Cracked China

2001 Shehui lanpishu: zhongguo shehui xingshi fengxi yu yuce (Social Blue Book 2001: Analysis and Forecasting of Social Conditions in China)
Edited by Ru Xin, Lu Xueyi, and Shan Tianlun
371 pages, Beijing: Shehui kexue wenxian chubanshe, 2001

China’s remarkable transformation over the last two decades has inspired both greed and fear in the West. The business community sees it as an unprecedented commercial opportunity, while many military strategists view China’s rise as the most serious threat to the international order in general and to the primacy of the United States in particular. But to those who have closely followed China’s economic reform and its impact on the Chinese political system and society, such greed and fear seem ill founded. While China’s economic achievements have been unprecedented, the "Middle Kingdom" also faces daunting challenges. If anything, the rush of foreign direct investment and the quadrupling of China’s per capita gross domestic product since the late 1970s have masked deep systemic flaws, while unleashing powerful socioeconomic forces whose impact China’s ossified political system has yet to fully absorb. In other words, no one should take China’s rise for granted.

The uncertainty surrounding China’s future is increasingly reflected in the writings of Chinese scholars and social critics. Unlike the chief executive officers of Fortune 500 companies and Pentagon planners, China’s intellectual elite has a more direct and realistic appreciation of the rising socioeconomic strains — inequality, unemployment, crime, environmental degradation, and corruption — generated at breakneck speed by modernization. Thanks to the growing cracks in the official censorship apparatus, many Chinese scholars can now publish their findings, even in government-owned media outlets.

2001 Shehui lanpishu: zhongguo shehui xingshi fengxi yu yuce (Social Blue Book 2001: Analysis and Forecasting of Social Conditions in China) is an apt example. This book is a collection of 22 short analytical essays on aspects of the Chinese economy and society. Its coeditors and contributors include some of China’s most prominent sociologists and economists, such as Lu Xueyi, director of the Institute of Sociology at the Chinese Academy of Social Sciences (CASS), and Hu Angang, director of the Center for Chinese Studies at Tsinghua University. Published annually by the Institute of Sociology at CASS since 1993 to review and forecast major socioeconomic trends in China, Social Blue Book contains a wealth of useful data and insightful analyses of social change in China and its dislocating effects on Chinese society. Over the years, Social Blue Book has gained a loyal — and growing — following among Chinese scholars at home and China watchers abroad. In 1993, the first Social Blue Book had a print run of only 8,000. By 2001, its print run had risen to 20,000.

Westerners may be rightly surprised that the Chinese government would permit such a publication, which contains frank, often negative assessments of socioeconomic conditions. Some may even be tempted to link publications such as Social Blue Book to certain pro-reform forces inside the government. The truth, however, is more mundane. As market forces have fundamentally altered the structures and practices of the Chinese print media, Chinese publishing houses are now driven primarily by profit motives and have become willing to take more political risks. In the meantime, the explosive growth of the media market has overtaxed the capacity of the official censors, forcing the government to curtail its control. Such developments have greatly benefited a Chinese intelligentsia that has become more outspoken and open to taking risks.

In its 2001 edition, Social Blue Book focuses on elite and public opinion of ongoing reforms in China, pressing short-term difficulties, and long-term challenges. The essays on the results of public opinion surveys conducted in 2000 may be viewed as an implicit report card on the policies of the current government. Judging by the response from both ordinary citizens and government officials, it would be truly charitable to assign a "C+" to Beijing’s leaders. The level of popular dissatisfaction remains uncomfortably high: In a survey of urban residents, only 35.6 percent were satisfied with their current conditions. Respondents singled out concerns such as runaway corruption, rising unemployment, and worsening inequality.

Unhappiness with the current leadership is also apparent in a survey of mid-level government officials. About 40 percent thought reform was too slow or had stopped altogether (in 1998 and 1999, the comparable figures were 12 and 28 percent, respectively). This change in officials’ perceptions only confirms the suspicion shared by many China watchers that the momentum of economic reform may have petered out. The most eye-catching finding is that political reform has become the most important issue for the same group of mid-level officials (44 percent identified it as the most important reform agenda item for 2001). There is definitely a logical connection between the perception of stagnation and the desire for political reform: China’s increasingly dysfunctional political system has become the greatest obstacle to its economic progress.

Beneath the dissatisfaction that the surveys reveal lies a frightening array of short-term difficulties, which the book outlines. Take, for example, the restructuring of inefficient state-owned enterprises (SOEs). The shutdown of bankrupt SOEs and excess industrial capacity caused massive layoffs. By the end of 1999, 1.16 million workers in the textile sector alone had been let go. The net increase in laid-off workers from SOEs in 2000 was 5 million. The rapid rise in urban unemployment has severely strained China’s patchy social safety net — the average unemployment stipend was $25 a month in 2000, or less than a dollar a day — and contributed to increased urban poverty and inequality. The prospects of reemployment were dim for most of these workers. One study in the book found that only 47 percent had found new jobs (and the reemployment rate for women was only 39 percent).

Among the long-term challenges China faces, contributors to Social Blue Book singled out one: rising inequality. Admittedly, pre-reform China was blessed by equality of poverty. But the famous dictum of the late leader Deng Xiaoping, "let some people get rich first," may have been implemented with excessive exuberance. Two decades of reform have quadrupled per capita income, but they have also exacerbated three types of inequality. The income for the top quintile in 1978 was 2.7 times that of the bottom quintile; now it stands at 6.6 times the lowest fifth. The urban-rural gap, which shrank in the 1980s, now has exceeded the pre-reform level (average urban income is now 2.65 times rural income). Regional inequality, which also abated in the 1980s, has risen to a historical high. Such trends imply growing risks for political stability and the sustainability of economic growth in China, but the current government appears clueless as to how to deal with rising inequality.

One is thus not surprised by the revelation in the concluding chapter: Social order and stability have both deteriorated since the late 1970s. Based on crime rates, death rates in traffic accidents, and several other indexes of social stress, a sociologist at CASS estimated that social order declined at an average annual rate of 1.1 percent in the last two decades. The social stability index (measured in terms of inflation, unemployment, poverty, and inequality) fell at an average rate of 1.6 percent per year over the same period. Even more alarming, the decline in both indexes accelerated in the 1990s (the social stability index fell, on average, 4.2 percent a year in the 1990s).

The news is not all grim. And China is by no means on the brink of a social revolution. The silver lining for Chinese leaders is that, although their people may be disaffected, most appear averse to confrontation. Only 6 percent of the urban respondents listed strikes and demonstrations as an option. An overwhelming majority (more than 75 percent) would prefer to seek solutions to their grievances through regular channels (the courts, the press, and government bureaucracies). Such public acquiescence may give Beijing time to reenergize lagging reforms, but it would not be wise for the leadership to take the Chinese people’s patience for granted. Likewise, Western business and military experts would be wise to reckon with the trends documented in Social Blue Book in their calculations of China’s role in the world.