Social struggles in the Chinese modernization process

Western newspapers are full of articles on China. They show their fascination for China's immense economic growth, the big investments, cheap labor... and present China as a threat to the Western World because of cheap labor, environmental hazards and China's stance in the Taiwan question. On and off there is also an article on the growing social instability, workers' struggles against the non-payment of wages, the working conditions, corruption... and peasant revolts against land-confiscation etc. This article gives some explanations why China is far from stable and why we might see further social explosions there.

China in Revolt
One of the most serious problems in China is still the peasant question. In just about 20 years rapid urbanization has reduced the agrarian population by 20 percent, but 60 percent of Chinese still live on the country-side. In other words: Nearly one third of the world's villagers are Chinese! The peasants though are less and less able to make a living in agriculture. That is why nearly all young women and men from outlying provinces migrate to cities to work and just return home for the Spring Festival, the Chinese New Year. The British historian Hobsbawn called the proletarianization of millions and millions of Chinese peasants in just a decade the greatest transformation of class relations since the New Stone Age. The number of migrant workers is estimated between 100 to 200 million.

Precarious stability and its limits
That the rule of the Chinese Communist Party (CCP) so far has not collapsed has to do with the still relatively egalitarian agrarian system, a "peasant socialism" unique in the world. The village administration allocates about 1 Mu (one 15th of a hector) of land to every Chinese peasant who has right of use. The state maintains ownership, though. This piece of land is the "life insurance" against hunger. Nearly all peasants who work in the city as day laborers leave the old people and children at home to till the fields.

This egalitarian agrarian system is the product of the 1980s' reform policies. The peasants paved the way for and benefited from these policies. After 1978 they spontaneously dissolved the people's communes, above all in the poor regions of provinces like Henan and Anhui, and allocated the state-owned land to the families. It took four years, until 1982, before the reform wing of the party around Deng Xiaoping adapted these policies. In 1978 he had still called the measures "anti-socialist." The party later legalized the family economy on state-owned ground and released the peasants from forced selling of grain to the state for extremely low prices. After the successful agrarian reforms the CCP expanded the market economy step by step to other areas of society.

Because of population growth, the high tax burden and today's low market prices for grains, "peasant socialism" reached its limits. Chinese media and social scientists constantly address the issue of the "burden of the peasants." In the last few years the Chinese government has come up with more than thirty resolutions to lower this burden and stop arbitrary imposition of fines - so far without success. China does not have a modern tax system the state could use for making financial adjustments between the booming east coast and the poor provinces on the Yellow River and in the west. The burden of the peasants is growing every year because after the extreme decentralization the village bureaucracy and the schools are forced to find their own financial resources. So the administration of a poor village often cannot do anything else but ask the peasants to pay for all the cadres' and teachers' wages. And due to "nepotism" the bureaucracy has immensely expanded in spite of the reduction of state's role.

Who wins the peasants, wins China
Local peasant unrest is mostly sparked by land issues. Cadres confiscate land for dams or industrial projects that the state had given to peasants with a 30 year lease. The law says that peasants should get compensation but that often does not happen. Then the peasants rebel against this "land robbery."

The new Chinese government under Hu Jintao and Wen Jiabao understands the explosiveness of the problem. Mao's sentence, "who wins the peasants, wins China" is often quoted. Plenty of literature on the problems of peasants, villages and agriculture show this attention. Now the government has cut the agrarian tax, taking the weight off peasants' back. Whether this cut will reduce the burden is questionable because the village administrations often have no other choice then to rely on other levies. At its last Congress, the CCP announced that the peasants' rights of use would be better protected.

The central government in Beijing does not want a general change of policies, like allocating more state's resources to the countryside. Two examples: The percentage of public spending going into health and education is far lower than during the 1980s, a policy mostly affecting peasants. In 2003 only ten percent had health insurance (in the cities 19.5 percent). After the collapse of the collective health system following the dissolution of the peoples' communes and the subsequent decentralization, becoming sick is a high risk for poverty and this also leads to the rise of miracle healers and "sects" promising cures to ill people. Furthermore, despite laws guaranteeing nine years of mandatory schooling without any fees, in the villages the number of school dropouts is rising because without "illegal" school fees the teachers' wages cannot be paid.

Social apartheid in China's streets
Outside their villages peasants face not only social disadvantages but also state discrimination - a heritage from Mao Zedong's model of socialism. For over twenty years, from 1961 to the mid-1980s, the CP prevented any urbanization of the society. The party tied the peasants to their parcels of land and the workers to factories through the registration-system (hukou). Between 1949 and 1978 the ratio between city and countryside and between workers and peasants barely shifted. With the development of the market and the virtual loosening of the hukou-system in the 1990s, the separation between urban and rural society has shrunk dramatically. Some discrimination remains, though: Those registered under the peasant-hukou or that of another city, cannot in Beijing, for instance, settle for a long time, their children cannot attend kindergarden or school, and they will find it impossible to work in a state-owned enterprise with social benefits. A peasant's child from the province Henan or Shanxi has to get better test results at the universities' entrance examination than a child from Beijing, and will in the end go to a lesser university. Many city-dwellers, including workers in state-owned enterprises, are against the abolition of the hukou because they fear competition from the villagers and a rise in crime. But despite the hukou-system, the cities are growing rapidly. In Beijing and Shanghai there are millions of unregistered people.

The migrant workers mostly accept worse working conditions and the discrimination because they can earn much more in the cities than in the countryside. Their families at home live on the money they transfer there. Since most of the migrant workers have no working contract they are often victims of fraud.

