Francis Fukuyama at the LA Times points out a very interesting dilemma for the Chinese government. While there is a substantial amount of repression involving the Communist government on Tibetans, other minority groups and religious organizations, there is another source of coercion not often reported; the local government oligarchs that oppress the local citizens.
"The vast majority of abuses against the rights of ordinary Chinese citizens -- peasants who have their land taken away without just compensation, workers forced to labor under sweatshop conditions or villagers poisoned by illegal dumping of pollutants -- occur at a level far below that of the government in Beijing.
China's peculiar road toward modernization after 1978 was powered by "township and village enterprises" -- local government bodies given the freedom to establish businesses and enter into the emerging market economy. These entities were enormously successful, and many have become extraordinarily rich and powerful. In cahoots with private developers and companies, it is they that are producing conditions resembling the satanic mills of early industrial England.
The central government, by all accounts, would like to crack down on these local government bodies but is unable to do so. It both lacks the capacity to do this and depends on local governments and the private sector to produce jobs and revenue.
The Chinese Communist Party understands that it is riding a tiger. Each year, there are several thousand violent incidents of social protest, each one contained and suppressed by state authorities, who nevertheless cannot seem to get at the underlying source of the unrest."
In this case, much like medieval Poland, the central government is simply too unorganized, weak and dependent on these local officials to protect its people from the depravations of their local bureaucrats. Another example might be the Post-Reconstruction American South, where racial segragation and local Jim Crow laws oppressed the lives of Black Americans. Many of these local protests involve local peasants complaining of horrible workinf conditions and widespread pollution, particularly of water resources. While the central government has taken some steps to reign in local officials, it's like bailing water from a sinking ship. Of course, this doesn't by any means excuse the central government's oppression of Tibetans, Chinese Christians or members of Fulon Gong.