice.
JUAN MABROMATA/AFP/Getty Images
By Ayham Kamel and Willis Sparks
When a Tunisian vegetable vendor's act of suicidal despair ignited fury and demands for change across the Arab world last year, the rulers of Saudi Arabia, the wealthiest and most influential of Arab states, went on high alert. Saudis have grown used to trouble across their southern border in Yemen, and when protests swelled in tiny Bahrain last spring, Saudi troops moved quickly across the 16-mile-long King Fahd Causeway to save Bahrain's ruling family from angry Shia protesters. These exceptions aside, the oil-rich Persian Gulf monarchies have so far avoided the worst of the region's unrest.
There are signs that may change. In Kuwait -- a member of OPEC and the Gulf Cooperation Council, home to 3.6 million people, and a base for thousands of U.S. troops -- a long-simmering conflict between an opposition-led parliament and the ruling Al Sabah family has reduced Kuwaiti politics to an increasingly bitter stalemate.
The government, led by Emir Sabah al-Ahmed al-Sabah, appoints the prime minister and claims the final word on policy. Reform-minded opposition leaders now say a majority of the 50 members of parliament should be able to appoint the prime minister and that appointees should answer for their performance to elected legislators. Public protests, fueled by uprisings in other Arab countries, have upped the stakes in the battle for control of policy, and in recent months, things have gotten much hotter.
In November, demonstrators stormed parliament and forced the resignation of Prime Minister Sheikh Nasser al-Mohammed al-Sabah, the emir's nephew. In December, the emir responded by dissolving parliament. In February, new elections were held and, much to the ruling family's dismay, the Islamist-led opposition won a majority of seats.
In the last few months, opposition leaders have summoned several ministers to answer corruption and mismanagement charges. While the emir did not respond by dissolving parliament, the country's constitutional court then entered the fray by annulling the results of the February elections and ordering reinstatement of the previous (less confrontational) legislature. Kuwait's cabinet resigned on Monday. The emir will probably call for new elections to avoid a confrontation with opposition groups, but public tolerance for this pattern of confrontation and reformation is now more limited.
It's unclear what happens next, but in months to come, Kuwait may be headed for the kind of trouble that its fellow oil-producing Gulf neighbors have worked hard to avoid.
The most obvious risk to Kuwait's stability could come from within the country's ruling family. By tradition, the post of emir is meant to pass back and forth between the family's Al Jaber and Al Salem branches. But with the death of the previous emir, an Al Jaber, in January 2006 following a nearly 30-year reign, a member of the Al Salem branch held the post for just nine days. The current emir, another Al Jaber, elbowed him aside. He is now 83 years old, and there is no clear plan for succession. When he dies, the Al Salems will probably become more assertive to ensure that their branch of the family is not reduced to permanent second-class status within the ruling elite. The Al Jabers will push back.
In addition, as in Saudi Arabia, some within the family worry that the current ruler has moved too quickly on reform, and there is a generation of younger royals who are already competing against one another for access, influence, and power. With every hint that a formal transfer of authority will soon begin, behind-the-scenes fighting will intensify as dozens of power players move to protect and enhance their positions. The resulting conflict could spill into the open -- and at a moment when determined opposition politicians and an increasingly restive public are ready to test their leadership.
Kuwaiti security forces can handle moderate levels of unrest. They've done it before. But an unexpected surge of demonstrations in a moment of divided leadership could provide them an unprecedented test.
That, in turn, could spook investors already worried about the impact of potential Middle East turmoil on the region's oil supplies. It could also bring higher levels of public anger into other Gulf states -- maybe even into Saudi Arabia. Kuwait is not Syria or Libya or even Egypt. It is a wealthy country unused to large-scale public unrest. But like regional heavyweights Saudi Arabia and Iran, Kuwait is an authoritarian country facing the medium-term prospect of generational change within the leadership in a volatile historical moment for the region.
That's why it will certainly bear watching in months to come.
Ayham Kamel is an analyst in Eurasia Group's Middle East and North Africa practice. Willis Sparks is an analyst in the firm's Global Macro practice.
By Samantha Grenville and John Watling
Australia's reputation for being a lucky country has certainly been polished to a high gloss over the past few years. Its buoyant economy contrasts mightily with the gloom and doom dominating the headlines in Europe and the U.S. But the country is abuzz with concerns about housing and whether or not the country is about to face the consequences of a busted bubble. The argument is vociferous but evenly matched, with partisans on both sides variously claiming imminent disaster or fevered imaginations. One thing seems certain though: the politicians are unlikely to intervene, even though in most such cases they would be falling over themselves to soothe the population's jagged nerves.
