Anxious Wealth

Money and Morality Among China's New Rich

John Osburg

• Publisher: Stanford University Press
• Year: 2013
• ISBN:
  9780804785358
• Edition: 1
• Topic: Sozialwissenschaften
• Subtopic: Kultur- & Sozialanthropologie

Who exactly are China's new rich? This pioneering investigation introduces readers to the private lives—and the nightlives—of the powerful entrepreneurs and managers redefining success and status in the city of Chengdu. Over the course of more than three years, anthropologist John Osburg accompanied, and in some instances assisted, wealthy Chinese businessmen as they courted clients, partners, and government officials.

Drawing on his immersive experiences, Osburg invites readers to join him as he journeys through the new, highly gendered entertainment sites for Chinese businessmen, including karaoke clubs, saunas, and massage parlors—places specifically designed to cater to the desires and enjoyment of elite men. Within these spaces, a masculinization of business is taking place. Osburg details the complex code of behavior that governs businessmen as they go about banqueting, drinking, gambling, bribing, exchanging gifts, and obtaining sexual services.

These intricate social networks play a key role in generating business, performing social status, and reconfiguring gender roles. But many entrepreneurs feel trapped by their obligations and moral compromises in this evolving environment. Ultimately, Osburg examines their deep ambivalence about China's future and their own complicity in the major issues of post-Mao Chinese society—corruption, inequality, materialism, and loss of trust.

1

INTRODUCTION

In 1997, I arrived in Guangzhou, the booming capital city of Guangdong province, to begin teaching English at a provincial education college. Like many casual observers of China, I was captivated by the irony of a wealthy, entrepreneurial class in an ostensibly socialist country and the social tensions and contradictions brought by China’s market reforms. My students were primarily high school English teachers in their twenties from small towns in rural Guangdong. They were attending two years of professional training in Guangzhou before being sent back to their schools. Over late-night snacks and beers in outdoor sidewalk restaurants, they talked about their hopes for the future and anxieties about the present. I quickly learned that the broader social and economic transformations of the previous two decades, while improving their standard of living, had overturned many of their certainties about Chinese society and their place within it. They felt both threatened by and drawn to the expanding world of business, angry about its injustices but seduced by its promises of excitement, status, and riches.

While the new rich were a common topic of discussion, many of the conversations we had about this group quickly evolved into discussions of marriage, romance, and sexual morality. In many ways, among my students it seemed that anxiety about growing social inequality in China manifested in moral discussions about men and women.

My male students frequently complained that in their hometowns uneducated entrepreneurs and nouveau-riche peasants were taking “their women.” They claimed that just a few years earlier the level of education and the lifestyle afforded by their occupations had given them moderate status in their rural home communities, enough status at least to attract another hometown teacher as a wife. Now they felt that the relatively paltry material benefits of their jobs—low incomes and dependence on their schools for cramped, dilapidated housing—ranked them lower in the marriage market than uneducated but wealthy entrepreneurs who often had private cars and personal residences bought in the commercial housing market. Their female classmates, they complained, had it easy. Because they were educated (but not overeducated), poorly paid (relative to a potential husband), and employed in jobs considered morally appropriate for their gender, these women had no trouble finding a suitable (and wealthy) spouse.

For these male students, an increasingly normative masculinity based on taking entrepreneurial risks and achieving success in the market economy had very real consequences for their life decisions. As a result of their difficulty getting married, many were looking for ways to leave their schools. However, because their work units (danwei) had funded their two-year stints at the education college, the only way out of their teaching commitments back home was for them to reimburse their schools for all the money spent on their behalf.¹ Ironically, this led quite a few of them to skip classes in search of business and money-making opportunities in Guangzhou. In fact, some had viewed attending the college in Guangzhou from the start as little more than a means of getting to the city to find better employment, a better quality of life, and, they hoped, a wife along the way.

They experienced their dependence on the state sector as a form of emasculation. Their outdated sense of entitlement, derived from their status as non-laboring “intellectuals” (zhishifenzi), informed their indignation over “their women” marrying nouveau-riche fish farmers and auto parts dealers who would have been both morally and politically suspect just a decade earlier. This example points to the gendered logic and consequences of stratification in contemporary China. The emergence of a new, class-inflected masculinity, revealed in this case in the domain of marriage, reoriented the ambitions of these teachers and altered their sense of themselves as producers, consumers, and men. And for the female teachers it helped reinforce a reemerging “traditional” femininity—that women should cultivate their feminine virtues and physical attractiveness along with the goal of marrying well. As many popular allegories now proclaim, overachievement in education and business would only make finding a husband more difficult.

There was a saying often repeated to me in these conversations: “As soon as a man gets rich, he goes bad; as soon as a woman goes bad, she becomes rich” (nanren yi youqian jiu huaile; nüren yihuaile jiu youqian). This statement suggests that to many of my students both the lure of wealth and the experience of prosperity affect men and women differently. They understood wealth not only to reveal basic differences between men and women, but to have a transformative effect on their motives, characters, and relationships as well. In short, the social stratification brought by China’s economic reforms has produced new ideologies and relations of gender, and these are in turn affecting the course of social and economic change in China (Gal and Kligman 2000).

