Social structure of China

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Contents 1 Chinese Social Stratification before 1949 2 Chinese Social Stratification 1949-1959 3 Chinese Social Stratification 1959-1979 4 Chinese Social Stratification 1979-1993 5 Chinese Social Stratification after 1993 6 Chinese Social Stratification by National Exam 7 Chinese Social Stratification by the Household Registration 8 A Coherent and Consistent Picture of Chinese Social Stratification 9 Chinese Peasant Class 10 Chinese Working Class 11 Chinese Capitalist Class 12 The Splitting off of the Cadre Class 13 Where is the Middle Class? 14 Notes 15 Source

[edit] Chinese Social Stratification before 1949

During the Spring and Autumn Period, lineage was considered less of a sign of authority. The rulers of the vassal states attacked each other, once even attacking the Zhou king himself. The ministers and high officers killed rulers of the vassal states, and took their property without concern for its inhabitants. The Zhou had a complicated law system to define the rights and obligations of the king, rulers of the vassal state, the minister and high official, and the literati. However, the political environment at this point in time was so unstable that little consideration was being given to any formal laws.

From Qin to late Qing (221 BC-AD 1840), the Chinese government divided Chinese people into four classes: literati (?), landlord and peasant (?), craftsmen (?), and merchant (?). Landlords and peasants constituted the two major classes, while merchant and craftsmen were collected into the two minor. Theoretically, however, except for the position of the emperor, nothing was hereditary.

During the 360 years of civil war after Han (202 BC-AD 220), there was a partial restoration of feudalism. Between Han and Tang (220-618), some wealthy and powerful families emerged with large amounts of land, and huge numbers of semi-serfs. They dominated important civilian and military positions of the government, making the positions available to members of their own families and clans. ^{[1] [2]}

It was after the Tang dynasty’s emergence that the government extended and developed the imperial examination system of the Han Dynasty and Sui Dynasty to a very rational and complete national system. This was done as an attempt to eradicate the feudalism that had extended from small political offices to the highest forms. Sui and early Tang governments divided land to the peasants without land, following a practice first instituted by the Han. The Song Dynasty (960-1279) followed suit.

By the 1880s, China’s population was between three hundred and fifty million and four hundred million, or about seventy million households. There was indeed considerable upward and downward social mobility among the four classes, with powerful families falling from grace due to incompetent offspring, failure to produce sons, etc.

In some senses, these statistics can be misleading. Although the landlord and peasant classes were significantly separated by economic statuses, the official statistics merged them into one based on their dependence on agriculture (?). By the same token, despite the fact that merchants were part of the ruling class and craftsmen were amongst the lower strata, official statistics merged them together because of their dependence on trade (?). Officials and degree-holders were integrated into the landlord class, but official statistics separated them due to the fact that officials and degree-holders had all passed at least one level of the civil examinations.

Between the time of the Opium War in 1840 and the founding of the People’s Republic of China in 1949, there were many dramatic changes occurring in both aspects of the economic structure. Peasant rebellions were rife, ^{[3] [4]} Western influence was becoming a nuisance, and taxes and levies were raised above any rational expectation.

In Beijing, Shanghai, and Hong Kong, the industrial working class (Smith, 2002; Honig, 1986; Hershatter, 1986) emerged in response to the greater usage of modern machines. Although the industrial revolution had created a blue collar working class worldwide, it still remained a significant minority amongst China’s working class, which mainly included traditional craftsmen and laborers. Between the years 1920 and 1949, the industrial sector of this class had only increased by less than three million members, mainly women and children working in cotton mills.

The upper class changed dramatically, however. From what had once been a collection of old gentry, a new group of individuals emerged to lead the country: military officials, new intelligentsia, national capitalists, landlords, and the state technocrats. During the mid-19th century, the military began a gradual restructuring that would enable it to develop officers who were not only capable of leading armies into battle, but also nations into the future. During the Qing dynasty, generals Zeng Guofan, Zuo Zengtang, and Li Hongzhang became both field marshals and governors, instituting military schools throughout the provinces. In keeping with traditional practices, their associate generals inherited positions as provincial governors. In 1867, during a period of massive modernization of the educational system, the first Naval Academy was founded, and by 1910 national military exams were obsolete, as national military schools were institutionalized in the provinces. By 1911, seventy such schools existed.

In late Qing, Yuan Shikai enacted a second generation of military leadership, and later Yuan Shikai was in office as the second president of the Republic of China. After his death, from his previous associate generals came five presidents of the Republic of China, one premier, and most of the warlords in north China. Yuan Shikai opened a complex of six exemplary military schools at Baoding (a city a hundred miles south of Beijing), and Jiang Jieshi (Chiang Kai-Shek) was one of its graduates.

The third generation was headed by Jiang Jieshi. In 1924, Russia helped Sun Zhongshan (Sun Yat-sen) rebuild Guomindang (KMT), and build another military school at Huangpu, a small town in the suburb of Guangzhou. Very soon, after 1928, most of the generals of Jiang’s army and most of governors in general were Huangpu graduates, including Lin Biao, who later rose to fame with Mao. The fourth generation was headed by Mao Zedong himself. After the Long March, he built several military schools including the Central Political and Military University (??????), with himself as president, Lin Biao2 as acting president, and Hu Yaobang3 as provost. During the days leading up to the founding of the People’s Republic of China in 1949, Mao was careful in sending one of his highest-ranking generals to act as mayors in the fallen big cities. This institution of military authority had been the standard practice in the past when a dynasty would collapse and another would grow, but slowly, after Mao’s induction, there became a practice of instituting scholar officials as the new power authorities.

A large factor in this division was the rise of a new generation of intellectuals, some educated abroad but always holding degrees. The rise of a public school system and the further creation of colleges and universities made available a small population of capable, competent citizens located in the larger cities and ports along the coastline. The below is the graduates in 1949.4

These new intellectuals (Schwarcz, 1986) came primarily from upper-class backgrounds and had received at least some traditional education.. They received modern perspectives in the new public or private educational institutions, but at the same time they saw themselves exactly the same as the degree-holders, the shi, of the dynasties. As a result, they always considered themselves to be obvious candidates for positions of authority.

National capitalists (Kwan, 2001; Bergere, 1989; Coble, 1986) also contributed force to the leadership after 1840. Initially called “compradors,” they came from amongst the native Chinese assistants to the foreign capitalists in China. The compradors were the first to make large sums of money available for the funding of modern enterprise. During the late Qing, the old merchant class and newly created capitalist class organized into chambers of commerce, promoting ideas of constitutionalism and providing the main impetus to form the provincial self-government assemblies. The withdrawal of foreign competition after World War One opened new markets to China, both inside and outside the country. Bankers and industrialists began to take the lead from merchants. These wartime and post wartime years formed the golden age of the Chinese national capitalists, but after Jiang Jieshi took power in 1927, due to the absence of solid support from a modern nation-state government, the most dynamic and most enterprising element of capitalists lost ground. Even at their peak, due to the shortage of capital and technology, they concentrated on light industry especially textile industry, not on heavy industry such as steel industry and machine building industry.

After 1840, the Chinese landlord class gradually lost all its positive and active social functions. The rural landlord class was the main body of China’s ruling class for two thousand years. However, very few Chinese landlords successfully converted to capitalists after 1840. To build a modern nation-state and realize industrialization, China needed successful political and military leaders, state and private capitalists, social thinkers and modern educationists, scientists and technicians. Most of these new social leaders first originated from the children of the rural landlord class, but they also took over all the social functions from the landlord class. It made the landlord class totally outdated and useless for modern nation-building.

It was the state technocrats (????) who eventually garnered the support of the state and ability to plan China’s modern nation building. In late Qing, they were given charge of state company administration, military direction, and educational planning. After Jiang Jieshi took power in 1928, their prevalence in government offices grew, as did their status as educational elites. In 1935, they were responsible for the centralization of the banking system, control of more than one third of light and heavy industry, as well as the military preparation for the incoming Japanese invasion. By integrating with national capitalists, they created the state enterprises, the precursor to China’s state enterprises after 1949. As a result, it is not a surprise that today’s China is still ruled by a same elite state technocrat class. China’s rapid social development after 1949 came from the rebirth of a full and complete state power. As a result, technocrats gradually replaced the revolutionaries as the ruling class. In 1956, the nationalization of the private commercial and industrial businesses eliminated national capitalists and integrated them into state technocrats. By early 2003, the technocrats had completely replaced revolutionaries.

[edit] Chinese Social Stratification 1949-1959

By 1958 a brand new structure of Chinese social stratification had emerged. The landlord class disappeared, the national capitalist class was merging into the cadre class, and the cadres became the only upper class in the new system. A vast peasant class was at the bottom of new China’s social stratification, seemingly exactly as it had been for the last two-thousand years. The disappearance of the Landlord class is very significant in understanding issues affecting China’s later socioeconomic development (Wong 1973). Compared to several other major developing countries, China achieved a higher level of socioeconomic development due to land reform and the dissolution of the landlord class. This created a vast pool of cheap land and cheap labor waiting for industrialization and urbanization. By 1958, state-owned and operated enterprises took over all the private enterprises and agreed to pay the previous owners through interest earned on the values of their enterprises for a period between ten and twenty years. These capitalists merged into the cadre class and remained at the top of the social structure, despite losing their businesses. As a result, from 1959 to 1979 Chinese social stratification took on a clear-cut, three-class structure (Figure 3-1). In 1959, there were ten million state cadres on the top; thirty-five million state workers right below the state cadres; and two hundred million peasants on the bottom (Graph 3-3). Graph 3-3 is a quantitative and longitudinal description of Chinese social stratification from 1952 to 1959. It, and those like it in subsequent chapters, provides a new level of detail relative to past research. In particular, based on recently available data on the cadre class, I am able to distinguish between state workers and cadres. A lack of statistical data on the private capitalists before 1958 leaves more than one question when considering the society the graph represents. As Graph 3-3 shows, Chinese society was typical of agrarian societies, the peasant class being composed of the majority of the population. At this point in time, it consisted of more than 80% of the labor force, and most were illiterate, using manual labor and simple tools to grow crops. Following the implementation of land reforms, Mao instituted a process of collectivization in response to the a few selling of land by peasants to the new generation of rich land owners. Afraid of creating a new landlord class, a system of co-cops was created, where land was worked equally by peasants. His idea was to capitalize on the sheer number of peasants and effectively produce a surplus harvest. Figure 3-1. Li Yi Model of the Chinese Social Stratification 1959-1979 This collectivization only created a greater gap between the peasants and the social and educated elite. Up to 1949, the upper class consisted of officials, degree holders, landlords and capitalists. But after the founding of the PRC, this situation totally changed. Wealthy landlords were cut out of and capitalists were merged. The cadre became the only elements of the upper class. The state workers made up a very minor part of the overall population and consisted of workers in heavy industries. After 1956, they were separated even further and a distinction was made between formal state workers and the urban collective workers, with the urban collective workers’ salaries being somewhat lower than their counterparts. Although state workers had no influence or power, their salaries were better than the common peasant’s (see Graph 3-2 and Table 3-1). Table 3-1 shows vividly that the worker’s income was two to five times higher than the peasant’s income. This will be further discussed in chapters seven and eight. Their prestige was also much lower than the cadres’ but much higher than the peasants’. Graph 3-3 clearly shows they were not a middle class but much higher than a middle class. They constituted a type of labor aristocracy, since in an agrarian society there is no room for a middle class. After 1961, common people found themselves designated as urban workers simply because they were born in metropolitan areas and not the countryside.

