Intercoll is a collective composed of social movements, activists and intellectuals involved in daily and concrete struggles, working to renovate critical thinking on the negative impact of global capitalism as well as developing economic, social, political and ecological alternatives that allow popular movements to ‘reinvent’ the world. Out of these tremendous and dispersed efforts, a new collective intellectual emerges along the lines suggested in earlier times by Gramsci and Bourdieu.
In the meanwhile, powerful networks expand204ing their power are restructuring through a global class war against the 99 % by all means including the ‘endless war’ initiated by US imperialism and its subaltern allies of the G7. Imperialism is also reengineering its strategies to confront popular uprisings as well as ‘emerging’ countries such as China and Brazil who are becoming major powers. In parallel, Europe is stagnating although people are rising up through new forms of popular convergences. Everywhere, elites are incapable of managing the multiples crises and moreover, new challenges like climate changes, democratic demands in the Arab world and elsewhere, while confronting peoples in their scramble for resources, particularly in Africa, South America and Asia.
Nonetheless, popular movements are fighting back, time and again by « internationalizing the struggle » as our comrades from Via Campesina say. Successes and advances are plenty, but also defeats and roll-backs. The gigantic battle of ideas goes on, as the neoliberal doxa continues to dominate.
Intercoll locates itself in that context. The idea is not to have “another project” or to duplicate what is being done otherwise. The idea is through a critical usage of the vast repertoire left to us by precedent popular movements and social struggles to deepen our understanding of internationalism, to capitalize on the intersections and dialogues initiated by the World Social Forum and therefore to nourish the rich tapestry of struggles and movements.
For further information
The Intercoll program in the World Social Forum has been made possible by the participation and support of several groups including CEDETIM (Paris), Les Nouveaux Cahiers du socialisme, Collectif FSM20016 et Alternatives (Montreal) and the Hao Ran Foundation (Taipei).
|Sixty years after revolution, China has become a driving force in today’s world of economic power and at the same time, an intense site of social confrontations. Many debates are criss-crossing the society, the State, the Communist Party, as well as local networks where a typically Chinese ‘alter-globalization’ is taking shape. Although largely unknown and under-reported, this movement is growing through local experimentations and resistances, and through a powerful battle of the ideas. At the same time, China is joining the world whereas solidarity and practical exchanges are growing along the lines of solidarity and justice.|
|The big China debate||Superpower or workshop of the world, what is really defining China? What is « market socialism »?|
|Struggles||Working class struggles, rebellions peasants, urban social movements, environmental mobilizations : what is hapenning? Who’s who?|
|China and the world||What is China doing in the Global south? What is at stake with the looking confrontation with the USA in Asia-Pacific? What about China’s presence in Africa?|
Table of Contents
- The Chinese Dilemma, Samir Amin
- China rising, Dorothy Grace Guerrerro
- China’s Rise Stalled?, Hung Ho-fung
- Changing Models of China’s Policy Agenda Setting, Shaoguang Wang
- China’s Environmental Crisis. Interview with Dale Wen
The Chinese Dilemma
The debates concerning the present and future of China—an “emerging” power—always leave me unconvinced. Some argue that China has chosen, once and for all, the “capitalist road” and intends even to accelerate its integration into contemporary capitalist globalization. They are quite pleased with this and hope only that this “return to normality” (capitalism being the “end of history”) is accompanied by development towards Western-style democracy (multiple parties, elections, human rights). They believe—or need to believe—in the possibility that China shall by this means “catch up” in terms of per capita income to the opulent societies of the West, even if gradually, which I do not believe is possible. The Chinese right shares this point of view. Others deplore this in the name of the values of a “betrayed socialism.” Some associate themselves with the dominant expressions of the practice of China bashing in the West. Still others—those in power in Beijing—describe the chosen path as “Chinese-style socialism,” without being more precise. However, one can discern its characteristics by reading official texts closely, particularly the Five-Year Plans, which are precise and taken quite seriously. In fact the question, “Is China capitalist or socialist?” is badly posed, too general and abstract for any response to make sense in terms of this absolute alternative. In fact, China has actually been following an original path since 1950, and perhaps even since the Taiping Revolution in the nineteenth century.
Chinese State Capitalism
The first label that comes to mind to describe Chinese reality is state capitalism. Very well, but this label remains vague and superficial so long as the specific content is not analyzed. It is indeed capitalism in the sense that the relation to which the workers are subjected by the authorities who organize production is similar to the one that characterizes capitalism: submissive and alienated labor, extraction of surplus labor. Brutal forms of extreme exploitation of workers exist in China, e.g., in the coal mines or in the furious pace of the workshops that employ women. This is scandalous for a country that claims to want to move forward on the road to socialism. Nevertheless, the establishment of a state capitalist regime is unavoidable, and will remain so everywhere. The developed capitalist countries themselves will not be able to enter a socialist path (which is not on the visible agenda today) without passing through this first stage. It is the preliminary phase in the potential commitment of any society to liberating itself from historical capitalism on the long route to socialism/communism. Socialization and reorganization of the economic system at all levels, from the firm (the elementary unit) to the nation and the world, require a lengthy struggle during an historical time period that cannot be foreshortened.
Chinese state capitalism was built to achieve three objectives:
- Construct an integrated and sovereign modern industrial system;
- Manage the relation of this system with rural petty production;
- Control China’s integration into the world system, dominated by the generalized monopolies of the imperialist triad (United States, Europe, Japan).
The pursuit of these three priority objectives is unavoidable. As a result it permits a possible advance on the long route to socialism, but at the same time it strengthens tendencies to abandon that possibility in favor of pursuing capitalist development pure and simple. It must be accepted that this conflict is both inevitable and always present. The question then is this: Do China’s concrete choices favor one of the two paths?
Chinese state capitalism required, in its first phase (1954–1980), the nationalization of all companies (combined with the nationalization of agricultural lands), both large and small alike. Then followed an opening to private enterprise, national and/or foreign, and liberalized rural and urban petty production (small companies, trade, services). However, large basic industries and the credit system established during the Maoist period were not denationalized, even if the organizational forms of their integration into a “market” economy were modified. This choice went hand in hand with the establishment of means of control over private initiative and potential partnership with foreign capital. It remains to be seen to what extent these means fulfill their assigned functions or, on the contrary, if they have not become empty shells, collusion with private capital (through “corruption” of management) having gained the upper hand.
Still, what Chinese state capitalism has achieved between 1950 and 2012 is quite simply amazing. It has, in fact, succeeded in building a sovereign and integrated modern productive system to the scale of this gigantic country, which can only be compared with that of the United States. It has succeeded in leaving behind the tight technological dependence of its origins (importation of Soviet, then Western models) through the development of its own capacity to produce technological inventions. However, it has not (yet?) begun the reorganization of labor from the perspective of socialization of economic management. The Plan—and not the “opening”—has remained the central means for implementing this systematic construction.
In the Maoist phase of this development planning, the Plan remained imperative in all details: nature and location of new establishments, production objectives, and prices. At that stage, no reasonable alternative was possible. I will mention here, without pursuing it further, the interesting debate about the nature of the law of value that underpinned planning in this period. The very success—and not the failure—of this first phase required an alteration of the means for pursuing an accelerated development project. The “opening” to private initiative—beginning in 1980, but above all from 1990—was necessary in order to avoid the stagnation that was fatal to the USSR. Despite the fact that this opening coincided with the globalized triumph of neo-liberalism—with all the negative effects of this coincidence, to which I shall return—the choice of a “socialism of the market,” or better yet, a “socialism with the market,” as fundamental for this second phase of accelerated development is largely justified, in my opinion.
The results of this choice are, once again, simply amazing. In a few decades, China has built a productive, industrial urbanization that brings together 600 million human beings, two-thirds of whom were urbanized over the last two decades (almost equal to Europe’s population!). This is due to the Plan and not to the market. China now has a truly sovereign productive system. No other country in the South (except for Korea and Taiwan) has succeeded in doing this. In India and Brazil there are only a few disparate elements of a sovereign project of the same kind, nothing more.
The methods for designing and implementing the Plan have been transformed in these new conditions. The Plan remains imperative for the huge infrastructure investments required by the project: to house 400 million new urban inhabitants in adequate conditions, and to build an unparalleled network of highways, roads, railways, dams, and electric power plants; to open up all or almost all of the Chinese countryside; and to transfer the center of gravity of development from the coastal regions to the continental west. The Plan also remains imperative—at least in part—for the objectives and financial resources of publicly owned enterprises (state, provinces, municipalities). As for the rest, it points to possible and probable objectives for the expansion of small urban commodity production as well as industrial and other private activities. These objectives are taken seriously and the political-economic resources required for their realization are specified. On the whole, the results are not too different from the “planned” predictions.
Chinese state capitalism has integrated into its development project visible social (I am not saying “socialist”) dimensions. These objectives were already present in the Maoist era: eradication of illiteracy, basic health care for everyone, etc. In the first part of the post-Maoist phase (the 1990s), the tendency was undoubtedly to neglect the pursuit of these efforts. However, it should be noted that the social dimension of the project has since won back its place and, in response to active and powerful social movements, is expected to make more headway. The new urbanization has no parallel in any other country of the South. There are certainly “chic” quarters and others that are not at all opulent; but there are no slums, which have continued to expand everywhere else in the cities of the third world.
China and Capitalist Globalization
China entered globalization in the 1990s by the path of the accelerated development of manufactured exports possible for its productive system, giving first priority to exports whose rates of growth then surpassed those of the growth in GDP. The triumph of neoliberalism favored the success of this choice for fifteen years (from 1990 to 2005). The pursuit of this choice is questionable not only because of its political and social effects, but also because it is threatened by the implosion of neoliberal globalized capitalism, which began in 2007. The Chinese government appears to be aware of this and very early began to attempt a correction by giving greater importance to the internal market and to development of western China.
To say, as one hears ad nauseam, that China’s success should be attributed to the abandonment of Maoism (whose “failure” was obvious), the opening to the outside, and the entry of foreign capital is quite simply idiotic. The Maoist construction put in place the foundations without which the opening would not have achieved its well-known success. A comparison with India, which has not made a comparable revolution, demonstrates this. To say that China’s success is mainly (even “completely”) attributable to the initiatives of foreign capital is no less idiotic. It is not multinational capital that built the Chinese industrial system and achieved the objectives of urbanization and the construction of infrastructure. The success is 90 percent attributable to the sovereign Chinese project. Certainly, the opening to foreign capital has fulfilled useful functions: it has increased the import of modern technologies. However, because of its partnership methods, China absorbed these technologies and has now mastered their development. There is nothing similar elsewhere, even in India or Brazil, a fortiori in Thailand, Malaysia, South Africa, and other places.
China’s integration into globalization has remained, moreover, partial and controlled (or at least controllable, if one wants to put it that way). China has remained outside of financial globalization. Its banking system is completely national and focused on the country’s internal credit market. Management of the yuan is still a matter for China’s sovereign decision making. The yuan is not subject to the vagaries of the flexible exchanges that financial globalization imposes. Beijing can say to Washington, “the yuan is our money and your problem,” just like Washington said to the Europeans in 1971, “the dollar is our money and your problem.” Moreover, China retains a large reserve for deployment in its public credit system. The public debt is negligible compared with the rates of indebtedness (considered intolerable) in the United States, Europe, Japan, and many of the countries in the South. China can thus increase the expansion of its public expenditures without serious danger of inflation.
The attraction of foreign capital to China, from which it has benefitted, is not behind the success of its project. On the contrary, it is the success of the project that has made investment in China attractive for Western transnationals.The countries of the South that opened their doors much wider than China and unconditionally accepted their submission to financial globalization have not become attractive to the same degree. Transnational capital is not attracted to China to pillage the natural resources of the country, nor, without any transfer of technology, to outsource and benefit from low wages for labor; nor to seize the benefits from training and integration of offshored units unrelated to nonexistent national productive systems, as in Morocco and Tunisia; nor even to carry out a financial raid and allow the imperialist banks to dispossess the national savings, as was the case in Mexico, Argentina, and Southeast Asia. In China, by contrast, foreign investments can certainly benefit from low wages and make good profits, on the condition that their plans fit into China’s and allow technology transfer. In sum, these are “normal” profits, but more can be made if collusion with Chinese authorities permits!
No one doubts that China is an emerging power. One current idea is that China is only attempting to recover the place it had occupied for centuries and lost only in the nineteenth century. However, this idea—certainly correct, and flattering, moreover—does not help us much in understanding the nature of this emergence and its real prospects in the contemporary world. Incidentally, those who propagate this general and vague idea have no interest in considering whether China will emerge by rallying to the general principles of capitalism (which they think is probably necessary) or whether it will take seriously its project of “socialism with Chinese characteristics.” For my part, I argue that if China is indeed an emerging power, this is precisely because it has not chosen the capitalist path of development pure and simple; and that, as a consequence, if it decided to follow that capitalist path, the project of emergence itself would be in serious danger of failing.
The thesis that I support implies rejecting the idea that peoples cannot leap over the necessary sequence of stages and that China must go through a capitalist development before the question of its possible socialist future is considered. The debate on this question between the different currents of historical Marxism was never concluded. Marx remained hesitant on this question. We know that right after the first European attacks (the Opium Wars), he wrote: the next time that you send your armies to China they will be welcomed by a banner, “Attention, you are at the frontiers of the bourgeois Republic of China.” This is a magnificent intuition and shows confidence in the capacity of the Chinese people to respond to the challenge, but at the same time an error because in fact the banner read: “You are at the frontiers of the People’s Republic of China.” Yet we know that, concerning Russia, Marx did not reject the idea of skipping the capitalist stage (see his correspondence with Vera Zasulich). Today, one might believe that the first Marx was right and that China is indeed on the route to capitalist development.
