Very profound economic and social changes have taken place in
During the 20 years preceding the reform and opening-up, China tried to build an ideal new society in which there was no private possession of means of production and wealth and no classes through the "great leap forward in economics" and "class struggle" in politics. But things turned out contrary to those hopes: what
The key industrial cities were originally earmarked as the starting point for the reform and the first step was to enlarge the decision- making powers of enterprises. But the reform program met with great resistance in these places. Unexpectedly, the reform made a breakthrough at the weakest point in the rural areas. The system of people's communes painstakingly established over a long period disintegrated within two or three years with the adoption of the contracted responsibility system with remuneratiori linked to output. The economic structural transformation resulted very soon in changes in social structure. The peasants with the autonomy of management in their own hands began to make rational choices and shift a large part of setting-up of firms by Chinese students who returned after studying abroad ushered in a high-income white-collar social stratum in urban areas. Lawyers, doctors, accountants and business brokers have also joined the white-collar ranks. Within the spectrum of state-owned enterprises, another stratum of enterprises and managers has gradually emerged in the course of property rights reform. In the luxurious gardens and villas in various Chinese cities now live nouveaux riches known as tycoons, a large part of whom are famous singers, film stars, dancers and outstanding sportsmen.
However, during the reform some people have got relatively small gains. The institutional reform in the state organiTations and enterprises has changed the practice of "large canteen cauldron" that existed for decades, getting a job no longer means a life- long employment; old-age provision and medical expenses are not born wholly by the state, and the apartments formerly distributed are sold to the owners. In the traditional industries under readjustment like coal, steel and iron, textile and machinery, millions of workers and staff members lost their jobs or are laid off. These unemployed and laid-off people constitute the main body of low- income groups in the cities and towns of present
The reform has quickened social mobility and social interest groups have become pluralistic with new social strata constantly emerging or on the horizon and the social stratification undergoing adjustment and regrouping. New gaps, frictions and conflicts in interests between different social strata have arisen but there does not appear a stable and ordered structure of social stratification.
Firstly, before the reform, with the disappearance of classes in possession of means of production and wealth the hierarchy in order of administrative power became the sole social estate system and the social status of every people was determined in reference to this system. After the reform the social stratification was multiplied and a trio-system appeared - in terms of wealth, in terms of power and in terms of social prestige. More channels are open before the people to promote their status. But no proper relations have been established between the three systems in the process of rapid social mobility. Some social groups of higher social prestige and greater power, for example, the intellectuals and cadres, have less income and wealth while other social strata with higher income and more wealth, for example, the self-employed households and owners of private businesses, are low in social prestige. This situation results in a psychological unbalance of many people and some people, tempted by selfish interests, take advantage of social resources in their hands to barter power and fame for money and wealth.
Secondly, before the reform egalitar- ianism dominated in distribution in China under the planned economy and all the people ate from the same big pot-one got the same reward or pay as everyone else regardless of one's performance in work. After the reform the incentive mechanism was introduced under a market economy, allowing some people to become well-off first through hard labor and honest business. But the accompanying result is that the gap in income and in the possession of wealth gets increasingly bigger between the urban and the rural areas, between different regions, between distribution under the state plan and distribution under market arrangements, between units with different power of resources allocation, and between different individuals. At first although the gap existed all the social strata benefited from the reform with the difference that some strata benefited more while others benefited less. However, over recent years the income of wealthier strata has continued to rise while the absolute income of poorer strata has been on the decrease. This phenomenon, seldom seen during the reform, has roused great concern among the scholars, who appeal to the government to adopt new tax and welfare policies to regulate people's income.
Thirdly, during the economic in- stitutional transition the anomies in the substitution of the new institution for the old undermines the order of social stratification. The gap between the rich and the poor that accompanies the fair competition under a market economy is absolutely different in nature and consequences from that under a power economy, an illegal economy or a criminal economy. A market economy is based on fair competition, the full use of resources, efficiency earnings and surplus added value it brings about will give the state adequate capability to regulate the gap and bear the cost. A power economy, an illegal economy and a criminal economy undermines the efficient allocation of resources, their "competitive edge" comes not from lowering the cost, but from shifting the cost. As a result, the inferior takes the place of the superior and wealth and income are illegally concentrated in the hands of the minority. In some places and fields power economy, illegal economy and criminal economy took advantage of the transitional period when the planned economy had been replaced by an imperfect market economy to corrupt the last vestige of the planned economy and undermine the market economy in the cradle. They also stimulate and activate a strong desire and dream to "grasp the opportunity, illegally finish primitive accumulation, to become rich quick and self-promote the social status."
Finally, after over twenty years of reform and opening-up the achievements scored during this period of time have convinced the Chinese people that the reform and opening- up are the only road to development for
Therefore, it is essential for future sustainable development in
The market economy, now more and more complex, is still new to
Furthermore, there is the problem of institutional reform. Over recent years repeated emphasis has been given to increase in peasants' income and lightening of their burden and hundreds of items for alleviating their burden have been published by the government, but their burden remains the same and the contradictions and conflicts arising from peasants, heavy burden are still being intensified. Why? The cardinal fact is that the labor force in agriculture accounts for about 50% of the national total but the added value of agricultural production makes less than 17% of the GDP. This small share of GDP has to be distributed among the 50% of the national total labor force: it is impossible to considerably raise the income of the peasants and to reverse the situation of low level of comparative profit of agriculture. So the institutional reform is a must. Through institutional reform the rural surplus labor and the surplus time of the peasants will be integrated with land, capital, technology and market and through transfer of profits to peasants and the rural areas the vigor of the peasants will be regained and their income increased. Then a reasonable social strati- fication will ensue.
* Li Peilin, born in 1955. Doctor of Sociology of
Translated by Song Jun
Revised by Denise Henry