The Chinese government feared a worker's rebellion more than they feared a student movement, basically because the party had come to power decades earlier because of a worker's movement. Once everyday citizens and workers became involved in the Tiananmen Square events, the government began to fear for their own power and cracked down on the protesters. The Tiananmen Square events forced the Chinese government to address (or appear to address) some of the issues important to the protesters. In order to do this, the government had to offer either economic reform or political reform. They would never reform politically so the only real option was economic reform: free-market capitalism.
This refom led to a huge rift opening between the wealthy and the workers. There are now two Chinas: the metropolitan, modern cities and the underdeveloped rural areas. The modern cities have benefitted from the economic reforms while the rural farming areas- which cover a majority of China- have slipped farther away from modernity. People from the rural areas move to the cities to work for the factories and get paid (if they get paid) the most minimal wages possible and then are forced to leave the cities before they can even benifit form the modernity of the cities. All of this migrant worker population is sinking farther and farther away from the wealth, prosperity, and growth that the factory owners and other wealthy people are experiencing. This split is causing increasing social unrest that the government doesn't know how to handle. This problem runs deeper than the government cares to acknowledge and this social unrest can only get worse before any solution will be attempted.
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