But Mao understood—better than Lenin—that the capitalist path would lead to nothing and that the resurrection of China could only be the work of communists. The Qing Emperors at the end of the nineteenth century, followed by Sun Yat Sen and the Guomindang, had already planned a Chinese resurrection in response to the challenge from the West. However, they imagined no other way than that of capitalism and did not have the intellectual wherewithal to understand what capitalism really is and why this path was closed to China, and to all the peripheries of the world capitalist system for that matter. Mao, an independent Marxist spirit, understood this. More than that, Mao understood that this battle was not won in advance—by the 1949 victory—and that the conflict between commitment to the long route to socialism, the condition for China’s renaissance, and return to the capitalist fold would occupy the entire visible future.
Personally, I have always shared Mao’s analysis and I shall return to this subject in some of my thoughts concerning the role of the Taiping Revolution (which I consider to be the distant origin of Maoism), the 1911 revolution in China, and other revolutions in the South at the beginning of the twentieth century, the debates at the beginning of the Bandung period and the analysis of the impasses in which the so-called emergent countries of the South committed to the capitalist path are stuck. All these considerations are corollaries of my central thesis concerning the polarization (i.e., construction of the center/periphery contrast) immanent to the world development of historical capitalism. This polarization eliminates the possibility for a country from the periphery to “catch up” within the context of capitalism. We must draw the conclusion: if “catching up” with the opulent countries is impossible, something else must be done—it is called following the socialist path.
China has not followed a particular path just since 1980, but since 1950, although this path has passed through phases that are different in many respects. China has developed a coherent, sovereign project that is appropriate for its own needs. This is certainly not capitalism, whose logic requires that agricultural land be treated as a commodity. This project remains sovereign insofar as China remains outside of contemporary financial globalization.
The fact that the Chinese project is not capitalist does not mean that it “is” socialist, only that it makes it possible to advance on the long road to socialism. Nevertheless, it is also still threatened with a drift that moves it off that road and ends up with a return, pure and simple, to capitalism.
China’s successful emergence is completely the result of this sovereign project. In this sense, China is the only authentically emergent country (along with Korea and Taiwan, about which we will say more later). None of the many other countries to which the World Bank has awarded a certificate of emergence is really emergent because none of these countries is persistently pursuing a coherent sovereign project. All subscribe to the fundamental principles of capitalism pure and simple, even in potential sectors of their state capitalism. All have accepted submission to contemporary globalization in all its dimensions, including financial. Russia and India are partial exceptions to this last point, but not Brazil, South Africa, and others. Sometimes there are pieces of a “national industry policy,” but nothing comparable with the systematic Chinese project of constructing a complete, integrated, and sovereign industrial system (notably in the area of technological expertise).
For these reasons all these other countries, too quickly characterized as emergent, remain vulnerable in varying degrees, but always much more than China.For all these reasons, the appearances of emergence—respectable rates of growth, capacities to export manufactured products—are always linked with the processes of pauperization that impact the majority of their populations (particularly the peasantry), which is not the case with China. Certainly the growth of inequality is obvious everywhere, including China; but this observation remains superficial and deceptive. Inequality in the distribution of benefits from a model of growth that nevertheless excludes no one (and is even accompanied with a reduction in pockets of poverty—this is the case in China) is one thing; the inequality connected with a growth that benefits only a minority (from 5 percent to 30 percent of the population, depending on the case) while the fate of the others remains desperate is another thing. The practitioners of China bashing are unaware—or pretend to be unaware—of this decisive difference. The inequality that is apparent from the existence of quarters with luxurious villas, on the one hand, and quarters with comfortable housing for the middle and working classes, on the other, is not the same as the inequality apparent from the juxtaposition of wealthy quarters, middle-class housing, and slums for the majority.
The Gini coefficients are valuable for measuring the changes from one year to another in a system with a fixed structure. However, in international comparisons between systems with different structures, they lose their meaning, like all other measures of macroeconomic magnitudes in national accounts. The emergent countries (other than China) are indeed “emergent markets,” open to penetration by the monopolies of the imperialist triad. These markets allow the latter to extract, to their benefit, a considerable part of the surplus value produced in the country in question. China is different: it is an emergent nation in which the system makes possible the retention of the majority of the surplus value produced there.
Korea and Taiwan are the only two successful examples of an authentic emergence in and through capitalism. These two countries owe this success to the geostrategic reasons that led the United States to allow them to achieve what Washington prohibited others from doing. The contrast between the support of the United States to the state capitalism of these two countries and the extremely violent opposition to state capitalism in Nasser’s Egypt or Boumedienne’s Algeria is, on this account, quite illuminating.
Great Successes, New Challenges
Where does the Chinese right come from? Certainly, the former comprador and bureaucratic bourgeoisies of the Guomindang were excluded from power. However, over the course of the war of liberation, entire segments of the middle classes, professionals, functionaries, and industrialists, disappointed by the ineffectiveness of the Guomindang in the face of Japanese aggression, drew closer to the Communist Party, even joining it. Many of them—but certainly not all—remained nationalists, and nothing more. Subsequently, beginning in 1990 with the opening to private initiative, a new, more powerful, right made its appearance. It should not be reduced simply to “businessmen” who have succeeded and made (sometimes colossal) fortunes, strengthened by their clientele—including state and party officials, who mix control with collusion, and even corruption.
This success, as always, encourages support for rightist ideas in the expanding educated middle classes. It is in this sense that the growing inequality—even if it has nothing in common with inequality characteristic of other countries in the South—is a major political danger, the vehicle for the spread of rightist ideas, depoliticization, and naive illusions.
Here I shall make an additional observation that I believe is important: petty production, particularly peasant, is not motivated by rightist ideas, like Lenin thought (that was accurate in Russian conditions). China’s situation contrasts here with that of the ex-USSR. The Chinese peasantry, as a whole, is not reactionary because it is not defending the principle of private property, in contrast with the Soviet peasantry, whom the communists never succeeded in turning away from supporting the kulaks in defense of private property. On the contrary, the Chinese peasantry of petty producers (without being small property owners) is today a class that does not offer rightist solutions, but is part of the camp of forces agitating for the adoption of the most courageous social and ecological policies. The powerful movement of “renovating rural society” testifies to this. The Chinese peasantry largely stands in the leftist camp, with the working class. The left has its organic intellectuals and it exercises some influence on the state and party apparatuses.
The perpetual conflict between the right and left in China has always been reflected in the successive political lines implemented by the state and party leadership. In the Maoist era, the leftist line did not prevail without a fight. Assessing the progress of rightist ideas within the party and its leadership, a bit like the Soviet model, Mao unleashed the Cultural Revolution to fight it. “Bombard the Headquarters,” that is, the Party leadership, where the “new bourgeoisie” was forming. However, while the Cultural Revolution met Mao’s expectations during the first two years of its existence, it subsequently deviated into anarchy, linked to the loss of control by Mao and the left in the party over the sequence of events. This deviation led to the state and party taking things in hand again, which gave the right its opportunity. Since then, the right has remained a strong part of all leadership bodies. Yet the left is present on the ground, restricting the supreme leadership to compromises of the “center”—but is that center right or center left?
To understand the nature of challenges facing China today, it is essential to understand that the conflict between China’s sovereign project, such as it is, and North American imperialism and its subaltern European and Japanese allies will increase in intensity to the extent that China continues its success. There are several areas of conflict: China’s command of modern technologies, access to the planet’s resources, the strengthening of China’s military capacities, and pursuit of the objective of reconstructing international politics on the basis of the sovereign rights of peoples to choose their own political and economic system. Each of these objectives enters into direct conflict with the objectives pursued by the imperialist triad.
The objective of U.S. political strategy is military control of the planet, the only way that Washington can retain the advantages that give it hegemony. This objective is being pursued by means of the preventive wars in the Middle East, and in this sense these wars are the preliminary to the preventive (nuclear) war against China, cold-bloodedly envisaged by the North American establishment as possibly necessary “before it is too late.” Fomenting hostility to China is inseparable from this global strategy, which is manifest in the support shown for the slaveowners of Tibet and Sinkiang, the reinforcement of the U.S. naval presence in the China Sea, and the unstinting encouragement to Japan to build its military forces. The practitioners of China bashing contribute to keeping this hostility alive.
Simultaneously, Washington is devoted to manipulating the situation by appeasing the possible ambitions of China and the other so-called emergent countries through the creation of the G20, which is intended to give these countries the illusion that their adherence to liberal globalization would serve their interests. The G2 (United States/China) is—in this vein—a trap that, in making China the accomplice of the imperialist adventures of the United States, could cause Beijing’s peaceful foreign policy to lose all its credibility.
The only possible effective response to this strategy must proceed on two levels: (i) strengthen China’s military forces and equip them with the potential for a deterrent response, and (ii) tenaciously pursue the objective of reconstructing a polycentric international political system, respectful of all national sovereignties, and, to this effect, act to rehabilitate the United Nations, now marginalized by NATO. I emphasize the decisive importance of the latter objective, which entails the priority of reconstructing a “front of the South” (Bandung 2?) capable of supporting the independent initiatives of the peoples and states of the South. It implies, in turn, that China becomes aware that it does not have the means for the absurd possibility of aligning with the predatory practices of imperialism (pillaging the natural resources of the planet), since it lacks a military power similar to that of the United States, which in the last resort is the guarantee of success for imperialist projects. China, in contrast, has much to gain by developing its offer of support for the industrialization of the countries of the South, which the club of imperialist “donors” is trying to make impossible. The language used by Chinese authorities concerning international questions, restrained in the extreme (which is understandable), makes it difficult to know to what extent the leaders of the country are aware of the challenges analyzed above. More seriously, this choice of words reinforces naive illusions and depoliticization in public opinion.
The other part of the challenge concerns the question of democratizing the political and social management of the country. Mao formulated and implemented a general principle for the political management of the new China that he summarized in these terms: rally the left, neutralize (I add: and not eliminate) the right, govern from the center left. In my opinion, this is the best way to conceive of an effective manner for moving through successive advances, understood and supported by the great majority. In this way, Mao gave a positive content to the concept of democratization of society combined with social progress on the long road to socialism. He formulated the method for implementing this: “the mass line” (go down into the masses, learn their struggles, go back to the summits of power). Lin Chun has analyzed with precision the method and the results that it makes possible.
The question of democratization connected with social progress—in contrast with a “democracy” disconnected from social progress (and even frequently connected with social regression)—does not concern China alone, but all the world’s peoples. The methods that should be implemented for success cannot be summarized in a single formula, valid in all times and places. In any case, the formula offered by Western media propaganda—multiple parties and elections—should quite simply be rejected. Moreover, this sort of “democracy” turns into farce, even in the West, more so elsewhere. The “mass line” was the means for producing consensus on successive, constantly progressing, strategic objectives. This is in contrast with the “consensus” obtained in Western countries through media manipulation and the electoral farce, which is nothing more than alignment with the requirements of capital.
Yet today, how should China begin to reconstruct the equivalent of a new mass line in new social conditions? It will not be easy because the power of the leadership, which has moved mostly to the right in the Communist Party, bases the stability of its management on depoliticization and the naive illusions that go along with that. The very success of the development policies strengthens the spontaneous tendency to move in this direction. It is widely believed in China, in the middle classes, that the royal road to catching up with the way of life in the opulent countries is now open, free of obstacles; it is believed that the states of the triad (United States, Europe, Japan) do not oppose that; U.S. methods are even uncritically admired; etc. This is particularly true for the urban middle classes, which are rapidly expanding and whose conditions of life are incredibly improved. The brainwashing to which Chinese students are subject in the United States, particularly in the social sciences, combined with a rejection of the official unimaginative and tedious teaching of Marxism, have contributed to narrowing the spaces for radical critical debates.
The government in China is not insensitive to the social question, not only because of the tradition of a discourse founded on Marxism, but also because the Chinese people, who learned how to fight and continue to do so, force the government’s hand. If, in the 1990s, this social dimension had declined before the immediate priorities of speeding up growth, today the tendency is reversed. At the very moment when the social-democratic conquests of social security are being eroded in the opulent West, poor China is implementing the expansion of social security in three dimensions—health, housing, and pensions. China’s popular housing policy, vilified by the China bashing of the European right and left, would be envied, not only in India or Brazil, but equally in the distressed areas of Paris, London, or Chicago!
Social security and the pension system already cover 50 percent of the urban population (which has increased, recall, from 200 to 600 million inhabitants!) and the Plan (still carried out in China) anticipates increasing the covered population to 85 percent in the coming years. Let the journalists of China bashing give us comparable examples in the “countries embarked on the democratic path,” which they continually praise. Nevertheless, the debate remains open on the methods for implementing the system. The left advocates the French system of distribution based on the principle of solidarity between these workers and different generations—which prepares for the socialism to come—while the right, obviously, prefers the odious U.S. system of pension funds, which divides workers and transfers the risk from capital to labor.
However, the acquisition of social benefits is insufficient if it is not combined with democratization of the political management of society, with its re-politicization by methods that strengthen the creative invention of forms for the socialist/communist future.
