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This is a paper presented at the
National Social Science Association Meeting
Las Vegas, Nevada, USA
April 1-3, 2012
Why Are the Poor in China Not Protesting?
Theodore Tin-Yee Hsieh
Judson University
thsieh@judsonU.edu
The year of 2011 may go down in history as the year of protests. People protested on the streets in Tunisia, Egypt and Libya and brought down the long-established dictators in their countries. Greeks marched in front of the parliament building against the unaccountable leaders and forced the prime minister to resign. Russians demonstrated on the Red Square against a corrupt autocracy, corruptly elected. Americans occupied a public park near the Wall Street to protest income inequality on behalf of the poor. Time Magazine chose The Protester as its Person of The Year, acknowledging his/her dominance in the year’s news “from the Arab Spring to Athens, from Occupy Wall Street to Moscow” (Person of the Year: The Protester, Time, 2011, cover).
One would think that the conditions are ripe for a “China Spring.” These are the current conditions in China.
China is one party dictatorship. Since 1949, China has been ruled by one political party and the Communist Party is not accountable to anyone except to its self-selected party leaders (Vote as I say. The Economist, 2011, 45-46). But the ruling Communist Party is very smart in pushing its pledges to build a “harmonious society.” Multiple parties would create conflict and disharmony, a theme repeated often through electronic and printed media in China. Chinese political and business leaders believe that “political reform will lead to ‘chaos.’” (The dog that didn’t bark. The Economist, 2010, 52). But, with the exception of some liberal academics and bloggers, many common folk, men on the streets as well as factory workers, seem to have the similar attitude.
Some leaders flaunt their wealth in a country where most of its citizens are still relatively poor. As observed among the 3,000 hand-picked delegates to the recently completed National People’s Congress (parliament) in Beijing, these leaders consist of 70 wealthiest Communist party members. According to Bloomberg Report, the total net worth of these 70 delegates is more than the combined wealth of the U.S. President and his Cabinet, nine Supreme Court Justices, and 535 Senators and Congressmen and Congresswomen (Billionaires Club: the National People’s Congress. World Journal, 2012, 3).
The same Bloomberg Report, widely reprinted and commented in all major Chinese language newspapers in Hong Kong, Taiwan and America, also focuses on the fact that the average wealth of the top 2% of the delegates (60 persons) in the People’s Congress is US$1.44 billion compared to US$323 million average wealth of the top 2% members (11 persons) in the US Congress. It is important to be reminded that the extreme wealth of the top 2% of the government officials in this still socialist country (China) is so much greater than those in the world’s leading capitalist nation (the United States) where the rich people at the top supposedly always exploit the poor at the bottom. Also, it is worth noting that in China, all the personal wealth is accumulated within the last three decades when the socialist economy was replaced by a market-oriented economy in 1978 (Spence, 1990, 641; Hsieh, 2008).
The delegates themselves do not see the irony in this. In fact, many flaunted their riches by wearing expensive clothing that drew admiring looks from on-lookers and criticism from netizens. One smiling delegate displayed a Hermes leather belt costing US$950.00. A lady delegate posted for a photographer with her $2500.00 Louis Vuitton ALMA medium-size orange color handbag. The daughter of former premier Li Peng wore a pink Emilio Pucci jacket priced at $1990 and drew much attention and criticism. It is a widely held view in China that one “cannot succeed without dirtying your hands” (The original sin. The Economist, 2009, 70).
China has one of the highest percentages of internet users in the world. Not only is China the biggest suppliers of parts for Apple, it also has over 513 million people with access to the internet. Nearly half of them also use weibo, the Chinese versions of Twitter that is blocked in China (A dangerous year. The Economist, 2012, 21-24). Twitter was credited as a unifying tool among the protesters in Arab Spring that brought down the dictators in Egypt, Tunisia, and Libya (Person of the Year: the Protester. Time, 2011).
China has one of the biggest gaps between the rich and the poor. When Dominique Strauss-Kahn was still the head of International Money Fund (IMF), he bemoaned “a large and growing chasm between rich and poor—especially within countries.” He argued that inequitable distribution of wealth could “wear down the social fabric….More unequal countries have worse social indicators, a poorer human-development record, and higher degrees of economic insecurity and anxiety” (Unbottled Gini. The Economist, 2011, 71).
Economists commonly use the Gini coefficient, which ranges from 0 (everyone has the same income) to 1 (one person has all the income) to measure the income inequality. In China, it went from 0.3 in the mid-1980s to 0.4 in the 2000s. It is considered a relatively large increase in inequality. (For comparison, the index climbed in America from 0.34 to 0.38 during the same period.) Chinese government has not published Gini figure in recent years. Some Chinese scholars believe that China’s coefficient is now higher than 0.5, making China among the most unequal countries in Asia, according to World Bank-DRC report (Satisfy the people. The Economist, 2012, 55-56).