Sources: 1) China Cadre Statistics Fifty Years, 1949-1998, 1.

           2) China Labor Statistical Yearbook 1998, 9. 

Note: There was a small capitalist class before 1956, and it was merged into the cadre class during the Great Leap Forward. There is no data on it in China’s official statistics.

[edit] Chinese Social Stratification 1959-1979

Despite the changes being made both internationally and domestically, class structures remained rigid and uniform for these twenty years. A tiny amount of cadres at the top of the social spectrum made up the elite class, followed by a few state workers and a massive amount of peasants at the bottom. While one’s social rank and salary were based on the class system and were a very important aspect of daily life for Chinese, informal rations that were based on grades and levels of class became a new and extremely important concern for citizens during this time. The misuse and manipulation of the ration system by members of the cadre class threatened to change them into a new class of privileged bureaucrats and technicians, mere descendants of the pre-revolutionary ruling class of cadre technocrats and selected representatives of the old proletariat. Whereas in the past, their position had been accessed primarily through acceptance to the best schools, now cadre status came to give them access to materials and options not fairly distributed amongst all. Housing had always been in demand in China, particularly in the larger cities, and cadres were protected from the intense competition for living space. In addition, the distributions of consumer durables such as bicycles, watches, sewing machines, and food items such as oil, meat, eggs, were another source of contention in China before the reform. Cadres often enjoyed special access to these goods, arousing the discrimination of workers, not to mention the peasants (Bian, 2002, 93). State and collective workers acted as the labor aristocracy during these two decades. Urban collective workers were involved in the light industries, such as garment and show making, as well as restaurant service and retail. State workers were placed in heavy industries and large firms, their salaries and benefits being a bit higher than collective workers. Like cadres, they enjoyed permanent employment, free medical insurance, and almost free housing, although their living standard was much lower. They enjoyed the same coupons for almost everything in a severe shortage economy. However, since urban education reform was growing at a rate much faster than in rural areas, more and more workers were high school graduates. The slowing down of state industries and the increasing number of qualified middle class candidates made it more and more difficult to obtain a position as a state worker.

Source: 1. China Cadre Statistics 50 Years, 1949-1998, 1. 2. China Labor Statistical Yearbook, 1998, 9. Note: 1. The figures of cadre from 1966 to 1970 are estimated. 2. From 1958 to 1977, the figure of peasant worker was up and down around 20 million. However, all the China’s official statistics began to count them only from 1978. State workers were divided into eight grades (Table 3-1) plus a pre-grade training period (???). But between 1959 and 1979, movement between the eight grades almost came to a standstill. Out of the eight grades, most workers could only dream of being promoted from the first grade (???) to the second (???), and only a few considered the idea of a promotion to the third (???). There is an obvious mistake in Graph 4-3 concerning the peasant worker, in that Chinese official statistical yearbooks do not take peasant workers into consideration before 1978. Pre-1949, there were several million peasants performing minor craft work to earn money. During the Great Leap Forward, Mao declared the whole rural area open to develop five kinds of small industrial firms (????) to concentrate on steel, machinery, chemical fertilizers, cement, and farm tools. At the peak of the Great Leap Forward, the number of peasant workers in these rural industries reached around thirty million, but during the famine right after the Great Leap Forward the number decreased down to ten million. Although the number rebounded slightly, the rural industrial sector took time to increase back to about 20 million in 1979. Peasants became commune members during these two decades under collectivization. On the one hand, standards of living can be seen as improved due to the absence of warlords, bandits, landlord, and local tyrants. The government invested a lot in agriculture, especially water conservancy, irrigation works, chemical fertilizers, and agricultural machinery. During the Cultural Revolution, a very cheap but very efficient rural medical service system was created, based on “barefoot doctors.” These doctors were peasants with minimum medical training, who used certain aspects of modern medicine along with traditional approaches to work in the countryside. In addition, schools were opened with the same mentality, operated by “barefoot teachers.” The life expectancy of peasants increased from less than forty years before 1949 to more than sixty years in the 1970s. At the same time, peasants were still the most illiterate, most powerless, and poorest social class. China’s inefficiently state-run industrialization was based on squeezing the peasant class, and collectivization gave them no chance at wealth through entrepreneurship. The household registration system made peasants poorer and poorer, as will be discussed in chanter seven. Although it is commonly mentioned that the household registration system and the people’s communes did little to collectively improve the standards of living for rural Chinese, much has to be said about the positive effects of the systems on the whole. People’s communes successfully gave peasants greater access to healthcare, drastically reduced infant mortality, and provided peasant children with essential education, while the household registration system successfully avoided the growth of urban slums. Analyses of Chinese social stratification have become a prevalent topic in major American sociological journals recently. Zhou (1996) discussed how in urban China having a college education has a significant positive effect on the rate of becoming a cadre or cadre professional. Those with a “distrusted” family background had a higher rate of becoming a professional, both before and during the Cultural Revolution. Having a senior high education has a significantly negative effect on the rate of becoming a worker between 1945 and 1965, but a significantly positive effect between 1980 and 1993. In a later study, Zhou (1998) found that educational inequality based on familial social origins persisted throughout the entire period.5 During the Cultural Revolution, the overall chances for a college education were so severely limited that young people from all social classes were disadvantaged. Whereas during other periods one’s father’s educational level and occupation would influence their acceptance into the senior high schools, during the Cultural Revolution this factor was irrelevant, if not detrimental. This trend was common both in urban and rural areas, despite the lack of educational institutions in the latter.

[edit] Chinese Social Stratification 1979-1993

The biggest change during the 1980s was the formation of the Chinese working class (Graph 5-3). From 1979 to 1993, the number of peasants increased from 286 to 340 million. Although the absolute number increased, the percentage of peasant laborers decreased, due to the 145 million peasants who became peasant workers. The concept of the peoples’ commune was completely eradicated by 1984. Peasants were free to plant anything they wanted, and encouraged to enlarge and build commune and brigade enterprises (later on township and village enterprises, TVE), and finally free to look for jobs in cities and TVEs in other rural areas. By 1993, 145 million peasants, one third of the peasant class, had become members of China’s working class, but were considered peasant-workers, a peasant but not a worker. A fierce competition for state jobs began during this time, as peasants began to obtain positions normally held by state workers. As a result, forty million urban people found jobs in non-state enterprises, up from almost zero in 1979. Although state workers and urban collective workers did not decrease absolutely, their percentage dramatically decreased within the Chinese working class. In 1991, the number of the peasant workers was 113 million, surpassing the number of state workers. In 1993, the number of peasant workers was 145 million, almost equaling the combined numbers of state workers, urban collective workers, and urban non-state workers. Peasant workers became the main body of the Chinese working class. The influx of new high school graduates and youth returning from rural areas where they had been stationed, and to accommodate these new workers new initiatives were set up for non-state enterprises. In early 1988, the state encouraged private enterprises (????), with eight or more employees, amending the constitution again to make private enterprises legitimate. In fact, in the early 1980s, rural and urban private enterprises had grown swiftly. Because the private enterprises were not legitimate at that time, most of them were in the name of state or collective enterprises, a situation called “wearing a red hat” (????). In official statistics, there were only 510,000 capitalists in 1993, although numbers could more realistically be anywhere from two to five million.6 From 1979 to 1993, the number of cadres increased from 18 million to 37 million.

Sources: 1. China Cadre Statistics 50 Year, 1949-1998, 1. 2. China Statistical Yearbook 2002, 120-121. 3. China Labor Statistical Yearbook 1998, 17.

[edit] Chinese Social Stratification after 1993

After 1993, China’s peasant class gradually declined and the working class grew steadily, the capitalist class grew rapidly, and the cadre class began to dissolve. The most important change was that state workers decreased from 72 million to 29 million within one decade. After 1993, Chinese urban social stratification changed dramatically (Graph 6-3). Those worker employed in the state sector were no longer considered to be part of a labor aristocracy. Due to post-1996 reforms, most state workers and urban collective workers disappeared in just five years! The number of state worker decreased from 72 million to 29 million, and urban collective worker from 34 million to 10 million. Most of them were transferred into urban private enterprises. Graph 6-3 shows vividly that the percentage of China’s state employees decreased rapidly to a eighth of the labor force.

Sources: 1. China Cadre Statistics 50 Year, 1949-1998, 1. 2. China Statistical Yearbook 2004, 126-127 and 150. 3. People’s Daily Overseas Edition, 10/11/2002, 1. Note: The numbers of cadre in 2002 and 2003 are estimated.

From 1993 to 2003, the number of peasants decreased from 340 to 312 million, and peasant workers increased from 145 to 176 million. This is only one example of how the rate of urbanization is much behind its rate of industrialization (Graph-6-3 and Graph 7-1). Without urbanization, China’s industrialization will eventually stagnate. The lack of urbanization stems from the out-dated household registration system, a topic which will be discussed in detail in the following chapter. During this period, the cadre class increased by several million members until finally reaching a plateau of 40 million due to the central government’s actions to freeze membership. However, two points need to be made when analyzing this: 1) outside these statistics, over 13 million quasi cadres were working in the non-state sector, and 2) in addition, between seven and nine million had become members of the new capitalist class. In Graph 6-3, the capitalist class is a small dot. According to different studies, Chinese capitalists are now producing between 70-85% of China’s GDP. According to official statistics, the number of capitalists increased from 500,000 to seven million between 1993 and 2003. However, this is a serious underestimate. According to more reliable estimates, the real number should be 10 to 15 million, as most capitalists are former or current cadres and communist party members, a fact that will be discussed further in Chapter Eight.

