A Blog by Jonathan Low

 

Jan 18, 2012

China: A Country Where No One is Secure

It is common in the affluent west - the US and western Europe in particular - to bemoan the lack of opportunity, the rising inequality between rich and poor, the declining standard of living and the general mistrust of the political process.

Although the target of this frustration is usually business - especially the financial services - and to a lesser extent, the 'insiders' in Washington, behind them lurks the specter of Chinese competition. Smart, ruthless, relentless and implacable, the Chinese appear to many to be a jugernaut.

Which is why the following article by Guo Yuhua, a professor at Beijing's Tsinghua University, the "Harvard of China" in Caixin, a Chinese business magazine is so compelling.

Had you read the article before knowing the author was a Chinese citizen writing about China, you could be forgiven for believing it was written by a Brit, a Greek, an Italian, a Spaniard or an American.
The author decries precisely the same concerns - but accurately points out that the typical Chinese starts from a much lower economic base than do those in the west.

As we contemplate our common concerns, understanding how universal they are may provide some perspective on both problems - and solutions. JL

Guo Yuhua comments in Caixin:
What is the most common feeling in China today? I think many people would say disappointment. This feeling comes from the insufficient improvement in their lives that people are achieving amid rapid economic growth. It also comes from the contrast between the degree to which individual social status is rising and the idea of the "rise of a great and powerful nation."
One phenomenon is a good example of such disappointment: A group of young college graduates "escaping and returning" to Beijing, Shanghai and Guangzhou.

Their reasons for "fleeing" are not difficult to imagine. Work pressure in these extremely large cities is high, competition is intense and the cost of living is high. So the young people chose to move to small and medium-sized cities to start their careers. The reason they returned to the big cities was that in many small and medium-sized cities ability, knowledge or even a diploma are not what open doors. Instead, what are required are networks of relationships. Family background also makes it difficult for young people from common families to better their lives, and they do not see a way out.

The disappointment of being unable to extricate oneself from difficulty is, of course, not restricted to college graduates. In opportunities for education, employment, promotions and overall improvement of their lives, people are discovering that society's resources and opportunities are increasingly concentrated in the hands of a few. People in the middle and lower strata of society are becoming increasingly marginalized and are finding that improving their lives is getting harder.

The 2004 China Social Mobility Report published by China Academy of Social Sciences said that people whose fathers have power or capital have an easier time becoming party cadres than people in general. Research into the changes in private businesses ownership after 1993 showed that the elite in non-business fields were more likely to own businesses today. Thus, opportunities for common people to start private businesses are fewer and fewer. It is exceedingly difficult for farmers moving to a city to find success. The registered permanent residence system and economic factors conspire to make this move very difficult.

A social trend has been captured by the phrase "returning to the system," which refers to resorting to traditional means of advancement. The number people signing up for the national civil service examination was 600,000 in 2007, 800,000 in 2008, 1.1 million in 2009, and 1.5 million in 2010, a clearly rising trend. "Returning to the system" has become the main method for members of society to climb the social ladder.

Imbalances in social rights, the reduction of social mobility and the hardening of the social structure will inevitably lead to the rich getting richer and the poor poorer, the strong permanently strong and the weak permanently weak.

The stagnation of social mobility will inevitably bring about a series of consequences. The biggest harm may not be in the gap between rich and poor itself, but the deterioration of the overall societal ecosystem and the fall of civilization. The social ecosystem is similar to the natural ecosystem. "Running water doesn't stink" is an old Chinese saying that indicates that a pool of standing water will become putrid. The deterioration of the social ecosystem resulting from stagnating opportunity is evident, and the picture is not pretty.

The lowest rung becomes a jungle. The unending series of malignant incidents in recent years – slave labor at kilns, migrant workers going unpaid, stabbing incidents at schools, the trafficking of children so they can work as crippled beggars, violent demolitions and relocations, a dozen attempted suicides at Foxconn, food safety crises caused by counterfeiting and profit-seeking – are all indicators of the deterioration of the bottom layer of the social ecosystem.

The reason that the bottom stratum is becoming a jungle is that a lack of opportunity is causing them to have only vague hope of obtaining social resources and moving up. In a society lacking opportunities for survival, development and expression, those in the lower strata can only win at the expense of their morality. The process is often full of injustices, devoid of faith, and even violent and cruel.

The logic of the strong mistreating the weak and the weak mistreating the weaker is thus born.

The middle class is also feeling pressure. In the context of special interest groups monopolizing high-quality resources, the formation of a middle class is difficult, making a relatively rational social structure hard to achieve. Movement from the middle class to the upper class is also difficult. Lack of employment opportunities, rare pay increases, high rents and homes prices, and expenses for marriage, birth and children's education bring members of the middle class more and more pressure. They are physically and mentally fatigued, and their social status is difficult to maintain and can even be on the decline.

Meanwhile, the elite are moving overseas. The elite stratus, despite its overwhelming preponderance of resources, has a huge sense of insecurity because of the overall deterioration of the social ecosystem. Members of this class either move abroad themselves or transfer their property overseas. This only shows that in a deteriorating social ecosystem, no one is secure or confident.

The lack of opportunity has caused social mobility to stagnate, and the universal feeling of bright prospects and enthusiastic spirits from the early days of reform and opening-up no longer exist. The stagnation of the reform process also inevitably causes society as a whole to lose its vitality. In addition to the chaos brought by the deterioration of the social ecosystem, the social mentality becomes deformed: people are both fascinated with and in fear of power.

The deterioration of the social ecosystem comes from the growing corruption of uncontrolled power. In the study of the process of China's transformation to a market economy, we have faced the fundamental issue of how to regard the costs and benefits of reform. Questions arise, such as: Where does the motivation for reform come from? Who benefits the most from reform? Who bears the heaviest cost? Talk of the "labor pains" of reform and the unavoidable "costs" of reform has already lost its persuasiveness because the same people are always bearing the costs and the same people are always receiving the benefits.

The current high-pressure stability maintenance has become one cause of social stagnation. The current thinking on stability maintenance is predicated on a suppression of legitimate interests. When, in the name of maintaining social stability, migrant workers are not allowed to organize and seek to recover wages in arrears, and those who have had their homes demolished are not allowed to negotiate for proper compensation, stability maintenance has become a tool to safeguard the interests of lawless companies and contractors that are refusing to pay wages and the developers robbing those whose homes they are demolishing. A vicious cycle forms: The more stability is maintained, the more unstable society becomes.

Power is becoming too formidable and cruel. It is out of control, and without limits. It has kidnapped society and strangled reform. Facing this, finding a solution is a matter of vital importance. In a situation where special interest groups have choked off the possibility of various types of progress, building a just society and enacting reform is difficult. Moreover, there is not a ready-made civil society waiting to settle into the void.

We need to realize several things. The impetus for reform comes from society, not from authority, and reform within the system is produced under the force of social strength. Fair and just rules are formed by interaction between various forces. Civil society is produced by the participation of citizens. Extrication from stagnation and the restoration of social vitality can only come from the start of civil consciousness and civil action. Only by empowering society and enlightening citizens can the strength to reform be developed

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