The Communist Party vs. Peasants and Workers: Will Hu Jintao’s “New Social Contract” Work?

Willy Wo-Lap Lam. Chinese Politics in the Hu Jintao Era: New Leaders, New Challenges. M.E. Sharpe, 2006.

Reaffirming the Mass Line and Restoring Human Dignity

The new leadership under President Hu Jintao is, to some extent, reinventing the wheel. In the official media, senior cadres and official scribes are still making platitudinous salutations to the Marxist canon. Yet it is apparent to most Chinese that communism has been terminally mothballed, rendered obsolete with the last century. What is left for the Chinese Communist Party (CCP)—its only raison d’être and the basis of its legitimacy—is “serving the people.” Yet with the advent of the twenty-first century—and forces such as globalization and the Internet—the CCP can no longer get away with saying that it suffices to just feed and clothe people. And with the concept of protecting citizens’ human rights finally written into the state Constitution in early 2004, the Fourth-Generation team has to make a commitment to raising the level of social justice and human dignity.

In a sense, Hu and ally Premier Wen Jiabao are but reviving the ideas of an earlier generation of reformist thinkers. The late philosopher Wang Ruishui, a former deputy chief editor of the People’s Daily, raised the idea of “socialist humanism” in 1983 and 1984. Wang pointed out that since the goal of Marxism was “the liberation and full development of the individual,” party and government authorities should do away with systems and institutions that inhibit people’s thinking and hamper the pursuit of political freedom. Wang and fellow free thinkers were attacked by hardliners during a relatively short-lived “campaign against spiritual pollution,” and the respected intellectual was later kicked out of the CCP.

At the Sixteenth Congress, the CCP leadership affirmed its goal for the twenty-first century: to maintain and prolong its ruling status, or the proverbial ideal of “long reign and perennial stability.” This, the Fourth-Generation chieftains hoped, would be made possible through raising the standard of living of ordinary Chinese and boosting social justice and allied “humanistic” values. This was the main thrust of the Sixteenth Congress Political Report, entitled “Building a well-off society in a well-rounded way.” It is significant that “development in a well-rounded way” was soon interpreted as taking a “scientific approach to development,” meaning that Beijing should aim for progress on all fronts, and not just jack up the GDP growth rate (see Chapter 2). In the two to three years prior to the Sixteenth Party Congress, ex-president Jiang Zemin had in some respects laid the groundwork for the Hu-Wen team’s yiren weiben (putting people first) state philosophy. For example, Jiang’s “Theory of the Three Represents” (that the CCP represents the highest productivity, the foremost culture, and the overall interests of the broad masses) had made clear that the CCP had morphed from a revolutionary party obsessed with class struggle to an entity for promoting the welfare of the entire people.

It was also in tune with the Zeitgeist that the Hu-Wen team should be raising the banner of populism. First- and Second-Generation titans such as Mao Zedong and Deng Xiaoping possessed some form of “revolutionary legitimacy,” having taken part in the Long March and fought bloody battles to usher in the Communist administration. Third-Generation leaders such as Hu Yaobang, Zhao Ziyang, or Jiang Zemin could claim to have “legitimacy” based on having corrected the wrongs of the Cultural Revolution; they also enjoyed the “deathbed blessings” of Deng. Fourth-Generation leaders such as Hu and Wen, who lack charisma and national stature, have to base their rule on the acquiescence if not the active support of the masses.

Almost from day one, the Hu Politburo indicated its commitment to a new deal for farmers and workers, the CCP’s traditional pillars of support. Hu, together with his Politburo colleagues, vowed to do something about phenomena such as the polarization between rich and poor and the erosion of the rights of workers and peasants. This flowed from a consensus among the leadership that the dire straits of marginalized sectors such as jobless peasants could wreak havoc on the CCP’s fragile mandate of heaven.

Hu and Wen spent almost their entire first year in office publicizing the new administration’s concern for the masses and the downtrodden. The two supremos made trips to hilly backwater regions that had been neglected in the national media, for example, poor, inaccessible towns and hamlets in Hebei, Inner Mongolia, Guizhou, and Shanxi. While inspecting Inner Mongolia less than two months after taking office, General Secretary Hu told local cadres, “we must ceaselessly safeguard, promote, and develop the interests of the masses.” The party chief pledged that funds Beijing had earmarked for bailing out needy families must be paid out promptly and without fail. And in a series of Politburo sessions devoted to redressing the wealth gap, the Hu leadership indicated it would introduce a “sliding” or favorable policy in allocating resources so as to resuscitate agriculture and help farmers, 200 million of whom were jobless or severely unemployed. The Politburo as well as major state media reiterated in 2002 and 2003 that the party’s “topmost priority is to show more concern for farmers and to support agriculture.”

Leading cadres and their advisers agreed that after more than two decades of fast development—and horrendous dislocations in many socioeconomic areas—Chinese society was going through a cycle of uncertainty with possibilities of cataclysmic explosions of anti-government sentiment. Studies by People’s University sociologists in 2003 and 2004 concluded that China had entered a “high-risk period.” Professor Li Lulu said incidents and conflicts in areas like relations between cadres and the masses, labor relations, the environment, public health, as well as law and order could tear asunder the social fabric. Peking University sociologist Liu Neng attributed the malaise to factors such as the exacerbation of social inequality, the profusion of fake products, environmental depredation, and the inadequacy of crisis-handling mechanisms.

While the Hu-Wen team has done much to improve techniques and systems in detecting social crises, it is aware that the terminal solution lies in narrowing the rich-poor gap and defusing sociopolitical contradictions by boosting social equality, mobility, and justice. And whether the CCP’s mandate of heaven can be extended depends on the extent to which the leadership can roll out a new deal for disgruntled peasants and workers. However, solid improvements in the lot of the underprivileged classes will require a much higher degree of powersharing—and real political reform—something that the party leadership is reluctant to do.

Hu Jintao’s Reinterpreation of the “Theory of the Three Represents”

Problems with Jiang Zemin’s “Theory of the Three Represents”

As we saw in Chapter 2, Jiang’s now-famous “Theory of the Three Represents” meant that the CCP had become for all intents and purposes a quanmindang, or a party for all the people—and not just the party of the gongnongbing (workers, peasants, and soldiers), deemed by the likes of Karl Marx and Mao Zedong as the cream of the masses and the pioneers of the revolution. This Jiang-style “new thinking” not only contradicted orthodox Marxist edicts but also threatened to alienate the CCP’s traditional supporters, namely workers and farmers. The elevated social and political status of parvenu “red capitalists” has been officially confirmed. And given that members of the new classes of private businessmen and professionals can be said to be exemplars of the highest productivity and the most advanced culture, they could not only become CCP members but also be inducted into leadership ranks.

According to a party source, Jiang had, in the run-up to the Sixteenth Congress, stressed that the CCP had no choice but to change from a gongnongbing party to one that is for all the people. Jiang and his aides cited an internal study by the party’s Organization Department, which showed many private entrepreneurs were joining the eight “democratic parties” instead of the CCP. Founded in the 1940s and 1950s, these eight entities consist of non-CCP politicians, professionals, and intellectuals who have at least in theory pledged to “discuss policies and take part in politics under CCP leadership.” The Organization Department document cautioned that if this trend were to go on, the party would lose hold of the most dynamic forces behind economic growth. Jiang and such allies as then Organization Department chief Zeng Qinghong indicated that the CCP must adjust itself to the new era. They noted that in the age of traditional manufacturing, when Marx wrote his revolutionary textbooks, workers were indeed at the forefront of productivity. However, in the information technology (IT) epoch, businessmen and professionals had displaced relatively less educated workers, not to mention farmers, as society’s vanguard.

The decision by Jiang and company to turn the CCP into a quanmindang that embraces the “new classes” drew fire not just from leftists, or quasi-Maoists, but also grassroots officials. Maoist ultraconservatives, who had been sidelined since the early 1990s, took advantage of the growing class antagonism to attack free-market reforms—as well as to claw back political capital. In 2002, leftists such as former head of the Propaganda Department Deng Liqun were at the forefront of the campaign to denigrate what they called the adulteration of Marxism—and to block the red capitalists’ entry into the CCP. In an internally circulated letter, Deng and a host of ultra-conservative cadres questioned the wisdom of admitting the private bosses to the CCP. “As part of the exploitative class, how can a capitalist carry on a lifelong struggle for the realization of socialism?” the document asked. And Lin Yanzhi, a senior party official in Jilin Province, also challenged Jiang openly. “Allowing private entrepreneurs to join [the party] would imply that we legitimize exploitative ideas and behavior within the party,” Lin noted.

Beijing was rife with stories that former party chairman Hua Guofeng, Mao’s anointed successor, had threatened to quit the party if it started to let in red bosses. And nearly 1,000 party veterans reportedly held a rally in Beijing on July 1, 2002, the party’s birthday, to protest against Jiang’s alleged revisionism of classic Marxism and Mao Thought. Jiang and his Politburo colleagues, most of whose sons and daughters were either budding red capitalists or professionals working for joint ventures, were able to defuse the challenge of the leftists. However, Jiang also realized that should factors such as polarization between rich and poor—as well as exploitation and corruption—become more serious, it was possible for leftists to form an “opposition coalition” with members of the “exploited” classes, which included a good chunk of the urban and rural jobless.

Jiang’s aides tried to conciliate the opposition by coming up with media articles reassuring workers that their traditional status as “masters of the state” and “vanguard of the party” would not be affected. A mid-July 2002 commentary by the official New China News Agency (NCNA) said the CCP would “always uphold the fundamental goal of relying on the working class with all its heart and mind.” The state media also quoted then Politburo member Wei Jianxing, who was in charge of labor unions, as saying that the recent reforms had not changed “the status of the working class as the masters of the state and enterprises.”

Unfortunately, arguments about the “peaceful coexistence” of workers and nascent capitalists ran counter to the ugly manifestations of what cynics called “the primitive stage of Chinese-style capitalism.” First, there were ample reasons why “red bosses” could hardly become exemplary Marxists. The official media were replete with articles stating that nouveau riche businessmen had evaded at least 100 billion yuan in taxes a year. According to an article in the People’s Daily, less than 20 percent of depositors owned 80 percent of the funds held in savings accounts in the nation’s banks. Yet these millionaires paid less than 10 percent of all personal-income taxes. According to Liaoning University professor Yang Yuyong, the rich got away with not paying 120 billion yuan worth of taxes a year, while the government only spent 20 billion yuan in cost-of-living benefits to the urban poor.

Then there was the rising spate of mining and industrial accidents, which Beijing commentators attributed to the get-rich-quick mentality of the unscrupulous private owners of mines and factories. After an accident in a gold mine in Fanzhi District, Shanxi Province, that killed at least thirty-nine workers in mid-2002, the Legal Daily launched an investigation into the 300-odd privately held mines in the same area. The official daily found that nearly all these mines had had at least one fatal accident in the past couple of years—and that local authorities had tolerated unsafe working conditions because they had been bribed by the owners.

The Beijing Youth Daily said in a commentary that vicious industrial accidents were often “the result of the alliance of capital and power.” The influential daily noted that particularly in remote areas such as Shanxi, Shaanxi, and Guangxi provinces, mine operators were in cahoots with local officials. Factory and mine owners ignored safety regulations because they enjoyed the protection of cronies in regional governments. The daily said the root cause of the accidents was “local cadres having been corrupted by the power of money.” The situation had hardly improved by the end of 2004. In the wake of a mine blast in Tongchuan, Shaanxi Province, which killed 166 miners, China Labor Watch director Li Qiang pointed an accusing finger at unscrupulous mine owners who were acting in collusion with local officials. “Mine owners, driven by profit, often violate regulations on safe practice … They gang up with local officials and disregard miners’ lives,” he said.

Little wonder that class antagonism between the have-nots and the exploited on the one hand, and “marketplace exploiters” on the other, had intensified by the early 2000s.

Hu’s Modification to the “Three Represents Theory”

Apart from factional dynamics—meaning the long-standing rivalry between Jiang’s Shanghai Faction and President Hu’s Communist Youth League clique—it was quite obvious that Hu would, shortly upon taking over power, make major modifications to the “Three Represents Theory.” Anxious to break out of Jiang’s mold, Hu was also driven by his conviction that the CCP’s ruling-party status would be jeopardized unless Jiang’s perceived favoritism toward the “privileged classes” was reversed.

There is no evidence that the new party chief and president has reservations about raising the political status of private businessmen and the professional classes. After all, quite a few children and relatives of Hu, Wen, and other top cadres are budding capitalists. However, from the Sixteenth CCP Congress onward, Hu made the strategic decision to focus only on the third item of the “Three Represents”: that is, that the CCP should promote the comprehensive interests of the broad masses. The Fourth-Generation stalwart is convinced that his close-to-the-masses dictums are more in tune with the times than the elitism implicit in Jiang’s “Three Represents Theory.” While Hu still cites the “Three Represents” slogan in public speeches, the Jiang mantra has for all intents and purposes been displaced by the new president’s populist sayings. In fact, Hu has deftly displaced “Three Represents” with the now-famous slogan of yiren weiben, or “putting people first.” Thus, in a September 2003 conference on studying the “Three Represents Theory,” Hu noted that the essence of this theory was none other than “establishing the party for the public good and running the administration for the sake of the people.”

There were complaints, coming particularly from the Greater Shanghai Region, that the Hu-Wen faction was adulterating Jiang’s masterpiece theoretical invention. In the eyes of some Shanghai Clique purists, there were unavoidable contradictions between protecting the interests of businessmen and those of workers and peasants. For example, Premier Wen’s crusade to boost the welfare of migrant laborers (see following section) would inevitably cut into the profits, particularly of private entrepreneurs, many of whom had made their fortune out of exploiting rural work hands.

