China's Durable Inequality: Legacies of Revolution & Pitfalls of Reform

A talk by Mark Selden

Since the early 1980s, China has been hailed as the poster child of post-socialist transition, shifting its revolutionary course via a reform that has generated the world’s most dynamic growth in GNP and trade over a quarter of a century and elevated it to the forefront of nations attracting foreign investment. Often eclipsed in this glowing picture are enduring, indeed exacerbated, structures of inequality and the vibrant forms of popular resistance these have spawned. Equally forgotten are structures of inequalities of the revolutionary era, including both persisting historical legacies and new forms of inequality structured by the priorities of the party state.

Mark Selden, in a talk on January 29 sponsored by the Center for Chinese Studies, offered a framework both for assessing structures of Chinese inequality in successive epochs of revolution and reform and for gauging the changing relationship between social movements and structures of inequality. Three key questions drive his analysis: What are the legacies of the Chinese Revolution for the pursuit of social equality? How has reform restructured patterns of inequality? What is the relationship between the social upheavals that took place during both periods and changing patterns of inequality?

Despite continuing, and in some respects exacerbated, inequality, Selden is optimistic that China can move toward a society that values citizenship rights and in that respect at least will be "more equal" or at least "less unequal."

Inequality in the Past

Selden began by describing China before the 1949 Revolution, and before Land Reform (which began in some places in North China before 1949), as a society characterized by inequality based on class.

The Land Reform, and the building of socialism in the cities, in effect demolished the class system of the ancien regime. However, it also in effect replaced the old structure of inequality with a new one, based not on class but on political power (which divided society into Communist Party cadres on the one hand and everyone else on the other) and on place of residence. While the vast majority of Communist Party cadres were not wealthier than "the people," they enjoyed the status, prestige and other perquisites that came with the party’s monopoly of political power.

The basis of the Maoist strategy of economic development, like strategies followed in many other countries, was the squeezing of the agricultural sector: in other words, the movement of capital from agriculture to industry, or, in social and spatial terms, the movement of capital from the countryside to the city. In China, this transfer of capital was accomplished mainly by the more-or-less conventional means of heavily taxing the agricultural sector and of enforced sales of grain to the state at artificially low prices. In the Maoist strategy this was linked with a rigid system of residential segregation (the hukou system), which effectively kept the peasants in the countryside and made migration to the cities virtually impossible.

In addition, urban residents were the beneficiaries of a wide variety of state welfare: job security, subsidized (albeit rationed) food and fabric, free education and healthcare, and so on: the notorious "iron rice bowl." Rural residents, on the other hand, were left to pull themselves up by their own bootstraps. The state invested little in the rural sector (on balance, it extracted far, far more than it invested). Whatever investment was to be made in the countryside, for the most part was to come from whatever the villages managed to save. Peasants in comparatively affluent areas hence lived a relatively better life--more and better food, superior education and healthcare, etc.--than peasants in poorer areas. In any case, the system privileged urban residents.

In short, the revolution spawned a structure of (1) inequality between cadres and everyone else, (2) equality among urban residents, (3) inequality between urban residents and rural residents, (4) equality among peasants in the same village, and (5) inequality between peasants in different areas or regions.

Inequality in the Present

The Chinese Communist Party, which in the Maoist era championed mobilizational politics, has since the 1970s endeavored to preserve its monopoly on political power through an emphasis on political stability, while prioritizing rapid economic growth.

By the early 1970s, Selden argued, China’s top leadership became convinced that economic development required reviving the rural economy and improving the standard of living of the peasants (80 percent of China's population), as well as boosting China’s long stagnant exports. From 1970, simultaneous with the U.S.-China opening, China’s imports and exports began their spectacular growth, spurred in part by promotion of rural collective industry. "By the early 1980s, the state had relaxed controls on the household sector, substantially boosted state purchasing prices for agricultural commodities, expanded the scope of rural markets, reduced taxes and compulsory grain and crop sales to the state, allowed private plots to expand from 5 percent to 15 percent of cultivated land, and increased incentives through new compensation systems." The result was a rapid growth of agricultural output and, in most places in the countryside, a marked growth in personal income.

Through the 1990s, however, peasants in the predominately agricultural provinces in the central and western regions face "a staggering burden . . . as a result of the imposition of arbitrary fees and levies." By 2004, the agricultural tax was abolished, and the impositionof  arbitrary fees was made illegal. "The biggest gain for many villagers as a result of three decades of reform is arguably the expansion of their citizenship rights, especially civil and political rights, in the form of increased freedom to seek waged employment or engage in market activities in cities." Selden noted, however, that "the expansion in civil and political rights has been spatially uneven and complicated by market forces. Social rights and entitlements have seen a secular decline in both cities and villages, as both the urban and rural welfare regimes have been seriously undermined by medical and pension reforms."

