Chinese Research Perspectives on Society, Volume 2 [1 ed.] 9789004276536, 9789004276529

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Chinese Research Perspectives on Society, Volume 2

Chinese Research Perspectives on Society International Advisory Board Yanjie Bian (University of Minnesota) Nan Lin (Duke University) Xueguang Zhou (Stanford University)

Volume 2

beijing The titles published in this series are listed at brill.com/crso

Chinese Research Perspectives on Society, Volume 2 Chief Editors

LI Peilin, CHEN Guangjin and ZHANG Yi Associate Editors

LI Wei and XU Xinxin

LEIDEN | BOSTON

This book is a result of the co-publication agreement between Social Sciences Academic Press and Koninklijke Brill NV. These articles were selected and translated into English from the original 《2012年中国社会形势分析与预测》(2012   nian Zhongguo shehui xingshi fenxi yu yuce) and 《2013年中国社会形势分析与预测》(2013   nian Zhongguo shehui xingshi fenxi yu yuce) with financial support from the Chinese Fund for the Humanities and Social Sciences.

This publication has been typeset in the multilingual ‘Brill’ typeface. With over 5,100 characters covering Latin, ipa, Greek, and Cyrillic, this typeface is especially suitable for use in the humanities. For more information, please see www.brill.com/brill-typeface. issn 2212-747X isbn 978-90-04-27652-9 (hardback) isbn 978-90-04-27653-6 (e-book) Copyright 2015 by Koninklijke Brill NV, Leiden, The Netherlands. Koninklijke Brill NV incorporates the imprints Brill, Brill Hes & De Graaf, Brill Nijhoff, Brill Rodopi and Hotei Publishing. All rights reserved. No part of this publication may be reproduced, translated, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without prior written permission from the publisher. Authorization to photocopy items for internal or personal use is granted by Koninklijke Brill NV provided that the appropriate fees are paid directly to The Copyright Clearance Center, 222 Rosewood Drive, Suite 910, Danvers, MA 01923, USA. Fees are subject to change. This book is printed on acid-free paper.

Contents 1 Marching Toward a New Phase of Development: Building a Moderately Prosperous (Xiaokang) Society ——Analysis and Forecast: Chinese Society from 2011–2012 The “Analysis and Forecast of Societal Features” Team, Chinese Academy of Social Sciences  1 Chen Guangjin 2 Chinese Urban-Rural Income and Consumption in 2012  23 Lü Qingzhe 3 Problems in China’s Income Distribution and Focuses of Reform: 2012–2013  39 Yang Yiyong and Chi Zhenhe 4 New Development in Chinese Social Security in 2012  53 Wang Fayun and Ding Yi 5 Report on Reforms to and Development of the Medical and Healthcare Industries in 2012  70 Fang Lijie 6 China’s Floating Population in 2012  95 Tian Feng 7 Chinese Urban Resident Quality of Life Investigative Report 2012  117 Yuan Yue, Zhang Hui, and Jiang Jianjian 8 The Chinese Senior Population’s Living Arrangements, Health, and Nursing Care Analysis of Data from the Sixth Population Census  133 Zhang Yi 9 New Changes to the Employment Difficulties Experienced by University Graduates: A Longitudinal Study of Graduates of Twelve Higher Learning Institutions  151 Li Chunling

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Analysis of Internet-based Public Opinion in China, 2012  167 Zhu Huaxin, Liu Pengfei, and Shan Xuegang

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Differentiation of Economic and Political Status of Chinese Private Entrepreneurs  192 Zhang Houyi and Lü Peng

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2012 Peasant Development Report  205 Fan Ping

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Labor Relations Regulations and Institutions amid Slow Economic Growth, 2012  217 Qiao Jian

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Statistical Overview of Social Development  247 Zhang Liping Index  263

Chapter 1

Marching Toward a New Phase of Development: Building a Moderately Prosperous (Xiaokang) Society ——Analysis and Forecast: Chinese Society from 2011–2012

The “Analysis and Forecast of Societal Features” Team, Chinese Academy of Social Sciences Chen Guangjin* Abstract The decade following the Party’s 16th National Congress was marked by many outstanding achievements, one of which was faster growth of the Chinese economy than in any other decade. A new stage for the development of the Chinese economy and society will begin in 2012, when the national economy will grow rapidly and stably, commodity prices will be controlled well, employment will stabilize, and the progress of both the people’s livelihood and social construction will proceed smoothly. However, there still exist a number of problems and challenges. 2013 will be the first year of the thorough implementation of the spirit of the Party’s 18th National Congress. China will deepen systemic reforms and innovation, promote the sharing of the achievements of development by the people and growing wealthy together; promote social fairness and justice as well as social harmony, and will take the first step toward completely building a moderately prosperous [xiaokang] society.

Keywords construction of the people’s livelihood – moderately prosperous society – xiaokang – fairness and justice

* Chen Guangjin, researcher, Chinese Academy of Social Sciences and the Institute of Sociology.

© koninklijke brill nv, leiden, ���5 | doi ��.��63/9789004276536_001

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In recent years, the development of the Chinese economy and society has been in a phase of rapid advance; it has made outstanding achievements of interest to the entire world. The Chinese domestic economy has grown to become the second largest in the world. China’s export growth is first in the world. China’s comprehensive national power is growing markedly. Commodity prices are stable. Citizen incomes and material culture living standards are on the rise. The social security system is being further improved. There remain many unstable, uncertain factors in the international economic and social environments, and there are still various problems and challenges within the operations of the domestic economy and society. The victorious convening of the Party’s 18th National Congress saw the proposal of the following tasks: completing the strategic task of building an overall moderately prosperous [xiaokang] society by 2020; clearer and more concrete demands for fairness and justice, growing wealthy together, and harmony; and promoting the development of the economy and society to enter a new stage. 1

Ten-Year Achievements of the Development of the Chinese Economy and Society

Over the ten years from the convening of the Party’s 16th National Congress in 2002 to the Party’s 18th National Congress in 2012, China successfully responded to such major challenges as SARS, the Wenchuan earthquake, the global financial crisis, etc. Over ten years of sustained rapid development, the economy and society made enormous achievements of interest to the entire world. The domestic economy grew rapidly. Comprehensive national powess increased markedly. Both the people’s livelihood and social construction developed markedly. Reforms and innovations to social management institutions were promoted greatly. This symbolizes major progress for the task of constructing a modern socialist China and has laid a solid foundation for the overall construction of a moderately prosperous [xiaokang] society in China. The Domestic Economy Grew 1.8-fold Over the Decade, Becoming the World’s Second Largest Over the past ten years, the Chinese economy has maintained rapid, sustained growth. China’s GDP grew from 10.8 trillion yuan in 2001 to 47 trillion yuan in 2011, making it the world’s second largest. Based on 1978 fixed prices, China’s 2011 GDP was 2.77 times larger than the 2011 GDP, a 1.77-fold growth. Over the 30-plus years of growth since Reform and Opening, the period from 2002 to 2011 has been the decade of fastest economic growth. Based on 1978 fixed 1.1

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prices, GDP grew 9.8 percent from 1982 to 1991, 10.2 percent from 1992 to 2001, and 10.7 percent from 2002 to 2011. It is particularly noteworthy that in these past ten years, Chinese agricultural production has been good. Total grain production has grown every year for ten years consecutively. Total national grain production was 570 million tonnes in 2011, a growth of 26.2 percent over 2011, for an average annual growth of 2.42 percent. This safeguarded national food security and laid a good foundation for the development of the economy and society. Over the past ten years, there has been a noticeable growth to China’s comprehensive national power. State fiscal revenues have grown rapidly over this decade. From 2001 to 2011, state fiscal revenues grew over three-fold, for an average annual increase of 15 percent. State foreign exchange reserves also grew rapidly. China’s foreign exchange reserves became the world’s largest in 2006. Per data from the State Administration of Foreign Exchange (SAFE), over the years 2001 to 2011, China’s foreign exchange reserves grew from USD $212.165 billion to USD $3.181148 trillion, coming to account for one third of world total USD reserves. Urban and Rural Resident Income and Consumption Have Grown Rapidly, and Material Culture and Standards of Living Have Risen Noticeably From 2002 to 2011, the income levels of urban and rural citizens across the country rose greatly. The national average urban resident disposable income level grew from 6859.6 yuan in 2001 to 21809.8 yuan in 2011. Over that same period the rural resident disposable income grew from 2,366.4 yuan to 6,977.3 yuan. Based on 1978 fixed prices, that’s a 1.53-fold increase for urban residents and a 1.11-fold increase for rural residents, an annual average increase of 9.7 percent for urban residents and 7.8 percent for rural residents. There was a 2.7-fold growth for urban residents over the previous decade, and a threefold growth for rural residents over the previous decade. As incomes grew, the household wealth of urban and rural residents also grew noticeably. The average year-end savings total for urban and rural households was 73,762.4 yuan in 2001, up to 343,635.9 yuan in 2001. Excluding price factors, that’s an increase of 3.7-fold over ten years. Living standards and consumption levels for Chinese urban and rural residents have also risen. In 2001, the Engel coefficient was 38.3 percent for urban households and 47.7 percent for rural households. By 2011, those figures had dropped to 36.3 percent for urban households and 40.4 percent for rural households. The new structure of life consumption expenditures also symbolized an increase to quality of life. The average growth of life 1.2

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c­ onsumption expenditures by urban and rural households, excluding food, shelter, and clothing, in areas such as transportation, telecommunications, culture, education, entertainment, and healthcare were of great significance. Statistics indicate that between 2001 and 2011, the average urban household proportion of life expenditures spent on transportation, telecommunication, culture, education, entertainment, and healthcare grew from 28.1 percent to 32.8 percent. For rural households, the proportion grew from 22.9 percent to 26.5 percent. Employment Has Increased, and the Employment Structure Has Been Adjusted Employment is the root of the people’s livelihood; so the state places great emphasis on promoting employment. In these past ten years, employment in China has increased greatly. In 2001, the number of employed citizens in China was 738.84 million, up to 764.2 million in 2011, an average annual increase of 6.2 percent. This growth was basically in line with the natural population growth rate of the 1980s. Over the same period, the number of employed urban citizens grew from 239.4 million to 359.14 million, a growth of 50 percent. Over the same period, the urban registered unemployment rate held steady at the low rate of 4.2 percent. At the same time, the transfer employment rate of rural migrant laborers grew rapidly. In 2003, there were 110 million rural migrant laborers.1 That figure grew to 250 million in 2011.2 Over these ten years, there have been great adjustments to the employment structure. Employment rates in primary industries have fallen continually, whereas employment rates in secondary and tertiary industries have risen continually. That is the fundamental trend of changes to the employment structure over this past decade. In 2001, primary industries accounted for 50.0 percent of all jobs in China, secondary industries for 22.3 percent, and tertiary industries for 27.7 percent. In 2011, those figures had changed to 34.8 percent for primary industries, 29.5 percent for secondary industries, and 35.7 percent for tertiary industries. Non-agricultural jobs in secondary and tertiary industries now account for nearly two thirds of all non-agricultural jobs. 1.3

1  Liu Jun and Chen Lan 刘军、陈兰, “Dangqian nongmingong liudong jiuye de shuliang, jiegou, yu tedian 当前农民工流动就业的数量、结构与特点 [The Quantities, Structure, and Characteristics of Rural Migrant Employment at Present],” Zhongguo Laodong Baozhang Bao 中国劳动保障报 (July 26, 2005). 2  National Bureau of Statistics 国家统计局, “2011 Chinese Rural Laborers Investigation and Monitoring Report 2011 年我国农民工调查监测报告,” National Bureau of Statistics website, accessed April 27, 2012.

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Employment is also becoming increasingly more marketized. In 2011, stateowned enterprises (SOEs) employed only 18.7 percent of all urban workers, a drop of 13.2 percent from 2011. Reforms to the Education and Healthcare Systems Deepened, and Marked Progress in the Education and Healthcare Industries Over this decade, reforms to the Chinese education system have been greatly deepened, most noticeably in increases to the number of students enrolled in higher education, reductions in tuition and miscellaneous fees for compulsory education, and great improvements to education assistance programs at all levels. Increases to the number of students in higher education began in the late 1990s. Since our entry into the 21st century, the number of students in higher education has continued to grow. In 2001, there were 2.683 million students in colleges, universities, and vocational schools, up to 6.815 million in 2011, an average annual growth of nearly 10 percent. The significance here is that we are moving away from educating a small elite and toward educating a broader swath of the population,3 as well as greatly increasing the university enrollment rates among China’s university-aged population. Ministry of Education (MoE) data indicate that the gross national higher education enrollment rate in China was 26.9 percent in 2011, a 15 percent increase over the 2001 rate of 15 percent. In order to alleviate the heavy tuition burden, the state has since 2006 issued policies exempting tuition and miscellaneous fees for rural and urban compulsory education. In order to mitigate financial difficulties for university students from low-income households, the State has greatly improved institutions for university loans and rolled out state scholarships, state motivational scholarships, and state student grants. This has to a great extent mitigated the difficulties experienced by a portion of urban and rural citizens in sending their children to university. In the healthcare realm, both the outbreak of SARS in 2003 and discussions regarding healthcare system reforms that have been taking place at every level of society since 2005 have both exerted great impetus on the State to promote the healthy development of the public healthcare industry. In 2011, there were 7.9 medical professionals per thousand urban citizens, and 3.19 per thousand rural citizens. That represented an increase of 2.75 per thousand urban citizens and 0.81 per thousand rural citizens over 2011. The number of urban community health service centers (stations) 1.4

3  It is widely believed internationally that gross university enrollment rates of 15 percent or below indicate that a nation is in a stage of elitist education; 15–50 percent indicates a stage of popularized education; and 50 percent and above indicates a stage of universal education.

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grew from 8,211 in 2002 to 32,860 in 2011. Construction of rural health clinics in rural areas was greatly improved. Beginning in 2006, the state began exploring new approaches to healthcare system reforms. In 2009, the state issued the “Opinions of the Chinese Communist Party Central Committee and State Council Regarding Deepening Reforms to the Medical and HealthCare System” [中共中央、国务院关于深化医药卫生体制改革的意见], in which it clarified and strengthened the public nature and common-good nature of the public healthcare system, gradually resolved such problems as unbalanced growth to the medical industry between rural and urban areas, strove to realize an objective of allowing everybody to enjoy basic medical services, and increased the health level of the overall citizenry. 1.5 Great Improvements to the Social Security System and Constant Increases to the Level of Safeguards Since entering the 21st century, China has accelerated the pace of construction of its modern social security system and gradually established and improved urban worker basic pension insurance, unemployment insurance, urban basic medical insurance, workplace injury insurance, maternity insurance, urban resident social pension insurance, new rural collective medical institutions, and new rural social pension insurance, and so forth. China has also established and perfected such social assistance systems as an urban and rural minimum life insurance institution, medical assistance, and so forth. China has developed and perfected such social welfare industries as orphan adoption, special care and placement, care for the handicapped, etc., and it has gradually formed a relatively complete social security system. Over these ten years, the numbers of participants in all major social insurance programs have grown noticeably. Statistics indicate that year-end enrollment in unemployment insurance rose from 103.546 million in 2001 to 143.171 in 2011. Year-end enrollment in urban worker basic medical insurance grew from 54.707 million in 2001 to 189.485 million in 2011. Year-end enrollment in worker injury insurance grew from 43.453 million in 2001 to 176.959 million in 2011. Year-end enrollment in maternity insurance increased from 34.551 million in 2001 to 138.92 million in 2011, and year-end enrollment in urban worker basic pension insurance increased from 141.825 million in 2001 to 283.913 million in 2011. Over these ten years, there has been noticeable progress in the construction of rural social security. As of the end of 2011, new rural cooperative medical institutions had been implemented in 2,637 county-level administrative districts across the nation, comprising a total of 832 million participants, approximately 97.5 percent of all rural citizens. That represents basic realization of complete coverage of all of China’s rural population. New rural social pension

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insurance pilots were begun in 2009, and by 2011, there were 326.435 million participants in that system, indicating coverage of over 38 percent. Urban and rural minimum life insurance is China’s most important social assistance program. In 2001, that program covered 11.707 million urban citizens and 3.046 million rural citizens. Those numbers went up to 22.768 million urban citizens and 53.057 million rural citizens in 2011, meaning that basically everybody who required insurance had been insured. Urbanization Rates Continue Rising and Urban and Rural Grassroots Community Construction Greatly Promoted With marketization comes urbanization. In 1977, China’s urban population accounted for 17.52 percent of the total population, up to 20.16 percent in 1981, for an annual average growth of 0.66 percent over those four years. In 1991 the proportion grew to 26.94 percent, for an average annual growth of 0.68 percent over the decade. In 2001 the proportion grew to 37.66 percent, an average annual growth of 1.07 percent over the decade. In 2011, the proportion of urban citizens grew to 51.27 percent, for an average annual growth of 1.36 percent over the decade. As the nation has become increasingly urbanized and industrialized, China’s urban and rural communities have grown and changed greately. In the countryside, the number of autonomous administrative unit—the fundamental unit of which being the administrative village—diminished as they were either dissolved or merged. Ministry of Civil Affairs (MCA) data indicate that in 2011 there were 700,000 administrative villages and 3.164 million village cadres in China; those figures dropped to 590,000 administrative villages (for an average annual reduction of 6000) and 2.319 million village cadres by 2011. Grassroots communities in urban areas, however, grew continuously. In 2003, there were 77,000 urban community resident committees in China with a total of 397,000 committee members. In 2011, there were 89,480 urban resident committees with a total membership of 454,000. Urban grassroots community work was thus strengthened. 1.6

Reforms and Innovation to Social Management were Intensely Promoted and Social Organizations Grew Rapidly Reforms and innovations to social management have been greatly deepened these past ten years, particularly in the past five years. At the same time that party leadership has been strengthened and improved and government responsibilities have been strengthened, promotion of social coordination and public participation has become an important theme. At the level of reforms to social management institutions, while we further improve the autonomy 1.7

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of grassroots communities, we must also gradually reform and improve such relevant management institutions as management of household registrations, floating population management, social organization management, emergency management, etc. The rapid growth of social organizations is an important symbol for the great promotion of reforms and innovations to social management. MCA data indicate that from 1997 to 2001, the number of social organizations (social groups, private non-governmental organizations, and foundations) registered with Civil Affairs departments continuously diminished; but that said trend was reversed in 2002, when the number of social organizations in the nation hit 133,000, a 3.1 percent growth over the previous year. As of 2011, there were 462,000 social organizations registered with Civil Affairs departments, a 2.5fold growth over 2002. In addition, there were also 159,000 urban community volunteer service organizations. These are all important organizational foundations for social coordination and public participation. It is noteworthy that the growth of the Internet, particularly the mobile Internet, has provided a technological means and platform for broader social participation. Statistics from the China Internet Network Information Center (CNNIC) indicate that as of the end of December, 2011, there were 513 million Internet users in China. The impact of the use of the Internet for obtaining information and participating in public affairs and social affairs is growing daily. In summary, a new social management structure composed of Party leadership, government responsibility, social coordination, public participation, and safeguards of rule-of-law is now forming. 2

The Overall State of Chinese Social Development in 2012

In 2012, the state of Chinese social development was stable, and people’s lives continued to improve. There were no labor shortages due to dropping economic growth rates, and the trend of urban and rural disparities was ­beginning to come under control. The magnitude of public investments into social industries, particularly education and healthcare, was amplified, and the social security system was further perfected. Reforms and innovations to social management were further deepened. The National Economy is Steadily Growing; Price Level Controls are Good Owing on the one hand to the sustained influence of the global financial crisis of 2009 and on the other hand to the promotion of the transformation of the economic growth models and economic restructuring, China’s e­ conomic 2.1

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growth rates in 2012 will experience a marked drop compared to previous years. Data from relevant departments indicate that the gross domestic product (GDP) over quarters one to three was 35.348 trillion yuan, a year-onyear growth of 7.7 percent. Of that growth, primary industries experienced a year-on-year growth of 4.2 percent, secondary industries 8.1 percent, and tertiary industries 7.9 percent. As compared to the rest of the world, these growth rates are still relatively fast. GDP growth in the first quarter of 2012 was 1.5 percent faster than in the fourth quarter of 2011. Second quarter 2012 growth was 2.0 percent faster than first quarter growth, and third quarter growth was 2.2 percent faster than second quarter growth. The overall economic growth situation in 2012 is stable, and it is predicted that by year’s end total GDP growth will be approximately 8 percent. Agricultural production is in good shape. Chinese summer grain production in 2012 totaled 129.95 million tonnes (129.95 billion kilograms), a 2.8 percent growth over the 2011 total of 3.65 million tonnes (3.55 billion kilograms), breaking the previous record set in 1997. There are about 11 million more mu of land planted with autumn grains than in 2011. Owing to good rainfall and climate conditions in the North, autumn grain production will be considerable, and a nine-year consecutive growth in total annual grain production will be realized. Development imbalances among different regions are being further reversed. Total national fixed asset investments (not including farmers) was 29.2542 trillion yuan from January to October, a year-on-year nominal growth of 20.7 percent. Investments in the East were 13.7801 trillion, a year-on-year growth of 18.2 percent, 8.1645 trillion in the Center, a growth of 26 percent, and 7.0439 trillion in the West, a growth of 24.2 percent. Investment growth in the Center and West remains faster than in the East. In addition to increased State investments into the development of the Center and West, private investments were also a major component of total investment growth in those two regions. From January to October, national private fixed asset investments totaled 18.0997 trillion yuan, a year-on-year nominal increase of 25.2 percent, remaining faster than overall fixed asset investment growth. Private fixed asset investments in the East totaled 8.9336 trillion yuan, a year-on-year increase of 21.8 percent; 5.5186 trillion in the Center, a year-on-year increase of 28.1 percent; and 3.6475 trillion in the West, a year-on-year increase of 29.5 percent. Price levels are relatively stable, and on the whole are exhibiting a downward trend, which has prevented a repeat of the 2011 situation in which economic growth slowed and prices skyrocketed. January to September household consumption and price coefficient data published by the National Bureau of Statistics indicate that CPI in January remained 4.5 percent; that it fell relatively stably after February; and that by September it had fallen all the way to 1.9 percent.

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State fiscal revenues continued to grow, but the magnitude of growth fell due to falling rates of economic growth. Ministry of Finance (MoF) data indicate that nationwide fiscal revenues over the first three quarters of 2012 totaled 9.0588 trillion yuan, a year-on-year growth of 892.5 billion yuan, or 10.9 percent, 18.6 percentage points fewer than the year-on-year growth rate of the previous year. Employment is Stable, and There are No Shortages of Employment Among Rural Laborer or University Student Populations In 2012, the state implemented more proactive employment policies, and the overall national employment situation was stable. There was no trend of falling employment accompanied by drops to economic growth rates. Statistics from the Ministry of Human Resources and Social Security (MOHRSS) indicate that from January to September, 102.4 million laborers were added to the national urban employment pool, and 4.32 million unemployed urban laborers were re-employed. Also, 1.35 million people with employment difficulties found employment. The registered urban unemployment rate remained stable around 4.1 percent for all three quarters. Most employment growth was realized in China’s Center and West. From January to August, there was a year-on-year drop to the magnitude of employment growth in the 11 provinces and direct-controlled municipalities of the East; but there was year-on-year growth to the magnitude of employment growth in the Center and West, seven percent in the Center and 14 percent in the West. The rural laborer employment situation is relatively good despite a drop in the economic growth rate. However, there has yet to be a mass return of rural laborers to their homes. A study conducted by MOHRSS into the labor markets of over 100 cities indicates that increasing numbers of migrant laborers were seeking employment over the first three quarters of 2012. That is primarily the result of rapid growth to investments in the Center and West, which are absorbing large amounts of migrant rural labor. University graduates are still experiencing difficulty finding employment, but public opinion reactions have been mitigated. There have also been changes to the mechanisms by which university graduates find employment; many university graduates enter the labor market to seek employment upon graduation. For example, the MOHRSS study indicates that there was a relatively large year-on-year increase of university graduates seeking employment on the labor market in the third quarter of 2012. This year’s graduates comprised 51.4 percent of the “new generation of unemployed youths” in the third quarter of 2012, as compared to 47 percent in the third quarter of 2011. There was a year-on-year growth of 20.1 percent of the overall number of unemployed youths. 2.2

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The employment structure has continued to be adjusted. The manufacturing industry’s demand for labor is decreasing, but labor demand in both the high-technology and service industries is increasing. The results of a MOHRSS month-by-month investigation into the labor usage situation of over 11,000 enterprises indicate that from the end of last year to the end of July, the manufacturing industry eliminated 1.35 percent of its employment positions, but the information transmission, computer services, and software industries increased employment positions by 4.65 percent. Employment in the lodging and food / beverage industries increased 3 percent, and resident services and other service industry employment increased 1.48 percent. Urban and Rural Resident Incomes and Consumption Levels Continue to Rise and Standards of Living Continue to Improve In 2012, urban and rural resident income levels continued to rise, but changes to the magnitude of increase to urban income levels and rural income levels were different. Data from relevant departments indicate that over the past three quarters, resident per capita cash income experienced real growth of 12.3 percent, a year-on-year decrease of 1.3 percentage points. Over the same period, however, urban income levels experienced real growth of 9.8 percent, a year-on-year increase of two percentage points. It is predicted that rural resident per capita net incomes will be slightly less in 2012 than in 2011, but urban resident per capita disposable real income growth will be higher than in 2011, up to about 10 percent. It is particularly noteworthy that by the end of 2012, the magnitude of rural resident per capita income growth will have for three consecutive years exceeded the magnitude of per capita GDP growth and the magnitude of urban per capita income growth. The state is continuing to increase the amplitude of adjustments to income distribution. As of the end of September, 18 provinces in China had adjusted minimum wage standards, for an average increase of 19.4 percent. At the same time, a large number of employers which began to voluntarily increase wages, owing to improvements to supply and demand on labor markets. These factors have driven accelerated growth in per capita urban disposable income. Urban and rural consumption levels are continuing to increase. Data from the National Bureau of Statistics indicate that in the first three quarters of 2012, nationwide retail consumption sales totaled 14.9422 trillion yuan, a yearon-year nominal growth of 14.1 percent; excluding price factors, that means a real growth of 11.6 percent, a slight year-on-year real growth over the same period in 2011. Urban retail consumption totaled 12.9332 trillion yuan, a yearon-year increase of 14.0 percent, and rural retail consumption totaled 2.0090 trillion yuan, a year-on-year increase of 14.4 percent. Retail sales of office supplies, furniture, telecommunications equipment, construction materials, and 2.3

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home decoration materials experienced a year-on-year growth of nearly or in excess of 20 percent; that indicates increasing standards of life for both urban and rural citizens. The Social Security System was Further Improved, and the Work of Providing Social Security to Rural Laborers was Further Advanced In 2012, the Chinese social security system was further improved. The twin objectives of complete coverage of the new rural pension insurance and urban resident social pension insurance institutions were basically achieved. Data from MOHRSS indicate that as of the end of September, all county-level administrative regions in the nation had begun work in new rural and urban resident social pension insurance. There were 449 million citizens enrolled in both urban and rural resident insurance plan, and 124 million urban and rural senior citizens were receiving monthly pension payments. The work of expanding coverage of and increasing payments into the social security system has been further strengthened. As of the end of September, there were 298.75 million citizens enrolled in urban worker basic pension insurance, an increase of 14.84 million over year-end 2011. There were 529.06 million citizens enrolled in basic health insurance, an increase of 55.63 million over year-end 2011. There were 149.16 million citizens enrolled in unemployment insurance, an increase of 5.99 million over year-end 2011. There were 185.67 million citizens enrolled in worker injury insurance, an increase of 8.71 million over year-end 2011, and there were 150.74 million citizens enrolled in maternity insurance, an increase of 11.82 million over year-end 2011. From January to September, the total revenue into the five social insurance funds totaled 2.0407 trillion yuan, a year-on-year increase of 24.6 percent. Total expenditures from those funds totaled 1.58898 trillion yuan, a year-on-year increase of 23.2 percent. Progress has been smooth in the work of increasing rural laborer participation in social insurance. As of the end of September, there were 44.53 million rural citizens enrolled in urban worker basic pension insurance, an increase of 3.13 million over year-end 2011. There were 49.22 million rural laborers enrolled in basic medical insurance, an increase of 2.81 million over year-end 2011. There were 26.09 million rural laborers enrolled in unemployment insurance, an increase of 2.17 million over year-end 2011, and there were 69.95 million rural laborers enrolled in workplace injury insurance, an increase of 1.67 million over year-end 2011. The magnitude of growth to the number of rural laborers enrolled in basic medical insurance was the greatest of all four categories. The work of guaranteed housing for urban residents has continued to be pushed forward vigorously. Data from the Ministry of Housing and Urban2.4