It has been possible for Hu, Wen, and their colleagues to make a strategic modification of the “Three Represents Theory” because, at least on paper, it has not been identified as the personal invention of Jiang. This is despite lobbying by the ex-president and other members of his Shanghai Faction that his name should be inserted in both the CCP and the state charters when they were revised in 2002 and 2004 respectively. Opponents to putting Jiang’s name next to the “Three Represents Theory” insisted that it was unusual for a living person to be cited by the party or state Constitution as having made major contributions. A compromise was struck at the last minute. The party charter merely saluted “the important Theory of the Three Represents.”

And this has more than academic significance. “Three Represents” would hereafter be considered a product of collective wisdom. Similar to many of the dictums of Mao or Deng, Jiang’s pet theory would be adjusted according to political expediency of the day. And in spite of the fact that Jiang had at the Sixteenth CCP Congress succeeded in promoting a good number of his Shanghai Faction affiliates to the Politburo and the Politburo Standing Committee (PSC), he was unable to prevent Hu and Wen from in effect turning his theory around, if not on its head. Moreover, regional cadres who were anxious to curry favor with the new leadership, including Guangdong party secretary Zhang Dejiang, lost no time in switching over to Hu’s interpretation of the “Three Represents.”

The Hu-Wen Team’s Populism: Rehoisting the Mass Line

The Hu-Wen administration is offering a novel social contract to 1.3 billion Chinese. The new deal can be summarized as prosperity under one-party rule, more upward mobility, a relatively efficient and clean government—but no “Western-style democracy.” Hu and his team have indicated that while political reform might be introduced in the latter part of the decade, the administration will put its focus on prosperity—particularly raising the well-being and the sociopolitical status of the broad masses. After all, a central message of the Sixteenth Party Congress was that China would become a “comprehensively well-off society” by the year 2020.

The party leadership is anxious to pass along the message that its mission of generating wealth for the nation will be married to the Maoist goal of being in unison with the masses. This philosophy was revealed by an unusually frank commentary in the CCP theoretical journal Seeking Truth in February 2002. The piece, entitled “The CCP must consolidate its status as ruling party through finding the law of [successful] administration,” was believed to be close to the thinking of the Hu-Wen team. After analyzing the failure of communist parties in the former Soviet bloc and other parts of the world, the article said the CCP must focus on economic development and improving the people’s standard of living. No less crucial was the party’s remaining faithful to its proletarian roots. Seeking Truth admonished officials that “the fundamental guarantee of the CCP’s ruling-party [status] is maintaining flesh-and-blood links with the people.”

Hu’s Maoist Roots

Not much is known about Hu’s debt to Maoism, except that one of his mentors was former PSC member Song Ping, a leader of the quasi-Maoist camp in the late 1990s. While the president has been projecting a generally reformist persona, he has never gone on the record as criticizing Mao’s errors such as the latter’s autarkist economic policy or the disastrous Cultural Revolution. It is likely that Hu harbors an opportunist attitude toward Maoism and Maoists: if Mao’s teachings can be reinterpreted to consolidate CCP rule and to boost the Fourth-Generation leadership’s legitimacy and popularity, there is no harm breathing new life into some of the Great Helmsman’s teachings.

There is thus more than symbolic significance in the fact that the first trip made by Hu after becoming party boss was a tour of Xibaipo, an old revolutionary base in Hebei Province. In March 1949, the CCP Central Committee convened a plenary session in Xibaipo barely half a year before the success of the Communist revolution was proclaimed in Beijing. And Chairman Mao’s speech at the plenum contained much of the basic philosophy and statecraft with which the CCP intended to rule the new China. The Great Helmsman underscored the primacy of economic development, raising the people’s standard of living, and being close to the masses. Equally importantly, Mao called upon all party members to be “modest, prudent, and self-disciplined.”

In a speech that was later splashed across the front pages of newspapers, Hu declared that the Sixteenth Congress’s goal of “building a well-off society in a well-rounded way” was in accordance with the Maoist tradition. He indicated that while the party had achieved much in reform and modernization since 1978, “we should not be complacent and stagnant.” Hu asked CCP members to bear in mind the party’s sacred mission, which was serving the masses and “sharing the people’s joys and sorrows.” “All party members, particularly cadres, must remember their mission of wholeheartedly serving the people, and struggle for the welfare of the greatest number of people,” Hu indicated. The party boss asked officials “to expand work at the grassroots level, to listen to and take care of the people and to lead them in building happy lives.”

In September 2003, Hu paid homage to revolutionary meccas and shrines in inland Jiangxi Province. He also visited Mao’s home in Ruijin. While talking to Jiangxi cadres, Hu admonished them to “develop our party’s superior revolutionary traditions, and uphold the principle of establishing the party for the public good, and running the administration for the sake of the people.” He added that the formation of the “red administration” by Mao and his colleagues was for the purpose of “seeking the well-being of the people,” and that party cadres must “be closely reliant upon the people.”

It was during Beijing’s large-scale celebration of Mao’s 110th birthday in late 2003 that Hu shocked his party’s liberal intellectuals by his seemingly unquestioned obeisance to the Great Helmsman. After praising Mao as having “won the support of not only the Chinese but everyone in the world,” the party chief went on to say that “no matter under what circumstances, we shall unswervingly uphold the great banner of Mao Zedong Thought.” Given that even official party documents had faulted Mao for having made serious mistakes during the Cultural Revolution (1966-76), a number of intellectuals in Beijing thought Hu had gone too far. This was despite the high possibility that Hu might have decided to glorify Mao out of the strategy of “using Mao to upstage [ex-president] Jiang.”

It is significant that fire-spitting leftists, or quasi-Maoists such as Deng Liqun and his younger disciples, who had risked their pensions and perks by lambasting ex-president Jiang, have largely kept quiet after the Sixteenth CCP Congress. There were suggestions that Song Ping had used his influence to calm down the ultraconservatives. A more plausible reason may be Hu’s frequent salutation of Maoist ideals. The new supremo however, has quite inevitably angered the party’s “rightist” intellectuals and cadres, who have accused Hu of turning back the clock. Criticisms that Hu had adopted the Maoist—and to some extent Deng-style—malpractice of clamping down on “pro-West” ideas mounted toward the end of 2004, when Beijing unleashed intimidation tactics to silence free-thinking intellectuals.

The “Three New Principles of the People”

It was quite a distance from the ideal of “government of the people, by the people, for the people.” And it seemed unlikely that General Secretary Hu was paying direct homage to pioneer revolutionary Dr. Sun Yat-sen’s “Three Principles of the People” (nationalism, people’s power, people’s livelihood). Yet Hu impressed observers with his fervent salute to the “people-come-first” precept while addressing an ideological study session for the CCP Central Committee in early 2003. “Power must be used for the sake of the people,” Hu indicated. “[Cadres’] sentiments must be tied to those of the people; and material benefits must be sought in the interest of the people.”28 It is significant that apart from reviving Mao-style populism, Hu seemed eclectic enough to take inspiration from Dr. Sun. For while the “father of the Chinese Republic” is highly respected in the PRC and overseas Chinese communities, Dr. Sun is also widely known as the founder of the Kuomintang, or Taiwan’s former ruling party.

Key to Hu’s strategy for boosting his national stature—and legitimacy—was to stake out a claim as a “people’s president,” a spokesman for the large number of Chinese who had lost out in the course of Deng Xiaoping’s nearly three decades of reform and open-door policy. These included laid-off industrial workers and the legions of jobless farmers. The theme of the first Politburo session called after the Sixteenth Congress was improving the lot of farmers. The Hu Politburo stressed that party and government policies must “tally with the realities of the village, the interests of farmers, and the requirements of rural productivity.” It is no coincidence that both Hu and Premier Wen had spent more than a dozen years working in grassroots-level jobs in impoverished Gansu Province in the late 1960s and early 1970s. Apart from Xinjiang party boss Wang Lequan, Hu and Wen were the only two cadres in the twenty-five-member Politburo with substantial experience in western provinces. Almost all the rest of the members of this supreme body had close ties to Shanghai and the coastal cities.

Hu’s “the masses come first” credo suffused a number of catchy slogans he laid down in 2003. Take, for example, the so-called threefold requirements for doing a good job, namely, that cadres must “do a good job in safeguarding, materializing, and developing the fundamental interests of the masses.” Hu indicated on another occasion that all party and government units “must base their decision making and work on considerations of whether the broad masses agree with [official policies] and whether the masses will derive benefits from them.” The new supremo added that “cadres must take a firm grip on questions that are of most relevance to, and that have the most direct bearing on the masses.” These and other masses-oriented aphorisms were repeatedly cited by ministers and regional cadres.

The goal of raising the living standards of the “underclass,” or ruoshi tuanti (disadvantaged classes)—particularly peasants and migrant laborers in the cities—has dominated the policy pronouncements of Premier Wen. In his first press conference after becoming head of government, Wen vowed to boost the income of farmers, expand the social security net, and narrow the regional gap. Measures promised by the new cabinet included further lowering the taxes of farmers as well as curtailing the number of grassroots-level bureaucrats, who get their salaries via levies and charges on already overburdened peasants. Whether Hu and Wen can make good the promises they made to the underprivileged could determine how well the CCP retains its mandate of heaven in the coming decade.

GDP Growth vs. Social Development

Much of the criticism leveled at Deng Xiaoping and Jiang Zemin was that for these Second- and Third-Generation leaders, economic growth and GDP figures were the be-all and end-all of statecraft. Not enough attention had been given by previous administrations to social development and social justice. The Hu-Wen team, however, has decided to promote social well-being, “humanistic values,” and environmental concerns alongside economic expansion. Hu simplified this concept as the “Theory of the Three Developments,” calling it “the new thinking and path of harmonious development, comprehensive development, and sustained development.” This essentially meant that development did not mean GDP augmentation alone. By “harmonious and comprehensive development,” Hu was referring to the fact that the interests of different regions and ruoshi tuanti would be fully taken into account in the pursuit of economic growth.

The gist of this new thinking on development was summarized at an academic conference in mid-2003 by one of the few heroes of the SARS outbreak, Guangdong epidemiologist Dr. Zhong Nanshan. “The degree of a country’s modernization shouldn’t be reflected just by GDP growth,” Dr. Zhong said. “Social development is just as important.” Premier Wen expressed approval in an internal policy session when he said: “One of our legs is longer than the other one.” “China has always paid a lot of attention to economic development,” he added. “Yet social development is lagging behind.” In the Chinese context, social well-being and the allied concept of social justice embrace a whole array of concerns including unemployment, rural poverty and illiteracy, public-health infrastructure, social equality, and the standard of the rule of law.

A key concept of the Third Plenary Session of the Sixteenth Central Committee held in October 2003 was “redressing imbalances,” or rectifying the ancien régime’s obsession with the glitzy hardware of modernization. As Wen put it, the SARS disaster had alerted Beijing to the imperative of “the harmonious and well-coordinated development of the economy and society.” Wen later called the new emphasis on social well-being “government management that is based on humanitarian considerations.” The plenum document contained several important initiatives. Wen wanted more attention and funds for rural China, particularly the landlocked western provinces. Central and regional governments would be asked to spend at least as much on schools and hospitals in the countryside as on new airports and office towers in urban areas. In various speeches in the latter half of 2003, the premier said the leadership had to “establish a more comprehensive view on development.” “We must put more emphasis on the harmonious development of the economy and society,” he said, adding that there should be a balanced and coordinated approach to allocating resources among cities and villages, among the different regions, and between man and nature. The premier also indicated that more emphasis must be put on “social management and the provision of public services.”

Even before the pivotal Third Plenum, Beijing had begun measures to redress long-held grievances of the ruoshi tuanti. Take, for example, social mobility. Since early 2003, provinces and cities including Henan, Jiangsu, Guangdong, and Chongqing had been liberalizing residency permit systems, a process that would, according to Beijing officials, pave the way for 300 million peasants to move to the cities. While such agrarian reforms could mean a big stimulus to domestic consumption and spending, they would also constitute a large drain on the resources of the central government. Other measures included slashing the tax burden on peasants and promoting the social status and payment of rural laborers (see following sections). There would also be a fresh impetus to improve China’s long-neglected environment, whose degradation has resulted in disasters ranging from acid rain to floods and desertification.

In industrial policy, the main concerns of former administrations were nurturing high-tech sectors and attracting foreign direct investment (FDI). While Wen also wanted FDI and high technology, he was keen to foster industries and product lines—including relatively low-tech and labor-intensive ones—that would create the highest number of jobs. “I keep tabs every day on the number of new college graduates who can find jobs,” Wen said in an internal meeting in late 2003. While the official urban unemployment rate that year was merely 4.1 percent, independent economists said the figure was at least twice as much.

This newfound commitment to social issues could in certain areas contradict the leadership’s efforts to boost market mechanisms. Take, for instance, Beijing’s insistence on maintaining the existing value of the renminbi or yuan. From 2003 onward, Western governments had been putting pressure on Beijing to revalue or to float the vastly undervalued renminbi. Yet because renminbi appreciation would hurt exports—and jobs—the leadership would rather err on the side of conservatism on this issue. And the limited nature of the currency appreciation that eventually took place in July 2005—2.1 percent—was largely expected.

