Routledge Handbook of Chinese Culture and Society

Kevin Latham

• Publisher: Routledge
• Year: 2020
• Print ISBN: 9781032400426
• eBook ISBN: 9781351718752
• Edition: 1
• Topic: Social Sciences
• Subtopic: Cultural & Social Anthropology
• Index: Social Sciences

The Routledge Handbook of Chinese Culture and Society is an interdisciplinary resource that offers a comprehensive overview of contemporary Chinese social and cultural issues in the twenty-first century.

Bringing together experts in their respective fields, this cutting-edge survey of the significant phenomena and directions in China today covers a range of issues including the following:

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• State, privatisation and civil society

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• Family and education

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• Urban and rural life

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• Gender, and sexuality and reproduction

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• Popular culture and the media

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• Religion and ethnicity

Forming an accessible and fascinating insight into Chinese culture and society, this handbook will be invaluable to students and scholars across a range of disciplines, including anthropology, sociology, area studies, history, politics and cultural and media studies.

PART I
State, society and education

1
THE STATE AND PRIVATISATION

The chase for cash and its whitewash

Dorothy J. Solinger

Some 25 years ago, it seemed fair to cast the state as a monolith, perhaps as a giant boulder, though one undergoing mutilation and disintegration, as marketers and policy mavens chiselled it apart (Solinger 1992). A process of dismantling, then already well underway, appeared to presage the unravelling of the state’s dominance over all economic activity, and of its sway over every kind of ownership, powers that, into the 1990s, it had enjoyed for some three and a half decades.

But in many ways, that process of decomposition has turned back on itself over the past ten years or so, as if as a magnet, sucking the discarded chips and segments back into itself once again. Instead of a cracking and crumbling edifice, today one sees that – despite the leadership’s moves to permit an offering up of state assets, and its willingness to open up opportunities for private entrepreneurship – the state instead is a fixture that in many ways, and in a multitude of realms, continues to exhibit a nearly undiminished clout. Today, however, the state accomplishes its preponderance not so much by diktat, plan and propaganda. In current times, the power of the state and its commanders over the economy lies as much in the personal as in the material and moral realms – i.e. state/Party power becomes instantiated in the state’s oft-seen skills to co-opt and collaborate, only sometimes to crush.

Nonetheless, the years since 1978 do tell a story of great change materially. In the first place – though, admittedly, as a result of state command – in the few years between 1997 and 2003, the total number of state-owned enterprises was nearly halved: the 262,000 of them in existence were reduced then to 146,000, according to the Ministry of Finance; employees’ numbers shrank from 70 to 42 million over the same years¹ (Batson 2014: 7).

Again, in terms of personnel, Barry Naughton calculates that by the end of 2004, employees in the domestic urban private sector represented about twice the numbers as those in the traditional state sector (55 million versus fewer than 30 million) (Naughton 2007: 106). In 2003, he figures, just about 5% of the entire labour force (including those in the rural areas) was working for the government or state-run public service units (ibid., 184). And, reportedly, the state sector’s share of total industrial output crashed down from its 78% of 1978 to a tiny 11% 30 years later (Lampton 2014: 81–82).

Nicholas Lardy has written that, by 2012, individual businesses and registered private firms employed almost four-and-a-half times the number they employed in 2000, accounting for over one-third of urban employment (Lardy 2014: 83). Also, more than seven-tenths of all firms were registered as private by the later year (ibid.: 66). Finally, as of 2013, 762 private firms were listed in the A-share market (of a total of some 10 million), with their combined output amounting to about 60% of gross domestic product (Mo 2013).

But even as the state’s assets, output and workers’ numbers all seemingly slid palpably, other forms of state activity pressed on. In the first place, official corruption can be depicted as the outcome of state officials’ coalitions, social networks and access, which, en masse, worked to weave up the sinews of the nation’s economy and kept it buoyant. And government and Party functionaries found multiple modes of interfering with, blocking and excluding the private realm’s efforts while facilitating the state-related portion of the economy.

This chapter reviews the state’s stances towards and connections with private business, exploring how and why the state and its officialdom moved from a place where they were building expectations of backing off to instead becoming actors in a drama of re-entry and resurrected dominance. While the chapter mainly analyses processes and outcomes as of mid-2014, the fact of state clout only intensified as the regime of Xi Jinping wore on thereafter (Sisci 2013).

