ARTICLE: “China Covers Up Violent Suppression of Village Protest,” by Howard W. French, New York Times, 27 June 2006, p. A3.

ARTICLE: “Rioting in China Over Label on College Diplomas,” by Joseph Kahn, New York Times, 22 June 2006, p. A1.

Caboose braking comes in many forms in China. In my vernacular, the “caboose” of the globalization train for any country tends to be the rural poor. It’s their ability to handle the whirlwind of rapid globalization that determines any country’s speed in that process. The train’s engine (usually industrialized, well-connected coastal areas) cannot travel any faster than the caboose.

Well, China’s caboose is getting awfully cranky, across the dial. China’s choices here are stark: slow down globalization and risk even further unrest due to slower growth, or make the tough political choices that deal with that despair at its source (like introducing private land ownership to the countryside like it exists in the cities) or give that despair more political voice in the system (more local self-representation and self-rule and more conduits for dialogue with the center).

Right now, if you’re a peasant in China and you’re pissed off, you basically have three choices: live with the pain, leave the pain (illegal economic immigration) or riot to get some action from the powers that be--ever so far away.

This is not an efficient system for China, which is moving a big chunk of its population along to something better--or so some students at a regional university thought when they paid high tuition rates on the premise of receiving a degree with the parent university’s name on the diploma. When those diplomas were handed out and the right seal of approval was not affixed, what did the students do? They rioted too.

One thing when peasants riots in China. That’s to be expected, like the summer dust storms in Beijing. But students at universities? Over a diploma? That shows you that expectations are rising across the dial in China, meaning more voices demanding to be heard when thing don’t go according to the plan--or the market’s expectations.

Many will interpret these examples of unrest as marking the beginning of the end of the Chinese economic miracle, when in reality they mark the end of its beginning. The easy stuff has been done. Now we get to the hard part, where ceilings are increasingly determined by the government’s willingness to trust its own markets and its own people more. Deals are being made and deals are being broken. As long as the volume of the former outpaces that of the latter, this train keeps on rolling.

Losers are hard to manage, politically speaking, but winners even more so.