An interesting comparison would be in the area of GDP per head in these mostly Chinese countries as listed in the annual report of The Economist (The World in 2012, January, 2012): China ($6,120), Taiwan ($22,170), Hong Kong ($36,650), and Singapore ($52,220). In this group, the world second largest economy looks like a poor country. But it does not look that bad when compared to its poorer neighbors: India ($1,960), Pakistan ($1,310), the Philippines ($2,570), and Vietnam ($1,430). With the total control of the mass media, the Chinese government is able to make the poor think about their poorer neighbors rather than their richer relatives.
There is a culture of official corruption. Two phenomena illustrate the wide spread culture of official corruption. The first involves the annual rankings of China’s wealthiest citizens published by Forbes magazine that are considered “pig-killings lists.” Early in 2009 a book titled The Curse of Forbes was published, detailing those on the lists being detained or arrested. A book review reports that “two await trial, ten are currently under investigation, seven have been investigated but not convicted, seven have fled China, and six have died (including two suicides and one murder). Eighteen have ended up in jail” (The original sin. The Economist, 2009, 70).
A particular case involved China’s biggest retail tycoon, Huang Guangyu, who was sentenced to a 14-year jail term and fined US$119 million. Huang started out a salesperson on Beijing streets without obvious resources. By 2008, he became China’s richest businessman, worth US$6.3 billion. He admitted that, between 2006 and 2008, he bribed just five government officials with nearly US$1 million. No details were made public because almost all trials of this kind were held behind the closed doors to protect the innocents (Guilty of something. The Economist, 2010, 69).
Perhaps a case recently reported in a Chinese language newspaper may illustrate the extent of official corruption. A vice-governor of Shandong, a prosperous province south of Beijing, was convicted of corruption for having US$9.0 billion in his possession. He was also accused for having 46 mistresses in 46 different residences in China. Like many other corrupt officials, he had already moved all members of his family overseas (Nine billion bribes and forty-six mistresses. Epoch Times, 2012, 3).
The second phenomenon is the practice of having “capital representative office” in Beijing from every Chinese province, most large cities, and thousands of city, district, county and town governments. These representative offices are there to entertain local officials when they visit the capital. Many offices have fancy restaurants and lavishly appointed guesthouses. The Outlook Weekly, an official government magazine, reported that these offices spend a combined US $1.5 billion a year. Numerous corruption scandals were uncovered. Many resulted in jail times for officials. One sensational case involved an office spending US$100,000 on fewer than 800 bottles of liquor (The delights of home cooking. The Economist, 2010, 51).
Why are there no Occupy Wall Street types of protest in China? These above-mentioned conditions may nurture a protest mentality. But the protesters in Occupy Wall Street movement in 2011 were basically educated, middle class persons with a left-leaning political agenda. The educated, middle class Chinese are not interested in political reform; they are more interested in wealth accumulation.
The street protests and demonstrations in China reported in the media in recent years were mostly staged with government permission or encouragement. They were also mostly staged against “foreign” factories and establishments (China labor unrest 2010. Wikipedia, 2012). The three strikes with most media coverage were against Honda, Toyota, and Foxconn. The first two were Japanese companies. Foxconn was a Taiwanese company. It was also the world’s largest contract manufacturer with 800,000 workers in China alone, making products for Apple, Dell, HP, Nintendo and Sony. According to the same Wikipedia article, of twenty strikes in 2010 by factory workers, seven of these factories were owned by Japanese investors, three others were Japanese/Chinese joint ventures, three were owned by Taiwanese, two were Chinese state-run, one was from the United States, one was from South Korea, one was a Chinese/Danish joint venture, one was owned by a local business, and one with unknown owner. The list seems to support the observation that these strikes were government approved with a certain political agenda behind them, such as “teaching the foreigners a Chinese lesson.”
But for strikers, the objective was for pay raises. These strikes were successful in that sense. For example, Foxconn had to put up salaries by 16-25% alone in February, 2012, in its factories in Shenzhen. But the pay raises also spelled the end of cheap labor in China’s coastal provinces. Many factories were closed and moved inland or to places like Vietnam and Indonesia, leaving these migrant workers from interior China without work (Satisfy the people. The Economist, 2012, 56). So the labor unrest will not take place for a while.
