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China: How Much Success?

China’s Economy and the Maoist Strategy

by John G. Gurley
Monthly Review Press, 325 pp., $5.95 (paper)

China’s Economic Revolution

by Alexander Eckstein
Cambridge University Press, 340 pp., $7.50 (paper)

The communist transformation of China is certainly the largest, and arguably the most ambitious, of the many state-administered “social experiments” which have characterized our century. The “experiment” on the mainland has been in progress nearly thirty years; it is not premature to ask whether it seems to have been successful.

In this series of essays, which began two issues ago, we have been examining one aspect of the overall Maoist strategy: the struggle to eliminate desperate poverty and to raise material standards of living, in China. In the first part (NYR, April 3) we saw that highly idealized accounts of China’s progress, such as Father Imfeld’s China as a Model of Development or Professor Gurley’s China’s Economy and the Maoist Strategy, do not provide us with the sort of information we would need to trace improvements in health and nutrition, the two most important aspects of a people’s material well being. The late Professor Eckstein’s China’s Economic Revolution is more useful and informative. While facts are hard to come by, it seems clear that accounts partial to the Maoist regime have over-estimated the improvements in health, and underestimated the extent of hunger.

In the second part (NYR, April 19) we looked at literacy and the status of women. Here again it seemed that, while China’s problems were exceptional, its achievements had been exaggerated. In this issue, we shall look at the extent to which economic inequalities have persisted in communist China, and speculate on how relevant the “Chinese model” is for other poor countries.

I

Inequality

The People’s Republic is widely regarded as the world’s most egalitarian society; is this reputation justified? Imfeld certainly believes it is; after all, he reasons, “The whole aim of socialism or communism can be summed up as creating a state of equality between peasants, workers, and intellectuals.” But what sort of equality? The word “equality” can be conveniently redefined to suit the needs of its users. No one even slightly familiar with contemporary China could seriously argue that equality before the law, equality of access to decision making, or equality of diverging ideals—the right to dissent—are cherished goals of the communist government. Quite the opposite: these, and many other sorts of equality, have been dismissed as “bourgeois rights.” The equality which Mao recognized, and seemed to push for with a sincerity unmatched by any other modern leader, was equality of standards of living.

How successful was Mao’s campaign to narrow the economic differences among the people of China? His strategies for eliminating material inequalities are well known, and Gurley does them justice in a skillful and sensitive survey. What Gurley does not make clear, however, is the world of difference between a strategy and its successful implementation. If we are willing to judge China by what it delivers to its people, not by what it wishes for them, we can find plenty of evidence that China is materially a less egalitarian society than the rhetoric of The Peking Review suggests.

Overall economic inequality in any nation can be broken down into two components: inequalities within groups, and inequalities between groups. In China today, inequality between groups is still highly pronounced. One obvious center of inequality has already been touched upon several times: this is between the privileged lives of urban folk, and the harsh, monotonous, often miserable lives of the five-sixths of China’s people who live in the countryside. Material comforts in Peking might not impress Americans, but for the Chinese they are so alluring that officials do not bother controlling the movements of the capital’s residents with travel credentials: it is simply inconceivable that anyone fortunate enough to live in Peking would choose to move anywhere else.1 Subsidized services—housing, education, health care, and the like—are both better and easier to come by in the cities. Rations are larger for city people, and the goods rationed are often of higher quality. Pork may be produced in the countryside, but consumption of this prized delicacy is about twice as great for city people. On top of these sorts of perquisites, whose value cannot really be measured properly, there is the difference in average incomes between urban and rural areas: on a per capita basis, this is currently about 2:1.2

Such differences, of course, put a significant premium on city life, and in the 1950s, before comprehensive clamp-downs on travel were enforced, the cities swelled with both the desperate and the ambitious from the hinterlands. Many of them were willing to wait months, even years, to earn the “fortunes” they could not hope to amass at home. By 1957 unemployment in Shanghai, the city where living standards for employed workers were then highest, was over 20 percent.3 By sending millions of people down to the countryside, finding jobs for millions more, and seeing to it that upward mobility from farm to city was nearly impossible, Shanghai and China’s other cities solved the political problem of urban unemployment. But the social differences which had generated the problem in the first place persisted.

China’s urban-rural differences, it is true, are not as extreme as those in most of Africa and Latin America. Yet they are greater than those in a number of societies which we do not immediately associate with equality: Greece, for instance, or Guyana, or South Korea and Taiwan.4 Anyone who has traveled extensively within the United States will appreciate the magnitude of a difference of 2:1 between the average per capita incomes in city and countryside when he considers the economic distance between our predominantly poor rural areas and the rich ring of suburbs which surround our major cities: there the difference is only 50 percent.

The most surprising fact about the inequality between city and countryside in China is that there are no clear signs it is diminishing. It was about 2:1 not only in the 1950s but also in the 1930s, the era of impoverished peasants and grasping urban capitalists. Income inequality within cities or rural regions may have declined, but there is no evidence that nearly three decades of socialism have brought Mr. Imfeld’s “equality” between rural “peasants” and urban “workers.”

