China's Development: Social Investment And Challenges

Social Investment and Challenges

Litao Zhao

• Publisher: WSPC
• Year: 2017
• eBook ISBN: 9789813223462
• Topic: Política y relaciones internacionales
• Subtopic: Política educativa

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China has made remarkable yet uneven progress in social development. This book analyses China's achievements and problems in social development from the perspective of social investment. Social investment has gained popularity in Europe as a new social policy paradigm. It seeks to use government budget more efficiently and effectively by investing in people rather than "social consumption".

This book focuses on a few policy areas central to social investment and capacity building, including education, technical training, R&D, and the hukou reform. It also analyses challenges and limitations of China's social investment policies. It sheds light on the most notable feature of China's social investment regime, which is the concentration of resources, privileges, and policy support on sectors and institutions with more growth potential. This helps to explain why China's progress in social development is remarkable but unequal.

--> Contents:

• Introduction
• Development-Oriented Social Investment
• Basic Education
• Vocational Education
• Higher Education
• Science and Technology
• Talent Schemes
• Hukou and Migration
• Social Investment in China

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--> Readership: Policymakers, academics, professionals, undergraduates and graduate students interested in China's social development, social investment, social policies and social issues. -->
China;Social Development;Social Investment;Education;Migration;Inequality Key Features:

• It is the first book to analyse China's social development from the perspective of social investment
• It is analytical while most books on China's social development and welfare regime are descriptive
• It promotes comparative social policy research

Chapter 1

Introduction

Welfare-centric approaches are ill equipped to account for East Asian development experiences. Based on the level of social expenditures either in absolute amount or as a percentage of gross domestic product (GDP), East Asian societies are too low to qualify for the title of a welfare state, particularly when they were at the stage of economic takeoff. Even after two decades of “welfare deepening” since the 1990s, their social expenditures in general are still not high by the standards of their international peers. Concepts and perspectives such as “reluctant welfarism” have been used to set East Asia apart from other welfare regimes.

Treating East Asia as a residual category in the taxonomy of welfare regimes, however, misses out on the positive side of East Asian development experiences. Japan and the “four little dragons” of South Korea, Taiwan, Hong Kong and Singapore have achieved a high level of economic and social development in just a few decades in a relatively peaceful manner. China is now following suit and on a scale that has geopolitical implications which make China different from its East Asian neighbours. Welfare-centric approaches, which view East Asia’s social policy as underdeveloped and/or marginalised, fail to account for East Asia’s progress in improving social well-being.

Some of the alternative perspectives are more appreciative of East Asian development experiences, led by the earlier works of Catherine Jones and James Midgley.¹ For instance, the “developmental state” perspective casts a more positive light on East Asia.² However, the emphasis on the role of an interventionist state limits the relevance of East Asia’s experiences to broader challenges encountered in other regions. The global spread of neo-liberalism makes the idea of “developmental state” or “interventionist state” unfashionable and less attractive. Moreover, democratisation and “welfare deepening” in some East Asian societies since the 1990s have led to the debate on East Asia “growing out of the developmental state”.³ The perspective of “productivist welfare regime”, which views East Asia’s social policy as growth oriented, is more to the point.⁴ Nonetheless, the issue of whether East Asian development experiences is temporarily confined to the earlier stage of industrialisation or has a much broader implication remains to be answered.

The “social investment” perspective, which has gained popularity in Europe, has the potential to provide a more convincing and positive account of East Asia. It is appealing as a political agenda because it sees social expenditures as investment rather than cost; it is also a useful analytical tool for policy analysis as it is specific about policy areas to receive priority funding. In a broad sense, East Asian societies, including mainland China, fit well with the social investment perspective. In East Asia, social policy has been part of a broader development strategy. Programmes seen as social consumption have been discouraged or postponed, while programmes seen as social investment have been given priority. The underlying philosophy is that development-oriented social policy facilitates economic growth, which in turn reduces welfare dependence and creates resources for improving social well-being. In this way, economic development and social development are mutually reinforcing.

China in the past three to four decades has demonstrated some of the core features of the social investment strategy. Its social policy has been development oriented. Education and science and technology have received priority funding and policy support compared with that of other social programmes. Economic development has been a major driving force for China’s social development. Thanks to rapid and sustained economic growth, China’s general social well-being had been improved even before the social protection programmes were put in place for rural residents and nonworking urban population. Overall, China’s development has been impressive. This book focuses on some of the key aspects of China’s social investment strategy, including different levels and types of education, talent schemes, and science and technology development. Some of the distinctive features are also highlighted, such as the leadership’s strong and sustained commitment to development, and the ability to mobilise resources for priority programmes, sometimes involving unpopular or unconventional means. This book also sheds light on the weaknesses and flaws of China’s social investment strategy, such as its narrow focus on education and science and technology, its strategy of concentrating resources on a small number of selected schools and universities, and institutional fragmentation that prevents adequate social investment for a large number of people.

China’s Social Policy Reform
1980s-early 2000s

China since the late 1970s has been involved in a dual transition from an agrarian economy to an industrial one and from a planned economy to a market-oriented one. The latter, which sets China apart from other East Asian societies, has strongly shaped China’s social policy reform in one way or another.