A ten-day stand-off between police and villagers in December, 2011, in Wukan in Guangdong was widely reported. The villagers protested the seizure of farm land by local officials for private (corrupt) development. There were hundreds of such protests in China everywhere. But Wukan was unusual in that its citizens were able to drive out party operators and police and take control of their village. Images of the confrontation between the hapless villagers and the haughty party officials on weibo (the Chinese version of Twitter) did help (A dangerous year. The Economist, 2012, 21-24). But Wukan was a unique incident. The party had never backed down in confrontation with people before Wukan and it probably will not in the future.
The Arab Spring protests seem to be middle-class initiated events. However, the middle class Chinese would not want to jeopardize their future by protesting against government.
Also, the factory workers want to keep their jobs where they are and would not protest because they know now that those multinational investors are able to move their factories somewhere else.
The farmers do not want to protest because they see the improvement of their lot and their children have jobs in the city. The gap between the rich and the poor in China has widened drastically in the last decade but the poor have seen that their life is getting better at the same time.
Income inequality is not the problem in China as long as there is a sort of equality of opportunity. When the poor see the opportunity the rich have, when the rural people see the opportunity the city folks have, when people living in the interior China see the opportunity of those living on the coast have, and when the less educated see the opportunity the more educated have, they have hope and they have patience.
Everyone was poor in China under the Communist rule until the adoption of Free Capitalist economy under Deng Xiaoping in 1978. The Communist party members, especially the “princelings (the second and third generation of the founding party members),” have the first opportunity to get rich before the common folks. Now they can flaunt their wealth in public, and I don’t think the common folks will protest their lack of taste.
The coastal city folks have the first opportunity to get rich (simply because they are fortunate enough to be born and raised in the city) before those living in the country because the Special Economic Zones were first placed there. People living in the interior China have been waiting for 30 years to have the opportunity to get rich and they are hopeful that their turn will come soon.
How about education? Chinese people value education for themselves and for their children. All they hope for now is that they will have the opportunity for it. The government at all levels now have enough resources to provide indoor classrooms for children living in the remotest part of the country. Common folks in the People’s Republic of China hope that more money can be invested in schools for the people. They are not impressed with US$8,000 a bottle wine that the government officials enjoy or those expensive overseas trips for “observation and investigation” taken by party members and their mistresses.
There is no need for income distribution. Common folks in China have never believed this socialist doctrine all these years under the Communist rule. But they do believe in “hope distribution.” As long as people have hope, there is no need for any government to be fearful of protest or demonstration.
Corruption was the main cause for downfall of about every Chinese dynasty. It will be the cause of downfall for PRC if the government leaders do not choose to do something about it. I heard a Chinese intellectual said lamentably: “I don’t care if those government officials are corrupt as long as they still have the conscience to leave something for the people.”
I also have heard that the Premier Wen Jiabao has two favorite books that he always puts in his suit case as he travels. One of the books is The Theory of Moral Sentiments by the great Adam Smith. A quote from this book written in 1759, 17 years before the more famous The Wealth of Nations was written, may be of encouragement to China and Chinese everywhere as the country is at the crossroads of political and moral reform after the very successful economic reform, “The disposition to admire, and almost to worship, the rich and the powerful and … neglect the persons of poor and mean conditions… is the great and most universal cause of the corruption of our moral sentiments” (Smith, 1759/2009, 36)."
Reference
A Dangerous Year. The Economist, January 28, 2012, 21-24.
Billionaires Club: The National People’s Congress. World Journal, February 28, 2012, 3. (In Chinese)
Chinese Labor Unrest 2010. Wikipeda, Retrived on March 28, 2012.
Guilty of Something. The Economist, May 22, 2012, 69.
Hsieh, Theodore Tin-Yee (2008). Max Weber, the Protestant Ethic, and the Economy in China. A paper presented at the National Social Science Association meeting, April 5-8, Las Vegas, Nevada, USA.
Nine Billion Bribes and forty-Six Mistresses. Epoch Times, January 20, 3. (In Chinese)
Original Sin. The Economist, September 5, 2009, 70.
Person of the Year: The Protester. Time, December 26, 2011.
Satisfy the People. The Economist, March 10, 2012, 55-56.
Smith, Adam (1759/2009). The Theory of Moral Sentiments. 250th Anniversary Edition. Edited by Ryan Patrick Hanley and Introduction by Amartya Sen. New York: Penguin Classics.
Smith, Adam (1775/1994). The Wealth of Nations. New York: Random House.
Spence, Jonathan D. (1990). The Searching for Modern China. New York: W. W. Norton.
The Delights of Home Cooking. The Economist, Janurary 30, 2011, 51.
The Dog That Didn’t Bark. The Economist, November 13, 2010, 52.
The World in 2012. The Economist, January 1, 2012, 111-112.
Unbottled Gini. The Economist, Janurary 22, 2011, 71.
Vote As I Say. The Economist, June 18, 2011, 45-46.
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