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«MARKET SOCIALISM AND RURALIST WELFARE REFORM IN POST-MAO CHINA* CHANG KYUNG-SUP Seoul National University Market socialism — or “the socialist ...»

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DEVELOPMENT AND SOCIETY

Volume 32 Number 2, December 2003, pp. 147~171

MARKET SOCIALISM AND RURALIST

WELFARE REFORM IN POST-MAO CHINA*

CHANG KYUNG-SUP

Seoul National University

Market socialism — or “the socialist market economy” — in China has practically

reinforced the rural-urban divide in social welfare. The danwei welfare system for urban workers has remained robust, albeit currently through different programs for social security, so that Chinese-style socialism still governs the lives of most urban workers. The market-based and/or private arrangements for social insurances and services complement, not replace, the danwei-supported welfare programs. In contrast, the demise of rural collective institutions has caused a desocialization of peasant welfare in most villages across China, as individual families are urged to self-support on the basis of private economic and social resources. Essentially, welfare ruralism exhorts primarily peasants (and peasant migrants) to revitalize their traditional values and functions for familial social support, in lieu of state-sponsored social security programs or social services. What Gordon White dubbed as “post-communist neoConfucianism” regarding the Chinese welfare tradition has been asymmetrically enforced onto rural population due to complicated historical, structural, and political factors. Welfare ruralism is a sort of internal orientalism applied to peasant welfare for which ideological and cultural work, as opposed to institutional and economic work for urban worker welfare, is the main mechanism for reform.

INTRODUCTION

Pre-reform collective organizations in China were intended to eliminate any need for separate welfare policies through “rectified” social relations of production for the entire peasant population. In contrast, the family-based, market-oriented economic activities in the reform period tend to present threats to secure income opportunities, and thus necessitate independent welfare mechanisms in villages. While some people have been allowed to “get rich first” (Deng, 1987: 12) under the liberal development strategy of market socialism, many others have been left impoverished and unprotected (Hinton, 1990). Moreover, the Chinese population is now ‘aging’ rapidly, mainly as a result of the effective family planning effort.

*This study was supported by the Overhead Research Fund of Seoul National University.

The author wishes to thank many scholars at the Chinese Academy of Social Science, Beijing University, Wuhan University, Brown University, and Seoul National University for support and advice.

148 DEVELOPMENT AND SOCIETY In the reform period, institutional decollectivization led to an inescapable result of threatening the already feeble financial and organizational foundations of the rural welfare system that had operated as part of the collective production organizations. To worsen matters, the personnel of rural welfare institutions, such as barefoot doctors, are increasingly lured into personalized professional service sectors under the marketized economic environment. In addition, the fiscal crisis of the Chinese state makes it difficult to financially compensate for the weakened collective welfare. It is critical that all these setbacks are occurring when social groups in need of welfare benefits are rapidly increasing.

There may be three theoretical options to be considered to cope with the crisis of the welfare system in rural China — namely, the adoption and expansion of state-managed public welfare programs, the privatization and marketization of welfare services, and the activation of self-help groups such as family and kin. More than two decades of rural reform seem to enable an overall judgment concerning which direction rural welfare has been transforming. Most local and foreign scholars concur that the encouragement of local self-help among the members of family and kin has been the main policy position of the Beijing leadership. In particular, rural families have been openly exhorted to reinforce their traditional functions of social support for the elderly, children, widowed persons, and ill or handicapped persons.

Family functions in supporting the elderly and other vulnerable persons, and in internally sharing frequent economic destitution, had been acknowledged and encouraged by the Chinese state, even before rural reform. One exception was the communalization drive in the late 1950s, when everyday life was tightly organized by various collective arrangements for child care, elderly care, laundry, sewing, dining, and sometimes even sleeping.

Similarly, the pre-reform rural welfare systems in general were much worse equipped and financed than the urban welfare systems. Even the much publicized “five guarantees” were mostly provided by the family itself, while the redistributive mechanism of collective funds played a supplementary role at best.

In the post-Mao era, the Chinese state has further increased its dependence on familial social support, as well as on the mutual aid tradition among peasant families. As Chow (1988: 74) observed, “nearly all proposals for a new social security system stressed the important roles of the family system and the local communities.” Thus, the main burden of economically and socially protecting needy or handicapped persons has fallen on the family, among both poor and rich segments of the rural population.





RURALIST WELFARE REFORM IN CHINA 149

Currently, individual peasant families assume not only production responsibilities but also welfare responsibilities. The former are formally stipulated, whereas the latter are implicitly — and perhaps deceptively — entrusted.

The Chinese state, confronted with a mounting financial crisis and the weakening of its organizational control of villages, has opted to revitalize the welfare functions of the peasant family, in an effort to impose a sort of household welfare responsibility system.

Although the use of the familial organization for rural welfare still needs to be supported with tax benefits and other comprehensive state supports, the Chinese state has merely issued frequent calls for rural welfare reform, instead of launching decisive policy measures. The success or effectiveness of this strategic dependence on the family will be largely determined by the extent of economic inequality and social differentiation created in the marketplace. The irony is that those families that are less successful in capturing new private economic opportunities — and thus need welfare protection — are also less likely to have sufficient family resources and networks for selfsupport.