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Rural Development (MOHURD) indicate that from January to October 2012, work was begun on 7.22 million housing units in the indemnificatory (guaranteed) and comfortable housing project, and 5.05 million units are basically complete. In addition, the state has seen definite results in its adjustments of real estate prices, and housing price inflation has come under control. The Amplitude of State Investments in the People’s Livelihood Continued to Increase, and Public Investments in Education Increased Markedly The preference shown by state public fiscal expenditures toward construction of the people’s livelihood is an important symbol for the transformation of public fiscal policy. In 2012, construction of the people’s livelihood remained a focus of state fiscal expenditures. Ministry of Finance data indicate that in the first three quarters of this year, nationwide fiscal expenditures totaled 8.4119 trillion yuan, a year-on-year growth of 1.4539 trillion yuan, or 21.1 percent. Of that total, education expenditures accounted for 1.2588 trillion yuan, a year-on-year increase of 32.6 percent. Medical and health expenditures totaled 493.5 billion yuan, a year-on-year increase of 24.4 percent. Social security and employment expenditures totaled 943.2 billion yuan, a year-on-year increase of 17.8 percent, and guaranteed housing expenditures totaled 294.4 billion yuan, a year-on-year increase of 28.8 percent (198.2 billion yuan of which went to the indemnificatory and comfortable housing project, a year-on-year increase of 34.1 percent). The “State Planning Compendium for Mid and Long Term Education Reforms and Development (2010–2020)” [国家中长期教育改革和发展 规划纲要 (2010–2020年] issued in 2010 demands that fiscal expenditures in education come to account for four percent of GDP by 2012. To meet that goal, state budget preparers planned for annual fiscal expenditures to education of 2.1984 trillion yuan in 2012, a real increase of 33.3 percent over 2011. The focus of that thrust was to promote a series of policies and measures for the development of pre-school education, to support the Center and West, and troubled areas of the East with subsidies of 15 billion yuan, an increase of 48.1 percent. It was also intended to set aside 105.754 billion yuan to improve the funding guarantee mechanisms for rural compulsory education, to promote reforms to weak schools in the rural compulsory education system, and to promote balanced development of compulsory education. It set aside scholarships and financial aid of 16 billion yuan to implement the rural compulsory education student nutrition improvement plan in focused areas which are particularly troubled areas, and it put up 20.697 billion yuan to shore up the policy system for assisting students from economically troubled households. 2.5

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Social Management System Reforms Continued, and the Resolution of Problems in the Household Registration System and the Development of Social Organizations were Accelerated In 2012, the work of reforming and innovating social management was further strengthened. Reforms and innovation to floating population management and social organization management were two focuses of that work. On February 23, the State Council General Office issued “The Notice Regarding Actively and Safely Promoting Reforms to the Household Registration System” [关于积极稳妥推进户籍管理制度改革的通知] calling for continued exploration into the establishment of an urban-rural integrated household registration [hukou] system. It also called for gradual implementation of the temporary residence permit system and one-time focused re-ordering of relevant policies which create inconveniences for temporary residents in their study, work, and lives. It made revisions to all those policies which should be revised and abolished all those which should be abolished. The Notice also demanded that all policies governing the moving of household registration be classified and that all those living in county-level cities with legal jobs and residences be allowed to change to a local registration. It demanded that those living in cities divided into districts who legally work and reside there for three years or more be allowed to change to a local registration and that the population size in direct-controlled cities, sub-provincial cities, and other large cities continue to be controlled. It also demanded that future policies and measures related to employment, compulsory education, technological training, etc., not be linked to the nature of one’s household registration. The Notice further required that those rural citizens who have already changed to an urban registration enjoy the same rights as local urban residents and that there be targeted, complete relevant institutions governing rural laborers who do not possess the criteria for changing their registration. It also demanded that great efforts be made to resolve rural laborers’ problems in the areas of labor compensation, children’s education, professional training, public health, rental and purchase of housing, social security, professional security and health, and so forth. At the level of social organization management, the focus was on resolving the difficulty of registration. Relevant State departments have begun revising the reasoning behind management regulations governing relevant social groups, private non-governmental organizations, and funds. They have also begun direct registration pilot work on the basis of the “two integrations” principle, i.e. implementing integrated direct registration based on the business manager for those social organizations classified business and economic, public charity, public welfare, and public service, and which are related to civil affairs. For those social organizations not engaging in civil affairs business and 2.6

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those the business functions of which transcend many departments, direct registration may be implemented once the local civil affairs department solicits opinions from relevant departments and once those opinions are unanimous. As of September, there were over 40 national social organizations directly registered at the Ministry of Civil Affairs. 3

Problems and Challenges Facing Chinese Social Development in 2012

In 2012, instability and uncertainties in the international economic and social environment continued to emerge, and China was still facing many problems and challenges in employment, labor relations, income distribution, social management, etc. The Task of Economic Restructuring is Formidable, and Consumption-Driven Economic Growth Still Needs to be Strengthened Since 2009, the international economic environment has worsened, and Chinese exports have been restricted. Export growth has exerted a negative contribution to economic growth, and domestic investment and consumption have become the primary drivers of economic growth. At the same time, nominal growth to fixed asset investments from January to October 2012 was slower than nominal fixed asset investment growth in 2011. Under the pressure of the two major tasks of transforming the economic growth model and restructuring the economy, there are increasing expectations at all levels of society that consumption growth will come to drive economic growth. However, a look at the third quarter of 2012 reveals that the magnitude of year-on-year real growth of social consumption goods is extremely limited (only 0.3 percent), and the ability of consumption to drive economic growth still needs to be strengthened. 3.1

Problems of Income Inequality Remain Severe, and There is a Risk of Rebounding of the Disparity Between Urban and Rural Incomes Income distribution has for many years been a hot button topic of widespread social interest. Relevant investigations demonstrate that the overall degree of inequality of Chinese income distribution is still increasing. In 2011, after the State increased the rural poverty level to 2300 yuan, it was estimated that the rural poor population exceeded 100 million. The reasons behind their poverty are extremely complex, and the task of rural poverty alleviation remains extremely arduous. 3.2

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In 2011, the combined urban and rural resident household per capita income rate was 3.13 times higher that of rural resident household, a decrease from the 3.23 ratio of 2010. There was a marked increase to the magnitude of year-on-year real growth of urban household per capita income over the period January to September 2012, but the year-on-year real growth of rural household per capita cash income fell over the same period in 2011. This trend indicates that there is a risk that the disparity between incomes in rural and urban areas will rebound, and is worthy of attention. Problems Still Exist in Employment Structure, and Tense Labor Relations Remain a Prominent Issue Structural problems in employment are focused in the the insufficient supply of mid to high-level technicians to meet the labor market’s demand, despite the fact that there is still surplus supply of ordinary labor. The results of an investigation by MOHRSS into nationwide labor markets indicate that the demand for mid to high-level technicians was much greater in the third quarter of 2012 than in the third quarter of 2011. At the supply and demand level, the proportion of vacant jobs for technicians of all skill levels to the number of people seeking employment is greater than one. The vacancy-to-employment-seeker proportions are highest for high-level technicians, 2.86; technicians, 2.38; and high-level engineers, 2.37. If this problem is not properly resolved, it will exert an adverse influence on China’s transformation of its economic growth mode and economic restructuring. The problem of tense labor relations continues to be escalate, but the magnitude of escalation has decreased. From January to September 2012, there were a total of 479,000 labor disputes filed at labor dispute settlement bodies of all levels nationwide, a year-on-year increase of 11.9 percent. Those disputes affected 660,000 laborers, a year-on-year increase of 19.4 percent. Classic case experience dictates that the majority of labor disputes arise from labor-­intensive enterprises and small and micro enterprises, but labor disputes are also common in some large enterprises, particularly foreign-funded enterprises. In some cases labor disputes incite such mass incidents as strikes, parades, etc. The primary reasons behind labor disputes are direct conflicts of interest and non-standardized management. 3.3

Social Conflicts Remain Frequent, and There are New Characteristics for Mass Incidents Chinese society is currently in a stage of frequent conflicts; its social conflicts are both diverse and complex. In recent years, there have been tens of thousands, and sometimes hundreds of thousands, of mass incidents incited by 3.4

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various social conflicts every year. The situation in 2012 does not inspire optimism. Data from the All-China Federation of Trade Unions (ACFTU) indicate that from January to August 2012, there were over 120 mass labor stoppage incidents of over 100 people incited by wage disputes nationwide in 19 different provinces; and there were over 270 such incidents involving 30 or more people. The primary reasons behind mass incidents are conflicts arising from land appropriations and forced evictions, conflicts surrounding environmental pollution, and labor conflicts. Analysis of the reasons behind all classes of mass incidents indicates that about half are caused by land appropriations and forced evictions, with environmental pollution and labor conflicts accounting for about 30 percent, and other social conflicts accounting for about 20 percent. 4

Outlook and Policy Suggestions on China’s Social Development in 2013

The Party’s 18th National People’s Congress, convened in November 2012, declared that China has already entered a decisive stage for the construction of a moderately prosperous [xiaokang] society. The 18th National People’s Congress Report established a blueprint for China’s future development. In 2013, the development of China’s economy and society will advance toward a new stage per the blueprint drafted by the 18th Congress. Accelerate Transformation of the Mode of Economic Development and Maintain Stable and Fast Economic Growth Three years of experience beginning in 2009 indicate that while there are many unstable and uncertain factors in the international economic environment, a growth model that relies primarily on investments and exports is difficult to sustain. A weakening of the driving effect of goods and services exports on economic growth may be a foregone conclusion. China is still a developing nation, and so maintaining stable, fast economic growth remains a central task of the economic work in this stage and for a time to come. In summary, we must maintain annual GDP growth of at least 7 to 8 percent for a few years to come. From the standpoint of employment, as the population age structure changes and fewer laborers are added to the labor pool, the pressure on the economy to maintain 10 percent growth will be reduced. This has provided beneficial conditions for the acceleration of transformation to China’s model of economic growth and economic restructuring. 4.1

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First, we must gain a foothold in expanding domestic demand and lay the roots of economic growth in domestic demand, particularly in resident consumption demand. We must also form a new pattern in which consumption, investments, and exports harmoniously drive economic growth. Of course, such transformations will necessarily require a long, arduous period of time. Second, we must ameliorate the factor input structure and change the previous model, which relied upon demographic dividends, low land costs, high resource costs, and high environmental costs, into a new model typified by the so-called “investment cost lowlands” effect. We must change from an extensive growth model to an intensive growth model via industry restructuring and upgrading, accelerating human resource formation, technological advancements, and the spillover effects on economic growth of institutionalized reforms. Third, we must actively adjust the energy structure and make breakthroughs in adjusting the energy structure via increasing energy efficiency and striving to develop new energy sources and clean energy. In summary, the fall of the economic growth rate to eight percent or less in 2012 represents both a challenge and an opportunity. We must seize the opportunities, turn the challenges into opportunities, and cause them to become a force driving China’s economy to advance into a new stage. We must use the Scientific Development Perspective as a guide to accelerate major transformation of the economy. Accelerate Increases to Labor Quality and Promote Technicalization of the Labor Pool Increasing the quality of the labor pool is both a prerequisite for resolving current problems within the labor and employment structure and a necessity for responding to transformations to the mode of economic growth. China’s current labor structure is no longer compatible with the demands of modernized development. To accelerate the improvement of labor quality, first, we must make great efforts to reform institutions and systems for education and labor training, thereby causing them to look more to the markets and to the future. Particularly within the current labor training system, there are such problems as insufficient supply, low efficiency, unreasonable structure, poor management mechanisms, etc. The prevailing direction of ongoing reforms is to accelerate the marketization of labor training and to change the current state of labor training, guided by the government, into one guided by markets whereby the government purchases services. Second, we must continue to accelerate public investments in labor training. The current proportion of fiscal expenditures going to employment as compared to total fiscal expenditures remains too low, far lower than the one percent level maintained universally by developed nations. Also, the 4.2

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allocation of public financial resources for employment must be shifted as quickly as possible from the current model in which training providers are the primary recipients of funds into a model in which the trainees are the primary recipients. While ensuring that labor training becomes marketized, we must also ensure that laborers are able to receive training services. Of course, common laborers in China still vastly outstrip demand. In order to promote their employment, we must continue to implement active employment policies, increase employment through many channels, support stable employment positions in enterprises, expand employment opportunities, aptly perform the work of finding employment for university students, and strive to support the transformation of rural labor into employment and entrepreneurship. Accelerate the Pace of Adjustments to Income and Profit Distribution Structures and Truly Reverse the Major Trend of Income Disparities from the Roots Up In order to ensure the accomplishment of the goal of completely building a moderately prosperous (xiaokang) society by 2020, the 18th National People’s Congress Report proposed a goal of “doubling both domestic GDP and urban and rural resident per capita incomes over 2010 levels.” To increase resident incomes by all conceivable means, the report also reaffirmed the requirement of “two in-sync’s”: i.e. that resident incomes should grow in sync with the economy, and labor compensations should grow in sync with labor productivity. This is intended to realize the vision of the results of development being shared by the people as well as social fairness. In order to ensure that the fundamental thinking of enriching the people be the priority of development and to come to view primary distribution and redistribution as an organic whole, not only must we start from such overall levels and reasonable structures as redistribution links, social security, public services, etc., but we must also expand reforms to the compensation system to primary distribution links, making an integrated system of the three components of “wages, insurance, and benefits.” Not only must we adjust the distribution relationship between the government, enterprises, and individuals and increase the amplitude of policies which divert more domestic income toward individuals, but we must also adjust the proportional relationship between capital factor gains and labor factor gains and improve the income distribution institution based on factor allocations. To this end, we must continue deepening reforms to wage institutions, overcome obstacles, and issue “Wage Regulations” suitable to the demands of “two in-sync’s” as fast as possible. We must continue accelerating the pace of urbanization and deepen reforms to the household registration system and related institutions. We must 4.3

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promote the transference of rural population into cities and further reduce the proportion of the rural population to the overall population. These are important measures necessary to resolve the disparities between urban and rural measures. At the same time, we must accelerate the pace of rural economic development and accelerate reforms to such resource allocation institutions as land distribution. We must ensure that farmers are able to obtain the land necessary to increase their incomes and increase the amplitude of rural poverty alleviation. We must gradually increase the level of rural minimum life guarantees and promote the equality rights of urban and rural citizens to benefit from public fiscal transference income. Further Improve the Social Security System and Increase the Level of Guarantees At present, the basic framework for the Chinese social security system has been initially established. Important goals for further improving the Chinese social security system include: expanding the coverage of the social security system, increasing the level of social security guarantees, increasing the comprehensive degree of social security institutions currently applicable to different social groups, and promoting fairness in the social security system. First, we must further increase the level of guarantees of the New Rural Cooperative Medical Scheme (NRCMS). The Scheme is currently able to help rural citizens respond to their medical needs to a certain degree, but if they ever contract a major illness, there is still nothing they can do. Second, we must further increase the coverage of the NRCMS in order to respond to the aging of the rural population and the elderly care risks posed by labor transference. At present, the NRCMS has already basically achieved complete coverage in its old-age pension insurance, but the degree of its population coverage remains too low. Third, we must further strengthen the work of rural worker’s insurance. As of September 2012, the proportion of rural laborers enrolled in urban worker’s basic pension insurance to all rural laborers (calculated based on an estimated figure of 250 million rural migrant laborers nationwide) was 17.8 percent, 19.7 percent for basic medical insurance, 10.4 percent for unemployment insurance, and 28.0 percent for workers injury insurance. We have great room for improvement. 4.4

Increase the Amplitude of Environmental Protection and Promote the Construction of Ecological Civilization In recent years, we have experienced a great number of calamitous environmental incidents. Not only have they imposed restrictions on the growth of the domestic economy, but they have also exerted an enormous negative influence on social development and social harmony and stability. All levels of society 4.5

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now place a great degree of concern on environmental pollution concerns, as well as on the public problems presented by the high frequency of mass incidents caused thereby. There is no time to waste in the resolution of environmental pollution problems. The Party’s 18th People’s National Congress proposed strengthening the demands for ecological civilization construction and placed ecological civilization construction at the same level as economic construction, political construction, cultural construction, and social construction. It also made ecological civilization construction an important component of the overall development deployment for socialism with Chinese characteristics and demanded that ecological civilization construction be fully implemented in the arenas of economic construction, political construction, cultural construction, and social construction. These measures are all completely necessary and extremely timely. The fundamental measures necessary to promote ecological civilization construction are accelerating establishment of environmental protection institutions and accelerating transformation of the mode of economic growth. We must also accelerate reductions to the energy and resource consumption required for economic growth, strengthen the concept of ecological civilization in production and in life, strengthen the government’s environmental oversight, and mobilize the whole of society to pay more attention to environmental problems. Continue Deepening Institutional Reforms and Promote Social Fairness and Justice The 18th National People’s Congress Report declared that fairness and justice are inherent requirements for socialism with Chinese characteristics and that we should urgently establish institutions that have a major effect on guaranteeing social fairness and justice. It further demanded that we gradually establish a social fairness guarantee system centered in fairness of rights, opportunities, and rules and that we strive to build a fair social environment. It also demanded that we guarantee the rights of equal participation and equal development and that we persist in causing the people to be able to enjoy the fruits of development and to grow rich together. This is an especially arduous task which requires the following: enormous resolve, great efforts in implementing the Scientific Development Perspective, ceaseless elimination of obstacles; the establishment of new economic and social development concepts and strategies; and deepening of reforms to economic institutions, income distribution institutions, and social institutions. The most important component is that we ensure equal participation and development of the people. Only by so doing can we better promote social fairness and justice, promote social harmony, and achieve the goal of complete construction of a moderately prosperous (xiaokang) society by 2020. 4.6

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References National Bureau of Statistics, “2011 nian woguo nongmingong diaocha jiance baogao 《2011年我国农民工调查监测报告》[2011 Investigative Report on Rural Laborers in China],” accessed from the NBS website on April 27, 2012. National Bureau of Statistics, Zhongguo tongji Nianjian《中国统计年鉴》[China Statistical Yearbook]. China Statistical Press, many years. Ministry of Human Resources and Social Security, “2012 nian disan jidu xinwen fabuhui 《2012年第三季度新闻发布会》[Third Quarter 2012 Press Conference],” accessed from http://www.china.com.cn on October 25, 2012. Ministry of Human Resources and Social Security, “2012 nian disan jidu bufen chengshi gonggong jiuye fuwu jigou shichang gongqiu zhuangkuang fenxi《2012 年第三 季度部分城市公共就业服务机构市场供求状况分析》[Analysis of the Market Supply and Demand Situation of Public Employment Service Organizations in Some Cities in the Third Quarter of 2012],” accessed from the MOHRSS website.

Chapter 2

Chinese Urban-Rural Income and Consumption in 2012 Lü Qingzhe* Abstract In this chapter, we analyze Chinese urban and rural income and consumption in 2012 and proffer our judgments regarding the development trends of urban and rural household consumption in China in 2013. In 2012, Chinese urban and rural resident incomes continued growing. At the same time, resident living standards were further increased, and the consumption structure was ameliorated. Furthermore, quality of life was greatly improved. However, there have also been some problems, such as relatively low proportions of laborer compensations to GDP influencing consumer spending; the large negative impact of high real estate prices on normal consumer spending, backwardness of the social security system’s development restricting the release of spending power, and others. We estimate that in 2013, Chinese economic growth will remain steady around 7.5 percent and urban and rural resident incomes will continue to grow rapidly.

Keywords resident income – consumer spending – quality of life

1

Urban and Rural Resident Incomes Continue to Grow

1.1 Urban and Rural Resident Incomes Continue to Grow Urban and rural resident incomes have maintained growth as the Chinese economy has rapidly grown. In 2011, the national average for per capita urban resident disposable income was 21,809.8 yuan, an increase of 15,529.8 yuan

* Dr. Lü Qingzhe, director of the National Bureau of Statistics Scientific Research Institute Social Statistics Bureau, high-level statistician and Ph.D.

© koninklijke brill nv, leiden, ���5 | doi ��.��63/9789004276536_002

24 Table 2.1

Lü Urban and rural resident income growth

Year

Urban Resident Family Per Capita Disposable Income Absolute Value Index (yuan) (100 in 2000)

Rural Resident Family Per Capita Average Net Income Absolute Value Index (yuan) (100 in 2000)

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

 6280.0  6859.6  7702.8  8472.2  9421.6 10493.0 11759.5 13785.8 15780.8 17174.7 19109.4 21809.8

2253.4 2366.4 2475.6 2622.2 2936.4 3254.9 3587.0 4140.4 4760.6 5153.2 5919.0 6977.3

100.0 108.5 123.0 134.1 144.4 158.3 174.8 196.1 212.6 233.4 251.6 272.7

100.0 104.2 109.2 113.9 121.6 129.2 138.7 151.9 164.1 178.0 197.4 219.9

over the 2000 average of 6280 yuan. Excluding price factors, that’s a 2.73-fold growth, or an annual average growth of 9.5 percent. The 2011 national average rural resident family per capita net income was 6977.3 yuan, an increase of 4,723.9 yuan over the 2000 average of 2,253.4 yuan. Excluding price factors, that’s a 2.2-fold growth, or an average annual growth of 7.4 percent (see Table 2.1). In the first three quarters of 2012, Chinese urban resident per capita disposable income was 18,427 yuan, a real year-on-year increase of 9.8 percent. Rural resident per capita cash income was 6778 yuan, a real year-on-year increase of 12.3 percent. 1.2 Changes to the Structure of Urban and Rural Resident Incomes A look at urban resident incomes shows us that proportion of wage incomes, the primary source of urban resident incomes, to total disposable income has fallen, from 71.2 percent in 2000 to 64.3 percent in 2011. However, the proportion of net business income to total disposable income grew from 3.9 percent in 2000 to 9.2 percent in 2011, property income from 2.0 percent in 2000 to 2.7 percent in 2011, and transfer income from 22.9 percent in 2000 to 23.8 percent in 2011 (see Table 2.2).

Chinese Urban-rural Income And Consumption In 2012

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Table 2.2 Changes to the structure of urban resident income Unit: % Nature of Income

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Total Income 100 100 100 100 100 100 100 100 100 100 100 100 Wage Income  71.2 69.9 70.2 70.7 70.6 68.9 68.9 68.7 66.2 65.7 65.2 64.3 Net Business   3.9  4.0  4.1  4.5  4.9  6.0  6.4  6.3  8.5  8.1  8.1  9.2 Income Property   2.0  1.9  1.2  1.5  1.6  1.7  1.9  2.3  2.3  2.3  2.5  2.7 Income Transfer  22.9 23.6 24.5 23.3 22.9 23.4 22.8 22.7 23.0 23.9 24.2 23.8 Income

Table 2.3 Changes to the structure of rural resident incomes Unit: % 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Total Income Wage Income Family Business Income Property Income Transfer Income

100 100 100 100 100 100 100 100 100 100 100 100  31.2 32.6 33.9 35.0 34.0 36.1 38.3 38.6 38.9 40.0 41.1 42.5  63.3 61.7 60.0 58.8 59.5 56.7 53.8 53.0 51.2 49.0 47.9 46.2

  2.0  2.0  2.0  2.5  2.6  2.7  2.8  3.1  3.1  3.2  3.4  3.3   3.5  3.7  4.0  3.7  3.9  4.5  5.0  5.4  6.8  7.7  7.7  8.1

A look at the structure of rural resident income shows us that the proportion of family business income, the primary source of rural resident income, to overall rural income has fallen, from 63.3 percent in 2000 to 46.2 percent in 2011. The proportion of wage income to total rural income grew from 31.2 percent in 2000 to 42.5 percent in 2011, property income from 2.0 percent in 2000 to 3.3 percent in 2011, and transfer income from 3.5 percent in 2000 to 8.1 percent in 2011 (see Table 2.3).

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Income Disparities between Provinces and between Urban and Rural Areas Remain Large A look at per capita resident incomes in every province reveals that the nation’s highest income levels are in Shanghai, with urban resident per capita disposable income of 36,230 yuan and rural resident per capita net income of 16,054 yuan. The province with the lowest income levels was Gansu, with urban resident per capita disposable income of 14,989 yuan and rural resident per capita net income of 3909 yuan. Shanghai’s urban resident per capita disposable income level was 2.42 times that of Gansu, and Shanghai’s rural resident per capita net income was 4.11 times that of Gansu (see Table 2.4). The province with the greatest disparity between urban and rural incomes in 2011 was Guizhou, where urban resident per capita disposable income was 3.98 times higher than rural resident per capita net income. The province with the least disparity was Heilongjiang, where urban resident per capita disposable income was 2.068 times rural resident per capita net income (see Table 2.4). 1.3

2

Urban and Rural Consumer Spending Levels Further Increased

2.1 Urban and Rural Consumer Spending Levels Continue to Rise In 2011, per capita urban resident cash consumption expenditures were 15,160.9 yuan, an increase of 10,162.9 yuan over the 2000 average of 4998.0 yuan. Excluding price factors, that’s an annual average growth of 8.2 percent. Rural resident household per capita consumption expenditures were 5221.1 yuan in 2011, an increase of 3551 yuan over the 2000 average of 1670.1 yuan. That’s an average annual growth of 7.9 percent. In the first three quarters of 2012, urban resident per capita cash consumption expenditures were 12,377 yuan, a year-on-year real growth of 7.5 percent. Rural resident cash consumption expenditures in the first three quarters of 2012 were 3853 yuan, a year-on-year real growth of 12.4 percent. Large Consumption Disparities Exist between Urban and Rural Areas, between Regions, and between Individuals From 2000 to 2011, there were large disparities in consumer spending level disparities between urban and rural areas. Although the gap has shrunken slightly in recent years, the urban-rural consumer spending ratio in 2011 remained 3.3:1 (see Table 2.5). Since Reform and Opening, the proportion of urban consumer spending expenditures to total consumer spending has risen steadily, up to 77.3 percent in 2011, 10.3 percent higher than in 2000. A look at the amount of consumer durables possessed by Chinese households also reveals that rural consumption is lagging behind urban consumption. 2.2

27

Chinese Urban-rural Income And Consumption In 2012 Table 2.4 Urban-rural income comparisons by province Region

Urban Resident Family Per Capita Disposable Income Total (yuan) Rank

Rural Resident Family Per Capita Net Income Total (yuan) Rank

Urban-rural Income Disparity

Beijing Tianjin Hebei Shanxi Inner Mongolia Liaoning Jilin Heilongjiang Shanghai Jiangsu Zhejiang Anhui Fujian Jiangxi Shandong Hebei Hubei Hunan Guangdong Guangxi Hainan Chongqing Sichuan Guizhou Yunnan Tibet Shaanxi Gansu Qinghai Ningxia Xinjiang

32903 26921 18292 18124 20408 20467 17797 15696 36230 26341 30971 18606 24907 17495 22792 18195 18374 18844 26897 18854 18369 20250 17899 16495 18576 16196 18245 14989 15603 17579 15514

14736 12321  7120  5601  6642  8297  7510  7591 16054 10805 13071  6232  8779  6892  8342  6604  6898  6567  9372  5231  6446  6480  6129  4145  4722  4904  5028  3909  4608  5410  5442

2.23 2.18 2.57 3.24 3.07 2.47 2.37 2.07 2.26 2.44 2.37 2.99 2.84 2.54 2.73 2.76 2.66 2.87 2.87 3.60 2.85 3.12 2.92 3.98 3.93 3.30 3.63 3.83 3.39 3.25 2.85

 2  4 18 21 10  9 23 28  1  6  3 14  7 25  8 20 16 13  5 12 17 11 22 26 15 27 19 31 29 24 30

 2  4 12 22 15  9 11 10  1  5  3 20  7 14  8 16 13 17  6 25 19 18 21 30 28 27 26 31 29 24 23

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In 2011, the ratio of urban resident per capita consumer spending of highincome earners to low-income earners was 3.94:1, and the ratio of rural resident per capita consumer spending of high-income earners to low-income earners was 2.76:1. In 2011, there were 21 provinces with per capita consumption levels below the nationwide average of 12,272 yuan. The per capita consumption level of Shanghai, the region with the highest consumption levels, was 6.5 times that of Tibet, the region with the lowest (see Table 2.6). Table 2.5 Comparisons of consumer spending levels Year

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Absolute Value (yuan)

Overall

Rural

Urban

Urban-rural consumption comparison (rural = 1)

 3632  3887  4144  4475  5032  5596  6299  7310  8430  9283 10522 12272

1860 1969 2062 2103 2319 2657 2950 3347 3901 4163 4700 5633

 6850  7161  7486  8060  8912  9593 10618 12130 13653 14904 16546 18750

3.7 3.6 3.6 3.8 3.8 3.6 3.6 3.6 3.5 3.6 3.5 3.3

Growth Index (previous year=100) Overall

Rural

Urban

108.6 106.1 107.0 107.1 108.1 108.2 109.8 110.9 109.0 110.3 108.2 109.5

104.5 104.5 105.2 100.3 104.2 110.8 108.2 106.9 108.5 107.7 108.0 111.7

107.8 103.9 104.9 107.0 106.9 105.0 108.0 109.7 106.9 109.1 105.9 106.6

Table 2.6 2011 consumption levels by region Region

Beijing Tianjin Hebei Shanxi Inner Mongolia

Absolute Value (yuan) Overall Rural

Urban

Urban-rural Consumption Difference (rural = 1)

27760.0 20624.3  9550.5  9745.6 13264.2

30037.0 23359.7 15330.7 14055.0 18996.3

2.2 2.4 3.1 2.5 3.2

13659.2  9658.4  4892.7  5626.7  5945.3

Chinese Urban-rural Income And Consumption In 2012 Region

Jilin Heilongjiang Shanghai Jiangsu Zhejiang Anhui Fujian Jiangxi Shandong Henan Hubei Hunan Guangdong Guangxi Hainan Chongqing Sichuan Guizhou Yunnan Xizang Shaanxi Gansu Qinghai Ningxia Xinjiang

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Absolute Value (yuan) Overall Rural

Urban

Urban-rural Consumption Difference (rural = 1)