Priority Given to Social Justice

The CCP can retain its ruling status without introducing democracy—but it has to give Chinese a decent level of social justice. This philosophy has so far informed many of the sociopolitical policies of the Hu-Wen administration. As important as pledges of more central-level attention and funds is the Fourth-Generation leadership’s apparent readiness to give the so-called underclass a measure of equality and dignity through promoting gongyi, or social justice. As pointed out in a commentary in the liberal paper Southern Weekend, the objective of bringing about a well-off society must be accompanied by improvement in social justice. “Social policy must be adjusted to favor disadvantaged groupings in order to maintain social harmony,” the paper said in 2003. Or as three influential social scientists, Wang Shaoguang, Hu Angang, and Ding Yuanzhu, noted at about the same time, “without social justice, there will be no way to rule a nation or have lasting peace.” “To prevent income differences and class polarization, the government must become aware of inequalities and be willing to distribute wealth more fairly,” they said. “The government also has to regulate social inequity and promote social justice if it wants to achieve long-term governance.”

Inherent in the gongyi ideal is the concept of fairness and dignity, which was for the first time taken seriously by the party and government leadership. In 2003, the State Council decided not to go ahead with a planned salary raise for the country’s 34 million civil servants. This was largely due to the perception that it would be unfair to grant relatively well-paid civil servants a fourth pay rise in as many years when millions were hovering on the brink of poverty. After all, the three pay hikes between 2000 and 2002 cost Beijing some 307 billion yuan, about the size of the estimated budget deficit for the year. And the decision in 2004 by a couple of municipal governments to hire foreign-trained professionals at a salary of up to 500,000 yuan a year was greeted by hostile media commentaries.

Of more symbolic significance were first steps taken to recognize the legal and political status of migrant laborers, who are often treated as second-class citizens. In late 2003, Zhu Lifei, a twenty-seven-year-old worker from the provinces, made history when she was elected a member of the municipal parliament in the city of Yiwu in coastal Zhejiang Province. In a commentary, the NCNA called on more regional authorities to “give migrant laborers their due recognition [in society].” While Yiwu is host to nearly 600,000 work hands from the central and western provinces, the latter had always been denied opportunities to stand for political office.

Equally important are efforts to extend the social security net from the cities to the villages. Pretty much until the turn of the century, only urban residents were entitled to government handouts, including dibao, or the subsistence-level cost-of-living subsidy to destitute families. Zhejiang was lauded as a trendsetter for ending the decades-old practice of depriving peasants of state welfare. In late 2001, the provincial leadership promulgated a regulation on the “lowest-level livelihood guarantee” for urban as well as rural residents. The average “lowest-level income standard” for peasants was set at 104 yuan per person per month, meaning that if a farmer earned merely 50 yuan a month, he would receive a subsidy of 54 yuan from local authorities.

The big question on the minds of liberal intellectuals, however, is whether real gongyi for disadvantaged classes is achievable in the absence of political liberalization, particularly a more equitable distribution of political power. According to Shanghai University social scientist Zhu Xueqin, political reform is necessary to right social wrongs—and to prevent the administration from slipping into a Latin American-style dictatorship. “Social injustice could engender massive social instability,” Zhu said, adding that liberalization of the political structure must go hand-in-hand with market-oriented economic reforms. Li Changping, a former county-level cadre who shot to fame by presenting a petition to ex-premier Zhu, noted that the roots of poverty lie in a “faultily and unreasonably designed system” of governance. Li pointed out that underprivileged classes such as peasants were discriminated against in areas including property rights, distribution of resources, the legal system, taxation, education, and welfare. “As long as peasants, who occupy the lowest strata of society, are denied access to power, they will forever remain marginalized,” the reformist warned.

Well-known exiled dissident Wang Juntao agrees. Wang, who was doing research at Columbia University, said that mere “favorable government policies” could not help upgrade the welfare or status of farmers. He pointed out that rural laborers must be allowed to form economic and political organizations to lobby for their welfare and benefits. The same goes for peasants’ freedom to organize unions to press for their rights—including the ability to negotiate with the government on how to fix the prices of produce.

Propagation of the Middle Class

When Deng first launched the era of reform in the early 1980s, his slogan was “to let one part of the population get rich first.” What the Hu-Wen leadership is promising is that in two decades’ time or so, almost half of Chinese will have entered the ranks of citizens with zhongchan or “medium-level income,” the rough equivalent of the middle class in industrialized societies. There is much controversy among scholars and officials in the PRC as to the level of income that would enable a Chinese to become a middle-class person. A relatively low threshold—a household income ranging from 60,000 yuan to 500,000 yuan a year—was cited by the National Bureau of Statistics in late 2004. However, foreign academics and media commentators have noted that this standard is too low, and probably set with the purpose of embellishing the quality of life of ordinary Chinese.

In any case, Hu and his Politburo colleagues seem convinced that the CCP might be able to prolong its mandate of heaven if it can successfully nurture a relatively prosperous, pro-status quo middle class. According to the Sixteenth Congress’ Political Report, China’s economy will quadruple by the year 2020—and per capita share of GDP should jump from around $800 in 2002 to $3,000. Per capita GDP in coastal cities ranging from Shanghai to Shenzhen, however, had already cleared the $1,500 hurdle by 2003. Indeed, many denizens along the “Gold Coast,” who in 2003 and 2004 could already afford to buy their own apartments and cars—and even send their only child abroad for education—had already entered into the ranks of the zhongchan. And the majority of them seemed so satisfied with their high standard of living that they had become a pillar of sociopolitical stability. It was not for nothing that the Sixteenth Congress Political Report indicated that China should “expand the proportion of middle-income earners [in the population], which will be beneficial to China’s social stability.”

As well-known sociologist Lu Xueyi pointed out, members of the middle class tend to identify themselves with the ideology and policies of the ruling party. “The larger the proportion of citizens with medium-level income, the more stable a particular country will be,” he said. According to Lu, who works at the respected Chinese Academy of Social Sciences (CASS), China’s zhongchan class made up about 18 percent of the population in 2003. The sociologist added that the country should be able to add one percentage point to the zhongchan proportion each year, so that the latter could swell to around 40 percent by 2020.

The major obstacle to the growth of a middle class is the peasantry, which still accounted for roughly 70 percent of the populace in the early 2000s. Noted CASS economist Jiang Xiaojuan indicated that China was engaged in a “gargantuan task of the mass transfer of labor forces.” She figured that by 2020, about 220 million peasants will have found jobs in the industrial and services sectors, which already employ some 350 million Chinese. According to London-based Sinologist Zheng Yongnian, the concept of a “well-off society” means in effect “rendering the proletarian class into the middle class.” Zheng notes that “the [new CCP] goal of building a well-off society in a comprehensive way consists precisely in popularizing the zhongchan ideal.” That this seems to go against orthodox Marxist precepts pales beside the critical CCP objective of attaining the proverbial “long reign and perennial stability.”

However, the improvement of living standards alone is not enough to persuade middle-class affiliates to become or to remain fans of the ruling party. Quite a number of zhongchan citizens are already clamoring for the kind of political clout that will enable them to protect their property, shape their own destiny, and even have a say in government policies. And to accommodate their demands, the CCP has by the turn of the century begun to broaden avenues for political participation while cleaving to time-honored one-party dictatorship. First, Jiang’s “Theory of the Three Represents” has made it possible for nonstate entrepreneurs and professionals not only to join the CCP but to become relatively senior cadres. At the Sixteenth Congress, millionaire private businessman Zhang Ruimin made history when he was inducted to the party’s ruling Central Committee. A number of illustrious members of the zhongchan and new classes—including the cream of the nearly 200,000 well-trained Chinese who had returned to the country after getting advanced degrees from Western colleges—have been recruited into the civil service at relatively high levels.

And for the past five years or so, the CCP has tried to tap new talent by selectively holding public exams to pick officials up to the level of heads of department. “The gist of the Three Represents Theory is to inject new blood into the party without having to tamper with the formula of one-party dictatorship,” said a Beijing-based Western diplomat. He added that the CCP could also claim that it was serious about rectifying problems such as corruption and inefficiency because it was hiring experts and managers from disparate sectors—including returnees from abroad—to fill top-level jobs.

It remains to be seen, however, whether Beijing’s bid to nurture a middle class with Chinese characteristics—and to open up the government on a limited basis—could effectively prolong its mandate of heaven. Many other conditions need to obtain before the middle class can become a stabilizing, pro-status quo political force, particularly in a country without multiparty politics. Obvious prerequisites include the rule of law and a level playing field for individuals as well as for business operations. For example, Singapore, whose model of governance is much admired by CCP cadres, has relatively rigorous, British-style legal and judicial standards.

Jiang, Hu, and other leaders have made much of Beijing’s commitment to legal modernization, which was played up in the Political Report to the Sixteenth Congress as an important attribute of a “comprehensively well-off society.” However, what the CCP has in mind is only rule by law, which means promulgation and implementation of statutes under stern party leadership. And a growing proportion of the middle class has expressed frustration and anger at the collusion between party cadres and their children on the one hand, and business tycoons on the other.

The perception that most aspects of Chinese life are still manipulated by an arrogant, self-protecting elite that is feathering its nest through monopolizing economic resources lies behind the “revolt” of China’s estimated 70 million gumin (individual buyers of stocks and shares) from late 2004 to early 2005. During this period, the indexes of both the Shanghai and the Shenzhen bourses dropped to six-year lows, and most gumin were blaming inadequate government policies as well as special privileges accorded to well-connected speculators. The Chinese media estimated that about 80 percent of gumin—the majority of whom are members of the middle class—had lost money since the late 1990s. Many embittered stock buyers have called themselves the “new ruoshi tuanti,” and they have blamed the Hu-Wen team for failing to take care of their welfare while claiming to “put people first.” And this anger, while caused basically by economic factors, could be translated into a crusade to transform the political system into one that will do a better job guaranteeing equality of opportunity in both the stock market and other areas of life.

Test Case: A New Deal for Peasants?

Not unlike Jiang Zemin, Premier Wen is given to citing ancient poetry while making speeches to domestic and foreign audiences. While the ex-president was often keen to show off his erudition, Wen is usually spot-on when using classical allusions to illustrate modern problems. During a public function at the Mid-Autumn Festival of 2003, for example, Wen recited this couplet to demonstrate his concern for the common man, in particular, the farmer: “My heart is often tormented by the suffering of farmers and growers of mulberry leaves,” the premier said. “My ears are filled with the lament of the hungry and the cold.” Chinese policymakers have used this formulation to characterize the plight on the farm—the sannong wenti, or “the threefold problems of agriculture, the village and peasants.” The problem of agriculture refers mostly to the quantity and quality of produce; that of the village refers to stability as well as law and order on the farm; and that of peasants refers to issues of employment, livelihood, and well-being of rural folk.

According to agrarian experts, the “peasants’ problem” is the most intractable among the sannong issues. Unless threatened by unexceptionally severe natural disasters such as floods or drought, China could in theory produce more than it needs. Since the late 1990s, however, production of grain has fallen owing to the gradual but irrevocable shrinkage of farmland owing to reasons including industrialization and real-estate development. Thus in 2003, arable land was cut by 2.54 million hectares, or 2.01 percent of total acreage, and the average plot per farmer was reduced to a miniscule 0.095 hectare. Wen repeatedly warned the nation that the nation’s “grain security” was in jeopardy. This problem, though serious, could at least be theoretically remedied by imports. This is despite Beijing’s marked aversion to relying on imports because of its long-standing concern for grain self-sufficiency and grain security. Much more severe is the challenge of law and order—and overall stability—in the countryside, which is basically a function of whether or not peasants are happy with their lot.

Rural joblessness could remain the nation’s weakest link in the first couple of decades of the century. Both government and foreign estimates say close to 200 million Chinese farmers are either unemployed or severely underemployed—meaning they can find work only during the busy harvest season. According to agronomist Wen Tiejun, the situation is even more dire. Fully 930 million Chinese are classified as peasants, nearly 500 million of whom are part of the labor force. However, even given that Chinese farms are intensely cultivated, no more than 100 million work hands are required. This means in effect that the state has to find jobs for 400 million farm hands.

According to CASS sociologist Lu Xueyi, the income gap between urban and rural residents has yawned wider by the year. Thus the differential between the per capita income in the city and on the farm grew from 2.72:1 in 1995 to 3.2:1 in 2003. Lu pointed out that the basic solution for the agrarian problem was still structural reform. For example, the price of grain and other staples that peasants sell to the state—referred to as “patriotic produce” by sociologists—is fixed by the government and not by the market. Moreover, farmers also lack adequate numbers of representatives in the senior levels of the party, government, and legislature who might be able to push their cause.

Farmers up in Arms

While the official media have largely desisted from detailed reports about rural disturbances, the level of discontent in the countryside has increased over issues including excessive taxation, arbitrary government policies, corruption among rural cadres, and the requisition of farmland without adequate compensation for affected peasants. Short-changed farmers have protested by means ranging from beating up tax collectors to laying siege to official buildings in villages and counties.

The plight of hard-pressed peasants is plain to all. Within five days in August 2003, two farmers in hardscrabble Xunyang County, Shaanxi Province, committed suicide—and another tried to kill himself—because of disputes with local officials over crop policies and the level of government subsidies. According to Li Liwen, the farmer who was rescued, the authorities tried to stop him from cultivating beans and sweet potato because this contravened a 1999 regulation asking peasants to quit farming in order to restore the ecological balance of the western provinces. “I was fined 560 yuan, yet our household of three people could only make less than 200 yuan a year,” he told the China Youth Daily. Other desperate cases involved suspicion that local cadres had held up relief funds that the central authorities had approved in the wake of severe flooding and other natural disasters. In September 2003, about 5,000 impoverished peasants in flood-stricken Shaanxi ransacked government premises in Hua County to protest the alleged failure by local cadres to distribute disaster relief funds and supplies.

