Category Archives: class conflict

“The End of the Chinese Dream”

There should probably be a question mark at the end of that headline, but many Chinese might leave it as is. Essentially FP is writing about the growing income inequality that is making many common Chinese angry- they notice that while the economy is still growing quickly, less and less of the money is making its way down to them. Have the Chinese rich managed to pull an America and cut the rest of the country out of the rise?

In June, a Chinese friend of mine who grew up in the northern industrial city of Shenyang and recently graduated from university moved to Beijing to follow his dream — working for a media company. He has a full-time job, but the entry-level pay isn’t great and it’s tough to make ends meet. When we had lunch recently, he brought up his housing situation, which he described as “not ideal.” He was living in a three-bedroom apartment split by seven people, near the Fourth Ring Road — the outer orbit of the city. Five of his roommates were young women who went to work each night at 11 p.m. and returned around 4 a.m. “They say they are working the overnight shift at Tesco,” the British retailer, but he was dubious. One night he saw them entering a KTV Club wearing lots of makeup and “skirts much shorter than my boxers” and, tellingly, proceeding through the employee entrance. “So they are prostitutes,” he concluded. “I feel a little uncomfortable.”

But when he tallied his monthly expenses and considered his lack of special connections, or guanxi, in the city, either to help boost his paycheck or to find more comfortable but not more expensive housing, he figured he’d stick out the grim living situation. “I have come here to be a journalist — it is my goal, and I do not want to go back now. But it seems like it’s harder than it used to be.”

Despite China’s astonishing economic growth, it has gotten harder for people like my friend to get by in the big city. His is not a particularly lucrative profession. Like many in Beijing, he cannot count on his annual pay to keep pace with China’s official rates of inflation — which many economists suspect are lowballed anyway.

Could it possibly be true that a swath of people in China’s big cities is downwardly mobile, if one compared wages with living expenses? I asked Patrick Chovanec, an associate professor at Tsinghua University’s School of Economics and Management in Beijing. Alas, he told me, it’s difficult to find much clarification in China’s famously fudgeable official statistics. (For instance, the official unemployment rate only includes individuals with urban hukous, or permanent residency permits — which excludes the most economically vulnerable.) Still, he noted: “If you perceive that you’re losing buying power — or have rising but unmet expectations — that’s when people get upset.… And this country, for a country growing at over 9 percent, is in a foul mood.”

As Michael Anti, a popular Chinese blogger and political commentator, told me, “The rich are becoming a dynasty.” Now people in China recognize that “you get your position not by degree or hard work, but by your daddy.” Anti added that though corruption and guanxi are hardly new concepts in China, there was previously a greater belief in social mobility through merit. “Before, university was a channel to help you to ruling class. Now the ruling class just promote themselves.”

There is a dark sense that something has changed. “It’s not simply income equality that bothers people — that’s a misconception,” Chovanec told me. “When Jack Ma makes a billion dollars for starting a successful company, that’s OK.… It’s inequality of privilege. It’s how people make their money. There’s now a whole class of people getting wealthy because of who they are, not what they do — and they follow a different set of rules.”

In today’s China, the abilities to buy and sell real estate and to win government contracts are among the greatest drivers of wealth, and it’s those who are already wealthy and well-connected who have access to these opportunities. If their children are lazy or dull, they can use their stature to create opportunities and positions for them, cutting short the trajectories of more able aspirants. Social status is becoming further entrenched because, as Chovanec notes, “Government is so pervasive in China’s economy.… Government has great power in determining winners and losers, so who you are and who you know does more than anything else to determine success.” And those at the top increasingly act above the law. “Privilege begets money, and money begets privilege.”

There are certainly many counter-examples, but the trend of super-rich getting super-richer while the middle class admits fewer and fewer members (and at a higher and higher price) seems undeniable.

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Filed under capitalism, class conflict, inequality

“Why China Is Unhappy”

Building on that last post, the WSJ writes about growing criticism of the government here:

On the Chinese equivalents of Twitter, criticism of the government is exploding, despite fierce censorship. A recent poll by Tsinghua University and the magazine Xiaokang found that 40% of Chinese are unhappy with their lives, while another survey by the magazine Outlook and Peoples University found 70% of farmers dissatisfied, mainly because of land seizures. Some 60% of the rich are emigrating or considering doing so, according to a survey by the Hurun Report and the Bank of China. Even the People’s Daily warned last week that there is a “crisis of confidence” in government.