10810.8 10633.7 35438.9 17166.5 21346.3 10054.7 14958.3  9522.5 13565.4  9171.4 10872.8 10546.9 19578.1  9180.6  9237.7 11831.7  9902.6  7388.5  8278.1  4730.2 10053.5  7492.6  8744.3 10491.9  8895.0

14803.8 14346.7 37557.5 21597.7 26856.4 14923.3 19761.6 14028.9 19983.5 15615.5 15935.5 16783.0 25526.8 15681.4 13271.9 17972.6 15687.5 13876.7 14463.6 11393.3 16213.4 13573.8 13348.2 17038.0 14662.9

2.4 2.4 2.1 2.1 2.2 2.8 2.3 2.4 2.8 3.2 2.8 3.0 3.3 3.4 2.6 3.9 2.7 3.5 3.0 4.1 3.5 3.4 2.7 3.6 3.3

 6238.8  5898.5 17757.5 10164.2 12371.1  5356.2  8436.4  5852.9  7062.9  4928.9  5652.6  5606.8  7853.8  4670.8  5203.6  4614.9  5881.6  3986.4  4824.6  2774.7  4697.4  3976.7  4904.7  4709.2  4495.4

Marked Improvements to Urban and Rural Residents’ Quality of Life

Marked Improvements Made to Urban and Rural Consumer Spending Structure Since 2000, urban and rural consumer spending has been upgraded across the board, and the consumption structure has been markedly improved. The proportion of such basic consumption items as food and clothing used to meet basic demands of life to overall consumption has gradually decreased, and the proportion of such developmental or leisure consumption as transportation, 3.1

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communication, entertainment, travel, medical services, and health upkeep to total consumption has gradually increased. In 2011, the urban resident ratio of basic goods consumption to total consumption was 47.4 percent, 2.1 percent lower than in 2000. The ratio of urban developmental and discretionary consumption to total consumption rose from 35.8 percent in 2000 to 39.5 percent in 2011. The rural resident ratio of fundamental goods consumption to total consumption ratio was 54.9 percent in 2011, eight percent lower than in 2000. The ratio of rural developmental and discretionary consumption to total consumption rose from 24.4 percent in 2000 to 26.3 percent in 2011. 3.2 Consumption Upgrades Made Across the Board —— Food consumption is quality-oriented. Urban average food consumption expenditures rose from 1971.3 yuan in 2000 to 5560.3 yuan in 2011, a growth of 9.8 percent. Rural average food consumption expenditures rose from 820.5 yuan in 2000 to 2107.3 in 2011, a growth of 9 percent. As rural and urban resident income levels have increased and life concepts have changed, foods have tended to become more nutritious and more diverse, and there have arisen trends of paying attention to safety and pursuing quality. The food structure is gradually being ameliorated, and foodstuff consumption is trending toward products that are higher in protein, lower in fat, lower in calories, green, and safe. Data indicate that in 2011, rural per capita consumption of poultry and poultry products was 23.3 kilograms, five kilograms higher than in 2000, and rural average consumption of milk and dairy products was 5.2 kilograms, a growth of 4.1 kilograms over 2000. Urban per capita consumption of pork in 2011 was 20.6 kilograms, 3.9 kilograms higher than in 2000, and urban average consumption of fresh milk was 13.7 kilograms, a 3.8 kilogram growth over 2000. —— Clothing consumption is quality-oriented. In 2011, average clothing consumption expenditures were 1674.7 yuan in urban areas, a 3.35-fold growth over 2000, and 341.3 yuan in rural areas, a 3.56-fold growth over 2000. Large increases to resident clothing consumption are the direct result of improved living conditions. Resident clothing consumption, previously practicalityoriented, is now quality-oriented, and residents now place more emphasis on the grade, brand, and degree of exquisiteness of fabrics used in the clothing they purchase. Clothing purchases are becoming increasingly centered around brands, fashion, and individual style. The degree of growth in high-end clothing, shoes, hats, etc., has been large, and the class of clothing consumption has increased markedly. —— Durable consumer goods are being greatly upgraded. Driven by surplus wealth and improvements to individuals’ quality of life, demands for

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self-improvement, and continued accumulation of individual wealth, resident ownership of durable consumer goods has continued to grow. Traditional durable consumer goods have been greatly upgraded, and such durable consumer goods as environmentally friendly refrigerators, inverter air conditioners, plasma flat panel televisions, private cars, and others have quickly entered resident households. There has been a marked acceleration to the upgrading and transformation of durable consumer goods. In 2011, for every 100 urban households, there were 135.2 color televisions, 97.1 washing machines, 97.2 refrigerators, 122.0 air conditioners, 81.9 personal computers, 18.6 private cars, and 205.3 mobile phones. For every 100 rural households in 2011, there were 115.5 color televisions, 62.6 washing machines, 61.5 refrigerators, 60.9 motorcycles, 179.9 mobile phones, 22.6 air conditioners, and 18.0 personal computers. —— Culture, education, and entertainment are becoming more abundant daily. In 2011, per capita urban expenditures on education and entertainment was 1852 yuan, accounting for 12.2 percent of total consumption, a 13.8 percent growth over 2010. Of the vigorous growth in entertainment expenditures, travel abroad has become an important manifestation of residents’ new found enjoyment of life. In 2011, average urban per capita cultural and entertainment service expenditures totaled 652 yuan, a growth of 16.6 percent. Of that amount, 385 yuan went to group travel, a growth of 21.6 percent. Urban resident investments into education have grown greatly, and there was a large magnitude of increase to training fees, kindergarten fees, and adult education fees. In 2011, per capita education expenditures totaled 750 yuan, a growth of 13.4 percent over 2010. Of that total, per capita training expenditures were 189 yuan, a growth of 27.9 percent. Per capita kindergarten expenditures were 85 yuan, a growth of 22.0 percent, and average per capita adult education expenditures were 61 yuan, a growth of 18.3 percent. Per capita rural expenditures in education and entertainment in 2011 were 396 yuan, 30 yuan higher than in 2010, a growth of 8.2 percent. —— Transportation and communications are growing vigorously and rapidly. In 2011, urban per capita transportation and communications expenditures totaled 2150 yuan, a growth of 8.4 percent. Family cars were further popularized, and consumption related to cars grew by a large margin, driving rapid growth to overall transportation consumption figures. Urban per capita transportation expenditures were 1397 yuan in 2011, a growth of 11.3 percent. As of the end of 2011, there were 18.6 private cars per 100 urban households in China, a 5.5-fold increase over 2010. The large magnitude of increase in car ownership drove fast, vigorous growth in fuel and car usage tax revenues. Average per capita fuel expenditures in 2011 were 349 yuan, a growth of 48.9 percent, accounting for 25.0 percent of all transportation expenditures,

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a growth of 7 percent over 2010. Per capita car usage tax expenditures in 2011 were 87 yuan, a growth of 24.0 percent. Further popularization of computers, mobile phones, and the Internet drove sustained growth in urban communications expenditures. Urban per capita communications expenditures in 2011 were 753 yuan, an increase of 3.3 percent. As of the end of 2011, there were 205.3 mobile phones per hundred urban households, an increase of 16.4 over 2010. Of that total, 33.6 were Internet-accessible, an increase of 17.6 over 2010, and there were 66.8 Internet-accessible personal computers per 100 urban families, an increase of 11.7 over 2010. Also by the end of 2011, growth in telecommunications equipment ownership drove growth in per capita mobile telephone expenditures, 121 yuan for a growth of 34.3 percent, and Internet expenditures, 125 yuan for a growth of 7.4 percent. Great Improvements Made to Urban and Rural Housing and Residential Surroundings In 2011, the rural per capita housing usage area was 36.2 square meters, an increase of 6.5 square meters over 2005. Housing conditions were also greatly improved. As of the end of 2011, 22.9 percent of rural households used flushing toilets, and only 5.9 percent of rural households were without toilets. Also as of the end of 2011, 38.2 percent of rural households use clean fuel oil, gas, electricity, and methane, and 55.1 percent of rural households had installed running water. Likewise at the end of 2011, 52.9 percent of rural households were accessible by concrete or asphalt roads, and 22.4 percent of rural households were accessible by roads made of hard materials such as stone or slab. Urban residential conditions were greatly improved, and supplementary facilities were further ameliorated. In 2011, urban per capita housing area was 32.7 square meters, a growth of 4.9 square meters since 2005, and the interiors of 67.8 percent of houses had been fitted out, a 2.3 percent increase over 2010. Also, 99.1 percent of housing was equipped with independent tap water, an increase of 0.4 percent over 2010, and 85.9 percent of housing units were equipped with toilets and showers, an increase of 3.7 percent over 2010. Finally, 68.0 percent of housing units were equipped with air conditioning or heat, an increase of 3.0 percent over 2010. 3.3

3.4 Marked Increases Made to Medicine and Health Levels As living standards have greatly increased, residents’ concerns for personal health have grown increasingly prominent. In 2011, per capita medical and health maintenance expenditures were 969.0 yuan in urban areas, accounting for 6.4 percent of total urban consumption, and 436.8 yuan in rural areas, accounting for 8.4 percent of total rural consumption. Conditions for medical treatment were also greatly improved. There were 4.58 trained health professionals per

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1000 c­ itizens in 2011, up from 3.63 in 2000. There were 3.81 beds in healthcare organizations per 1000 citizens in 2011, up from 2.83 in 2007. As healthcare conditions have improved and the burden on the healthcare system has been alleviated, resident health levels have increased markedly. In 2010 the average Chinese life expectancy was 74.83 years, up 3.43 years from the 2000 level of 71.40 years, and higher than the global average. Maternity mortality rates are down from the 2000 level of 53.0 per 10,000 to 26.1 per 10,000 in 2011. Infant mortality rates are down from the 2000 level of 32.2 percent to 12.1 percent in 2011. 4

Major Problems in Resident Life Consumption

Urban and Rural Income Growth Rates are Out of Sync with Economic Growth Rates, and Low Labor Compensation Rates as Compared to GDP are Adversely Affecting Consumer Spending Chinese resident income growth rates are out of sync with the Chinese economic growth rate. From 1979 to 2011, Chinese per capita GDP grew by an annual average of 8.8 percent, but urban resident per capita disposable income and rural per capita net income grew by an annual average of 7.4 percent, a deviation of 1.4 percentage points. Although rural per capita net income grew 2.6 percent faster than GDP in 2011, urban per capita disposable income grew 0.4 percent slower than GDP. In recent years, there has been a trend whereby the proportion of labor compensations to GDP has fallen continuously. The proportion of labor compensations to GDP fell from 50.7 percent in 2004 to 44.9 percent in 2011. The international average proportion of labor compensations to GDP is between 50 and 55 percent. During the heavy industrialization stages of Japan’s and South Korea’s industrialization processes, there were years in which the proportion of labor compensations to GDP fell below 40 percent, but the proportion never fell continuously for several years running. During the industrialization phases of such countries as the UK, the U.S., and Germany, the proportion of labor compensations to GDP was consistently high. These factors are important reasons behind insufficient consumer spending in China. 4.1

Decreasing Consumption Trends and Low Household Consumption Rates are Causing Insufficient Consumption In recent years, there has been a declining trend for urban household consumption, owing to different income levels and income disparities. Average con­sumption has decreased from 79.6 percent in 2000 to 69.5 percent in 2011. Average rural household consumption was 74.0 percent in 2010 and 74.8 ­percent in 2011, a decrease from the period of years from 2005 to 2009 (see Table 2.7). 4.2

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Table 2.7 Comparisons of urban-rural average consumption trends Unit: % Year

Nationwide Urban Rural

Highest Income Bracket Urban Rural

Lowest Income Bracket Urban Rural

2000 2005 2006 2007 2008 2009 2010 2011

79.6 75.7 74.0 72.5 71.2 71.4 70.5 69.5

92.6 92.3 89.8 90.2 88.5 86.7 84.3 85.1

72.0 68.0 67.1 65.5 64.3 64.2 64.0 62.6

74.1 78.5 78.9 77.9 76.9 77.5 74.0 74.8

121.8 145.1 137.5 137.4 143.0 152.0 135.6 165.6

59.5 59.3 62.3 61.2 60.7 60.8 58.3 54.5

Per the Law of Diminishing Marginal Propensity to Consume, there are clear inclinations toward high saving rates and low consumption rates among high income brackets, the members of which frequently convert income into savings and investments. Although people in lower income brackets show a greater propensity to spend, they lack corresponding purchasing power. This situation can easily lead to a break in consumption, which would then cause consumption demand to be insufficient. Since 2000, Chinese final consumption rates have fallen gradually every year, from 62.3 percent in 2000 to 49.1 percent in 2011, a total decrease of 13.2 percent, and household consumption has fallen from 46.4 percent to 35.4 percent, a decrease of 11.0 percent (see Table 2.8). As compared to the rapid growth of investment rates, the contribution and driving power of household consumption on economic growth are clearly insufficient. High Real Estate Prices are Influencing Normal Household Consumption In recent years, thanks to many powerful State-level macroeconomic regulatory policies, excessively fast increases to real estate prices have begun to come under control. However, real estate prices remain excessively high, and the ratio of housing prices to income is far higher than the internationally accepted standard of three to six. In 2011, the average housing price in China was 4993 yuan per square meter. Assuming that the average household purchases a 90 square meter housing unit, the average total price of housing, including 4.3

35

Chinese Urban-rural Income And Consumption In 2012 Table 2.8 Comparisons of consumption rates, 1978–2011 Unit: % Year

Final Consumption

Household Consumption

Rural Consumption

Urban Consumption

1978 1980 1985 1990 1995 2000 2005 2006 2007 2008 2009 2010 2011

62.10 65.50 66.00 62.50 58.10 62.30 53.01 50.78 49.61 48.55 48.53 48.19 49.08

48.79 50.76 51.64 48.85 44.88 46.44 38.93 37.08 36.13 35.34 35.43 34.94 35.42

30.30 30.72 30.95 24.20 17.83 15.34 10.65 9.78 9.08 8.76 8.32 7.94 8.03

18.49 20.04 20.69 24.64 27.05 31.10 28.28 27.30 27.05 26.58 27.12 27.01 27.39

taxes, renovations, and other fees, is approximately 500,000 yuan. Based on the 2011 urban per capita disposable income of 21,810 yuan, the average working class citizen would have to earn several decades, or even a lifetime, of salary to own a home of his own. Many Chinese citizens have become “houseslaves” in order to own their own homes, having no choice but to repress their consumption and work toward long-term household capital accumulation. Sluggishness of the Social Security System’s Development Has Restricted the Release of Household Consumption Capacity A sound social security system can enable residents to reduce expected future expenditures, diminish consumer concerns, and release current consumption capacity. China’s current social security system is not ideal. Its levels of social safeguards in medicine, old-age care, and children’s education are low. The system is weak, particularly in rural villages, and social security still doesn’t cover the entire population. Further, social security policies lack directionality and effectiveness. In recent years, the Chinese social security system has been greatly shored up and has grown rapidly, but its growth has lagged behind economic growth. Under conditions of insufficient future consumer 4.4

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confidence, the traditional consumption concepts of “a little wealth makes life peaceful,” “be content with warmth and a full belly,” “budget expenses according to income,” and “wealth-attainment syndrome” have caused households to suppress consumption in preference of savings. Such major expenditures as buying a home, sending children to university, and marriage require many years of savings, and so saving has become an important means for citizens to be prepared for a rainy day, thus restricting their consumption capacity. 5

Development Trends and Major Tasks for Urban-Rural Household Life Consumption in 2013

2013 will be the first year the fourth generation of People’s Republic of China leadership is in power. China’s major economic policies will maintain a certain degree of continuity. In the first half of 2013, there will not be any major changes to the domestic economic policy environment, but the second half of the year may see the gradual issuance of a few major economic policies. GDP growth will hold steady around 7.5 percent and urban and rural household income will maintain fast growth rates, which will lay a foundation for stable consumption growth. We predict that consumption will grow by about 14 percent in 2013. Increasing Resident Income is a Fundamental Solution to Increasing Consumption Capacity Generally speaking, as compared to high income earners, mid and low income earners have high Engel coefficents, high consumption trends, and high income elasticity. Given conditions of equal magnitude of income growth, the consumption expenditure ratios of mid and low income earners is much higher than those of high income earners. This requires us to make an effort to increase the income levels of mid and low income earners. We must more effectively promote the development of consumption markets by increasing minimum wage standards, improving the social security systems for oldage care, and healthcare, alleviating the tax burden on mid and low income earners,reducingtaxes on life necessities, reducing double taxation, decreasing value-added tax rates, striving to increase the real income of mid and low income earners, and increasing consumption capacity. 5.1

Optimization of the Supply Structure is the Most Powerful Driver of Economic Growth Asymmetry between the supply structure and the demand structure is the fundamental reason behind a portion of excess capacity in China’s present 5.2

Chinese Urban-rural Income And Consumption In 2012

37

economic development. It is also a factor restricting growth of household consumption demand. Consumer spending demand grows as society progresses, and rigid demand is indispensable. So increasing the quality of consumption products and increasing the diversity of material products are the keys to satisfying basic consumer spending. As demand for deficit spending is growing rapidly, the only way to satisfy daily increasing consumption demand is to greatly renew, refresh, and innovate consumer products. Urban and rural residents are currently experiencing a process of consumption structure upgrading, and service consumption has become an important component of household consumption. This requires social production to implement timely restructuring to industries, products, and services, to augment consumption demandoriented economic growth and the amplitude of industry restructuring and transformation, to actively foster consumption hot spots, to adjust the production structure, to improve the supply structure, to satisfy existing demand, to increase the amplitude of innovation, and to propel economic growth. Implementing Policies that Encourage Consumption is an Effective Means of Guaranteeing Increases to Consumption Demand Expanding domestic household consumption is a fundamental requirement of transforming the mode of economic growth. In recent years, the state has implemented a series of policies intended to promote rapid increases to the level of household consumption. The “home appliances to the countryside” policy played an active role in boosting rural consumption. The prosperity of rural consumption markets increased the level of rural consumption and promoted changes to traditional rural attitudes toward consumption. In 2011, relevant state departments launched the “Energy-saving Products Benefit the People Program” and “Replace the Old with the New” policies for cars and appliances, offering a certain degree of subsidies for replacing old cars, televisions, refrigerators, washing machines, air conditioners, computers, and other products. They also further released the household consumption capacity of urban mid-level income earners. The widespread use of highly energy-efficient products effectively drove production and technological advancements of related products. However, diminishing returns is already beginning to set in for a portion of consumption-driving policies. “Home appliances to the countryside” has already been rescinded, and consumption markets are now in desperate need of new consumption policies. Thus, we should continue improving measures that encourage consumption and strive to improve the consumption environment. We should increase the quality of household consumption and create a social environment of safety, credibility, trust, and friendliness. Finally, we should promote resource-conserving, environmentally-friendly modes of consumption. 5.3

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Differential Treatment of Urban and Rural Household Consumption is a Good Policy for Expanding Consumption Markets In cities, service consumption demand has become a highlight of resident life. In the countryside, integrated construction of urban and rural areas represents the turning point for rural citizens toward an improved living environment and increased quality of life. The contrast between and changes to urban and rural household consumption structures demonstrates that the development of urban household consumption is superior to that of rural household consumption. Such fashionable consumption items as travel, culture, and online information have become new growth points for urban consumption, while house construction and purchases of durable consumer goods are growth points for rural consumption. So we should respond to the different peculiarities of urban and rural household consumption and improve construction of urban and rural consumption markets. We should also release corresponding immediate-use consumption products and deficit spending consumption products. We should in particular pay attention to the development characteristics of urban household consumption and establish rural consumption market product release plans. Finally, we should actively respond to rural household consumption transformation and release rural household consumption capacity. 5.4

Chapter 3

Problems in China’s Income Distribution and Focuses of Reform: 2012–2013 Yang Yiyong and Chi Zhenhe Abstract Income distribution has become a hot button topic widely discussed across society. In this chapter, we will analyze changes to China’s income distribution in 2012. First, we will present analysis of changes to China’s primary income distribution, where the proportion of labor incomes to gross domestic product (GDP) and the proportion of household income to GDP have both fallen greatly. Then, we present an analysis of resident income distribution, in which we found that the disparities between urban incomes are shrinking, as compared to the disparities between rural resident incomes, which are growing markedly. At the same time, the gap between Chinese urban and rural incomes is shrinking, while the gap between regions is growing.

Keywords labor income share – household income share – resident income disparity

Problems of income distribution have become a major hot button issue in society. They include both problems of functional distribution of income and scale distribution of income. The problems of functional distribution of income can be seen in the low proportion of labor income to GDP and the declining trend thereof. On the other hand, the problems of scale distribution of income can be seen in the enormous growth to resident income disparities. At the same time, another major problem within income distribution is that factor income is redistributed between households, enterprises, and the government, while the proportion of household income to total production is diminishing. In addition, disparities between urban and rural incomes and between income levels of different regions are a major reason behind the worsening of the income distribution situation.

© koninklijke brill nv, leiden, ���5 | doi ��.��63/9789004276536_003

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Changes and Trends within Functional Distribution of Income

The term “labor income share” (also known as wage share) refers to the proportion of labor income to total output within the functional distribution of income. China’s overall labor share has fallen continuously since 1995 (see Figure 3.1). In 1995, the labor share in China was 52.16 percent, down to 39.74 percent in 2007. From 1995 to 2007, the labor share in China fell a total of 12.42 percent, an average annual decline of 2.24 percent. Figure 3.1 demonstrates that there were four distinct stages of changes to China’s labor share from 1995 to 2011. The first stage ran from 1995 to 2003, over which the labor share fell from 52.16 percent to 46.14 percent, a total decline of 6.02 percent for an average annual decline of 1.52 percent. The decline was slower from 1995 to 2003 than from 1993 to 2011. This demonstrates that this was a period of slow decline for the labor share. The second stage ran from 2003 to 2007, over which the labor share fell from 46.14 percent to 39.74 percent, for an average annual decline of 3.67 percent. The rate of decline in this stage was much faster than over the period 1993 to 2011, meaning that this was a stage of rapid decline for the labor share. In 2008, China’s labor share shot up from 39.74 percent in 2007 to 47.98 percent, a growth of 8.24 percent. The great magnitude of growth in 2008 was caused by a difference in data sources used to calculate the labor share in that year. The labor share in 2009 continued rising, up to 46.62 percent, holding about steady with the 2003 level. This demonstrates that the period from 2007 to 2009 was a stage of growth for China’s labor share. The fourth stage ran from 2009 to 2011, over which the labor share began gradually falling again, from 46.62 percent to 44.94 percent, an average annual decline of 1.68 percent. The above analysis indicates that the labor share dropped rapidly from 2004 to 2007 but began rising in 2008, causing structural changes to the labor share from 2004 to 2008. The structural changes that occurred from 2004 to 2008 were caused by changes to the methodology of calculating GDP between economic census years and non-economic census years. In non-economic census years, individual economic entities, rural labor compensations, and business profits are all counted as labor compensations, whereas in economic census years, individual economic entity labor compensations and business profits are counted as operating surpluses.4 If one does not consider the structural 4  Bai Chong’en and Qian Zhenjie 白重恩、钱震杰, “Guomin Shouru de Yaosu Fenpei: Tongji Shuju Beihou de Gushi 国民收入的要素分配: 统计数据背后的故事 [Factor Distribution of Domestic Income: the Story Behind the Statistics],” Jingji Yanjiu 3《经济研究》(2009).

Problems in China ’ s Income Distribution and Focuses of Reform

41

Figure 3.1 Chinese labor shares, 1978 to 2011 Data source: Zhongguo Guonei Shengchan Zongzhi Hesuan Lishi Ziliao 1952–2004 中国国内生产总值核算历史资料 1952–2004 [Historical Records of Chinese GDP Calculation 1952–2004], Zhongguo Guonei Shengchan Zongzhi Hesuan Lishi Ziliao 1952–2004 中国国内生产总值核算历史资料 1952–1995 [Historical Records of Chinese GDP Calculation 1952–1995], and several years of the China Statistical Yearbook Note: the labor share and GDP figures from 2008 were both derived from capital flow statements; data from all other years were calculated regionally based on the income methodology

changes from 2004 to 2008 and looks solely at the labor share from 1993 to 2003 and from 2009 to 2011, one will discover that the labor share has been trending slowly downward every year. That trend was caused by industrialization within China’s industry structure.5 That demonstrates that the labor share fell as China’s industry structure centered around manufacturing grew. So the labor share will continue its gradual descent in 2012 and 2013.

 National Bureau of Statistics, Department of National Accounts 国家统计局国民经 济核算司, “Zhongguo Jingji Pucha Niandu Guonei Shengchan Zongzhi Hesuan Fangfa 中国经济普查年度国内生产总值核算方法 [The Accounting Methodology for Calculating China’s GDP in Economic Census Years] (Beijing: China Statistics Press, 2007).  National Bureau of Statistics, Department of National Accounts 国家统计局国民经 济核算司, Zhongguo Fei Jingji Pucha Niandu Guonei Shengchan Zongzhi Hesuan Fangfa 中国非经济普查年度国内生产总值核算方法 [The Accounting Methodology for Calculating China’s GDP in Non-Economic Census Years] (Beijing: China Statistics Press, 2010). 5  Luo Changyuan and Zhang Jun 罗长远、张军, “Jingji Fazhan Zhong de Laodong Shouru Zhanbi: Jiyu Zhongguo Chanye Shuju de Shizheng Yanjiu 经济发展中的劳动收入占比: 基于中国产业数据的实证研究 [The Labor Share Within Economic Development: Empirical Research into China’s Industry Data],” Zhongguo Shehui Kexue 4 (2009).

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Changes to Income Distribution: Households, Enterprises, and the Government

There is a great variance in the distribution of primary income between households, enterprises, and the government. The household share of primary income distribution accounts for the majority of value added in a year; so household income leads the other categories in primary income distribution. For example, the household income share in 2003 was 7.378081 trillion yuan, accounting for 63.2 percent of GDP. The enterprise and governmental shares of primary income are much smaller in comparison. For example, the enterprise share of primary income in 2003 was 18.82 percent, and the government share was 17.98 percent. So the lion’s share of primary income went to households, while the rest was allocated among enterprises and the government. The Chinese Economic Census of 2004 caused a major change to the GDP calculation methodology between economic census years and non-economic census years, including the scope and methodology of calculation.6 Changes to the methodology of GDP calculation exerted a considerable influence upon both incomes and income shares of the various income-earning entities (see Table 3.1). Table 3.1 demonstrates that the household income share fell from 63.2 percent in 2003 to 59.6 percent in 2004 and that the enterprise income share rose from 18.82 percent in 2003 to 23.48 percent in 2004. The government income share fell from 17.98 percent in 2003 to 16.93 percent. This shows us that changes to the GDP calculation methodology caused the enterprise income share to increase while causing the household and government shares to decrease. So we have no choice but to demarcate our observations of changes to income shares before and after 2004. Prior to 2004, the household income share fell from 67.23 percent in 1996 to 63.2 percent in 2003. So there was already a declining trend for the household income share prior to 2004. After 2004, the household income share continued its descent, from 59.6 percent in 2004 to 57.23 percent in 2008. Either way you look at it, the household income share has fallen consistently. The enterprise income share remained steady around 17 percent from 1995 to 2003, meaning a low level of fluctuations for the enterprise share. After 2004, the enterprise income share rose continuously, from 23.48 percent in 2004 to 25.26 percent in 2008. From 1992 to 2003, the government income share rose from 15.53 percent to 17.98 percent, for a total rise of 2.45 percent. The government income share 6  Xu Xianchun 许宪春, “Guanyu Jingji Pucha Niandu GDP Hesuan Fang’an de Sikao 关于 经济普查年度 GDP 核算方案的思考 [Thoughts on the GDP Calculation Methodology in Economic Census Years],” Jingji kexue 经济科学 4 (2005): 5–17.

Problems in China ’ s Income Distribution and Focuses of Reform Table 3.1

43

Government, enterprise, and household shares of gdp primary income distribution, 1992 to 2008

Year

Enterprise Income Share (100 mn yuan) (percent)

Government Income Share (100 mn yuan) (percent)

Household Income Share (100 mn yuan) (percent)

1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

 5080.64  7123.08  9168.51 11565.12 11522.47 13250.94 13489.32 14563.77 16724.61 17339.54 17923.94 21969.87 37467.80 43088.01 50356.37 63099.51 79867.40

 4138.27  5814.99  7588.40  8705.35 10381.47 11829.72 12982.84 13654.71 14737.24 17573.36 18167.10 20991.29 27010.53 32414.47 38927.98 49010.01 55391.24

 17432.93  21622.42  29913.22  37224.41  44946.63  48061.36  50495.15  52360.74  56826.77  60814.03  67844.99  73780.81  95108.71 110306.07 128238.35 155654.14 180970.19

19.06 20.61 19.65 20.12 17.24 18.12 17.53 18.07 18.94 18.11 17.25 18.82 23.48 23.19 23.15 23.57 25.26

15.53 16.83 16.26 15.14 15.53 16.17 16.87 16.95 16.69 18.36 17.48 17.98 16.93 17.45 17.90 18.30 17.52

65.41 62.56 64.10 64.74 67.23 65.71 65.61 64.98 64.36 63.53 65.28 63.20 59.60 59.37 58.95 58.13 57.23

Data source: China Statistical Yearbook, multiple years.

again rose from 16.93 percent in 2004 to 17.52 percent in 2008. This demonstrates a rising trend for the government income share from 1992 to 2008. In summary, within primary income distribution, the enterprise income share has remained stable while the household share has fallen and the government share has risen continuously. The income earned by the various income earning entities after primary income distribution does not constitute their final disposable income. Before being redistributed, the income must then undergo current transfers between the different entities, such as income tax, social security fees, social insurance welfare, etc. After current transfers, primary income distribution then becomes disposable income for the various income earning entities, whereupon it becomes the final income distribution as calculated in GDP (see Figure 3.2).

