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CHINA’S HARMONIOUS TURN: ALL CHANGE, ALL STAY THE SAME

Lorenzo Marsili

China’s president Hu Jintao formally presented at the 17th National Congress of the Chinese
Communist Party his thought of “scientific development”, a doctrine of continued economic growth
tempered by greater social and environmental awareness with the aim of creating a “sustainable”
and “harmonious” society.

The run-up to the Congress saw fierce arguments between traditional socialists, socialist reformers,
and so-called “neoliberals”. The issue at stake is which path of development the CCP should take;
to question the economic reforms or instead increase their pace aiming at sustained economic
growth. Hu’s doctrine of harmonious development aims to strike a middle course, resolutely
confirming the market orientation of the CCP but promising a substantial increase in social security
expenditure.

However, it is highly unlikely that Hu’s programme will lead to any significant changes in the basic
outlook of China’s recipe for development.

Market consciousness

Any traveller to Beijing, Shanghai, or other major Chinese cities is struck by the proliferation of
high-rise districts, surprised by the sight of the world’s largest shopping centres, puzzled by the
omnipresent exhortations to enjoy through incessant advertisement. If in the 1950s and 1960s the
slogan Jianku fendou qinjian jianguo (Live a plan life and wage a hard struggle to build our
country) appeared in huge billboards in public places, in the 2000s similarly vast spaces are
occupied with injunctions to consume from multinational corporations.

Celebrated Chinese feminist critic and academic Dai Jinhua sees in this “wealth mentality” a
window over the new ideal lifestyles and values of China’s urban populations, summoning
individuals to construct a fantasy about the wonderful world of the petite bourgeoisie. And indeed,
the ascetic values of selfless struggle, frugality, and self-denial at the base of the Chinese
Communist Party have given ground to one of the most sustained consumer revolutions in history. A
recent survey conducted by the Communist Youth League asked 1,780 students about their
aspirations for the future. The first choice was to be a billionaire, the second to be the boss of a
multinational corporation. The phenomenon of xiahai, the “jumping into the sea” of private
business on the part of government officials seeking greater earnings is a well documented fact, as
is the increasingly marginal social position of important but low-earning jobs such as school
teaching.

This should not come as a surprise, nor should we think the ruling Communist party view this with
suspicion. In a country where egalitarianism has been strenuously enforced through half a century
of Communist rule, the functioning of a market society requires values that, surpassing both
socialist and traditional mores of justice and communality, may sanctify individual gain, the
accumulation of wealth, and the pursuit of profit.

Up to a certain extent, this was the role Deng Xiaoping played with the extensive popularisation of
seemingly banal but socially and psychologically potent slogans such as “To get rich is glorious”,
sanctifying the importance of initiative and entrepreneurship, “Some must get rich first”, giving the
green light to inequality, and the injunction to “smash the iron bowl” inaugurating a period where
the individual can rely only on his personal assets.
Hu Jintao’s second term in office is not likely to affect this evolution, much to the dismay of his
leftist critics. The administration is well aware that the moral-ideological framework of Chinese
socialism will have to continue being dismantled to make room for a theology of free market,
efficiency, and competitiveness, which alone may benefit China’s economic strengthening.

In 2001 Jiang Zemin called for a greater representation of the most advanced productive forces in
the CCP, effectively paving the way for an alliance between the State and the business elite. In 2003
the joint conference of the National People’s Congress drastically increased the number of deputies
representing the new rich. Now Hu Jintao cannot afford to loose the support of this class crucial for
economic development, which is at once a staunch supporter of neoliberal economic growth and a
powerful force within the echelons of the party. Activist Liu Xiaobo has recently published a report
according to which 80% of China’s richest individuals are either former government officials or
have direct contacts with party cadres.

Song Guoqing, a prominent economist at Beijing University, initially worried that Hu Jintao’s
emphasis on narrowing the country’s wealth gap might get in the way of economic development,
mirroring the fears of many of the urban privileged. Commenting at the closure of the Congress,
however, he happily concluded that “economic growth still comes first”.

