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CREATING WEALTH AND POVERTY IN POSTSOCIALIST CHINA

STANFORD UNIVERSITY PRESS

Contents

Illustrations...............................................................................................................................................ixAcknowledgments.............................................................................................................................................xiContributors................................................................................................................................................xiiiPART I Poverty, Wealth, and Stratification: The InterconnectionsCHAPTER ONE Poverty and Wealth in Postsocialist China: An Overview Deborah Davis and Wang Feng............................................................3CHAPTER TWO Market versus Social Benefits: Explaining China's Changing Income Inequality Qin Gao and Carl Riskin..........................................20CHAPTER THREE Market and Gender Pay Equity: Have Chinese Reforms Narrowed the Gap? Philip N. Cohen and Wang Feng..........................................37CHAPTER FOUR The Labor of Luxury: Gender and Generational Inequality in a Beijing Hotel Eileen M. Otis....................................................54CHAPTER FIVE The Changing Structure of Employment in Contemporary China Peter Evans and Sarah Staveteig...................................................69PART II Postsocialist Power and Property RelationsCHAPTER SIX Institutional Basis of Social Stratification in Transitional China 85CHAPTER SEVEN Rethinking Corporatist Bases of Stratification in Rural China Xueguang Zhou.................................................................97CHAPTER EIGHT Creating Wealth: Land Seizure, Local Government, and Farmers Zhou Feizhou...................................................................112CHAPTER NINE Resolution Mechanisms for Land Rights Disputes Zhang Jing....................................................................................126PART III Postsocialist Life ChancesCHAPTER TEN Regional Inequality in China: Mortality and Health Yong Cai...................................................................................143CHAPTER ELEVEN Beyond Cost: Rural Perspectives on Barriers to Education Emily Hannum and Jennifer Adams...................................................156CHAPTER TWELVE Urban Occupational Mobility and Employment Institutions: Hierarchy, Market, and Networks in a Mixed System Yanjie Bian.....................172PART IV Interpreting Postsocialist Wealth and PovertyCHAPTER THIRTEEN The Social Contours of Distributive Injustice Feelings in Contemporary China Chunping Han and Martin King Whyte..........................193CHAPTER FOURTEEN From Inequality to Inequity: Popular Conceptions of Social (In)justice in Beijing Ching Kwan Lee.........................................213CHAPTER FIFTEEN Social Stratification: The Legacy of the Late Imperial Past R. Bin Wong...................................................................232Reference MatterNotes.......................................................................................................................................................249References..................................................................................................................................................265Index.......................................................................................................................................................289

Chapter One

Deborah Davis and Wang Feng

China today is an economic giant deeply embedded in global trade and production. In 2006, China's nominal gross domestic product (GDP) exceeded two and one-half trillion U.S. dollars, larger than that of France and approaching that of Germany. Calibrated in the metric used by the World Bank to capture comparable real standards of living, China's GDP in 2006 reached 10.21 trillion purchasing power parity (PPP) dollars, thereby placing its economy second in the world only after the United States. In the three decades since 1979, when it began to dismantle the socialist planned economy, China has become the number one recipient of global capital flow among all developing countries, and the Shanghai Stock Exchange, which reopened in 1990, had by 2007 become the sixth largest stock exchange in the world. In May 2007 eight million new accounts were opened in a single month. For the first time in its history, the combined stock market capitalization in China's two stock exchanges surpassed its GDP. By any metric China is a central player in global capitalism, and the practices and institutions of socialism appear to have receded into a distant past.

Communist capitalism has not only produced an economic miracle but also glaring inequality. In 2005, China Daily reported that 236,000 citizens were millionaires and that the number of individuals with at least one million U.S. dollars in assets grew at the sixth fastest pace in the world (Wilson 2005). At the same time, per capita incomes are low and a majority of citizens live on less than two dollars a day. Moreover, simultaneously with sustained macro level growth, levels of income inequality are now comparable to those in the United States and greater than those in India and Indonesia. Thus, within the story of global growth and new affluence are social, political, and economic dynamics that produce both wealth and poverty.

One can argue that the most central process in China's postsocialist transformation is the "reallocation of labor and capital" that transformed other former socialist economies (Mitra and Yemtsov 2006: 25). Yet in almost every parameter China's postsocialist trajectory does not parallel those of Russia and Eastern Europe in initial outcomes or pace of change. Instead of suffering a devastating economic downturn in its initial retreat from socialist autarky, China experienced two decades of double-digit growth and a dramatic drop in poverty. In contrast to the "shock therapy" that characterized postsocialist transformations in Europe and Central Asia, China followed a gradualist reform approach that not only avoided sudden economic contraction but also kept the state firmly at the helm. In addition, even as China has emerged as a giant in the global capitalist economy, the communist one-party system that engineered both the socialist and the postsocialist revolutions retains its political monopolies. In 2007, twenty-four Chinese companies made the list of the Fortune 500; all were either owned or controlled by the Chinese state. China's postsocialist economic surge, therefore, in many ways more closely resembles the trajectory to relative affluence in the 1970s of such authoritarian East Asian developmental states as Taiwan and Korea rather than duplicating the experience of the former Soviet Union or Eastern Europe.

Prevailing meta-explanations for rapid transformation typically privilege dichotomized pairs of economic and social stratification regimes, highlighting the shift from an agrarian to an industrial society or from a planned to a market system. But China's transformation does not accord easily with either an abrupt transition to an industrial society or sudden abandonment of a command economy. Central to China's emerging dynamics of social stratification is the interaction between institutional practices of the socialist decades and deep engagement with the market rules...