Even more serious were instances of rebellion by farmers who had not been duly compensated for “selling” land-use rights to aggressive developers—who were often backed by corrupt local officials. What happened was that while farmers who were obliged to vacate their plots were promised adequate recompense, the funds were miniscule compared to the real market value of the land, and parts of the meager payouts to farmers often ended up in the pockets of officials. Minister of Land and Natural Resources Sun Wensheng admitted in early 2004 that farmers were owed up to 10 billion yuan in unpaid or partially paid compensation fees as a result of requisition.

Very often, disgruntled peasants have no alternative but to follow the centuries-old custom of trekking thousands of miles to the capital to present their petitions to the authorities. A 2003 article in People’s Daily declared that officials must properly investigate and handle rural grievances. The party mouthpiece noted that peasants had the constitutional right to petition the government—and that cadres should not take such expressions of opinion as the proverbial “wild torrents and ferocious beasts.” It added that rural petitioners felt obliged to use violent means or to take their cases to the provincial and central authorities only because grassroots cadres were “dragging their feet when handling peasants’ problems.”

In growing numbers of rural districts, however, farmers are no longer contented with passive petitioning. Many are starting to organize themselves—or even to use violent methods to express their views. And in individual provinces such as Hunan, the influence of nonofficial peasant organizations had become so entrenched that provincial authorities had no choice but to acquiesce in their existence—and even work with them to settle rural problems. Yet the Hu-Wen leadership has refused to grant farmers more political power despite Beijing’s credo of “putting the people first.” This obstinacy means the countryside will remain a powder keg for a long time to come. After all, Hu, Wen, and their colleagues know full well that from dynastic times to the late 1940s, numerous empires and regimes fell precisely because peasants could not bear it any more—and they took up arms to oust an administration that was deemed to have lost the mandate of heaven.

Raising the Economic Standards of Farmers

At the landmark Fifth Plenary Session of the Sixteenth Central Committee in late 2005—which also endorsed the Eleventh Five Year Plan for 2006-2010—President Hu introduced the concept of “the new socialist village.” This was roughly defined as a village with modern production methods, “civilized lifestyle, sufficient livelihood, and democratic management.” Just as in previous major party or government meetings, CCP leaders made ritualistic pledges about improving the standard of living of peasants. Apart from the abolition of rural taxes and levies, the leadership promised to help poor children with special education subsidies. More significantly, the liberalization of the hukou, or household registration system, would be further speeded up to enable some 300 million peasants to migrate to urban areas—especially newly created medium-sized cities—in the coming fifteen to twenty years. And the so-called dibao, or minimal-level livelihood assistance payouts, would be extended from urban to rural areas to cover 100 million destitute farmers. Moreover, “social sustenance systems”—basically mechanisms for dispensing emergency social-welfare benefits—are being set up in 90 percent of the provinces and 70 percent of the counties and villages. Given the sheer numbers involved, however, even the most optimistic expert would expect the improvement of the living, education, and other standards of farmers to be gradual.

Boosting Subsidies and Cutting Levies

In the early 2000s, the heaviest burden on farmers was not normal taxation by the national or regional governments but up to sixty different types of fees and levies slapped on them by local authorities. These charges, which were in theory illegal, were often arbitrarily imposed on farmers by grassroots party and government units for purposes including paying the salaries of officials, as well as underwriting education, public works, and other administrative costs. The Wen cabinet has, since its inauguration in early 2003, moved swiftly to improve the lot of the peasants. As Finance Minister Jin Renqing noted, it was time urban and industrial sectors started “paying back” the villages. “Cities must repay their [financial] debt to the countryside,” Jin said in late 2003. The minister indicated that plans were afoot to remit taxes on a number of cash crops raised by farmers.70 Moreover, state investment in rural education, culture, and public health would be increased. At the outset, however, only a handful of rich cities such as Shenzhen or Shanghai agreed to curtail rural taxes within their jurisdiction. For example, Shanghai farmers stood to make savings of 143 million yuan a year because of government largesse.

It was not until the National People’s Congress (NPC) of March 2004 that Wen spelled out arguably the most generous deal for farmers since 1949. The premier received enthusiastic applause from the deputies when he indicated that except for levies on special crops such as tobacco, the standard 8 percent agricultural taxes would be abolished in five years. And in 2005, Beijing upped the ante by announcing that the taxes would be cut by the end of 2006. In terms of real numbers, however, this would not amount to much. Agronomists estimated that the dispensation would enable farmers to save 100 billion yuan—or about 120 yuan per person—compared to what they had paid before 1999, when tax reforms began.

Perhaps more significant were orders given by the State Council in 2003 and 2004 to individual provinces and cities to do their best to either remit taxes or boost agrarian subsidies. In good old Chinese fashion, this set off a kind of competition among regional cadres who wanted to earn Brownie points from the Hu-Wen leadership. Thus Taiyuan city in Shanxi Province vowed in mid-2004 to spend more than 1 billion yuan to promote the rural welfare. In the major agricultural province of Henan, officials pledged to cut taxes for the year by 2.19 billion yuan while boosting subsidies by 1.16 billion yuan. Heilongjiang and Jilin were among the first provinces to declare the outright abolition of all taxes on produce.

Wen’s cabinet also pledged to augment direct subsidies to destitute rural households so as to relieve severely destitute peasants. The rural welfare budget for 2003 was 299.9 billion yuan, which was 800 million yuan more than that of the year before—and more than double the total subsidy outlay for the five years ending in 2002. According to the China News Service, the number of farmers living in abject poverty stood at 28.2 million in 2003, while 7 million of them inhabited areas “which lack basic conditions for survival.” In late 2005, CCP leaders admitted that 26 million Chinese still lived in stark poverty.

While Wen has won widespread praise for his dispensation to the peasantry, quite a few scholars have raised doubts about boosting subsidies to farmers or remitting their taxes. Well-known Peking University economist Justin Lin indicated, for example, that the central government’s problematic finances could not sustain perennial subsidies. “Moreover, more subventions [to the farming section] will lead to over-production of produce,” said Lin. Other economists pointed out that because of China’s accession to the World Trade Organization (WTO), more subsidies to farmers could lead to accusations by foreign governments that Beijing was adopting protectionist and other unfair trading policies regarding the agrarian sector.

Moreover, the farmer’s lot will not be improved just by cutting taxes. There are limits as to what the central government can do regarding the problem of peasants having to shoulder many of the administrative expenses of the village, town, township, and county governments, particularly the salaries of grassroots cadres. The official estimate in 2003 was that it took about twenty-five farmers to pay for the upkeep of one local rural cadre. However, there were quite a large number of villages, especially in poor areas, where eight or nine peasants had to support one local-level cadre. This was true in impoverished Huanglong County in Shaanxi. While Huanglong is a small county with only 40,000-odd people, it has more than 4,400 cadres and civil servants working in 308 departments. In the early years after “liberation” in 1949, however, the comparative ratio was only twenty-eight farmers to one official.

It is because of the profusion of grassroots-level cadres and civil servants that former premier Zhu basically failed to implement his famous feigaishui (“tax in exchange for fees”) experiment. In early 2002, the premier ordered village and township governments to stop collecting fees and charges from peasants. Instead, Beijing would make up for the shortfall by an annual rural subsidy of between 20 billion and 30 billion yuan. Yet by year’s end, Zhu conceded that the feigaishui experiment had to be postponed owing to the “[limited] ability of state finances to cushion the shock.” The reality was that many regional and grassroots administrations were complaining that without the fees, they could not even pay the teachers—and that the nine-year free-education program enshrined in the Constitution could not be sustained.

After taking over the State Council in March 2003, Premier Wen admitted that the feigaishui problem was a tough nut to crack. He said, only half jokingly, that the person who could solve the feigaisui conundrum should be awarded an honorary doctorate. He cited the famous “Theory of Huang Zongxi,” a reference to the Ming Dynasty thinker’s reforms in rural policies. Huang had tried methods including feigaishui to lower taxes on peasants, but without much success. “Huang wrote that every time there was a merger of taxes and fees, the burden of the peasantry rose,” Wen said. “We cannot get into this vicious cycle.”

It was not until the second half of 2004 that thanks to injection of more funds by both Beijing and provincial governments, the feigaishui experiment was extended to all provinces. However, this does not mean that peasants in the twenty-two provinces that had abolished agrarian taxes would not need to pay any levies at all. As Hong Kong Sinologist Linda Li noted, farmers living in areas where both fees and taxes were supposedly abolished still had to pay so-called one issue, one decision charges—or ad hoc levies for public services in areas including education and transport. Moreover, rural residents are burdened with taxes, fees, and charges that do not target peasants specifically, such as road-maintenance charges, license fees of all sorts, and value-added taxes for sales and purchases of different goods.

Boosting the Income of Peasants

Because of the steady drop in the prices of agricultural products worldwide—and competition posed by the influx of foreign farm produce after China’s WTO accession—it is unrealistic to expect that farmers’ income would see substantial improvement in the foreseeable future. From 1997 to 2000, the prices of produce dropped 22 percent, and the loss to farmers amounted to between 300 million and 400 million yuan during this period. The trend was reversed in 2003 and 2004 when, owing to factors including quirky weather, produce prices jumped, in some cases by 40 percent. However, the upsurge was considered temporary, and in the longer term, Chinese farm products could be threatened by voluminous imports from Asia and North America. Soon after coming to power, the Hu-Wen team pledged that rural income would increase by 5 percent annually. In 2003, per capita rural income rose by 4.3 percent over the year before to hit 2,622 yuan; however, this percentage increase was lower than the 4.8 percent recorded for 2002. Moreover, in 2003, urban dwellers’ income shot up by 9.3 percent, roughly the same rate as GDP growth for that year.

According to Professor Wang San’gui of the Chinese Agricultural Sciences Institute, the future of the farm lies in “urbanization.” Wang said it was illogical that while agriculture only accounted for 16 percent of GDP, it was the source of income for 40 percent of the country’s laborers. “In China, the pace of urbanization is too slow,” he said. “There is no way to realize a leap forward in rural income.” In the Chinese context, urbanization has several layers of meaning. First, farmers move to the cities and work there as “migrant laborers.” Second, peasants in traditional farming areas should have more opportunities of supplementing their income by going into industry and the services.

Migration of rural workers to the cities had taken place since the mid-1980s, and by 2005, there were more than 100 million nongmingong (rural workers) working in the cities. However, Beijing needs to formally abolish the residence permit system, as well as provide migrant workers with guomin daiyu (national treatment) (see following sections). Official statistics show that in 2002, 17 percent of the income of rural households was derived from nonagricultural jobs performed by migrant laborers in urban areas. This percentage was as high as 30 in provinces such as Sichuan and Anhui, which “exported” the largest numbers of workers to the cities. Moreover, fully 41.8 percent of the increase in rural income was based on remittances from relatives working in urban districts.

According to People’s University Professor Wen Tiejun, the only way for government departments to boost the welfare of farmers is to end the state monopoly on a host of economic activities. They include collection and sale of produce, trading and transport, finance and insurance. “There is practically no money to be made from agricultural production,” Wen said. “The profit margin is much higher from the services sector—and what’s more, the profits will be plowed back to the farm.” Wen suggested that the government provide loans to farmers to set up such service-oriented businesses.

Another thoroughgoing solution is some form of the privatization of farmland, which has since 1949 been “collectively owned.” Since real estate became a big money spinner in the mid-to-late 1990s, however, local administrations have sold land-use rights to property developers while paying a minimum of compensation to affected peasants (see following section). The Guangdong government indicated in late 2004, for example, that it owed around 2 billion yuan in unpaid land requisition fees to peasants. Experts have suggested that Beijing should make it clear that farmers have a right to sell or rent the plots they occupy. This move would enable peasants—at least those living close to cities—to raise the requisite seed money for making the move to cities. Moreover, a higher degree of mechanization will be made possible since farming specialists could pull together larger plots of land through acquiring or renting plots from different households.

Raising the Education Level of Farmers

Rural poverty means that only a very small percentage of peasant children can go to technical institutes or colleges—and this lack of opportunity has resulted in farmers being mired in the vicious cycle of perennial deprivation. Twenty percent of all Chinese are considered illiterate. In his book Telling the Premier the Truth, rural reformer and author Li Changping writes that in his native village in Hubei, barely 20 percent of the kids were attending high school. The percentage was way lower than that thirty years ago. Moreover, given blatant sex discrimination in the countryside, girls have a much lower chance of attending schools than boys. Many teenage girls are even “sold” as child brides to richer townships.

Indeed, one of the biggest failings of the Chinese Communist administration is the horrendous state of rural education. This is despite the fact that the Constitution spelled out clearly that every Chinese—rural or urban—should have nine years of free education. In a report filed in September 2003, United Nations human rights researcher on educational opportunities Katarina Tomasevski said China spent too little on education and that children of migrant workers were discriminated against in the allocation of education resources. China spends 2 percent of GDP on education, just one-third of the proportion recommended by UNESCO. Worse, most of these funds have gone to the cities. Experts estimate that in rural areas, the bulk of the funding for schools comes from local resources—very often illegal levies slapped on the shoulders of already overburdened peasants.

It is a measure of Premier Wen’s personal interest in the welfare of the farmer that the State Council convened a rare national conference on rural education in late 2003. Wen laid down the goal that by 2007, 85 percent of all areas in western China should enjoy free education—and that illiteracy among youths should be lowered to 5 percent. It is, however, a sad reality that the edicts of Beijing are only observed in the coastal and richer provinces. In outlying regions, horror stories of parents resorting to tragic means to support their kids’ education are periodically reported in the national media. For example, parents in 1,336 households in Le Du County, Qinghai Province, had to sell their blood to earn extra income so as to pay their kids’ school fees.