Following the principles of a multi-party electoral system as advocated ad nauseam by Western media and the practitioners of China bashing, and defended by “dissidents” presented as authentic “democrats,” does not meet the challenge. On the contrary, the implementation of these principles could only produce in China, as all the experiences of the contemporary world demonstrate (in Russia, Eastern Europe, the Arab world), the self-destruction of the project of emergence and social renaissance, which is in fact the actual objective of advocating these principles, masked by an empty rhetoric (“there is no other solution than multi-party elections”!). Yet it is not sufficient to counter this bad solution with a fallback to the rigid position of defending the privilege of the “party,” itself sclerotic and transformed into an institution devoted to recruitment of officials for state administration. Something new must be invented.
The objectives of re-politicization and creation of conditions favorable to the invention of new responses cannot be obtained through “propaganda” campaigns. They can only be promoted through social, political, and ideological struggles. That implies the preliminary recognition of the legitimacy of these struggles and legislation based on the collective rights of organization, expression, and proposing legislative initiatives. That implies, in turn, that the party itself is involved in these struggles; in other words, reinvents the Maoist formula of the mass line. Re-politicization makes no sense if it is not combined with procedures that encourage the gradual conquest of responsibility by workers in the management of their society at all levels—company, local, and national. A program of this sort does not exclude recognition of the rights of the individual person. On the contrary, it supposes their institutionalization. Its implementation would make it possible to reinvent new ways of using elections to choose leaders.
This paper owes much to the debates organized in China (November–December 2012) by Lau Kin Chi (Linjang University, Hong Kong), in association with the South West University of Chongqing (Wen Tiejun), Renmin and Xinhua Universities of Beijing (Dai Jinhua, Wang Hui), the CASS (Huang Ping) and to meetings with groups of activists from the rural movement in the provinces of Shanxi, Shaanxi, Hubei, Hunan and Chongqing. It also owes much to my reading of the writings of Wen Tiejun and Wang Hui.
China Rising: a new world order or an old order renewed?
DOROTHY GRACE GUERRERO
China’s remarkable economic performance over more than thirty five years and its transformation into one of the world’s biggest trading powers, has led many to believe that it will be the successor to the US in global dominance. The stagnation of the advanced capitalist economies and contraction of the economies in the Eurozone in recent years have strengthened the notion that the world is at a turning point in the balance of power between the advanced economies of the North and the emerging economies of the South such as China, India, Brazil and South Africa.
The new configuration of power has increased the representation of developing countries in key and decisive processes in the United Nations, the World Trade Organisation and International Financial Institutions like the World Bank and International Monetary Bank, as well as in informal but strategic summits like the G20 group. Little attention has been given, however, to the central issue for many people in the South, which is not just China’s rise or growth nor even the relative state of democracy there. The more important question is whether China and the other new actors are offering a new and better model of development that could chart economic and social progress for other developing countries?
Already a growing number of voices are pointing to China becoming a “sub-imperialist” or a “new imperialist” power that is continuing the same or more intense practices of exploitation and extraction of resources from poorer countries to enable it to join the ranks of the world’s high income countries. Given China’s extraordinary success as a new economic power in the global economy, is China resuscitating a flagging and failing capitalist system? Is it giving new energy to the same unsustainable and unjust paradigm that facilitates the accumulation of wealth by a few while resulting in dispossession and pauperisation of the already marginalised and disempowered?
It is certainly the time to turn the spotlight on the implications for civil society of a global order in which China is an ever more dominant player. Various forecasts predict that China will soon surpass the US as the top global economic power. Whether this will happen as early as 2016 as the IMF predicted using purchasing power parity as basis of analysis or by 2020 or by 2030 according to the World Bank, most “guesstimates” agree that it will be earlier than previous assessments.
China’s rise to the top does not of course mean that China will soon rule the world the way the US does. It is beset by huge challenges and contradictions: limited agricultural land and water resources to meet the needs (and demands) of its massive population and fuel its continuing growth; increasingly polluted air and water; widening income disparities, especially between urban and rural populations; the inevitable collapse of unsustainable price controls on fuel and food; and massive corruption are just some of the problems that could raise people’s discontent and upset the Communist Party’s control. There is also a growing civil society that must be involved in global movements for justice. The fact that it makes up a seventh of the world’s population, and that its social and environmental policies will impact on everyone globally, means that understanding China is more important than ever before.
To understand China’s development and its projection as a global power, it is important to both understand its history and some of the core principles and objectives that drive Chinese governing elites, both prior to 1949 and up to today.
Martin Jacques, author of When China Rules the World, argues that we need to understand China as a “civilizational state” and not just through a Western-originated notion of a nation state. All over the world, the Chinese consider themselves to be part of a single civilisation with strong values of ancestor worship, guanxi (understanding of connections or relations), and Confucian culture and so on. Chinese understanding of race and difference is important to consider in studying how they perceive unity and identity. There are also different understandings of democracy, statehood and social relationships. Combined with strong historical lessons brought about by experiences of foreign interventions and internal conflicts, the state has managed to develop a political culture that bolsters its legitimacy in managing the economy, politics and society. This has allowed the state more freedom to implement policies affecting public life (like mega-projects from the ancient ChineseWall to present-day giant dams and high speed trains) as well as private life (one child policy, social welfare and subsidies).
The government’s argument that states’ sovereign rights trump human rights and its continuing refusal to follow Western style democracy does not mean that universal norms such as human rights, labour and environmental standards should not apply to China or don’t make sense in China. The Chinese government still views human rights in strongly aspirational rather than legal terms by arguing for priority to be placed on socio-economic rights and the right to development, and continues to insist that human rights should be implemented according to a country’s national conditions.8 Recently, however, it did sign a wide range of human rights treaties and has also officially accepted the universality of human rights. Of course these international moves are not always complemented by actions at home.
The more interesting development, however, is the increasing number of voices in Chinese society that are beginning to question old notions of state power and practices of government officials. Many express their desires to live well, to live in a healthy environment and to live with dignity. In fact many are now organising themselves and expressing their dissatisfaction over the worsening state of the environment, air pollution in cities, deplorable working conditions and low wages, corruption, substandard quality of food and other basic commodities and the overall lack of participation in decision-making processes that directly affect their livelihood, access to, and management of, resources.
China kept a chauvinistic policy before 1978 and foreigners who lived and visited the country often remarked that the Chinese had a Sinocentric view and general lack of trust to foreigners. This attitude is shaped by what most Chinese explained as the humiliation they experienced with foreign domination. It also can be traced further back to a time when the Chinese elite viewed themselves to have the most advanced civilization—the name China (中国, Zhōngguó) means the land in the “middle of the universe” —and considered China the cultural center of the world. Mao Zedong called it Han chauvinism; the Hans are the dominant ethnic group in China. It is no longer a prevalent notion among current officials, nevertheless, the attitudes still linger to some extent today.
The post-revolution period from 1949, saw huge transformation of society brought about by the mobilisation of mass movements under the direction of a single party to deliver land reform from 1950 to 1953, marriage reform in 1952, collectivisation of agriculture in 1953 and nationalisation of private industry by 1955. Some of these reforms involved terrible human costs, most notably the famine caused by the Great Leap Forward (1958-61), which led to an estimated 18-45 million deaths. At the same time, some of China’s pre-1979 policies did lay the foundations for an economic and industrial infrastructure and social and educational base.
Deng Xiaoping, the architect of reform, described the Chinese approach as “crossing the river by touching the stones”. This well-known metaphor describes the experimental nature of the reform, whereby the Party looked for areas where positive changes could be made, continued if concrete results or success were achieved and if not, reversed step-by-step.
The government’s 11th and 12th Five Year Plans (2006-2010 and 2011-2015 respectively) have focused on quality of growth, structural reforms to harness innovation and economic efficiency, and social inclusion to overcome the rural-urban divide and the income inequality gap. The goal has been to both introduce necessary reform and at the same time maintain stability. This is no easy task as Yu Jianrong, a prominent and influential scholar who heads the Rural Development Institute of the China Academy for Social Sciences (CASS), explains.
Given increased conflicts of interests between various actors in national and local governments, various policy flaws emanating from differences between the clamor for reforms and the need to maintain stability, the development of information technology and the increasing consciousness of citizens about their rights, China’s political fixation with ‘stability at all costs’, Yu argues, breeds rigidity, discourages flexibility and innovation in responding to emerging social problems and, most importantly, hampers the development of more appropriate institutional responses to social conflicts.
The Chinese regime’s determination to guarantee stability certainly shapes their economic policies, particularly their overriding mission to both secure the supply of energy and other natural resources that it needs for its manufacturing exports and to expand their market to continue its growth. This relentless drive for economic growth has had implications internally (particularly social and environmental) as well as externally where China’s hunger for resources has led to conflicts with affected communities.
Nevertheless, China’s leaders have been very careful to distinguish China’s rise from those of colonial and imperial nations. In their discourse, they call their vision heping jueqi or the peaceful rise of China and present this as underpinning their policies on trade, development assistance and cooperation. China argues that as a developing country, it shares their status with other developing countries and so portrays its trade, investment and development relations with other developing countries as being forged in the spirit of South-South cooperation. It assures its Southern partners, on many occasions and in many statements, that its rise should be seen as non-threatening because it also suffered from domination from foreign powers and therefore will not become a coloniser or dominant power to them. Chinese leaders repeatedly express that China did not seek hegemony before and will not seek hegemony now and in the future.
Chinese officials also point out that China is expanding its political influence through an institutional approach, that is, by means of international cooperation and integration into the international community. In 2007, the Chinese Communist Party under Hu Jintao institutionalized harmonious world (hexie shijie) as its foreign policy, a counterpart to the national policy discourse of harmonious society (hexie shehui).
China’s diplomacy is presented as pushing for its core interests of safeguarding of sovereignty, security, and development. These core interests can be more usefully detailed as ensuring China’s political stability, namely, the stability of the CCP leadership and of the socialist system; second, sovereign security, territorial integrity, and national unification; and third, China’s economic and social development.
There are two opinions in the leadership on what is the best strategy for upholding such interests. The first one is based on Deng Xiaoping’s teaching of tao guang yang hui, or keeping a low profile in international affairs promoted by prominent political figures, such as Tang Jiaxuan, former foreign minister, and General Xiong Guangkai, former deputy chief of staff of the People’s Liberation Army. They argue that since China remains a developing country, it should concentrate on economic development. The second is the nationalist one, which is pressing for a more “can-do” foreign policy since China is more powerful now than before.
At the same time, China adamantly asserts the integrity of its territorial sovereignty and does not allow any partner state to make official diplomatic relationships with Taiwan, the Government of Tibet in Exile or East Turkistan (Xinjiang) Independence Movement groups. This assertion of China’s territorial sovereignty is also reflected in its assertions of sovereignty over disputed territories such as the Spratly Islands or indeed control of the South China Sea itself.
CHINA’s ECONOMIC GROWTH: CAUSES AND EFFECTS
China’s rise as a global power is largely predicated on its incredible economic growth in the last three decades. Its embrace of “free market” economic policies is frequently cited as the main cause of this growth and is used to bolster the case for neoliberal globalisation elsewhere. But the path China followed is different, and at least on economic grounds, more successful than the “shock therapy” followed by other formerly communist planned economies such as Russia.
China did not achieve such phenomenal growth simply by opening up its economy. The first point to note is that China’s pre-1978 condition wherein people already had access to land and universal health care and primary education, played an important role in the country’s readiness for economic take-off in the 1980s. Indeed, social development was a major component that helped China in its early phase of transition to the market economy. Without comprehensive land reform followed by the formation of agricultural co-operatives and, later, people’s communes, the reform policies after 1979 could not have been implemented successfully. China’s industrialisation was aided by rural development, safety nets enjoyed by rural families and workers, and security of land tenure.
China was also extremely cautious and pragmatic in how it opened up its economy. China’s reform process had four phases: First, gradual opening to the global economy and policy reformulation (from 1978—1986). From 1979 to 1984, the Chinese government established new regulations to permit joint ventures using foreign capital and established four Special Economic Zones (SEZs) in Shenzhen, Zhuhai, Shantou, and Xiamen. The commune system was dissolved and state-owned enterprises were privatised (or corporatised) in 1984. In the second phase from 1986—1992, China developed “twenty two regulations”, which created a more beneficial environment for foreign investors, whilst maintaining considerable state control to maximise benefits from this investment.
China’s Rise Stalled?
It was perhaps predictable that China’s initial sharp rebound from the global financial crisis would serve to entrench widespread perceptions that the PRC represents an alternative and, on some readings, superior model of capitalist development . Desperate pleas by Hillary Clinton and Tim Geithner for Beijing to continue its purchase of US Treasuries in the immediate aftermath of the 2008 meltdown seemed to confirm that China was indeed displacing the US, the alleged culprit of the crisis, and becoming a new centre of the global economy. Yet the celebrations of China’s rise at the expense of the US evoked more skeptical responses too. Michael Pettis’s provocative and well-informed new book, The Great Rebalancing, presents a more critical view.
It contends that countries that run a persistent trade surplus, like China, are at least as responsible for the global financial crisis as those running deficits, like the US. In his view, the outcome of the crisis will put an end to the ‘economic miracles’ of the surplus countries and may lead them into Japan-style lost decades. The only way out would require a profound rebalancing of the surplus countries’ economies. I will argue that a third scenario could be derived from the book’s analysis, beyond Pettis’s alternatives of a prolonged, deepening crisis or smooth, coordinated rebalancing. But first let us examine The Great Rebalancing’s account.