[edit] Chinese Social Stratification by National Exam

Table 7-1 shows the distribution of educational achievement in China from 1964 to 2000. The only way to go to college was still through the successful completion of the national entrance exam. Table 7-1 shows very few people were actually doing so. Data shows that the vast majority of the population lacked the educational credentials to take the exam, let alone pass it. In the year 2000, less than 50 percent of the population finished junior high, and less than 15 percent finished senior high or vocational school. As recently as 2000, only 3.6 percent of the population went to college. Amongst junior high and vocational school graduates, less than one tenth had the chance to go to college. The competition for the national exam begins during the first grade. An annual “elementary school graduation exam” (??????) takes place in every county (or a district in the city), and is organized by the county educational bureau based upon the same format as the national university entrance exam. It focuses on only two subjects, mathematics and Chinese language. Although the exam has only a roughly 5% rate of failure, it is the actual score that matters most for these children. The score determines which junior high school the child can attend, and like anywhere there is a substantial variation in the quality of the junior high schools. In the same way, the annual “Provincial Junior High Graduation Comprehensive Exam” (PJHGC) (???????) determines which students may attend the more competitive senior high schools, and which will attend vocational schools. The educational department of the provincial government conducts the exam in a format similar to the national exam with two exams on each day, lasting three days minimum. The subjects include mathematics, Chinese language, political science, English, physics, chemistry, and biology.

Table 7-1. Basic Educational Statistics from China’s National Population Census

• Source: China Statistical Yearbook, 2004, 97.

Note: The illiterate population of 1964 census referred to people 13 years old and over. The illiterate population of the 1982, 1990, and 2000 censuses referred to people 15 years old and over who could not read or could read very little.

There are several dozen “key provincial senior highs” (?????) in each province. These schools are able to actively recruit students based on their PJHGC exam scores, bringing in students to board from many different counties or prefectures. Due to the high quality of the students and teachers, most graduates of these senior highs will go on to competitive universities. In urban areas, many families found it was a better option economically to have their children attend vocational schools instead of the competitive high schools. Although they lost the ability to attend college, they could enter into the work force in a faster amount of time and begin supporting their families. At the end of the sophomore year of senior high, the annual “Provincial Senior High Graduation Comprehensive Examination” (???????) determines which students will receive a high school diploma and continue on to various colleges. The format is the same as the junior high graduation comprehensive examination, lasting several days and including all the standard subjects. For those students who have no intention of taking the entrance exam and pursuing college, it is possible to take this exam and enter into the labor market with a high school diploma. It may be tempting to compare the entrance examinations with the American SAT exam, but one should understand the complex differences that distinguish the two. The Chinese exams last several days, with each subject test lasting several hours. Previously, the six exams were held on three fixed days from July 7 to 9, every year. Due to the hot weather and the stress on the students, the month was nicknamed “Black July.” Beginning from 2002, however, the exams were held on June 8 to 9 to avoid the discomfort and allow universities another month to recruit candidates. In most Chinese cities, two weeks before the exam, the city government bans construction from 10:00 pm to 6:00 am, in order not to disturb examinees’ sleep. During the exam days, all construction sites close to the exam sites are closed. Traffic police go to the streets to guarantee that the examinees can go in and out of exam sites without harassment. In 2003, there were 6,130,000 examinees, 7,234 exam sites, and 230,000 exam rooms.7 In 2004, some 7.23 million applicants took the exam, 1.1 million or 18% more than 2003. Among them, there were 5.67 million current year senior high graduates, female examinees made up 44.5%, minority examinees made up 7%, and examinees older than twenty-six years old made up 0.4%. Rural students accounted for 55%, for the first time surpassing urban students. 8 Families try their best to keep the best mental and physical situation for the examinees. On the television and in the newspapers, stories of how some families support their children before and during the exam days abound. While some peasant families suffer financial burdens to support their children during the decade of preparation, some wealthy families rent rooms in 5-star hotels to simply provide comfort to their children during exam time. For examinees, the actual score of the exam means either entrance into the top 4% of China’s educational elite, or the other, random 96%. In a country of over one billion people, it means entrance into one of one hundred select universities to study with top scholars. To the family, the score decides the future. It is a reflection of not only the family’s strength and support, but also financial success and prestige in the coming future. College entrance determines the rank and file of the student for the rest of his or her life.

[edit] Chinese Social Stratification by the Household Registration

Previous research on the household registration system (Solinger, 1999; Wang, 2004; Kam and Zhang, 1999; and Cheng and Selden, 1994) has noted that the urban-rural separation that exists in Chinese society is a new concept, contradictory to socialist terms and an obvious consequence of modern migration.  One can argue that the system originated in response to modern problems: in the 1950s, it addressed the famine resulting from the Great Leap Forward.  Between 1965 and 1985, the military preparedness in anticipation of foreign invasion caused a greater focus on domestic migration.  And after 1985, after the threat of war, the system was ordered to preserve the privileges of urban residents, and maintain stability.        

But one cannot identify these historical events as the only mobilizing factors in the registration system. Although one can state that the system played a part in keeping Chinese cities free of the slums and beggars that India suffers, the disadvantage was that during these three decades the proportion of urban population only increased from ten percent to twenty percent (Graph 7-1). China’s urbanization rate was not only far behind that of the developed countries and the world average, but also far behind the average of Third World countries. In late 1970s and early 1980s, Deng Xiaoping allowed the peasants to disband the people’s communes, and gave every peasant family a very small piece of land. The state increased the grain purchase price to be several times higher than it was before. The peasants were only required to supply to a small amount grain to the state as tax; they could keep the rest for themselves, and sell surplus grain to the market. The peasants also freely produced more meat, cooking oil, and fruits. After only a few years, around 1984 and 1985, China began to have surplus grain. After 1985, until today, China’s biggest agricultural problem is not the shortage of grain; it is the “difficulty that the peasants have in selling their surplus grain” (???). To support the peasants, the state had to build many huge granaries, and raise the grain purchase price as high as that of imported American grain. Still, peasants produced less and less grain because there was no profit. In short, since 1985 there has no longer been a food shortage in China. Also, after the Russian army was trapped in Afghanistan in the early 1980s, Deng formally announced in 1985 that there was no threat of foreign invasion in sight, so there was no longer a need for war preparations. Thus, after 1985, there was no need to separate urban residents and peasants, and there was no real obstacle to build a universal Chinese national labor market. So the question is: Why does China still keep this out of date system? The reason is the six to one advantage of urban residents, as discussed below. If the system were to end, some peasants might enjoy social mobility but many urban residents, especially those who are not cadre, quasi-cadre or capitalist, might suffer downward mobility, perhaps resulting in social instability in urban areas.

Source: 1. China Statistical Yearbook 2004, 95. 2. China Labor Statistical Yearbook, 1998, 4.

Graph 7-1 shows how the Chinese people are now divided into two categories: 500 million urban residents who have urban household registration (????), and 800 million peasants with rural household registration (????). Household registration is not a geographical but a social status. For workers and cadres, although they may work in rural areas their whole life, they will retain urban household registration. Peasants, even if they work in an urban area for one or two decades, still hold peasant household registration. This social inequality originates from where they born. As the peasants had very low economic and political status, the very term, “peasant” carries negative meanings. Phrases like “peasant mentality,” “peasant’s habit,” or “like a peasant” all have derogatory meanings in Chinese. There is almost no inter-marriage between urban residents and peasants, especially between female urban residents and male peasants. Perhaps the most striking example of the status of the peasant can be found in China’s electoral law and criminal law. Until ten years ago, China’s national criminal law stipulated that if an urban resident was convicted of three felonies, his urban resident status would be revoked and he would become a peasant.15 From 1953 to 1994, the electoral law stipulated that the population represented by a rural deputy in the national congress should be eight times that represented by an urban deputy. The 1995 amendment to the Electoral Law shrank the ratio from 8:1 to 4:1. After the 1960s, state enterprises mainly recruited state workers from urban residents. Only a very few slots were given to demobilized soldiers from rural areas. In most cases, passing the national university entrance examination was the only legitimate way for a peasant to change to an urban citizen. However, since most good high schools are in urban areas, the percentage of peasant children passing the exam is always much lower than urban children. The 800 million peasants are well aware of their own low social status. Their biggest desire or dream for themselves and their offspring is to leave the rural area and become urban citizens. There are numerous indicators of the inequality of urbanites and peasants, the most striking being wealth and standard of living. An October 2002 official report16 showed that, in 2001, the annual income per capita of urban residents was 6860 yuan (US$825), and of peasants 2366 yuan (US$285). On the surface, the gap is three to one. However, 40 percent of peasants’ income is in goods, not currency, so the currency is only 1800 yuan/year (US$217) or 150 yuan/month (US$18). Of this 150 yuan, 20 percent must be spent for seed, agricultural chemicals, chemical fertilizers, diesel oil, and so on. As a result, the monthly purchasing power of a peasant is only 120 yuan (US$14), enlarging the gap between the urban and rural to five to one. Further, urban residents enjoy other kinds of transfers, such as housing, education, sanitation, and electricity because the price of electricity in urban areas was lower than that of rural areas. Putting this together, according to the report, the urban-rural gap was six to one in 2001. According to all the official statistics, during the last decade the urban-rural gap has increased. In reality, the gap is probably much larger than six to one since the benefits of urban infrastructure and education are much bigger than one sixth of the income of the urban residents. The urban China and rural China are simply two worlds. Urban China is mainly an industrial society, and rural China is an agrarian society. Urban residents use machines for most work, and rural Chinese use their hands. Urban residents are in work units and companies, and villagers are in villages. Urban China is ruled by law and rural China is ruled by custom. Urban China is more individual and nuclear family oriented and rural China is more kinship and village oriented. They have different ideologies, different life styles, and different rhetoric. Thus, mainland China is an industrializing agrarian society consisting of an urban industrial society and a rural agrarian society. During the last two decades, a small portion of the agrarian society rapidly transformed into an industrial society, mainly in coastal areas, and the suburbs of inland big cities. There is not only a gap between urban and rural, but also big differences among big cities, medium cities, and small cities in China. The gap among them is around two to one or three to one. Basically, the bigger the city, the more wealth, prestige and power citizens have. This social inequality originated from the place of birth. If you graduated from a national university, chances are good you would be sent back to your home province. If you graduated from a provincial university, you would probably be sent back to your home prefecture. If you graduated from a normal school or nursing school in a prefecture capital, you would be sent back to you home county. Only natives have a natural right to stay in the national capital, provincial capitals, and prefecture capitals where they were born. For demobilized officers, their home province is responsible for giving them an appropriate job. This situation has become increasingly absurd. In April 2003, even China Daily was moved to say:

More students that ever before are having a difficult time finding work. … The household registration system is the greatest hurdle for college graduates as they try to find satisfactory jobs.