The crisis is real, but the Communist Party mouthpiece didn’t quite get it right. Chinese lost faith in local-level officials a long time ago, but until recently they continued to believe in their national leaders. They also largely accepted the post-1989 social contract in which the Party provided rising living standards in return for not questioning its monopoly on power.

This is changing as a result of two trends. The first is a growing awareness among the bottom strata of society that it is policy made at higher levels, not merely the incompetence or corruption of local officials, that is responsible for their woes. The second is the interest of the wealthy and the intellectuals in reform after two decades of being bought off by the Communist Party.

Beijing intellectuals are making pilgrimages to the remote Shandong town of Linyi where blind legal activist Chen Guangcheng is under house arrest. Since the tax authorities last week presented the dissident artist Ai Weiwei with a $2.4 million bill for fines and back taxes, a movement has sprung up to donate money, both electronically and in paper airplanes delivered to his house, to keep him out of prison. Anger over the government’s concealment of air pollution levels, even as the leaders in Beijing install air purifiers to protect their own health, has spawned another ad hoc campaign.

What seems to be turning the tide toward political activism is a realization that unless one is a member of the Party elite, upward mobility is limited and hard-won advancement can be taken away without due process. Since universities expanded enrollments in the early 2000s, many families have borrowed heavily to pay tuition for their children. But graduates without political connections have trouble getting on the career ladder, ending up joining the “ant tribe,” slang for educated young people living in slums. Meanwhile, the children of elites can street-race their Ferraris without fear of arrest.

The government response to all this unhappiness has been to increase the resources and power of the domestic security apparatus. This year the budget for security surpassed that of the military for the first time, and disappearances of dissidents have become commonplace. Instead of cowing the population, this is only creating more instances of official abuse that are publicized on the Internet, leading to greater anger and defiance.

Alarm bells should be ringing. The virtuous cycle of social stability and material progress that has persisted for two decades is going into reverse. This need not lead to disaster, as long as the Communist Party recognizes its mistakes and responds to the public desire for the rule of law and curbs on the power of the state. Otherwise there is more unhappiness ahead.

Couldn’t agree more. I’ve said it before, but the system barely seems to work now, and has no strategy for what to do in the future. As Susan Shirk said, China today is a ‘fragile superpower.’

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Filed under activism, class conflict, Communist Party, corruption, local governments

“Kashi Special Economic Zone: The Last Chance to Get Rich for the Rich”

More on the Kashgar violence, this time from the Xinjiang Review. They attribute the problems to a growing gap between Han and Uyghur citizens which bridges the gap between ethnic conflict and class war:

During a recent trip to various cities and counties in southern Xinjiang, I heard many Han businessmen had repeatedly stated that Kashgar, as a special economic zone, is the last to get rich. It is said that within two years, the housing price has doubled in good locations in Kashi. This may explain why, in addition to political reasons, local officials and businessmen are eager to tear down old Uyghur communities and build skyscrapers in the name of economic development and ethnic harmony, a fortune-seeking pattern popular seen in many interior cities.

Since most Uyghurs are unable to “upgrade” to new apartments or to “re-model” their old houses, they have increasingly become marginalized even in their “town:” not only does the destruction of their tradition houses and business worsen their current economy, but also the coming of large number of Han officials, volunteers, merchants, police, workers, and others who benefit from the development contribute to rising prices, from housing to food.

Several Chinese scholars in Beijing have actually noticed the dilemma in state-sponsored development that on the one hand, economic development is expected to reduce ethnic tension between the Han and Uyghurs, while on the other hand, the beneficiary are mostly Han, which actually increases economic gap between the two groups and generates more ethnic problems.

In other words, violence in Xinjiang cannot be interpreted only in ethnic terms. From an economic perspective, it is also a class struggle between the poor Uyghurs and the rich Han. What complicates the Uyghur-Han relation is that it is a mixture of ethnicity and economy. The Chinese Communist Party was proud of overthrowing oppressive classes and liberating oppressed classes within the Han ethnic group in the past. Today, the class issue in Xinjiang (embodied in ethnic tension) between oppressed Uyghur and oppressor Han, coupled with international forces and influences, is a real test for China’s proletariat party if it truly represents the oppressed people, be it Uyghur or Han.

I don’t want to entirely undersell the ethnic dimension to this, but parts of that analysis certainly ring true. I have to laugh about the ‘proletariat party,’ though. It’s been some time since the Party has even pretended to aspire to anything like that, outside of downplayed rhetoric and old politics lessons.

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Filed under China, class conflict, ethnic conflict, Xinjiang