Neoliberalism ‘with Chinese Characteristics’

inequality, all in the space of twenty years (see Figure 5.2). The gap

between rural and urban incomes (ossi

fied by the residential per-

mit system) has been increasing rapidly. While a

ffluent urban

dwellers drive BMWs, rural farmers are lucky to eat meat once a

week. Even more emphatic has been the increasing inequality

within both the rural and the urban sectors. Regional inequalities

have also deepened, with some of the southern coastal zone cities

surging ahead while the interior and the ‘rust belt’ of the northern

region have either failed to take o

ff or floundered badly.

48

Mere increases in social inequality constitute an uncertain indi-

cator of the reconstitution of class power. The evidence on this last

point is largely anecdotal and by no means secure. We can, how-

ever, proceed inferentially by looking 

first at the situation at the

bottom of the social ladder. ‘In 1978 there were 120 million work-

ers in China. By 2000 there were 270 million. Adding the 70 mil-

lion peasants that have moved to the cities and found long-term

wage work, China’s working class now numbers approximately 350

million.’ Of these ‘more than 100 million’ are now employed in the

non-state sectors and are o

fficially categorized as wage labourers.

49

A large proportion of those employed in what is left of the state

sector (both SOEs and TVEs) in e

ffect have the status of wage

labourers also. There has, therefore, been a wholesale process of

proletarianization going on in China, marked by the stages of pri-

vatization and the steps taken to impose greater 

flexibility on the

labour market (including the shedding of welfare and pension

obligations on the part of public enterprises). The government has

‘gutted’ services as well. According to China Labor Watch, ‘Rural

governments get almost no support from wealthier areas. They tax

local farmers and impose endless fees to 

finance schools, hospitals,

road building, even the police.’ Poverty is intensifying among those

left behind even as growth roars ahead at 9 per cent. Between 1998

and 2002, 27 million workers were let go from SOEs as their num-

bers fell from 262,000 to 159,000. Even more surprising, the net

loss of manufacturing jobs in China over the past decade or so has

been around 15 million.

50

 In so far as neoliberalism requires a large,

easily exploited, and relatively powerless labour force, then China

certainly quali

fies as a neoliberal economy, albeit ‘with Chinese

characteristics’.

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