   Despite being eased, local household registration remains a prerequisite for students seeking good jobs in many big developed cities, including Beijing and Shanghai. A recent survey by Beijing’s laborer administration department indicates job seeker must have Beijing household registration to be considered for 40 percent of the jobs in the capital. That requirement dashes the dreams of thousands of college graduates who hope to work in Beijing or other big cites. … 
    It is not unusual for a Beijing or Shanghai resident to earn 10 times the salaries (sic) of his/her classmates who find jobs in comparatively poor hinterland cities. … The household registration system has widened the gap between China’s developed regions and hinterlands.       
   Yet, some interest groups in developed cities are struggling to maintain household registration system and other barriers that curb the flow of talent because they want to monopolize the resources. That situation, developed cities having more jobs, but greater barriers while hinterland regions have less new jobs, is making it hard for unemployed people to find jobs. The huge gap not only makes it difficult for rural surplus laborers to find jobs, but also reduces college graduate’s chances to find employment. …
   Due to the household registration system and other restrictions, most migrant workers, about 94 million last year, cannot find permanent jobs in cities. That also means fewer job opportunities for college graduates. The reason is simple: More workers require more managers and management clerks, such as accountants and sales persons. When workers have temporary jobs, there is less need for managers; most of them are college graduates. 
   The current inequity between State Owned Enterprise (SOEs) and private firms also contributes to the problem. While private enterprises can generally compete with SOEs in terms of production, they have a much more difficult time luring talent. SOEs can help college graduates receive a household registration, but most private cannot. There are only few exceptions: Some private high tech firms are allowed to arrange the household registration for college students they plan to employ. Most college graduates, as a result, try to land jobs with SOEs, even through the low-efficient sector cannot provide so many jobs. But many of those graduates will leave the SOEs after receiving the household registration. This is a waste of time for everybody.17

After 1993, no one in China publicly opposed the eventual cancellation of this form of social apartheid. The problem is when and how. The worst result of this system is that currently China’s urbanization is near 20 percent behind industrialization. This is highly unusual. Currently this system is the biggest obstacle to China’s socioeconomic development. The 20 percent lag directly decreases the size of China’s national goods market, national capital market and most importantly, national labor market. Conversely, the decreased markets directly decreases the size and speed of China’s industrialization, and slows down China’s socioeconomic development, and especially, slows down the growth of China’s GDP. China’s top leaders must cultivate the political will and political courage to cancel the apartheid.

[edit] A Coherent and Consistent Picture of Chinese Social Stratification

In general, there are two ways to look at Chinese social stratification after 1949. The first is to directly look at the structure qualitatively. Figure 2-1 portrays the structure of Chinese social stratification in late imperial China, Figure 3-1 from 1958 to 1980, and here Figure 8-1 predicts Chinese social stratification in 2005 based on quantitative data. Compared to Figure 3-1, Figure 8-1 shows the great change in Chinese social stratification during last two decades. During this time, there were three great transformations. First, one third of the peasants became peasant workers, and the number of peasant workers almost equaled the number of urban workers. Second, within urban workers, because of the rapid decrease in state workers after 1997, the number of non-state urban workers surpassed that of state workers (also see Graph 8-1). Third, a capitalist class reemerged with shocking speed. The second method of conceptualizing the scenario of Chinese society is to look at data after 1949 quantitatively and chronologically. If we combine Graphs 3-3, 4-3, 5-3, and 6-3, we collectively gather Graph 8-1. As analyzed in early chapters, there are several small discrepancies in Graph 8-1. For instance, statistics on peasant workers are unavailable from 1958 to 1978, the number of capitalist is underestimated, and the thirteen million cadres and quasi-cadres in the talent market are in the categories of capitalists and urban non-state workers. Modifications to Graph 8-1 could be the topic of the further studies, and professional social statisticians could make the Graph 8-1 more accurate. However, these small modifications will definitely not change the basic shape of Figure 8-1 and Graph 8-1. The combination of Figure 3-1, Figure 8-1, and Graph 8-1 is a coherent and consistent picture of Chinese social stratification after 1949. The next seven sections will explain this picture.

[edit] Chinese Peasant Class

In 2003, there were 312 million peasants in China, not including the 176 million peasant workers. Peasants still supply almost half of China’s labor, despite their rapidly diminishing population. The percentage of labor in agriculture is the most important variable and the most important criterion. With current technology in hand, one fourth of China’s peasants are all that’s needed to till China’s lands, so well over half of them are surplus laborers. There is an extensive amount of research on China’s peasant class. As analyzed in early chapters, the peasant class is at the bottom of Chinese social stratification, as economically, the income gap between urban and rural residents is six to one at least. However, within the official category of peasant, the income of peasants is several times lower than that of the peasant workers. According to official statistics, rural residents include both peasant workers and peasants (see Figure 8-1 and Graph 8-1). The income of peasant workers is several times higher than that of the peasant. As a result, the income of peasants is extremely low compared with the income of urban residents, leading to multiple problems. Despite a higher life expectancy and overall improved quality of life, more than two-thirds of China’s poverty-stricken population is included in the peasant class. According to the United Nations , the proportion of Chinese people living on less than US$1 per day declined from 33% in 1990, to 16% in 2000, revealing that China lifted 150 million people, or 12% of its population, out of poverty in the 1990s. This went against the general global trend, in which, excluding China, the number of extremely poor people actually increased by 28%. As noted earlier, the plots allotted to peasant families are on average are 1.2 acres, but can be as small as an eighth of an acre. In hundreds of millions of cases these plots fail to generate enough money for a peasant family. When China’s GDP increased by 9% annually, peasants’ incomes stagnated and the gap between the rich and the poor in China increased rapidly. The state could not raise the grain purchase price; otherwise the price of China’s agricultural products would be higher than that of American products. Because land holdings are too small, mechanization is almost impossible, which made China’s peasants lack the scale economy. The tax burden continued to be heavy after the early 1990s. Statistics show the average number of staff within small town governments range from sixty to a hundred, some even into hundreds. Usually there are thirty to forty people within a village government, almost the size of a town government. Peasants’ hard-won revenues were sucked up by these redundant personnel. Because the state did not pay tuition, peasants took up the burden of the paying tuition fees for their children, which averaged roughly 30% of their annual income. This only led to further anger and dissatisfaction. In the post-Mao era, the state tended to take it for granted that urban infrastructure such as power, roads, schools, and hospitals could be financed by the state, but in the rural areas peasants were forced to shoulder the majority of those costs. This creates problems in the fields of health care, so to deal with the situation, in 2003 the central government allocated 10 yuan (US$1.2) annually to every peasant, and also collected 10 yuan from local government, and 10 yuan from each peasant to help poverty-stricken peasants afford expensive medical treatment for serious illnesses. Beginning in 2004, the Chinese government has dedicated itself to plans that would abolish taxes and fees specific to peasants and build a public finance system that would cover both rural and urban areas. This means that the centuries-old agricultural taxes will be scrapped in 2006. The center also planed further reforms: streamlining township governments, increasing financial input in infrastructure in townships and villages, and improving the rural educational system and health care system. The Chinese leadership must understand that it is impossible to sharply increase the income of the peasants under their current level of productive force. The only way to increase their income is to cancel the household registration, to accelerate industrialization and urbanization, to decrease the number of the peasants gradually, to increase the land holding of peasant family gradually, and to realize the mechanization of agriculture gradually, so that the income of the peasants will increase sharply as the result of agricultural mechanization. In 2002, there was a popular poem entitled “Peasants’ Confusion” (translated by Li Yi and Liu Min) circulated on the Chinese internet. It imitated a Chinese peasant talking to a Chinese urban resident. It looks like the original author was an urban resident who made fun on the peasants.

Just when we begin to afford meat, you have started to prefer vegetables. Just when we work up the money for a wife, you have gathered a mistress. Just when we begin to have sugar to eat, you have started to urinate sugar . Just when we learn to wipe our bottom with white paper, you have begun to wipe your mouths with that. Just when we begin to own a little cash, you have started to buy insurance. Just when our kids can come back home for Spring Festival, you have started traveling to Hong Kong.

Just when we finish hoeing the field, you have gone to work out at the gym. Just when we begin to have enough food, you are spending money to lose weight. Just when we learn to use fragrant soap to bathe, you have turned to washing your hair at salons. Just when we manage to have a decent set of clothes, you have begun to cut holes in your new pants. Just when we begin to envy the prosperity of cities, you have started to build villas in the countryside. Just when we move into brick houses, you have begun camping outdoors. Just when we afford to put our kids in school, you have started sending yours overseas.

Just when we learn to deposit money, you have begun to play with stocks. Just when our TVEs struggle, you have entered your SOEs to the stock market. Just when our migrant workers go to the cities, you have started leaving your posts . When our best boys go to cities to become officials they turn into criminals of corruption. When our best girls go to cites they are turned into “misses.”

Just when we begin to have television to watch, you have started to play with computers. Before we even see what a computer looks like, you have logged onto the Internet with broadband. Just when we learn that the NBA is basketball, you have made MBA in fashion. Just when we begin to understand entertainment programs, you have turned to pornography from satellite dishes.

Just when we learn that WC means toilet, the W has joined TO. Just when we begin to have a little extra grain, the price of grain has taken a dive. Just when we exchange Receipts for cash, you have exchanged cash for American dollars. Just when we killed the pests in the field, you have begun to prefer vegetables bitten by pests. Just when we begin to have tap water, you have turned to spring water. Just when we dare to ride a bus, you have proudly gone into a taxi. Just when we learn to play Majiang, you have started to gamble. Just when we can smoke cigarettes with filter tips, you began to smoke heroin. Just when we raise lots of chickens, you have begun to like soft-shelled turtle. Just when we learn to breed turtle, you have begun to eat scorpions.

Just when we get our tubes tied, you have started test-tube babies. Just when we begin to have electricity, you have turned to candle light dinners. Just when we learn to make love with the lights, on you started using Viagra. Just when we can afford white flour, you have turned to the white powder.

But the low status of the peasant in Chinese society must be seen as determined by the primitive nature of their production. As their methodology for working the land to produce food lacks modernization, the amount of space that the state can allocate to their needs remains a hurdle. Marx has a classic paragraph on the nature of French peasant in the early 1850s:

The small peasants form a vast mass, the members of which live in similar conditions, but without entering into manifold relations with one another. Their mode of production isolates them from one another, instead of bringing them into mutual intercourse. The isolation is increased by France’s bad means of communication and by the poverty of the peasants. Their field of production, the small holding, admits of no division of labor in its cultivation, no application of science and, therefore, no multiplicity of development, no diversity of talents, no wealth of social relationships. Each individual peasant family is almost self-sufficient; it itself directly produces the major part of its consumption and thus acquires its means of life more through exchange with nature than in intercourse with society. The small holding, the peasant and his family; alongside them another small holding, another peasant and another family. A few score of these make up a village, and a few core of villages make up a Department. In this way, the great mass of the French nation is formed by simple addition of homologues magnitudes, much as potatoes in a sack form a sackful of potatoes. In so far as millions of families live under economic conditions of existence that divide their mode of life, their interests and their culture from those of the other classes, and put them in hostile contrast to the latter, they form a class. In so far as there is merely a local interconnection among these small peasants, and the identity of their interests begets no unity, no national union and no political organization, they do not form a class. They are consequently incapable of enforcing their class interest in their own name, whether through a parliament or through a convention. They cannot represent themselves, they must be represented. Their representative must at the same time appear as their master, as an authority over them, as an unlimited governmental power that protects them against the other classes and sends them the rain and the sunshine from above. The political influence of the small peasants, therefore, finds its final expression in the executive power subordinating society to itself. Historical tradition gave rise to the faith of the French peasants in the miracle that a man named Napoleon would bring all the glory back to them. (Marx, 1978/1852, 608)

Although Marx’s comments strike a similar chord with Chinese peasants, more importantly today’s lower class are trying their best to realize the Chinese dream: to become urban residents. Their involvement in the modernization of the PRC is crucial due to their numbers, and essential especially in the urban sectors. It is mainly the out-of-date household registration system that blocks these peasant workers from becoming urban residents, as their numbers continually increase (Graph 8-1). This is obvious socioeconomic stagnation. The rapid growth of China’s GDP can not be based on impeding the transforming of peasants to workers forever. In the long run, that transformation is more important than the GDP growth rate. The rapid growth of the GDP is only meaningful if it is accompanied by the decline of the peasant. In the long run, China’s future will be determined by the speed of the industrialization and urbanization of China’s peasant class.

