How Chinese Veterans Could Derail President Xi’s Plans

Disgruntled veterans could derail President Xi Jinping’s plan to strengthen China’s military.

On April 16 the Chinese government opened the first-ever Ministry of Veterans Affairs to administer the benefits of 57 million former members of the People’s Liberation Army (PLA). But after decades of neglect, this latest move could be too little too late.

Much to the Communist Party’s chagrin, the Ministry of Veterans Affairs was created in response to a series of large protests by Chinese veterans demanding the healthcare, pensions, and jobs they had been promised.

Over the past several years, veterans have staged over 50 demonstrations including two large protests that saw hundreds gather in their uniforms, singing army songs, and waving banners in the nation’s capital.

“We’ve gotten nothing since retiring from service: no pensions, no social security,” said one protestor at the October 2016 rally where more than a thousand veterans gathered. He refused to give his name, but said he was a former army driver who served for 14 years and after retiring two decades ago had been forced to work odd jobs to survive.

Most protesters seem to have been between 40 and 60 years old. Many of the older protesters had fought in the bloody 1979 Sino-Vietnamese War or the Korean War.

Fearful of any widespread organized dissent, Chinese authorities have swiftly cracked down, censoring media mentions and beating and arresting protesting veterans. 

The unrest comes at a sensitive time for Xi, who is also the chairman of the powerful Central Military Commission, as he seeks to strengthen his grip over the military while also modernizing it by attracting highly qualified and motivated soldiers.

Thousands of protesting veterans sends an adverse message to existing and potential recruits, and the Chinese government has moved quickly to assuage concerns.

At the 19th Party Congress in October, Xi announced plans for the creation of an agency similar to the United States Department of Veteran Affairs to better care for China’s veterans.

“We will protect the legitimate rights and interests of military personnel and their families, and make being a serviceman a respected profession in our country,” Xi said.

The announcement is in keeping with Xi’s goal of modernizing the PLA by 2035 and to become a top-tier military by 2050.

Despite Xi’s promises, veterans remain skeptical.

“We’ve been disappointed by our government so many times … our experience tells us to keep watching and see whether the promise will be turned into a real policy,” said Sun Xingan, a 61-year-old combat veteran of the 1979 war with Vietnam, in reaction to the announcement of a new ministry in October.

Following decades of broken promises and bureaucratic logjams, veterans like Sun are rightly wary, and a new ministry will have to overcome several major obstacles to provide veterans with better care.

When the Communist Party took control in 1949, they did not establish an agency to administer pensions and other benefits for veterans of the world’s largest army. Instead, authorities have relied on non-legally binding orders to local governments to provide pensions, medical care, and other basic benefits to former service members.

But local provinces are buried in debt of $2.5 trillion, and care varies widely with some provinces unable to address basic needs for residents, let alone veterans. Rural areas in particular are struggling to provide adequate healthcare and education. Meanwhile, an analysis by the Chinese Academy of Sciences shows the pension fund surplus will turn into a deficit by 2023 and grow to $118 trillion by 2050.

Further complicating matters, the Communist Party implemented a series of reforms in the 1980s that have left veterans in limbo. Starting under Deng Xiaoping, the military began drastically cutting personnel from a high of over 4 million in the early 1980s to under 2.4 million in 2015.

In lieu of benefits, many of these former PLA members were offered jobs at state-run enterprises, but the 1980s also saw major market reforms that led to severe cutbacks to the state-owned industrial sector.

Through the 1990s and the 2000s, over 40 million employees were laid off as factories privatized, introduced labor-saving machinery, or went bankrupt. As a result, many veterans lost their jobs and their benefits, and were forced to compete in a tight labor market. This has proven particularly difficult for older and less-skilled veterans.

The new veterans’ ministry has been tasked with establishing a centralized system and policies to handle pensions, retirement benefits, and other needs including helping former military personnel find jobs, which could be quite a challenge.

In 2015, Xi announced an additional cut of 300,000 troops in the coming years. So the new agency will not only have to find jobs for the tens of thousands veterans already unemployed, but also an additional 300,000 newly discharged troops who will all be competing with the 7.5 million college students graduating each year.

With the economy slowing and the job market tightening, it is unclear if the economy can absorb so many individuals seeking work.

It also remains unclear who will pay for veterans’ benefits. Local governments receive a little more than half of national tax revenue, yet cover 80 percent of public spending. And cash-strapped local authorities have been seeking to reduce their mountains of debt. 

Neil Diamant, a law professor at Dickinson College who has followed the veterans’ protests in China, explained that the central government has consistently underfunded veterans programs administered by local authorities.

“This results in widespread efforts to limit expenditures at the local level,” Diamant said. “The more veterans there are at any point in time, the more difficult this becomes.”

Caring for veterans is no easy task. Even with an annual budget of $200 billion and a staff of 280,000, the U.S. Department of Veterans Affairs struggles with its enormous mission. It remains to be seen how much authority and resources China’s central government will allocate to its new veterans agency as it navigates a complex environment.

Speaking in 2016, Diamant was skeptical of the future.

“My guess is that [authorities] just wait [veterans] out, hoping that age will eventually prevent many from becoming overly feisty.”

But the stakes are high for Xi. The PLA has long been a key pillar of the Communist Party’s power and the lingering resentment of millions of veterans could prove to be a significant impediment to Xi’s plans to maintain his hold over the party and military.