Understanding these circumstances starts with the recognition that the term ‘middle class’ covers a range of meanings that has developed over time. In the early 19th Century the middle class were the new captains of industry, the industrial and commercial bourgeoisie emerging from industrialisation. They were ‘middle’ because they were in-between the court on the one hand and the yeomanry and the leaders of the cities and towns on the other. As industrialisation developed further, the professional and managerial middle classes (in-between state and society) emerged to service the needs of the state and businesses.
In China, the middle classes to emerge in the last thirty years of post-socialist growth and development have included both a new bourgeoisie as well as growing numbers of professional and managerial middle classes, including some occupations such as lawyers and psychologists that were previously outlawed. Interestingly, while in other parts of the world the creation of a bourgeoisie historically predated the emergence of professional and managerial middle classes, in China, or at least in the People’s Republic of China since 1949, the professional and managerial classes existed before the bourgeoisie. The modernising state during 1950s-1970s when economic growth was also significant needed managers and professionals in many areas of social as well as economic activity.
These comments justifiably suggest a growing middle class, but there is a need for perspective in assessing the size and extent of China’s middle class. Economic growth has been dramatic for the last thirty years at about 9-10 per cent pa. All the same, average GDP per capita in China is still only about US$5,500 pa (2012.) Less than 10 per cent of the population earn 60,000 yuan rmb (Chinese dollars) a year, a level of income that would in terms of housing, schooling, food and other consumption elsewhere in the world permit a middle class life style.
In Europe and elsewhere the rise of the middle class is associated with political change. There is an over-generalised equation between the growth of a middle class and the emergence of liberal democracy. The nascent bourgeoisie of Europe (including the UK) somehow felt themselves excluded from politics and so organised to change the political system to include their participation. The key to this development (to the extent that the over-generalisation reflects events) is that there was a political space between the new bourgeoisie and the wielders of political power.
In China this political space between the new entrepreneurs and the political system simply does not exist. There have been fundamentally two paths to economic wealth and prosperity for the individual entrepreneur:
- One is that a manager in the state economic system took a decision to either develop their enterprise as a commercial undertaking with the unfolding of reform, or decided to go it alone leaving the comfort of the ‘iron rice bowl’ for the rewards that come with risk. Often state enterprises hived off parts of their operation to make them economically more efficient or simply to allow greater local determination of production. One result is that many state enterprises were not only restructured but also came to be equity holders in apparently new private and non-state enterprises.
- The other path to individual entrepreneurial success was from individual initiative in the private sector. All kinds of economic enterprise are now permitted – the only check on development is effectively the market. At the same time, if a new entrepreneur wanted to grow their business, to move say typically from retail to service to manufacturing, then access to land, labour and capital would largely be dependent on relations with the Party-state. Indeed in many cases this required the entrepreneur to share equity with local government.
There are two clear results from the depiction of these paths to entrepreneurial development. The first is that many enterprises in China, and certainly most sizeable businesses, are neither state owned nor private but various kinds of hybrid. The second is that the links between the political and business systems are very close. The political space between political and business leaders that existed in earlier experiences of industrialisation has not existed in China. Either the new bourgeoisie has emerged from the Party-state or they have been incorporated into it.
Of course this is not to say that other elements of China’s middle class – intellectuals, professionals, managers – might not also be a force for political change. But here too there is little evidence to support such an argument. State officials by definition and economic managers by experience have an investment in the current political system. Professionals and intellectuals have seen their standard of living rise dramatically in the last two decades. While many may desire more political openness they also fear a less predictable and possibly chaotic future. The carrot of prosperity and the stick of uncertainty limit more radical change.
The Chinese Communist Party has repeatedly talked about its aim of building an olive-shaped society, in which the vast majority of the population have a largely equal but still high average income. It is a dream of a middle class consumer society, but one of constructive authoritarianism instead of liberal democracy. The social contract is one that promises stability and prosperity.
Middle Class China: Identity and Behaviour, edited by Chen and Goodman, will be published this month.
Minglu Chen is lecturer in China Studies in the China Studies Centre and the Department of the Politics at the University of Sydney. She is the author of Tiger Girls: Women and Enterprise in the People’s Republic of China and is currently working on entrepreneurs and political change in China.
David S G Goodman is Academic Director of the China Studies Centre and professor of Chinese Politics at the University of Sydney, as well as a professor in Social and Behavioural Sciences at Nanjing University. He is also author of Class and Social Stratification in China, and is editor of China’s Peasants and Workers: Changing Class Identities. He is currently working on entrepreneurs and political change in China.
China Watching and Contemporary Geopolitics of Fear and Fantasy – by Chengxin Pan