[edit] Chinese Working Class

In 2003, there were about 372 million workers in China, proving that the creation of a working class is the main theme of current social stratification. There are substantial studies on China’s working class (Smith, 2002; Honig, 1986; Hershatter, 1986; Solinger, 1999; Zhang, 2001; Murphy, 2002; Chan, 2001; Sargeson, 1999; O’Leary, 1999; and Sheehan, 1998), showing that the creation began after 1840 with the development of the state defense industry and others to support it. Later on, private industries also developed, with foreign firms coming in to use China’s cheap labor and explore the market . From 1840 to 1949, along with the development of modern industry, the working class increased to about two million. From 1949 to 1978, the quality of life for the working class was just above that of the peasant class. They were much richer, had more prestige than the peasants, and most of their children went to the same school along with the children of the cadres. Most importantly, they had urban household registration. As showed earlier, they were not the lower class, not the middle class, but the labor aristocracy. The urban collective worker was mainly in light industry, as their wages and social welfare were only a bit lower than the state worker. Since 1979, this situation has been changing dramatically. The working class has increased from 20% of all the labor force in 1979 to nearly 50% in 2001 (Graph 8-1). The labor aristocracy has all but been eliminated. To see this dramatic change, we can remove workers from Graph 8-1 to Graph 8-2 to demonstrate the dramatic increase of peasant workers. The peasant workers were around twenty million from 1958 to 1978, with a later increase to 174 million before reaching stability. Second, there was a dramatic increase of urban non-state worker after 1997 because China dramatically shrunk its state sector, ending with a dramatic decrease of state workers after 1997.

Source: see Graph 8-1.

Mao made the Chinese working class docile and organized labor to be a managed entity that could be continuously mobilized. An obedient labor force keeps management costs down too. Despite the enormous numbers of workers in Chinese factories, the ranks of manages who supervise them are remarkably thin by Western standards. In 2004, factory wages in China’s booming east coast could be US$120 to US$160 a month and a half that inland. It is not only cheap labor that drives China’s economy. Based on this docile and organized Chinese working class, the talents of Chinese manufacturers drive their costs down. The best operations are as efficient and as responsive as the world’s elite manufacturers (Fishman, 2004). In my view, currently the Chinese working class can be divided into three social strata: state workers and urban collective workers, urban non-state workers, and peasant workers. According to China Statistical Yearbook 2004, in 2003,

1) 29 million state workers

   10 million urban collective workers

2) 178 million urban non-state workers (13 million more quasi cadres and 5 million more capitalists should be excluded from this category) 24 million self employed 25 million in private enterprises 12 million in limited liability corporations 6 million in share holding corporations 5 million in foreign funded units 4 million in units with funds from Hong Kong, Macao, and Taiwan 1.7 million in corporative units 0.4 million in joint ownership units (and 99 million others who National Bureau of Statistics of China did not know where they were, including urban unemployed) 3) 176 million peasant workers 136 million were in the township and village enterprises (TVE) 23 million were self employed 18 million were in private enterprises.

In March 2003, in his inauguration press conference broadcast nationally, Premier Wen Jiabao estimated that 140 million peasant workers were floating population. In 2005, major state media frequently mentioned that there were 220 million floating peasant workers, but without mention the sources. In my view, the Chinese working class is neither a class in itself nor a class for itself yet. The state worker, urban non-state worker, and peasant worker are in three different worlds. The 29 million state workers are located in heavy industry, high tech industry, public service industry, and defense industry. Most of them are senior high graduates, while few are graduates of the five kinds of universities. Although they earn much less money than the cadres compared to twenty years ago, they still earn more than urban non-state workers in general, not to mention much more than peasant workers. However, the complaints and demonstrations by state workers are much more common than from urban non-state workers and peasant workers. Most complaints come from laid-off state workers, for several reasons. First, promised subsidies from the government did not come on time. Second, they considered the subsidy to be not enough. Finally, for some bankrupt state enterprises, the government gave workers a rather large one time severance pay. With this money, some workers were successfully transformed into non-state urban workers. However, after several years, some of them were still unemployed, and had already spent out all the severance pay. According to the new rule, they were treated as urban poor, and local governments subsidized them month by month. They are in a very difficult situation if they are sick or they have a family emergency. They are very unhappy with their current situation; especially those state workers above fifty years old but who had not reached the age of retirement, 60 for male and 55 for female. There is a state union in China; all the state workers are the union members. During most demonstrations the union is usually in the middle, bridging the workers and the government. The demonstrations from this social group will be less and less since the retirement pension for a state worker has improved significantly. In several years, all the people of this social group will be old enough to get a pension. About 160 million urban non-state workers comprise almost half of China’s working class, however lacking in public demonstration. Along with the booming Chinese economy, Chinese cities have gained prosperity very rapidly, leading to many opportunities. With the benefits of urban household registration, they succeeded in gaining the better employment opportunities and leaving the manual labor to the peasant workers. Capitalism grew in this sector, and as portrayed in the end of the last chapter, both state worker and non-state urban workers were able to enjoy retirement pension insurance, unemployment insurance, medical insurance, and the urban poverty subsidy. On the one hand, there is substantial urban unemployment in every Chinese city, where all city governments require the local enterprises to give priority to recruit residents with a local household registration. On the other hand, in every Chinese city there are many more migrant peasant workers than the local unemployed urban population. For example, several years ago, when there were two million unemployed urban workers in Shanghai, there were six million peasant workers also in Shanghai. I asked an associate professor from the sociology department at Fudan University, “Why don’t the two million Shanghainese just take those two million jobs, so that Shanghai can have two million less peasant workers?” His answer was very straight: “Are you kidding?! How can our Shanghainese to do those kinds of jobs?!” Two hundred million more peasant workers consist of more than half of China’s working class. They focus on low tech and labor intensive industries, since most of them have only received an elementary or junior high school education. They take the jobs with low pay, an unpleasant working environment, and low prestige and cannot benefit from unemployment insurance, pension insurance, medical insurance, or poverty relief plans. A peasant family with one member or more working outside is much richer than a peasant family without a peasant worker. Currently, these peasant workers are without hope of getting urban household registration in the locality where they are working, and instead float around the country looking for jobs. They take jobs whenever and wherever they can find them. In Guangdong Province, peasant workers’ annual income increased by less than 100 yuan (US$12) over the past ten years, which resulted in an abrupt labor shortage around 2004 to 2005. According to statistics from labor departments, total payment owned to peasant workers reached 40 billion yuan (US$4.8 billion) in 2002. According to the all China Federation of Trade Union, it was 100 billion yuan (US$12 billion) in 2004. In some extreme cases, peasant workers were assaulted by employers, and some were even driven to commit suicide out of despair for the apparent hopelessness of their situation. Defaulted payment in the construction industry accounts for 70% of total default, but the cause of the default lies mostly in the government’s hands. Some local governments asked construction companies to start projects in advance and promised to pay them later, as statistics provided by the Ministry of Construction indicate unpaid compensation to construction companies reached 333.5 billion yuan (US$40.5 billion) in 2002. In today’s China, the state worker, urban non-state worker and peasant worker are in different industries, work in different environments, get different pays, have different socioeconomic and political rights, and have different kind of prestige. Within one locality, they simply live in different districts and neighborhoods. As a result, they have totally different consciousnesses. These differences directly come from social apartheid: the household registration system. The making of the Chinese working class as a whole is directly determined by the termination of the household registration system. The market itself does not lead to abolishment of this social apartheid, as too many social groups will benefit from the injustice. It is only the state who has the power to alter it.

[edit] Chinese Capitalist Class

According to official statistics, in 2003, there were 7.73 million capitalists in China. As portrayed in chapter two, merchants (商) were always one of the four social classes in Chinese society for two thousand years. After 1840, the Chinese capitalist class was always weak and dependent on the state because China became a periphery country in the world system. As portrayed in chapter three, in the late 1950s, the state bought the capitalist class as a whole, and merged the capitalist class into the cadre class. After 1979, within just two decades, a vibrant Chinese capitalist class reemerged. There are some strong studies on China’s capitalist class (Kwan, 2001; Bergere, 1989; Coble, 1986; Pearson, 1997; Malik, 1997; and Dickson, 2003). According to different studies, now three-fourths (3/4) to four-fifths (4/5) of China’s GDP comes from the private sector. In Graph 8-1, the capitalist class is just a dot between the cadres and the state worker. To see it more easily, the increase in the capitalist class is shown in Graph 8-3.

   According to official statistics, in 2003, among these 7.73 million capitalists, the 5.2 million were urban residents, and 2.53 million had rural household registration.  All these numbers are serious underestimates. In my view, official statistics fail to report at least four kinds of capitalists. First, after 1998, almost all the township and village enterprises (TVE) were privatized within two to three years. A huge number of managers and local cadres became owners of enterprises, thus becoming capitalists. Second, after 1997, a huge number of small and medium-sized state enterprises and a substantial number of large state enterprises were privatized. Many former cadres from these enterprises also became owners. Third, during recent years, most large state enterprises sold shares in the stock market. During this process, many managers of these enterprises and some government cadres who regulated them got large amounts of stock. Fourth, some officials, their accurate number is unknown, accumulated a huge amount of money, legally or illegally. They put the money in stocks or foreign banks. Their salary is much smaller than the interests they get from their deposit and stocks. In my estimation, putting all these together, the size of the Chinese capitalist class should be ten to fifteen million, not 7.73 million. 

Source: see Graph 8-1.