State workers face bankruptcy
The core work force in state industry is the main loser in the ongoing economic boom. For a long time the Party spared them. Unlike the "shock therapy" in Russia, in China privatization of the state enterprises was carried out slowly. Credit from state banks prevented rapid bankruptcy of unprofitable state enterprises. The modernization of the Chinese banking system is supposed to change that practice. Then, millions of state workers will be faced with ruin after getting sacked. Already in 2002 urban unemployment was estimated between seven and twenty percent. The sacked state workers cannot compete with the migrant workers and are not qualified for better jobs in private companies.

The state workers, kind of "mobilized for service" by the state, enjoyed a range of privileges in China. Unlike intellectuals and party cadres they were rarely victims of the "Cultural Revolution's" campaigns (1966-1977). And in contrast to the vast majority of Chinese, the peasants, merchants and contract workers, state workers claimed accident and pension insurance, got cheap housing and reserved placement for their children in kindergarten. Since China lacks centralized public social benefits, state workers received them through their workplace. With privatization these privileges were abolished or are threatened.

Hence, in older heavy industry centers like Manchuria, Sichuan or Henan mass protests have already taken place against unemployment and the selling-off of the state enterprise's pension and welfare-funds. Since the media is forbidden from covering the events, the extent and content of workers' unrest and strikes is unknown. The Ministry of Public Security states that the number of collective protests, including strikes, has risen from 8.700 (1993) to 32.000 (1999). It is striking, that so far links haven't been made between the state workers' protests the state workers and those of migrant workers. They are still poles apart. Most observers believe that the majority of strikes have a local character, originating in single work units. The workers rarely turn against the political system as such. They demand continued employment, payment of pensions or dismissal of corrupt managers or cadres. They repeatedly refer to the high ideological status of the proletariat in the past. "Haven't you told us for 50 years that we are the vanguard of society?", is the striking state workers' reply to the Party.

The state reacts to the protests with "the carrot and the stick". The alleged ringleaders get arrested and can be sent to prison for years on charges of "breach of the peace." After 1989 the People's Armed Police was trained and equipped as a special anti-riot force. However, at the same time the affected regions got financial aid. The state-controlled union often tries to mediate between the state and the workers. In order to strengthen state control "neighborhood" organizations (shequ) are formed. One of their tasks is to pay its members a small social welfare stipend, only to those with the right hukou, of course. That is supposed to solve social problems locally. Chinese labor-NGOs also try to stand up for the workers by means of the legal system.

Afraid of "chaos"
Thanks to development in China today only one out of five people - and not one out of three as in 1970 - suffers from malnutrition. The winners in the Chinese economic miracle are not a small minority but hundreds of millions of people. In the cities large numbers of people are on a consumption binge. Nearly all Chinese eat, dress, live and are housed better than before the 1979 reforms. There are also regions in China where the urbanization and the proletarianization of the peasants proceeds successfully, in the sense of a bourgeois modernization. In the provinces of the east coast (Jiangsu, Zhejiang) the petty trades peasants were doing on the side long ago became their main source of income. The transition from village to city is smooth.

These facts, nevertheless, cannot hide the social inequality. For the first time since the beginning of the reforms in 1979 the number of people having to survive on less than one US-dollar per day is again growing. In the cities there is a "new poverty." China's Gini Coefficient, an international standard for social inequality1 increased from 0.33 (1980) to 0.46 (2000), and therefore reached „dangerous" dimensions. While in western capitalism mostly capitalists get rich, in China besides the entrepreneurs it is the cadres and the public officials. Traditionally, in the "Middle Kingdom" holding office involves wealth. High sums are collected for nearly every stamp, act of administration and other "favors." The Chinese government has, at least in its propaganda, reacted to the growing social divide: A "harmonious society" should be built. Deng Xiaoping's old phrase, "Some get rich first and others get rich later," was substituted with the slogan of "common prosperity."

Despite the discontent over the Party's dictatorship, all classes in China seem to be afraid of "chaos," i.e. a weak state. Criminal gangs and secret societies are on an upsurge. Zhou Yongkan, the Minister of Public Security, called the religious movement Falungong the biggest threat to stability. The movement, the government calls it a "sect," has according to its own statements more members than the CCP.

It is still open what character the diverse social unrest in China will take. But whatever the form, it will surely take on global importance. A crisis in China could throw the international financial markets and the whole world economy into a deep recession. Enough reason for an internationalist left to focus more on the struggles in China.
Anton Pam

Information on workers' struggles in China
Websites
Chinese Labour Bulletin:
http://www.china-labour.org.hk

Asian Labour:
http://www.asianlabour.org/

Anita Chan Website:
http://rspas.anu.edu.au/~anita/

Wildcat on struggles in Asia:
http://www.umwaelzung.de

Books
Gries, Peter / Rosen, Stanley (ed.): State and Society in 21st-Century China. Crisis, Contention, and Legitimation, Routledge Curzon, New York

Kupfer, Kristin (Hrsg.): Sozialer Sprengstoff in China? Dimensionen sozialer Probleme in der Volksrepublik; Focus Asien 17; Essen, Germany (http://www.asienhaus.de/index.php)

Lee, Ching Kwan (2004): Is Labour a Political Force in China? Paper presented on the Conference "Grassroots Political Reforms", Harvard University 29-30 October 2004

Perry, Elizabeth (2002): Challenging the Mandate of Heaven, Social Protest and State Power in China, M.E. Sharpe, New York

[prol-position news | 2/2006] www.prol-position.net

• 10 means absolutely equal distribution of income, 1 means absolutely unequal distribution. The German Gini-Coefficient in comparison is about 0.3.