There has been much discussion in the press about Hu’s failure to push his own protégé, Li Keqiang
(experienced in addressing the problems of China’s poorer regions), in the position of most likely
future Chinese president when the next Party Congress will be called to renew the country’s
leadership in 2012. The honour was instead bestowed on Xi Jingping, son of the reformist Xi
Zhongxun (architect of the special economic zones, which offered tax breaks to foreign
multinationals) and business-friendly current boss of Shanghai.

Limited social reforms

The apparent wealth of Beijing’s central districts should not deceive us. China has morphed from an
egalitarian communist society to one of the countries with the highest level of economic disparity,
surpassing the United States in the Gini index of social inequality. The benefits of the new
economic system have primarily benefited urban areas and the coastal provinces, with little
advantage for the rural hinterland, where still lives the majority of the population. The recent
phenomenon of mass migration and the plights of the “floating workers” in China’s booming cities
are well known facts.

An example of the new “social” concerns of the ruling elites is a new health system, recently
inaugurated and much touted in the official media.
After the dismantling of the Maoist health system at the beginning of the eighties, the majority of
the rural population found itself without access to health care. It is estimated that in some parts of
the country more than 60% of peasants in dire poverty have been driven there by medical expenses.
Beginning from this summer, however, for a small premium of 15 yuan (about £1) a year, farmers
can claim back between 40 and 60% of their hospital costs. For the most impoverished the premium
is usually waived altogether.

In his speech at the recent Party Congress, the current vice-minister of health Gao Qiang has
declared that by 2020 the whole of the Chinese population will benefit from health coverage. He
however did not give any details as to how this would work. And indeed, for the poor residents of
China’s hinterland even covering half of their medical costs can be a dramatic experience; when the

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income in the countryside averages €350 per year, the farmer’s own contribution is likely to
represent an unbearable percentage of his total earnings.

The current system furthermore does not take into account the millions of rural residents who have
moved to the cities in search of better living conditions, who are still considered rural residents and
hence excluded from urban welfare schemes. In order to benefit from the new insurance, they
would have to travel back to their provincial hospital – often a long, exhausting, and expensive
journey. In order to address this problem, beginning from January it will be necessary for all urban
employers to offer medical insurance. However, this will be ineffective for the great numbers of
workers employed “informally”.

Wang Hui, probably the foremost intellectual of the so-called “New Left” movement, points out the
material impossibility of a European-style welfare state in today’s China. With a GDP pro-capita
still well below £5,000 per year, the central government simply does not raise sufficient taxes to
fund a wholly comprehensive social support.

But if Wang Hui suggests in exchange the possibility of other economical policies that might still
install a sufficient regime of social wellbeing, such as handing out company “shares” on land sold
by local authorities to build private enterprises, none of this is even contemplated in the high
echelons of the party.
We are not witnessing any copernican turn to China’s social privisions, let alone a return of socialist
policies, but rather a gradualist increase in welfare expenditure with much caution for its effects on
the national budget.

From private gain to public benefit

According to Chinese government sources every year the impoverished countryside is witness to
tens of thousands of protests. Distress at what is perceived as the disregard of the Chinese “new
rich” for the social wellbeing of the country is complemented by mounting criticism of Chinese
capitalism, as evidenced by the lively debate around the “New Left”.

Hu’s doctrine of sustainable development seems to indicate that the CCP is attempting to resist such
criticism by posing as the representative of the conversion of the private interests of the new
“capitalist” sectors into nationally beneficial development. Far from representing a turning away
from the pro-capitalist policies of his predecessor Jiang Zemin, Hu’s “social ticket” represents the
most effective, if not the only way of maintaining China’s overall market system intact while
avoiding the risk of serious social turbulences in the country. In other words, a classical market
reformism aiming to concede the minimum necessary to guarantee the required social order for
economic development.