The Great Rebalancing
Pettis is a professor of finance at Peking University and a veteran Wall Street wheeler-dealer specializing in ‘emerging markets’, initially in Latin America. His first book, The Volatility Machine: Emerging Economies and the Threat of Financial Collapse, appeared in 2001, and since then his contrarian views have become well known through his widely cited blog, ‘China Financial Markets’. Drawing diverse theoretical insights from Keynes and, surprisingly, Hobson, Lenin and David Harvey, The Great Rebalancing is a systematic elaboration of Pettis’s diagnosis of the origins of the financial crisis and suggestions for its remedy. He sees the global trade and capital-flow imbalances underlying the crisis as primarily a consequence of the consumption-repressing growth model adopted by the surplus countries, most notably China and Germany.
The Great Rebalancing sets out the principles at stake, in the form of ‘accounting identities’. Where consumption is repressed relative to production, the result is a rise in saving. If domestic savings exceed domestic investment, then in an open economy the excess saving will flow abroad to other countries, in the form of net capital export.
China’s purchase of US Treasury bonds and Germany’s lending to Spain and Greece are examples of such exports. Similarly, for a country that imports capital from abroad, investment will exceed saving. It follows that the amount of net capital outflow or inflow will be equal to the difference between savings and investment; the difference will also be equal to the country’s trade balance. Therefore, an economy’s trade surplus/deficit will be equal to that economy’s net capital outflow/inflow, which in turn is equal to its saving less investment. As open economies are linked to one another through trade and investment, capital export and trade surplus originating from one country’s under-consumption must be balanced by capital imports, trade deficit and over-consumption in another country. In other words, domestic imbalances of trading partners will mirror each other, generating global imbalances.
Examining how these principles have operated in the concrete case of China’s domestic imbalance, Pettis, like many other authors, finds that the prc’s model of repressed-consumption growth is not new, but is an extended replication of the Japanese model. As Pettis emphasizes throughout the book, a country’s consumption levels and savings rate have nothing to do with its culture and the habits of its people: China’s high saving and low consumption are consequences of explicit policies: wage repression, an undervalued currency and financial repression.
Since the 1990s, the vast supply of rural migrant labor, whose rights and access to services where they worked were denied under the hukou system, in addition to what Pettis describes as ‘government-sponsored unions that more often see things from the point of view of employers than from that of workers’, ensured that wages grew much more slowly than productivity, hence repressing the growth of workers’ income and consumption relative to the growth of production. At the same time, China’s central bank intervened in the currency market to prevent the yuan from appreciating alongside the growth of the trade surplus. The undervalued currency benefited exporters, but made domestic consumption more expensive; the policy has therefore operated as a hidden tax on household consumers, which is transferred to exporters. The low interest rates maintained by state banks for both depositors and borrowers have also constituted a hidden tax on households: while ordinary depositors have had to put up with meagre or even negative real interest rates, state enterprises and government units could borrow at give-away rates to fuel the orgies of real-estate and infrastructural construction. This again is tantamount to a subsidy to the state sector paid by financially repressed depositors.
This model of development brought about miraculous economic growth rates, rapidly improving infrastructure and an internationally competitive manufacturing sector. Paradoxically, though the growth rate has attracted high investment, the financial repression involved also pushes saving—here, mostly corporate and government rather than household saving—to an even higher level. As such, the excess saving of China has to be exported overseas in exchange for external demand for its manufactured products. Given the size of the US market and the high liquidity of US assets, Treasury securities in particular, most of China’s excess saving ends up heading to the US. To Pettis, the Chinese purchase of dollar assets is a trade policy, ‘aimed at generating trade surpluses and higher domestic employment’.
For the American economy, such large-scale capital imports are ‘usually harmful’, as the US has ‘no choice but to respond to the growing net inflows [of capital] with higher investment, higher unemployment, or higher consumption’. With capital inflows pushing up the dollar, cheapening manufactured imports and penalizing us manufacturers, ‘there was little incentive for American businesses to borrow and expand production domestically’. Instead, the massive inflows of capital fuelled the expanding real-estate bubble and debt-financed consumption. Pettis concludes that the US consumption spree and trade deficit was caused by excessive foreign (Chinese) investment in dollar assets that ‘force Americans to consume beyond their means’.
In his analysis of the Eurozone crisis, Pettis sees the relation between Germany, a surplus country, and Spain and other ‘deficit countries’, as reminiscent of that between China and the us. In the 1990s, post-unification Germany put into place ‘a number of policies, agreed on by trade unions, businesses and the government, aimed at constraining wages and consumption and expanding production, in order to regain competitiveness and generate jobs.’
These consumption-repressing policies worked well. But excess saving has to be exported, in exchange for ‘importing’ external demand. In this instance, the context included the launch of the euro and increasing European integration. German capital was exported to peripheral Europe principally in the form of bank lending, but its harmful effects resembled China’s capital exports to the US in the form of buying Treasury bonds. Taking Spain as his example, Pettis contends that German’s anti-consumption policies eroded the profitability of Spanish manufacturing and discouraged private investment in the tradable goods sector there, while at the same time Germany’s excess saving was being exported to Spain on a massive scale. The result was the expansion of a gigantic real-estate bubble in Spain.
Pettis reminds us that global imbalances caused by under-consuming countries which export surplus capital to other economies are not novel in the development of capitalism. Drawing from the insights of Hobson and Lenin, he notes that in the late nineteenth and early twentieth century, under-consumption in industrialized economies—where workers’ demand was repressed since wealth and income were concentrated in the hands of the rich—created pressures for those countries to export capital to their formal or informal colonies, which in turn started to run trade deficits and be indebted to the colonizing countries. The main difference between then and now is that, in the early 1900s, capital-exporting colonizers ‘managed the colonial economies and their tax systems, and so they could ensure that all debts were repaid’. Global imbalances could therefore last longer in the age of imperialism, as ‘large current-account imbalances could persist for as long as the colony had assets to trade [or to be expropriated]’.
What Pettis does not mention is that a century ago, when colonized importers of capital were invariably underdeveloped economies, the imported capital mostly flowed into extractive industries instead of financial markets. This kind of investment did not generate the type of volatility that financial investment in today’s deficit countries entails. On the other hand, this highly territorial form of capital export drove the imperial powers to vie aggressively with one another for colonial possessions, intensifying inter-imperial rivalry and triggering the First World War.
Capital exporters today, like China and Germany, do not enjoy that sort of colonial control over importers of their capital, like the US and Spain, and much of it flows into financial and real-estate activities. Imbalances under these conditions are less sustainable. Once the bubbles burst, or borrowing capabilities run out in the increasingly indebted deficit countries, consumption there will collapse. This is what has been happening in the US, Greece and Spain since 2008. When this happens, trade-deficit countries are forced to undergo painful rebalancing, which can be achieved through tax hikes on the rich and/or policies that restrain consumption and boost saving. Such rebalancing efforts will be futile, however, if the surplus countries continue to repress consumption, export surplus savings and maintain trade surpluses with the deficit countries.
It is mathematically impossible for the US and peripheral Europe to attain trade surpluses and repress consumption if no other countries are shrinking their surpluses and boosting consumption. In the global economy, someone’s surplus must be accompanied by another’s deficit. A true rebalancing of the global economy is possible only when the deficit countries and surplus countries rebalance their domestic economies simultaneously through mirroring policies.
America’s and Spain’s policies to restrain consumption and boost saving have to be accompanied by policies in China and Germany that boost consumption, reduce saving and reverse their trade balance. Pettis suggests that Germany should cut taxes and increase government spending to deflate its savings and move towards a trade deficit, generating demand for the tradable goods sector in Spain and Greece. In that case, the latter’s rebalancing policies, which restrain consumption and investment, would cause less unemployment. If Germany is reluctant to rebalance, then Spain’s and Greece’s adjustment may be so painful that they will be forced to default on their debt or devalue their currency by leaving the euro. Likewise, American rebalancing has to be accompanied by China’s shifting in the opposite direction, if it is to be effective. The prc needs to boost domestic consumption and reduce its saving. As China’s under-consumption is mainly attributable to the squeezing of household income to subsidize export manufacturers and the state sector, boosting consumption will have to involve a ‘distributional struggle’ in favour of the household sector.
China’s rebalancing is not only crucial to the rebalancing of the US and global economy, Pettis argues. It is also essential in order to prevent a serious economic crisis within the prc itself. The two engines of the Chinese miracle—investment and exports—are starting to crumble. China’s infrastructure is becoming excessive, relative to its stage of development, and falling returns on newly constructed infrastructure are exhausting the lending capability of the state sector, which is already overloaded with pre-existing loans. In the meantime, US consumption is declining and the concomitant political pressure on Beijing to shrink its trade surplus mounts. With the investment and export engines faltering at the same time, an increase in Chinese household income and consumption becomes all the more important.
The Great Rebalancing should be celebrated for its clarity and concision. It mounts a convincing challenge to mainstream moralizing about the origins of the global crisis, demonstrating that the global imbalances which underlie it unfold through a process of uneven and combined capitalist development, in which the US, China, Germany and peripheral Europe are interlinked parts. These merits notwithstanding, the analysis has two major gaps. The first of these centres on the origins of the imbalances themselves. If capital inflows from surplus countries are so harmful to deficit countries, fuelling financial and real-estate bubbles, then why do the latter keep letting the surplus capital in? Do the deficit countries really have no choice but to accept passively whatever the surplus countries are exporting to them?
Recall that the whole edifice of Pettis’s argument is grounded on the accounting identity that a country’s trade surplus equals its net capital export, as well as its saving less investment; yet as he states, this premise only applies to an ‘open’ economy. It follows that the analysis of the mirroring imbalances between surplus and deficit countries would not have been valid had it not been for the completion of global-market integration—the removal of numerous national controls.
Such integration is far from the natural state of global capitalism. It is a result of the neoliberal project that Reagan and Thatcher started in the 1980s as a remedy for the crisis of falling profit rates across advanced capitalist countries in the 1970s. The creation of the WTO in 1994, China’s accession to it in 2001 and the launch of the euro in 2002, deepening the integration of the European market, are major milestones of this project. The rise of a global integrated market makes the flow of goods and money feasible on a much vaster scale. Deregulation of financial markets in the US and Europe helped to ready these countries for the massive absorption of foreign capital as fuel for speculative activities. Viewed in this light, though high saving and the export-oriented model of growth in surplus countries is directly responsible for the imbalances in the deficit countries and the global imbalances at large, it was the neoliberal turn of the US and Europe in the 1980s that set the stage, enabling such growth models to work at all.
The second gap relates to the potential outcomes of the current global crisis, seen here as entailing either prolonged stagnation and ‘lost decades’, or coordinated rebalancing. Pettis is certainly right to assert that rebalancing within China, the biggest surplus country in the world today, would be very difficult, given the adamant resistance of the bureaucratic-capitalist elite, who are the major beneficiaries of the current model. What remains to be seen is whether China, faced with the limits to its model of exporting surplus capital to the US, yet resisting rebalancing, might choose to shift to a more ‘classical’ strategy of capital export—that is, to export capital to underdeveloped countries and invest mostly in extractive industries and infrastructure there. Though the stock of China’s outward fdi flow so far amounts to less than 30 per cent of its holding of US Treasuries (or 10 per cent, if we exclude flows into Hong Kong), according to the prc Ministry of Commerce it increased dramatically between 2002 and 2010, from $29.9bn to $317bn, or $118bn excluding Hong Kong.
China’s outward fdi comprises a lot of investment in mining and infrastructure in the global South. The recipients of Chinese capital—and that from other emerging surplus countries, like Brazil and South Africa—also constitute expanding markets for Chinese manufactured exports. China’s increasingly proactive economic expansion in the developing world, Africa in particular, has provoked heated debate. For example, on the eve of the brics Durban Summit in March 2013 Lamido Sanusi, Governor of Nigeria’s Central Bank, wrote in the Financial Times that China is just another colonial power in Africa.
China Reaching Out
To be sure, China’s relations with the other developing countries that absorb its exports of capital and manufactured goods are far from the classical colonial model of the early twentieth century. China has so far lacked the will and muscle to assert military and political influence over the destinations of its capital exports. But this seems to be starting to change, as China’s latest National Defence White Paper, ‘The Diversified Employment of China’s Armed Forces’, stated explicitly that protecting overseas economic interests is now a core goal. With the gradual integration of China’s economy into the world economic system, overseas interests have become an integral component of China’s national interests.
Security issues are increasingly prominent, involving overseas energy and resources, strategic sea lines of communication, and Chinese nationals and legal persons overseas. Should China manage to develop its geopolitical prevalence in select parts of the global South, then Beijing might well be able to delay rebalancing and sustain its high-saving, high-export model of development by shifting from the US to the developing world as the major destination of its surplus capital and manufactured exports. Of course, China’s rise as a new imperial power is at most incipient. The two alternative scenarios that Pettis contemplates—a smooth, coordinated rebalancing of the surplus and deficit countries or a long, rocky landing of China and Germany, following in the footsteps of Japan’s lost decades—are still much more plausible in the short run. In any event, the global crisis starting in 2008 is a turning point in the development of global capitalism. In the long run, whether it will lead to a more balanced and sustainable world economic order, a perpetual global crisis, or a renewed partition of the world by old and new imperial powers remains to be seen.
Changing Models of China’s Policy Agenda Setting
China’s political system has undergone profound changes and thereby to challenge a conventional wisdom in the West that no political reform has ever taken place in China.