The arguments in favor of a bubble depend in large part on the meteoric rise in housing prices over the past decade and a half (by some estimates they were up about 150 percent between 2004 and the recent peak in 2010). Much of this increase was driven by higher household debt, which had many economists clucking in concern. Demand for housing has also been propped up by the soaring economy. China's gigantic appetite for the country's minerals and other primary resources has spurred strong growth in Australia's mining and allied sectors (including reports of unskilled mine workers earning six-figure salaries and attendant health and social issues), boosting the currency in the process. Other parts of the economy, such as tourism and domestic manufacturing have not been so lucky and are suffering because of the Australian dollar's surge. The recognition of the two-speed economy combined with elevated housing prices have spurred considerable popular fear among Australians that the country is on the brink.
Doomsday forecasters argue that the bursting of the housing bubble will cause the economy to implode, with the banks acting as the transmission mechanism. Collapsing home prices would destroy bank balance sheets, forcing the banks to raise capital in volatile markets, or to deleverage and withdraw credit from the real economy. That move would further depress home and other asset prices in a negative feedback loop.
So then why does Australia's government seem unwilling to intervene? Prime Minister Julia Gillard and Treasurer Wayne Swan have quietly deflected questions about housing with gentle bromides and urgings to the private sector to talk up the economy. They have likely made the wise decision, politically at least.
First, there may not be a housing bubble. Policymakers at Australia's Reserve Bank certainly seem to believe there is no danger. Reserve Bank assistant governor Guy Debelle speaking at a recent mortgage industry conference claimed he was more worried about the EU and that housing risk is not something that keeps him awake at night. Home prices have been declining steadily over the past year or so, and if that continues, household debt ratios may drop even further, freeing up the central bank to ease rates. In the meantime however, the Reserve Bank is clearly concerned that lowering rates would boost the wrong sort of confidence, encouraging still relatively indebted households to continue borrowing.
Second, there may be no need to act even if there were a dramatic decline in housing prices. Australian banks are considerably stronger than they were before the 2008/09 crisis. The IMF recently stress-tested the major banks by hypothetically invoking an Ireland-style housing bubble and bust, and found that banks would be buffeted but remain solvent. In perhaps the strongest vote of confidence in the local economy, Germany's Bundesbank -- arguably one of the world's most conservative central banks-is considering buying Australian dollars, signaling the country's emergence as a true safe haven.
Gillard may also be disinclined to tackle the issue lest it add to her burdens. Authorities are already facing a tough battle over the incoming carbon tax, which opposition Liberal Party leader Tony Abbot has used as a cudgel against the incumbent Labor Party government. Any misstep on housing would have the unfortunate side effect of giving Abbot another target.
All of these considerations argue in favor of a gentle hand on the tiller and against dramatic action until it may be absolutely necessary.
Samantha Grenville is an associate with Eurasia Group's Comparative Analytics practice, John Watling is a senior editor with Eurasia Group.
Ian Waldie/Getty Images
By Carroll Colley
While Russia will enter the WTO in late August, U.S. industry will be left on the sidelines until Congress removes the Cold War-era impediment to greater trade between the former foes. But it's a safe bet that Congress won't graduate Russia from the Jackson-Vanik amendment, which is necessary to grant permanent normal trade relations to Russia and take advantage of its accession to the WTO, before the November election. The reason? Russia is perpetually steeped in controversy, and U.S.-Russia relations have become a campaign issue in the race between Republican Mitt Romney and President Barack Obama. U.S. industry likely won't be able to take advantage of greater market access in Russia until the lame-duck session at the end of the year, and possibly later.
The White House is much more focused on November 6 (Election Day) than August 23 (the approximate date of Russia's WTO entry). Only after repeated requests from Republican lawmakers for senior level officials to testify on the Hill -- widely viewed as a Republican maneuver to force the administration to speak on the record about its Russian policy -- did the administration relent by sending the duo of Deputy Secretary of State William Burns and U.S. Trade Representative Ron Kirk to testify before the House Ways and Means Committee and the Senate Finance Committee. The White House calculates that a "yes" vote on graduating Russia from Jackson-Vanik (a 1974 provision that ties trade relations to freedom of emigration and other human rights considerations) would have little electoral upside, and might even harm Obama before the election.