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Figure 3.2 demonstrates that the enterprise share of GDP disposable income following current transfers is declining by a great magnitude. For example, the enterprise share of income in 2008 before current transfers was 25.26 percent, but the enterprise share of disposable income fell to 21.6 percent following current transfers. The government obtains a great amount of income from enterprises during current transfers. Particularly after 2000, the government greatly increased its quantity of disposable income by obtaining large amounts of income from both enterprises and households during current transfers. The government’s share of disposable income after current transfers is increasing by a great magnitude. For example, in 2008 the government’s share of primary income was only 17.52 percent, but its share of disposable income after current transfers rose to 21.28 percent, a growth of 3.76 percent. From 1992 to 2001, households increased their share of disposable income following current transfers, but after 2001 the household share of disposable income following current transfers began to diminish. For example, in 1992 the household share of primary income was 65.41 percent, but the household share of disposable income was 67.71 percent, an increase of 2.3 percent. In 2008, the household share of primary income was 57.23 percent, but the household share of disposable income was 57.11 percent, a drop of 0.12 percent. This demonstrates that current transfers reduced the enterprise share of disposable income and increased the government share of disposable income while also changing the distribution of disposable income between households, enterprises, and the government. Current transfers increased the household share of disposable income prior to 2000 but reduced it thereafter, thus increasing the magnitude of the decrease of the household share of disposable income. From 1992 to 2008, the household share of disposable income fell from 67.71 percent to 57.11 percent, a drop of 10.6 percent (including the influence of changes to the GDP calculation methodology). That demonstrates that current transfers have further intensified the declining trend for the household share of disposable income. In summary, changes are currently taking place to the distributive ­structure of primary income in China, in which households claim the lion’s share. The household share of national income fell continuously from 1992 to 2004. The government share grew continuously. The enterprise share held steady, although it has begun to rise in recent years. Current transfers exert an important influence on the structure of primary income distribution, reducing the enterprise share of disposable income and increasing the government share. Current transfers have increased the magnitude of decline to the household share of disposable income while accelerating the increase of the government share of disposable income. If the trends displayed in Figure 3.2 continue, the household share of disposable income will continue to shrink in 2012 and 2013 while the enterprise and government shares will continue to grow.

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Figure 3.2 Disposable income shares of individual income bodies, 1992 to 2004 Data source: several years of the China Statistical Yearbook

3

Resident Income Disparities Seen From Different Perspectives

3.1 Urban Resident Income Disparities Figure 3.3 displays urban and rural Oshima indices,7 which reflect urban-rural resident income disparities in the same way as Gini coefficients. Figure 3.3 demonstrates that the urban Oshima index rose continuously from 2002 to 2005, from 7.89 in 2002 to 9.18 in 2005. The rise in the Oshima index over that period demonstrates that urban resident income disparities were worsening continuously and that income distribution was becoming increasingly unequal. The urban Oshima index began trending downward in 2005, with only a slight hiccup in 2008 (see Figure 3.3). By 2011, the urban Oshima index had fallen to 8.56, roughly equivalent to the 2003 level. This demonstrates that urban resident income disparities are shrinking and that the situation in which 7  Due to data constraints, the urban Oshima index calculates the difference between the per capita income of the top 10 percent and the bottom 10 percent of urban income earners.

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Figure 3.3 Rural and urban Oshima indices Data source: several years of the China Statistical Yearbook

urban resident income disparities rise continuously has come under control. Figure 3.3 demonstrates that the magnitude of decrease for the urban Oshima index in 2011 was 0.09, a drop of 1.04 percent from 2010. This demonstrates that the degree of improvement to urban income inequality is dropping. So the speed of improvement to urban resident income disparities in 2012 will be smaller than that of 2011. If macroeconomic operations remain stable, the Oshima index for urban resident income in 2013 may continue falling, and the degree of inequality of urban resident incomes may be further reduced. 3.2 Rural Resident Income Disparities Rural resident income disparities are growing more severe. Figure 3.3 demonstrates that although the rural Oshima index fell in some individual years, such as 2004 and 2010, its overall trend has been upward. In 2002, the rural Oshima index was 6.88, up to 8.39 in 2011, a gain of 21.95 percent. Increases to the Oshima index indicate that the degree of inequality of rural resident incomes is growing larger. The changes to the Oshima indices in Figure 3.3 indicate that in 2012, the rural Oshima index will continue to grow, meaning that rural resident income distribution will become even more unequal. Figure 3.3 also demonstrates that the magnitude of increase of the rural Oshima index in 2011 was greater than in previous years, which means that growth of rural income disparities is accelerating. So even if the magnitude of increase of the rural Oshima index in 2012 is smaller than in 2011, it may remain greater than that of 2009. So the magnitude of growth of rural income disparities may grow. If the 2011 Oshima index trend continues, the Oshima index for rural resident incomes will grow larger in 2013, meaning growth to rural resident income disparities.

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Figure 3.4 Urban-rural income ratios Data source: several years of the China Statistical Yearbook

3.3 Urban-Rural Resident Income Disparities Urban-rural resident income disparities have grown enormously due to dual models of urban and rural economic development. Figure 3.4 demonstrates that urban-rural resident income disparity grew continuously from 2002 to 2009. In 2002, the urban-rural resident income ratio was 3.11, meaning that per capita urban resident disposable income was 3.11 times greater than per capita rural resident net income. In 2009, the ratio was 3.33, meaning that per capita urban resident disposable income was 3.33 times greater than per capita rural resident net income. In 2010, the urban-rural resident income ratio began falling, for reasons that we infer to be related to rises in agricultural products and increasing rural migrant laborer wages. In 2010, the ratio fell to 3.23, meaning that the gap between urban and rural resident incomes had ceased to grow and was beginning to shrink. In 2011, the ratio fell further, to 3.13, meaning that the urban-rural income gap is continuing to shrink. Owing to increasing prices of agricultural products and rising wages, the growth rate of per capita rural resident net income may be higher than that of per capita urban resident disposable income in 2012. So the urban-rural resident income ratio may continue to fall, and the gap between urban and rural resident incomes may shrink further. 4

Changes and Trends in Regional Income Disparities

Regional disparities in income are a major reason for China’s overall income disparity problems. Development in China’s eastern coastal regions has been faster than in the Center, West, and Northeast, which has caused resident income growth in the East to be faster than in other regions and has gradually

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exaggerated the income gap between regions (see Table 3.2). In 2005, urban per capita disposable income in the East was 13,374.88 yuan, but per capita disposable income was 8808.52 yuan in the Center, 8783.17 yuan in the West, and 8729.96 yuan in the Northeast. This demonstrates that urban per capita disposable income in the Center, West, and Northeast are roughly identical to one another but lag far behind per capita disposable income in the East. So there is a large disparity in urban income between the East and other regions. As of 2011, urban per capita disposable income in the East was 26,406.04 yuan but only 18,323.16 yuan in the Center, a disparity of 8082.88 yuan, much greater than the 2005 disparity of 4566.36 yuan. This shows that urban resident income disparities are continuing to grow. Different from the disparity in urban income levels, which are clearly divided between the East and all other regions, the rural resident income disparity varies from region to region (see Table 3.2). In 2005, rural per capita net income was 4720.28 yuan in the East, 2956.6 yuan in the Center, 2378.91 yuan in the West, and 3378.98 yuan in the Northeast. The difference between the East, the highest, and the West, the lowest, was 2341.37 yuan. That demonstrates that there is a large regional disparity between rural resident income levels. In 2011, rural resident per capita net income was 9585.04 yuan in the East, 6529.93 yuan in the Center, 5246.75 yuan in the West, and 7790.64 yuan in the Northeast. The difference between the East and the Center was 3055.11 yuan, 4338.29 yuan between the East and the West, and 1794.4 yuan between the East and the Northeast, all larger than the disparities in 2005. That demonstrates that regional disparities between rural resident income levels are growing. The above analysis indicates that income disparities are growing both among urban and rural residents. If the trends exhibited in Table 3.2 continue, disparities between both urban and rural resident income levels and resident income levels between regions will continue to grow. 5

Conclusions and Outlook

5.1 Conclusions Beginning in 1995, China’s overall labor income share has fallen continuously, and the proportion of labor compensations to GDP has grown ever smaller. The household share of GDP primary income distribution has fallen, while the government share has risen. Changes to household, enterprise, and government shares of primary income distribution have determined the changes to the shares of all three entities of final distribution of disposable income. As

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Table 3.2 Per capita urban disposable income and per capita rural net income Unit: yuan

2005 2006 2007 2008 2009 2010 2011

Urban East

Center

West

Rural Northeast East

Center

West

Northeast

13374.88 14967.38 16974.22 19203.46 20953.21 23272.83 26406.04

 8808.52  9902.28 11634.37 13225.88 14367.11 15962.02 18323.16

 8783.17  9728.45 11309.45 12971.18 14213.47 15806.49 18159.40

 8729.96  9830.07 11463.31 13119.67 14324.34 15940.99 18301.31

2956.60 3283.16 3844.37 4453.38 4792.75 5509.62 6529.93

2378.91 2588.37 3028.38 3517.75 3816.47 4417.94 5246.75

3378.98 3744.88 4348.27 5101.18 5456.59 6434.50 7790.64

4720.28 5188.23 5854.98 6598.24 7155.53 8142.81 9585.04

Data source: several years of the China Statistical Yearbook

the household share of final income distribution has fallen, the government share has risen. Current transfers have further increased the magnitude of decreases to the household share of disposable income and increases to the government share of disposable income. The scale distribution of income demonstrates that the urban resident income Oshima index and the urbanrural income ratio have both fallen. This shows us that the degree of inequality of urban resident income levels has fallen while urban-rural resident income disparities have gradually shrunken. These trends are all beneficial to reducing inequalities in resident income levels across the nation. Nevertheless, the rural resident income Oshima index has continued to grow. This demonstrates that rural income disparities are continuing to worsen. Income gaps between regions, to both urban and rural incomes, are continuing to grow larger, which will inevitably lead to a growth of nationwide income disparities. 5.2 Outlook Our initial forecast for 2012 is that urban resident per capita disposable income will exhibit real growth of 9.5 percent and that rural resident per capita net income will exhibit real growth of 12.0 percent. Our outlook for 2013 is that urban resident per capita disposable income will exhibit real growth of 9.1 percent and that rural resident per capita net income will exhibit real growth of 9.5 percent. Comrade Hu Jintao noted in the 18th National People’s Congress report that even as the people’s living standards have increased markedly, “problems of

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inequality, incoordination, and unsustainability within development remain prominent,” and that “disparities in development between urban and rural areas and between regions, as well as in resident income distribution, remain large.” He continued, “In the future we must increase resident income by all means conceivable. In order for the people to enjoy the fruits of development, we must deepen reforms to income distribution institutions and strive to realize synchronization of resident income growth with economic development and synchronization of labor compensation growth with labor productivity rate increases. We must increase the share of resident incomes within the national distribution of income and increase the share of labor compensations within primary income distribution. Primary income distribution and redistribution must be undertaken with consideration of both efficiency and fairness, but redistribution must place even more emphasis on fairness.” He continued, “We must increase resident property income through many channels and standardize the order of income distribution. We must protect legal income and increase income for low income earners. We must adjust excessively high income and ban illegal income.” Reforms to income distribution must change and improve the distributive structure of income. A simple doubling of income cannot be called reform to income distribution. There is only one goal for further income distribution reforms: while promoting the growth of overall wealth in society, gradually shrink income disparities and realize common wealth. The focus of future income distribution reforms will lie in how to shrink income gaps. For example, increasing the amplitude of increases in income for low income earners is the key to income distribution reform, and striving to expand the middle income bracket is the foundation of income distribution reform. Appropriately restricting growth of the high income bracket will be a worthwhile achievement of income distribution reform. The difficulty of future income distribution reforms will lay in straightening out the social distribution relationship, particularly in how to use regulations to straighten out the income distribution relationship between monopolistic industries and non-monopolistic industries. Another difficult question is how to straighten out the urban-rural income distribution relationship by promoting healthy urbanization. Yet another difficult question is how to straighten out income distribution among owners of capital, managers, and ordinary workers by promoting collective wage bargaining. Our initial prediction is that the comprehensive reforms to income distribution to be formally unveiled in 2013 will be focused on the following areas.

Problems in China ’ s Income Distribution and Focuses of Reform

1. 2. 3. 4.

5. 6. 7. 8.

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Comprehensive income distribution reforms should feasibly increase investments in the people’s livelihood and actively promote integration and equalization of urban and rural basic public services. Implement more proactive employment policies targeting university graduates, migrant workers from rural areas, and urban residents with employment difficulties. Establish sound mechanisms for regular increases to worker wages and rigorously enforce the minimum wage law. Strengthen regulations on both total wages and wage levels within monopolistic industries and rigorously standardize salary regulation of high-level management of state-owned enterprises, financial organizations, and so forth. Promote sustained rural income growth by all conceivable means and continue to shrink the urban-rural income gap. Accelerate improvement of the social security system. Standardize the income distribution order and increase the transparency of income distribution. Intensify regulations, and strengthen the role taxes play in mitigating income inequality, and feasibly make substantive progress in reducing the tax burden on mid- and low-income tax brackets. References

Bai Zhong’en and Qian Zhenjie 白重恩、钱震杰, “Guomin Shouru de Yaosu Fenpei: Tongji Shuju Beihou de Gushi 国民收入的要素分配: 统计数据背后的故事 [Factor Distribution of Domestic Income: the Story Behind the Statistics],” Jingji Yanjiu 经济研究 3 (2009): 27–41. Luo Changyuan and Zhang Jun 罗长远、张军, “Jingji Fazhan Zhong de Laodong Shouru Zhanbi: Jiyu Zhongguo Chanye Shuju de Shizheng Yanjiu 经济发展中 的劳动收入占比: 基于中国产业数据的实证研究 [The Labor Share Within Economic Development: Empirical Research into China’s Industry Data],” Zhongguo Shehui Kexue 中国社会科学 4 (2009): 65–79. National Bureau of Statistics, Department of National Accounts 国家统计局国 民经济核算司, “Zhongguo Jingji Pucha Niandu Guonei Shengchan Zongzhi Hesuan Fangfa 中国经济普查年度国内生产总值核算方法 [The Accounting Methodology for Calculating China’s GDP in Economic Census Years] (Beijing: China Statistics Press, 2007).

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National Bureau of Statistics, Department of National Accounts 国家统计局国民 经济核算司, Zhongguo Fei Jingji Pucha Niandu Guonei Shengchan Zongzhi Hesuan Fangfa 中国非经济普查年度国内生产总值核算方法 [The Accounting Methodology for Calculating China’s GDP in Non-Economic Census Years] (Beijing: China Statistics Press, 2010). Xu Xianchun 许宪春, “Guanyu Jingji Pucha Niandu GDP Hesuan Fang’an de Sikao 关于经济普查年度 GDP 核算方案的思考 [Thoughts on the GDP Calculation Methodology in Economic Census Years],” Jingji Kexue 经济科学 4 (2005): 5–17.

Chapter 4

New Development in Chinese Social Security in 2012 Wang Fayun and Ding Yi* Abstract In 2012, China realized total coverage of the old-age pension system and readjusted basic old-age pensions for retired persons of private enterprises. China also established urban-rural major illness insurance and unified standards for one-time workrelated injury grants-in-aid. Society places a great degree of concern on social security. Questions concerning such topics as the delaying of the retirement age, social insurance rates, investments into old-age pension funds, the methods of establishing new social insurance affairs, etc., have come under intense dispute.

Keywords social insurance – new development

1

Basic Situation

In June 2012, “The State Council endorsed the Twelfth Five-year Plan Planning Compendium for Social Insurance” [社会保障‘十二五’规划纲要], which demanded that during the Twelfth Five-year plan period, more emphasis be placed on guaranteeing fairness and more emphasis be placed on coordinated urban-rural development. It demanded that more emphasis be placed on highquality, highly-effective service and that more emphasis be placed on sus­ tainable development. The Compendium also defined primary goals for the development of social insurance during the Twelfth Five-year plan period.

* Wang Fayun of the Ministry of Human Resources and Social Security Insurance Management Center and Ding Yi, associate professor in the electronic technology department of the Armed Police Engineering University.

© koninklijke brill nv, leiden, ���5 | doi ��.��63/9789004276536_004

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Those goals were to bring about basically complete social insurance institutions, and make the system relatively sound. Other goals were to further increase the scale of coverage and stably increase the level of guarantees. Other goals were to basically resolve all problems handed down by history and provide a stable, sustainable social security network of appropriate level in order to completely construct a moderately prosperous [xiaokang] society. On April 27, the 26th meeting of the Standing Committee of the Eleventh National People’s Congress passed the Military Personnel Insurance Law of the People’s Republic of China [中华人民共和国军人保险法], which went into force on July 1, 2012. The insurance rights of military personnel, a special group, were thus granted legal protection. Per State Council orders, the National Audit Office brought together over 40,000 state-employed auditors nationwide from March to May to conduct audits into all social security capital under management of 31 provincial level regions, five cities of provincial-level planning status, the Xinjiang Production and Construction Corps, and others. The audits covered 29,273 enterprises, 4207 hospitals, and 8101 village (or residential) committees. The audit results indicate that the construction of China’s social security system is basically complete and that social security capital is basically guaranteed. They further demonstrate that the social security management system has basically been formed, and that particularly during the Twelfth Five-year Plan period, the construction of China’s social security system has realized historical strides. Finally they indicate that China has completed construction of the social security network with the most people covered in the world and has played such roles as “booster,” “shock absorber,” “stabilizer,” “safety net,” and others. China did all this in order to provide beneficial conditions for deepening reforms, institutional track-switching, and social stability. Under a keynote of seeking progress amid stability, the development of social security has made new strides. 1.1 Complete Coverage Has Been Achieved in Old-age Pension Insurance This is without a doubt the most outstanding achievement in the development of China’s social security system in 2012. In the second half of 2009, pilots for New Rural Social Pension Insurance were begun in 27 provinces (or regions), 320 counties (municipalities, regions, and banners), and some districts and counties of direct-controlled cities. In 2010, the State Council decided to expand New Rural Social Pension Insurance pilots, extending them to old revolutionary base areas, minority-inhabited areas, frontier areas and povertystricken areas. They clearly proposed that by 2010 the regions of Tibet, Gansu, Qinghai, Sichuan, and Yunnan basically be completely covered and that pilots be preferentially extended to the Sandizhou region of southern Xinjiang as well

New Development In Chinese Social Security In 2012

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as all other frontier counties and State major poverty alleviation counties in Xinjiang. Finally, they mandated that pilots be universally extended to the other 25 provinces and autonomous regions, 341 counties, and four direct-controlled cities in the nation. In 2011, the New Rural Insurance Scheme grew rapidly, adding 1076 counties (municipalities, districts, and banners) in 27 provinces and autonomous regions, and four direct-controlled cities within the scope of its pilots. At the same time, the pilot work was extended from the countryside to cities. The state decided to roll out Urban Resident Social Pension Insurance pilots in 1902 counties in 27 provinces and autonomous regions and in four direct-controlled cities. In the first half of 2012, the State Council further decided to launch the work of New Rural Social Pension Insurance and Urban Resident Social Pension Insurance in all county-level administrative regions in the nation, adding a total of 862 pilots in 23 provinces and autonomous regions. On Chinese Communist Party Founding Day, July 1, the Ministry of Human Resources and Social Security (MOHRSS) and other departments held the issuing ceremony for postal stamps to commemorate the propagation activities of the national urban-rural resident pension insurance system’s achievement of complete coverage, in the particularly significant locale of Xibaipo, Pingshan County, Hebei Province. On the strength of three big steps in three years, and the three major accelerations in only three years, China realized the historical accomplishment of bringing the urban-rural resident social pension insurance system from nothing to nationwide complete coverage, eight years faster than originally anticipated. Total fiscal expenditures from all levels of government into the two pension insurance subsidy funds over three years exceeded 170 billion yuan. As of the end of September, there were 449 million people covered by the two insurance plans, 124 million urban and rural residents receiving basic pension payments, in addition to 277 million enterprise employees enrolled in pension insurance. Now there are over 700 million people with pension insurance in China. The dream of everybody enjoying old age pension insurance has become reality, and China has built the world’s largest pension insurance system. Given the condition of voluntary participation, the rapid advances of the two pension insurances and the rapid growth of the number of people covered demonstrate that the establishment of the two institutions has obtained sincere support and positive response from the masses of rural citizens and unemployed urban residents. It also demonstrates the Chinese government’s extreme efficiency, which is virtually impossible in other nations. On October 12, the State Council convened a special meeting to give an overall summary of the work of New Rural Social Pension Insurance and Urban Resident Social Pension Insurance and solemnly commend all those avantgarde work units and individuals who had made outstanding contributions.

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Member of the Chinese Communist Party’s Politburo Standing Committee and State Council premier Wen Jiabao was present and gave a speech, in which he emphasized that the resident social pension insurance system that covers both urban and rural residents had been basically completed, and that development of the Chinese social security system is an important milestone. The wish of the Chinese people for thousands of years, that “the elderly be cared for,” is gradually becoming a reality. Basic Pensions for Retired Persons of Private Enterprises Have Been Adjusted Annually for Eight Consecutive Years The State Council decided that beginning on January 1, 2012, the level of basic pension payments be increased for persons who retired from private enterprises before December 31, 2011. The adjustments included universal adjustments and special adjustments, including preferential treatment for high-technology personnel and advanced-age personnel of private enterprises. These adjustments benefited retirees from over 60 million private enterprises and increased basic monthly per capita pension payments by over 200 yuan up to 1,721 yuan, a growth of 14 percent. They ensured that the purchasing power of those receiving basic pension payments not diminish and allowed retired persons to appropriately enjoy the fruits of the development of the economy and society. Although the magnitude of the adjustments was not small, high-level technical retirees of private enterprises are still not entirely satisfied, due to public institutions’ large subsidy increases, which further exacerbated existing disparities. Those personnel are now demanding a nationwide integrated preferential policy be put in place immediately, and that the standard of such be based on the retirement pensions of university professors and associate professors. As local governments view large increases to basic pensions of retired persons from local private enterprises as an important measure on which great emphasis is placed in improving the people’s livelihood, and for such reasons as local governments of different places trying to keep up with each other in the level of adjustments, the real level of adjustment of many provinces has exceeded the control line of 10 percent for local per capita basic pensions. Furthermore, in recent years, preferential policies implemented in adjustments to old-age pensions has caused a severe trend of “keeping up with the Joneses” among such mass groups as mid-level retired persons of private enterprises, former party leadership, former cadres, etc. The conflict is heated, and the problem of segmentation is severe. These are all areas to which we must pay further attention in adjustments to old-age pensions in the future. As of the end of September 2012, there were 298.75 million people participating in urban worker basic pension insurance nationwide, an increase of 1.2

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57

14.84 million. Of those, 226.09 million were currently employed, a growth of 10.44 million over the end of the previous year, and 72.66 million retired, a growth of 4.39 million over the end of the previous year. In the first three quarters, 733,000 new cross-provincial procedures were filed nationwide for pension insurance, an increase of 200,000 over the previous year’s figure of 533,000, a growth of 60.2 percent. Of those, 313,000 applied to transfer in, a year-on-year growth of 92,000, and 420,000 applied to transfer out, a yearon-year growth of 108,000. A total of 214,000 cross-provincial migrant laborer pension insurance procedures were filed nationwide, accounting for 29 percent of all cross-provincial procedures. Of those, 62,000 were transfer-in procedures, accounting for 20 percent of nationwide cross-provincial transfer-in procedures, and 151,000 were transfer-out procedures, accounting for 35.9 percent of nationwide cross-provincial transfer-out procedures. Private enterprise worker old-age pension relations are coming gradually onto the correct track. From January to September, income into the national basic old-age pension fund was 1.426 trillion yuan, a year-on-year growth of 268.5 billion, or 23.2 percent. Old-age pension fund expenditures totaled 1.1414 trillion yuan, a yearon-year growth of 205.7 billion, or 22 percent. Of that total, total enterprise expenditures were 1.0279 trillion yuan, a growth of 189.5 billion, and a year-onyear growth of 22.6 percent. 1.3 Establishment of Urban-Rural Resident Major Illness Insurance Once full coverage was achieved in medical insurance, the reimbursement scales of the “three catalogues” State basic medical insurance policy grew yearly, in 2011 up to 77 percent for urban worker basic medical insurance, 62 percent for urban resident basic medical insurance, and 70 percent for the New Rural Cooperative Medical Scheme. The real reimbursement rates of basic medical insurance have also risen steadily in recent years, especially in rural insurance. The real reimbursement rate for urban worker basic medical insurance grew from 58.91 percent in 2005 to 64.1 percent in 2011, a growth of 8.81 percent, and the rate for urban resident basic medical insurance grew from 45 percent in 2005 to 52.28 percent in 2011, a growth of 16.18 percent. The real reimbursement rate for New Rural Cooperative Medical Insurance grew from 24.8 percent in 2005 to 49.2 percent in 2011, a growth of 98.39 percent, and the real rate of urban-rural resident medical insurance grew from 23.78 percent in 2005 to 44.87 percent in 2011, a growth of 88.69 percent. The masses now have a basic guarantee of “being treated for illness,” and the common people now dare to seek medical treatment. That is not to say that the problems common people face in seeking medical treatment have been fully resolved. Notably, the protection levels of urban resident medical insurance

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and New Rural Cooperative Insurance are low, and institutions are not sound enough. Also, the share of burden of payment on the individual for high medical expenses for major illnesses experienced by the masses is still high and the troubling phenomenon of “one person gets sick; the whole family goes on hard times” still exists. Finally, coverage of major illnesses is still a shortcoming in the construction of a medical insurance system that covers all citizens. At the same time, basic medical insurance funds have low surpluses but large quantities of accumulated balances. The state has decided to launch urban-rural resident major illness insurance on the foundation of basic medical coverage and offer further protection against large-sum medical bills for major illnesses, in order to alleviate the problems of “becoming poor because of illness” and “becoming poor again because of illness” to which the masses react intensely. They are also intended to cause the vast majority of people to not again fall on economic hard times because of illness and to enable urban and rural residents to one and all enjoy coverage against major illnesses. This is an expansion and an extension of the functions of basic medical coverage, as well as a beneficial supplement to basic medical coverage. Major illness insurance covers those enrolled in urban resident medical insurance and in New Rural Cooperative Insurance. Its funds are earmarked from the urban resident medical insurance fund and the New Rural Cooperative Insurance fund, and thus no longer will individuals have to bear the burden of additional fees. Major illness insurance establishes urban residential annual per capita disposable income and rural annual per capita net income as the standard for household catastrophic medical expenditures. When the medical expenses of an insured citizen exceed that standard, it is very possible that the household will fall into economic distress. Major illness insurance gives a second reimbursement to that small portion of people whose burden of medical expenses meets criteria, on the foundation of a primary reimbursement from basic medical insurance. The requirement is that real reimbursements not be less than 50 percent. This will greatly mitigate the economic distress of those afflicted with major illnesses, and this is a program worthy of being called “benevolent rule.” As of the end of September, there were 529.06 million citizens nationwide enrolled in basic medical insurance, a growth of 55.63 million over the end of last year. Of that total, 261.17 million were enrolled in urban worker basic medical insurance, a growth of 8.9 million over the end of last year, and 267.89 million enrolled in urban resident basic medical insurance, a growth of 46.73 million over the end of last year. Of those enrolled in urban worker basic medical insurance, the number of currently employed citizens was 196.02 million, a growth of 6.53 million over the end of last year, and 65.15 million were retired persons, a growth of 2.36 million over the end of last year. From January

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to September, the nationwide basic medical insurance fund earned income of 477.19 billion yuan, a year-on-year growth of 28.2 percent, and expenditures from the fund were 376.01 billion, a year-on-year growth of 24.9 percent. The nationwide urban worker basic medical insurance fund earned income of 425.4 billion yuan, a year-on-year growth of 25.3 percent, and fund expenditures were 336.4 billion, a year-on-year growth of 22.7 percent. The balance of payments of the funds has remained basically stable. The First Nationwide Integrated Social Security Standards of Treatment are Born Article 39, line 3 of “The Work-related Injury Insurance Regulations” [工伤保 险条例] as revised and implemented in 2011, stipulate that the standard for one-time work-related injury grants-in-aid is 20 times the nationwide urban resident per capita disposable income of the previous year. This truly integrated the standards for nationwide one-time work-related injury grants-inaid. However, as data sources and specifications for nationwide urban resident per capita disposable income from the previous year are difficult to control, especially considering the impact of public opinion, it is easy to end up in a situation in which amounts approved for one-time work-related injury grantsin-aid are inconsistent. In order to tackle this problem, ensure that the regulations are fully implemented, and to make approvals easier for processing bodies, MOHRSS decided that it would annually issue unified cardinal numbers for approvals of one-time worker-related injury grant-in-aid, which it would derive from the nationwide urban resident per capita disposable income figures from the previous year, as published by the National Bureau of Statistics. One-time worker-related injury grants-in-aid are the first social insurance remuneration project to be implemented nationwide. One-time work-related injury grants-in aid for work-related injuries that occurred between January 1, 2012 and December 31, 2012 are to be remunerated based on 2011 nationwide urban resident per capita disposable income figure of 21,810 yuan as issued by the National Bureau of Statistics. As of the end of September, there were 185.67 million people enrolled in nationwide work-related injury insurance, a growth of 8.71 million over last year. Of that total, rural migrant laborers comprised 69.95 million, a growth of 1.67 million over the end of last year. There were 19.10 million employees of public institutions enrolled. In the nation, a total of 1.42 million people received remunerations from the work-related insurance system. From January to September, the nationwide work-related insurance fund earned income of 37.3 billion yuan, a year-on-year growth of 23.6 percent, and the fund’s expenditures were 27.8 billion yuan, a year-on-year growth of 52.9 percent. In a 1.4