Even greater than the difference between city and country, however, is the difference between rich and poor provinces. Partly by historical accident and partly by design, China’s wealth lies along a coastal rim which extends up into Manchuria. As one travels inland, agriculture becomes less stable and less productive, industry disappears, and the standard of living plummets. In 1957, the last year for which there are reliable and comprehensive figures, the ratio of per capita agricultural and industrial income between Honan, the poorest province, and Shanghai, the richest, was well over 7:1.5 If we exclude the city-states from our reckoning, and instead compare Honan with the rich Manchurian province of Liaoning, the difference was almost 3:1. (By contrast, the apparent income difference between Mississippi and Connecticut, our poorest and richest states, is only about 2:1, and this overstates actual differences in consumption. Prices are about 20 percent lower in Mississippi, and a progressive income tax siphons off a higher proportion of the average family’s earnings in Connecticut.)

Indeed, it could be shown that the inequality between rich and poor regions in China was more acute in 1957 than in any of the large nations of the world except perhaps Brazil.6 Anyone familiar with the dazzling wealth to be found in southern Brazil and the appalling poverty of the Brazilian northeast will understand the sorts of differences we may be discussing within China.

Over the past two decades a sort of revenue sharing program has been in effect, the clear intention of which has been to subsidize and develop the depressed provinces.7 Industry in backward areas, it seems, has grown faster than the national average, although of course from a far smaller base; in some sense, then, differences in the level of industrialization among the provinces have probably therefore diminished.

But agricultural differences between regions may be just as great today as they were twenty years ago. In the early 1960s, when the countryside was still recovering from the Great Leap Forward, modern techniques and equipment were specially earmarked for the advanced provinces, where production was already strong and extra investment could be assured a reasonably safe return. The weak areas, on the other hand, were encouraged to be “self-reliant.” Whether the surge of egalitarian policy in the 1970s has compensated for the gap that doubtless developed in the 1960s will be known only if and when comprehensive regional figures come out. But even if the past twenty years have brought an appreciable narrowing of regional differences—and it is not certain that they have—China could still be a nation against which Mexico might compare its glaring regional inequalities quite favorably.

Differences between areas, of course, are the result of investment decisions and historical developments over the centuries; it would be unfair to expect these to be evened out in a single generation. But what about the differences within areas: did the Maoist regime bring economic equality to the people within a given locality? Information here is incomplete; yet it would be impossible not to bring down the top of the income pyramid and raise up the base in the course of comprehensive land reform and a program to confiscate property income. On the other hand, it is easy to exaggerate the narrowness of current gradations. Take industrial workers, who probably make up the bulk of workers in the cities. When he visited factories in Canton, Eckstein made notes on the ratio of the highest wages to the lowest that are instructive here:

Interestingly enough, this range of wage differentials [from 3:1 to 5:1] is quite typical for industries in many other countries, both developed and underdeveloped. For instance, in Guatemala the ratio of average hourly earnings of electrical fitters to laborers was 7:1 in the early 1960s. The ratio of carpenters’ wages to unskilled laborers’ in construction was 5:1. In Singapore, the ratio between government skilled and unskilled rates was 2.5:1. In Egypt, average weekly earnings of semi-skilled workers in all industries were more than three times as high as unskilled earnings in 1960. In the US and Europe the wage spread within industry seems to be typically about 3:1. All these examples suggest that the Chinese industrial wage structure is not significantly more egalitarian than that of other countries. Yet this conclusion must be treated with caution since many of these wage data are not fully comparable. [Page 299]

What about the differences within agriculture? Martin K. Whyte, a sociologist now at the University of Michigan, has examined income inequality in contemporary China, and has this to say about income distribution:

The ratio of incomes from collective labor of the top 20 percent [of the village studied] to those of the bottom 20 percent is about 4.6:1…. This is at the lower end of the scale, but not “off the scale,” when compared with figures for other Asian developing countries, where this ratio of the upper 20 percent to the lower 20 percent varies from 4-5:1 up to 10:1.8

  1. 1

    Claudie and Jacques Broyelle, “Comme vivent les Chinois,” L’Express, January 23, 1978, reprinted in the November issue of the Australian magazine Quadrant.

  2. 2

    Martin K. Whyte, “Inequality and Stratification in China,” China Quarterly, December 1978.

  3. 3

    Christopher Howe, Employment and Economic Growth in Urban China, 1949-1957 (Cambridge University Press, 1971).

  4. 4

    A good discussion of urban-rural disparities can be found in Michael Lipton, Why Poor People Stay Poor (Harvard University Press, 1977).

  5. 5

    Nicholas R. Lardy, “Regional Growth and Income Distribution: The Chinese Experience,” Yale Economic Growth Center Discussion Paper No. 240, November 1975.

  6. 6

    See Nicholas R. Lardy, Economic Growth and Distribution in China (Cambridge University Press, 1978).

  7. 7

    Lardy, Economic Growth and Distribution in China.

  8. 8

    Whyte, “Inequality and Stratification in China,” op. cit. Martin Blecher has taken Whyte to task for the simplicity of this “top to bottom” measure, and suggests more sophisticated measures should be used. See Blecher, “Income Distribution in Small Rural Chinese Communities,” China Quarterly, December 1976. Since Blecher was unable to come up with data for even ten communes on which the better measures could be used, however, his criticisms seem premature.

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