Creating Wealth and Poverty in Postsocialist China

Creating Wealth and Poverty in Postsocialist China

Creating Wealth and Poverty in Postsocialist China

Creating Wealth and Poverty in Postsocialist China

Synopsis

The Chinese economy's return to commodification and privatization has greatly diversified China's institutional landscape. With the migration of more than 140 million villagers to cities and rapid urbanization of rural settlements, it is no longer possible to presume that the nation can be divided into strictly urban or rural classifications.

Creating Wealth and Poverty in Postsocialist China draws on a wide variety of recent national surveys and detailed case studies to capture the diversity of postsocialist China and identify the contradictory dynamics forging contemporary social stratification. Focusing on economic inequality, social stratification, power relations, and everyday life chances, the volume provides an overview of postsocialist class order and contributes to current debates over the forces driving global inequalities. This book will be a must read for those interested in social inequality, stratification, class formation, postsocialist transformations, and China and Asian studies.

Excerpt

Deborah Davis and Wang Feng

China today is an economic giant deeply embedded in global trade and production. In 2006, China’s nominal gross domestic product (GDP) exceeded two and one-half trillion U.S. dollars, larger than that of France and approaching that of Germany. Calibrated in the metric used by the World Bank to capture comparable real standards of living, China’s GDP in 2006 reached 10.21 trillion purchasing power parity (PPP) dollars, thereby placing its economy second in the world only after the United States. In the three decades since 1979, when it began to dismantle the socialist planned economy, China has become the number one recipient of global capital flow among all developing countries, and the Shanghai Stock Exchange, which reopened in 1990, had by 2007 become the sixth largest stock exchange in the world. In May 2007 eight million new accounts were opened in a single month. For the first time in its history, the combined stock market capitalization in China’s two stock exchanges surpassed its GDP. By any metric China is a central player in global capitalism, and the practices and institutions of socialism appear to have receded into a distant past.

Communist capitalism has not only produced an economic miracle but also glaring inequality. In 2005, China Daily reported that 236,000 citizens were millionaires and that the number of individuals with at least one million U.S. dollars in assets grew at the sixth fastest pace in the world (Wilson 2005). At the same time, per capita incomes are low and a majority of citizens live on less than two dollars a day. Moreover, simultaneously with sustained macro level growth, levels of income inequality are now comparable to those in the United States and greater than those in India and Indonesia. Thus, within the story of global growth and new affluence are social, political, and economic dynamics that produce both wealth and poverty.

One can argue that the most central process in China’s postsocialist transformation is the “reallocation of labor and capital” that transformed other former socialist economies (Mitra and Yemtsov 2006: 25). Yet in almost every parameter China’s postsocialist trajectory does not parallel those of Russia and Eastern Europe in initial outcomes or pace of change. Instead of suffering a devastating economic downturn in its initial retreat from . . .

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