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portion of regions, expenditures grew relatively fast year-on-year due to increases in remuneration standards, initiation of payments to people who had suffered previous work-related injuries, and other factors. 1.5 Other At the end of September, there were 149.16 million people nationwide enrolled in unemployment insurance, a growth of 5.99 million over the end of last year. There were a total of 2.08 million receiving unemployment payments, a growth of 110,000 over the end of last year. There were 150.74 million enrolled in maternity insurance, a growth of 11.82 million over the end of last year. From January to September, 2.283 million people had been paid remunerations from maternity insurance, a year-on-year growth of 594,000 or 35 percent. During the first three quarters, the nationwide unemployment insurance fund earned income of 79.01 billion yuan and made expenditures of 29.53 billion yuan, for an accumulated balance of 268.85 billion yuan. The nationwide maternity insurance fund earned income of 21.3 billion yuan, a year-on-year growth of 38.5 percent, and it made expenditures of 14.3 billion yuan, a year-onyear growth of 49.3 percent. The fund’s accumulated balance is 41.3 billion yuan. In addition, the signing ceremony for the “Social Insurance Agreement between the Government of the People’s Republic of China and the Government of the Republic of Korea” [中华人民共和国政府和大韩民国 政府社会保险协定] took place in Beijing on October 29. MOHRSS Minister Yin Weimin and South Korean ambassador to China Lee Kyu-hung signed the Agreement on behalf of their respective governments. It is the first social insurance agreement signed by the Chinese government with the government of another nation since the issuance and implementation of China’s Social Insurance Law. It appropriately resolved the insurance problems faced by citizens of either nation working abroad in the other nation and reduced the burden on relevant enterprises and individuals. The signing of the agreement will provide better social rights guarantees for enterprises and employed individuals of either nation working in the other and will further promote economic and individual contacts between the two nations. At present, the Chinese government has begun bilateral social insurance agreement talks with 19 nations with which it maintains close economic and trade ties. 2

Central Issues of the Year

The faster social security grows, the more people who pay attention, the more controversy, and the more central issues for discussion. In 2012, the government placed great emphasis on the people’s livelihood. Also, social security

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and the people’s livelihood became linked closely and consistently garnered great attention, never lacking for topics of discussion. 2.1 The Dispute over Pushing Back the Retirement Age The controversy regarding pushing back the retirement age has been going on for a long time. Almost every year this topic comes up once and inevitably makes big waves. This year the reason the discussion has become so heated is that some people think that “pushing back the retirement age is an inevitable trend.” They link together so-called “pension fund shortages” and the retirement age, making the issue even more complicated. Thereafter, www.people .com.cn conducted an online survey asking “what do you think about flexibly pushing back the age of eligibility for receiving retirement pension payments?” In only 10 days, 2.32 million people voted, 94.8 percent of whom were against the proposition. Views of the retirement age issue vary among different groups and different professions, as do interests demanded. Some hope to retire early, while others hope to push back retirement. This gave rise to two major camps: the “for-early-retirement” faction and the “push-back-­retirement” faction. Opponents think that pushing back the retirement age is not beneficial to social fairness, especially for ordinary laborers and low income earners, and that it might give rise to interest groups and unfair distribution. They also think that it will exacerbate low youth employment rates. Some even think that pushing back the retirement age is tantamount to robbing from the poor to help the rich. Those in support think that China’s problem of an aging population is growing more severe daily, that “demographic dividends” are growing weaker daily, and that pension funds will soon face major shortages. For all these reasons, they find it urgently necessary to push back the retirement age. Increasing the legally-mandated retirement age is also a requirement for increasing the average life expectancy and extending the fixed number of years for investments in human capital. It is the necessary choice for protecting inter-generational fairness. Current retirement policies have led to wastes of human capital and have particularly affected the levels of female pension funds. “Flexible retirement” is a good method for resolving conflicts between old-age care and employment, but we should make careful considerations and proceed slowly and cautiously. The opinions of both supporters and opponents have demonstrated the following trend: proceed slowly and pension payments: some families happy, some families concerned. This is nothing more than a problem that should never have become a problem. Increasing the retirement age is not a necessary step for the coming years within pension insurance institutions. We have nothing to be alarmed about, and certainly don't need to resort to anger. The so-called “pension fund expenditure shortcomings” are not a reason for increasing the retirement age. Before increasing

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the retirement age, we must consider the overall employment situation as well as the distribution of laborers in primary, secondary, and tertiary industries. We must also consider such social factors as the average life expectancy. Society’s response to pushing back the retirement age merits our deep reflection. A direct look shows us that the vast majority of people think that increasing the retirement age will inevitably cause ordinary people to suffer losses. At a deeper level, they’re concerned about the source of the “fiscal necessity” of this policy. At present, how to standardize the retirement age is of much more significance than controversy regarding increasing the retirement age, particularly those questions about retirement ages that frequently cause confusion or controversy in the course of daily work, such as whether or not to integrate the retirement age of female cadres and female workers in enterprises, and if so, how to go about integration? Another example is the inconsistency of retirement ages for similar positions within the same departments in different regions. Social security treatment must be fair, and the conditions for enjoying social security benefits must also be fair. Fairness is not only economic equality, but also equality of rights. 2.2 Misreadings of Pension Insurance Fund Investments International experience dictates that “pension fund speculation” is not an industry phenomenon. Particularly in American and European countries, pension funds are insulated from stock markets. U.S. pension funds are managed by the Social Security Trust Fund. U.S. law stipulates that pension funds may purchase only government bonds and not engage in any other investments. Many European nations likewise manage pension funds as “state security strategic reserves” and do not allow them to enter the stock markets. China’s current basic pension insurance funds are allowed only to deposit money in banks or to purchase state bonds, but this policy has long been denounced. Officials fear that if they allowed diversified investments and those investments flopped, there would be great losses. Current policies have ensured security, but there is great risk of devaluation of the funds; the funds currently lose several hundred billion yuan this way annually. We’ve long been stuck between a rock and a hard place. The majority of voices demanding that pension funds to be allowed to invest in the stock market has been professional academics, securities regulation departments, and securities operators. They are calling changes in order to maintain or increase the value of their funds. Particularly in recent years with the stock market downturn, calls for pension funds to be allowed to enter the stock markets, thereby rescuing those markets,have grown louder. At the beginning of the year, with permission from the State Council, the National Social Security Fund Council was entrusted by the government of Guangdong

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Province to invest and operate 100 billion yuan in surplus capital from the province’s urban worker basic pension insurance fund. With the exception of the three provinces of the Northeast, which are experimenting with capital in individual pension insurance accounts, locally managed basic pension insurance funds elsewhere are all under entrusted-investment management, the first time such has happened since 1997. On March 19 in Beijing, the National Council for Social Security Fund and the Guangdong provincial government signed a commissioned investment agreement, which stipulated that capital would arrive in batches, and provisionally established the agreement’s time limit as two years. In a moment’s time, the stock exchanges in both Shanghai and Shenzhen started dropping after a red hot streak. Some media outlets and individuals mistakenly interpreted “entrusted investment operations” as “entrusting investments to the market.” Some even interpreted it as “entering the stock market.” The National Council for Social Security Fund then quickly issued a clarification that the interpretation of entrusted pension fund operations as “entering stock markets” was not accurate. They made it clear that they will maintain a guiding principle of caution, and that newly added capital will be distributed more into fixed income products in order to guarantee that the funds at least maintain value or maybe even gain in value. Among the potential directions for possible investment directions, they never once mentioned stock markets. It is noteworthy that Guangdong’s move has incited the interest of other provincial governments. Some have even planned to copy the plan. We don’t know if there are other motives involved other than increasing returns on capital. Nevertheless, this has been an effective effort in resolving the current problem of excessively low operating returns within pension funds. We cannot set fund investment yields in individual years as criteria for evaluation, but we must instead consider long-term yields and systemic risk. At present, security remains priority number one. 2.3 The Dispute over the World’s Highest Social Insurance Fee Rates Perhaps as a result of the perspective of relevant research bodies that China’s social security fund has massive fiscal shortages, social insurance fees have become a major topic. On the Internet there have been several reports that “China’s social insurance fees are the highest in the world,” which have garnered widespread attention. The Renmin ribao [人民日报] has published articles to clarify the truth, on the basis of statistics from social security fees in 173 different countries. At present, the sum of social insurance fees from all five of China’s social insurances is about 40 percent, putting China in 13th place among countries in the sample, meaning that China’s pension insurance rates are relatively high internationally. The national conditions of the various

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countries vary widely, and the capital planning for social insurance is affected by a composite of such factors as population structure, institution models, coverage scopes, and others. For example, many developing nations operate very few social insurance projects, and their coverage rate is low, meaning that their rates are also low. It is very difficult to use a simple comparison of social insurance rates to reflect the entire situation of the various nations’ social insurance fund planning scales. Enterprises are concerned about the level of social insurance rates because it affects their human resources costs, their competitiveness, and their profits. The masses of society, on the other hand, are not primarily concerned with the level of social issuance rates, but are rather more concerned about the amount of fees they pay into the system corresponding with the level of service they get back, as well as with the sustainability of the social security system on the whole. Relevant experts think that other than strengthening balance of payments management of the funds and ensuring that the funds maintain value, the key to controlling or reducing social insurance fees lies in increasing fiscal investments into the social security system. At present Chinese fiscal expenditures into social security are markedly low; only 20 percent or more of annual fund growth comes from State coffers. The focus of fiscal expenditures from now on should be gradually shifted to social security. In its suggestions regarding income distribution reform submitted to high level party officials, the Chinese Democratic League proposed that the state increase the proportion of increases to urban-rural resident income to public investments into the development of social security by 100 percent or more on top of the existing foundation and make growth of investments into the people’s livelihood and welfare higher than fiscal growth a rigid restricting indicator. They also suggested that the party strive to make fiscal expenditures around 30 percent of social security growth by 2020. 2.4 The Dispute over Who Will Handle Major Illness Insurance As compared with the above three hot topics, this topic is hot primarily only within the insurance industry. In the long term, social insurance is handled primarily by social insurance handling bodies belonging to government departments. But in the face of the surging growth of enrollees, the work involved in processing insurance enrollments has ballooned, meaning long-term shortages in funding, staffing, and supporting technology. The new round of medical system reforms are aimed at “commissioning qualified commercial insurance organizations to handle all manner of medical insurance management services.” In recent years, some local governments (Zhanjiang, Guangdong; Taicang, Jiangsu; Luoyang, Henan, and others) have begun actively exploring potential methods for the integration of government guidance and mar-

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ket mechanisms. That would mean setting aside a portion of capital, and on the basis of government established policies, handing it over to commercial insurance organizations to operate on the basis of a contractual system. Those companies would then be responsible for their own profits and losses. On a foundation of summarized local experience and repeated research of evidence, the model for the urban-rural resident major illness insurance initiated this year is “guidance by the government and operation by commercial insurance organizations.” Should public bodies be responsible for social insurance? If that’s not necessary, then what kinds of commercial insurance organizations and public bodies are better and can better ensure the interests of the insured? Can the security of the funds be guaranteed? If the fees paid to commercial insurance organizations are used to improve the quality of service of the insurance organization, what will be the result? Will there be problems in the linking up of the two? At the end of the day, this is a dispute between the government and the market. There is not much international precedent for the various potential ways in which major illness insurance can be handled, but no matter what, they must conform to China’s present national conditions and make brave explorations and innovations into public service management and operations models. Due to time shortages, the pros and cons of allowing commercial insurance organizations to handle major illness insurance have not yet fully come to light. More time will be needed to test the waters. No matter what, however the People’s Insurance Company must never again be allowed to assume control of all enterprise pension insurance and then give up halfway, a situation that impacted the interests of all retired persons of private enterprises. 3

Outlooks for 2013

Premier Wen Jiabao pointed out that during the accomplishment of the tasks of the coming five years or longer, one of the things upon which the masses place attention, and which we must place particular emphasis on and feasibly grasp, is as follows. As the economy develops, we must ceaselessly increase urban and rural resident incomes and improve the social security system. We must gradually diminish the disparities in development between urban and rural areas and between regions and strive to resolve problems of unequal income distribution. The development of social security remains an important task for the coming year and thereafter. On the whole, since in recent years the larger institutional system has become relatively sound, the intensity of progress has been great, and as the

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previous government term has expired, we predict that the keynote of social security development next year will be “stability.” We predict that policy gaps will be remedied and that policies will be deepened and perfected. We predict that reserves will be strengthened and that there will be concrete results in processing. Finally, we predict that quality will be pursued on a foundation of maintaining quantity. However, we also think that since the beginning of the year, economic growth slowdowns have affected expansion of coverage of every social insurance program and collections by the various funds, and that the magnitude of increases to the number of people enrolled will shrink. Next year, the hysteresis effect of slowing economic growth will grow more pronounced, and the difficulties facing the advancement of social security will certainly be greater than this year. Based on this year’s situation, we have made the following conclusions about the development of social security next year. Joint Policies for Urban-Rural Resident Pension Insurance and Enterprise Worker Basic Pension Insurance are About to be Issued and Implemented As early as 2001, the State issued “The Measures for Fluidly Linking Up Pension Insurance Institutions Between Public Institutions and Private Enterprises” [职 工 在 机 关 事 业 单 位 与 企 业 之 间 流 动 时 的 养 老 保 险 衔 接 办 法 ]. Though these measures weren’t ideal, they were better than nothing. In 2009, the State Council General Office issued the Provisional Measures for Urban Enterprise Worker Basic Pension Insurance Relationship Transfer and Continuance [城镇企业职工基本养老保险关系转移接续暂行办法]. Three years hence, operations within pension insurance transference and continuance are stable, and the amount of such business is steadily rising year by year. In August of this year, MOHRSS, the Ministry of Finance, the General Staff Headquarters of the People’s Liberation Army, the General Political Department, and the Central Military Commission jointly established regulations for pension insurance relationship transference and continuance of retired military personnel. That is to say that in addition to the linkage of urbanrural resident pension insurance and public-private worker pension insurance, there are already operable procedures for transference between public institutions and between regions. Now that pension insurance has basically achieved total coverage, transference and linkage difficulties between institutions are becoming more prominent daily. If this problem goes unresolved, urban-rural pension insurance will be unable to meet planning goals, and will have great difficulty in mitigating the insurance enrollment worries of rural youths and in attracting their active participation. This will also give rise to many highly complicated phenomena in insurance enrollment. The issuance of nation3.1

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wide integrated urban-rural pension insurance institution linkage measures represents the realization of the long-held dreams of the masses of workers, especially rural migrant laborers, and is one of the central issues being paid attention to at all levels of society. The difficulties of linking the two together were concentrated in the following. First is the time of linkage, i.e. real-time linkage or linkage after reaching the legal age of retirement. The second is the conditions of linkage, i.e. whether a payment period has been established. The third is whether transference between institutions converts the payment period or whether it jointly calculates payment periods. The fourth is how to resolve complicated enrollment problems. The fifth is the procedures and time limits of processing. At present basic consensuses have been reached on these issues after penetrating research and frequent discourse. Conditions are ripe right now. Urban-Rural Resident Pension Insurance Institutions Will Be Further Improved The number of people covered demonstrates that urban-rural resident pension insurance institutions have already become the primary entity of China’s pension insurance institutions. The institutional models for basic pension funds and individual accounts are both simple and clear. In the future, the level of pension funds will be adjusted to the limit of basic pension funds. The funding models for integration of payments by individuals, collective subsidies, and government subsidies are very precise. At the same time as emphasizing the burden of the individual to pay fees, all level of governments will actively assume the burden of government subsidies, and the problems caused by funding gaps from those groups of people who are unemployed or earn low income will be well resolved. In contrast, private enterprise worker pension insurance institutions and accurate quantification of transitionary pension funds have not appeared. It is thus difficult to make the first step in solidifying individual accounts. After many years of adjustments, the incentive mechanisms of institutions are weakening. In order to comprehensively plan for urban-rural pension insurance system construction, we must continue improving the policy systems for the New Rural Cooperative Medical Scheme and urban resident insurance. We must further improve encouragement mechanisms for people to enroll in insurance. We must truly achieve more payments and more subsidies, more long-term payments, and more gains. We must drive up the proactivity of rural migrant laborers and urban residents to enroll in insurance. The policies for New Rural Insurance and urban resident insurance need to be integrated at the appropriate time. 3.2

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Continue Adjusting the Pension Fund for Retirees from Private Enterprises The basic pension fund for retirees of private enterprises has been adjusted annually for eight years running. It’s still a point of suspense whether they will make it a ninth straight year in 2013. The necessity of the situation demonstrates that after eight consecutive years, adjustments have become habit. Expectations from all parts of society, especially from retirees, are very high. On top of that, considering the convening of the 18th National People’s Congress this year and the end of the previous term of government next year, the probability of adjustments is high. In recent years, prices have continuously risen. From the perspective of maintaining the buying power of retirement pension funds against rising prices, we must make adjustments to mitigate the losses suffered as a result of rising prices. The disparity in treatment between retired high-level workers of private enterprises and those from public institutions remains large. We must continue adjustments and strengthen preferential treatment in order to remedy these disparities. We predict that the method of adjustment will be a continuation of this year’s method, i.e. a synthesis of universal adjustments and targeted adjustments. The magnitude of adjustments will be similar to this year’s. But if adjustments continue, the sustainability of basic pension insurance funds will be a giant consideration. Central financial planners should correspondingly increase subsidies to local pension insurance funds to remedy their financial gaps. In the long term, basic pension funds cannot be adjusted every year. A summary of the experience gained from eight years of consecutive adjustments is that there is no time to lose in creating a regular adjustment mechanism for basic pension funds. New Rural Insurance and urban resident insurance have been in operation for three years now. The basic monthly premium of 55 yuan per month has not been increased. From the perspective of strengthening the institution’s attraction power and exploring the construction of adjustment mechanisms for basic pension insurance funds, it is extremely necessary to appropriately increasing basic pension fund standards. 3.3

Comprehensive Controls for Basic Medical Insurance Payments Will Soon Be Rolled Out Medical care cost controls are a major problem worldwide. As medical insurance has achieved complete coverage, basic medical insurance fund expenditures have grown increasingly larger, owing to the aging of the population and the increases to the percentage of reimbursable medical costs. As a result, relevant departments have increased controls on total reimbursement costs and on budgeting management for the comprehensive basic fund bal3.4

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ance of payments. On that foundation, they plan to roll out the work of total reimbursement cost control in all planning regions on the directional basis of per-head payments as calculated through explorations of clinical overall ­planning, and illness categories covered by major illness insurance in hospitals and clinics. The primary contents of the reforms are as follows: strengthening and improving fund budgeting management, strengthening balance of payment budgeting, and augmenting the executive implementation strength of budgeting. Also, on the principle of maintaining surpluses by planning income based on expenditures and maintaining a balance of payments, after excluding one-time advance payments by enrolled work units and individuals, comprehensive planning should consider such factors as price levels, levels of medical care costs, etc. in order to reasonably establish an annual total reimbursement control objective of medical insurance funds being allocated to medical care organizations in planning regions. They should also gradually establish an evaluation and oversight system for medical services centered in ensuring quality, controlling costs, and standardizing treatment, and control excessively fast growth of healthcare costs. In addition, the following have all come into the field of vision of policymakers: policies for subsidies paid to family members of the deceased and the handicapped,integrated planning for urban and rural medical insurance and policy linkage, reforms to the methods of payment into medical insurance, advancements to workers medical insurance accounts, the construction of a work-related injury system that integrates the three constituent parts into a unified whole, normalizing and increasing the comprehensive planning level of pension insurance and medical insurance, advancing reforms to state-owned work unit pension insurance mechanisms, and others. At the management level, the following will be further strengthened: advancement of condensing the processes for enrolling in the five social insurances into one system, construction of the social insurance information network, the distribution of social security cards, the creation of a “network service hall,” gradual integration, standardizing management service contents and standards, advancing social insurance standardized construction, and others.

Chapter 5

Report on Reforms to and Development of the Medical and Healthcare Industries in 2012 Fang Lijie* Abstract The new round of healthcare reform that begun in 2009 has now advanced into its fourth year. On the whole, the new healthcare reforms are being implemented on the basis of the idea that “everybody should enjoy access to basic medical and healthcare service.” They emphasize the “public welfare nature” of restoring the health service system and aim to transform health service models in order to respond to changes in both the population structure and the spectrum of diseases. The reforms have clarified funding institutions and have begun building a basic framework for grassroots medicine. In 2012, healthcare reform entered the most central, and also the most complicated area: reforms to public hospitals. Nevertheless, there are still great uncertainties in reforms to grassroots healthcare providers. Reforms to public hospitals remain in the initial stage of framework construction, especially in regard to financing, and have not yet evolved into corresponding services. In the future, reforms to healthcare providers will be the focus of overall healthcare reforms.

Keywords healthcare service system – healthcare provider reforms – grassroots medicine – public welfare

From 2009 to present, there have been great changes to the Chinese medical and healthcare systems every year. These changes were the result of the new round of healthcare system reforms initiated in 2009. The depth and breadth * Fang Lijie, Sociology Doctorate, associate researcher at the Chinese Academy of Social Sciences Sociology Institute.  The author was assisted greatly by Mr. Zhao Hongwen of the World Health Organization and his friends, and would like to express gratitude for that help here.

© koninklijke brill nv, leiden, ���5 | doi ��.��63/9789004276536_005

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of the reforms indicate that the central government has decided to implement fundamental reforms to the healthcare system. Healthcare system reforms are an extremely complicated process. The Chinese Minister of Health Chen Zhu has described the process as possessing “four beams and eight pillars.” The “four beams” are systemic reforms to the public health system, the medical service system, the medical assurance system, and the drug supply system. The “eight pillars” are medical regulation bodies, operating bodies, investment bodies, price formation mechanisms, regulation bodies, technological and human resources guarantees, information systems, and legal mechanisms. The new round of healthcare reform is targeting these “four beams and eight pillars” in order to reconstruct the healthcare “building.” 1

Progress of Healthcare Reform

Of the four systems for medical and healthcare, the earliest to be reformed was the medical assurance system. The CCP and the State Council Resolution to Further Strengthen Rural Healthcare Work [中共中央、国务院关于进 一步加强农村卫生工作的决定] determined that pilots would be launched starting in 2003 to comprehensively plan for the New Rural Cooperative Medical Scheme (NRCMS) and the rural medical assistance system, and that the coverage of the NRCMS would be greatly expanded. Its target was a participation rate of over 90 percent in all of China’s rural areas. In 2007, urban resident basic medical insurance pilots were also initiated. Prior to the comprehensive initiation of healthcare reforms in 2009, great achievements in medical assurance had already been made. From the perspective of healthcare reform, as the NRCMS for the first time clearly defined the State’s fiscal duties in providing rural medical assurances, the Scheme became a turning point for the development of healthcare in China. All reforms that followed were continuations of “expanding the government’s responsibilities.” From the perspective of social welfare, the NRCMS and urban resident medical insurance systems, as well as the urban worker medical insurance system begun in 1998, created an institutional framework for insurance that covers the entire population. That hinted that previous medical and welfare benefits, previously called “labor assurances” targeted at only the conventional urban employed population, were now going to be upgraded to a “social assurance” system in the true sense, one which covers the entire population. This was also a portion of the transformation of welfare models in China. Behind the 2009 healthcare reform were the ever more severe problems widely bemoaned as “seeking medical assistance is expensive” and “seeking

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medical assistance is difficult.” In March 2009, the Opinions of the CPC Central Committee and the State Council on Deepening the Health Care System Reform [中共中央、国务院关于深化医药卫生体制改革的意见] were issued, symbolizing the formal beginning of the new round of healthcare reform. A lack of government responsibility in the previous stage led to a healthcare system that was overly concerned with pursuit of profits. For this reason, the new round of healthcare reform placed particular emphasis on the target of “everybody enjoying basic medical and healthcare services,” as well as the public nature of basic medical services and the public welfare nature of public healthcare providers. The Opinions also proposed comprehensive reforms to and harmonious development of the four sub-systems. The Implementation Plan for the Recent Priorities of the Health Care System Reform (2009–2011) [医药卫生体制改革近期重点实施方案 (2009–2011年)] put forward that five focus reforms should be grasped from 2009 to 2011: accelerating the promotion of basic medical assurance system construction, initially constructing a state essential medicines program, shoring up the basic medical and healthcare service system, promoting gradual equalization of basic public healthcare services, and promoting reform pilots in public hospitals. In the four years that followed, the five reforms were not implemented at the same time or at the same pace. They were rather developed gradually from shallow to deep, from simple to complex. The first reforms to achieve substantive progress were the “essential medicines program” and the “equalization of basic public healthcare services.” Shortly after the issuing of the “2009 State Essential Medicines Catalogue” [国家基本药物目录] 30 percent of government-founded urban community health service centers and county (grassroots medical and health centers) completely stocked essential medicines and implemented zero-margin sales thereof. By 2011 this system had achieved complete coverage of all grassroots health centers. Also in 2009, the State Basic Public Health Service Projects [国家基本公共卫生服务项目] and State Basic Public Health Service Norms (2009) [国家基本公共卫生服务规范 (2009 年版)] were issued, allocating 15 yuan of public health service funding from all levels of government, providing nine categories of basic public health services to urban and rural residents for free, and increasing the comprehensive planning standard for 2011 to 25 yuan. In addition to these two sub-systems, the major work focuses of the medical assurance system from 2009 to 2011 were placed on extending the coverage of the existing institutional framework, increasing the level of assurances, and improving management. At present, urban-rural medical assurances cover over 90 percent of the population, and public planning standards have been increased to approximately 300 yuan. The major-illness assurance program has also gone into practice.

