Wednesday, February 7, 2007

China 1989 - Third Installment

Part III of "Exorcising the Ghost of Mass Political Activism: Deng Xiaoping, Workers, Peasants and the 1989 Spring Uprising"

Falling incomes and falling social status

A famous big-character poster, authored by workers in 1989, was entitled "Ten Polite Questions for the CCP." Question no. 6 read: "Deng Xiaoping has suggested raising the status of intellectuals from 'stinking ninth' to 'top rank.' What is a top ranking person? Would that be a landlord? Or a landlord's father?"

In line with this elevation of status, intellectuals have been demanding better compensation. Since "modernization, not revolution, is [now] said to be the route to China's salvation, academics and professionals openly argue that their mental labour is worth considerably more than manual labour." The petty bourgeoisie [the middle class], however, has been receiving extremely low pay, ironically, as a result of the inflation spurred by the reforms themselves. Workers, even worse off, generally see neither their status nor their real pay increasing in the last few years. On the contrary, they see their position falling from "leading class" to bottom of the heap.

A 1988 survey of different social groups reported that among worker respondents 83% agreed with the proposition that "workers' social status is falling and their standard of living has hardly risen." Interestingly, 72.4% of respondents from other classes also agreed with this statement about the workers' situation.

“Although the official media still call the working class the leading class of the nation, workers seem to know well that it is nothing but a cliche. For instance, from 1984 to 1987, the NCTU conducted a series of surveys in many cities. The results showed that 56 percent of workers thought that the social status of the worker was declining (Xiao & Shi 1989: 18). Workers' frustration grew even stronger as time went on. A survey of 33 cities... in late 1987 found that 71.6 percent of the worker interviewees believed that, rather than being the leading class, the working class was now at the bottom of society, because workers had no political power, no money, and no higher education, the things the [sic] Deng's regime highly valued. What they can offer is only manual labor, which was less compensated for those days. A more recent survey showed that those who felt that workers' social status was declining had gone up to 83 percent.”

This is a logical outcome of the Deng reforms. With the stress now being modernization and the managerial class seen as critical, the workers' expected role inevitably must devolve to hardworking and driven manual wage laborers. The rationale of his modernization program rests upon toppling the working class from their former first rank status under Mao. For Deng's strategy to succeed, he must instead subordinate workers and extract as much as he can from them through the classic carrot and stick. Had this strategy worked and production continued upward, the regime would have been able to compensate the middle strata more handsomely and probably avoided massive middle class involvement in the demonstrations. Instead, the intelligentsia, students and their parents, while benefiting from the Deng educational reforms with easier access to higher education, continued to receive low pay and were especially hard hit by the runaway inflation. Starting waitresses in hotels, for example, make more than teachers and professors.

On April 27, 1989, a reporter interviewed bystanders: "A library clerk...: 'Inflation has given us a lot of difficulties because prices rise but salaries don't. Students voice that desire of ours to suppress the inflation. And then there's corruption. Bribery is evident everywhere, and the people are sick of it.'”

Impact of the Reforms: Official Corruption

Contrary to many commentators, widespread cadre corruption is not some aberration, the product of a few, or even many, bad eggs. It is not something that can be banished by a combination of exhortation and sanction. The regime has been trying this and it is not working. It is, rather, a natural and inevitable outgrowth of the Deng reforms.

Corruption has been fueled by a combination of factors. In the summer of 1988, convinced that price reform had to be undertaken if China was to push forward economically, Deng and the Chinese leadership permitted certain commodities' prices to be set by the market. To keep downward pressure on prices, however, they retained administered prices on other goods as a transitional measure. As Bendict Stavis (1990) points out, "Chinese leaders were very much aware that sharp increases in food prices have sparked politically destabilizing strikes and demonstrations in Poland and other countries." (p. 41).

In May of 1988 the government hiked the administered prices of meat, fruit, vegetables and sugar. Non-staple foods went up 24.2% and vegetables rose 49.7% (a significant move in any country, but in the Chinese diet vegetables are central)! To partially compensate for these increases, wage subsidies were extended to government workers, workers in state-run enterprises, retirees, college students, technical students and minority nationalities. At the same time monthly housing payments were boosted up to ten times higher by the State Council.