The privatization of state owned enterprises (SOEs), Selden argued, "has been devastating for laid off workers, hitting middle-aged women workers particularly hard. Not only did workers experience the abrupt shattering of a compact with the state that had rested on the bedrock of lifetime employment, but unemployment has also frequently meant the permanent loss of welfare entitlements built up over a lifetime of labor. Even though the government has initiated a contribution-based new safety net, the system is ineffectively and unevenly implemented and many workers remain outside in the cold. The most vulnerable workers in old industrial regions are least likely to obtain benefits. By 2002, a new class of urban poor had emerged, estimated to be about 15-31 million, or 4-8 percent of the urban population." But such figures barely begin to capture the impact of the pattern of layoffs, at a time of continued influx of rural migrants, for the entire urban population and urban life.

At the same time, despite the easing of restrictions on migration for China's rural villagers, after three decades of reform the villagers retain a "second-class status." Under the hukou household registration system, which remains in effect, migration to cities from the countryside is still technically illegal (or, at best, its legality is unclear)  but now (unlike in the heyday of socialism) migration is practically possible. Burgeoning industry in the cities is hungry for labor, and peasants are hungry for work. The result is that China’s "floating population" of rural migrants who temporarily work in the cities has grown to around 120 to 150 million. "While significant numbers of rural workers have made income gains in the coastal and urban industry . . .  the structures of inequality, particularly the state-structured inequality through the hukou system, is one of the factors that holds the [rural-urban bifurcation] in place," said Selden.

Migration to the city "opens up the hope and possibility for rural people that they can share in some of the particular gains that urban people have taken advantage of," said Selden. On the other hand, the hukou system also makes possible various forms of the exploitation (a word Selden did not use) of migrant laborers. For instance, villagers can still be kicked out of the cities or find their children refused admittance to public schools. In fact, often when migrant laborers themselves open schools for their children, the authorities close them down. And stories abound of employers not paying migrant laborers, who have little recourse.

In the meantime, as citizenship rights continue to evolve, Selden said the necessity of earning income for the family will drive villagers to the cities. "The [rural families] on the edge are the ones without someone slaving in the cities, earning meager cash earnings. . . .  The family is the crucial unit in terms of rural poverty."

China’s workers and peasants have not been passive in the face of these new forms of exploitation. Selden pointed to the countless instances of so-called peasant riots as evidence of resistance. In the cities, "in contrast to the large-scale horizontal bonds formed by workers, students and villagers during the Cultural Revolution," Selden continued, "the mode of organization in contemporary labor protests is one of ‘cellular mobilization.’ Most urban protests are based on single work units or subgroups within those units, and rarely achieve lateral organization across factories, industries, neighborhoods, cities or beyond. In a few exceptional instances workers veered away from cellular mobilization, displaying a capacity for broader class-based activism. Yet, as soon as arrests of worker representatives from one factory occurred, popular support quickly collapsed. And once the government began conceding to some workers’ economic demands, even the momentum for work-unit based action has frequently been undermined. Above all, once mobilization extends beyond a single community or enterprise, the state steps in quickly to crush the movement."

and Inequality in the Future?

Income inequality continues to grow in China. In fact, by most measures it has reached alarming proportions. Today China’s gini coefficient is probably over 0.50. This compares with rates of between 0.24 and 0.36 enjoyed by most developed European nations, a bit above 0.30 for Japan, 0.325 or so for Taiwan, and above 0.4 for the United States.

Perhaps related to issue of inequality of income and wealth is the issue of inequality of rights and power. "The rhetoric of resistance," Selden argued, "has tended to shift from a revolutionary language of class and class struggle to a liberal, contractual paradigm of legal rights and citizenship. This mirrors the Communist Party’s own shift from a rhetoric and mobilizational praxis pivoting on class analysis and antagonistic contradictions, to a language of strata directed toward integrating the new business elite into the party and shifting popular protest from the streets into the courts. A striking parallel in the evolving dynamic of rural and urban unrest may sow the seeds of significant change: attempts to take advantage of openings associated with legal reform in the context of political authoritarianism. The extreme imbalance of power between officialdom and the populace, however, constitutes a formidable barrier to the realization of liberal legal rights in both the countryside and the city. The contradiction between an authoritarian legal system and an ideology of rule of law could lead to radicalization and convergence of popular movements in a society notable for rampant and growing spatial and class inequalities."

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Mark Selden (PhD, History, Yale, 1967)  is a coordinator of Japan Focus, an electronic journal and archive on Japan and the Asia-Pacific at http://japanfocus.org. A Senior Fellow, East Asia Program, Cornell University, his research centers on modern and contemporary China and Japan and Asia, war and peace, the political economy of development, social movements, revolutionary change, regional formation, agrarian studies, and historical memory. He is the editor of book series at Rowman and Littlefield, Routledge, and M.E. Sharpe publishers. Among his publications are The Yenan Way in Revolutionary China (Harvard, 1971), Remaking Asia: Essays on the American Uses of Power (Pantheon, 1974), The Political Economy of Chinese Socialism (M.E. Sharpe, 1988; Chinese edition 1990); The Political Economy of Chinese Development (M.E. Sharpe, 1993); China in Revolution: The Yenan Way Revisited (M.E. Sharpe, 1995; Chinese edition 2002); and Revolution, Resistance, and Reform in Village China (coauthored with Edward Friedman and Paul Pickowicz; Yale 2005).

 

 

Published: Friday, February 15, 2008

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