While announcing China’s Eleventh Five-Year Plan in late 2005, Beijing also noted that central and regional authorities would be spending 218 billion yuan on rural education in the coming five years. This would cover books and other expenses incurred by children in impoverished western provinces, which also owe their teachers unpaid salaries of at least 10 billion yuan. However, the urban-rural gap remains huge. For instance, it will still be a rarity for kids from poor villages or townships to go to university. College entrance exams in China are tough; high school students in the cities, many of whom can afford expensive private tutors or exam-preparation courses, generally enjoy an advantage. By contrast, poor peasant parents have to incur a huge debt in order to send their children to university. Indeed, several tragedies took place at big-name universities when rural students apparently resorted to violence to protest their being discriminated against by fellow students from the rich cities.

Raising the Political Status and Powers of Peasants

The crux of the matter behind the plight of the peasantry remains power—more precisely, their pitiful lack of political power. Farmers have no voice in the leadership. As will be discussed in Chapter 4, the Hu-Wen team has refused to expand or upgrade village-level elections, which Deng introduced in 1979, to higher levels. Farmers’ representation in the higher echelons of the party and government is abysmal. While some 20 percent of the party’s Central Committee members are military or security officers, only a handful of cadres at that level are farmers or spokesmen for agrarian interests. Farmers’ representation at the NPC is also much lower than that of city dwellers. Thus there is one NPC deputy for about 240,000 city residents, but only one parliamentarian for every 960,000 peasants.

Farmers’ lack of representation at the top means that central-level initiatives toward grassroots villages have often been adulterated, or not carried out at all. There have been numerous reports even in the official media that the “new deal” spelled out by Premier Wen and his colleagues has not materialized. A case in point was the No. 1 Central Document on Agriculture promulgated, in early 2004, as well as the series of dispensations that Wen unveiled at the NPC at about the same time. According to the official Fortnightly Chat journal, while more than 200 billion yuan of investment and welfare funds for farmers had been promised by the government that year, only “a very light drizzle” had fallen on the villages, meaning that peasants had yet to enjoy substantial benefits.

By mid-2004, there were signs that the CCP leadership might be willing to give farmers at least more oversight powers. Laws and regulations were being drafted that would allow villagers to form finance management committees to oversee how the elected village administrative committees could go about spending public funds. And VAC leaders would be obliged to make public all spending on infrastructure projects as well as major issues such as the requisition of land for redevelopment. The planned regulations would also codify the procedures whereby villagers could start impeachment hearings regarding incompetent or corrupt VAC leaders through, for example, a signature campaign.

Gradual Abolition of the Hukou System and Increased Socioeconomic Mobility

In his famous book Looking at China with a Third Eye, author Wang Shan laid bare an ugly facet of China’s development: Mao forbade farmers to leave their land, and industry took off partly thanks to the exploitation of the lowly peasants, veritable beasts of burden whose life was brutish and short. There had been some changes by the turn of this century. For example, there was a limited but still significant relaxation of the hukou, or residence permit system, which was introduced in 1958. Until recently, a Chinese born in the villages could not go and live in the cities except through joining the army or job placement after graduation from college.

Partly to facilitate the migration of nongmingong, the hukou system was gradually relaxed around the year 2000. By 2004, more than half of the nation’s provinces and cities had experimented with ways to break down the urban versus rural divide. Yet significant limitations remain. Almost all cities have attracted tens of thousands of migrant workers. Yet nongmingong are veritable second-class citizens because they can only stay for certain periods and apply for inferior menial jobs. International cities such as Beijing and Shanghai have come up with a “green card” system, which confers permanent residence status on outside residents upon payment of a hefty fee. In most regions, peasants can only settle for good in small to medium-sized cities. Although the Eleventh Five Year Plan did not give specific figures or timetables, it was assumed by Beijing experts that up to 300 million farmers will have migrated to urban areas by the year 2015 or so. According to projections by the Beijing-based Research Institute on the Development of International Cities, the urban population of China should reach 800 to 900 million by 2020.

While the theories and principles behind freedom of mobility are well understood, hukou liberalization will only be gradually carried out for the rest of the decade. Experts such as Beijing University of Science and Technology’s Professor Hu Shengdou point out that the hukou system is closely linked to the “vested interests of different departments and localities.” For example, officials in pioneer cities such as Zhengzhou, which opened the door to peasants in the early 2000s, have found it extremely costly to expand educational, medical, and other services. Moreover, mobility of the population is only possible when enough jobs can be found for new arrivals in the cities. This explains why as of late 2005, Beijing had not announced details on, for example, which kinds of peasants were eligible to move to the large cities, and which other categories must settle in small or medium-sized cities close to their villages.

So far, mobility, particularly upward mobility, has been attained with relative ease only by those peasants who have struck it rich through doing business or other kinds of nontraditional occupations. A limited number of farmers have successfully sat for civil-service entrance exams and become grassroots cadres. Thus, more than 5,000 of the 700,000 civil servants recruited from 1994 to 2003 were rural residents. Moreover, Beijing has from the early 2000s onward been appointing peasant-turned-rural businessmen to at least mid-ranking party and government posts. This is a break from tradition: formerly, most senior officials at the county level were professional cadres named by the Organization Department of the relevant province. For understandable reasons, the great majority of peasants-turned-cadre were well-heeled businessmen, many of whom had already occupied positions in the local people’s congress or consultative conferences. A 2003 report stated that the average peasant-cadre in Sheyang County, Jiangsu Province, had an annual income of at least 100,000 yuan. However, the possibility of bona fide peasants holding high-level positions—which, paradoxically, took place during the Cultural Revolution—will remain low in the foreseeable future.

The Right to Organization

In the long run, the sannong wenti can only be solved through political reform. Despite more than fifty-six years of Communist rule, many agrarian areas yield the impression of being jungles where the strong—corrupt cadres, clan chiefs, and triad bosses—prey on defenseless peasants. For example, farming expert Xu Yong had this to say about officials’ total neglect of the law: “It is a prevalent phenomenon in villages that cadres violate the law.” “When law is useful for them, they will take rule of law as an excuse,” he added. “When law is useless or even harmful for them, they will disregard law.” And the lowly farmers have negligible clout to assert their rights. As Beijing-based agrarian expert Liu Yawei noted, “the current Chinese political system is such that in the halls of local and central power, taxpaying peasants have no real representatives to speak on their behalf or to monitor the government’s agrarian policies.” The status of peasants in China is lower than that in most socialist or capitalist countries.

Deng Xiaoping took some early steps to raise the status of farmers by introducing village-level elections in the late 1970s, under which peasants can cast votes to choose members of the village administrative committee (VAC). However, the powers of the VAC are limited and there are no concrete plans by the CCP leadership to expand or elevate the elections to higher levels. The views of Wei Shengduo, the party secretary of the township of Pingba, near Chongqing, were significant. In August 2003, Wei tried to organize the first universal-suffrage election of a township chief in Chinese history. The radical reformer insisted that only when peasants could vote in their own leaders would agrarian problems be solved. “Now, all the rural cadres are appointed by superior [party] units,” Wei said. “These cadres are only concerned about the views of their superior departments and their bosses. They don’t have the peasants’ interests at heart.”

A major initiative to boost the political and bargaining powers of farmers could be the formation of nonghui, or farmers’ unions, the rural equivalent of trade unions. Many of the nonghui prototypes have developed out of peasants’ desire for self-defense against heavy taxation or corrupt officials. CASS rural expert Yu Jianrong cited one county in Hunan, probably the province with the highest level of activism, where up to eighty volunteers had become “farmers’ representatives for cutting taxation and for presenting petitions.” Yu indicated that if local self-government and grassroots democracy were allowed to develop at a faster clip, these “representatives” could even become candidates for township and county chiefs.

According to Beijing-based scholar Zhao Ligang, farmers’ unions can make it easier for peasants to join the market economy—as well as to bargain with the government over issues including the purchasing price of produce. “Only when farmers are organized can the cost of taking part in a market economy be lowered,” he said. Zhao noted that Beijing’s policymaking process was more and more influenced by lobbying on the part of powerful economic blocs in society. “Without adequate organization, farmers will become the losers in government decision making,” he added.

CASS’s Yu pointed out that a new generation of “peasant leaders” had spontaneously emerged in the course of the farmers’ perennial struggle with grassroots cadres over problems such as taxation and corruption. Yu said most of these leaders were demobilized soldiers or former nongmingong, who had a better idea of political realities outside the villages. Yu added that nonghui were “organizations of political participation [by peasants] for the purpose of communication and consultation with the government.” He noted that Beijing should not worry about nonghui because few would ever become “revolutionary, anti-government outfits.” Indeed, the experience of many rural researchers is that the majority of nonghui leaders merely wanted to ensure that local officials abide by the central leadership’s new policies toward the peasantry. Yu argued that it would be better for the government to allow peasants to organize themselves into associations instead of stifling these initiatives. The rural expert said government neglect or suppression could result in nonghui members taking violent means. “There is also the risk of peasant organizations becoming secret societies,” he warned.

Other proponents of nonghui have also noted that these organizations would not vitiate the power of the party and state. Beijing’s Zhao added that farmers’ unions could serve the purpose of propagating government policy—and that they would help maintain social stability and curtail underground criminal organizations. However, as of late 2005, Beijing had only acquiesced in the existence of quasi-nonghui in Hunan. At the same time, more liberal provinces such as Zhejiang have passed provincial regulations on farmers’ setting up “professional cooperatives.” Yet it is clear that such cooperatives are tolerated or even encouraged by local governments as long as they do not take part in politics, such as haggling with local administrations on the division of the rural-income pie.

Crusading Farmers in Action

By the mid-2000s, peasants have become more aggressive and better organized in venting their grievances or holding errant cadres responsible. The most common form of resistance consisted of farmers using petitions and media exposure, as well as legal procedures, to make their cases heard. For example, thousands of farmers living in the outskirts of Changsha, the provincial capital of Hunan, signed a petition in early 2004 demanding that a golf course under construction be stopped. The petition, relayed to the provincial leadership, said the recreational facility contravened relevant provisions in the National Land Law and that farmers whose land had been taken away had not been adequately compensated.

A by-product of the Hu-Wen team’s effort to raise the status of the Constitution and the law is that meek, often despised peasants are able to take legal action against corrupt officials. In the spring of 2004, the Beijing leadership was shocked when about 10,000 farmers in the outskirts of Fuzhou, capital of Fujian Province, signed petitions for the censure and dismissal of a dozen-odd officials in the provincial capital of Fuzhou as well as the surrounding districts and townships of Cangshan, Minhou, Fu’an, Qingkou, Shishan, and Chengmen. While there is little the peasants can do to remove party and government officials from their posts, relevant clauses in the Constitution as well as Election Laws on the NPC and local-level people’s congresses (PCs) do have provisions for impeachment of deputies. And the angry Fujian farmers were demanding that these officials, including Fuzhou party secretary He Lifeng and mayor Lian Zhiqian, be stripped of their positions as members of the NPC and local PCs.

The gripes of the peasants were familiar: local officials in these five counties and townships were working in collusion with real-estate companies to secure land-use rights from farmers for redevelopment while paying the latter only a small fraction of the going price of the plots. Take the case of Shishan village, for example. On average, farmers were offered a payment of up to 30,000 yuan per mu (or 0.0667 hectare). But in actual fact, officials of various levels invariably took a “cut” of the compensation so it was not unusual for farmers to only pocket several thousand yuan per mu. The price that the officials could then fetch at public auction or through prearranged deals with property developers, however, was as high as 1 million yuan per mu.

In the case of the Qingkou township, funds worth more than 240 million yuan that should have been distributed among nearly 10,000 peasants had since the late 1990s been ploughed into the construction of a nearby “technological zone,” the East South Automobile City (ESAC). The approval of these peasants had never been sought—and each of them was only paid 800 yuan a year as “dividend” from the ESAC project. Meanwhile, the victims had been denied their ordinary means of livelihood—farming—and the most they could get from the authorities was 70 yuan a month to buy grain.

The plight of peasants—and the alleged crimes of officials riding roughshod over them—was made worse by the fact that Fuzhou authorities were pulling out all the stops to suppress farmers’ protest actions. According to eyewitness accounts, the petition name lists were forcibly destroyed. And Lin Zhengxu, an organizer of the petitions, was beaten up by police even though the latter failed to produce an arrest warrant. Local cadres also tried to stop petitioners from reaching Beijing. According to Li Boguang, a Beijing scholar and lawyer who had taken up the Fuzhou cases, the authorities’ tough tactics could engender a grave crisis. “The Constitution and the law are the only avenues left to farmers,” Dr. Li said. If they are denied the right to use legal weapons, the lawyer said, “farmers might resort to other means to vent their anger.” The Beijing-based lawyer, however, was himself detained by security personnel in December 2004.

Similar cases of peasant rebellion—via the courts—have been reported in other parts of China. About 20,000 peasants near the cities of Tangshan and Qinghuangdao in Hebei took action in 2004 to strip corrupt local officials of their CP memberships. For instance, Tangshan party secretary Zhang He was alleged to have pocketed part of the 60 million yuan that was supposed to have been paid to thousands of peasants who had to be resettled to make way for a dam project. The peasant leaders had originally wanted to lodge a petition with the NPC in March 2004. Yet they were detained and sent back to Tangshan by police from that city, whom Zhang had allegedly sent to the capital. With the help of several crusading lawyers form Beijing, Tangshan peasants petitioned the NPC for the removal of Zhang’s position on the local congresses.107 As of mid-2004, the CCP Central Commission for Disciplinary Inspection had started investigations into allegations of large-scale rural corruption in Hebei, but no local officials have been penalized.

