Beyond the Middle Kingdom: Comparative Perspectives on China's Capitalist Transformation

MARK W. FRAZIER

Assessments of welfare policy effectiveness in a high-growth economy can be highly subjective. On the one hand, China’s rapid growth has lifted per capita gross domestic product from $674 in 1978 to $4,726 in 2003. Moreover, 220 million rural Chinese, possibly more, have moved out of poverty.¹ On the other hand, it is clear that China suffers from vast and growing inequalities of wealth, deplorable environmental protection, collapsing rural education and health care, informal or underground employment for an increasing number of urban residents, and a rapidly aging population without solid prospects for adequate pensions and elderly care. Coping with these “externalities” of rapid growth has become the core political objective of the Hu Jintao administration. Policy makers and think tanks talk of creating a “welfare state” with universal health care and old-age pensions by 2049.² Yet the political pressures at play in China suggest that universal coverage will arrive well before the centennial of China’s socialist revolution. This chapter looks at the politics of welfare-state building in China by placing China’s recent experiences and debates over welfare policy in the perspective of large, high-growth economies with enduring social and economic divisions.

Discussions of welfare policy in China that have attempted to place China in a comparative context have most often turned to the experience of the East Asian “developmental states,” in which governments pursued an exportoriented strategy of rapid growth and consciously avoided all but the most

-89-