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The implementation of both the essential medicines program and basic public health projects has had a direct influence on grassroots healthcare providers. At one level, they have all begun stocking essential medicines and selling them at zero-margins, brought an end to “supporting the medical industry by the sale of drugs,” and cut off the previous primary revenue source of grassroots healthcare providers. At another level, most funding for basic public health services has gone to grassroots healthcare providers, giving them an additional source of revenue, causing them to become more service-centered in medical treatment, and endowing them with a dual focus of medical care and public health. For those reasons, after implementation of reforms to the two subsystems, further reforms to grassroots healthcare providers were launched in rapid succession, attaining major progress in 2010 and 2011. The State Council General Office Opinions on the Establishment and Improvement of Compensation Mechanisms for Grassroots Medical and Health Organizations [国务院办公厅关于建立健全基层医疗卫生机构补偿机制的意见] issued at the end of 2010 stipulated that the primary income sources of public grassroots healthcare providers be shifted away from the sale of drugs and toward service fees and government compensations. Service fees stipulated thereby could be divided into medical assurance expenditures and personal expenditures. Government compensations could be divided into public health funding and current balance of payments assistance. In this way, over half of public health funding was to come from the government, and grassroots medical services could once again be of a public welfare nature. Although 2011 saw the passage of the important document “Guiding Opinions Regarding Reform Pilots to Public Hospitals” [关于公立医院 改革试点的指导意见], and the selection of 16 public hospital reform pilot cities connected to State guidance, neither the document nor the pilots were able to bring about a clear framework for public hospital reforms. Public hospital reforms in all areas in 2010 and 2011 were limited to the following: optimizing diagnosis and treatment processes, standardizing medical behaviors, overall implementation of measures to make the people’s lives more convenient, decreasing the wait time for medical treatment, and improving the technological level of the medical environment for the masses. Reforms did not touch on systemic problems. At this point, we can look at this set of reforms from a different perspective. If we divide medical services into grassroots medical services and services provided at the county-level and higher, then those reforms over the three year 2009 to 2011 not aimed at medical assurances were primarily focused on the grassroots level. The essential drug program was focused primarily on grassroots organizations, and grassroots public health services are a component of primary care. The implementers of both placed emphasis on g­ rassroots ­healthcare

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providers, on which reforms were thereafter enacted. This gave rise to a complete grassroots health services framework based on “fundraising centered in fiscal compensations and public health funding—the essential medicines program—grassroots healthcare providers—basic health services (including public health services).” The core of the framework is the service-oriented behavior of grassroots healthcare providers. Continuing in that line of logic, we should next construct a healthcare service framework for healthcare providers at the county-level and up that includes the aforementioned funding, medicine, and medical treatment bodies. So in 2012, reforms to public hospitals will finally be included on the legislative agenda, as the State Council General Office Notice Regarding Opinions of Comprehensive Reform Pilots to County-level Public Hospitals [国务院办公厅关于县级公立医院综合改革试点意见的通知], issued in June, gives a clear explanation of the road ahead for reforms to public hospitals. The reform “blueprint” for medical and health system reforms has finally been issued in its final form. In the coming sections, we will give a detailed description of the concrete prospects for reforms as described by the “blueprint,” as well as problems to be faced and directions in which to proceed in 2012. We must also clarify that when we appraised the healthcare system and all its subsystems, assessed not only to whether they were inherently rational and adhered to logic, but also the results of implementation. The end goal of health policies and medical services is to increase the overall level of health in society. As these comprise “social policies,” we also need to consider their fairness and sustainability. For that reason, accessibility, fairness, and sustainability were the core evaluation standards. Those three plus a fourth standard, the reasonability of reform measures, comprise the four analysis standards of this chapter. 2

The Development of Medical Assurances

Medicine, medical insurance, and hospitals together comprise a complete system. Services provided by healthcare providers are the core of this system, and medical insurance is its financial foundation. As previously stated, reforms to the medical assurance system were the first healthcare reform initiated, as well as the subsystem which has shown the most marked development. If one were to say that there were no controversy over whether social policies in the 1990s or 2000s should provide “emergency assistance” or “poverty assistance,” then by now it would be safe to say that a consensus has been reached that welfare for the entire population is now the clear direction of development, and the

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Resident social medical assurances Unit: percent

Urban worker basic insurance Publicly-funded medical care Urban resident basic medical insurance NRCMS Other social insurance Uninsured

Total 2011

2008

Urban 2011

2008

Rural 2011

2008

14.8  0.7  9.5

12.7  1.0  3.8

47.4  2.2 25.1

44.2  3.0 12.5

 2.9  0.2  3.8

 1.5  0.3  0.7

69.5  0.3  5.2

68.7  1.0 12.9

13.4  0.9 10.9

 9.5  2.8 28.1

89.9  0.1  3.1

89.7  0.4  7.5

Data source: All data in this chapter come from The China Health Statistical Yearbook [中国卫生统计年鉴]—issued via the Ministry of Health official website—statistical abstracts, government documents, and speeches by and interviews of officials. Data from all subsequent figures and tables all come from the same sources and will not again be cited.

first step in that direction is “the state shouldering the brunt of the financial burden.” For that reason, in the the area of healthcare, medical assurances are quantitative reforms that don’t touch on too many interest disputes, meaning that their power to obstruct reforms is very limited. At another level, there is already great controversy regarding the “large” problems of medical assurances, including, for example, insuring the entire population and the government’s responsibilities. For that reason, institutions in this area were the first to be issued. 2.1 Major Developments in the Medical Assurance System in 2012 After nine years of development, the coverage rates of urban worker medical insurance, urban resident medical insurance, and NRCMS insurance have all exceeded 90 percent. The medical insurance framework for the entire population has been initially established. The per capita funding for both NRCMS and urban resident medical insurance has hit approximately 300 yuan. The amount of expenditures for in-patient procedures picked up by the government for NRCMS is above 70 percent, and around 75 percent for urban resident medical insurance. After the achievement of complete coverage, the focus of work in medical assurance in 2011 and 2012 was shifted to increasing the level of assurance and the level of management. First, major illness assurances made great strides

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in these two years. As of 2012, 20 major illnesses were included in NRCMS major illness insurance, and the real reimbursement rate of expenditures for those major illnesses was raised to 70 percent. For all those who qualify for emergency assistance, the Ministry of Civil Affairs compensates another 20 percent, bringing the overall level of reimbursement up to 90 percent. In addition, six ministries and commissions jointly issued the Guiding Opinions Regarding the Development of Urban-Rural Major Illness Insurance Work [关于开展城乡居民大病保险工作的指导意见], which allocated either a certain proportion of fixed sum of the urban resident medical insurance fund or the NRCMS fund to go toward major illnesses. The Guiding Opinions also stipulated additional compensations for individuals meeting criteria with heavy medical bill burdens even after a preliminary compensation for expenses for a high-price major illness. Second, increasing importance is being attached to the management of medical assurance. The focuses of work in the NRCMS in 2012 were the following: accelerating the promoting of reforms to NRCMS methods of payment, actively exploring the participation of commercial insurance organizations in the pilot work of NRCMS service centers, continuing to strengthen NRCMS oversight and regulation, and soundly performing finetuned regulation of NRCMS. The Guiding Opinions Regarding the Promotion of Reforms to New Rural Cooperative Medical Scheme Payment Methods [关 于 推 进 新 型 农 村 合 作 医 疗 支 付 方 式 改 革 工 作 的 指 导 意 见 ] demanded that in 2012, pilot work be begun in reforms to payment methods in the form of actively comprehensive planning of designated healthcare providers within a given region and complete coverage of the spectrum of diseases. They also demanded that the scale of implementation be gradually expanded and that relevant departments strive to realize complete implementation of comprehensive planning across all regions by 2015. That is to say that as the institutional framework has been gradually improved, medical assurance has moved toward a more fine-tuned technical level. 2.2 Evaluation of Progress First, a look at the accessibility of medical assurance resources demonstrates that an institutional framework for the coverage of the entire population has already been basically established and that the level of assurance is being gradually increased. Compensatory major illness assurance has been established, and the level of management is improving. The sum of all those facts indicates that the development of medical assurance is extremely praise­worthy. Figure 5.1, however, indicates that although the share of individual health expenditures is declining yearly (from 60 percent in 2001 to 34 percent in

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Figure 5.1 Healthcare costs year to year

2011), the absolute amount of individual health expenditures has been rising yearly (from 301.3 billion yuan in 2001 to 846.5 billion yuan in 2011). This is a reflection of the still heavy burden of medical expenses on the individual. That is to say that the speed of increases to the level of medical assurance has not caught up with the rate of growth of overall medical expenses. This is not an inherent problem of the level of medical assurance, but is rather a reflection of the excessively fast growth of healthcare costs. A look at welfare states demonstrates that the greatest threat to sustained operations of their systems is an excessively high fiscal burden caused by rapid growth of healthcare costs. For that reason, since the 1980s, every single welfare state has established cost controls as the ultimate priority of reforms to their medical systems. In China, health-related expenses accounted for 5.15 percent of GDP in 2011, less than the average level of high-income nations of 11 percent, but still worthy of attention due to the trend of excessively fast growth of health expenses. Figure 5.1 demonstrates the rapid growth of medical expenses in the recent decade. If this trend persists, the entire medical system will face severe risks in the form of growing costs. In reality, the government departments in charge of NCRMS and urban medical insurance (health departments and social security departments, respectively) have begun to place importance upon this issue. Documents demonstrate that the level of attention placed on medical assurance regulation in the past few years has grown continuously. That is a reflection of the government’s assuming the burden of funding. At one level, the government, as the de facto insurance agent for insured people, needs to increase the efficiency of its capital usage and ensure that its resources benefit the insured to the greatest extent possible. At another level, as governmental departments, they need to control costs to a reasonable degree and not allow them to become a n ­ egative

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influence on economic development. A reliance upon technical measures alone is insufficient to effectively control rising costs. As stated above, medical assurance is just one portion of the medical services system, and it was the system that “compensated hospitals for the sale of drugs” that caused “inflated high drug prices.” Since there were no changes to the bodies that compensated public hospitals, when medical assurances were promoted in isolation for ten years, they actually encouraged excessive use of drugs and medical examinations. Figure 5.1 demonstrates that costs have grown especially quickly since 2007, the very year that NRCMS achieved total coverage and that urban resident insurance went into implementation. In summary, medical insurance, medicine, and hospitals are all interconnected within a complete system, and so medical insurance institutions attempting only to resolve the problem of “expensive medical treatment” is insufficient. If reforms to medicine and hospitals are not successful, we will not only be unable to achieve the targets of healthcare reform, but there will also be risks to economic development as well. In addition, at the societal level, the fragmentation of the medical assurance system has brought about severely insufficient fairness. Such insufficient fairness is not a problem inherent to the medical assurance system. It is rather a universal phenomenon in the area of social welfare at our current stage, or in other words it is determined by the peculiarities of China’s current transformations. First, the peculiarity of the “identity system” within China’s welfare institutions, which first came about during the era of the planned economy, still exists today. The three portions of China’s present medical assurance institutions are all partitioned based on the identity system, i.e. urban worker medical insurance, urban resident medical insurance, and the NRCMS. Even within a single region, there are different levels of funding for all three programs, and all three are managed by different departments. Second, disparities between regions have been a major cause of unfairness. The responsibility for social welfare funding lies primarily with local governments, and so different levels of economic development among different regions has led to disparities in the level of medical assurances. In 2011, the highest funding standard in the NRCMS system was in Shanghai, at a level of 987 yuan per capita, and the lowest level was in Guizhou, at only 225 yuan per capita. In one county of southern Jiangsu, NRCMS and urban resident insurance were joined together in 2008, with a funding standard of 500 yuan in 2012 (350 yuan from the two levels of fiscal subsidies and 150 in individual resident payments). The funding standard for urban worker medical insurance in that county, which is operated separately from the other two, was between 2500 and 3000 yuan, an enormous disparity. In addition, the two systems covered over 95 percent of the locally

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registered population, but only half of the non-locally registered population. The vast majority of non-local residents were enrolled in medical insurance in their native regions, but their level of medical assurance was far lower, their compensation rates far lower, and their compensation procedures far more complicated. Development trends indicate that more and more regions are achieving integrated urban-rural planning for medical assurances. In other words, urban resident and NRCMS insurance programs are being merged and jointly managed by social security departments. The primary provinciallevel regions that have achieved integrated urban-rural planning are Tianjin, Qinghai, and Chongqing. More and more other provinces are pushing in this direction at the county and municipality levels. However, no effective measure for mitigating inter-regional disparities has been established. This has exerted an enormous impact on the floating population. In developed regions with larger proportions of non-local residents, this has caused inequality in social welfare treatment between locals and non-locals at one level. At another level, it has negatively influenced the ability of non-locals to benefit from the medical assurance system. The solution to this problem should not be limited to considerations of medical assurances alone, but should rather be considered from a much broader perspective of differential treatment on the basis of identity and on comprehensive planning for inter-regional development. 3

Comprehensive Reforms to Grassroots Health Services

By “grassroots healthcare providers,” we primarily refer to such organizations at the town, township, village, or urban community level as town hospitals, village clinics, community health service centers, community health service stations, and so on. The functional positioning of the grassroots medical services system has for a long time been public health services and basic medical services. However, since the beginning of reforms, grassroots healthcare providers have experienced a tide of change similar to that in public hospitals. In other words, fiscal subsidies have reduced yearly, meaning that their survival came to depend primarily on the sale of drugs. For that reason, grassroots health providers competed with one another to provide higher standards of medical care in order to attract more patients. At the same time, as the profits of public health services are thin, they have been widely ignored for a long time. It is for that very reason that grassroots healthcare providers are the entry point for the new round of healthcare reform. At one level, the reforms have brought about the essential medicines program and done away with the necessity of using drug sales to support hospitals. At another level, the implementation of basic

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public health projects has promoted a return of grassroots healthcare providers to “basic health services.” Thus the “essential medicines program,” “basic public health projects,” and “grassroots healthcare provider reforms” within grassroots medical services are all linked and form a whole of three constituent parts. On that foundation officials have begun to plan the establishment of an institution of “general practitioners.” This will be the direction of the future, but it will bring about more uncertainties in coming development. 3.1 Grassroots Healthcare Service Provision in 2012 As stated above, the basic institutional framework for new grassroots medical services was initially established in 2011, and at present all public grassroots healthcare providers have implemented essential medicine programs and basic public health service projects. Shortly after that, reforms to grassroots healthcare providers were completed. At present, reforms are currently being extended to village health clinics. The following are some aspects of those reforms. 3.1.1

Reforms to the Implementation and Funding of the Essential Medicines Program “Essential medicines” are medicines that are suited to “basic medical and health needs.” In 2012, the State Essential Medicine Work Committee [国家基 本药物工作委员会] approved and passed a State Essential Medicines Catalogue containing 307 drugs. All essential medicines were included on the essential drug medical insurance medicine catalogue, and all governmentestablished grassroots healthcare providers were stocked with state-provided essential medicines, which they sold on a zero-margin basis, to eliminate the phenomenon of “selling drugs to sustain hospitals.” After the essential medicines program went into place, all operating expenses of government-established grassroots healthcare providers, such as personnel and business expenditures, were paid back to them through either service payments or government subsidies. Speaking concretely, that means that: a) Basic medical services were paid for primarily via medical assurance fees and personal fees, of which the previously widespread registration fees, examination fees, hypodermic fees (including intravenous shot fees but not including drug fees) and medical service fees were all consolidated into “ordinary diagnosis and treatment fees,” at a national average standard of approximately 10 yuan, a reform that affected patients enrolled in insurance, which allowed them to have the vast majority of their medical payments covered by insurance. b) Basic public health services are established by the government

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but paid for via urban-rural basic public health funding assurance mechanisms. c) Current balance of payments margins are offset via governmental “verification of tasks, verification of balance of payments, and subsidies based on consideration of results.” d) The government allocates funding for the costs of development and construction, including basic construction and equipment purchases, based on the construction and development planning of grassroots healthcare providers. 3.1.2

The Implementation of Basic Public Health Projects and Changes to the Structure of Services The functional positioning of grassroots healthcare providers has been further clarified in relevant documents. The positioning includes “basic healthcare services,” including basic medical and public health services, and guiding grassroots healthcare providers to gradually shift the focus of service toward the diagnosis and treatment of common illnesses and frequently-occurring illnesses. The positioning also pertains to resident health management, which new health reforms are to achieve via a series of policies and measures. Of those measures, the state’s “Basic Public Health Projects,” which went into place in 2009, are the most crucial. That institution proposed a service pack containing nine categories of public health services (increased to 10 categories and 41 items in 2012), including the following: establishment of citizen health records, health education, prevention and immunization, prevention of infectious diseases, disease management for chronic diseases such as high blood pressure and diabetes and major mental illnesses, children’s health, pregnant women’s health, senior health, and so on. Since implementation began in 2009, all levels of government have begun allocation of the per capita standard of 15 yuan in funding to healthcare providers, for the free provision of services to urban and rural residents. The standard was raised to 25 yuan in 2011. At the same time, officials have emphasized that personnel, equipment, and departmental office configurations be “suited to their functional positioning.” Documents have demanded that grassroots healthcare providers, the service capacity of which has exceeded their functionality, either be converted into hospitals or “have that portion of their resources which have exceeded functional positioning diverted to county-level hospitals.” If adjustments are initiated on the basis of functional positioning, as the functional capacity of grassroots healthcare providers rises, there will be a drop in the provision of some medical services. For example, many town and township hospitals in the past were capable of simple lower abdominal surgery and contained basic in-patient services functionality, but as those services were not included

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within the scope of “basic medical services,” they were not encouraged to continue development thereof due to their existing functional positioning. 3.1.3 Introducing General Practitioners In order to respond to adjustments to medical services, another institution was initiated, i.e. the “general practitioner” institution. General practitioners (GPs) are extremely common in such developed nations as the UK and Australia. They provide integrated service grounded in “service targets” of prevention and health maintenance, diagnosis and treatment of common and high-­frequency illnesses, health rehabilitation, management of chronic diseases, etc., by entering service agreements with patients. In community health services, GPs play the role of “gatekeeper.” The majority of patients must be diagnosed by a GP in order to be admitted to hospitals’ specialist departments. Patients also generally continue seeing GPs even after receiving specialist treatment. China’s aging population and disease spectrum primarily consisting of chronic diseases have caused the core demands of health services to shift from “disease treatment” to “health management.” GPs are without a doubt a service model extremely suited to this situation. The State Council Guiding Opinions Regarding the Establishment of the General Practitioner Institution [国务院关于建立全科医生制度的指导 意见] gave a detailed description of the future construction of the GP institution in China. Their descriptions demonstrate that we are learning from the experiences of such countries as the UK and Australia. As the “gatekeeper” of resident health, GPs on the one hand embody the foci of “health management” and “prevention-oriented medicine” while on the other hand reasonably divide diagnosis and patient flow, achieving the goal of “first diagnosis at the grassroots level” in order to mitigate the problems of “difficulty in seeking medical treatment” and “expensive nature of seeking medical treatment.” There are now extremely few GPs in China. At present a GP pool is being developed via such methods as school training, employment advertising, professional retraining, and so on. As of 2012, town and township hospitals in China’s Center and West had attracted a total of 10,000 medical students to whom the state was providing free orientation training, with plans to extend GP retraining in grassroots organizations to 30,000 doctors. The current goal is to develop 150,000 GPs during the Twelfth Five-year Plan period and to initially establish a GP institution in China by 2020. Eventually the plan is to basically bring about two to three qualified GPs per 10,000 Chinese urban and rural residents. But at present, we remain extremely far from achieving that goal.

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3.1.4

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Reforms to Human Resources Allocation Institutions of Grassroots Healthcare Providers As previously stated, such operating expenses as personnel and business expenditures of government-established grassroots healthcare providers are compensated via the twin channels of service fees and government subsidies. Reforms to compensation mechanisms can include a transition of funding for infrastructure and equipment to be directly provided to healthcare providers via government subsidies. They can also include public health personnel’s income coming from public health funding of 25 yuan per capita annually, 10 yuan of which for common diagnosis and treatment fees. Finally they can come from government margin-mitigating fiscal subsidies. Different from the ideology of “public corporatization” of public hospitals, reforms in 2009 initially emphasized the “public institution” nature of grassroots healthcare providers. For that reason, reformers stipulated that “wage totals be calculated based on the average salary of local government work-unit employees, based on the designated number of employees and amount of service work budgeted.” Related performance-based wage institutions were also implemented on the principle of reforms to public institution wage reforms. A 2010 document proposed that the balance of payment surpluses of grassroots healthcare providers be kept in house or submitted up the chain of command per regulations and that in suitable regions pilots for “two directions of balance of payments” be launched. A 2011 document demonstrates that the service functions of GPs will to a large extent be integrated with grassroots healthcare providers, but “GPs may work full-time or part-time in grassroots healthcare providers (or hospitals), or may open independent clinics or jointly found clinics with other doctors. We encourage the organization of GP teams consisting of such personnel as GPs, community nurses, public health doctors, rural doctors, and so on, to provide segmented services for residents.” The method proposed by the document was the signing of service agreements with residents, by which residents may choose their own GP, and GP income is determined by the number of residents served. This shows that such a flexible model of internal competition is very dissimilar from the aforementioned “governmentalized” public institution reform direction. The authors of a 2012 document used such expressions as “implementing individual decision-making power of grassroots health provider legal persons,” “implementing a system of responsibility of the hospital director (or head),” and “a portion of grassroots healthcare providers’ balance of payments surpluses may be used to improve welfare standards per regulations and mobilize the activeness of hospital staff.” This shows us that reforms

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to grassroots healthcare providers before 2011 were on the “administrative” road of reforms to public institutions, but after 2012 they might start on a road of “anti-administrative” internal competition. 3.1.5

The Extension of the Essential Medicines Program and Basic Public Health Projects to Rural Clinics Village clinics are not considered “government-established” grassroots healthcare providers, but they do undertake a large quantity of basic health service work. For that reason, corresponding reform measures are being extended to village health clinics, including primarily government subsidies to make up for reduced income caused by village clinics initiating the essential medicines program, as well as village clinics undertaking basic public health services, subsidized by the government via purchasing of services. 3.2 Evaluation of Progress News reports and research indicate that among all reforms to the health system, the public places the most concern on public hospital reforms, medical assurances, and reforms to medicine institutions, while grassroots health services garner a smaller degree of attention. However, as population structure and the spectrum of diseases change, the transition from a model of “treating diseases” to one of “health management” and the appropriate redistribution of health resources are of utmost importance. This not only satisfies new healthcare demand, but also reduces the incidence of disease, thus helping to reduce health costs. For this reason, grassroots medical institution reforms are of utmost importance from the perspective of the overall transition of health service models. The demands made in new medical reform documents and the implementation of the reforms show us that two major reform directions have been established in basic health service reforms. The first is that the government now bears the primary burden of funding, in order to increase the fairness of health services and to allow government resources to achieve the goal of “everybody enjoying basic medical and health services.” The second is responding to changes to both China’s population structure and the spectrum of diseases, making the focus on “prevention and health maintenance” and transitioning from a model of “treating disease” to one of “health management.” These two will help us grasp the root of reforms to basic health services. They represent a major advancement in transforming China’s health services model and increasing its fairness. Nevertheless, as stated above, the nature and management models of grassroots organizations and institutions for the allocation of human resources remain in a stage of exploration and comparison. That is to

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Table 5.2 Numbers of patients diagnosed and treated in healthcare providers and admitted to hospitals Year

Number of patients diagnosed (100 mn) Total Hospitals Town Clinics

Patients admitted (10,000) Total Hospitals Town Clinics

2005 2006 2007 2008 2009 2010 2011

40.97 44.63 47.19 49.01 54.88 58.38 62.71

7184 7906 9827 11483 13256 14174 15298

13.87 14.71 16.38 17.82 19.22 20.40 22.59

6.79 7.01 7.59 8.27 8.77 8.74 8.66

5108 5562 6487 7392 8488 9524 10755

1622 1836 2662 3313 3808 3630 3449

say there is no accepted conclusion as to who should pay, how much should be paid, what is to be done with what is paid, how much will be paid in the future, how services are to be provided, or how they’re to be managed. The accessibility of grassroots public health services has increased due to adjustments to functionality and compensation mechanisms, but the utilization efficiency of some medical services is dropping, as well as the accessibility of a portion of medical services. As displayed in Table 5.2, the overall number of patients diagnosed, treated, and accepted into hospitals trended upward from 2005 to 2011, but the numbers for town and township clinics began dropping in 2010, especially the number of people admitted to hospitals. Our research indicates that there are many reasons behind this situation, including the following: overall social income levels, rising social security levels, demands on health services, and health knowledge, still insufficient abilities of grassroots medical services, lack of targeted health management services, and the subsequent preference for services of higher utilization ­levels. At the same time, the functional positioning of healthcare providers has restricted the development of services in hospitals and other bodies. The negative impact of the “administrative-oriented” direction of reforms to grassroots healthcare providers since 2010 is particularly noteworthy. As the risks of medical services are high and the doctor-patient relationship tense, without adequate incentives, there is no way to encourage medical professionals to administer diagnosis and treatment service, and in some cases there is even “passing the buck” in the treatment of patients. Such a model lacking incentives is obviously not beneficial to the development of medical services.

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Such a negative effect has a noticeably profound impact on relatively impoverished regions. For example, our investigation in Guizhou revealed that the core of town and township hospital work has been shifted to public health, as they are less willing to provide medical services. This forces urban and rural residents to frequent county-level hospitals, making them more crowded. At the same time, in-patient hospital patients have reported that in-patient services previously available in town and township health centers are now available only in county-level hospitals. Although medical costs are on the decrease, the overall costs of seeking hospital treatment (including transportation, patient accompaniment, etc.) are much higher than in town and township health centers. This exerts a strong negative influence on the economy and on the accessibility of healthcare. Related problems within current healthcare reforms lie in two areas. On the one hand, in order to “strengthen the grassroots level and protect the basics,” we must strengthen the capacity of grassroots healthcare providers and increase investments to them in a big way, in order to realize the vision of “the first diagnosis being made at the grassroots level.” On the other hand, “administrativization” reforms to grassroots healthcare providers have caused them to be less willing to provide medical services, meaning that reforms to personnel allocation institutions have caused grassroots healthcare providers to send patients to higher level hospitals for treatment. This has made it impossible to realize the vision of “bidirectional referrals.” From the perspective of changing the health service model to one of “health management,” the core of service should be “people,” not “illness,” and the target of service should be “all people,” not “the sick.” The model of service should be “active” provision of services, not “passively” waiting in hospitals for the ill to show up. All of this is different from the previous model of public health service centered in improving environmental health and controlling communicable diseases. Although this touches upon many aspects of public services, and the government must bear the burden of financing, the provision of “active services” requires a certain degree of incentive mechanisms. In other words, the provision of services should be competitive. For that reason, the “GP” institution that adheres to those two conditions should be more suitable to grassroots healthcare providers than “administrativization.” Otherwise, although the focus on basic health services is the core of the current round of grassroots reforms as well as a fundamental advancement, it still lacks in a key area in the response to the health problems of the aging population: rehabilitation and long-term nursing care. This is not unrelated to the current division of departmental responsibilities in China. Medical s­ ervices

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fall under the purview of the Ministry of Health, while long-term nursing care falls to the Ministry of Civil Affairs. For that reason, nursing care has not been a consideration within the new round of healthcare reform. We must note that developed nations have often experienced the phenomenon of “social hospitalization,” which means the hospitalization of a patient not for need of medical care, but because of a lack of economic means for long-term care. Such a phenomenon not only renders us incapable of meeting targeted needs, but also poses a large risk to medical insurance funds. At the medical demand end, prevention and health maintenance, treatment, and rehabilitation and long-term care together comprise a continuous healthcare process. For the sake of “health management,” we cannot overlook a single link in that chain. In summary, though the direction of grassroots medical services reforms is correct, the concrete course they are taking remains unclear, and in some cases is even contradictory. Defining the government’s role in funding and the direction of future development is the first stage of reforms, but at present it is not clear whether we can turn capital into resources, turn an institutional framework into a reasonable concrete form, or appropriately realize effective methods. We hope that in the future we can continue the GP institution of 2012 and not have to repeat this process. 4

Reforms to Public Hospitals

Public hospitals have long been the center of disputes about healthcare reform, as well as being the key link to healthcare reform. Prior to the current round of healthcare reforms, even though public hospitals were “public” in nature, they received only about 10 percent of their funding from the government. They were restricted by scores of administrative regulations, forcing them to eek out their survival in a tight crack between government planning and the markets, giving rise to a vicious cycle. In the end, that vicious cycle led to distortions in behavior of public hospitals. This has been reflected in the income structure of medical personnel. At one end, their basic wages and man-hour pricing is far lower than market values. At the other end, there’s an enormous profit space in sales of drugs and fees for medical examinations. Under such conditions, the income of medical personnel is reflected primarily not in the value of their human capital, but in the quantity of drugs they are able to sell. In other words, medical personnel are no longer “medical service providers” but are rather the final link in the drug sales chain. Though the problem is glaringly obvious, the dispute over how to resolve it has persisted for years. In the

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end, the Ministry of Health rejected “marketization” and “administritivization” and opted for a more reasonable route: making the government the primary financier of medicine and providing subsidies to both the demand and the supply sides. At the same time hospitals were to remain suited to the market economy environment, and the “four separations” were to be brought about, i.e. “separating the government from operations, separating regulation from operations, separating hospitals from drug sales, and separating profitable aspects from non-profit aspects.” Deputy Health Minister Zhang Mao in 2011 told the Xinhua News Agency that “70 percent of the nation receives medical services in county-level h ­ ospitals, so augmenting their abilities will be beneficial to resolving the difficulties of the masses in receiving medical treatment. At the same time, the complexity of reforms is relatively low, so we can explore reforms to large hospitals. This year we want to push comprehensive reforms to county-level hospitals with a focus on reforms to ‘using drugs to subsidize medicine’ and the formation of compensation mechanisms that uphold the public welfare nature of hospitals.” However, the majority of public hospital income comes from drug sales, which means that in order to eliminate “using drugs to subsidize medicine,” officials must find a suitable replacement mechanism. Although 2011 reform documents defined the direction of reforms, no substantive measures related to compensation mechanisms were issued. It wasn’t until 2012 that reform documents with clearer wording on compensation measures were released, pushing reforms to public hospitals into a substantive implementation phase, with county-level public hospitals serving as the breakthrough point. The Primary Ideology and Contents of Reforms to Public Hospitals in 2012 In the Opinions Regarding Comprehensive Reform Pilots to County-Level Public Hospitals [关于县级公立医院综合改革试点的意见] issued by the State Council General Office in June 2012, officials stayed in line with the abovementioned ideology and proposed three part mutually-linked reforms: reforms to compensation mechanisms, reforms to human resources and distribution institutions, and the establishment of modern regulation institutions for public hospitals. Officials chose 311 counties (or municipalities) to serve as the first round of pilot locations for comprehensive reforms to county-level public hospitals. The central government allocated 3 million yuan to each county (or municipality) and spurred local governments to put in even greater fiscal investments. Officials will initiate a second round of pilots at the appropriate time and plan to push reforms nationwide by 2015. The concrete ideology and planning of the reforms are as follows. 4.1

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4.1.1 Reforms to Compensation Mechanisms Officials will repeal the drug-commissions policy and convert the three ­subsidization channels of service fees, drug sale commissions, and government subsidies into two channels consisting of only service fees and government subsidies in county-level hospital pilot zones. Concretely speaking, officials will first abolish drug commissions and reduce the prices of drugs and expensive medical products. They will reduce the quantity of intensive medical inspections using large equipment and treatment prices and increase the fee standards for diagnosis and treatment, surgery, and nursing care. They will bring about reasonable costs for medical technical services and the true value of the labor of technical medical personnel. They will include medical technical service fees into the scope of medical insurance expenditure policies per regulations and push synchronized reforms to medical insurance payment methods. They will also use fiscal investments at all levels of government to completely realize the basic construction of and major equipment purchases for the following: public hospitals, focused scientific development, personnel training, retired persons fees complying with state regulations, subsidies for losses established by policies, an assumption of public health tasks and urgent medical treatment, support of border areas, support of rural areas, and other public services. 4.1.2 Reforms to Personnel Allocation Institutions Officials will change the previous situation of administrative regulation via the rigorously controlled planning of staff structure and will innovate planning and job position management. They will scientifically and reasonably establish staffing plans and gradually transform management of identities into management of positions. They will bring about autonomous staff usage of countylevel hospitals and completely push the institution of free employment. They will improve internal income distribution and incentive mechanisms in public hospitals and increase the proportion of personnel expenditures to total expenditures. They will gradually improve the treatment of medical personnel and forbid the linking of individual incomes to sales of drugs and medical examination fees. 4.1.3 Establishment of Modern Hospital Management Institutions Officials will establish the status of public hospitals as independent legal person entities and their rights to operate and manage themselves. By reasonably delimiting the rights and responsibilities of the government and public hospitals in affairs of assets, human resources, finances, and so on, they will establish check and balance mechanisms and division of labor institutions between

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policy making, execution, and regulation and straighten out the government’s regulation system for public hospitals. First, they will establish and improve the administrative structure for legal persons and explore the establishment of policy making regulatory mechanisms based in regulatory councils. They will also implement an institution of responsibility to be borne by the hospital director and assessments of director goal attention during a fixed tenure term. Second, they will optimize internal hospital operations management and encourage the exploration of the establishment of operations management mechanisms of division of labor and cooperation between public hospitals and administrators. Third, they will improve evaluation mechanisms and establish a performance assessment system for public hospitals based in their public welfare nature and operations efficiency. They will also link assessment results to the retention or firing and the rewarding or punishing of the director, as well as subsidies paid to the hospital and overall hospital wage levels. In addition, the Planning and Implementation Scheme of Deepening Medical and Health System Reforms During the Twelfth Five-year Plan Period ‘十二五’期间深化医药卫生体制改革规划暨实施方案] [ calls for “striving to develop non-public healthcare providers, relaxing entry thresholds for hospitals founded with social capital, encouraging such social power as enterprises, charity organizations, funds, commercial insurance organizations, and so on, with real strength, as well as overseas investors, to found healthcare providers, encouraging qualified personnel (including those from the regions of Hong Kong, Macau, and Taiwan) to establish private clinics per the law . . . By 2015, the number of beds in non-public healthcare providers and their service quantity should be about 20 percent of the nation’s total.” 4.2 Evaluation of Progress A large portion of public hospital services are related to public products, and so their “public welfare” nature must be maintained, and they cannot be completely marketized. However, we cannot go against marketization reforms in the domain of the economy. Hospital operations are embedded in the market environment, and so their behaviors must be suited to the external market economy environment; this view, however, is completely different from marketization of public hospitals. Prior to ongoing healthcare reforms, the following shortcomings were present in government regulation of public hospitals. The first shortcoming was inadequate investment in the public domain, which led to a deviation from initial intention of public hospitals possessing a “public welfare” nature. The second shortcoming was regulatory deficiencies in the market domain, which caused public hospitals to be simply pushed toward

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Figure 5.2 Revenue structure of government-founded hospitals

markets as the there was poor separation between the government and operators, and between regulators and operators. This led to an absence of effective external regulation and effective performance evaluation mechanisms. The third shortcoming was the unsuitability of relevant regulations and control mechanisms for the market economy environment, including inappropriate controls on service pricing, staffing plans, and so on. Figure 5.2 demonstrates that from 2008 to 2011, revenues of governmentfounded hospitals8 grew rapidly, but fiscal involvement in other areas remains small. Operating revenues (including treatment revenue and revenue from the sale of drugs) continue to account for the bulk of overall revenue, and overall revenue growth is more a reflection of growth to operating revenue. A study of Figure 5.2 and Table 5.3 demonstrates that though drug-sales revenue accounts for a smaller share than treatment revenue (including registration fees, examination fees, etc., a large portion comes from human resource expenses), hospitals are losing money in the medical treatment balance of payments, whereas the drug sale balance of payments is profitable. That is to say that most hospital profits come from the sale of drugs. As substantive reforms to public hospital compensation mechanisms were begun only in 2012, the data from the previous four years reflect the situation prior to reforms.