The Closed-Door Model
The closed-door model prevailed in imperial China, when the people had no idea of political participation. In contemporary China, moreover, such a model of agenda setting has not yet altogether disappeared. A case in point was the price reform in 1988, which was a “touchy” issue at the time. When moving from a planned to a market economy, China encountered enormous trouble in fully exposing its pricing mechanism to the supply and demand of the market, since the government had always controlled the pricing process in the past.
In the early 1980s, Deng Xiaoping warned that great caution should be taken in price reform. From 1985 to 1987, as the consumer price index started to rise in line with steady progress of the price reform, China came to be faced with the most serious inflation that it had experienced since the early 1950s. At the February 1988 meeting for analyzing the economic situation, the CCP Politburo realized that prices had risen so fast that people could no longer endure it. The State Council then took some measures to hold down prices, including exerting control over government expenditures and cutting down investment in fixed assets. With these initiatives in place, the State Council then decided to increase the purchase prices of some agricultural products and to replace the old practice of price-fixing with open subsidies to urban employees. Unexpectedly, the introduction of these measures set off panic purchasing all over China. In this situation, it would have been wise to slow down the price reform, yet Deng Xiaoping insisted then that the reform should brook no delay. Against this backdrop, People’s Daily, the most influential newspaper in China, published an editorial entitled “Plough Ahead with Reform” on June 9. The author of this editorial was quite clear that the price reform would temporarily harm the interests of a great number of people, but he seemed to be confident of the people’s endurance.
The CCP Politburo, obviously affected by such an optimistic view, discussed and then approved the Preliminary Program for Price and Salary Reform, which declared that the main objective of the reform was to liberalize the prices of most commodities except for strategic commodities and labor services. On August 19, when the reform plan was promulgated, there was another fit of nationwide purchasing fever. In some places, people swarmed into banks and withdrew immature deposits from their fixed accounts to get their hands on cash for a buying spree. During the price reform, the agenda was virtually set alone by the CCP Politburo through a series of internal meetings. Once policy makers determined to speed up the price reform, they did not bother to seek the understanding and support of the public. They wishfully hoped that people would cotton to the plan and willingly bear the loss caused by the ensuing inflation. As a result, the consumer price index rocketed all the way to 18.8 percent in 1988 and discontent was soon contagious, which partly foreshadowed the political crisis in 1989. Later, Deng Xiaoping took a good lesson from the experience.
The Mobilization Model
The mobilization model is quite familiar to people in China. During Mao’s era, this model was applied in setting almost all major and strategic agendas, ranging from the Land Reform, the Three-Anti and Five-Anti campaigns, the General Line for the Socialist Transition, the Great Leap Forward, the People’s Communes, and the Four Clear-ups Movement, all the way to the Cultural Revolution. In general, the mobilization model consists of five phases. In the first phase, “the movement is started and instructions issued” Instructions may take the form of either an official document from the CCP Central Committee or the State Council, or an editorial or commentator’s essay of the CCP-controlled People’s Daily.
During the Cultural Revolution, such instructions often came as “Chairman Mao’s Latest Directives.” In the second phase, “the instructions are disseminated to all levels in company with an imposing propaganda campaign” The dissemination is normally arranged in a set order: Party members should know before non-Party individuals; cadres should know ahead of ordinary people. The propaganda campaign is to ensure that everyone in the country knows about the relevant instructions. Sometimes when speed is emphasized, it is required that the whole process of dissemination should be completed within twenty-four hours. In the third phase, people are organized to “study the instructions for deeper understanding” Here “study” means to discuss the official documents, editorials, and commentaries as well as supplementary reading materials. The objective of studying is to make sure that people get a clear, full understanding of the essence of the CCP Central Committee’s initiative, including why the new agenda is set, what is the thrust of the new agenda, and what steps are to be taken to carry out the new agenda. The fourth phase involves “grasping typical cases and spreading the experience gained at selected units to the whole country” “Typical cases” can be negative as well as positive.
Highlighted “typical cases” are used to convince the public that the agenda is necessary, feasible, and superior. Finally, after all the above-mentioned phases, the mobilization model seeks to form a consensus among people on how to fulfill the agenda. The upside of this method is that it is much less costly than either coercion or exchange; the downside is that it cannot have an enduring effect. Since the reform and opening up, the mobilization model has not been used as frequently as before, but it has not been completely abandoned either. For instance, it played an important role in setting the agenda in the following policy areas: introducing the one-child-per-couple policy (1980); opening channels for employment in the private economy (1981); establishing the household responsibility system in the countryside (1982); launching the “five emphases, four beauties, and three loves” campaign and the “clearing-up of ideological pollution” campaign (1983); speeding up the reform of the urban economy (1984); pushing forward the wage reform in state-owned enterprises and stopping the practice of eating from the same big rice-pot (1985); restructuring the labor system through breaking the “iron rice bowl” (1986); counteracting bourgeois liberalization (1987); stepping up the restructuring of the personnel, income distribution, and social security systems (1992); advancing the reform of the old-age pension system of public enterprises (1995); reducing staff for improved efficiency and laying off or dispersing redundant employees (1997); and introducing a nationwide reform of the health insurance system in the urban sector (1998) (1978–2003). Mao’s was an era of great men, when most important policies were made by Mao Zedong, Zhou Enlai, and other members of the highest leadership. But that does not mean there was no room for the inside access model. We may spot some special features of this model in the following cases from the early 1950s to the early 1970s.
Case One. The Korean War broke out in June 1950. By early August, the People’s Army of the North had gained control of more than 90 percent of the Korean peninsula. The socialist bloc headed by the Soviet Union then took the optimistic view that Korea would be reunited in next to no time. But Mao Zedong and other Chinese leaders remained sober-minded. On August 23, after a thorough analysis of information received from all sides, Lei Yingfu and his colleagues in the Operations Room of the General Staff came to the conclusion that the odds of American troops landing at Inchon were great. If so, the supply lines of the North Korean army would be cut and its main forces would be open to attack from both the north and the south, and consequently the war situation would change overnight. Furthermore, they predicted that the American troops would most probably carry out their invasion at Inchon on September 15, 1950, a day of high tide. Mao Zedong began to deploy forces in anticipation of the worst-case scenario (Lei, 1993). Lei’s predication, which turned out to be correct, had a direct bearing on the strategic decision making of the highest leaders at this crucial juncture.
Case Two. The military conflict between China and the Soviet Union in March 1969 triggered heated debate in China over its strategy toward the Soviet Union. Some thought that the Soviets would shift their strategic center of gravity to the East and attack China, while others reckoned that the Soviet Union would continue to focus on the West, striving for strategic advantage in Europe in competition with its main rival, the United States. What worried the Chinese government most then was the possibility that the Soviet Union and the United States would join forces against China. At the end of 1969, Wang Shu, then a staff reporter with the Xinhua News
Agency in West Germany, wrote an in-depth analysis of the Soviet strategic posture. With well-documented facts and reliable statistical data, Wang argued that Europe was still what the Soviet Union and the United States really coveted, and the Soviets’ vital interests still lay in Europe. As for the Sino–West German relationship, Wang Shu suggested that China should abandon the old view that West Germany was a “militaristic, revanchist country.” He believed that pacifism prevailed in West Germany. With rapid economic growth, West Germany was more and more eager to acquire a bigger share of the international market. It would be mutually beneficial if China could improve its relationship with West Germany.
More specifically, Wang Shu recommended that Chinese leaders should invite the leaders of West Germany’s main opposition parties to China in the hope of putting pressure on the ruling party to boost relations between the two countries. Mao Zedong and Zhou Enlai expressed deep appreciation of Wang’s view after they read his reports on the European situation, Soviet strategy, and the relations between China and West Germany. They separately met with Wang Shu in late July 1972. China’s Ministry of Foreign Affairs cited him for commendation in an internal official dispatch. Wang Shu’s report exerted a considerable influence on China’s highest leadership in their decision on the country’s global strategy. Subsequently, Sino–West German relations developed speedily. The two countries signed a communiqué on the establishment of diplomatic relations on September 29, 1972.
These cases highlight three characteristics of the inside access model during Mao’s time. First, this model was largely applied to issues related to national security. Second, proposals or advice for internal reference came mainly from military staff officers or intelligence agencies rather than research institutes. Third, most of the proposals were products of individual “masterminds” rather than institutionalized think tanks. At that time, the newly founded People’s Republic was faced with a treacherous and hazardous international environment so that the priority of China’s highest leadership was strengthening and defending the country.
Clearly these three characteristics were products of the time. The inside access model was applied more frequently after the reform. The most important reason for this is that China had profoundly altered its strategic priorities. If the primary concern in Mao’s time was how to make the country stand on its own feet, the issue of the utmost importance in the reform era would be how to make China prosper. It is no easy task to develop a modern economy; the process is so complicated that no single individual is capable of engineering it. The task requires a transformation of the existing supporting mechanism for decision making, which, by counting on individual masterminds for advice, could no longer satisfy the modern needs of decision making. Against this background, China put forward the slogan of “scientific decision making” at the outset of the reform. Soon after, clusters of think tanks began to emerge.
The Chinese Rural Development Research Group, formed in 1980, was one of the first think tanks in China. The group consisted of children of some high-ranking officials and well-known intellectuals. Their family ties enabled them to maintain close connections with the central leadership. With the support of both the Research Section under the CCP Central Committee Secretariat and the Chinese Academy of Social Sciences, the members conducted field investigations and submitted their research reports directly to the central leaders, who used them as comprehensive and systematic firsthand data for the Central Meeting of Rural Work in 1981.
Later, the group participated in helping the central government with drafting a series of “No. 1 documents” on issues related to the countryside and agriculture. Gradually, the research output of the group became very influential in governmental policy making. Later, some group members entered government-run research institutions like the China Economic Reform Research Institute (CERRI). CERRI began to play an increasingly important role when the reform extended toward urban and industrial areas. It remained the most influential think tank in China until1989. Typically, these think tanks published some internal reports such as “briefings,” “reference materials,” and so on. The circulation of their publications tended to be very small, yet such publications might go straight to the top leaders of the central government.
The current central leadership team came into office at the end of 2002. Compared to their predecessors, they seem to be more aware of the importance of making policies in a democratic and scientific way. An indication is that from December 26, 2002, to April 23, 2007, the new CCP Politburo held forty-one workshops, averaging one every forty days, inviting philosophers, natural scientists, social scientists, and legal scholars to give them lectures. The new central leadership has never tired of emphasizing the importance of building up and strengthening think tanks and brain trusts, in the hope that, based on forward-looking and strategic research, they can provide decision makers at all levels of government with thoughtful policy advice. In response, the Chinese Academy of Sciences promised that, as the nation’s foremost think tank in science and technology, it would “bring its initiative into full play so as to upgrade [its] capacity of offering advice for pivotal strategies concerning national development” (Qi, 2004).
The Reach-Out Model
Generally speaking, policy advisers prefer to influence decision makers directly rather than in a roundabout fashion. Unless it is as a last resort, they do not take issues to the public for help and risk offending decision makers. Why, then, do they occasionally take that step? The most important reason perhaps is that they encounter strong opposition from within the establishment and believe public opinion will surely be on their side.
The reach-out model is by no means common in China. Nevertheless, there is a recent example. China began market-oriented medical reform in the 1990s. According to nationwide surveys of medical service in 1993, 1996, and 2003, medical expenditures of urban and rural residents increased steadily while the percentage of the population covered by health insurance shrank. In a dramatic way, the Severe Acute Respiratory Syndrome (SARS) crisis of 2003 revealed the vulnerability of China’s health-care system brought about by the market-oriented medical reform and led people to reflect on the whole matter. However, some governmental officials insisted that the country’s medical system should be further marketized. In the spring of 2005 the China’s Medical System Reform Study Group, a project jointly sponsored by the Social Development Section of the Development Research Center under the State Council and the World Health Organization, published a series of reports that concluded that China’s medical reform “had not been successful,” if it was not a “colossal failure.”
At first, the reports drew little attention because they appeared in an internal journal. In June 2005 the situation took a sudden turn when Ge Yanfeng, deputy director of the Social Development Section of the Development Research Center under the State Council, disclosed the conclusion of the general report while being interviewed by news media. He argued that medical reform in China must stick to two principles. First, the reform ought to ensure equity, that is, guarantee all people equal access to basic medical services. Second, it should emphasize the cost-effectiveness of medical investment; in other words, the health of the whole population should be improved as much as possible under the condition of limited public investment in health care. In his view, it was impossible for the market-oriented medical reform to achieve either goal. Almost at the same time, Liu Xinming, director of the Policy and Law Department of the Ministry of Health told Hospital Journal that “marketization should not be the direction of China’s medical reform”.
Their remarks aroused great excitement among the media and the mass public. At the time there was much discussion in the media about medical reform, while the public almost universally agreed with the judgment that “the medical reform was a total failure”. Although some liberal scholars insisted that the medical reform should not be turned back and the Ministry of Health was continually trying to avoid any comment on whether the medical reform was a success or a failure, the Pandora’s box had been opened and the public would not accept any further reform measures unless the government made big policy adjustments. Soon thereafter a new consensus seemed to have emerged: the government should guarantee basic care to everyone in the country. Now the government has pledged itself to introducing an urban health-care system covering all residents and to assisting all rural communities to restore the cooperative medical system (CMS) before long. Apparently, in this case at least, the reach-out model performed wonders.