It is far from unusual that a poor country like China would try to mobilize grassroots traditions and morals for familial self-support in solving the welfare needs of various needy or handicapped people. Even in advanced countries such as the United States and the United Kingdom, conservative politicians have often called for family values to replace public welfare.

However, this policy necessity in China has been unevenly applied between rural and urban areas. In stark contrast to openly neglected peasant welfare, there has been a wide array of political efforts to ensure the stability of workers’ welfare, particularly in state enterprises.

Well into the 1990s, the comprehensive danwei (work unit) welfare system — a core element of Chinese-style socialism — was not significantly dismantled for most regular employees in state enterprises, even when many of them were generating severe losses. In fact, numerous loss-generating enterprises were saved from bankruptcy primarily for the sake of their employees’ jobs and welfare. The recent adoption of co-payment schemes for social insurance programs for old-age support, health care, unemployment, and industrial accidents has not relieved most state enterprises of such welfare burdens in any meaningful sense, since their expenses for social insurance premiums and in-company social services roughly amount to total wage payments. The proportion of regular employees in state enterprises has continued to decline, and unemployed and underemployed workers suffer from severe poverty and insecurity in rapidly growing numbers. However, these unfortunate workers still constitute a minority, and are 150 DEVELOPMENT AND SOCIETY given special considerations in economic activities wherever available.

Besides, many of them would enjoy even better material lives by working in lucrative private and/or foreign enterprises. Also, the privatization and marketization of social services such as education, medicine, and housing have rapidly occurred in urban areas. However, much of this trend reflects the growing demands of affluent urban residents for better-quality schools, hospitals, and houses.

Market socialism — or “the socialist market economy” — in China has practically reinforced the rural-urban divide in social welfare.1 Field studies consistently report that the danwei welfare system for urban workers has remained robust, albeit now through different programs for social security, so that Chinese-style socialism still governs most urban workers’ lives. The market-based and/or private arrangements for social insurances and services complement, not replace, the danwei-supported welfare programs. In contrast, the demise of rural collective institutions has caused a desocialization of peasant welfare in most villages across China, as individual families are urged to self-support on the basis of private economic and social resources. A sort of welfare ruralism has exhorted mainly peasants (and peasant migrants) to revitalize their traditional values and functions for familial social support, in place of state-sponsored social security programs or social services. What Gordon White (1998: 192) dubbed “post-communist neoConfucianism, involving the conscious manufacture of a set of alleged truths about the Chinese welfare heritage,” has been asymmetrically enforced onto rural population due to “the over-determining role of historical, structural and political factors in shaping the trajectory of Chinese welfare reform” (White, 1998: 194). Welfare ruralism is an internal orientalism applied to peasant welfare for which ideological and cultural work — as opposed to institutional and economic work for urban worker welfare — is the primary tool of reform.

While the Beijing leadership may not accept that its welfare reform policy has exacerbated the rural-urban disparities, it at least acknowledges ever-widening rural-urban inequalities as the most critical problem of “the socialist market economy” in China. In ‘The Decisions of the Party Center concerning the Improvement of the Social Market Economic System’ released on October 21, 2003, the party-state listed the redressing of urban-rural disparities as the first goal of state work for the next ten years (www.yonhapews.co.kr, October 22, 2003).

RURALIST WELFARE REFORM IN CHINA 151

MAOIST SOCIALISM AND RURALIST WELFARE

Peasant Welfare in the Maoist Era In spite of historical shifts in its contents, rural welfare in Mao-era China embodied the Marxist ideology that rectification of the social relations of production, rather than philanthropy, should be pursued to deal with needy and disadvantaged people. Separate social welfare was not an essential concern in initiating a Marxist revolution and building Communism in a postrevolutionary society. The socialist economic system was supposed to do away with exploitative relations of production that were responsible for poverty and insecurity. If some individuals suffered from poverty, it signaled that the socialist system itself should be further perfected, and not that a separate welfare system should be developed.2 Physically handicapped people, elderly and children should be universally protected and supported in communal living arrangements, and not through categorical assistance prescribed in administrative welfare programs. These positions were amply illustrated in China’s pre-reform policies and practices concerning social welfare.

In Chinese villages under socialism, there were no separate institutional arrangements for welfare, other than collective work organizations. These collective work organizations arranged material assistance for needy members and families as entitlements or rights, rather than as charities.

According to Hussain and Feuchtwang (1988: 38), however, such entitlements were “concerned less with providing assistance than minimizing the numbers needing assistance by instituting a formidable array of social and economic imperatives for self-sustenance.” The main purpose was not to deliver comprehensive welfare benefits, but to help the needy get back on their own feet. To achieve this purpose, the Communist Party of China (CPC) embarked on a series of economic restructuring measures without hesitation. These included land reform, cooperativization, collectivization, and communalization. The changes in the social relations of production, as Marx had envisaged, were expected to help remove economic destitution from all segments of Chinese population.

Indeed, this ideological position and practical concerns had direct ramifiIn the Marxist perspective, as Donzelot(1979) argues, the philanthropically disguised welfare system is needed only in bourgeois society where labor, while subjected to exploitation and alienation, needs to be maintained in proper quality to ensure smooth operation of the capitalist production system.



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