Obama's meeting on June 18 with President Vladimir Putin on the margins of the G20 in Los Cabos seemingly failed to produce a breakthrough on Syrian policy. Headlines about ongoing arms shipments bound for Syria and the potential for continued Russian intransigence at the U.N. Security Council also represent potential political liabilities during the election home stretch, not to mention a host of domestic political issues. Romney, meanwhile, has called Russia the U.S.'s greatest political "enemy" -- and later changing that description to "foe" -- because he senses a potential weakness in an Obama foreign policy that has otherwise produced several notable successes.
It would be much simpler, politically, if supporters of graduating Russia from Jackson-Vanik could cast it as a vote for American business, as Secretary of State Hillary Clinton did in a recent opinion piece. But they can't. Passage is complicated by the Magnitsky bill, human rights legislation that targets government officials involved in the case of Sergei Magnitsky, a Russian lawyer who died in police custody in 2009. Largely viewed as a replacement for Jackson-Vanik, the stated aim of the bill is to deny visas to corrupt officials, freeze any U.S. accounts they have, and publish their names. The reality is that the Obama administration last summer instituted its own visa ban and any potential offenders have long ago transferred any funds from the U.S.. The net effect of the bill, therefore, is the "naming of names," which would represent a significant embarrassment to the Putin regime. The bill enjoys broad bipartisan support, with a number of lawmakers stating publicly that passage of the Magnitsky bill is a prerequisite for their vote on Jackson-Vanik.
The Obama administration has sent contradictory messages about its support for the Magnitsky bill. While originally opposing the bill, the administration seems to have accepted the inevitable and has been working with its primary author, Democratic Sen. Ben Cardin of Maryland. One recent Senate version provides for the public list as well as a confidential annex, which would largely allow the administration to circumvent the thrust of the bill by invoking national security exemptions. This is strongly opposed by a number of senior lawmakers, including Sen. John McCain, who was a co-sponsor of the effort to repeal Jackson-Vanik on the caveat of corresponding passage of the Magnitsky bill.
As the August recess rapidly approaches, the window for graduating Russia from Jackson-Vanik prior to its WTO accession closes. Obama appears to have little room to maneuver in expending political capital on the matter without raising the risk of elevating Russia-and its collateral baggage including Syria, Georgia, Iran, and domestic protests-to a legitimate campaign issue. Unless Congress moves forward on its own prerogative-which appears unlikely-the repeal of Jackson-Vanik won't get passed before November, or later, leaving the world's largest economy unable to take advantage of the accession of the WTO's newest member.
Carroll Colley is the director of Eurasia Group’s Eurasia practice.
By Crispin Hawes
The death of Saudi Arabia's Crown Prince Nayef bin Abd al-Aziz, though unsurprising, highlights the risk of policy stagnation, an issue of some significance for the Kingdom given its domestic challenges.
As expected Nayef's full brother and appointed successor, Minister of Defense and Aviation Salman bin Abd al-Aziz, has been anointed as Crown Prince. But the current generation of princes-the sons of the kingdom's founder, Abd al-Aziz Ibn Saud-is facing the end of its period in power, which has lasted since their father's death in 1952. There are a few potential candidates to succeed Salman, but the most obvious choices are the Deputy Interior Minister Ahmed (a full brother of Salman and Nayef), Muqrin, a longtime ally of King Abdullah and the General Director of the Saudi Intelligence Agency, and Sattam, Governor of Riyadh.
In broader policy terms, the government will delay any potentially controversial legislation or regulatory reforms. Moreover, there are unlikely to be any significant external or internal policy changes in the coming months. The Saudi regime will want to consolidate power and send a strong message (to both supporters and enemies) that stability will be maintained.
The longer-term danger is that more frequent changes to the succession driven by the age of the current princes will make policy stagnation more likely, creating significant political and economic risk. The Saudi Arabian economy faces considerable challenges and social discontent over economic issues, such as growing unemployment. The current response relies on spending to drive growth and legislative changes aimed at forcing employers to hire more Saudi nationals. These policies are unlikely to address the Saudi economy's significant issues. And as age claims more of the princes in coming years, the likelihood of successive policy freezes makes the adoption of more effective policies even less likely. That outcome would likely open the door to growing social tension and stresses in Saudi Arabia, a regional lynchpin and a vital source of energy for the global economy.
