AN ALTERNATE CHINA
The obituaries that marked Deng Xiaoping’s death on February 19, 1999 were extremely outspoken in their praise of the economic reforms he had unleashed on China. However, while getting rich has been glorious for many Chinese, a much larger number, although enjoying some of the reform’s benefits live a less capital existence.
We must start back a few years for a proper analysis. On June 4, 1989, there was a massacre that took place in Tinanmen Square in Beijing. It was a military suppression of students and others of a democracy movement. This happened under the Deng regime. Many foreign observers were in agreement that dire economic consequences would most likely result from this political folly. It was seen as though the Communist Party’s hard-liners had triumphed and consequently any market reforms would end. Measures already implemented to control inflation combined with the brutal killings were probably going to send China into a deep and prolonged recession.
Something strange happened though. Market reforms, far from being abandoned, were instead deepened. From 1991 to 1994, China’s Gross Domestic Product (GDP) increased even more rapidly than it had in the frantic 1980s when China led the world in annual average growth.
This continuing economic boom brought familiar social consequences. While average living standards continued to rise gradually through the mid-1990s, the rewards of economic progress were distributed in an increasingly unequal fashion. The gap between rich and poor, growing since the decade prior, became more and more visible in the 1990s.
There are no official figures on the number of newly rich. Some estimates have said that there may be as many as 10 million millionaires or so in China. This number is so substantial when you think about how the People’s Republic is the world’s most rapidly growing market for luxury goods. The significance of these numbers may be interpreted in various ways, but it is strikingly clear that China’s socialist market economy has quickly produced a bourgeoisie class. This category of people happens to have a powerful stake in the existing Communist order.
Also visible and way more numerous are the 50 to 150 million peasants from economically depressed rural areas who have migrated to the cities in search of work. Living in shantytowns or simply on the streets, the fortunate ones work as low-paid laborers on round-the-clock construction sites. As most of us have observed on TV, young peasant women labor in sweatshops under oppressive conditions. Some are employed as servants, nannies, and housecleaners in the homes of urban professionals. The migrant workers are somewhat of a functional underclass in that they do the work that permanent residents of the city avoid. Just like their counterparts in other capitalist countries, such as ours, they serve to make life comfortable for the well off. One can easily say that the rapid development of the cities is partly due to the unlimited supply of cheap labor provided by rural immigrants.
The distance between urban China’s rich and its poor laborers is as wide a social gap as is likely to be found in any other capitalist country. It really doesn’t matter if they are compared to developed or developing nations. During Mao Zedong’s years as the leader of China, life in China was plain, to say the least. Most of the population walked around wearing the same blue jacket that Mao did. This was their way of conforming. Now, at the close of the Deng era, there are terrible extremes of wealth and poverty visible. The rapid social change is as remarkable as the rapid transformation of the economy.
It is true, of course, that there were dramatic improvements in the living standards of the Chinese people during the reign of Deng Xiaoping. No matter how unequally distributed the gains and whatever the social costs, virtually all sectors of society and all regions of the country enjoy significantly greater incomes and higher standards of living than they did at the onset of the reform period. However, also true, the great majority of the laboring population are victims of more intensive forms of economic exploitation than was the case in the pre-Deng era.
The working people in both city and countryside generally enjoy greater per capita income and improved material conditions of life, as I just said, and suffer greater exploitation at the same exact time. Is it just me or does this seem rather contradictory? Let’s further investigate this. Capitalism is utilized by enormously expanding both production and productivity. China did this in several ways. They had an infusion of domestic and foreign capital seeking high returns on investments, the introduction of scientific managerial methods borrowed from capitalist countries, and purchased the labor power of relatively well educated workers at very low cost. All of the afore-mentioned steps taken are subject to the discipline of both the market and the Communist State. China contains many forms of enterprises. There are state, collective, private, and bureaucratic forms of enterprise that generate huge profits. The end result of all this is that the workforce has rapidly expanded. This expansion has provided jobs for tens of millions of people. Per capita income has increased along with this as well. The wages paid to most new entrants into the industrial workforce are surprisingly low. Therein, we find how cheap labor accounts for the staggering gap between the low costs of production and the high value of what is produced.
A market economy is notorious for generating inequality. This truth is evident in present-day China. Whereas China once was highly egalitarian under Mao, it is today regularly compared with unfavorable, inequitable countries such as Taiwan, South Korea, and India. The part that makes me angry is that the Deng regime anticipated this growing inequality. From the beginning of the reform program in 1979, egalitarianism was denounced by Deng. He believed that wealth was a deserving reward for the productive efforts of the rich, while poverty is an apt punishment for the poor. So when one looks at statements from the Deng regime they only boast of the vast number of entrepreneurs who became millionaires in the reform period. They hardly speak of any attempts to compensate for the loss of Maoist public welfare and social security systems because they hardly made any. Countless peasants have been left largely dependent on private help.
There exists no reliable data on the incomes of the upper class so they have been largely ignored in studies made on income distribution. This is not right. If a serious attempt is to be made to comprehend the meaning of inequality in the Deng era these groups cannot be ignored because they derive the highest benefits from China’s socialist market economy. The poor may not necessarily be getting poorer, but the rich are getting richer and the gulf between them is clearly widening.
From the perspective of an outsider looking in, I don’t think it would be too outlandish for me to assume that there is some powerful resentment building up among the people who were schooled under Mao’s egalitarian principles where they were used to seemingly small differences in living standards as opposed to China as we know it in the present day.