This research report explores the non-economic price which the Chinese had to pay for economic development since the year 1978. The report focuses on issues of the power-capital China and rights-deprived China.
Power capital China considers the institutional price paid for economic development and how much power capital institutions emerged and developed. It was a hybrid political culture where political power, as well as economic capital, was infused leading to the formation of a power capital economy where power capital entrepreneurs grew and a likewise culture evolved. Following this, there was another sociocultural price that was paid for China’s economic growth, also denoted as the poverty of rights. During this phase, there was severe exclusion and deprivation of the disadvantaged groups throughout the process of economic transition. The major cause was systematic inequality and injustice (Young, (2015)).
These lead to daunting social-economic challenges for the under representative group. Such a scenario can be evident from the poverty of rights for the urban poor, deprivation rates for migrant labourers and poverty of landed rates for farmers. Further evidence to the scenario is the protest and house church members since 1978. The report further addresses the analytical dimension of development in China since the year 1978 and studied the fluctuations in social-cultural price and their consequences on the economic development of China.
Economic reforms in China began particularly when Deng Xiaoping rose to power and became the paramount leader of China. His policies focused on economic growth, entrepreneurship and subtle suppression of dissent. The first of the economic reforms began in agriculture which was largely mismanaged earlier by the Communist party (Chow, (2004)). During the late 1970s, food supplies were deficient and there were warnings that the disaster of 1959 could repeat itself leading to severe famines. By emphasising on household responsibility system and the collective icing on agriculture, agricultural production rose by almost 25% during the period. This also set a precedent for the privatisation of other parts of the economy. Deng had used a bottom-up approach in his reforms which was an important factor contributing to the success of such an economic transition.
Reforms were also being implemented in the urban industry which led to increasing in productivity. A pricing system of dual price was introduced by way of which state-owned industries could sell the products at the plan as well as market prices. Another important economic reform was opening the door of China to foreign businesses who wanted to set up in China. The country was thus open to foreign investment. Special economic zones by created for foreign investment and these loans became engines of growth. Chen Yung was another powerful person in China after Deng and had more conservative ideologies. His idea was to use the market for the allocation of resources within the overall plan scope.
The Chinese communist party identified a sensual threat to the state by the private entrepreneurs. To combat such threats, the CCP developed a two-pronged strategy to confront the social and economic changes which were underway in China. Firstly, they created certain business associations, most of which had party or state officials as their leaders and such associations provided an institutional link between the party or state and the private entrepreneurs.
Secondly, a number of private entrepreneurs became party members. These entrepreneurs who became party members are labelled as red capitalists. They symbolised the competing and extremely contradictory nature of contemporary China. A dynamic market economy that was not well regulated existed alongside the Leninist political institutions. Initially, the private entrepreneurs, being the primary beneficiaries of the economic reform had very little reason to challenge the state or make any new demands on any of the policy agendas. This is why they choose to be party members so as to be able to regulate the policies.
When the Maoist policies which favoured economic modernisation were abandoned, there were several civic organisations were formed. This strategy was corporatist in nature. However, such red capitalists were not posing any kind of severe threat to the CCP policies. Following the era of red capitalism, came the era of intellectual elites. Several Chinese students were sent out for higher education. These students returned with the western ideology of Democratic liberalism. Several surveys found that once the intellectual elites consisted of the entrepreneurs in China, a slight majority of them started believing that the business associations are not representatives of the views of the government.
A very crucial issue at this stage was whether such business associations could influence the policies or their implementation at the local level (Hou, (2011)). The business persons and officials, all held diametrically opposite viewpoints on this issue. More than two-thirds of private entrepreneurs believed that policies could be influenced by them whereas three fourth of such officials believed that they could not influence the policies. This resulted in a potential area of conflict. It was found that the viewpoints were more converged between the private entrepreneurs and government officials in the areas of higher economic development. However, in areas of lower development, the private entrepreneurs were found to be more optimistic in their abilities to impact policy-making.
It could be seen that entrepreneurs had become more active in politics as individual actors in the area of reformation. Many of them joined the CCP as the simplest way of involving themselves in politics. Around 20-30% of the entrepreneurs became party members. It was noted that a vast majority of red capitalists belonged to a certain party before entering into business. The party also lifted the ban on capitalists from entering the party. Also, such recruitment of capitalists was top-down.
Search entrepreneurs were also taking key roles in politics by involving themselves in the Congresses and elections of the villages. One of the major goals of the CCP was to keep political participation within the party itself. This was achieved by appointing the entrepreneurs who had joined the CCP as officials in the villages. It could therefore be seen that the private entrepreneurs of China and business associations constituted a nascent civil society but played an unconventional role. Rather than using their power to bring changes to society, such capitalists started to become further closely associated with the system. Therefore, it is clear that the entrepreneurs of China were not very supportive to bring democratic reform to the country for the fear of political instability.