“With food and housing costs up, the living standards declined for 21 per cent of the residents of Beijing, Shanghai, and Tianjin. More careful studies showed an even greater impact of inflation. By the end of 1988, about 35 percent of urban families in thirteen cities showed a decline in [their] standard of living. The economic pressures on many families with fixed incomes, coupled with the fact that some entrepreneurs were becoming very wealthy, reinforced jealousies and tensions. There were incidents of window breaking and tire slashing at the quarters of top cadres.”

As Stavis goes on to point out,

“[T]he two-track price system created an ideal condition for corruption. Government officials were offered bribes for allocation of low-priced goods, which could then be resold at a high profit. One Chinese researcher argued that this combination of an embryonic market system and the old system of centralized power ‘has created a major hotbed for corruption within the party.’ [A Chinese economist estimates a 200 billion yan gap between planned prices and market prices. A huge field for corruption.] It was not unusual that vigorous investigators of corruption were arrested and imprisoned as bureaucratic racketeers fought back. The Chinese recognized that "public opinion polls and sociological surveys all show official corruption as the most unsatisfactory phenomenon in China today. Discontent is widespread. If the corrupt elements are allowed to continue, more grievances will arise among the people."

William Hinton states that "The level of corruption in China has reached proportions similar to those that overwhelmed the Guomindang back before 1949." Wang cites a few folk rhymes from hundreds of new folk rhymes that appeared in 1988 with political messages:

"Chairman Mao's cadres had clean hands, but Deng Xiaoping's cadres are becoming millionaires."

And, in a reversal of the famous "East is Red..." rhyme which celebrated Mao and socialist China:

“The west is red,
The sun is falling,
Here come a Deng Xiaoping,
He serves the privileged stratum very well,
And he tells others "mind your own business"

A joke that was making the rounds in China shortly before the crackdown went something like this: Deng, in a dither over what to do about the demonstrators in Beijing, visits Mao's mausoleum and asks the old man what to do. Mao tells him: "Let's change places."

Indeed, a new "Mao Zedong fever" appeared among Chinese workers beginning in 1987, in which Deng is compared unfavorably to Mao. For example, from a Beijing bus driver came this comment:

“Now many people cherished the memory of Mao's era, because Mao advocated egalitarianism. Egalitarianism does not mean ‘everyone eating from the same big pot.’ It only means the elimination of sharp income differentials. Nowadays, however, many officials have become very rich while most of the people still have to live plainly and frugally. The gap between the rich and the poor is so wide that it is hard to describe it. Many people in Beijing are talking about the necessity ‘to liquidate corrupt officials.’ In Mao's days, there was no such things.”

"No wonder during the protest movement so many workers carried Mao's portrait." As one western paper pointed out:

“Grassroots support for Mao is most striking in places where the chairman once commanded fierce loyalty, like northeastern China and his home province, Hunan. It has surged along with the popular discontent over inflation, income inequalities, crime, and corruption that are accompanying Deng's market-oriented economic reforms.” --Christian Science Monitor, April 11, 1989

That cadre should be the prime offenders is not only an outgrowth of their positioning in society making their corruption possible. It is also, in a perverse twist, a product of the Party's historic leading role in society. That is, as Hinton points out, if the cadre did not themselves take the lead in every campaign, including in this case the campaign to "Get Rich is Glorious" and "Some Must Get Rich First," then why should other enthusiastic entrepreneurs step out and face the possibility of being attacked should the campaign be reversed?

As Gorbachev and others in the Soviet bloc are presently discovering, a transition to a market driven economy from a socialist or even pseudo-socialist background is fraught with hazards. Social explosions are acutely likely. Those who seek to introduce market driven measures into at least ostensibly egalitarian countries have all confronted this ineluctable phenomenon. Even in obviously inegalitarian societies the price hikes that accompany IMF imposed austerity measures, for example, usually provoke riots. In China's case Deng must, in addition, contend with a legacy in which the Party's working slogan was "Serve the People." Party members were widely seen as the people's servants. Enriching yourself as a perk of Party membership had not previously been a CCP practice. Official corruption, therefore, came as far more of a shock to the Chinese than it is to, say, Mexicans under PRI, where it is more a matter of course - though, of course, nevertheless intensely disliked.

By declaring an end to mass, political campaigns against corruption and rightists, Deng also ended the main way in which supervision of cadre by the Party and by the people had been and could be conducted. The Spring Uprising provided the people's answer to this. What should be noted, too, is that the legacy of those dozen Party-initiated political campaigns provided a fertile ground and precedent for the Spring Uprising.

End of Part III. The final installment, Part IV, is here.

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