Chinawas equivalent to all of the workers in
the Global North combined at the time.^2
Around 160 million people moved from
the countryside to the cities for work in
factories – the largest internal migration
in human history – assembling commodi-
ties that would be exported to the world
market.
Along with this state-managed liber-
alization of the economy came a disman-
tling of the benefits of the previous period.
The so-called ‘iron rice bowl’ – the social
contract that ensured a cradle-to-grave
job for Chinese workers – was shattered
by reforms in the state-owned enterprise
sector. Healthcare was deregulated and
vast amounts of land were effectively pri-
vatized. GDP grew and hundreds of mil-
lions were lifted out of absolute poverty,
but inequality and precariousness sky-
rocketed. The dividends were distributed
unfairly: in 1990, the average salary of
an urban woman was 77.5 per cent that of
a man. By 2010, it was 67.3 per cent.^3 By
2013, communist China was among the
most unequal countries in the world.
When I ask Han Dongfang, who grew
up in a poor village in the Shanxi prov-
ince, whether the average Chinese person
is better off now or before the reform
period, he tells me that it depends on the
metric. ‘When I was a child 45 years ago,
we would eat pork once a year during
Chinese New Year, just to make sure we
didn’t forget the flavour. I didn’t know fish
existed until I was 10 years old,’ he says.
‘Now [Chinese people] can afford to be
vegetarian! But there is a Chinese saying:
it’s not a big deal if everyone is poor. But it
is a big deal if there’s no equality. So people
feel the unfairness. That is the problem.’
Fault lines
The 2008 financial crisis, triggered by a
runaway financial sector in New York and
London, signified a shift in the world’s
centre of gravity from West to East.
Beijing launched a massive economic
stimulus programme worth $586 billion,
‘an intervention comparable in scale to
anything ever undertaken in the Mao era
or under Soviet communism’ according
to historian Adam Tooze; this has been
credited with ‘saving global capitalism’,
by stimulating demand at a time when
the rich world was in recession.^4 Some 70
per cent of the stimulus went on infra-
structure spending; between 2011 and
2013, China consumed more concrete
than the United States did in the entire
20th century.
The creation of a physical, tangi-
ble new China – of high-speed rail and
colossal, sea-spanning bridges – partly
explains why Chinese people are among
the most optimistic in the world, with 91
per cent saying their country is moving
in the right direction, according to a 2019
IPSOS Mori poll of 28 major nations.
(The figure is 21 per cent in the United
Kingdom.) At the same time, the dog-eat-
dog neoliberal ethic and perception of
astronomic inequality makes China rank
surprisingly low in international happi-
ness rankings. Optimistically sad. Park it
next to hammer-and-sickle-waving mil-
lionaires as another uniquely Chinese
contradiction.
But the optimism may soon wear thin.
The economist Walden Bello suspects
that China might be the site of the next
big financial crisis. The symptoms are
‘overheating in its real-estate sector, a
rollercoaster stock market and a rapidly
growing shadow banking sector’, whereby
a large quantity of loans – estimates of
shadow-banking trades range from $
to $18 trillion per year – are made not
by regulated banks but by state-owned
enterprises and local governments.^5 As
China is increasingly integrated in the
global economy, a sudden downturn in
the Shanghai stock market is more likely
to reverberate globally.
‘I suspect China’s growth will not be
sustainable for many more years,’ Minqi
Li, an economist who participated in the
1989 Tiananmen Square uprising and
now teaches at the University of Utah,
tells me. Li is less concerned with debt
than with the fundamentals: ‘[China’s
growth] has been based on the exploita-
tion of cheap labour under sweatshop
conditions as well as a very significant
environmental cost. China is now the
world’s largest greenhouse gas emitter
[and] importer of both oil and natural
gas.’ Reaching peak oil production or
geopolitical instability in the countries
where China gets its primary resources
could chuck serious grit in the gears of
the economy.
‘I also think that China’s working class
will not be content with being cheap
labour forever. And growing urban mid-
dle-class professionals will demand more
political and social rights,’ Li adds.What Xi wants
These dilemmas are not unknown to
the Communist Party leadership. In
fact, they form the basis of PresidentNOVEMBER- DECEMBER 2019 17
I
VOICES
FROM
CHINA
CHENG LIANG,
HIGH SCHOOL TEACHER,
SHANGHAI
As told to Alec AshAre you optimistic or pessimistic about
the future, both China’s and your own?I’m optimistic about China’s future, and
by extension my own. From an economic
perspective, China has a huge population
and enormous potential in its consumer
base. Urbanization and infrastructure
investment will continue for a long time.
When it comes to politics, the ordinary
[person] on the street treasures the peace
and stability of these boom times and
supports the current system... Regardless
from which perspective you look at it, there
are many reasons to have confidence in
China’s future, and I’m optimistic that my
own life will continue to get better too.