china’s middle class an emerging social group. middle class originally, those inhabitants of...
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Middle Class
• Originally, those inhabitants of medieval towns in France who occupied a position somewhere between the peasants and the landowning nobility were referred to as Bourgeoisie
• The bourgeoisie later became synonymous with the middle class.
Wealth & Democracy
• Independent middle class was associated with democratization in history
• However, there is no necessary connection between economic prosperity and democracy
In China
• Modernization had already started well before the reforms– modernizing state system and bureaucracy– most of GNP derived from industries– substantial service sector in economy
By late 1950s
• Party-state controlled almost all industry and commerce
• Petty commodity economy remained– marginal– low status– legally tenuous– politically risky
By 1970s
• Public versus private interests
• Public was increasingly dominated by empty ideological rhetoric and ritualistic action
• Private consisted in the promotion and discussion of particularistic interests through the back door and in the back alleys of the system
In Reform Era
• Reform measures and economic growth have since brought about– endorsing the pursuit of private material
interests– greater economic and social diversity and
political openness– remarkable individual wealth to certain groups
of people
Late 1970s & Early 1980s
• Private production and commerce were legalized
• Individual (or household) enterprises [geti]– small operations (less than 8 employees)– officially sanctioned as a “necessary
supplement to the socialist economy”
• 32 million geti employed 66 million people by the end of 2009
Late 1980s
• Private enterprises [siying]– each has more than 8 employees– recognized and confirmed by Zhao Ziyang– legalized by constitutional amendment in
1988 as a ``supplement to the publicly owned economy”
– investors have property ownership and inheritance rights
From 1999 to 2009
• Private enterprises [siying]– increased from 1.5 million to 7.4 million– investors increased from 3.2 million to 16.5
million– employees increased from 20 million to 86
million
• Since 1992 siying GDP grows at 60% a year and tax grows at 80% a year
Employees of Urban Household & Private Enterprises (in millions)
0
5
10
15
20
25
30
35
40
45
1978 1980 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002
Actual Size of Private Sector
• Official figures understate the real size and significance of the private economy in China today– confusion in classification of township and
village enterprises– intentional obfuscation by entrepreneurs or
officials– difficulty in classifying new hybrid forms of
enterprises
New Middle Class
• Owner-operators– private entrepreneurs
• Managers– state capitalists– social capitalists– suburban executives
• Service providers
State & Middle Class
• Party-state remains central to China’s economic development and to its emerging new middle class
• Middle class of the reform era have emerged from within the local ``establishment”
Socially & Culturally, ...
• Socially, the new middle class are characterized by intense parochialism– remarkably limited social mobility– identification with native place
• Culturally, the new middle class are trendsetters, especially in consumption patterns
Politically, ...
• The new middle class are not alienated or independent from the party-state
• They operate in close proximity and through close cooperation with the party-state
• In a 1997-1999 survey at 4 counties, 16% of private entrepreneurs had run in village elections
Private Business
• Change in the rhetoric:– marginal => ``supplement” => ``necessary
supplement” => ``necessary component” => ``organic part”
• Economic justification:– create jobs (3/5 of new firms, 1/5 of new jobs)– pay taxes– donate to charitable causes
``Three Represents”
• A CCP document in 1989 barred private entrepreneurs from entering the Party
• Difficulty of implementation at grassroots– in a 1997-1999 survey only 27% of county
officials supported the ban
• In 2001, Jiang Zemin: CCP represents the ``requirements of the development of advanced productive forces”
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