8  Owing to changes to methods of statistics calculations in recent years of the China Health Statistical Yearbook, in this chapter I use data from “government-established hospitals,” which account for the vast majority of all “public hospitals.” Other public hospitals are stateowned enterprise-founded hospitals and hospitals under military management.

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Table 5.3 Balance-of-payment structure of government-established hospitals

Overall Revenue (10,000 yuan) Government Subsidy Revenue Revenue from Subsidies of Superior Government Levels Operating Revenue Treatment Revenue Drug-Sale Revenue Other Revenue Overall Expenditures (10,000 yuan) Special Financial Expenses Operating Expenditures Treatment Expenditures Drug Expenditures Other Expenditures

2008

2009

2010

2011

60,902,249

74,569,116

90,114,486

108,855,130

 4,926,206

 6,336,271

 7,686,304

  9,843,664

  176,158

  250,206

  217,730

   277,229

55,799,885 29,141,989 25,639,821  1,018,075 58,953,855

67,982,639 35,442,077 31,360,277  1,180,285 71,145,292

82,210,452 43,303,099 37,600,965  1,306,389 86,024,557

 98,734,237  53,153,888  43,991,402   1,588,947 104,747,264

 1,418,443 57,535,412 32,784,656 24,113,386   637,370

 2,046,031 69,099,261 39,112,903 29,254,777   731,581

 2,793,708 83,230,850 47,239,436 35,107,312   884,102

  3,782,384 100,964,879  58,619,374  41,249,065   1,096,441

A look at new healthcare reform documents demonstrates that at the funding level, the responsibility of the government to serve as the primary financiers of public hospitals has been clarified. The documents have also appropriately limited the number of public hospitals as well as the quantity of their services and encouraged the development of private non-profit hospitals. At the level of administering public hospitals, the documents have increased the autonomy of public hospitals while strengthening regulation. At the level of personnel allocation, the documents have brought about market values in salary levels and staff structures. All of these reform measures respond to the above problems. The relationship between the government and hospitals has been further clarified, and reforms are proceeding in the correct direction. Nevertheless, right now is just the initial phase for reforms to public hospitals. The fact that the direction of reform is correct does not necessarily mean that initial goals will be achieved. There are many choices for concrete operable plans between the ideology of the framework of reforms and desired ­concrete

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results. For example, how will we create salary institutions and incentive mechanisms for medical personnel after the abolishment of drug sales commissions? How can we effectively regulate hospitals after granting them more autonomy? How can we make corresponding adjustments to medical assurance institutions after changing compensation mechanisms? As compared to other fields, reforms to public hospitals touch on a great number of interest relationships, and there is no consensus on a number of questions. These have all increased the uncertainties of the outcomes of the ongoing reforms, which at present we still cannot evaluate. In addition, the bulk of reforms in 2012 were focused on county-level hospitals. We still have not extended reforms to all public hospitals, especially within other functions of large and comprehensive hospitals, as well as reforms to the relationship between county-level hospitals and other hospitals. Another example is the relationship between county-level hospitals and grassroots healthcare providers. How can we cause third-tier hospitals to play their “leading” role? How can we bring about support for grassroots healthcare providers? How can we truly realize “bidirectional referrals?” How can we increase the level of research and development of large, comprehensive hospitals? All these must be added to the legislative agenda after county-level hospital reforms are fully in place. 5

Summary and Outlook

As stated above, the original intent of new healthcare reform was to resolve the problems of “difficulty in seeking medical treatment” and the “expensive nature of seeking medical treatment.” However, after implementation was initiated, the reforms did not become stuck at the shallow level of “treating the head for headaches and the feet for foot-aches” which is the common outcome of “problem-oriented” treatment, but rather the overall medical system was fundamentally replanned. New healthcare reformers have established a principle-based framework in which government funding ensures fairness and accessibility, which is suitable to changes to the population structure and the disease spectrum, and which takes “health management” as the core of its health services model. Current reforms are taking place within this principle framework, as demonstrated in Figure 5.3. The end results of medical services demonstrate that the situation has not improved noticeably. After four years of new healthcare reform, drug prices remain high, hospitals remain crowded, and it remains difficult for the common people to receive appropriate healthcare services. Nevertheless, the

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Figure 5.3 New healthcare reform “blueprint”

a­ chievements of healthcare reform are not easy to refute, but are rather exceedingly deserving of praise. That is to say that the present situation is correct and is a necessary experience. At the same time, reforms are far from achieving success, and upcoming tasks remain arduous. In summary, though the framework for new healthcare reform has finally been established and is currently proceeding in the correct direction, whether funding institutions and the principle-based framework can be converted into corresponding services and promote improvements in real results remains dependent upon the issuance of more practical measures. Reforms to medical institutions are the core of those practical measures. Not only must they include public hospitals, but they must also include grassroots healthcare providers and the relationship between the two. We are currently waiting for the outcomes of these reforms with baited breath.

Chapter 6

China’s Floating Population in 2012 Tian Feng* Abstract As China is further urbanized and industrialized, the floating population will continue to grow. Population mobility is now a long-term, stable social trend. Of the floating population, those migrants possessing non-rural hukou household registrations are differentiated from those possessing rural hukou household registrations through such mass characteristics as relatively higher education levels and better employment situations. Both groups have become the object of social attention. In this chapter, we will analyze the demographic characteristics of migrants of different household registration statuses, their family situations, their employment, their income, and so on, on the basis of the Floating Population Dynamic Oversight Data released in 2011 by the National Population and Family Planning Commission. Our goal is to promote the integration of the floating population into society and help them to become an important force driving the sustained, stable development of China’s economy and society through economic and social policies.

Keywords non-rural hukou household registration – floating population – social integration

Since the beginning of the 21st century, China has become further urbanized and industrialized, and the migrant population has grown continually. Data from the National Bureau of Statistics indicate that 271 million Chinese citizens have lived outside the area in which they are registered for a half a year or more, and 230 million of those are migrants (excluding those who live away from their area of household registration but within the same municipality or equivalent region). In both scale and sustained timeframe, population

* Tian Feng is an associate researcher at the Chinese Academy of Social Sciences Sociology Institute.

© koninklijke brill nv, leiden, ���5 | doi ��.��63/9789004276536_006

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mobility has transformed from a temporary phenomenon into a long-term, stable social phenomenon. Migrants are now a part of society that cannot be overlooked. Such factors as migrants’ lives, work, and social attitudes directly affect not only China’s economic development, but also the harmony and stability of the Chinese society. In this chapter, we will attempt to analyze such aspects of migrants of both rural and non-rural household registration as their characteristics, family situations, employment and income, consumption habits, social security, and mentality. We hope that our analysis will be helpful to the government, society, and academia in improving their understanding of the lives of migrants and that more effective economic and social policies may be implemented. We also hope to help migrants overcome household registration obstacles, integrate with society as fast as possible, and become an important force driving the sustained, stable growth of the Chinese economy. In this chapter we make use of migrant data from a report issued by the State Population and Family Planning Commission (SPFPC) [国家人口和计划生育委员会] in 2011. The SPFPC investigation selected random samples from a far-reaching survey, which included 31 provinces, autonomous regions, and cities under the direct control of the central government, as well as the Xinjiang Production Construction Corps, in 410 county-level districts, 3200 town and township communities, 6400 village residential committees. Investigators surveyed migrants from 12,800, and 108,590 individuals surveyed held rural household registration household household registrations, accounting for 84.87 percent of the total, and 19,333, or 15.10 percent, held non-rural household registration household household registrations. Only 0.03 percent of respondents replied “other.” 1

The Characteristics and Family Situations of Migrants

There are More Male Than Female Migrants, and There is a Higher Concentration of Female Migrants among Non-rural Household Registrations There are relatively great disparities between the life and professional experiences of male and female migrants. Once females pass a certain age, many choose to withdraw from the ranks of the floating population and return home to have children or to raise the children they had previously left behind. Males, on the other hand, are more likely to persist in working away from home for a longer time. Even though roughly equal numbers of males and females initially enter the floating population, the number of females drops sharply once they 1.1

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reach the age of marriageability. This means that there are generally more male than female migrants. Survey data indicate that there are more male than female migrants among both rural and non-rural household registration groups. Among rural household registration holders, males account for 53.10 percent, while females account for 46.90 percent. Among non-rural migrants, males account for 53.47 percent, and females for 46.53 percent. This demonstrates that the malefemale disparity among both groups is roughly the same. There is a great connection between this fact and disparities between men and women in terms of life and professional experience, as mentioned above. The distribution of different age groups indicates that the proportion of men of lesser age to total male migrants of rural household registration is higher than that of all other classes of migrants. There is also a relatively high proportion of non-rural women between the ages of 25 and 35 in the migrant population. The proportions of both rural and non-rural female migrants drop significantly for the above-40 category (see Figure 6.1). Most Migrants Fall in the 25–39 Age Group, and the Majority of New Migrants Come from the New Generation Rural migrants face great difficulty in remaining long-term in cities and in integrating in urban society, due to differentiated development of urban and rural areas, as well as restrictions inherent to the household registration system. The traditional importance of returning to one’s ancestral home is also a major factor. As rural migrants grow in age and experience declining physical functions, they tend to leave the migrant work force and return to their homes. For those reasons, and since it is difficult for rural migrants to integrate into urban society, most migrants are young. The survey’s results indicate the following 1.2

Figure 6.1 Age distributions of migrants, by sex and household registration

98 Table 6.1

Tian Migrant age group breakdown, by household registration type Unit: %

Age range

Rural

Non-rural

Age range

Rural

Non-Rural

16–29 20–24 25–29 30–34 34–39

5.23 15.02 17.74 16.99 18.16

3.01 12.38 21.06 19.39 16.74

40–44 45–49 50–54 55–60 Sample number(N)

15.04 8.25 2.16 1.42 108,590

12.71 8.61 3.11 3.00 19,333

age breakdown among rural migrants: 25–29 years account for 17.74 percent, 30–34 years for 16.9 percent, 35–39 for 18.16 percent. The age breakdown among non-rural migrants is: 25–29—21.06 percent, 30–34—19.39 percent, 35–39—16.74 percent (see Table 6.1). The survey’s results indicate that the new generation of migrants (the post1980 and post-1990 generations) account for 44.82 percent of the migrant population. Although they are slightly fewer in number than the older generation of migrants, as the older generation gradually leaves the floating population, the younger generation will come to constitute the majority. Non-rural Migrants Include Some University Students, and the New Generation of Migrants Have Relatively High Levels of Educational Attainment As compulsory education has been further universalized, the vast majority of migrants have been educated through the middle school level, and some have even received higher education. This demonstrates that the concept of “migrant population” is no longer restricted to rural migrant laborers alone, but rather includes a high proportion of people who have received higher education but encounter difficulty in obtaining qualifications to convert their household registration over from small and medium sized towns and cities to larger cities and towns. Note, for example, the “bei piao [北漂, drifting northward]” movement. The survey’s results indicate that 18.69 percent of non-rural migrants have attended three-year colleges, and 11.5 percent have attended four-year colleges or university. Only 1.03 percent have received graduate or higher levels of education. Among rural migrants, only 2.9 percent 1.3

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have attended three-year colleges, and 0.73 percent have attended four-year colleges or university. Only 0.02 percent have received graduate or higher levels of education (see Table 6.2). Members of the new generation of floating population, the bulk of which consist of the post-80 generation, are generally better educated than the older generation. The survey’s results indicate that only 0.61 percent of the new generation of migrants have never attended school, and 5.93 percent have only a primary school education. In comparison, 2.82 percent for the older generation have never attended any school at all, and 21.77 percent have only a primary school education. At the higher education level, 8.24 percent of the new generation of floating population have attended three-year colleges, as compared to 2.89 percent for the older generation. Also, 3.76 percent of the new generation of migrants have attended four-year colleges or university, as compared to only 1.24 percent of the older generation (see Table 6.3). It is thus evident that the new generation of migrants has a higher level of education than the older generation, and non-rural migrants have a higher level of education than rural migrants. Table 6.2 Migrant education levels, by household registration type Unit: % Level of Education

Never attended school Primary school Middle school High school Technical secondary school

Rural

Non-rural

Level of Education

Rural

Non-rural

2.08

0.42

University specialized

2.90

18.69

16.56

4.08

0.73

11.55

59.23

31.36

University undergraduate Graduate

0.02

1.03

13.91

21.72

108,590

4.56

11.15

Sample number(N)

19,333

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Table 6.3 Migrant education levels, by generation Unit: % Level of Education

Never attended school Primary school Middle school High school Technical secondary school

New Generation

Old Generation

Level of Education

New Generation

Old Generation

2.82

0.61

University specialized

2.89

8.24

21.77

5.93

1.24

3.76

55.97

53.85

University undergraduate Graduate

0.12

0.24

12.51

18.27

70,625

57,375

2.68

9.10

Sample number (N)

Most Migrants are Married, and the Percentage of Unmarried Non-rural Migrants is Higher Than That of Unmarried Rural Migrants Most migrants begin migrant life before they marry. That is to say, most of the floating population have already left their homes and entered a new area before becoming married. As they grow older, some leave the ranks of the floating population upon becoming married. The majority, however, continue working away from home even after marriage. The survey’s results indicate that most migrants have marital history. Specifically, among rural migrants, 20.36 percent have never married, and 78.30 percent are currently married. Another 1.03 percent are divorced, and 0.31 percent are widows or widowers. Among non-rural migrants, 24.17 percent have never been married, and 72.98 percent are currently married. Another 2.43 percent are divorced, and 0.42 percent are widows or widowers (see Table 6.4). 1.4

1.5 Few Migrants Travel Alone, as Most are Accompanied by Spouse Over the course of the history of China’s floating population, there have been several major trend changes. For one, migration is less and less something done primarily by single individuals and is increasingly a family’s collective action. The unit of migration has shifted from individual to family. At first,

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china ’ s floating population in 2012 Table 6.4 Migrant marital status, by household registration type Unit: percent Marital Status

Rural

Non-rural

Never married Currently married Divorced Lost spouse to death Total number of samples (N)

20.36 78.30 1.03 0.31 108,590

24.17 72.98 2.43 0.42 19,333

the goal of migrants in leaving home to work was simply to earn more money. They could tolerate low living standards and quality of life, and often give low priority to family life. However, as society and the economy have developed, migrants are leaving their homes not only to make money, but also to achieve “self-realization,” and as such are taking the quality of their family life increasingly seriously. Of particular importance is the ability of social networks of family, relatives, and others to enable migrants to more easily integrate into urban society and become a kind of social capital, something that migrants used to lack. Thus, the proportion of lone migrants is dropping while that of migrant families rises. The survey’s results indicate that 27.05 percent of migrants migrate by themselves, and the remaining 72.95 percent migrate with family members. Of those who migrate with family members, 90.27 percent migrate with spouse, and 65.50 percent migrate with children/children-in-law. Another 8.50 percent are accompanied by their parents. Only 3.61 percent are joined by their siblings, grandchildren, or grandparents. Most Migrants Stay within Their Home Province, and a Higher Proportion of Rural Migrants End Up in Other Provinces In addition to evident urban-rural disparities, there are major disparities between the provinces and municipalities of China’s east, central, and western regions. This is one of the major reasons behind the enormous scale of internal migration. The vast majority of migrates move from central China to eastern China. All of this migration is inter-provincial. As the central regions develop economically, and as industries in the east upgrade, some labor-intensive industries will transfer from the east toward the center and west. This will lead to increases to intra-provincial and intra-municipality migration. The two combined may even surpass inter-provincial migration in scale. 1.6

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For both rural and non-rural migrants, inter-provincial migration remains the major form of population movement. The survey’s results indicate that nearly half, 49.98 percent of rural migrants are inter-provincial migrants, as compared to only 4.05 percent of non-rural migrants. Another 31.1 percent of rural migrants migrate intra-provincially but inter-municipality, as compared to 3.31 percent of non-rural migrants. Another 18.68 percent of rural migrants migrate intra-municipality but inter-county, as compared to 2.64 percent of non-rural migrants. 2

The Employment and Income Situations of Migrants

The Proportion of Employed Migrants High, and There is Little Difference in Employment Numbers between Rural and Non-rural Migrants Per theories related to internal migration, one of the major drivers of internal migration is people’s belief that they will earn more elsewhere. Reality demonstrates that the floating population is highly goal-oriented. Their goal then is to find suitable work which will provide greater income. Therefore, the vast majority of migrants are employed in their host cities; i.e. they hold jobs which generate income. Though some are accompanying family members and are not employed, their proportion to the total is low. Other research has shown that if migrants are unable to find employment in their host cities, they return home rather quickly, or otherwise go elsewhere to seek opportunity. The survey’s results indicate that most migrants, 83.79 percent, are employed in their host cities,and 2.38 percent are without work. Another 1.41 percent have lost their jobs, and 10.25 percent are homemakers. The employment rates for rural and non-rural migrants are nearly identical, 83.91 percent for the former and 83.13 percent for the latter (see Table 6.5). This demonstrates that employment is one of the major reasons behind internal migration. It is precisely because migrants can find suitable employment opportunities in their host cities, and because their host cities have a demand for migrants, that migrants are able to remain stable in their host cities. 2.1

There is a High Proportion of Rural Migrants Employed in Manufacturing Sector, and Some Non-rural Floating Population are Employed in High-End Tertiary Industries In the past, most migrants who migrated to cities from rural villages tended to work in industries with low demand for technical skills, but rather laborintensive, such as manufacturing, construction, and low-end service industries. 2.2

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china ’ s floating population in 2012 Table 6.5 Employment statuses of migrants, by household registration type Unit: % Employment status

Rural

Non-rural

Employment status

Rural

Non-rural

Employed Recently unemployed Jobless

83.91 1.3

83.13 2.03

Student Retired

1.67 0

2.95 1.98

2.3

2.79

108,590

19,333

Homemaker

10.81

7.12

Sample number (N)

There are large differences in the distribution of rural migrants among different regions. In coastal regions, for example, most rural migrants are employed in the manufacturing industry. In major cities like Beijing and Shanghai rural migrants are primarily employed in construction and low-end tertiary industries. Non-rural migrants tend to have higher levels of educational attainment than rural migrants and are thus more likely to be employed in high-end tertiary industries or in party/government institutions. There are fewer nonrural migrants employed in manufacturing. The survey’s results indicate that there are many more rural migrants in the manufacturing and construction industries than non-rural migrants, particularly in the manufacturing industry. Of rural migrants 21.44 percent are employed in the manufacturing industry, as compared to 15.93 percent of nonrural migrants. A certain proportion of non-rural migrants are employed in finance/insurance/real estate, health/sports, social welfare, education/culture, radio/film/television, scientific research, technical services, party/government institutions, and social groups, but fewer than one percent of rural migrants are employed in those industries. This demonstrates that only a very tiny proportion of rural migrants enter high-end tertiary industries (see Table 6.6). A Large Proportion of Non-rural Migrants are Employed in White-collar Occupations, but Rural Migrants are Largely Found in Manufacturing and Service Occupations After the first generation of migrants, composed mostly of peasants, entered cities, the majority entered unsavory, difficult, tiring jobs that urbanites were not willing to do. The rise of labor-intensive industries along the coastline is 2.3

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Table 6.6 Industries employing migrants, by household registration type Unit: % Industry

Rural

Non-rural

Manufacturing Excavation Agriculture, forestry, husbandry, fisheries Construction Production or supply of electricity, coal, or water Wholesale and retail Lodging and food/beverage Social services Finance/Insurance/real estate Transportation and shipping/warehousing and communication Health/sports and social welfare Education/culture and radio, film, television Scientific research and technical services Party and government organizations and social groups Other Sample number(N)

21.44 1.25 3.07 10.74 0.49 23.59 12.84 11.23 0.72 4.33

15.93 1.68 1.65 7.94 1.15 22.12 11.01 11.41 3.45 5.15

0.70 0.54 0.67 0.14 8.24 91,117

2.23 3.34 3.27 1.35 8.32 16,071

attributable to the attraction by those areas of large amounts of rural excess labor. Most rural migrants, whether employed in urban service industries or in factories, are employed in blue-collar, labor-intensive occupations. Nonrural migrants are employed in different occupations. As compared to rural migrants, they possess higher levels of cultural capital, economic capital, and social capital. So they tend to be employed in white-collar occupations more than their rural counterparts. The survey’s results indicate that more rural migrants choose jobs in the manufacturing and service industries than do in any other. The top three professions chosen by rural migrants are entrepreneurship at 17.61 percent, commercial or service sector at 13.10 percent, and manufacturing at 11.70 percent. There are relatively fewer non-rural migrants engaged in manufacturing occupations. There are many more non-rural migrants employed in white-collar occupations. For example 17.32 percent are technicians, and 9.00 percent are office staff. Another 17.29 percent are independent businessmen (see Table 6.7).

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china ’ s floating population in 2012 Table 6.7 Primary occupations of migrants, by household registration type Unit: % Primary occupation

Rural

Non-rural

State or party department/organization Specialized technician Office staff or related Commercial or service sector Entrepreneurship Vendor Food and beverage Home management Cleaning staff Security guard Renovations Agriculture, forestry, fisheries, husbandry, etc. Production or shipping equipment operator Manufacturing Shipping Construction No fixed industry Other Sample number (N)

0.20 6.84 2.00 13.10 17.61 6.10 10.83 0.45 1.32 0.88 3.52 2.97 6.39 11.70 3.23 6.49 2.67 3.69 91,117

1.98 17.32 9.00 15.56 17.29 3.72 8.64 0.43 0.71 0.90 1.57 1.28 4.80 5.36 2.63 3.24 1.63 3.93 16,071

Most Migrants are Employed in the Non-private Sector, and More Non-rural Migrants are Employed within the Civil Service and Public Institution System Than Rural Migrants Under the employment institutions of the former planned economy, rurallyregistered citizens had almost no opportunities to enter cities and the urban labor system, and it was difficult for non-rurally-registered citizens to achieve employment via migration. Only after Reform and Opening and the establishment of a marketized employment system have rurally-registered people been able to migrate in order to find employment. However, migrants still face a certain degree of restrictions in entering the public sector due to the household registration system. For that reason, most migrants remain employed in the non-public sector. Some non-rural migrants are able to find employment in the public sector. 2.4

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The survey’s results indicate that the top two types of organizations that employ migrants of both rural and non-rural household registrations are individual industrial/commercial units (42.93 percent of rural migrants and 35.96 percent of non-rural migrants) and private enterprises (34.33 percent of rural migrants and 34.60 percent of non-rural migrants). Among non-rural migrants, 4.50 percent are employed in the public sector, and 10.67 percent in state-owned enterprises, much higher than the proportions of rural migrants (see Table 6.8). Rural Migrants are More Reliant upon Social Networks for Job-seeking, and Non-rural Migrants are More Reliant upon Employment Agencies The survey’s results indicate that most migrants, of both rural (43.52 percent) and non-rural (37.89 percent) household registrations, tend to find their jobs on their own. Rural migrants tend to rely more on social networks, particularly social networks of people from their native areas. Significantly more rural migrants find employment through family members/relatives and people from 2.5

Table 6.8 Categories of employers of migrants, by household registration type Unit: % Nature of employer

Rural

Non-rural

Nature of employer

Rural

Non-rural

2.07

1.81

1.29

0.91

0.35

0.75

2.71

3.60

1.50

0.86

6.90

3.05

Land contractor

1.12

0.59

Government or public sector

1.10

4.50

State-owned enterprise

3.61

10.67

Collective enterprise Individual industrial/ commercial unit Private enterprise

2.10

2.69

42.93

35.96

Hong Kong/ Macau/Taiwan enterprise Japanese or S. Korean enterprise European or American enterprise Chinese-foreign joint venture Other

34.33

34.60

Jobless

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their native areas/classmates than do non-rural migrants. Significantly more non-rural migrants find employment through corporate employment fairs and the Internet than do rural migrants (see Table 6.9). It is thus clear that though non-rural migrants do make ample use of their social networks when seeking employment, their reliance upon social networks is significantly less than that of rural migrants. Excessive Overtime Work is a Serious Problem for Migrants, and the Average Hourly Wages of Non-rural Migrants are Markedly Higher The incomes of migrants who have received higher education or possess relatively high technical skills tend to be higher. Non-rural migrants, who tend to have higher levels of education and technical skills, thus earn much more than rural migrants, who must work more hours in order to augment their income. The survey’s results indicate that migrants of both rural and non-rural household registrations all encounter serious problems of excessive overtime requirements. Of rural migrants, 2.66 percent work four days a week or fewer, and 16.56 percent work five days. Another 44.79 percent work six days, and 35.99 percent work seven days. Among non-rural migrants, 2.51 percent work four days a week or fewer, and 38.71 percent work five days. Another 37.16 percent work six days, and 21.62 percent work seven days. Among rural migrants, 3.56 percent work seven hours or fewer a day, and 44.65 percent work eight hours. Another 51.80 percent work nine hours or more. Among non-rural 2.6

Table 6.9 Job search methods of migrants, by household registration type Unit: % Job search method

Rural

Non-rural

Job search method

Rural

Non-rural

Government department Social media

1.12

0.59

Internet

2.07

1.81

1.10

4.50

1.29

0.91

Local friends

3.61

10.67

0.35

0.75

2.10 42.93

2.69 35.96

Media advertisement No help from others Corporate job fair Other

2.71 1.50

3.60 0.86

Family/relatives People from same area/classmates

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migrants, 4.95 percent work seven hours or fewer a day, and 63.65 percent work eight hours. Another 31.39 percent work nine hours or more. Their average incomes indicate that non-rural migrants earn significantly more than their rural counterparts. The average hourly wage for non-rural migrants is 15.93 yuan, as compared to 11.00 yuan for rural migrants. Over One Third of Currently Employed Migrants Work without a Labor Contract, and Contract Signage Rates are Higher among Non-rural Migrants As they are highly mobile, migrants tend to change jobs frequently. As they are easy to replace at their jobs, in the past public institutions and enterprises tended to pay them on an hourly basis and seldom signed labor contracts. This made it impossible for migrants to obtain legal protections. Since the implementation of the Labor Contract Law [劳动合同法] in 2008, labor contract signage rates among migrants have increased greatly, but some public institutions and enterprises still choose not to sign contracts with migrant laborers. Non-rural migrants tend to have higher levels of educational attainment and sense of self-preservation, meaning they enjoy greater job security, and show more awareness of the need to sign a labor contract with their employer. Fewer rural migrants sign labor contracts. The survey’s results indicate that 41.26 percent of currently employed migrants have labor contracts of fixed duration, and 37.21 percent work without a contract (see Figure 6.2). There is a wide disparity between rural and non-rural migrants on this issue. Of non-rural migrants 54.92 percent have labor contracts of fixed duration, 16.5 percent higher than for rural migrants. Of non-rural migrants 16.41 percent have labor contracts of no fixed duration, nearly 3 percentage points higher than for rural migrants. Only 23.18 percent of non-rural migrants work without a labor contract, 17 percent fewer than rural migrants. 2.7

3

The Life and Consumption Conditions of Migrants

There are High Rates of Home Ownership among Non-rural Migrants in the Area Where They Work, and Their Living Conditions are Better Traditionally in China, “a roof over one’s head” is a sine qua non of family life. A place to live is not only a requirement for life, but it is also intimately connected with such major life events as marriage and the birth of children. It is also an 3.1

china ’ s floating population in 2012

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Figure 6.2 Migrant labor contract signage, by household registration type

important factor for determining how long migrants will remain in their host city. In recent years, real estate prices have remained high, making the dream of owning one’s own home increasingly difficult to realize for migrants. It often takes the entire savings of two generations to buy just one housing unit. This forces migrants to rent or live in employer-provided dormitories. That means that their living conditions are generally inferior. The survey’s results indicate that home ownership among rural migrants is low. Only 11 percent own their own residence, as opposed to 26.58 percent among non-rural migrants, a 15.58 percent difference (see Table 6.10). Home ownership rates are higher among non-rural migrants, whose living conditions are also superior to those of rural migrants. Ninety-five percent have tap water, and 85.43 percent have bathrooms. 83.57 percent have kitchens, and 70.57 percent have shower facilities. All those figures are lower among rural migrants (see Table 6.11). Non-rural Migrants are More Likely to Use Public Transportation, and Their Commutes are Longer Due to disparities in the nature of their employers, rural migrants tend to be employed in manufacturing and labor-intensive industries located in the hinterlands between urban and rural areas. This allows them to live near work or be provided with housing by their employer. Most non-rural migrants are 3.2

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Table 6.10 Types of migrant housing, by household registration type Unit: % Nature of current housing

Renting from / employer Renting from private landlord Cheap government housing Borrowed housing

Rural

Non-rural

5.30

5.52

65.65

50.78

0.21

0.18

1.67

3.03

Nature of current housing

Rural

Non-rural

Free housing provided by employer Bought or built by self Live in place of work Other nonconventional housing

11.89

10.95

11.00

26.58

3.88

2.77

0.41

0.20

Table 6.11 Migrant living conditions, by household registration type Unit: % Rate of availability

Rural

Non-rural

Tap water Bathroom Kitchen Shower facilities

89.78 67.84 71.15 49.95

95.06 85.43 83.57 70.57

employed by the service industry in city centers; so most opt for housing far from work at lower prices in order to save money. This means longer commutes and more time spent on public transit. The survey’s results indicate that 20.20 percent of non-rural migrants take public transit to work, 12 percent more than among rural migrants. On the other hand, 19.18 percent of rural migrants bike to work, and 35.65 percent walk, both percentages being higher than those for non-rural migrants (see Table 6.12). The average commute time for non-rural migrant workers is 18 minutes, with a mean being 15 minutes. Those numbers are 13 and 10 minutes for rural migrants.