Beijing’s refusal to fully recognize the political rights of farmers—and provide them with proper channels for negotiation with the government—came to a head in October 2004, when some 60,000 peasants in Hanyuan County, Sichuan, clashed with several thousand police and People’s Armed Police (PAP) officers. The cause of the confrontation was inadequate compensation for the close to 100,000 peasants who would be displaced by the construction of the nearby Pubugou Dam. While the central authorities and the power company involved were said to have offered the peasants relocation fees of up to 8 billion yuan, individual households had only received a few thousand yuan. Moreover, local cadres had blocked peasants’ efforts to petition higher authorities in Sichuan or Beijing. Protestors shouted “Long Live the CCP!” as they clashed with police. At one point, demonstrators surrounded the local hotel where Sichuan party secretary Zhang Xuezhong—a Hu Jintao protégé who had come for a mediation session—was staying. Local media said more than ten farmers were killed in the melee.

After the thousands of PAP officers had finally dispersed the mob in early November, President Hu and Premier Wen gave orders to mollify the peasants. The leaders pledged that no “ringleaders” would be detained, and that construction of the dam would be temporarily halted pending discussion with local peasants. However, the Hu-Wen team also laid down a hard-line stipulation, namely that “stability and unity must be preserved,” and that “zhongdian [major] hydraulic works, especially those connected with the develop-the-west strategy” must be guaranteed. While compensation for peasants would reportedly be raised, no local officials have been penalized for corruption or for mishandling this major crisis. And dam construction work resumed in late 2005.

Test Case: The Plight of Workers

In theory, the lot of urban workers is much better than that of farmers. According to official statistics, the average annual income of urban workers was 16,000 yuan in 2004, nearly 5,000 yuan more than the 2001 figure. By and large, urban wages have increased at the same rate as GDP growth. Moreover, most staff of state-owned firms and factories enjoy five-day weeks, meaning that in addition to annual vacations and festivals, they are entitled to 114 rest days out of the year.

The government has also extended and firmed up the social security net. Unemployment insurance for workers in state-owned enterprises (SOEs) has been increased. In the early 2000s, there was also a boost in special subsidies to workers facing difficulties. The number of recipients of dibao, or “minimum livelihood-assistance payouts” given by the Ministry of Civil Affairs to the jobless, reached 20,536,000 at the end of February 2003, a jump of more than 10 million over the figure just a year before. The size of the handout has also been boosted, particularly in the rich provinces. For example, Guangdong vowed in 2003 to augment dibao funds by 400 million yuan a year. And most cities have provided financial assistance or given tax exemption to enterprises that hire previously unemployed workers.

However, most workers feel unsafe and unsure about their future. Jobs in the old manufacturing sectors are being diminished even as, thanks to globalization, employment opportunities in joint ventures along the coast are increasingly dependent on global trade cycles and investment by multinationals. Although wages have risen, most old-style welfare benefits are gone—and more and more workers have to buy their own retirement and health-insurance packages. Even worse for anxious parents, the employment rate of new high school and college graduates has gone down. The sense of insecurity and angst hitting workers was arguably the single most important factor behind the success of the Falun Gong in the late 1990s. And while the quasi-Buddhist sect was largely suppressed by ex-president Jiang, the same social malaise that contributed to its fast growth has remained—and could pose a big threat to national stability.

The Politics of Fast-Shattering Rice Bowls

The Hu-Wen team was the first administration to consider lessening unemployment or generating new jobs as a “major political task.” The People’s Daily pointed out in 2003 that the employment question was at the heart of the CCP’s goal of “running the administration for the sake of the people”—and the key to “the long reign and perennial stability of the country.” The stark reality of Chinese political economy is that, as former premier Zhu Rongji pointed out in internal speeches, China must maintain a GDP growth rate of at least 7 percent or risk grave social tension owing to unemployment. Zhu estimated that this “pressure from jobs” would remain formidable until around the year 2020, when hopefully China’s population growth will have started to level off. According to the Tenth Five-Year Plan of 2001 to 2005, the economy must produce 8 million new jobs a year. This, however, will only take care of the needs of residents in the larger cities. If the demands of towns and small cities nationwide are taken into account, up to 30 million jobs have to be created each year.

According to official figures released in mid-2003, the “registered unemployed” in urban areas numbered nearly 8 million people, thus resulting in a jobless rate of 4.1 percent. This was within the target set by Beijing for containing the unemployment rate within the 4.5 percent parameters. However, most independent Chinese and Western economists say the jobless rate is really around 8 percent because a good chunk of the unemployed are not registered with the authorities.

And each year, the ranks of job seekers are swollen by growing numbers of high school and college graduates. This means that even assuming that the state could create 8 million jobs as mandated by the Tenth Five-Year Plan the situation becomes more and more desperate for old or new job seekers alike. The severity of the situation was reflected in the high jobless rate among graduates in 2003. As the summer ended, only half of the 2.12 million college leavers could find jobs. The plight of graduates that year was exacerbated by the fact that it was in 1999, when they entered college, that Beijing had decided to significantly boost enrollment. In 2002, there were only 1.45 million graduates—and job seekers.

While Beijing has done away with many aspects of central planning and executive fiats, it still slaps job-creation quotas on different economic sectors and departments. For example, a Beijing-based agronomist said village and township enterprises (VTEs) were in the early 2000s asked to create 2.5 million new jobs a year. Yet employment for a mere 1 million people was generated by this depressed sector. VTEs, once a reliable provider of new jobs, had fallen on hard times. The agronomist said that while in the early 1990s an investment of 10,000 yuan in a typical VTE could create 12 jobs, the comparable figure for the early 2000s was down to a mere 0.67.

Moreover, as China’s world factory seeks to climb the technological ladder, the majority of workers are not qualified to fill the growing vacancies in high-tech sectors along the coastal cities and development zones. State statistics showed that in late 2004, barely 3.5 percent of China’s 70 million urban workers could be classified as highly skilled technicians. In industrialized nations, the comparative figure is as high as 40 percent. The situation is particularly serious in the northeast and western provinces, where the government is anxious to attract foreign investment.

Few Improvements in Labor Rights

Limited Role of Official Unions and Deterioration of Working Conditions

In his address to the Fourteenth Congress of the official All-China Federation of Trade Unions (ACFTU) in late 2003, President Hu played up the fact that the legal rights of workers must be safeguarded. He warned that employers who “deduct workers’ salaries, extend their working hours, neglect work safety, or infringe upon the rights of workers” would be penalized.119 However, despite the Hu-Wen team’s expressions of concern for the welfare of the working class—and Hu’s campaign to promote rule by law—not much has been done to improve the legal and political status of workers.

The mammoth ACFTU was established in 1925 as the only labor organization of socialist China. It has enjoyed a fast growth since Deng’s reform and open-door policy. From 1997 to 2002, ACFTU branches nationwide expanded from 1.13 million to 1.71 million, while membership mushroomed from 42.69 million to 134 million. However, although the ACFTU is usually headed by a senior cadre with Politburo status, it has been criticized by international labor watchdogs for failing to protect rights of workers such as collective bargaining.

Some improvements in the “official labor movement” were made in 2003. For example, ACFTU leaders revealed plans to allow workers to directly elect grassroots-level union leaders in a few years’ time. Indeed, in some rich cities such as Hangzhou, Zhejiang Province, workers had started direct election of local union leaders in 1999. However, the basic nature of the official union has remained the same. It reports to the Communist Party leadership, and it does its best to encourage workers to toe the line of “maintaining stability while making self-sacrifice for the sake of the socialist enterprise.” Thus, in his ACFTU address, Hu spoke of the need for “Communist Party committees of all levels to enhance and improve their leadership of trade unions.”

Workers as well as farmers are denied basic civil liberties, including those of holding strikes and forming unions, for fear that the latter would cut into the CCP’s monopoly on power. Patriarch Deng’s fear of the “Polish disease”—the highly politicized and anti-Communist labor movement symbolized by the Solidarity Movement in Poland in the 1980s—still seems to govern the thinking of the Fourth-Generation leadership. ACFTU officials have openly said that “hostile forces both in and out of China have interfered in the labor movement” with a view to goading workers to “struggle against” the government. Despite harsh criticism from Western governments as well as from international labor and human rights organizations, Beijing has refused to allow the formation of nonofficial trade unions. This is despite China having signed on to various United Nations-approved international covenants on economic and human rights. Moreover, the arrest and harassment of the leaders of non-party-affiliated or underground trade unionists has not diminished after Hu and Wen took over the reins of government.

Meanwhile, conditions of laborers have deteriorated both along the rich coast and in the poor hinterland. Workers are hardly accorded basic human dignity. In August 2004, a company in Changchun, capital of Jilin Province, caused a stir when it asked trainees to practice salesmanship by kneeling down at the city’s thoroughfare, Chongqing Road. And factory managers who suspect certain staff members of stealing company property routinely strip-search the suspects. A 1999 survey revealed that most of the 6 million female workers in Guangdong were locked up at night and forced to work seven days a week. The situation has only marginally improved since then.

There are also horror stories about workers getting prematurely old and sick due to the high levels of toxic material in their factories. Some commentators have called this phenomenon “a 30-year-old worker with the lung of a 60-year-old.” For example, three workers of Fuhui Industrial Company, Guangdong Province, died in late 2002 because of long-time exposure to heavy metal as well as noxious gases. The factory did not even provide employees with facial masks. And it was unwilling to pay the medical bills of those workers who had come down with respiratory and other diseases. A mid-2004 report by the State Administration of Work Safety revealed that more than 600,000 workers nationwide were suffering from chronic vocational diseases.

Workers’ lack of bargaining power—and the most basic shengcunquan (right to life)—is best illustrated by the atrocious number of industrial accidents, particularly those in the mines. According to published statistics, 63,735 Chinese lost their lives in accidents including industrial mishaps in the first six months of 2004. (Official figures invariably lump together industrial and traffic accidents.) According to the International Labor Organization, deaths from workplace accidents in China were 11.1 per 100,000, meaning that in the early 2000s, some 81,115 laborers perished from mishaps a year.

Workplace incidents increased in 2004 and 2005 as the prices of commodities and in particular coal shot through the roof. Official statistics said that around 6,000 coal miners were killed every year in explosions, shaft collapses, and other accidents in different parts of the country. However, Western watchdogs estimate that the numbers could be much higher as thousands of deaths—especially those in private pits—went unreported owing to the owners’ desire to avoid trouble and punishment. Moreover, the wives of diseased miners, most of them being rural laborers, were in most cases merely given a one-off compensation of around 20,000 yuan. The authorities estimated in late 2004 that at least 51.8 billion yuan needed to be spent to improve the safety of state-owned coal mines, yet it is doubtful whether central or regional governments are willing to foot this bill.

It is difficult to estimate the number of workplace-related conflicts such as rallies and protests given Beijing’s anxiety to suppress news about embarrassing outbreaks of instability. The year 1999 saw the last time that Beijing publicized figures about labor disputes, which numbered 120,000, compared to 8,152 in 1992. It was not known, however, how many of such cases of altercation and flare-ups led to concrete industrial action. Human rights watchdogs estimate, however, that the number of protest actions, ranging from work stoppages to confrontation with police, is about 100,000 a year.

Both state and private enterprises have come up with all sorts of draconian measures to prevent workers from venting their grievances. For instance, the state-owned Fengcheng City Electricity Co. Ltd. in Jiangxi Province tried to prevent workers from filing petitions and other complaints with higher authorities by deducting from their salaries. Thus, workers who had petitioned once would be fined 200 yuan, and two times, 400 yuan. Those who had demonstrated three times would receive no salary for the month.130 Many factories also employ former policemen or demobilized soldiers as security guards, one of whose purposes is to stop workers from taking industrial action or making complaints to city officials.

Breaking the Back of Wildcat Unions

It is a measure of China’s fast-improving economic and diplomatic clout that it is getting away with all sorts of draconian action against “underground” labor unionists. Compared to dissidents, labor leaders are generally not well known overseas. And while visiting Western dignitaries sometimes urge Chinese leaders to release certain human rights activists, labor organizers who have been locked away are often forgotten.

Perhaps the most telling example of Beijing’s determination to crush the budding independent labor movement was what took place in the rustbelt cities of Liaoyang, Liaoning Province, and Daqing, Heilongjiang Province, in early 2002. In Liaoyang, a decaying industrialized city, up to 30,000 employees of about twenty state-owned factories and mills staged demonstrations due to long-owed salaries and pensions. The workers laid siege to the municipal government, and law and order broke down. In the Daqing Oilfield, as many as 80,000 workers protested over the puny size of their maiduan gongling (one-off retirement payout) package, which, once paid, would leave the huge state enterprise owing the retirees nothing.

The case in Daqing was solved relatively quickly because the oilfield still had a lot of money: it partially satisfied the workers’ demands by raising the retirement payout. However, the Liaoyang protests dragged on for several weeks. The factories had absolutely no funds, while the laid-off workers, who had no prospect of finding jobs elsewhere, had nothing to lose by confronting the authorities. Consider the bitterness behind this well-remembered lament of labor leader Yao Fuxin: “We devoted our youth to the party, but no one supports us in old age! We gave our youth to the party for nothing!”

Beijing was particularly nervous about the Liaoyang activists for several reasons. They displayed a disturbingly high level of organization, with an association of activists representing workers from more than twenty factories in the city. Moreover, the underground union was making political as well as economic demands on the authorities; it was clamoring for high-level investigation into the corruption of municipal- and even provincial-level officials. The government used a mixture of brute force, persuasion, and trickery to break the movement. People’s Armed Police and anti-riot crack police teams were called in. Local cadres also tried to break up the solidarity of the organizers by promising jobs for those who were willing to compromise. The relatively few considered intransigent—and unmoved by bribes—were locked up. All in all, at least four labor leaders were detained. While two were released on bail toward the end of the year, two “ringleaders” from the Liaoyang Ferro-Alloy Factory, Yao Fuxin and Xiao Yunliang, were convicted in January 2003 of “efforts to overthrow the government.”