I begin with an explanation for the decision to privatise in the first place: the simple answer here is about a new cash hunger, stirred up by a hefty starvation for lucre over decades of radical socialism. This statement must be qualified, however, in that this was a hunger that required (and continues to require) an ideological whitewash. I go on to trace the historical policy process relating to the state’s move to divest (so to speak) as that process unfolded, from 1979 onward, and outline the institutional steps involved – or the shifting preferred forms for so-called “restructuring state enterprises”—steps that state policy formalised along the way. In the process, I highlight the material allure and incentives the programme of state withdrawal presented, plus the similar motives that drove various players – political elite and their families, local governments and their officials and managers and entrepreneurs (members of the so-called private sector) – into the game of converting public property.

Second, I consider the ideational dimensions behind the evolution of ownership transition, both in terms of the rationale China’s official belief system provided for that transformation and in terms of the restraints and roadblocks that that ideological system placed in the path of privatisation. Put otherwise, ideology – the Marxist/Communist/socialist/Maoist doctrine that remains, at least in rhetoric, the state ideology of the People’s Republic of China (PRC) – served at once as apologia, allowing and underwriting the movement of privatisation and yet also acted as an obstacle obstructing that very movement. The regime’s stated credo, when sufficiently twisted about, thus both supplied the legitimation for the novel challenge of undoing the practice of Chinese state socialism and yet that same dogma dictated the limits that have kept the economy from fully marketising or from wholly opening itself to non-state players. The third section addresses the material barriers that stand in the way of further actual privatisation.

Fourth, I depict the outcome as a concoction that at one moment causes, drives and motivates, but at another results and issues from, the course of the state stepping back: This is an alliance of businesspeople and politicians that existed from the start of economic liberalisation but that only became more intense and more lucrative over the years. This has been a collaboration that permitted egregious corruption and for which one of these parties – whether businessperson or politician or both – often eventually have had to take the blame and suffer the punishment when exposed. I also refer to the “blur” and “blend” of ownership systems that the products of privatisation frequently display. Corruption usually lurks within these alliances. My material comes from secondary literature, including some of my own early work.

Why privatise?

The motives of the players

At the end of 1978, decision-makers in Beijing agreed to turn away from the Maoist mode of development – which had dictated relative autarky, big pushes for growth spurred by disruptive “mass movements”, and anti-materialism. This late 1970s choice entailed casting economic modernisation as the key engine of policy, and a series of retreats then unravelled, tilting policy towards the realm of non-state activity with a result that over stages allowed for more and more market activity. The most critical reason for this undoing was the need at all levels for funds, along with a belief that providing individual incentives – and thereby stirring up people’s initiative to find ways to earn their own income – would generate wealth at the micro-level while developing the nation.

Through the 1980s, the leadership recognised the utility of granting small groups (in agriculture), and then individual entrepreneurs (in commerce), some margin for money making. However, as the years passed, early qualifications on this activity became fewer and fewer. And as actors grabbed at opportunities to go a bit further than official regulations decreed, by the 1990s (Solinger 1984b, 1985), small-scale openness gradually spun away from control by the authorities (Lu 2013).

Still, even if officialdom seemed to be giving in to something not yet decreed, the impetus for the venture was not undermined. For the pushes forward that followed from below achieved what the policymakers truly intended: activating the economy, spurring productivity and making China and (most of) its people wealthier, all on the understanding that such inducement to profit would, with time, spell growth for the country at large. What happened, however, was that the authorisation to “get rich” for some soon became a fetish for funds, a craving for capital and a stimulation to competition that made the socialist-era rivalry between the state and the private economy pale into pettiness (Solinger 1984a: Chapters 1 and 4). Indeed, to simplify somewhat, one could claim that for every actor in the new marketplace, the impulse to join in came chiefly from a hunger for cash.

This phenomenon – this choice to go for wealth – appears in every scholarly treatment in the English-language literature on the moves towards marketisation and privatisation. For instance, already in the 1980s, the fees and any profits that accrued to local cadres from entrepreneurs’ dealings meant income for official coffers, in addition to providing cash that those in charge could skim off for themselves (Wank 1999: 68). By the time of the 1989 Tiananmen upheaval, a prominent popular grievance was the raging corruption of the political elite at all strata, made possible by the copious flow of cash. Later, companies, created in the hordes in the early 1990s, enabled their official owners to rake in wealth as they converted public assets into money of their own (Li 2013: 2).

