Transforming China
THE FLIPSIDE TO THE CHINESE ECONOMIC MIRACLE
ANDREW LODGE STAFF
There is another side of the coin to the fantastic growth, one that is often mentioned in passing but whose deeper exploration is much more sparse. It is the growing inequality, an inequality that has meant that, for many, the rising tide is threatening to drown them. And so while China’s economy explodes upwards, there is a great deal of rumbling from below.
Historically, China has been governed by a secession of imperial dynasties that were given a mandate to rule from heaven, a sort of divine right of kings. However, in the incredibly sophisticated Chinese worldview, the emperor needed to deserve the mandate in order to continue ruling. According to Mencius, a scholarly giant emerging out of Confucianism, “Heaven blesses the authority of a just ruler, but Heaven is displeased with an unwise ruler and gives the Mandate to someone else.” In other words, the mandate from heaven is lost when the ruler is ineffective or unjust. The concept remains central in Chinese thinking, and, perhaps not surprisingly in light of this, China has been the setting for a number of dramatic uprisings over the course of its long and rich history.
FROM MAO TO DENG
The 20th century began as one of extreme turmoil for the region. As China experienced the new century’s birth pangs, deep in the heart of the middle kingdom a younger generation began reading Karl Marx. Their movement was eventually outlawed but managed to gain a great deal of supp ort from the rural poor. And it was on the backs
of the peasantry that Mao Zedong and the Chinese Communist Party eventually came to power in 1949, first by driving out the Japanese occupiers during the Second World War, and then by driving the ruling Nationalist party back to the island fortress of Taiwan. They were never to return.
Under Mao, the peasants were glorified. The peasantry was, famously, “the vanguard of the revolution,” and urban intellectuals were sent down to the countryside to learn rural ways.
After Mao’s death in 1976, and the inevitable power struggle that followed, Deng Xiaoping rose to the top and introduced a series of reforms that, in retrospect, can be seen as the impetus for what we see in China today. Called “socialism with Chinese characteristics,” free market initiatives were slowly introduced into the country’s economic base. Deng admitted that “some people must get rich first,” and so a new China with a new vision was born.
CHINA’S BOOM
Thirty years later, most Chinese openly admit that there is little comparison between the China then and the China now. Both urban and rural China have undergone massive transformations, but it is in urban areas where the change is perhaps most dramatic, at least at first glance. High-rises, freeways, massive billboards for Marlboro, Rolex, Mercedes, McDonald’s duelling with Kentucky Fried — China’s big cities are unfettered capitalism in action. Growth is paramount. In Guangdong in southern China near Hong Kong, one can literally watch the city grow, and regulation seems to be something of an afterthought. Free market think tanks such as Canada’s Fraser Institute drool over China.
The “haves” of China’s economic miracle have indeed done very well, and it is them that are quoted when we learn about the China of today from the newspapers and news programs. Implicit in the message is that a free market will lead to a freer society. Western thinking clutches, perhaps naively, to the idea that capitalism and democracy are somehow intertwined. Certainly to this point, though, there is little evidence for that. China’s ruling party remains as repressive as ever on a political front. It’s just that now a person is free to be rich — or poor.
At first glance, China’s reforms appear to have done wonders for the vast majority of the population. In a 20-year stretch ending in 2001, the World Bank reports that the level of people below the poverty line fell from over 50 per cent in 1981 to under 10 per cent in the new millennium. This has done wonders for meeting the much-coveted “Millennium Goals” established at the United Nations. While many nations have stagnated or floundered since the idealistic goals to end poverty were proposed, China has done remarkably well. According to the World Bank, China has met the targets “14 years ahead of the 2015 target date for the developing world as a whole.”
There is a twist that the World Bank and its supporters who invest in China fail to mention. Measurements of income are not the most accurate measure in a country that formerly operated on a planned economy. Per capita income was indeed very low in 1980, but health care, education, and food were provided by the state. Since the reforms, the “iron rice bowl,” as it was known, has disappeared. And because everything is for sale, millions find themselves with a much higher income than they had in 1980, but in worse shape socio-economically.
THE GREAT DIVIDE
The greatest cause for concern among China’s elites is the threat to stability posed by the growing inequality in the country. The disparities fall along several axes, illustrating China’s amazing complexity. Li Xiaoxi of Beijing Normal University was cited in the Communist party’s official newspaper, the People’s Daily, in June 2005 identifying two major areas of concern: “There are two gaps that need to be addressed. The first is the very wide gap between different social groups. The other is the astonishing economic development gap between regions.” The former “gap” is significant, in that “social groups” is something of an umbrella term. Reforms have not had the same gilded lining for the many ethnic minorities in the country, and women find their “value” dangerously undermined. Nick Simon, a U of M graduate student who is currently spending a year in China, points out via e-mail that “parents in rural areas receive cash awards if they reach 60 without having more than one son or two daughters. This in itself says a lot about the value of women.”
The rising inequality has coincided dangerously with the destruction of the safety net. Education is no longer accessible to all, and illiteracy rates are once again on the rise after being reduced from 80 per cent to seven during the 1950s. China is also in the midst of a public health crisis. Joan Kaufman, the director of the AIDS Public Policy Project at Harvard University, argued in a paper last year that in China, “health services and health education outreach have been seriously weakened by 20 years of
There are other ominous signs looming as well. In a country that formerly prided itself on not permitting the economic exploitation seen in many other developing countries, sweat shops operating on foreign investment and on the blood and tears of women and children are now symbols of the China miracle. It is for them that investors flock to China. Under such circumstances, it is often the most defenceless that absorb the brunt. Child beggars are now a common sight in Chinese cities, as are children working in factories. Hou Wenzhou is a social worker in China. She estimates, according to a 2001 Globe and Mail report, that at least one million children labour in the wage economy. “Child labour is on the rise in China again,” she was quoted as saying.
Not surprisingly, the population is starting to notice. Throughout the late ’80s and ’90s, reports of rural protests and even outright revolts have been filtering out of the Chinese heartland. According to the Chinese government, as reported by the Christian Science Monitor in June of this year, there were nearly 90,000 uprisings in 2005 alone, and almost all took place in the countryside. The government, for its part, has been enthusiastically downplaying these incidents, no doubt appreciating all too well the irony of the moment. It was the peasantry, after all, to whom the Communist party turned early in the twentieth century, and it was riding on their backs and on the wave of their anger that the Party managed their improbable ascension to power. Now as the new century unfolds, the peasants are becoming angry again. The question begs to be asked: how long can the Communist party hang on to the Mandate of Heaven?
The promise that the lower ends of the spectrum will “catch up” by the mechanism that allows wealth to “trickle down” is Chicago-school neoliberalism at its best. It has been used by those controlling capital for decades now, but there is little actual evidence that it helps pull everyday people out of poverty. In fact, many of the policies instituted around the world under the “trickle down” mantra have been downright disastrous for the marginalized.
Small business owner Amy Gu, one of the oft-cited entrepreneurial class, doesn’t have a lot of time for the Chinese miracle: “It is not a miracle, because a miracle implies that something good is happening, but this is not necessarily a good thing. There are massive social problems and not everybody is living well. It’s good for the country’s global image, but there are many people being left out. It would be best for the government to slow down its economic growth, and focus on putting money back in to social services.”
