Like other Bolshevik countries, China has undergone a change in the direction of\nprivate capitalism, but in a very different way from nations of Eastern Europe. Firstly,\nthe ‘Communist’ Party has remained in control, and secondly, there has been no\nintroduction of any form of parliamentary democracy or multi-party system. <\/p>\n\n\n\n
The economic changes in China can be dated from 1978, and it is useful to divide them\ninto changes in industry and those in agriculture. It should be borne in mind that even\ntoday China is a predominantly agricultural country and most of the population live in\nvillages rather than towns or cities. However, the population living in urban areas is now\ngrowing, with many workers from the countryside migrating to cities. <\/p>\n\n\n\n
The “reforms” were applied first in agriculture. Previously, rural workers\n(the term ‘peasant’ is hardly appropriate) had been grouped in communes, and income\ndepended on a whole production unit rather than the performance of individuals. A series\nof changes was introduced gradually from 1978 on. Communal plots have been done away with\nand replaced by household plots of land, with each household making a contract for selling\ngrain to the state. What are called ‘sideline occupations’ have become more important,\ni.e. growing other kinds of crops, especially cash crops. Some people have become\nprosperous through this system, but others have become poorer and no longer have the\ncommunal safety net to fall back on. Average incomes in the countryside are about one\nthird of those in cities. <\/p>\n\n\n\n
Starting in 1980, parallel changes were introduced in industry. While state-owned\nindustries remain dominant, they are run on a much less centralised basis, with a lot more\nmanagerial control. Private companies have been encouraged, and overseas investment has\nbeen invited in at ever-increasing rates (enticed by the prospects of masses of cheap\nlabour). <\/p>\n\n\n\n
The growth in the private sector is unsurprising, given that nearly half of state owned\nenterprises make a loss. A number of Special Economic Zones have been set up to attract\nforeign investment, with favourable tax and trade regulations. China is second only to the\nU.S.A. in terms of attracting overseas investment – \u00a316 billion was invested in 1994.\nOver 20 cities now have stock exchanges, with over 200,000 people working in the security\nand capital market sectors. <\/p>\n\n\n\n
Rates of Gross Domestic Product (GDP) growth have been high since the move away from\nstate control of the economy. Between 1986 and 1990, the annual growth rate of GDP\naveraged 8%. Between 1991 and 1995, the figure was 12%. <\/p>\n\n\n\n
China’s two way trade with the United States last year amounted to $57 billion compared\n with $40 billion with the European Union. <\/p><\/blockquote>\n\n\n\n
One consequence of all this has been inflation. Inflation was 21% in 1994 and 14% in\n1995. <\/p>\n\n\n\n
Another has been unemployment. <\/p>\n\n\n\n
Official statistics say that 2.8% of China’s urban working population currently has no\n job, and that the unemployment rate will rise to 4.8% by the end of the century. That is\n an embarrassing enough figure for a Communist government to admit to, but no one believes\n that it reflects the true picture. <\/p><\/blockquote>\n\n\n\n
The problem has been especially acute among the uprooted farm workers forced to migrate\nto cities. Rural unemployment has, according to most estimates, led over 100 million\npeople (about 1 in 12 Chinese) to migrate to cities. Beijing (Peking) alone has over 3\nmillion of these ‘transient’ workers. Many are homeless or live in appalling conditions.\nWorkers have lost their previous job security and subsidised housing. There have been\ndrastic price rises in some goods and workers have been forced to buy government bonds\nwith part of their wages (this has been much resented). <\/p>\n\n\n\n
In 1991 over 14,000 workers were killed in industrial accidents. In 1993, 81 workers\nwere killed in a fire at a factory in the Shenzhen Special Economic Zone; the factory’s\ndoors had been locked to prevent unauthorised breaks from work. <\/p>\n\n\n\n
Corruption has been endemic, with many top government and Party officials (and, in\nparticular, members of their families) implicated. There can, of course, be no doubt, that\nChina is a class-divided society. While 70 million people live below the official poverty\nline, earning less than 300 yuan per year, there are one million people who have assets of\nover one million yuan. Seventeen Chinese capitalists were listed by Forbes<\/em> magazine\nin 1994 as among the world’s richest people. The wealthiest are four brothers who own the\nHope Group (the largest private company in China), and are worth 600 million yuan each.\n(\u00a31 UK Sterling = C13 yuan) <\/p>\n\n\n\n
The 1989 protest movement, which led to the June massacre in Beijing, was the biggest\nof a number of such dissident activities over the last two decades. The protesters had a\nvariety of goals, mostly centering on an expansion of democracy and an end to corruption.\nSome workers were starting to make a class analysis and to set up independent trade\nunions. The violence with which the protests were met was aimed not just at the\nparticipants but at the whole population of Beijing. Prominent protesters have since been\nhunted down and imprisoned or executed, and a campaign of lies and intimidation has\nendeavoured to impress on all Chinese that no opposition will be tolerated. <\/p>\n\n\n\n
Author: Paul Bennett \n<\/p>\n\n\n\n
\n\n\n\nPlease email your comments about this article to feedback@worldsocialism.org<\/a><\/p>\n\n\n\n
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- (1) The Economist<\/em> – May 11th – 17th 1996 <\/li>
- (2) The Economist<\/em> – October 14th – 20th 1995 <\/li>
- (3) The Economist<\/em> – July 6th – 12th 1996 <\/li><\/ul>\n\n\n\n
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