Urban and rural lifestyles in China are entirely different. The urban lifestyle involves an intensive lifestyle where people enjoy a high quality of life. The rural population prefers an easy and comfortable lifestyle with fresh air and fresh food without any noise and pollution. ever since the economic reform, urbanisation has taken a quick route in China (Lardy, (1993)). It is one of the quickest ever seen in the world. Ever since the implementation of reforms at an operational level, the urban population has increased manyfold at the expense of the rural population which has decreased largely. To date, almost 95% of the population lives on 46% of the land.
With new constructions and more housing being developed every day, the agricultural lands are decreasing largely (Zhang, (1996)). While people in the urban areas pay more attention to the quality of life in both material and spiritual aspects, they would prefer to buy houses in residential quarters, buy cars and travel abroad. However, the rural population lives largely on agriculture and breeding. The shift towards urbanisation has resulted in the poverty of rights in China. The migrant labourers faced severe economic deprivation and social segregation during this phase of economic transition. The protest tent House churches were legally excluded and regarded as religious repression.
Economic policies designed focus more on economic segregation. There was a high degree of social inequality with discriminatory policies leading to severe degradation of the rural class. Targeting to become a globalised economy, internal migration also became highly complex in China. Migrant labourers started working their way back to the villages as they faced a systematise degradation from the law as well as order maintenance of the states.
There exist a high degree of social stigma and several restrictions on the migrant class in the fragmented labour market. Because of the social exclusion, the current migrants were being excluded in the cities where they travelled and were also insufficiently re-integrated back into their origin villages. This made them experience social inclusion, particularly a lack of social support, a feeling of vulnerability and a deficiency of community persistence. The migration decisions of the state largely impacted people’s lives and created inequality across social groups.
Another major impact that was adverse and seen in China was the religious persecution against Chinese Christians. The Chinese government adopted a strict legal structure to monitor and constrict religious affairs. Even until 2018, there were revised regulations on religious affairs and such acts were pointed out as unconstitutional and unlawful as an administrative decree. The CCP employed several tactics and procedures in their crackdown against the churches. Despite article 36 of the Constitution which set the parameters for the regulation of religious freedom, there were certain clauses in the article which were diplomatic and problematic (Garnaut, Song & Fang, (2018)). The article emphasised the practice of and protection of normal religious activities where the word normal was not defined by the government.
This provided the government with the ability to crack down or disband certain practices which they did not consider normal (Naughton, (1996)). Since there is no law that directly prescribes religion, the government used other grounds to personally quit the questions. They used to convert religious issues into financial crimes or criminal cases. Devotional materials printed were treated as illegal publications and church gatherings were characterised as being unlawful assembly that disrupted public order.
Pastors will not be allowed to be invited from overseas for preaching as it was regarded as a crime of endangering national security. If people tried to reveal the persecution of Christians to foreign media organisations, they were accused of leaking state secrets. In this manner, the Chinese government leveraged crimes to clamp down on Christian folks. Several regulations on religious affairs became the main tool for religious oppression in China.
Although it may be argued that the adoption of such economic reforms by China led to a surge in its economic growth and restored China as a major global economic power, all this was at a cost of such economic challenges posed to the citizens.
China is a quintessentially mixed kind of economy. The state dominates resource allocation, particularly the financial portion and has enormous resources available to buy off the opposition and co-opt allies. Till the time, the state assets would be available for distribution among elites, such social groups would remain satisfied and would have no contribution to the democratisation of China.
Several entrepreneurs turned away from politics because of corruption while there were others who were clearly involved in the corruption and could be seen from the wealth generation in the private sector (Tsui, (1996)). The entrance of Red capitalism was an unanticipated consequence of the commitment to modernisation. The entire growth and development were clearly at the cost of rural and religious class exploitation.
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Chow, G. C. (2004). Economic reform and growth in China. Annals of Economics and Finance., 5, 93-118.
Zhang, W. W. (1996). Ideology and economic reform under Deng Xiaoping, 1978-1993. Routledge.
Lardy, N. R. (1993). Foreign Trade and economic reform in China. Cambridge University Press.
Young, S. (2015). Private business and economic reform in China. Routledge.
Garnaut, R., Song, L., & Fang, C. (2018). China’s 40 years of reform and development: 1978–2018. ANU Press.
Hou, J. W. (2011). Economic reform of China: Cause and effects. The Social Science Journal, 48(3), 419-434.
Tsui, K. Y. (1996). Economic reform and interprovincial inequalities in China. Journal of Development Economics, 50(2), 353-368.
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