The state encouraged the reemergence of the capitalist class. Currently, the Chinese capitalist class is responsible for most economic growth and job creation in China. There are several important reasons for the dramatic development of the non-state sector after 1979. First, before 1979, the Chinese economy was a shortage economy with a demand much higher than the supply. Second, after 1985, there was a huge amount of surplus rural labor. Third, there was a serious shortage of services in urban areas. Fourth, in 1978, Deng stopped Mao’s policy of “up to the mountains and down to the countryside.” All the sent- down youth came back to their home cities within several years, leading to a huge amount of urban unemployment. From 1980 to 1985 urban unemployment reached thirty-seven million people, reminding old people of China right before 1949, and it seriously threatened the legitimacy of the government. The state sector, especially state enterprises could do nothing to deal this crisis, because there was already a huge amount of surplus labor within the state sector. The government encouraged everyone to do everything possible to increase jobs and to increase supply. The non-state sector filled this need. Thus, the state encouraged the reemergence of capitalism as a means of dealing with chronic urban and rural unemployment. After 1992, within just one decade, cadres, party members, and state professionals became the main body of the capitalist class. Before 1992, most private enterprises had been established in the service sector, light industry, manufacturing, mining, transportation, and construction industries. After 1992, private enterprises extended to finance, inter-bank lending, securities trading, and real estate. In the late 1990s, instructed by the central government, all the township and village enterprises (TVEs) were privatized. Also from the late 1990s, a huge amount of state enterprises were sold to capitalists, many of them at half price. In 1999 and 2004, China amended the constitution twice, to make private enterprise legally equal to state enterprises, and make legal private property untouchable.

Table 8-1. Top Ten Forbes Rich List 2004 (China)

Name Age Net worth Industry 1 Rong Zhijian 62 US$1.5 billion Construction and Real estate 2 Huang Guangyu 35 US$1.3 billion Retail and Real estate 3 Chen Tianqiao 31 US$1.28 billion Internet game 4 Xu Rongmao 54 US$840 billion Real estate 5 Lu Guanqiu 59 US$774 million Auto-parts 6 Ding Lei 33 US$ 668 million Web station 7 Liu Yonghao 53 US$650 million Forage, finance and real estate 8 Du Xia 56 US$530 million Super market chain store 9 Liu Yongxing 55 US$500 million Forage and aluminum 10 Zhu Mengyi 45 US$436 million Real estate

China conducted a survey on the capitalist class in 2003. According to the survey, in 2002, the registered capitalists were 6.2 million but the true number could surpass ten million. From 1993 to 2003, former cadres within the capitalists increased from 40.1% to 63.1%; those with college degrees increased from 16.6% to 33.5%; and 4.9% with a master’s degree in 2003. The number of registered private companies surged from 238,000 in 1993 to 2,435,000 in 2002. The average private company had registered capital of about US$122,530, and employed eleven people. Some 527 private firms employed more than a thousand workers each. The average private firm earned after-tax profit of US$106,265. Table 8-1 shows several important things. First, nine of them are first generation “nouveau riche.” Second, the distinction between foreign and Chinese wealth is staggering. Third, they are all in light and low tech industries. None of them is in high tech industry, heavy industry, and defense industry. None of them has a company potentially can compete with Global 500. Fourth, many of them got rich from real estate, which can lead to larger problems for the country as a whole. China is now a paradise for both domestic and international capitalists. Every provincial capital, and many coastal rich areas, sport gated communities fit for kings and modeled after those in the United States. Many mansions are sold for more than US$ 1 million. Most nouveau riche does not want to be counted statistically, and do not want to be interviewed. Many of them made their first million by breaking the law. Some did it by smuggling. Some did it by speculating before 1989, as portrayed in chapter five. Some did it by selling and reselling government contracts. Some did it in the stock market. In the beginning of China’s stock market a decade ago, there was much cheating. Those who cheated and conspired earned money. Some did it in real estate, which will be discussed next. All this reduced the prestige of Chinese capitalists. China has become one of the world’s most unequal societies with a gap between rich and poor that dwarfs the divide in the United States. According to official statistics, in February 2003, 29.9% of capitalists were communist party members but only 5.9% joined the party after they became capitalists. As noted above, this number is highly underestimated. In my estimation, 60 to 70% of capitalists are party members. In short, most capitalists are party members and most capitalists were or are cadres. In the early 1970s, in mainland China, countless loud-speakers keep on repeating a famous Mao quotation: “The capitalist class exists within the party!” (资产阶级就在共产党内！) In the early 1980s, this famous quotation became a famous laughing stock: Mao was out of his mind! How could he say a capitalist class existed within a communist party?! Politically, the Chinese capitalist class supports the party and the state because they benefit materially and because they are worried that social instability will harm their property interests. On the one hand, in Chinese society, capitalists cannot accomplish anything without having close ties to the state, as it can help capitalists or break them. On the other hand, the state needs capitalists to invest, to produce more GDP, and to hire more labor (not to mention the fact that most capitalists are party members, and most of them were cadres before they became capitalists, which means that capitalists and the state have very good relations in most localities). However, taxes, real estate, access to bank loans, and godfathers are the four areas in which there are sometimes conflicts between the state and capitalists. The first is tax. The capitalist class produces three-fourths to four-fifths of mainland China’s GDP, but only pays one-third or less of aggregate taxes. The state enterprises pay the other two-thirds. Most capitalists successfully evade taxes, helped by local governments. The tax which the capitalist class did not pay to the state during last decade constitutes half of their current capital and wealth. This partly explains why most of them never needed bank loans for their development. This makes the state very unhappy. The second is real estate. Most of the capitalists are in manufacturing, trade, transportation, construction, and service sectors. However, some found that these industries would not make them rich fast enough. They found that a better way and easier way to get rich was real estate. This resulted from flaws within China’s legal system. After 1949, theoretically, and by law, all land belongs to the state. In recent years, in China’s metropolises and middle-sized cities there has been a huge wave of real estate development, especially in Beijing and Shanghai. The key to making big money in real estate is to get land from the city government and to get loans from the state banks. With the loan you can buy the land from the city government, then build skyscrapers, then sell them out. In recent years, many capitalists moved from their original industry to real estate, and the industry became very dark and dirty. However, there is no sign that China will have a clear legal system for land use in the near future. The third area of contention is access to state bank loans (Tsai, 2002). In all the annual meetings of the national congress and national political consultative conference, capitalist legislators and representatives always complain about the difficulties in getting loans from state banks. Most of them said that during the process of their development they never got one cent in loans, and complained that in their localities the standard bribe for a loan is as high as 20 to 30% of the loan. Every year the central government promised that the state would find a way to make it easier for capitalists to get loans. However, the issue has yet to be solved. The fourth problem is the reemerging underworld with local capitalists at the core. The underworld has a long and rich history in Chinese society. Whenever the state was weak or breaking apart, the underworld was strong, and always became one of the major forces in collapse. After 1949, the new regime completely wiped out China’s underworld, which had never happened in China’s history before. After the Cultural Revolution, in some villages clans rose up to fill the power vacuum, but they were not yet underworld. The real reemergence of the underworld came after the early 1980s, where in rural areas, the people’s communes disbanded, and the newly rebuilt township government could not supervise a large population. In some villages if the village party organization and the village head were weak, a clan which had a rich and strong leader would take the lead. Soon, some capitalists tried to take power in a village, a township, or even a county or urban district. The way they did it was universal. First they tried to manipulate local elections, and bribed local officials, police, prosecutors, and judges. Gradually, they became a gang with the local capitalists as their core. There are many reports in the state media on how and where the state wiped out these gangs, and “liberated” local people suppressed by them. In my view, in the foreseeable future China’s capitalist class will only be a part of the upper class, but not a part of the ruling class, especially in the central and provincial level. They will always depend on the state. It will be determined not only by China’s political economy, but also by China’s position in the world system. In simple English, the Chinese policies of the next several American presidents will have more influence on this process than anything else. In the foreseeable future, China’s non-state sector will always be low tech and labor intensive. This is determined by the current world system and by American technology. In today’s China, the non-state sector mainly produces low tech and labor-intensive products that American firms stopped producing decades ago. The state sector controls the production of high tech and capital intensive products that China must have but which the United States refuses to sell to China, particularly weaponry such as advanced fighters, aircraft carriers and nuclear submarines, advanced radars, and advanced communication equipment and more importantly, the machines and materials needed to produce these products. Only the state sector can research, develop and manufacture these products. Therefore, most educational elites are in the state sector, although the non-state sector produces three fourths to four fifths of China’s GDP. As long as the United States refuses to sell these products to China, and prohibits other countries from selling them to China, there has to be a strong state sector in China. Chinese capitalists can do nothing about it. It is not that the Chinese capitalist class is inefficient, but it is the current world system that has made it impossible for the Chinese capitalist class to lead China in catching up with the rest of the world’s modernized nations. The non-state sector may do something to assist the state on these important courses, but they are only assistants, not the leaders. China’s non-state sector will be able to upgrade to more high tech and more capital-intensive methods only if the US gives up the technological containment of China. They have to depend on the state, but not lead the state. China’s ruling class is the leading cadres.

[edit] The Splitting off of the Cadre Class

As shown in chapter two, the current ruling class has been ruling China since more than 2,000 years ago. It emerged as the ruling class at the end of China’s feudal society (Table 2-1), the Spring and Autumn (770BC-476BC), and the Warring States (475BC-221BC). That class is the literati (士), who were initially the military. Very soon, the literati became mainly civilians. In the Chinese tradition, the memory of the literati can live forever and the literati can be immortal for three kinds of achievements (三不朽): first, to render meritorious service to the state and people, (立功); second, to achieve virtue, enjoy high prestige and command universal respect (立德); and third, to achieve glory by writing a masterpiece (立言). After the Tang Dynasty (618-907), only degree holders could be regarded as formal literati. According to a Confucian slogan from the Song Dynasty (960-1279), still found in junior high textbooks today, literati should “be the first to worry about the affairs of the state and the last to enjoy oneself; be the first to endure hardships and the last to enjoy comforts” (先天下之忧而忧，后天下之乐而乐). The highest model of the Chinese literati is “Being a field marshal in wartime, and being a premier at peacetime” (出将入相). It is also an honor to be a professional: “If one cannot being a good premier, it is fine to be a good medical doctor” (不为良相，便为良医). In short, “No one can live forever; let me die with a loyal heart shining in the pages of history” (人生自古谁无死，留取丹心照汉青). Following the theory of the Mandate of Heaven of the early Zhou Dynasty (1046 BC), for two thousand years from Han (206BC-220) to Qing (1644-1911) Dynasties, the official ideology of the ruling class was essentially Confucianism on the surface and Legalism at heart, with Lao Zi as the philosophical wisdom and Sun Zi as the core of military strategy. According to the ideology, if a dynasty holds the Mandate of Heaven and serves the people, the literati should assist the dynasty in governing the country. If the dynasty loses the Mandate of Heaven and no longer serves the people, the literati should lead the people to overthrow the old dynasty and build a new dynasty (改朝换代), usually through a civil war (逐鹿中原), with corpses piled like mountains and blood flowing like rivers (尸积成山，血流成河), from great disorder under heaven (天下大乱) to great order throughout the land (天下大治). After 1840, the special meaning for “great order throughout the land” was to catch up with the core countries, realize industrialization, urbanization, and democratization, and rebuild China’s status in the world system (振兴中华). One can argue that, before 1840, the degree-holders, the landlord class and rich merchants formed the ruling class. From 1840 to 1949, it was the Western powers, warlords, capitalists, and landlords, plus literati, which formed the ruling class, with the warlords and Western powers at the core. From 1949 to 1958, the landlord class was wiped out, and the capitalist class was bought and merged into the cadre class. From 1958 to 1979, in two decades, for the first time in Chinese history, the pure literati and the military became the only elements of the ruling class. From 1979 to the present, although a rising capitalist class has become a part of the upper class, the status of the capitalist class is lower than that of the landlord class before 1840. Since China is a backward latecomer in the current world system, today degree-holders, or technocrats, hold more power than they did before 1840. Thus, for the ruling class in the beginning of every dynasty, there is a transition period from military generals to degree-holders and from military bureaucracy to a civilian bureaucracy. It is same for the new dynasty, the People’s Republic of China. The difference is that this is not only a change to a new dynasty, but also, more importantly, a change from the elite of an agrarian society to the elite of an industrial society. In the new China, it was a long period from 1949 to 1997. The Long March generation ruled China until 1997, when Deng passed away. In 1997, finally, the highest power transferred from a founding brother, Deng Xiaoping, to a degree-holder, Jiang Zeming. In this writer’s view, the current Chinese bureaucracy is much less formal and much less bureaucratic than it was before 1840. After more than two thousand years of development before 1840, China’s bureaucracy had become highly complete, highly rational, highly professional, and highly efficient for an agrarian society. Many of its elements are still very valuable. China is trying to build a bureaucratic system that fits an industrial society, but it takes time.