Analysts said that for fear of international outcry, Yao and Xiao were not charged for running wildcat labor unions. According to a senior cadre at the ACFTU, Yao was guilty of “organizing illegal demonstrations” and “committing violent acts” including setting fire to cars during the protests. They were also accused of having links with “hostile foreign forces” and being members of the banned China Democracy Party. In May 2003, Yao was slapped with a seven-year and Xiao a four-year jail term, for which the International Labor Organization lodged protests with the Chinese authorities. Han Dongfang, director of the Hong Kong-based watchdog group, China Labor Bulletin, said: “The sentences [on Yao and Xiao] show just how little China has progressed on the path to rule of law; instead the ‘law’ continues to be used as a weapon against freedom of association and expression.”

The Hu-Wen administration has continued to play hardball against underground trade-union activists. In late 2004, police in the Jiangsu city of Yancheng arrested two female labor organizers, Ding Xiulan and Liu Meifeng, for their role in organizing protests in the Zhongheng Textile Co. in October that year. Several hundred Zhongheng workers staged demonstrations for two weeks after they were laid off—and given a meager maiduan gongling package of 433 yuan for every year they had worked there. The Hong Kong-based China Labor Watch organization said it was possible the two would be jailed on charges of engaging in anti-government activities.

By 2004, there were signs that respected scholars and writers had taken up the plight of workers. After a spate of particularly vicious coal mine accidents—including a gas explosion in a state-owned Shaanxi Province mine that killed more than 200 miners—300 Chinese intellectuals, including well-known writers, professors, and civil rights activists such as Du Daobin, Li Jian, Zhang Zuhua, Liu Xiaobo, and Liu Junning, signed a petition in November calling on Beijing to allow workers to form independent unions. The appeal also noted that owners and managers of mines and factories with atrocious safety records should be severely punished. The Hu leadership, however, has responded to the new activism on the part of academics and writers by launching a political campaign against “public intellectuals.”

The Case of Migrant Workers

By 2003, close to 100 million nongmingong (rural or migrant laborers), about the population of Sichuan or Henan, were working in the cities. And despite growing unemployment in urban areas, about 5 million rural farmers join the ranks of the nongmingong each year. Because of the supposedly endless supply of migrant workers, their wage levels had until early 2004 remained substantially the same for more than a decade. In prosperous Guangdong Province, nearly half of the 26 million workers from poorer provinces earned less than 800 yuan a month.

Nongmingong already form the backbone of the working class. As of late 2002, 57.6 percent of laborers in the so-called second-category production activities, or traditional manufacturing, were rural workers. They have also made inroads in the services sector, taking fully 37 percent of jobs in this field. While the nongmingong have made tremendous contributions to construction and other industries, rural workers are routinely disenfranchised and discriminated against. They do the so-called 3D jobs—dirty, dangerous, and demanding. And they are not protected by labor laws, few and inadequate as they are. For example, rural work hands in Guangdong usually toil for at least fifteen hours a day, seven hours more than the mandated eight-hour workday. Many are paid below the minimum monthly wage of around 500 yuan stipulated by several Guangdong cities.

Premier Wen was the first top-level leader to demand a new deal for migrant workers. In the run-up to Chinese New Year in early 2003, he urged employers nationwide to pay these poor souls before they returned home to celebrate the festivities. It was estimated that rural laborers nationwide were routinely owed tens of billions of yuan on Chinese New Year’s eve. After Wen’s admonition, many provinces and cities scrambled to ensure that nongmingong within their jurisdiction would be adequately paid. It turned out that some of the worst offenders were local-government units and SOEs. For example, as of mid-2004, northeastern Heilongjiang Province still owed migrant workers salaries of 95 million yuan. Most of the culprits were government departments handling construction works as well as real-estate developers. In late 2004, the State Council passed a regulation saying employers who owed employees salaries would be penalized by having to pay their staff 50 percent to 100 percent more.

It was only in 2002 and 2003 that provincial and municipal governments started promulgating regulations on the welfare of migrant laborers. Quite a few cities came up with rules saying that nongmingong should not be paid less than the minimum wage for ordinary laborers. Super-rich Guangzhou and Shenzhen in Guangdong Province were among the few cities in China with a minimum wage for migrant workers. In 2002, the minimum remuneration was raised by 60 yuan to 510 yuan a month. And it was not until September 2003 that rural workers were formally admitted to the ACFTU. Labor law professor Yang Hanping said allowing nongmingong to join labor unions was “a necessary demand of social progress and a recognition of the contribution of rural workers to urban construction.” Vice-Chairman of the ACFTU Su Liqing admitted that official unions should do more for the nongmingong. “Unions should represent migrant workers in signing labor contracts with employers or represent them in negotiations over working hours, wages, and workplace conditions,” Su said.

Various trade union leaders have proposed that employers of nongmingong must hand over to the authorities a basic level of “salary guarantee funds” before they can hire such laborers. As Gu Zhizhong, a labor union leader in the prosperous city of Kunshan, Jiangsu Province, pointed out, “we should break the back of whichever companies that do not pay migrant workers.” In the summer of 2004, Kunshan started to require construction companies to deposit with the authorities “salary guarantee funds” amounting to at least 5 percent of the total cost of projects.

In the final analysis, however, it was not so much the “putting people first” ethos of the Hu-Wen team as it was sheer market forces that led to the first substantial rise in the salaries of migrant workers in the past decade or so. By mid-2004, there was a shortage of nongmingong along the east China coast, leading to a boost in wages of 10 percent or so. And Hong Kong and Taiwan businessmen, who hire tens of millions of workers in the Pearl River Delta region, have complained about worsening labor shortages. Apart from the phenomenon of the bubble economy, other factors include the rise in the prices of farm produce. The latter persuaded a proportion of rural work hands to return to their home provinces to engage in traditional agriculture.

Experts, however, are hardly persuaded that the fate of the nongmingong has actually improved. Individual economic sectors began showing signs of slowing down in 2005—and the demand for labor might decrease in some areas. Moreover, it was unlikely that the prices of farm produce would continue to edge up. Most importantly, the supply of migrant workers from hinterland provinces is still voluminous. This lies behind the forecasts made by cadres such as former chief trade negotiator Long Yongtu that China’s cost advantages would last for a decade or more. For the nongmingong, however, this means that unless proper laws and regulations are in place, they will continue to remain victims of discrimination and exploitation in China’s “world factory.”

The Plight of Other Disadvantaged Sectors

Victims of AIDS and Environmental Depredation

It was not until after the SARS crisis that the spotlight was put on the plight of HIV/AIDS carriers. The Chinese government said as of late 2003 that the number of AIDS sufferers was close to 1 million; yet experts from the World Health Organization (WHO) and other international organizations said the figure could be several times as much. Indeed, Beijing’s neglect of AIDS victims bordered on criminality. The reason is simple: SARS was a highly visible disease that drove away tourists as well as foreign investors. Yet AIDS has hit mostly members of powerless ruoshi tuanti, or disadvantaged sectors. Apart from homosexuals, AIDS has affected mostly drug users, prostitutes, members of ethnic minorities, as well as peasants who periodically sell blood to bolster their income. Western aid agencies reckoned that as many as 1 million peasants in landlocked Henan Province might have been infected through selling blood at grossly unsanitary plasma-collection centers in the late 1980s and early 1990s.

Experts said that until early 2004, hundreds of thousands of AIDS victims were practically left to die because they were denied medical care. Human Rights Watch found that drug users—a high-risk group—were merely sent to unhygienic detoxification centers, where they were in many instances forced to work in labor camp-style workshops. It was only from mid-2003 onward that Beijing began soliciting international help. The famous Chinese-American inventor of the “cocktail treatment,” Dr. David Ho, was invited to give advice on anti-AIDS research. Yet for the first few months, Dr. Ho was not allowed to travel to Henan and other affected provinces.

Moreover, the authorities did not allow volunteers or NGOs to get involved. Well-known AIDS activist Wan Yankai was detained by state security personnel in August 2002 for “leaking state secrets.” His crime was that he had sent to foreign news agencies and human rights watchdogs an internal report on the AIDS problem in Henan. World-famous AIDS activist Dr. Gao Yaojie was subject to harassment and surveillance at least until late 2004. And consider what happened to the impoverished “AIDS village” of Xiongqiao in Henan in July 2003. Several hundred police and thugs broke into the hamlet one night, smashing property and arresting thirteen farmers. The “crime” of the villagers was that they had made a noisy protest against insufficient government economic and medical aid.

The central government’s attitude toward AIDS changed after Premier Wen’s celebrated handshake with victims in December 2003. In February 2004, Vice-Premier Wu Yi was appointed head of a new Work Committee to Prevent and Cure AIDS. Wu announced that free medical treatment would be accorded victims who were peasants or unemployed city dwellers. As of late 2004, however, quite a few NGOs on the frontline indicated that local officials still adopted an uncooperative attitude. A well-known activist in Henan, Li Dan, who had been harassed by police, said in late 2004 that “many officials are not following the central government’s policies.” And foreign reporters still have difficulty getting permits to cover AIDS-related stories in far-flung provinces.

Apart from “new” diseases such as SARS and AIDS, Chinese authorities must move fast to prevent the spread of both old and new sicknesses in view of environmental degradation and the breakdown of the village health-care system. A notable case is the return of snail fever, or schistosomiasis, which is a parasitic disease carried by freshwater snails that cause damage to victims’ blood and liver. More than 843,000 Chinese, mostly peasants living near lakes and waterways, were infected with snail fever in 2003. Forty-three counties in seven hinterland provinces have failed to control the disease and some thirty-eight counties previously free of the illness have seen a resurgence of the scourge. Again, these and other victims of industrial pollution have only limited recourse to justice or compensation.

The Phenomenon of Forced Eviction

Collusion Between Developers and Corrupt Cadres

Perhaps nothing better illustrates the growing contradiction between the haves and have-nots—and that between an insensitive bureaucracy and the suffering masses—than the thousands upon thousands of urban, and particularly rural, residents forced to leave home in the name of urban renewal or real-estate development. According to the Petitions Office of the State Council, the number of complaints and petitions related to forced eviction has risen dramatically since the late 1990s. In the first eight months of 2003, the office received 5,360 visits by citizens with grievances relating to urban clearance, up 48 percent from the same period the year before.

As the case of disgraced Shanghai tycoon Zhou Zhengyi illustrated, many real-estate developers have signed under-the-table deals with local officials. It is thus relatively easy for housing companies to throw out urban or rural residents after paying minimal compensation; and those who refuse to go are sometimes chased away by police and even thugs called in by officials. In Shanghai, about 850,000 households, or at least 2 million people, moved out of their original homes to make way for urban renewal in the twenty months ending in 2002. While Shanghai officials claimed that only 300 disputes had arisen, the problem was much graver. And letters that angry residents sent to Beijing protesting against forced eviction by Zhou Zhengyi’s company was one factor behind the billionaire’s arrest in 2003.

Things came to a head in the summer of 2003 when in the space of six months, at least three disgruntled evictees tried to commit suicide in Beijing by self-incineration. Consider the failed suicide attempt by Anhui resident Zhu Zhengliang, who tried to burn himself to death at Tiananmen Square. Forty-six-year-old Zhu, a laid-off worker in the small town of Qingyang County, was protesting what he called unfair compensation. According to his son, eviction teams sent by local authorities had destroyed his humble house, in the process smashing seven antiques left by his forebears. Zhu’s wife was also beaten up, and the couple had petitioned provincial authorities five times before Zhu’s fateful trip to Beijing.

The liberal Southern Metropolitan News quoted a lawyer as saying that although in theory people affected by eviction notices possessed the same rights as developers, the former were usually outgunned by the latter. And this applied to evictees who had access to lawyers. In the case of residents forced to leave Jing’an District, Shanghai, to make way for real-estate development, their lawyer, Cheng En’chong, was even arrested by the authorities. Many of Cheng’s clients were victims of real-estate projects associated with Zhou. In August, 2003, Cheng was put on trial for “leaking state secrets” and subsequently sentenced to three years in jail.

As real-estate and industrial development began to take off even in central and western provinces, more farmland has been rezoned for urban development—in the process depriving peasants of their only means of livelihood. An early 2004 report in the People’s Daily said that about 40 million farmers had been forced to give up their plots after the latter had been requisitioned for “redevelopment.” Other estimates in late 2005 put the figure at close to 70 million. On the average, each member of households affected was given a one-off payment of no more than 18,000 yuan, which was barely enough for a person to live for seven years. A late-2004 CASS report entitled “Analysis and Forecast of China’s Social Situation, 2004-2005” also cited “massive loss of land by farmers” as one of six major problems that bedeviled the country’s development. The report warned that wanton rezoning of land for urban renewal, coupled with neglect of farmers’ livelihood, could exacerbate social contradictions.

Insufficient Remedial Measures

It was only by the summer of 2003 that Beijing started paying high-level attention to the plight of evictees. Senior officials began intervening to solve particularly horrendous cases. For example, Politburo member and vice-premier Zeng Peiyang gave personal instructions on how to deal with the cases of the evictees who tried to burn themselves to death at Tiananmen Square that year. Beijing also mandated leading officials in different provinces and cities to deal with the economic and political aftermath of urban redevelopment, particularly compensation for peasants forced to make way for urban renewal.