The Outside Access Model
Even though the outside access model is seldom practiced in China, there have been nevertheless a couple of cases in point in recent years. The so-called three parallel rivers (the Jinsha, Nujiang, and Lancang) of Yunnan Province were put on the United Nations Educational, Scientific and Cultural Organization (UNESCO) World Heritage list as a natural property on July 3, 2003. Less than a month later, the National Development and Reform Commission approved a hydroelectric project on the Nu River (Nujiang), which met with immediate and strong opposition from domestic environmental organizations. These organizations mobilized the media in an effort to win over the public, and at the same time wrote letters to the leaders of the State Council, asking them to stop the project. In mid-February 2004 Premier Wen Jiabao remarked on a report submitted to the State Council by the Development and Reform Commission that “as far as this giant hydroelectric project is concerned, more careful study is needed to make a rational decision since the project has received great attention from the public and there are still disagreements about its environmental effects.” Wen’s comments temporarily halted the project.
In July 2005, when Wen went to inspect local work in Yunnan, a local official reminded him that the Nujiang hydroelectric project had been stopped for a long while, and that the local government, caught in the crossfire, wanted the central government to make an immediate decision. When he returned to Beijing, Wen ordered the Development and Reform Commission, the State Environmental Protection Administration, and the Ministry of Water Resources to “step up the investigation and research and bring forward your plans.” For fear that the project was to be restarted, sixty-one environmental organizations and ninety-nine individual activists jointly wrote an open letter in September 2005 addressed to the State Council and the subordinate ministries or commissions concerned. Meanwhile, those who backed the project also wrote to the central government, pushing for an immediate resumption of construction hence began a seesaw battle between the two camps. The central government has not made a final decision to date. This is a landmark case in Chinese history, showing that the activities of civil organizations and the letters submitted to top decision makers by citizens at long last can produce enormous effect on the central government. As Chinese society becomes increasingly pluralized and open, people from all walks of life and with different political stances have become more willing to express their views and more forceful in doing so. It can be predicted that the outside access model will become one of the major models for China’s future agenda setting.
The Popular-Pressure Model
In the past, the first five models mentioned above were commonly observed in China, while the popular-pressure model was rarely applied. Although Chinese leaders began to call openly for “scientific” and “democratic” policy making in the mid-1980s, the more democratic popular-pressure model did not often come into view until the late 1990s. How do we account for the growing prominence of the popular-pressure model? To answer this question we have to explain where “popular pressures” come from and why “popular pressures” become increasingly consequential in the policy agenda setting. Where do the pressures come from? Although China’s economy has grown, on average, at 9 percent per year throughout the last quarter of a century, the single-minded pursuit of the highest possible aggregate growth rate has resulted in a whole series of acute challenges.
By the end of the 1990s, quite a few problems had become alarming, including the environmental crisis, the widening income gap (regional gap, urban-rural gap, and gap among urban residents, and gap among rural residents), the lack of economic and social security (high unemployment rates, unaffordable education and medical services, and frequent workplace accidents), and so on. Meanwhile, the society became more and more differentiated and polarized. At the outset of the reform, when the country was highly egalitarian, people were willing to sacrifice their individual short-term interests for the sake of long-term social interests, because they believed that everyone would benefit from the reform eventually and could not imagine that the reform might one day turn into a zero-sum game. Then the overwhelming majority of the Chinese population embraced the reform wholeheartedly. Now, people are more guarded, suspicious of every new reform measure. Those who have suffered losses in one way or another in the early stages of the reform no longer support new reform initiatives without hesitation. These people have deep hatred for the abuse of power, corrupt officials, and overnight upstarts and their extravagant lifestyle, and contempt for glib talking scholars who try to make a pile out of the “reform.” Above all, most of them feel that China’s reform has gone astray lately and that it is time for China to change course by pursuing more balanced and more coordinated socioeconomic development. This is the social pressure that the Chinese government is now facing. What makes popular pressure forceful enough to change the policy agenda? Four factors appear to be crucial, namely, stakeholder consciousness, the associational revolution, the changing role of the mass media, and the rise of the internet.
When a society is not highly differentiated, all interest groups remain “in themselves,” with little awareness of “for themselves.” They are thus unlikely to exert pressure on policy makers in pursuit of their own interests. As society becomes highly differentiated, each interest group becomes more sensitive to its own interests, thus giving rise to a strong incentive for putting pressure on policy makers. Of course, it is one thing to have such incentives; it is another to be able to exert real pressure. What counts here is a group’s mobilization ability. Those that control political and organizational resources no doubt possess the greatest mobilization ability. The reorientation of China’s regional policy is a good example in this regard. A regional gap already existed in China before the mid-1980s, but the problem was not severe. Later, as the government’s policy intentionally gave preferential treatment to the eastern part of the country, the gap between China’s coastal areas and the inland provinces soon widened. In the early 1990s, scholars and policy researchers heatedly debated the country’s regional policy. The prevalent view then was that there was no need to make a fuss over the regional disparity either because it had not widened or because it was not yet very big. Even paramount leader Deng Xiaoping (1992) insisted “we should not dampen the vitality of the developed areas at present.” He contended that “the right time to raise and settle this problem might be the end of this century,” “when our people are living a fairly comfortable life.” But the underdeveloped regions did not have patience to wait any longer. Starting from the early 1990s, each year, at the annual meetings of the National People’s Congress, some representatives of the inland provinces openly expressed their disapproval of the government’s lopsided regional policy. In 1996, under the mounting pressure, the Fourth Session of the Eighth National People’s Congress passed the Ninth Five-Year Plan and the Long-Term Objectives for the Year 2010, both of which stressed the importance of more balanced development of regional economies and aimed to narrow the existing disparities. Unfortunately, in practice, not much real effort was made to achieve these goals in the years that followed. In the late 1990s, that provoked more resentful complaint and more forceful criticism of the regional policy of the central government. Against this background, in 1999 the central government finally decided to launch the Go-West Program. The State Council soon set up the Leading Group for Western Development, which symbolized the official start of the Go-West Program. It was not long before the National People’s Congress deputies from the provinces in Northeast China began to beg the central government to reinvigorate their local economy, as this part of China had become the nation’s “rustbelt” during the course of the economic reform. In September 2003 the project of Revitalizing the Old Industrial Bases in Northeast China officially became “a strategic decision” of the central government.
The past two decades have witnessed an unprecedented associational revolution in China. By March 2007 there were over 190,000 associations of various types registered with government civil affairs departments at the county level and above. However, those registered associations
account for only a small fraction of China’s associational landscape, as a large number of associations choose either to register as business organizations or not to register at all.8 More important, according to Chinese law, for grassroots organizations below the county level (e.g., organizations whose activities are mainly confined to specific enterprises, administrative units, schools, residential communities, townships, or villages), registration is not required. If the unregistered are included, it is estimated there are at least 500,000 associations operating in China. Most associations have no interest in public policy, but one type is heavily involved in policy-related activities, namely, so-called advocacy groups, commonly known as nongovernmental organizations (NGOs). Environmental groups are among the most active NGOs in China. Before the 1990s, there had been environmental organizations, but most were quasi-official, top-down academic societies of environmental research. At that time, pollution was not a grave problem and did not trouble most people. Environmental organizations devoted more effort to research than action or took no action at all. However, with the 1990s, China’s environment steadily deteriorated and people’s awareness of ecological issues heightened. Consequently, the number of environmental NGOs multiplied. In the new century, environmental NGOs, especially those made up of university and college students, mushroomed in every part of China. According to incomplete statistics, at present there are at least 2,000 environmental NGOs in the nation. Most receive no financial support from the government at all; for many, a significant proportion of funds comes from abroad. Those NGOs engage in environmental education, help the government to draw up environmental protection plans, and work as environmental consultants for some institutions. More important, they try by every possible means to improve the environment, and to stop projects, plans, or actions that may cause environmental damage. By doing so, they put great pressure on the government.
Changing Role of the Mass Media
Environmental NGOs are not large in number but are quite influential. One reason for their effectiveness is that many of them maintain close ties with mass media and many of their organizers are journalists by profession, both of which help amplify their voices and add to their weight. Apart from serving as the “loudspeaker” for environmental NGOs, Chinese media have in general been playing an increasingly active role in setting the public agenda, thus contributing to policy adjustments in recent years. The media may affect agenda setting in three ways: they may select certain issues for coverage while ignoring others; they may highlight some issues while downplaying others; and they may prioritize the highlighted issues in a certain order.
Here we are not talking about coverage for a short while by any particular newspapers, magazines, television networks, radio stations, or publishers. Rather, we mean coverage for an extended period by a whole class of the public mass distributors of news and information. Obviously, without media coverage the public would not know about some issues. For example, research has found that in China deadly coal mine accidents were more frequent and appalling in the 1980s, but they did not become a public issue. Since the mid-1990s, at the same time that the death rates from coal mine accidents have been steadily declining, coal mine safety has become a focus of public attention, because this issue has received not only extensive but also highlighted media coverage (Wang Shaoguang, 2006).
Normally there coexist several highlighted public issues within a relatively long period; thus the way the mass media prioritize these issues influences the public’s assessment of their relative importance. In recent years, the Chinese people have shown growing concern about such issues as agriculture, the countryside, farmers, migrant workers, the ecological environment, public health, health insurance, inequality, and others. This can be largely attributed to the media’s extensive and highlighted coverage of them. In China, the mass media are supposed to serve as the Party’s “propaganda machine”. Yet the Party’s mouthpiece has been gaining more publicity in recent years, facilitating interaction between the government and people, because of great changes in both the quantity and the quality of the media.
As far as quantity is concerned, compared with the early days of the reform, the number of radio stations has tripled and the numbers of television stations, newspapers, and magazines have increased tenfold (National Bureau of Statistics, 2006: 196). Chinese media have gone through an even more profound change in quality. The marketization of media began in the 1980s and sped up in the 1990s. The government is still the owner of radio stations, TV stations, and some newspapers and magazines in the legal sense. However, with little or no budgetary allocation from the government, media organizations have to survive harsh competition on their own.
The operational logic of media agencies altered once they become primarily profit-driven entities. They have to consider how to attract readers, viewers, and listeners, and how to expand their commercial influence. Of course, as the mouthpieces of the central or local Party/governments, some newspapers and magazines are granted only a limited degree of freedom. Their survival strategy is to create, under their banners, subsidiary newspapers and magazines that enjoy much more latitude. Examples include Global Times under People’s Daily, Oriental Outlook under the Xinhua News Agency, Xinmin Evening News and Bund Pictorial under the Shanghai Wenhui–Xinmin United Newspaper Group, and a host of others. Newspapers and magazines such as China Newsweek, Finance, Commercial Week, and China Industry and Business Daily, are not designated as organs of the Party and government to begin with; they seem to be more autonomous.
Perhaps inspired by these well-known publications, hundreds of regional and local newspapers and magazines (e.g., Southern China Times, Dahe Daily, etc.) have added new pages for investigative reports, news reviews, and commentaries on public affairs, trying to expand the boundaries of freedom of expression. Even radio and television broadcasting has begun to follow such examples. As competition is getting increasingly furious, media are eager to get close to common people and inquire into real life and search out the truth. Every now and then, they report sensitive news events and comment on sensitive public issues. By doing so, they provide more and more space for various social groups to articulate their needs, demands, interests, and policy preferences, and help turn people’s concerns into public issues, thus contributing to the country’s recent changes in policy, law, and institutions.
The Rise of the Internet
The competition the mass media faces comes not only from within the traditional media, but also from such burgeoning media as the internet, mobile phone short message service, and so on. In particular, the rapid growth of internet use has forced traditional media to change their conventional ways of disseminating news and information and to provide more room for discussing public affairs. It has been less than fifteen years since China was officially connected to the internet, yet “explosive” may be the proper word to describe the growth of internet use in the country. In early 1997, China had barely 620,000 internet users. By July 2007, the number had soared to 162 million, an astounding leap by any standard.
More to the point, the upsurge shows no signs of slowing down. Before 2000, there were virtually no network media in China since internet users numbered no more than 10 million. This situation began to change in 2001, when China’s internet population reached 25 million. In 2002, when the internet population exceeded 45 million, public online discussion increased dramatically. In 2003, when the internet population rose to 70 million, online public opinion flourished. A series of cases, including the pornographic video case the Liu Yong case the Huang Jing case the BMW car case the case of a Japanese group whoring in Zhuhai the Beijing-Shanghai high speed railway case and the Sun Zhigang case triggered widespread public debate in cyberspace. No wonder that 2003 was deemed “the year of online public opinion”. Since then, the internet has become a primary channel for the public to send messages, express ideas, and comment on public affairs, and vent their spleen. At present, online public opinion is exerting more and more influence on the public agenda setting.
Compared with traditional media, the internet is characterized by four distinctive features. Every person is a potential information provider; the number of potential information providers is in the millions rather than in the hundreds or thousands; information flows in more than one direction; and information can reach every corner of the earth instantaneously. As these features make it extremely difficult to manipulate information dissemination, Chinese netizens now enjoy more freedom of expression than ever before and therefore acquire more say in governmental activities.
Characterized by publicity, openness, interactivity, diversity, and instantaneity, network media have changed the logic of the public agenda setting. In the era of traditional media, the public agenda was set all in all by a small bunch of media agencies. The government had little trouble dominating agenda setting since controlling these agencies was fairly easy. However, things are different in the time of the public network: through interactions, netizens are capable of turning what they (rather than media agencies) deem important into part of the public agenda. For example, through discussion in cyberspace about a series of cases (including the BMW car case, the Sun Zhigang case, migrant workers demanding payment of their salaries, unsuccessful medical reform, Professor Lang Xianping’s criticism of the state-owned enterprises reform), online public opinion demonstrated how powerful it was in influencing public agenda setting. Netizens were outraged by those cases because all of them violated the principle of equity and justice that people cherished.