Table 8-2. The Civil Servants by Ranks in 1997

Rank (10,000 people) Percentage Prefecture and above 2.28 0.43 County 28.8 5.43 Township 188.2 35.46 Ordinary official and Staff 311.2 58.64 Total 530.7 100

     Source: Documents for Leaders (领导文萃), 1998, volume 8, 110. 

. At the end of 1997, there were 5.7 million civil servants. Table 8-2 shows their distribution by ranks. The same kind of data is not available on cadres in state enterprises and state institutions. Of 40 million cadres, perhaps 2 to 3 million cadres were at the county level and above, about 100,000 cadres are at the level of prefecture and above, and more than 20,000 are at the level of vice-province and above. These 20,000 leading cadres are arguably China’s power-elite. Among the 28 million state professionals in 1998, 1.58 million of them were higher professionals, and 8.35 million of them were at the middle level. Among them, perhaps about 3,000 were granted the level of vice ministry-province and above. In fact, now almost all the leading cadres in state institutions and state enterprises themselves are higher professionals. Also, more and more party and government leaders themselves are higher professionals. For example, all top nine Chinese leaders in 2005 also hold a title of higher engineer. In short, of 40 million cadres, 10 million capitalists, plus 13 million more quasi-cadres in the talent market is China’s upper class. Thus among forty million cadres, about 3 to 4 million elites at the level of vice county and associate professor and above are China’s ruling class. Among them, there are about 35,000 cadres at the level of vice ministry-province and above who are the real power holders. Now, it is this ruling class and these power holders who lead China’s great transformation from an agrarian society to an industrial society. A few capitalists are also within the ruling class if they also concurrently hold a leading position in the state, such as legislator or political consultative conference representatives at the central or provincial level, but to this point none of them is a real power holder. Below the upper class are state workers, urban non-state workers, peasant workers, and peasants.

Table 8-3. The 1993 System in 2001

Civil Servants State Professional in the State Institutions State Workers in the Government and State Institutions Monthly Salary (yuan) I yuan = US$8.3 President Vice President Premier Grade 1 and 2 1740 to 2251 Vice Premier Grade 3 and 4 1533 to 1893 Minister Governor Level 4 and 5 1246 to 1700 Vice Minister Vice Governor Grade 6 816 to 1546 Prefecture Grade 7 and 8 Higher Professional 935 to 1295 Vice Prefecture Grade 8 and 9 Higher Professional 745 to 1128 County Grade 10 Higher Professional Vice higher Professional High School higher 655 to 1014 Vice County Grade 11 Vice higher Professional Middle-level Professional Higher School higher High School 1 Fundamental School Higher 579 to 829 Township Grade 12 and 13 Vice higher Professional Middle-level Professional High School Higher High School 1 Fundamental School Higher Skilled Worker 516 to 736

Vice Township Grade 13 and 14 Vice higher Professional Middle Level Professional High School Higher High School 1 High School 2 Fundamental School Higher Fundamental School 1 Skilled Worker 499 to 632 Ordinary Official Grade 14 and 15 Middle level Professional Initial level Professional High School 1 High School 2 Higher School 3 Fundamental School Higher Fundamental School 1 Fundamental School 2 Fundamental School 3 Skilled Worker 426 to 582 Staff Grade 15

   Middle Level Professional

Initial level Professional High School 1 High School 2 High School 3 Fundamental School higher Fundamental School 1 Fundamental School 2 Skilled Worker Ordinary Worker 395 to 525 Initial Level Professional High School 2 High School 3 Fundamental School 1 Fundamental School 2 Skilled Worker Ordinary Worker 323 High School 3 Fundamental School 2 Skilled Worker Ordinary Worker 288 Fundamental School 3 Skilled Worker Ordinary Worker 278 Ordinary Worker 268 Source: SPWD 2001, 24-341 to 24-425.

China’s economy kept growing at about 9% annually from 1979 to 2004, so the salary of the cadres accordingly rose. Table 8-3 is based on the latest data available. There was another rise in 2003, but the data are not available. For most civil servants (cadres), the amount of the monthly salary in the Table 8-3 is not their real income. Only for civil servants and schoolteachers in the remote rural areas, is the salary in Table 8-3 real. For most civil servants (cadres), their work units pay them a real salary several times higher than shown in Table 8-3. For middle level and higher-level officials, the amount in Table 8-3 is a joke. Nowadays, a decent meal to treat an honored guest is at least 1,000 yuan, and not rarely, about 3,000 to 5,000 yuan. As discussed in previous chapter, some state professionals in state institutions and state enterprises enjoy a salary ten times higher than the official figures shown in Table 8-3. There are two more things in Table 8-3 worth mentioning. First, on the surface, there are fifteen grades. However, three more grades were created mainly for public school teachers, nurses, and teaching assistants, with a much lower salary. Second, as discussed in previous chapter, several central government documents clearly pointed out that the state institutions would gradually cancel all the positions of the state workers and replace them with urban non-state workers and peasant workers. As a result, workers’ real wages would be much lower than the salary in the Table 8-3. Finally, in the Table 8-3, the highest salary, 2,251 yuan, is only eight times higher than the lowest wage 268 yuan. In reality, the difference is many times bigger than that. After 1949, although most cadres gradually became state professionals, they still regarded themselves as literati first, and professionals second. When cadres went to the streets to protest in 1989, they saw themselves as loyal literati fulfilling their patriotic duty to point out the government’s shortcomings, like their ancient counterparts did many times before. They saw themselves as the representatives of the Mandate of Heaven, of truth, and morality, like their ancient counterparts. This has totally changed. After 1992, gradually, more and more cadres changed their mentality from a member of the upper class to the mentality of a member of the middle class; although their income and reputation still definitely belonged to the higher upper class. The cadre class split after 1992. It is not to say that before 1992, Chinese cadres only asked what they can do for China, and did not ask what China can do for them. Human beings are human beings. For two thousand years, countless literati also pursued their own self interests, many of them were also corrupt, and had many other shortcomings, and were amply criticized by both Mao and Deng. However, before 1992, this was not the ideology of the literati. In theory, in ideology, on the surface, literati were to put national interests above self-interests. After 1992, the real ideology changed to “to do whatever to pursue money” (一切向钱看). Even for cadres at the level of vice county and associate professor and above, one could dare to publicly pursue self interests, or simply money, by all means, and not feel any shame. The social atmosphere is totally changed after 1992, as it has become laughable to consider national interests and public interests publicly. Many do not see themselves as a part of the ruling class anymore. Instead, they see themselves as wage earners. They worked to put food on the table. Many of them see themselves as a middle class, not an upper class. The 13 million more quasi-cadres in the talent market are all in the non-state sector. They are fighting for their own fortune, with nothing to do with the state. They do not want to be laughable literati; they want to be nouveau riche. They are the embryo of a future Chinese middle class. As discussed in previous chapter, currently the state sector still provides most positions to college graduates. However, it is changing fast. The non-state sector now provides more and more positions. Within one or two decades, the non-state sector might provide more positions than the state sector, and it is foreseeable that within one or two decades the quasi-cadres in the talent market might surpass the number of the state cadres, currently 40 million. This will be the real beginning of China’s middle class. Among 40 million state cadres there is also a split. For many state enterprise managers and technicians, especially those at low or middle levels, the state enterprise is no different than a non-state enterprise. If the non-state enterprises offer them a higher salary, they would be happy to go. It is same for many managers and professionals in the state institutions, but the fact is that most of the non-state enterprises and non-state institutions are low-tech organizations, which mainly need peasant workers, not high tech managers, technicians, and highly qualified professionals. Still, it is the state enterprises and state institutions that provide most positions to the higher and middle level professionals. In short, China’s cadre class is splitting, and the germ of a future middle class is already there.

[edit] Where is the Middle Class?