In 1997, when the Fifteenth Party Congress called for downsizing and “letting go” of the smaller and medium-sized, state-owned firms, the purpose was to absolve the government from having to go on subsidising losers, thereby saving it investment funds (Batson 2014: 7). For as early as the mid-1990s, when somewhere over half of the smaller enterprises had already been released to private owners, as much as 90% of the loss-making concerns were small ones, and some 60% of these were operating at a loss (Cao, Qian and Weingast 1999: 105, 107). So official attitudes to them were often “good riddance!”

District and subdistrict levels of government, suffering from funding shortage, were desperate for any revenue that could be found beyond their budgets and so created new nonstate business entities, with the express goal of gaining income (Duckett 1998: 42, 44–45). Also, public institutions, such as hospitals or universities (shiye danwei), were ordered to find their own sources of financing, which they did by retailing their services through newly constructed commercialised auxiliary units (Lin and Zhang 2011: 208). For all such entities in what had become a competitive marketplace, debts, pension obligations and taxes that were higher than earlier, and fluctuating prices drove an urge for cash acquisition outside state channels (Duckett 1998: 137, 145–149).

At the urban level, local authorities, evaluated on the basis of how much growth and revenue they could generate, figured they could enhance their own chances for promotion should they hand over their less profitable state firms to these enterprises’ managers; in addition, managers bought off local officials to gain ownership (Zeng and Tsai 2011: 47, 68; Oi 2005: 116; Cao, Qian and Weingast 1999: 121; Ding 1999: 39; Nee and Opper 2012: 229; Putterman 1995: 1052; Whiting 2001: 173; Young 1995: 103–104).

Central-level politicians and their families – all the way up to the kin of a premier, have benefited handsomely from their access to secret shares in shareholding companies formed to draw in new sources of funding. In some cases the figures reveal enormous stakes, even as high as $2 to $3 billion dollars (Barboza 2012, 2013; Barboza and LaFraniere 2012; Barboza, Silver-Greenberg and Protess 2013). As Xueliang Ding explained nearly two decades ago, officials of senior rank found it easy to get a hold of low-cost shares in the form of dividends and profits (Ding 1999: 36). In the extreme cases, politicians “hollowed out” public property, fostering a “competitive private sector” with its “roots in state agencies” (Walder and Oi 1999: 17, 19). Leading officials becoming managers was commonplace (Duckett 1998: 136) by taking state-owned enterprises as their “tools” for making money (Demick 2013).

Those outside the state who managed to build up their own private wealth were often sought out by the Party. In the 1980s, but more so after Party General Secretary Jiang Zemin welcomed private entrepreneurs as Party members and representatives of the “advanced productive forces” in 2001, they were co-opted into political office at all levels of the polity (Gold 1991: 93; Dickson 2003, 2008; Chen and Dickson 2010; McGregor 2010: Chapter 2). Similarly, what are now private ventures that once belonged to the state have slipped into managers’ hands and become their own possessions, whether via buyouts, shareholding, diversion, stealing, stripping or startups (Ding 1999, 2000).

For the regime as a whole, in the late 1970s, urban private business seemed to promise policymakers solutions to the serious scarcity of urban jobs and an answer to the long-silenced demands of the public for daily use commodities and services. But most importantly, privatisation augured an increase in the tax take that the state could garner, vital to a regime bent on modernisation and economic revival (Gold 1990: 158, 162). As early as the mid-1980s firms short on cash were permitted to convert themselves to shareholding entities for the express purpose of getting access to outside funding, a motive the state sustained for years to come (Ma 1998: 385; Oi 2011: 15).

Similarly, when stock markets were expanded in and after the 1997 Party Congress, again the intention was to draw in capital that could relieve the state firms’ financial problems (Ma 2008: 202); in putting factories’ and other firms’ shares up for sale, a major reason was to raise funds for a state-run social securi...

Table of contents

• Cover
• Half Title
• Title Page
• Copyright Page
• CONTENTS
• Notes on contributors
• PART I State, society and education
• PART II Urban China
• PART III Rural China
• PART IV Gender, sexuality and reproduction
• PART V Popular culture and media
• PART VI Religion and ethnicity
• Index