As the net has become an important channel of public expression, the highest leadership is paying more and more attention to it. For instance, both President Hu Jintao and Premier Wen Jiabao admitted that they had learned from internet sources about public opinion during the outbreak of SARS in 2003. The Fourth Plenary Session of the Sixteenth CCP Central Committee held in September 2004 decided that “much attention should be paid to the influence of some new media like the internet on public opinion.” The great concern of the high leadership with online public opinion indicates how influential network media have become.
Of course, network media are by no means pitted against traditional media. On the contrary, they are complementary. When an issue becomes the focus of netizens’ attention, traditional media will probe the issue and provide in-depth reports. Likewise, reports by a traditional media agency about an individual event may set off intense debate in online forums and rapidly elevate it to the public agenda. In most situations, network media and traditional media interact with each other. It is often difficult to judge which is the initiator. The Sun Zhigang case is a typical example of such interaction. On March 20, 2003, Sun Zhigang, a young man from Hubei Province, could not show his proper identification document and was beaten to death at the Guangzhou Detention Center. At the end of March, a media-major postgraduate student in Beijing exposed this case on an online forum, Peach Flower Port <www.xici.net/b280834>), maintained by a well-known BBS provider, Xici Lane <www .xici.net>).
Peach Flower Port is a cyber club where media professionals all over the country often meet together. Learning of the case from this online forum, Chen Feng, a reporter with the Southern Metropolis News, and his coworkers decided to interview Sun’s relatives and the authorities concerned, the result of which was the Southern Metropolis News’s report of the case on April 25. Other papers soon reprinted the report. By this time, the number of China’s netizens had topped 70 million. With the help of the internet, the Sun Zhigang case became a household topic everywhere in the nation in no time and caused a strong response online (Chen, 2005). The furious public reaction to this case placed continual and powerful pressure on the government to do something. Eventually, the State Council decided, on June 20, to abrogate the custody and repatriation system altogether. Had the internet not existed, the case might have emerged and then faded out quickly like previous happenings of the same kind.
To the best of our knowledge, there was no precedent in China nor elsewhere in the world for an interaction between network media and traditional media that resulted in such a quick nullification of an administrative system that had been in place for more than forty years. The Sun Zhigang case perhaps qualifies as a “focusing event,” but it is somewhat special. In most cases, it tends to take longer for public opinion to alter the public agenda and then to change the policy agenda. By comparing the issues put on the public agenda (including the three agricultural problems, migrant workers, household registration reform, compulsory education, public health, medical security, etc.) and government policy adjustments in recent years, we may establish a clear line of close connections between the two. In almost all policy areas, public criticism of the old policies tends to appear three to five years earlier than policy adjustments. That the former contributes to the latter is beyond doubt.
At first, the public aimed its criticism at some specific policies. As debates went on, people came to realize that the faults with those policies could be traced back to the general policy orientation—“efficiency first”—adopted by the central government It was this misguided policy orientation that led local governments to strive for high growth of GDP at any price. Hence, in recent years, the network and traditional media often aired sharp criticism of the “efficiency-first” principle. The central government was pressured to respond. To cushion the criticism, the Sixteenth National Congress of the CCP in 2002 tried to reinterpret the expression of “efficiency first, fairness valued (giving priority to efficiency with due consideration to equity)” and reformulated it as “more attention should be paid to efficiency in primary distribution, but to fairness in redistribution”.
Yet, the widening gap between rich and poor put people on alert: the problem of unfairness in primary distribution (for example, the income gap between bosses, managers, and employees) also needs to be solved. Redistribution through taxation and government expenditure alone was barely enough to narrow the income gap. The expression “efficiency first, fairness valued” was maintained, but substantially modified by the “humanist and scientific view of development” at the Third Session of the Sixteenth CCP Central Committee in October 2003. This catch phrase was finally rejected by the Fourth Session of Sixteenth CCP Central Committee in September 2004.
Adopted by the Fifth Plenary Session of the Sixteenth CCP Central Committee at the end of 2005, “Suggestions of the CCP Central Committee on the Formulation of the Eleventh Five-Year Guidelines on National Economic and Social Development” seemed to have gone further, demanding that China should “promote social equity and enable all the people to share the benefits of reform and social development”. This is a historic leap from “no development, no surviving,” “allowing the early bird to catch the worm (encouraging some people to get rich first through honest labor and legal management),” and GDP worship, to “humanism,” “shared prosperity,” and “building a harmonious socialist society. “Without the public’s questioning of the “reform,” without animated debate over public policies among new and traditional media, and without the strong public call for reorienting China’s reform, such a great transformation in policy orientation would be unimaginable.
The six models of policy agenda setting coexist in various degrees in China today. Compared with the Mao Zedong and Deng Xiaoping eras, the legacy of strongman politics has almost disappeared. As the influence of policy researchers, experts, media, stakeholders, and ordinary citizens on agenda setting increases, the closed-door model and the mobilization model have become largely obsolete, the inside access model a normal practice, the outside access model and the reach-out model occasionally observed, and the popular-pressure model frequently used.
This study suggests that today the public is not an ignored bystander but is seriously involved in the agenda-setting process and that there is an impressive congruence between the priorities of the public and the priorities of the Chinese government. In the ruling party’s terminology, agenda setting “is becoming a more and more scientific and democratic process”; or in Wen Jiabao’s words, agenda setting “emphasizes solutions to major problems, either relevant to the grand strategy of the country’s social-economic development or of deep concern to the mass public” (Wen, 2006). Although the political process in China has yet to become as scientific and democratic as desired, the logic of Chinese politics has nevertheless been undergoing fundamental change. These profound changes in Chinese politics cannot be properly appreciated from the peephole of authoritarianism. Like a “dog-skin plaster” used by quack doctors in traditional China, “authoritarianism,” a concept imported from the West, has been randomly applied everywhere in the past century. Chinese politics has always been so described, from the late Qing dynasty to Yuan Shikai, the warlords, Chiang Kai-shek, Mao Zedong, Deng Xiaoping, Jiang Zemin, and now to Hu Jintao, irrespective of the earth-shaking changes in between. The term is so absurd that it serves more as an ideological curse than as an instrument for academic analysis. It is the time for researchers to forsake such nonsense once and for all.
China’s Environmental Crisis
Interview with Dale Wen
How serious is the environmental crisis in China?
The environmental crisis in China is dead serious. For example, the ground water table of the North China plain is dropping by 1.5 meters (5 feet) per year. This region produces 40 percent of China’s grain. One cannot help wondering about how China will be fed once the ground aquifer is depleted.
What in your view are the three most serious environmental crises being faced by China at this point?
Water pollution and water scarcity; soil pollution, soil degradation and desertification; global warming and the coming energy crisis.
What in your view is the role of western TNCs in the current environmental crisis?
Taking advantage of lagging implementation of environmental laws in China, many western TNCs have relocated their most polluting factories into the country and have exacerbated or even created many environmental problems. For example, Pearl River Delta and Yangtze River Delta, the two Special Economic Zones where most TNC subsidiaries are located, have the most serious problem of heavy metal and POPs (persistent organic pollutants) pollution.
Some people say that the problem is capitalism? Do you agree?
Capitalism is certainly a big contributor that we have to address. But it is not the only factor-we should not forget that the former Soviet Union also had a dismal environmental record. A critical view of developmentalism needs to be fostered by progressives to address the environmental crisis.
Is the resolution of the environmental crisis dependent on democratization in China?
Not necessarily. With the type of representative democracy that exists in western countries, the rich and powerful can always manage to externalize the environmental cost to the poor and voiceless-this is a major problem of the US environmental movement. The prevalent “not in my backyard” approach often results in relocating of pollution and environmental devastation instead of addressing the real problems. So I do not think the US-style democracy can help to solve the environmental crisis in China. A true participatory democracy may help-as everyone will have a say, including the victims of ecological destruction. Social democracies in northern Europe work better than US model and are much closer to a true participatory democracy, but they also have much less population and resource pressure than China, thus copying that model directly will not be an easy way out. China will have to develop its own inclusive political system according to its own history and culture. The current leadership is emphasizing “the harmonious society” and “sustainable development”. While the details of these phrases still need to be spelled out, I think it is a good start.
Western environmentalists criticize Chinese for reproducing Western lifestyles that have a heavy impact on the environment? What can you say about this?
The criticism is right on target, as the rapid adoption of Western lifestyles by China’s elites is a sad reality. But we should not forget why it is happening–the mainstream West (including the governments, the media and even some NGOs) has fiercely encouraged the middle class mentality and lifestyles in China, as they think these are the basis for western type of democracy. Western environmentalists would be more convincing to their Chinese audience if they also criticized the lifestyles in their own country and the influence of the West in spreading such lifestyles.
What does China’s “New Left” have to say about the environment? Do they have a program of environmental regulation? What are the key points of this program?
As China’s “New Left” refers to anyone who disagrees with the neoliberal orthodoxy, so they do not have a unified voice about the environment yet. Some New Left scholars, like Wang Hui, Huang Ping and Wen Tiejun, have written extensively against developmentalism and are active participants in China’s emerging green movements. However, other New Left scholars assume that once the equality problems are addressed, the environmental issues will be automatically solved. This is a position I disagree with. The combination of green and red perspectives will be a challenge for China’s New Left, as it is for many progressives in other parts of the world.
China is the second biggest emitter of greenhouse gases in the world. Should China be subjected to mandatory limits for greenhouse gas emissions under a new Kyoto Protocol?
I think that under a new Kyoto Protocol, greenhouse gas emission quotas should be allocated on an equal per capita basis, and all countries should be subjected to such mandatory limits under a cap-and-trade arrangement. While some may object that such a program reward over-population in the developing countries, we should not forget that current quota allocation according to previous emissions rewards big emitters (i.e. developed countries) who have created the global warming problem at the first place. As a compromise, we can use current or 1990 population for quota setting, then an equal per capita quota system, which would discourage both population growth and greenhouse gas emission. Another issue is that in this age of transnational corporations, the boundaries of nation states are blurred. For example, if a forest in Indonesia is cut to supply Chinese factories set up by US companies, and the finished goods are exported to satisfy western consumers, who should be responsible for the GHG emissions in the process? I think the end-consumers should bear most responsibility.
James Lovelock, the environmentalist of Gaia fame, has advocated adoption of nuclear energy as part of a strategy to counter global warming. Do you think nuclear might or should be part of China’s alternative energy program?
I do not know enough about the pros and cons of nuclear energy to answer this question directly. But I think there are many proven, environmental-friendly, cost-effective and less-controversial technologies already available-including energy efficiency, wind power, bio-gas digester (using human/animal wastes and agricultural leftovers), solar cooker, solar heater, etc. And China is the world leader in some of these technologies (e.g., bio-gas digester and solar heater). I hope all these proven and safe technologies would be significant parts of China’s alternative energy program before we get dependent on nuclear energy.
What do you think about the environmental movement in China? How independent are the environmentalists from the government? How effective are they?
The environmental movement in China is growing very fast. It has great potential and faces a big challenge at the same time. Most environmentalists are quite independent from the government, but they are not independent enough from their western funders-financially, and more importantly, ideologically. In my opinion, this is the big bottleneck that limits their effectiveness. They need to break out of their middle-class cocoon to reach the larger public.
Environmental organizing was a training ground for democracy in Eastern Europe in the eighties. Do you think that might be the case in China as well?
I do not know enough about the real situation that existed in Eastern Europe. From the limited information I have, environmentalists and their ideas were pivotal in bringing about change. But from what happened afterwards, I am not even sure whether this was a change for the better. Since the 1990s, materialism and consumerism have swept across the land, and environmentalists have been marginalized. I have heard that some environmentalists there are quite bitter about this or even feel that they had been used in the eighties-what they wanted was a more humanized socialism instead of the unchecked capitalism of today. I certainly DO NOT want to see all this replayed in China. As I mentioned before, China needs to develop its own inclusive political model according to its own history and culture.
What is your own alternative ecological and economic path for China?
Personally, I would like to see an alternative that combines social justice and ecological sustainability: some kind of ecologized socialism, or ecologized social democratic system. Another important task for the progressive left is to reclaim the spiritual and religious sphere. This is a challenge for all progressives around the world. Those who are already engaged in the task, including diverse interfaith efforts in the west and liberation theology in Latin American, can be an inspiration for many of us. As someone spiritual, but not religious, I think traditional left ideology such as Marxism has emphasized too much on material production, and this has actually facilitated the prevailing developmentalism and consumerism in the 20th century, and it has surrendered the religious and spiritual realm to the right. Secular materialism is not the right thing to combat religious fundamentalism, which is rising in the world. We need to cultivate and promote a healthy and tolerant spiritual life to forge the way forward. As some Achuar Indians say, the problem with the west is that people there get their dreams wrong. The indigenous peoples and many land-based peoples the developing countries a still have a strong spiritual connection with the land and environment, and we need to learn from them. For Chinese, we should reexamine and relearn some positive aspects of our traditional culture including Confucianism, Daoism and Buddhism, as well as learn from the rest of the world.