There are several dozens studies on China’s middle class (Bian, 2002, 97) and its significance and formation, but I respectfully disagree with most of them on the grounds that there is no evidence of a middle class currently in China. Sociologically, there are two meanings of middle class. First, the middle class means the class in the middle of social structure. According to this meaning, Graph 8-1 showed who China’s middle class is currently. Giving that definition, the peasant is the lower class, the urban resident is the upper class, and the peasant worker is China’s middle class. Second, narrowly, the middle class means a white-collar service professional class. In developed countries, this class was a part of the upper class in the stage of industrial society. At the end of the industrial society, and in the post-industrial society (Gilbert, 2003, 17), the size of this class gradually equaled and finally surpassed the size of the working class; so they became the middle class between the upper class (the capitalists and upper managers) and the lower class (the working class). China is still an industrializing agrarian society and has a long way to go to realize an industrial society. It is impossible for China to have a white-collar service professional middle class right now. In today’s China, most white-collar service professionals are cadres and quasi-cadres. Both cadres and capitalists definitely belong to the upper class in terms of power, wealth, and reputation. Most studies created some variables to define China’s middle class, and the most common variable was ownership of a private car. On June 9, 2003, China proudly announced that China’s total private car ownership had reached ten million. On average, there is one private car per 120 Chinese people, and China’s auto industry has become China’s fifth industry. The number of automobiles produced in China (most of them by foreign companies) surpassed France, ranking China fourth in the world only after the United States, Japan, and Germany. It is indisputably a great achievement. However, it does not mean China has a middle class. One car per 120 people definitely means that to own a car is a sign of the upper class, not a sign of a middle class. Statistically, it is really inappropriate to argue that currently there is a middle class in China because there are many private cars in China. This is ironic. In China, people with associate’s degree and above comprise less than 5% of the population. The cadres at level of associate professor and above are definitely among the top 2% of the population in wealth, reputation, and social privilege. How could some of them feel that they are just an ordinary wage earner, a member of a middle class? There are several reasons. First, the media keeps reporting the stories of the upstarts. There are many upstarts, but they are much less than 1% of the population. However, the media reports lead many to think that there are so many new wealthy people that most cadres are not even in the top fifth of the society. Secondly, due to the household registration system, the peasant class, and even the working class is separate from most cadres. When cadres live together, they see no one poorer than them. Thirdly, the term “middle class” came from developed countries. When cadres buy an apartment and a car and travel around, they feel that now, finally, they have reached the level of the middle class of the developed countries, even though they are the upper class, at least in terms of consumption, on their own. Fourth, some studies argue that there is a now middle class in China. For most of them, the ideal type of the middle class is the middle class of the developed countries. Twenty years ago, even China’s upper class was poor compared to the working class in developed countries. Now, after twenty years of rapid economic development, the lifestyle of China’s upper class is approaching the life style of the middle class in developed countries. According to Weingrod’s and Cheng’s research (Fishman, 2004), a Chinese family can live a comfortable life close to that of the American middle class for a fraction of the cost. Though China claims per capita income is US$1,100, the government numbers on income do not tell nearly the whole story on the consumer class, especially not in the eastern cities. People tend to have two to three jobs, with many taking in short-time assignments here and there. Real income in Shanghai, for instance, is close to US$2,500 per capita, US$5,000 per household. The Chinese can, on average, buy nearly five times as much in goods and services per dollar what an American can. If you multiply income against China’s purchasing power parity, Chinese urban incomes approach the buying power of Americans making US$12,500 a year. As a result, “China now has a hundred million people who are comfortably middle class”. I fully agree with the statistics, but I can not agree with the concepts. In my view, sociologically, the concepts could be totally different based on exactly same statistics: China’s population is 1.3 billion with an upper class consisting of one hundred million people, the top 7.7% of the population. This upper class consists of rich cadres, capitalists, and some talent whose dossiers are still kept in the talent market. This upper class buys what the American lower middle class buys, but most of them are still not rich enough to buy a small house and a car. China will have a middle class sooner or later because China will become an industrial society sooner or later, and after that, China will become a post-industrial society. The size of China’s white-collar service professional class will equal and then surpass the size of China’s working class. This is the irresistible historical trend, and this is the future of China.

[edit] Notes

1. ^ Robert Mortimer Marsh, Mandarins: The Circulation of Elites in China, 1600-1900, Ayer (June, 1980), hardcover, ISBN 0405-12981-5
2. ^ The Cambridge History of China, Vol. 13, 30
3. ^ Hinton, William 1997 (1966). Fanshen: A Documentary of Revolution in a Chinese Village. University of California Press
4. ^ Crook, Isabel and David. 1959. Revolution in a Chinese Village Ten Mile Inn. Routledge

[edit] Source

The original content was provided by Li Yi author of The Structure and Evolution of Chinese Social Stratification. It closely parallels the content of that book which is copyrighted by University Press of America.

General Reading on Chinese Social Structure

Watson, James L (ed.) 1984. Class and Social Stratification in Post-Revolution China. Cambridge University Press.

Li, Yi. 2005. The Structure and Evolution of Chinese Social Stratification. University Press of America.

Firebaugh, Glenn. 2003. The New Geography of Global Income Inequality. Harvard University Press.

The Oregin of Chinese Social Structure

Eberhard, Wolfram. 1962. Social Mobility in Traditional China. Netherlands: E.J. Brill.

Ho, Ping-Ti. 1976. The Ladder of Success in Imperial China: Aspects of Social Mobility, 1368-1911. Columbia University Press.

Marsh, Robert M. (1961) 1980. The Mandarins: The Circulation of Elites in China, 1600-1900. The Free Press.

Chow, Yung-teh. 1966. Social Mobility in China: Status Careers among the Gentry in a Chinese Community. New York: Atherton Press.

Elman, Benjamin A. 2000. A Cultural History of Civil Examination in Late Imperial China. University of California Press.

Chang, Chung-li. 1955. Chinese Gentry: Studies on Their Role in Nineteenth-Century Chinese Society. University of Washington Press.

Esherick, Joseph W. and Rankin, Mary Backus (eds.) 1990. Chinese Local Elites and Patterns of Dominance. University of California Press.

Fei, Xiaotong. (1953) 1968. China’s Gentry. University of Chicago Press.

Watson, James L (ed.) 1984. Class and Social Stratification in Post-Revolution China. Cambridge University Press.

Chinese Peasant Class

Fei, Xiaotong. 1992 (1947). From the Soil: The Foundations of Chinese Society. University of California Press.

Fei, Xiaotong. 1947 (1939). Peasant Life in China: A Field Study of Country Life in the Yangtze Valley. London: Kegan Paul.

Prazniak, Roxann. 1999. Of Camel Kings and other Things: Rural Rebels against Modernity in Late Imperial China. Rowman & Littlefield.

Hinton, William. 1997 (1966). Fanshen: A Documentary of Revolution in a Chinese Village. University of California Press.

Crook, Isabel and David. 1959. Revolution in a Chinese Village Ten Mile Inn. Routledge.

Endicott, Stephen. 1988. Red Earth: Revolution in a Chinese Sichuan Village. New York: New Amsterdam Books.

Friedman, Edward et al. 1991. Chinese Village, Socialist State. Yale University Press.

Potter, Sulamith Heins and Potter, Jack M. 1990. China’s Peasants: The Anthropology of a Revolution. Cambridge University Press.

Huang Shu-min. 1998. The Spiral Road: Change in a Chinese Village Through the Eyes of a Communist Party Leader. Second Edition. Westview Press.

Ruf, Gregory A. 1998. Cadres and Kin: Making a Socialist Village West China, 1921-1991. Stanford University Press.

Seybolt, Peter J. 1996. Throwing the Emperor from His Horse: Portrait of a Village Leader in China, 1923-1995. Westview Press.

Gao, Mobo. 1999. Gao Village: A Portrait of Rural Life in Modern China. University of Hawaii Press.

Chan, Anita et al. 1992. Chen Village under Mao and Deng. University of California Press.

Gilley, Bruce. 2001. Model Rebels: The Rise and Fall of China’s Richest Village. University of California Press.

Zhou, Kate Xiao. 1996. How the Farmers Changed China: Power of the People. Westview Press.

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Khan, Azizur Rahman and Carl Riskin. 2001. Inequality and Poverty in China in the Age of Globalization. Oxford University Press.

Bernstein, Thomas P. and Lu Xiaobo. 2003. Taxation without Representation in Contemporary Rural China. Cambridge University Press.

Wright, Daniel B. 2003. The Promise of the Revolution: Stories of Fulfillment and Struggle in China’s Hinterland. Rowman & Littlefield.

The Household Registration System

Solinger, Dorothy J. 1999. Contesting Citizenship in Urban China: Peasant Migrants, the State, and the Logic of the Market. University of California Press.

Wang, Fei-Ling. 2004. “Reformed Migration Control and New Targeted People: China’s Hukou System in the 2000s.” The China Quarterly 177:115-132.

Kam, Wing Chan and Li Zhang. 1999. “The Hukou System and Rural-Urban Migration in China: Processes and Changes.” The China Quarterly: 831-840.

Cheng, Tiejun and Mark Selden. 1994. “The Origins and Social Consequences of China’s Hukou System.” The China Quarterly 139: 644-668.

Chinese Working Class

Smith, S. A. 2002. Like Cattle and Horses: Nationalism and Labor in Shanghai, 1895-1927. Duke University Press.

Honig, Emily. 1986. Sisters and Strangers: Women in the Shanghai Cotton Mills, 1919 – 1949. Stanford University Press.

Hershatter, Gail. 1986. The Workers of Tianjin, 1900 – 1949. Stanford University Press.

Zhang, Li. 2001. Strangers in the City: Reconfigurations of Space, Power, and Social Networks within China’s Population. Stanford University Press. Murphy, Rache. 2002. How Migrant Labor is Changing Rural China. Cambridge University Press.

Chan, Anita. 2001. China’s Workers under Assault: The Exploitation of Labor in a Globalizing Economy. M.E. Sharpe.

Sargeson, Sally. 1999. Reworking China’s Proletariat. St. Martin’s Press. O’Leary, Greg (ed). 1998. Adjusting to Capitalist: Chinese Workers and the State. M. E. Sharpe.

Sheehan, Jackie. 1998. Chinese Workers: A New History. Routledge.

Chinese Capitalist Class

Kwan, Man Bun. 2001. The Salt Merchants of Tianjin: State-Making and Civil Society in Late Imperial China. University of Hawaii Press.

Bergere, Marie-Claire. 1989. The Golden Age of the Chinese Bourgeoisie 1911-1937. Cambridge University Press.

Coble, Parks M. 1986. The Shanghai Capitalists and the Nationalist Government, 1927-1937. Harvard University Press.

Pearson, Margaret M. 1997. China’s New Business Elite: The Political Consequences of Economic Reform. University of California Press.

Malik, Rashid. 1997. Chinese Entrepreneurs in the Economic Development of China. Praeger.

Dickson, Bruce, J. 2003. Red Capitalists in China: The Party, Private Entrepreneurs, and Prospects for Political Change. Cambridge University Press.

Krug, Barbara. 2004. China’s Rational Entrepreneurs: The Development of the New Private Sector. Routledge.

Cadre and Quasi-Cadre

Schwarcz, Vera. 1986. The Chinese Enlightenment: Intellectuals and the Legacy of the May Fourth Movement of 1919. University of California Press.

Xu, Xiaoqun. 2001. Chinese Professionals and the Republican State: The Rise of Professional Association in Shanghai, 1912-1937. Cambridge University Press.

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Lee, Hong Yung. 1991. From Revolutionary Cadres to Party Technocrat in Socialist China. University of California Press.

Cao, Cong. 2004. China’s Scientific Elite. Routledge.

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Liu, Xiuwu. 2001. Jumping into the Sea: From Academics to Entrepreneurs in South China. Rowman and Littlefield.

Hao Zhidong. 2003. Intellectuals at a Crossroads: The Changing Politics of China’s Knowledge Workers. State University of New York Press.

Lu, Xiaobu. 2000. Cadres and Corruption : The Organizational Involution of the Chinese Communist Party. Stanford Univerity Press. Bold text