In mid-2003, Hu himself made the decision to send four teams of inspectors to look at disputes relating to urban clearance in Shanghai, Nanjing, Hangzhou, and Shandong. The president reportedly instructed that tearing down the houses of the masses was “a matter of the utmost significance.” “Urban development will only have the support of the masses when the public’s interests are taken into account,” he warned. Premier Wen also cautioned against the problem of individual cadres and developers taking advantage of loose regulations to make illegal profits.

One reason for high-level concern was evidence that unlike the majority of suppressed peasants, evictee-petitioners were beginning to organize themselves. For example, Beijing resident Hua Huiqi, himself a victim of urban clearance, had become a liaison person for other groupings who made it to Beijing to present their grievances throughout 2003. Another Beijing-based organizer, Ye Guozhu, was arrested in September 2004 after he had tried to organize a 10,000-man rally in the capital against forced eviction. Ye was later that year given a four-year jail term for “disturbing law and order.”

Individual cities had from mid-2003 begun to lay down more clear-cut regulations to minimize the grievances of forced eviction. In Shanghai, for example, real-estate companies must make public announcements giving details of the compensation they are offering the evictees—and the criteria used for determining the values of homes. Companies must also set up offices on building sites to handle complaints. Moreover, developers must neither use force nor cut the utility supplies of affected residents as a means of intimidation. In Shanghai, a group of 152 lawyers also began providing inexpensive services to victims of urban development, including taking their cases to the local courts.

Shanxi is one of the several provinces to have promulgated local regulations on issues relating to land and redevelopment. A series of public hearings was called by the provincial legislature in September 2003 to gauge the opinions of lawyers as well as citizens. These soon became platforms for the downtrodden to air their grievances against the rich and powerful. In the provincial capital of Taiyuan, many among the city’s 80,000 poorest families, who were dependent on social security benefits, had been bullied by redevelopers. One evictee said he could only receive a one-off compensation of 30,000 yuan. It was merely sufficient for him to rent a small apartment for six years.

Analysts said the question of forced eviction might improve because the authorities were finally becoming worried about the property bubble in big cities, especially the rampant corruption that went with it. Vice-Minister of Construction Liu Zhifeng pointed out in late 2003 that a lot of illicit money had changed hands in the areas of land development and building construction, as well as the calculation and dispensation of compensation for evictees. In 2003, the Ministry of Land and Natural Resources (MLNR) investigated some 82,400 cases of fraud involving redevelopment schemes over 747,000 hectares of land, 240,000 hectares of which had originally been farmland.

The important question, however, is whether farmers’ rights over their small but valued plots have been guaranteed. As of late 2004, the MLNR and other authorities claimed that they had returned to farmers 16.05 billion yuan, out of the 17.55 billion yuan that was owed them since 1999. Yet few officials handling the land portfolio have been penalized. In late 2004, the Construction Ministry introduced a regulation which said that companies wanting to tear down buildings for redevelopment must make public announcements about compensation for original residents—as well as hold public hearings to determine the proper level of payouts. However, it remains to be seen whether urban residents—and defenseless rural folk—can have as big a say as developers and other powerful vested-interest groupings.

A Checkered Report Card on the “Putting People First” Crusade

As of 2005, the Hu-Wen team’s yiren weiben credo had permeated Chinese society and brought about significant changes in people’s conception of issues ranging from social justice to “green development.” More attention is focused on the plight of disadvantaged classes. However, it is clear that social malaise such as the widening gap between rich and poor will not likely be healed in the rest of the decade. In fact, the population of “destitute Chinese,” defined as people with a per capita income of 637 yuan a year or less—and who have difficulty feeding and clothing themselves—increased by 800,000 in 2003 to hit around 30 million. This was the first time that the number of the impoverished had increased since the start of the reform era in 1978. As of late 2003, there were 85.17 million Chinese with per capita income of 882 yuan or lower.

It is true that from early 2003 onward, the Hu-Wen administration has as a whole demonstrated more sensitivity toward the personal dignity and sociopolitical rights of ruoshi tuanti, especially the peasants. Yet the harsh treatment that is still accorded the seemingly endless throngs of petitioners to Beijing testifies to the distance that the new leadership has to go to attain the yiren weiben ideal. As CASS’s Yu Jianrong noted, “a major aspect of the sannong question did not arise from farmers themselves; one root cause is [the attitude] of administrators.” Famous expert in grassroots elections Li Fan has charged that “since 1949, the central authorities have severely restricted the political rights and freedoms of the peasant.”

Other social critics have pointed out that while in the wake of WTO accession, foreign companies and foreign residents in China have enjoyed “national treatment,” members of ruoshi tuanti such as peasants and migrant workers are still routinely discriminated against. And the fact that in late 2005, three years into their administration, Hu, Wen, and colleagues still found it necessary to boost control mechanisms has exposed them to accusations that their “putting people first” doctrine is mere window dressing.

The crux of the matter regarding ruoshi tuanti is empowerment. The lot of the politically outgunned peasants, nonmingong, and workers will never be improved until they have the wherewithal—especially mechanisms for organizing themselves—to bargain effectively with the “new elite” running China, that is, the “unholy alliance” between cadre-mandarins and nouveau riche entrepreneurs. By 2005, quite a few senior cadres have at least indirectly admitted that peasants are discriminated against in the distribution of national resources. For example, Health Minister Gao Qiang noted that only 20 percent of medical funds and other resources were spent in rural areas. Unless farmers have the political clout to alter the power equation, dispensations from on high, such as the abolition of agrarian taxes and so forth, can only be palliatives, not thorough solutions to the social injustice that is tearing apart the body politic.

More Disturbing Signs of Discontent

Things are not looking rosy for President Hu’s pledges about being “close to the masses” and “running the administration for the sake of the masses.” Despite the Hu-Wen team’s reassurances about doing more for society’s underclasses, there are growing signs of disaffection among disadvantaged sectors. Telltale signs of social discontent have included a proliferation of xinfang or shangfang (petitioning the authorities) cases as well as suicides. In 2003, the NPC Xinfang Office received around 58,000 petitions, up 10 percent from the year before. This, however, did not take into account local-level petitions—and the fact that grassroots officials invariably spent a lot of effort trying to prevent petitioners from going to Beijing. Head of the National Xinfang Office Zhou Zhanshun admitted in 2004 that “most of the petitioners have genuine grievances.” Yet officials noted that barely 0.2 percent of petitioners were lucky enough to have their cases satisfactorily settled.

As for suicides, official statistics showed that some 287,000 people took their own lives in 2003, with 2 million unsuccessful attempts. This means that every two minutes, one Chinese kills himself or herself while there are eight unsuccessful suicide attempts. While the per capita suicide rate in China is not the highest in the world, it is symptomatic of an uncaring government—and shockingly unequal distribution of income and resources. According to experts at the Beijing Psychological Crisis Research Center, more than 80 percent of the country’s suicides are farmers, particularly female ones. As the cases of self-immolation committed by victims of “urban clearance” have shown, many have tried to end their lives as an act of protest against gross unfairness in society.

Other Chinese who feel cheated by the system, however, are not so docile. Until the late 1990s, a disgruntled, newly laid-off factory worker might choose to vent his frustration by murdering his boss. Now, aggrieved citizens might air their grievances by committing “individual acts of terrorism” such as letting off explosives in a crowded place in a big city. In the summer and autumn of 2003, numerous cases of severe urban violence were reported. Real or fake bombs and other explosives were discovered in airports, supermarkets, department stores, and fast-food chains in cities including Beijing, Shenzhen, Guanghou, Nanjing, and Wuhan. Moreover, partly as a result of market reforms, it has become much easier for would-be urban terrorists to purchase and manufacture lethal weapons. For example, a bomb costs less than 30 yuan to make. Beijing’s worst nightmare is that the terminally frustrated and disaffected could band together and form guerrilla-style urban terrorist groups.

Also on the rise is the use of rat poison as a vehicle of “urban terrorism.” Ten yuan’s worth of Dushu Qiang, a cheap but potent rat poison, could kill hundreds of people. In September 2003, more than 400 pupils and teachers in a school in Yueyang, Hunan Province—and another 75 in a Guizhou Province school—were hospitalized after eating meals laced with Dushu Qiang. A year earlier in Nanjing, 42 people, mostly college kids, were killed with the same weapon. While government officials have not released casualty figures from rat poison, the China News Service reported that in a three-month period ending January 2003, police had investigated 585 cases of criminal rat poisoning.

According to a late 2003 report in the official Chinanewsweek, “individual terrorist crimes” have posed a big threat to Chinese society. Means used by these quasi-terrorist felons—many of whom are members of disadvantaged and marginalized sectors of society such as the chronically unemployed—have included explosives, poison, arson, hijacking, and assassination. Chinanewsweek quoted noted Beijing-based scholar Hu Lianhe as saying that “social contradictions have been magnified because [traditional] social adjustment mechanisms and safety valves have lost their function.” Hu cited the problematic judicial and court system, poor mediation efforts by official departments, and the inefficacy of the system of government units handling petitions from the downtrodden.

Beijing Boosts Control Mechanisms

Scenes like the following are taking place with alarming frequency all over China. In the early hours of July 31, 2004, about 100 policemen and riot-control operatives from Zhengzhou, Henan Province, moved into Shijiahe Village in the city’s outskirts in an effort to arrest eight peasants who had organized repeated petitions to provincial and central departments. It turned out that the Shijiahe Village Administrative Committee had more than a year ago sold a sizable chunk of land to a property firm for 40 million yuan. However, VAC officials refused to distribute the money. Shijiahe folks had somehow learned about the planned action of the police, who were soon surrounded by about 3,000 angry villagers. The law officers fired rubber bullets as well as tear gas at the mob. More than thirty peasants were wounded, six seriously.

Even more than frequent “disturbances” in the countryside, what worries CCP authorities are so-called acts of urban terrorism that would not only cause large numbers of deaths but also damage China’s international reputation. This was a major reason behind a series of anti-terrorist exercises in cities and provinces including Beijing, Guangzhou, Jiangsu, Henan, and Shandong, held by the PAP and other security units about one year after the September 11 incident. The ostensible objective of these maneuvers was to show the world that Beijing had the ability to handle unexpected incidents during major events such as the 2008 Olympics. Yet their primary aim seemed to be preventing outbreaks of urban violence perpetrated by disgruntled workers and peasants.

Of course, Beijing has always insisted that major cities are susceptible to atrocious attacks from shadowy secessionist groups in or near the Xinjiang Autonomous Region (XAR) such as the East Turkestan Islamic Movement. However, both the army and the PAP had largely tamed underground pro-independence groupings in the XAR after two years of a heavy-handed crackdown that started in 2000—and XAR authorities had by 2002 again felt emboldened to invite foreign executives to talk business in the far-off region. After watching a PAP anti-terrorist war game in the outskirts of Beijing in early 2003, President Hu said China must “resolutely prevent and combat all types of terrorist activities so as to earnestly safeguard the security of the masses and world peace.” What was uppermost in the minds of Hu, Wen, and other Politburo members seemed to be what some Chinese publications called “quasi-terrorist crimes committed by individuals” who harbored grievances against the authorities.

The Hu-Wen team had by late 2004 come up with multipronged strategies to keep the forces of chaos at bay. Both the carrot and the stick have been beefed up. The first was to boost the strength of anti-terrorist groups within the PAP and ordinary police. More personnel with expertise ranging from disposing of bombs to foiling hostage-taking were being hired. Tens of thousands of officers handling high-tech crimes, including cyber-cops, have been added to the public security establishment. At the same time, Beijing would provide more channels for peasants and laborers who want to present petitions to provincial and central authorities. The leadership also decided to restructure the much-maligned xinfang system. Instead of petitioners going to Beijing, the new line of 2005 was that the CCP leadership would ask cadres of all levels to “go down to the grassroots” to listen to grievances. New xinfang regulations have more clear-cut provisions on punishing officials who caused the grievances in the first place. Moreover, the Ministry of Public Security has been asked to accept petitions from the people. NCNA noted that in 2005, police offices of all levels handled more than 200,000 cases of complaints and other special requests, which resulted in “the masses receiving nearly 160 million yuan worth of compensation.”

After a particularly serious spate of unrest of October and November of 2004—which included massive protests in Hanyuan County, Sichuan, against the construction of a dam and related hydroelectric facilities—Beijing decided to adopt a more flexible policy toward those who dared confront the authorities. Police and PAP officers were told to avoid direct confrontation with demonstrators—and to take a conciliatory approach unless force was absolutely necessary. As Politburo member in charge of law and order Luo Gan pointed out at a late-2004 meeting, cadres should “correctly handle contradictions within the people and maintain harmony and stability in society.” And police forces must try harder to “ensure fairness and justice in society.” Apparently referring to the Hanyuan protests, Luo indicated that local officials should fully assess whether a forthcoming policy “would tally with the fundamental interests of the masses.”

However, Luo, who has the image of an uncompromising disciplinarian, left it beyond doubt that Beijing would use all necessary means to crush anti-government activities. At the meeting, he urged zhengfa (political and legal affairs) cadres to “boost their ability to engage in the struggle against [state] enemies and to maintain national security.” After all, the Politburo was convinced that a high proportion of the protests and destabilizing incidents in society were the result of “infiltration and instigation” perpetrated by hostile foreign forces as well as antisocialist, “bourgeois-liberal” elements within China. As we shall see in the next chapter, however, the Hu-Wen team’s apparent failure to realize that much of China’s worsening sociopolitical malaise has its roots in the country’s archaic, Leninist party-and-state system could mean that more repression by the police-state apparatus may invite more resistence from the angry masses.