In a review of China’s development in the Mao period, Walder characterises the Chinese model as a variant of Stalinist forced-draft heavy industrialisation. The economy and society were fundamentally restructured for this purpose. In the urban areas, the majority of urban residents were deployed to workplaces or “work units”, which distributed a wide range of goods and services, rationed or unrationed. Many large government agencies, enterprises, schools and hospitals operated as self-contained communities. In the countryside, villagers were organised into rural collectives, which were responsible for their livelihoods through collective farming and cooperative social programmes. Within urban workplaces and rural collectives, there was “a nearly complete fusion of political and economic power, and extensive political organization”, “a remarkable lack of residential and job mobility” due to the system of household registration and food rationing, and “broad dependence on workplaces for the distribution of goods and services”.⁵

In the 1970s, this model was seen by many outside of China as an alternative model of development for the third world for its independence from foreign capital and the world system, and for its achievement in increasing industrial and grain output, raising life expectancy, controlling epidemic diseases and expanding basic education. However, the problems of this model had become clear by the late 1970s. Economically, industrial productivity had declined steadily from the 1950s; socially, there was little improvement in consumption throughout the 1960s and 1970s. China’s development performance especially paled in comparison with its East Asian neighbours. By the late 1970s, the development gap had widened, with China lagging far behind Japan and the “four little dragons”. It became clear that “effective state management of relationship with the world economy, and not withdrawal from it, was the effective strategy”.⁶

Since the late 1970s, China has begun to shift from class struggle to economic development, with economic reform and “open-up” as the main strategy, scholars have observed a dramatic departure from the Mao era in the social welfare domain in the 1980s: “The egalitarian ideals and collective solution of the Maoist era have disappeared, and in their place is an ideology that validates individual rather than group goals, and private rather than public solutions”.⁷ Out of practical considerations, the state endorsed decentralisation and marketisation as the reform strategy. To incentivise local governments for economic development and due to government financial constraints, the central government devolved financial responsibilities to the provincial governments in the form of fiscal contract. In return, the provincial governments were granted the right to retain most of the revenues. The similar arrangement was replicated down the administrative hierarchy from the provincial to the prefectural, county and town/township governments.⁸

In the 1980s and early 1990s, there was a sharp contrast between rural and urban areas in terms of welfare benefits. In the countryside, there was a clear retreat from collective welfare programmes. In terms of social relief and assistance, while the success of such programmes in the Mao era was subject to “the quality of village leadership and the cohesion of the community” and to a less degree “the absolute levels of wealth”, in any area “where decollectivization significantly weakened the commitment or ability of village-level leaders to maintain local welfare services or finances, the quality of programmes declined”.⁹ In the area of health care, there were substantial losses in the numbers working in health (and education) despite the fact that every component of the rural non-agricultural sector was gaining employees. Most of the village-level cooperatives that offered collective insurance and provided primary care were dismantled, and rural residents with some type of insurance dropped from 85% in the 1970s to 9% in 1987.¹⁰

In the area of education, the central government explicitly delegated financial responsibility for rural education to the township government. In practice, the government budget only covered teachers’ wages. Other expenditures such as school operational costs and maintenance/renovation of school buildings had to be financed by local resources either through funds collected from households, school-generated revenues or fees charged directly to students. In relative terms, there was a shift of financial burden from government to rural community and families. As a result, through the 1980s and 1990s, “provincial and county economic indicators were closely linked to educational investments, per-pupil spending and school availability”.¹¹

In contrast to “the general pattern of contraction in the rural areas, government programmes serving urban residents have undergone rapid expansion” in areas from health care and education to pensions and price subsidies.¹² The rapidly growing welfare funds were increasingly channelled to urban residents. Some scholars have seen this pattern as a result of the political strategy to distribute welfare services as a reward to the “most deserving ones”, be they individuals or classes.¹³

The observation by Deborah Davis in the late 1980s that urban workers in state-owned enterprises belonged to the “most deserving ones” no longer held from the mid-1990s. After several rounds of effort to reinvigorate state-owned enterprises failed in the 1980s, the government turned to a radical strategy of “keeping large state-owned enterprises and letting go of the smaller ones” (zhuada fangxiao) in the mid-1990s. The new move not only fundamentally changed the economic and employment structure, but also made it imperative to establish a new social security system for millions of laid-off workers. Unlike the period of the 1980s and early 1990s when there was more dismantling than building in the social policy domain, a new social security system came into being between the mid-1990s and the early 2000s. Some of the ideas were mooted in the 1986 labour contract reform. However, the building of a new social security system did not gain much momentum until the mid-1990s when ...

Table of contents

• Cover
• Halftitle
• Series Editors
• Title
• Coyright
• Contents
• About the Author
• Chapter 1 Introduction
• Chapter 2 Development-Oriented Social Investment
• Chapter 3 Basic Education
• Chapter 4 Vocational Education
• Chapter 5 Higher Education
• Chapter 6 Science and Technology
• Chapter 7 Talent Schemes
• Chapter 8 Hukou and Migration
• Chapter 9 Social Investment in China
• Index