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    Greater China
     Oct 11, 2006
China yearns for Hu's 'harmonious society'
By Wu Zhong, China Editor

HONG KONG - The Chinese Communist Party's policymaking Central Committee began its annual plenary session on Sunday. A major focus of the four-day session is to set policy principles to implement President Hu Jintao's signature concept of building a "harmonious society".

This is the first time in 25 years after late paramount leader Deng Xiaoping launched economic reforms that the party Central Committee will devote an annual plenum to social equality. All

other such gatherings in the past quarter of a century have concentrated on economic reforms or ideological issues.

The fact that this year's party plenum focuses on building a "harmonious society" has twofold significance.

On the one hand, it is evident that Hu now is firmly in power so that his idea is being materialized into the party's line. This is the sixth plenum Hu has chaired since he replaced Jiang Zemin as the party's general secretary in late 2002. However, Jiang did not give up his last and most powerful official post as chairman of the Central Military Commission until two years later. In this sense, it could be said that Hu had been working under Jiang's political shadow.

Two weeks before the convention, Hu sacked Chen Liangyu as Shanghai party chief. As Chen, who was also a politburo member, is widely considered a major member of the so-called "Shanghai Gang" backed by Jiang, Hu's bold move proves he has walked out of Jiang's shadow. The timing of Chen's removal was by no means coincidental but was designed to deliver the message that Hu is in full charge of this plenum so that his idea can be elaborated and implemented.

This suggests, furthermore, that the Chinese Communist Party (CCP) will likely to revise its charter at its 17th National Congress next year to include Hu's "harmonious society" idea as the party's guiding ideology.

On the other hand, the theme of this plenum strongly suggests there now are so many acutely "unharmonious" factors in Chinese society that the party policymakers have to spend their annual gathering to ponder possible solutions. For if society were quite harmonious, the party elite would devote their precious time to other more urgent issues.

Indeed, social problems, such as the widening wealth gap and social injustices, have piled up to such an extent that if the CCP were to fail to address them properly, its very legitimacy would be questioned and challenged.

Widening wealth gap
An irony in the era of Mao was that where there was no class struggle, he would try to create one. For while he aimed at turning China into a classless society, he thought the only way to attain this was through endless class struggles. Indeed, one major reason why many Chinese remain nostalgic for Mao three decades after his death is expanding social inequality.

After the founding of the People's Republic in 1949, Mao literally deprived everyone of all private property through land reform and nationalization campaigns. In this way he had as a practical matter brought social equality to China in the sense that everyone was equally poor. But Mao thought enemies of the working class should be continuously suppressed politically and ideologically, so he launched mass movements one after another, climaxing with the Cultural Revolution (1966-76), which only ended when he passed away.

In sharp contrast, the economic reforms over the past 20-plus years have made the country richer and stronger, while at the same time creating a wealth gap that keeps widening. Thus Hu and his colleagues now have to spare no effort to deal with the problem to make society more "harmonious". In other words, they are worried that class struggles will inevitably erupt if social stratification is not effectively checked.

And there are good reasons for the CCP elite to be deeply concerned. The wealth gap has caused increasingly serious social differentiation, threatening social stability.

A survey by the National Bureau of Statistics last year showed that 10% of urban residents commanded 45% of the total wealth in Chinese cities, while the bottom 10% shared only 2% of the total wealth. Another survey, by the New Fortune magazine, showed that in 2003, the top 400 tycoons had already amassed more than 303 billion yuan (US$38 billion) - more than triple that year's entire gross domestic product (GDP) of Guizhou, one of China's poorest provinces.

The Gini Coefficient (GC) in Chinese cities now is well above 0.4. According to a study by a Nankai University team headed by Professor Chen Zongsheng, the GC in 1988 was 0.35 and rose to nearly 0.5 in 2003. GC is a measurement of wealth disparity that takes a value between zero and one; the bigger the number, the greater the disparity. A value of 0.4 is generally regarded as a red alert and 0.5 means likely social unrest. By this yardstick, Chinese cities are on the verge of social unrest.

The wealth gap between urban and rural areas is also expanding. In 2005, average per capita income of urban residents was 3.22 times that of farmers. Wealth disparity between regions is widening too. Per capita GDP in the richest province in coastal eastern China now is 10 times that in the poorest province in western China. The income gap among workers in various industries is also growing.

Chinese officials and researchers now generally agree that the widening wealth gap is the major factor hampering social harmony. Ding Yuanzu, a researcher with the National Development and Reform Commission's Academy of Macroeconomic Research, said that to build a harmonious society, the underdeveloped regions and low-income people should be taken better care of, according to a report by Xinhua news agency.

Officials and researchers are also concerned that if the government fails to take effective measures to narrow inequalities, the public may stop supporting its economic reform and open-door policy, resulting in more social unrest. It is thus expected that the party plenum will set policy principles to narrow the income gap through reforms in the current wealth-distribution system.

Social injustice
One of the major causes for rapidly expanding wealth disparity is social injustice, which is also a major source of growing public discontent. Many people have gained their wealth not through their own enterprise but through their connections with officialdom.
Children of many senior officials have been immediately appointed as executives of large state-owned enterprises (SOEs) despite being relatively inexperienced. Or, if they decided to set up their own businesses, it was easy for them to get financial support. For example, when Chen Liangyu's son kicked off his business in Beijing, Chen granted 1 billion yuan to support him.

Although China's economy has become relatively market-oriented, many resources are still in the firm grip of the government. Hence for a private business person, the shortcut to becoming rich is to collude with officials. A private businessman in Shenzhen said: "If one relies on his own hard work, one may in practice make a living by running a small business, but if one wants to become rich, one must gang up with officials."

Therefore collusion between entrepreneurs and officials is running wild. One of the most notorious shortcuts for some to become rich quickly has been to collude with officials to speculate on land lots for construction. The parcels are taken away from farmers with minimal compensations and then sold at high prices. Land acquisition has become such a problem that most of the nearly 90,000 mass demonstrations (those involving more than 100 protesters) in 2004 were triggered by unjust land requisition.

Entrepreneur-official collusion has also been rampant in coal-mining. With the protection of local officials, private coal-mine owners simply ignored safety regulations to cut production costs. As a result, thousands of miners are killed in accidents.

The restructuring of the SOEs has also given the opportunity for some executives to become rich by pocketing state assets at low cost through the so-called management buyout scheme. Meanwhile massive numbers of workers in the state sector wait to be laid off.

The list of social injustices could go on and on.

But it is obvious that official corruption is at the root of such social inequalities. Only when official corruption is effectively checked can social fairness and justice be restored.

By sacking Chen, Hu has shown his resolve in cracking down on corruption. However, since official corruption has become so rampant, arduous efforts are still needed. Moreover, a more effective supervision system should be established to prevent further injustices.

All in all, there are many other problems to be dealt with to make Chinese society more harmonious. However, restoring social justice and narrowing the widening wealth gap are the most important and urgent issues. The party plenum may set policy principles, but the key lies in whether such principles will be fully implemented.

For ordinary Chinese, Hu's idea of building a harmonious society may sound good. However, if it cannot be put into practice, they may feel it is irrelevant to their lives.

(Copyright 2006 Asia Times Online Ltd. All rights reserved. Please contact us about sales, syndication and republishing .)

Out from under Jiang's shadow (Sep 27, '06)

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