This book examines the rise of elite networks composed of nouveau-riche entrepreneurs, state enterprise managers, and government officials. These powerful new groups have exerted increasing dominance over many aspects of Chinese commerce and politics during the reform era, which began in the late 1970s. The book considers these networks, which are composed mostly of men, as gendered social formations governed by an ethics of brotherhood, loyalty, and patronage. Using ethnographic data gathered from interviews, experiences as the host of a Chinese television show, and countless evenings accompanying businessmen entertaining their clients, partners, and state officials, I analyze the ways in which relationships are formed between elite men through shared experiences of leisure—banqueting, drinking, gambling, and cavorting with female hostesses—and the importance of these relationships in organizing business ventures, orienting personal morality, and performing social status.

This “masculinization” of the sphere of private business and deal-making in China has generated challenges for women entrepreneurs, who are often accused of using their sexuality to get ahead, and has given rise to a new class of young women who live off the patronage of China’s new-rich businessmen and corrupt state officials. These young women are central to mediating relationships and mirroring status among elite men and are integral to the emergence of a growing, semi-legitimate “beauty economy” (meinü jingji) in urban China, which seeks to exploit the youth and attractiveness of young women for commercial gain.

I also examine the rise of new forms of leisure and consumption, new patterns of marriage and sexuality, and the proliferation of official corruption in China, all as aspects of shifting templates of interpersonal morality. I contend that these phenomena are key to understanding new forms of economic inequality and gender discrimination in contemporary China, as well as many aspects of China’s current political configuration.

China’s Market Reforms and the Rise of Entrepreneurs

After the death of Mao in 1976 and after a brief Maoist interim period led by Hua Guofeng, the Communist Party, under the leadership of Deng Xiaoping, began to reassess many of the tenets of Maoist economics such as collectivization and the centralized allocation of resources. In the domain of ideology, Deng proclaimed that the fundamental contradiction in Chinese society was no longer between classes, but between “the backward and the advanced forces of production,” and therefore called for the unleashing of the latter, even if it meant the appearance of “transitional” forms of social inequality. Deng grounded his new theory of “socialism with Chinese characteristics” in a selective reading of Maoist thought that stressed pragmatism over theoretical dogmatism, an approach summarized by Mao’s oft-quoted phrase, “seek truth from facts.” Deng and the Party legitimated their reform program largely as a reorganization of the economy in accordance with certain “natural laws” of the market. Market reforms, were, and continue to be, legitimated as scientific and rational means of achieving the socialist ends of national economic prosperity, social stability, and prestige in the international political arena.

In 1978, the Third Plenum of the Eleventh Party Congress introduced the first reforms that marked the beginning of the Reform and Opening Policy (gaige kaifang) and what has become known as the reform era. This period has been marked by a decline in central economic planning and an increasing reliance on market mechanisms for the distribution of capital, resources, and goods. The “opening” component of the Reform and Opening Policy also signaled an opening to cultural and economic exchanges with the capitalist world—the United States, Japan, Hong Kong, and Taiwan in particular. It also signaled a turning away from the “nonaligned” countries of the third world (Rofel 2007: 11).

Reforms began in rural areas in 1980 with the introduction of the household responsibility system. However, following a general theme of the reform era, practices on the ground tended to precede their official sanction in state policy. Under this system, individual households contracted for a portion of collectively owned land and farm equipment, which they “paid” for in taxes and grain quota obligations to the state. Households were allowed to organize production in any way they saw fit and to sell their surplus for profit. Although the household responsibility system improved agricultural output and raised the standard of living throughout rural China, reforms in rural industry benefited a smaller portion of the country and produced a class of rural industrialists which included many cadres and their kin.

Post-Mao reforms also included a reorganization of state power. The Communist Party apparatus was formally dislodged from the government bureaucracy (though not disconnected in practice), and the daily operation of the government became less subject to the intense politicization that characterized the Cultural Revolution years (1966–1976). The Party’s role was envisioned as formulating goals, agendas, and priorities, while the government’s role would be to develop and implement policies that realized these goals (Fairbank and Goldman 1998: 420). Deng called for the rationalization of bureaucratic rule, emphasizing professional qualifications over ideological purity among the official ranks (Meisner 1999). Both economic and political decision-making were partially decentralized, granting greater autonomy to local-level governments and cadres. While this change helped facilitate rapid economic growth in many areas, it also gave local officials the power and administrative space to personally profit from economic reforms. They were able to do so largely because many of the new market-oriented businesses were built on the bureaucratic architecture of the previous collective, state-run economy.