Crispin Hawes is the director of Eurasia Group's Middle East practice.
HASSAN AMMAR/AFP/Getty Images
By Willis Sparks
A few days ago, Google introduced a tool that warns its users inside China about the hundreds of sensitive words and phrases that can produce an error message or even freeze the site, at least for a moment. China Digital Times (CDT) has since compiled a list of the most interesting (sometimes surprising) search terms. Taken together, they offer a glimpse of the wide range of things that China's Internet monitors don't want Chinese citizens reading and talking about. Translations are provided by CDT.
All the terms you see below in bold are apparently considered sensitive subjects.
Why are Chinese authorities worried about truth, benevolence, and forbearance? Because these words are associated with the outlawed spiritual movement Falun Gong. Watch out for the phrase snow lion; it's a reference to the flag of Tibet. Not surprisingly, searches for Taiwan Political Talk, Xinjiang + independence, and the Tibetan government-in-exile produce similar reactions. References to dissidents like Chen Guangcheng and Ai Weiwei can get you bounced. So can entering the words Liu Xiaobo or the Nobel Peace Prize he won in 2010. In fact, you might want to avoid the word dissident.
Nor do China's Internet monitors want citizens thinking about Chinese people eating babies or baby soup. That goes double for pornography, Playboy, and boobs.
Other words and phrases are dangerously suggestive for different reasons. The expression blood house, which refers to forced evictions, is a problem. Perhaps that's because it can encourage curiosity about assembly, a student strike and a people's movement. As these kinds of events take on a life of their own, it can lead young people to explore the so-called three leaves -- leave the Party, leave the Youth League, leave the Young Pioneers -- the 21st century Chinese equivalent of turning on, tuning in, and dropping out. It can also lead students into the public square, trigger a rebellion, a coup d'état or even a revolution. These kinds of things can provoke martial law.
It has happened before, though you won't learn much about that simply by searching for Tiananmen, tankman, block tank, or by entering 89 + student movement, Beijing + something happened, or what happened to Beijing. Lately, these sorts of spontaneous insurrections have been popping up in places like Egypt and Tunisia, stoking fears in Beijing of Jasmine + revolution, a Beijing spring or a China spring.
Insurrections aside, mere political embarrassments ring alarms, as well. Searches for Governor Bo Xilai or Chongqing, the province he governed before scandal charges brought him down, make the list -- as does Heywood, the family name of the British businessman his wife is suspected of having murdered. Add Chen Jian, victim of an earthquake who gave a live interview before dying beneath the wreckage and Zengcheng, a city in Guangzhou with the misfortune to have hosted a riot among migrant workers last summer.
Then there is Twitter and Facebook. Expect problems if you hunt for Wikileaks + China. China Digital Times is on the list along with traditional foreign troublemakers like Voice of America and Radio Free Asia. Expect glitches if you investigate the country's great firewall, the web brigade of Internet censors who help hold it in place, and freegate, dynapass or ultrasurf, tools for those who want to climb over the wall.
It's a bit more surprising that searches for Mao, Deng Xiaoping and Jiang Zemin raise red flags. Even the names of today's leaders (Wen Jiabao and Hu Jintao) and tomorrow's (Xi Jinping and Li Keqiang) can create a disruption. Same for searches of the nine elders who operate behind the scenes in the Politburo Standing Committee. Simply entering Chinese Communist Party can create a problem, to say nothing of its less flattering nicknames the Common Disabled Party, Common Tragic Party, or the more colorful red bandits.
It's clear that Chinese authorities don't want citizens reading Mein Kampf. It's less clear why they appear to frown on the Coen Brother's film Burn After Reading. It's easier to understand sensitivity about the phrase best actor when you learn that's it a derisive nickname for Premier Wen Jiabao. But one mustn't get too curious about another of his popular nicknames: teletubbies.
Taken together, these and hundreds more words and phrases demonstrate just how hard it is to "manage" communications in a country of 1.4 billion people, more than half of whom have already found their way online.
Unfortunately for all concerned, this list of words and phrases is only getting longer.
Willis Sparks is an analyst in Eurasia Group's Global Macro practice.
China Photos/Getty Images
The Call, from Ian Bremmer, uses cutting-edge political science to predict the political future -- and how it will shape the global economy.