You are unique in that you are an expatriate Chinese that nevertheless cares about the future of China a lot and holds progressive views that is critical of both the Chinese government and the US. Are there other people like you here in the US? What would you advise other Chinese expatriates? And do you think the Chinese government will listen to you?
There are other people like me here in the US, but we are certainly a small minority. For other Chinese expatriates, my advice is: “The US is not the whole world, and the middle class people we normally interact with is only a small part of the world population-it even does not represent the majority of those who grow and pick our food in US. So get in touch with reality, get more informed, do not take your middle class experience in US for granted and try to impose that on China.” I do not know if the Chinese government will listen to me, but I hope that it will judge my ideas according to their content instead of my expatriate status. More importantly, I hope the government will listen to the grassroots people more. One problem in the reform era is that the government has listened to the elites (technocrats, intellectuals, expatriates, foreign experts, etc.) too much and has gotten disconnected from the majority of working people. There have been some positive indications in the last two years that the government is responding more to people’s need. I hope this trend will continue.
How confident are you that China will change course before it is too late?
It is not only China that has to change course, but other countries as well. Some problems, like global warming, seem so severe that even our best efforts may only mitigate them in the near future. Any solution will require long and hard work, and this holds for China as well. These problems have been known for some time without being adequately addressed, but it is better late than never, and we should all hope and work for the best.
Worker protests in China
China Labour Bulletin
From the beginning of June 2011 to the end of December 2013, China Labour Bulletin recorded 470 strikes and protests by factory workers across the country. This represented 40 percent of the 1,171 total number worker protests recorded across all sectors during that period. As expected, the bulk of the China’s factory protests occurred in the manufacturing heartland of Guangdong, and especially in the Pearl River Delta area. There were 267 incidents in Guangdong, some 57 percent of the total. Factory protests were also concentrated in the coastal provinces of Jiangsu, Zhejiang, Shandong and Fujian with 40, 35, 19 and 16 incidents respectively. Despite the relocation of many factories to inland provinces such as Henan and Sichuan, there is little evidence that the pattern of labour unrest seen in the coastal provinces is being replicated inland just yet. CLB recorded just eight incidents in Henan and six in Sichuan. Moreover, several of these incidents were related to the restructuring of state-owned enterprises rather than the issues normally seen in privately and foreign-owned factories in the coastal regions. However, it is important to note that Guangdong might be over-represented in this dataset partly because of the frequency and intensity of traditional media coverage of labour disputes in the province as well as the familiarity and expertise of workers in Guangdong with social media, which has allowed their disputes to gain the kind of attention protests in other provinces may not receive.
The main demands of striking factory workers
The most common demands of workers during these protests were clearly related to the economic problems in the manufacturing sector discussed in Chapter One. Demands for compensation (following mergers and relocations), wage arrears and pay increases, for example, accounted for about three-quarters of all the demands recorded on the strike map, while many other demands were related to the cost-cutting measures adopted by factory managers, such as the reduction of benefits, subsidies and allowances and the non-payment of overtime. One of the most notable aspects of the compensation demands made by workers in this period was that, in many cases, they asked for a higher rate of compensation than that mandated by the Labour Contract Law, which states that employees who are laid off should be compensated one month’s salary for every year of service. If employees decided not to move with the company to a new location they would often demand the “market rate” for lay-off compensation, which could be double the legally mandated rate or even higher. Moreover, even if they were not leaving the company, workers sometimes still demanded compensation for moving to new premises, a change of business ownership or simply as a bulwark against possible future lay-offs or changes in pay and conditions. Although wages for factory workers have increased by around 50 percent on average since mid-2010, it is clear that for many production line workers, wages are still far too low. CLB recorded 121 demands for pay increases from factory workers in this period, many earning not much more than the local minimum wage. In most cities in China, the minimum wage is only about a quarter to a third of the average wage in that city. Under China’s current Five-Year-Plan (2011-15), the minimum wage is set to increase at an average rate of 13 percent a year and eventually reach 40 percent of the average wage in each region. However, the latest job data shows that pay increases in the manufacturing sector are actually slipping further behind those in higher paid sectors such as finance and technology. Another important factor in the pay disputes logged by CLB is the wage disparity among ordinary workers, senior staff and managers. Largely because of their own low pay levels, production line workers are acutely sensitised to any move that might increase the already substantial gap among them, senior employees and managements.
Organizing and social media
As in previous years, the majority (57 percent) of strikes and protests had between 100 and 1,000 participants. This appears to be the optimal range for organizing strikes: If there are fewer than 100 participants, workers can be more easily pressured by management and or government officials to return to work. Strikes with more than 1,000 workers on the other hand can be more difficult to organize and sustain. However, some 19 percent of the protests by factory workers did have more than 1,000 participants, including some with up to 8,000 workers.
The ability of workers to organize strikes and protests, especially at larger factories, was enhanced considerably during this period by the rapid development of social media and messaging platforms such Weibo and WeChat, and the widespread availability of cheap, no-brand smart phones, which often function just as well as more expensive iPhones and Samsung models..Sina Weibo had about 600 million registered users at the end of September 2013, although the number of active users was only about ten percent of that. The majority of factory workers may not be very active on Weibo and WeChat but they can at least use these tools to keep in touch with their colleagues and stay up to date with the latest developments in the strike or dispute at their factory. Workers who are active have proven themselves highly adept at using mobile social media tools to not just to organize protests but ensure that they come to the attention of the public, the traditional media and local government officials.
Protecting worker representatives
The question of how to protect worker representatives from management reprisals was one the key issues for factory workers during this period. Although many strikes and protests were at least partially successful, in that the bosses made some concessions or went some way to meeting the workers’ demands, employers could just as easily a take tough stand against workers during the dispute or more commonly retaliate against the strike leaders once the employees had returned to work. It is important to note here that although it is not illegal to go on strike in China, the right to strike is not protected under the Constitution and employers can often use the provisions of the Labour Contract Law to dismiss strike leaders. For example, Article 39, Paragraph 2 of the Labour Contract Law stipulates that employers can terminate the labour contracts of those who seriously violate company regulations.
Outside the factory
Although protests by factory workers tend to get the most attention both inside China and internationally, the majority of worker protests still occur outside the factory, most notably in transport, construction, retail, education and other services. While these protests do bear some similarities to those by factory workers, they also have their own distinct causes and characteristics. China Labour Bulletin recorded 306 strikes and protests by transport workers between June 2011 and the end of December 2013. Around 60 percent of those incidents involved taxi drivers.
Teachers in well-established government schools in major cities can earn a reasonable salary and do not have to worry too much about wage arrears. However they often have to work long hours and supervise students’ extracurricular activities with no overtime payment. The situation in many smaller, less economically developed towns can be a lot worse. Teachers are often poorly paid, especially when compared with civil servants and other public employees with the same experience and qualifications, and can go several months without being paid at all. Many teachers are reluctant to strike in order to resolve their grievances because of the impact such action would have on their students. However, the lack of an effective teachers’ union and the absence of any effective channels of communication between teachers, school administrators and government officials often means strike action is the only way teachers can get their voices heard. CLB recorded 69 teachers’ strikes in the period covered by this report, two thirds of which included demands for higher pay and or the payment of wage arrears
The evolution of labour rights groups in Guangdong
Non-governmental organisations (NGOs) that promote and defend workers’ rights have become a key part of China’s burgeoning civil society, particularly in the south-eastern coastal provinces where migrant workers are heavily concentrated. Labour NGOs have traditionally offered camaraderie and practical support to migrant workers, in a sense, providing them with a home away from home. Their main work effort revolved around legal support for workers whose rights had been violated and/or who had been injured at work. Through lectures, workshops and publications, labour NGOs provided migrant workers with information about their rights under the law, occupational health and safety, job search techniques, tips for urban living and health issues for women workers etc. When resources allowed, some organisations also provided workers with simple vocational skills training. An important element of their work was organizing cultural and recreational activities that helped bring workers from different regions of China and different factories closer together – not just in the same room but towards a common end. While this approach may have been appropriate in the 2000s, the development of the workers’ movement in China over the last few years has meant that labour groups have had to adapt in order to keep pace with the new collective demands of workers. Encouragingly, several labour NGOs in Guangdong are now moving away from the traditional approach of just helping individual workers towards a more collective focus, providing workers with strategic advice on collective bargaining and maintaining solidarity in the face of management hostility.
The emergence of a new working class in China
During the era of state-planned economy, China’s workers were portrayed as the “leading class” and “masters in their own house.” However, such depictions had more to do with political ideology than economic reality. The relatively small number of workers in China’s cities generally did have stable jobs and reliable benefits but these were essentially gifts bestowed by the state and the threat of withholding such gifts was enough to control the workers. Today, after 35 years of economic reform, the picture is very different. No one would dare to pretend that workers are China’s “leading class:” That position has been usurped by big business and corrupt government officials. However, China does now have a strong and increasingly active working class, one that cannot so easily be controlled by the state. Spearheaded by young men and women from the countryside, who under the old system would not have even been classified as workers, China’s new working class is not at all interested in political rhetoric, it is focused instead on basic social and economic rights; earning a living wage, creating a safe work environment and being treated with dignity and respect by the employer.
All too often, however, workers are confronted with authoritarian and exploitative managements who deny them even these basic entitlements. The lack of an effective trade union, and the absence of any permanent mechanism for collective bargaining in the workplace, leaves workers with no option but to go on strike, work to rule, or stage protests and demonstrations in order to get their voices heard. However, it is precisely these collective actions that help foster a greater sense of unity and solidarity among the workers, and in turn change both the way workers see themselves and the way management sees them. Younger workers in particular no longer see themselves as mere isolated individuals, strangers in the city who have no choice but to keep their heads down and earn a little money before returning home. Rather, they see themselves as a collective force, a part of the city where they work and not apart from it. Workers know that by coming together and staying united they can put much more pressure on their employer not only to make concessions on their specific demands but more importantly to see their employees less as subjects to be dictated to and more as a distinct interest group that has to be respected.
Importantly, China’s new working class is increasingly engaging with civil society. Labour rights groups have played a vital role in guiding workers through their disputes with their employers, discussing what collective bargaining strategies to employ, how to respond to setbacks, and how to maintain solidarity and support their representatives. Labour rights groups are at the forefront of the development of collective bargaining in China, both on the ground and in disseminating the results and lessons learned to a wider audience. The rapid development of social media in China over the last three years has given workers and civil society organisations a much broader voice. Workers are shaking off the image of poor, exploited individuals and emerging as an active, dynamic and unified group capable of taking action to help itself. And in so doing they are gaining more support from ordinary members of the public who can identify with their struggle.
The Chinese government struggles to respond
When the new leadership of the Chinese Communist Party took over at the end of 2012, it inherited a crisis of legitimacy. The economy was slowing down, the gap between the rich and the poor was growing at an alarming rate and corruption among government officials was at an all-time high. General Secretary Xi Jinping and his colleagues knew they had to move the economy on to a more stable and sustainable footing, crackdown on the worse excesses of corrupt officials and find some way of allowing ordinary people to share in the benefits of China’s much vaunted “economic miracle.” The Party and government have in the past attempted to boost domestic consumption in China by raising the minimum wage but this has been largely ineffective because most adjustments only keep up with the cost of living. Moreover the government-mandated minimum wage can actually limit the pay increases workers might otherwise get because employers see it as the state-set basic wage to pay all low-level employees. Just about the only way workers can get a real pay rise is by going on strike and demanding more. As a result, local authorities often end up getting dragged into disputes that could and should be resolved by talks between labour and management. This is a role local authorities are singularly ill-equipped to handle. They lack the staffing, the expertise, as well as the financial resources to successfully intervene or mediate every time workers strike. Sometimes the authorities try conciliation and urge labour and management to come to an accommodation, on other occasions they adopt a hard-line approach and detain worker activists. But whatever attitude they take, nothing really seems to change. Government officials increasing recognise that running around trying to put out fires is not a long term solution to the problems endemic in the workplace. Many officials understand the need for a mechanism to resolve labour disputes in-house and the need for the official trade union to play a far more proactive and pro-worker role in the disputes. Thus far, however, attempts to rouse the All-China Federation of Trade Unions from its slumber have had little impact. Even when Xi Jinping summoned the new leaders of the ACFTU to Party headquarters in Zhongnanhai and told them face-to-face that China’s workers deserved better, the ACFTU responded with its usual jargon, platitudes and archaic rhetoric while basically ignoring the issue at hand. It was not that the ACFTU was defying the Party but simply that it did not know how else to respond.
 From Shifting Power, Critical Perspectives on Emerging Countries, TransNational Institute, 2014.
 Published in New Left Review 81, May-June 2013
 Michael Pettis, The Great Rebalancing: Trade, Conflict, and the Perilous Road Ahead for the World Economy, Princeton University Press: Princeton 2013
 Extract from an article published in Modern China Volume 34 Number 1January 2008; 34; 56
 Wang Shaoguang (PhD in Political Science from Cornell University in 1990) is a chair professor in the Department of Government and Public Administration at the Chinese University of Hong Kong, a Changjiang Professor in the School of Public Policy and Management at Tsinghua University, and the chief editor of The China Review, an interdisciplinary journal on greater China.
 Interview conducted by Walden Bello, Focus on the Global South, < http://focusweb.org/node/1097 >. Born and raised in China, Dale obtained her PhD from the California Institute of Technology. Currently an associate of the International Forum on Globalization (IFG), she worked in Silicon Valley’s high tech industry before moving to non-profit work. She travels frequently to China, where she maintains close ties with China’s emerging civil society.