“Township-village enterprises” (TVEs) were one such example.² They evolved from collective and brigade-run industries started during the Great Leap Forward (1958–1960). The dramatic success of TVEs in the mid-1980s spawned the first class of “new rich”; and “rural entrepreneurs” (nongcun qiyejia) and nouveau-riche “upstarts” (baofahu) emerged as social categories around this time. Though officially classified as part of the collective sector of the economy, TVEs were run independently of planned economic decisions by the state, a common theme of much market-oriented business during the first decade of reforms.³ They were officially registered as collectives (known as “wearing a red hat” [dai hongmaozi]), but most were run like profit-oriented private businesses. In fact, many “privately run” businesses to this day are still started with state-controlled capital, affiliate themselves with a state-owned enterprise or ministry, or invite one or more government officials to serve on their governing board, practices that allow them to reap the tax benefits, regulatory flexibility, and political protection afforded by close ties to the state (Wank 1999; Tsai 2007; Huang 2008).

Small-time entrepreneurs first appeared in urban areas in the early 1980s as “independent households” (getihu). For the most part, this term referred to a petty capitalist class of shop owners, peddlers, taxi drivers, and restaurateurs who were independent of the state-controlled work-unit (danwei) structure, made their own production decisions, and received few or no state-sponsored benefits such as medical care and housing. Businesses classified as getihu were envisioned by policymakers as units of household production and were legally limited to eight employees. Up until the early 1990s, most urban Chinese viewed this class with suspicion and disdain.⁴ Many early getihu who prospered in the nascent market economy were in fact men and women with low political status and sometimes criminal backgrounds on the margins of the state-run economy who had little to lose by engaging in semi-legal business. They included unemployed youth and intellectuals who had recently returned to urban areas after being sent down to the countryside during the Cultural Revolution, as well as former political prisoners.

Reflecting on this era, many of my informants described the first group to get rich from market-oriented small businesses as “daring” (danzi da) because of the semi-legal nature and uncertain political status of many of their activities. According to narratives of the time, because they already lived a marginal, insecure existence, successful getihu were not afraid to suffer or “eat bitterness” (chiku). In the 1980s, many parents would have been reluctant to allow their daughters to marry an entrepreneur, which at the time was still perceived as a politically insecure status (Yang 1994: 160).

The power and scope of the market economy in urban areas increased significantly in 1984 when the Communist Party leadership called for the increased efficiency and autonomy of state enterprises. Cut off from public funds and facing bankruptcy if unable to show a profit, most urban enterprises began to be run like profit-minded businesses, and some aspects of production (as well as entire enterprises) were contracted out (chengbao) to entrepreneurs, many of whom were the current managers of the businesses being privatized. Until the mid-1990s, however, the majority of these enterprises used their increased revenues to provide for employees by constructing housing and creating jobs for their employees’ children, thereby continuing to fulfill their socialist-era welfare obligations (Andreas 2008: 127). While many managers themselves became shareholders in or proprietors of formerly state-owned enterprises through managerial buyouts and “insider privatization”, others profited both directly and indirectly from their sale. According to several of my interviewees, as failing and unprofitable state enterprises started to be dismantled, countless numbers of them were sold at well below market prices to relatives and associates of the cadres overseeing their sale who manipulated the value of the company’s assets.

In 1988, private firms (siying qiye) received official legal sanction, and private businesses were allowed to legally hire more than eight employees. In practice, it was still difficult for them to obtain bank loans, they were subject to higher rates of taxation than their “red hat”-wearing or state-run counterparts, and they were (and still are) barred from certain sectors of the economy. As Kellee Tsai (2007: 54) puts it, it wasn’t until after Deng Xiaoping’s 1992 Southern Tour (nanxun) that “the red hats started to come off” and the number of legally registered private enterprises began to mushroom.⁵ Many state-run and collective enterprises were dismantled or privatized, resulting in over 50 million public sector workers losing their jobs. Those state enterprises that remained were increasingly run like profit-oriented businesses, shedding many of the welfare obligations to their employees (Andreas 2008: 131). Around this time the flow of rural migrants to cities and prosperous rural regions such as the Pearl River Delta, which had started in the early 1980s, became a flood. These migrants filled the service and manufacturing jobs created by the newly legitimated private sector.

After 1992, foreign investment, the bulk of which initially came from Taiwan and Hong Kong, also took off, creating more opportunities for entrepreneurs as factory managers and export merchants. China’s Special Economic Zones, as well as other coastal cities open to foreign capital, attracted much of this investment, which was primarily used to support export-oriented manufacturing. During the 1990s and 2000s, foreign investment continued to grow exponentially as other cities and provinces were opened up to international capital. Most of the early foreign corporate ventures in China came in the form of joint ventures, which paired foreign companies with Chinese state-owned and privately owned enterprises. But since China’s entry into the World Trade Organization (WTO) in 2001, foreign investment has increasingly taken the form of wholly foreign-owned enterprises (WFOEs). By 2008, 80 percent of foreign investment assumed a “wholly-owned” structure (Walter and Howie 2010: 7).

Seeing the success and official sanction of profit-making, by the mid-1990s members of nearly all occupational groups and economic strata of China’s cities began to moonlight in private enterprises to supplement their work-unit incomes. Many left their work units or dropped out of school to form private businesses in the hope of making a for...