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china ’ s floating population in 2012 Table 6.12 Means of getting to work for migrants, by household registration type Unit: % Means of transportation

Rural

Non-rural

Means of transportation

Rural

Non-rural

Public transit Company shuttle Personal car

8.14 1.76 12.44

20.20 4.99 14.53

Bicycle Walking Not applicable

19.18 35.65 22.83

13.12 31.45 15.71

Non-rural Migrants Tend to Interact More with Locals, and They Tend to Relax by Watching Television and Playing on Computers The degree of interaction with locals is an important indicator for the level of migrant integration into the urban society. In general, migrants tend to interact most often with people in a similar economic station. For that reason, there are disparities between the groups of people with whom rural migrants and non-rural migrants interact in the host cities. Non-rural migrants are typically of a similar social and economic status to the locals in the area where they have migrated, but there is a degree of disparity between the social and economic status of rural migrants and that of the locals. This makes it easier for non-rural migrants to integrate with locals than for rural migrants, who tend to socialize more with people from their native areas. The survey’s results indicate that 38.07 percent of non-rural migrants interact most with locals, 14 percent higher than the figure for rural migrants. On the other hand, 55.13 percent of rural migrants reported interacting most with people from their native areas, about 17 percent higher than the figure of non-rural migrants (see Table 6.13). Not only are non-rural migrants different from rural migrants in the groups of people with whom they regularly interact, but they also spend their leisure time differently. Both groups of migrants reported watching television/movies/ visual recordings as their favorite form of leisure activity. Number two among non-rural migrants was the Internet/computer games at 39.56 percent. Nonrural migrants reported much higher rates of reading/newspapers/study and sports/fitness than rural migrants. Rural migrants reported much higher rates of talking with family, doing chores, resting/sleeping than non-rural migrants. This demonstrates that the two groups of migrants spend their leisure time differently (see Table 6.14). 3.3

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Table 6.13 Social interaction of migrants, by household registration Unit: % Those with whom you interact most locally

Rural

Non-rural

Those from your home area with a local household registration Those from your home area with their household registration still registered at home Other locals Others from other regions I seldom interact with others

22.19

16.89

32.94

21.06

24.12 16.51 4.24

38.07 19.43 4.55

Table 6.14 Leisure activities of migrants, by household registration type Unit: % Leisure activity

Rural

Non-rural

Leisure activity

Rural

Non-rural

Television/films/ recordings Chess/cards/ mahjong Shopping/visiting parks Sports/fitness Reading/ newspapers/study

82.27

75.84

24.93

39.56

17.51

14.97

46.02

35.27

21.32

25.50

Internet/ computer games Talking with family Resting/sleeping

38.40

27.79

8.04 13.98

18.01 25.36

Household chores Other

41.93 0.60

33.25 0.68

There are Higher Participation Rates in Social Activities and Less Economic Pressure on Non-rural Migrants Non-rural migrants also display a higher level of integration into local society in their participation in social activities. The survey has abundantly proved this point. For example, 32.32 percent of non-rural migrants participate in social cultural activities, 5.4 percent higher than the rate reported by rural migrants. Also, 37.55 percent of non-rural migrants reported participating in 3.4

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social welfare activities, nine percent higher than the rate reported by rural migrants. Further, 15.65 percent of non-rural migrants reported participation in election and assessment activities, 6.5 percent higher than reported by rural migrants (see Table 6.15). The economic and social status of non-rural migrants is higher than that of rural migrants. They can often rely on their own abilities to resolve the difficulties they encounter, and they encounter less pressure back at home, either in elderly care, the raising of children, or economic hardships. The survey’s results indicate that 47.22 percent of rural migrants encounter problems of elderly care back home, 5.8 percent more than non-rural migrants. Twenty percent of rural migrants encounter problems of raising children at home, 5.5 percent more than for non-rural migrants. Of rural migrants, 53.71 percent experience economic hardship at home, about 13 percent more than for nonrural migrants (see Table 6.16). Table 6.15 Social activity participation of migrants, by household registration type Unit: % Social activity

Rural

Non-rural

Community cultural and sports activities Community public benefit activities Planned birth association activities Property owner committee activities Election and assessment activities

26.93 28.49 37.08 3.87 9.13

32.32 37.55 34.50 7.81 15.65

Table 6.16 Major domestic problems encountered by migrants, by household registration type Unit: % Problem encountered at home

Rural

Non-rural

Care for the elderly Raising of children Economic shortcomings

47.22 20.01 53.71

41.39 14.54 40.66

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The Social Security and Social Mentality of Migrants

Most Rural Migrants are Covered Primarily by Village Collective Insurance, while Non-rural Migrants are More Likely to Be Enrolled in Urban Social Insurance Although a social security system with universal coverage is beginning to take shape, the disparities between urban and rural areas remain large, and there are still discontinuities among regions. It is difficult for both rural and nonrural migrants to receive the level of social security to which they are entitled when in their host cities. The survey’s results indicate that 62.41 percent of rural migrants are enrolled in New Rural Cooperative Medical Insurance at home and 11.70 percent in rural pension insurance at home. Another 20.95 percent of non-rural migrants are enrolled in urban pension insurance at home, and 28.83 percent of nonrural migrants in urban medical insurance at home (see Table 6.17). This demonstrates that a certain proportion of both rural and non-rural migrants are enrolled in the social security system in the areas from which they migrated. In addition, many more non-rural migrants receive social security benefits than rural migrants. Specifically, 30.48 percent of non-rural migrants are enrolled in pension insurance, 33.90 percent in medical insurance, 24.89 percent in workplace injury insurance, 22.88 percent in unemployment insurance, 4.1

Table 6.17 Enrollment in social insurance of migrants, by household registration type Social insurance at home

Rural

Non-rural

Social insurance at home

Urban pension insurance Urban medical insurance Workplace injury insurance Unemployment insurance Maternity insurance

1.54

20.95

4.37

28.83

1.17

6.49

0.42

6.48

0.91

4.18

Housing fund

0.26

4.71

Urban subsistence insurance Rural subsistence insurance New rural cooperative Rural pension insurance Other (please specify)

Rural

Non-rural

0.18

1.47

1.95

0.64

62.41

11.86

11.70

2.46

0.07

0.05

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china ’ s floating population in 2012 Table 6.18 Participation of migrants in local social insurance, by household registration type Unit: % Local social insurance

Rural

Non-rural

Local social insurance

Rural

Non-rural

Pension insurance

12.44

30.48

7.88

22.88

Medical insurance

15.25

33.90

5.85

14.26

Workplace injury insurance

16.74

24.89

Unemployment insurance Maternity insurance Housing fund

2.95

14.69

14.26 percent in maternity insurance, and 14.69 percent in housing provident funds. The enrollment rates of rural migrants in all those forms of insurance are lower (see Table 6.18). Most Migrants Identify to a Great Degree with Their Host Place, and They Also Tend to Think That They are Happier Living and Working There A sense of belonging is the key to determining if migrants can integrate into local society. The survey’s results indicate that most migrants like the city in which they currently reside and would be willing to become a member of society there. Both rural and non-rural migrants both tend to think, “I like the city where I live now,” “I am concerned about the changes happening to the city where I live now,” “I am very willing to integrate with the area where I now live and become a member of that community,” “I feel that locals are willing to accept me as one of them,” and so on. Most also tend to disagree with the sentiment that “I feel that locals look down upon outsiders” (see Table 6.19). Both rural and non-rural migrants gave similar responses when asked about their level of happiness in their current location as compared to what they experienced at home. Of rural migrants 35.97 percent said they are now happier, while 33.83 percent of non-rural migrants did. Fifty-one percent of rural migrants and 51.33 percent of non-rural said they are about as happy as they had been before moving. Of rural migrants 3.65 percent rural migrants and of non-rural migrants 4.96 percent said they were happier before. And 9.16 percent of rural migrants and 9.89 percent of non-rural reported being unsure. 4.2

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Table 6.19 Social attitudes among migrants, by household registration by type Unit: % Do you agree with the following statement?

Household registration

Completely Disagree disagree

Basically Completely agree agree

I like the city where I currently reside I pay attention to the changes taking place in the city where I reside I am very willing to integrate with the area where I live and become a member of that community I feel that locals are willing to accept me as one of them I feel that locals look down upon outsiders

Rural Non-rural Rural Non-rural

0.75 1.05 0.71 0.72

2.39 2.71 3.73 2.94

52.35 48.83 52.93 47.44

44.51 47.42 42.64 48.90

Rural Non-rural

1.13 1.00

6.56 5.03

48.98 45.07

43.33 48.90

Rural

1.13

7.80

56.09

34.99

Non-rural

0.87

5.67

51.45

42.01

Rural Non-rural

27.15 31.27

47.80 48.60

20.01 16.08

5.03 4.06

Table 6.20 The happiness of migrants, by household registration by type Unit: % Your level of happiness here as compared to at home

Rural

Non-rural Your level of happiness here as compared to at home

Rural

Non-rural

Happier About the same

35.97 51.22

33.83 51.33

3.65 9.16

4.96 9.89

Less happy Not sure

Chapter 7

Chinese Urban Resident Quality of Life Investigative Report 2012 Yuan Yue, Zhang Hui, and Jiang Jianjian* Abstract “The Chinese Resident Quality of Life Indicator Report” is an ongoing follow-up survey begun by the Horizon Research Consultancy Group in 1993. A composite of several years of the survey demonstrates that urban resident satisfaction of life has increased gradually from year to year since 2000. The survey’s results from this year demonstrate that microeconomic indicators such as personal income, profession, social security, consumer confidence, and others affecting overall life satisfaction are on the rise, and price tolerance levels have stayed low. Economic pressure is everywhere, and concerns related to old-age care are growing. Awareness of such social stability problems as loss of public faith in the commercial domain and the rich-poor divide are growing increasingly obvious, and approval of the State’s direction of development and confidence in government management have stayed high. There has been a great deal of emphasis placed on territory disputes, and there are high appraisals and strong confidence in the government’s foreign policy performance.

* The analysis data from this report come from household surveys in 10 cities: Beijing, Shanghai, Guangzhou, Wuhan, Chengdu, Shenyang, Xi'an, Dalian, Xiamen, and Jinan. The ages of respondents varies from 18 to 65. Not fewer than 200 successful testing samples were obtained from each city, for a total of 3091 successful samples. Investigators surveyed many levels of society and drew samples at random. The data have been weighted based on the real population of each place investigated. The standard deviation of samples given a 95 percent degree of confidence was ±1.02 percent. The composition of survey samples was as follows: male 58.5 percent, female 51.5 percent; 16–25 years 13.2 percent, 26–35 years 27.8 percent, 36–35 years 28.5 percent, 46–55 years 21.8 percent, 56–65 years 8.7 percent; primary school education or less 2.8 percent, middle school education 22.8 percent, high school/vocational/ technical school education 40 percent, high-level vocational college 23 percent, undergraduate education and higher 11 percent, and 0.4 percent unwilling to report education level.

© koninklijke brill nv, leiden, ���5 | doi ��.��63/9789004276536_007

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Keywords Overall life satisfaction – microeconomic indicators – future confidence

1

Steady Improvement in Feeling of Satisfaction

The 5-point Satisfaction with Life Scale indicates that urban resident overall life satisfaction is 3.57. From 2000 to 2012, urban resident overall life satisfaction grew stably, with the proportion of those satisfied with life holding steady between 50 and 70 percent. The significance of all the report’s indicators and the urban resident life satisfaction scores over the five year period from 2008 to 2012 demonstrate the following. 1.) The confidence of the masses in the government’s management, particularly in its management of international and economic affairs, has remained at a relatively high level, but there is little correlation between those indicators and overall life satisfaction. 2.) Satisfaction in such macro indicators as the nation’s economic situation, sense of the nation’s international status, public security, and others, as well as their influence on overall life satisfaction, are at an intermediate level. 3.) Confidence shown by macro indicators closely related to individual life, welfare, income, and so on, such as personal economic situation, social security situation, employment situation, consumer confidence, and so on, are low, but they exert an important influence on overall life satisfaction.

Figure 7.1 Changes and trends of urban resident overall life satisfaction, 2002–2012 Note: The data in the Figure are assigned via the 5-point Satisfaction with Life scale. “5” means extremely satisfied with life, and “1” means extremely dissatisfied with life. Data source: Several years of Horizon Research Consultancy’s “Chinese Urban Resident Quality of Life Indicators Report”

chinese urban resident quality of life investigative report 2012

2

119

Public Opinions on Sensitive Social Issues

A scan of several years of the social issues on which urban residents place concern demonstrates the following. 1.) General prices, real estate prices, medical prices, and others have been constant sources of concern. 2.) Such problems as the poor-rich divide, social stability, and territory disputes have begun to become points of focus. The poor-rich divide first entered the top ten list of social issues of concern in 2007. In 2012, 31.6 percent of residents responded that they were most concerned about the poor-rich divide, putting it in third place behind general prices and real estate prices. Social stability first entered the top ten list in 2011 in ninth place, but jumped to fifth place in 2012. Territory disputes with neighboring nations and society’s moral atmosphere first entered the top ten list in 2012. The survey results from 2012 indicate that there was an increase to living standards over the past five years for 68.9 percent of respondents and that as compared with average local living standards, there was a drop in the proportion of respondents who thought their families were in poverty (from 21.4 percent in 2011 to 14.8 percent in 2012). However, among those respondents who found their family’s living standards to be poor, 60.1 percent believed it would not be likely for them to leave their state of poverty through their own efforts, a drop from the 2011 level of 69.2 percent. More noteworthy is the fact that only 5.4 percent of respondents thought that the majority of the rich nowadays were worthy of their riches. Speaking to the resolution of the poor-rich divide in the coming one to two years, 51.1 percent of respondents were optimistic, believing that the problem could be resolved to a certain degree, but that proportion was low as compared to the quantity of respondents reporting that their families were in poverty (only 42.6 percent reported confidence). A third of respondents (33.3 percent) believed they would maintain their optimism, and 13.9 percent were pessimists who thought the rich-poor divide would become further exacerbated. 3

Pressure from Price Fluctuation Limits Rise in Consumer Confidence

In the first three quarters of years 2006 to 2012, China’s CPI underwent several major fluctuations. Although urban resident price fluctuation endurance vacillated with CPI, the degree of vacillation wasn’t as marked as that of CPI. CPI over the first three quarters of 2012 fell by a large magnitude as compared to the first three quarters of 2011, and the urban resident price fluctuation endurance did not show any marked increase.

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Table 7.1 Urban resident life satisfaction scores and their influence on overall life satisfaction Indicator

Satisfaction with recreation and entertainment Satisfaction with professional situation Satisfaction with personal financial situation Satisfaction with personal social security situation Evaluation of national economic situation Price fluctuation endurance Degree of recognition of consumer timing Consumer confidence index Degree of worry about future old-age care Expectations of future competitiveness Degree of optimism for future income Degree of optimism for future life Sense of nation’s international status Sense of social and public order and security Degree of confidence in government management of economic affairs Degree of confidence in government management of international affairs Degree of confidence in government management of social affairs

2012 Correlation Satisfaction

2011 Correlation Satisfaction

0.47

3.41

0.63

3.44

0.42 0.42

3.52 3.22

0.53 0.63

3.57 3.32

0.28

3.33

0.32

3.52

0.21 0.22 0.21 0.39 –0.16 0.22 ___ 0.25 0.20 0.23

3.70 3.22 2.89 3.27 3.42 3.38 ___ 3.68 3.75 3.57

0.32 0.46 0.32 0.54 –0.19 0.36 0.37 0.40 0.25 0.33

3.60 3.17 2.93 3.29 3.57 3.38 3.75 3.55 3.73 3.60

0.13

4.25

0.20

4.11

0.06

4.19

0.14

4.18

0.17

3.72

0.31

3.80

Note: The data above were obtained via the five-point satisfaction scale. For the degree of worry about future old-age care, higher scores indicate higher degrees of worry. For all other scores, the higher the number, the higher the level of satisfaction or confidence. The correlation figures from the table are the coefficient between the index in question and the overall life satisfaction figure. Data source: Several years of Horizon Research Consultancy’s “Chinese Urban Resident Quality of Life Indicators Report”

chinese urban resident quality of life investigative report 2012

2010 Correlation Satisfaction

2009 Correlation Satisfaction

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2008 Correlation Satisfaction

0.32

3.18

0.39

3.41

0.52

3.32

0.38 0.45

3.28 3.21

0.44 0.46

3.58 3.14

0.51 0.52

3.49 3.16

0.26

3.26

0.31

3.51

0.38

3.39

0.33 0.32 0.20 0.41 –0.15 0.23 0.28 0.28 0.20 0.21

3.65 3.13 2.89 3.25 3.25 3.34 3.50 3.37 3.78 3.60

0.45 0.40 0.28 0.47 –0.25 0.24 0.28 0.30 0.21 0.24

3.64 3.33 3.00 3.26 2.83 3.20 3.32 3.29 3.88 3.62

0.40 0.45 0.31 0.51 –.33 0.17 0.37 0.39 0.19 0.29

3.55 3.15 2.95 3.22 2.97 3.22 3.45 3.36 3.83 3.53

0.11

4.17

0.17

4.23

0.08

4.15

0.11

4.29

0.16

4.36

0.23

3.91

0.10

3.63

0.24

3.85

0.08

3.65

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Table 7.2 Comparisons of social issues of concern to urban residents, 2006–2012 (%)

2012

2011

2010

General prices Real estate prices

43.4 36.1

General prices Real estate prices

61.1 54.4

General prices Real estate prices

48.6 39.1

Rich-poor divide

31.6

23.1

Medical treatment 37.5

Food and drug safety Social stability

28.8

Food and drug safety Employment

22.7

Employment

28.2

22.2

Medical treatment

16.3

Social security

25

Employment

20.1

Social security

15.3

18.9

Anti-corruption

19.5

Anti-corruption

14.5

Food and drug safety Rich-poor divide

Social security Territory disputes

14.2 9.8

Rich-poor divide Social stability

13.5 13.1

Education reforms 11.2 Anti-corruption 10.0

Social moral atmosphere

8.8

Education reforms

9.5

Economic crisis

13.9

6.3

Note: The data in the table are rates of concern calculated based on three responses per respondent from a pre-selected list of issues. The table lists only the top ten concerns of each year. Data source: Several years of Horizon Research Consultancy’s “Chinese Urban Resident Quality of Life Indicators Report”

A scan of several years of urban resident consumer confidence indices demonstrates that urban consumer confidence hit bottom at the end of 2008 but began rising again in 2009 and has since remained relatively stable, with no major fluctuations. Among the three indices of consumer confidence, degree of identification with consumer opportunities has consistently been a factor pulling down consumer confidence, while evaluation of the national economic situation has consistently elevated consumer confidence. 2012 survey results indicate that only 6.9 percent of urban families plan to increase household consumption in the coming year and that 60.5 percent of families indicated that they would decrease consumption and increase savings in 2013, an increase over the 52.4 percent level of 2011.

chinese urban resident quality of life investigative report 2012

2009 Real estate prices Medical treatment

2008

123

2007 70.4 General prices 33.6 Real estate prices

67.6 28.6

Employment

33.9 General prices 32.5 Food and drug safety 29.3 Real estate prices

29.5 Medical treatment

24.1

General prices

23.3 Social security

24.4 Social security

20.9

Social security

22.8 Employment

20.6

Anti-corruption

17.6 Medical treatment

22.1 Food and drug safety 16.8 Employment

Food and drug safety Rich-poor divide Education reforms

16.7 Anti-corruption

11.9 Rich-poor divide

17.3

15.3 Rich-poor divide 11.5 Environmental protection 11.4 Aging population

11.5 Anti-corruption 10.4 Olympics

16.8 14.8

8.2

10.7

Social public order

Education reforms

17.4

The survey’s results indicate that over half (51.3 percent) of urban residents reported heavy economic pressure. Further analysis indicates that the top three sources of economic pressure on urban residents are housing (56.9 percent), basic costs of life (49.2 percent), and children’s education (33.2 percent). The economic pressure on mid-level and higher income earners comes mostly from housing, while the largest economic pressure on low income earners comes from basic costs of life. The survey results also indicate that even among households that achieved increased savings in the previous year, 46.2 percent reported increased economic pressure. This demonstrates that feelings of economic pressure are universal and that it is difficult to substantively increase price fluctuation

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Figure 7.2 Changes and trends of Chinese urban resident price fluctuation endurance, 2006–2012 Note: Price fluctuation endurance data from the figure were derived from a five-point survey. The higher the score, the more the respondent can tolerate price fluctuations. Data source: CPI data from the National Bureau of Statistics, and price fluctuation endurance data from several years of Horizon Research Consultancy’s “Chinese Urban Resident Quality of Life Indicators Report”

Table 7.3 Urban resident consumer confidence indices by year

2004 2005 2006 2007 September 2008 December 2008 October 2009 October 2010 November 2011 October 2012

Evaluation of Degree of identification Evaluation of personal with consumer national economy opportunities economy

Consumer confidence index

3.1 3.1 3.34 3.15 3.16 3.08 3.14 3.21 3.32 3.22

3.13 3.15 3.31 3.27 3.22 3.00 3.26 3.25 3.29 3.27

2.69 2.78 3.05 2.99 2.95 2.54 3.00 2.89 2.93 2.89

3.59 3.66 3.62 3.67 3.55 3.36 3.64 3.65 3.60 3.70

Note: consumer confidence indices are a reflection of evaluations of one’s personal economy, evaluations of the national economy, and one’s degree of identification with consumer opportunities. Data source: Data from December 2008 come from the “Urban Resident Life Forecast Report 2009” drafted by the Horizon Research Consultancy Group. Data from all other years come from several years of Horizon Research Consultancy’s “Chinese Urban Resident Quality of Life Indicators Report”

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Figure 7.3 Primary sources of economic pressure on urban residents Data source: Horizon Research Consultancy’s 2012 “Chinese Urban Resident Quality of Life Indicators Report”

endurance and consumer confidence. It also demonstrates that public feelings of general prices and real changes to CPI are not entirely linked. 4

Growing Concerns about Old-age Care

In 2000, the aging population problem is now a major Chinese social development which we must face. Urban residents have universally expressed concerns over future old-age care. A scan of data over the six year period from 2007 to 2012 reveals that though there were fluctuations, the trend for urban resident old-age concerns is rising, from 2.79→2.97→2.83→3.25→3.57→3.42 (on a five-point scale in which higher scores indicate more worry). The 2012 survey results indicate that 59.2 percent of respondents were concerned about future life care, and 54.2 percent about the cost of old-age care. In 2006, those numbers were 39.6 percent and 38.9 percent. Another statistic indirectly reflects the feeling of pressure from old-age care felt by the masses, namely that among respondents under 30 of marriageable age, the second greatest reason for wanting to have a second child was, “to reduce the pressure of taking care of me in old age” (18.1 percent). Though the traditional family model of children taking care of their parents remains the mainstream (57 percent in 2007 and 36.6 percent in 2012), changes are already taking place to urban resident old-age care concepts as compared to five years ago. More people are willing to adopt the model of “living at home but being taken care of by in-home caretakers or residential committees. The ratio of those willing to go to old-age care centers established by Civil Affairs departments has also risen to a certain extent. There has been

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Figure 7.4 Reasons urban residents of marriageable age wish to have multiple children Data source: Several years of Horizon Research Consultancy’s “Chinese Urban Resident Quality of Life Indicators Report”

basically no change to the proportion of people who opt to send their elderly to commercial care centers. Survey data indicate that only 19 percent of adult children live with their parents. Another 43.7 percent live in the same city as their parents, and 35.9 percent live in separate places from their parents. The now widespread household model of “2-4-1” is another major factor inhibiting the traditional old-age care model. A single couple needs to take care of four seniors, meaning that the household senior care model exerts enormous economic pressure on the children. In this year’s survey, 22.2 percent of adult children reported that their 65+ year old parents had given them more economic assistance in the long run, and that it was not at all rare for elderly parents to give their adult children “economic breast feeding.” 61.9 percent of respondents hope that the state can bear the burden of their retirement funding, but only 39.6 percent predict that their retirement funding will come from the state. 32.2 percent think they will have to rely on themselves for their retirement funding. These figures indicate insufficient faith of the masses in social old-age care, and reflect the worries of the masses pertaining to old-age care problems. The survey data indicate that urban residents think that the number one symbol of a happy old-age life is “no material worries,” i.e. “having a stable income source” (66.9 percent), “having medical insurance and social security” (52.3 percent), and so on. Next in line come “health of body and mind,” “emotional satisfaction,” and so forth. In second place with 59.9 percent of respondents is “bodily health, not too many illnesses or pains.” The aging population is a global problem. The global trend indicates that an extension to retirement ages is an inevitability, owing to enormous

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Table 7.4 Comparison of most wished for old-age care model by urban residents in 2007 and 2012

Living at home, being cared for children or other younger generation family members Living at home, having basic living needs provided by community residents Living at home, hiring professional care personnel for care Living in old-age care centers established by Civil Affairs departments Living in a commercial old-age care center Relying primarily upon oneself Refused to answer/not sure

2012

2007

36.6 percent

57 percent

14.1 percent

3 percent

13.8 percent

4.2 percent

19.6 percent

13.1 percent

5.7 percent 9.1 percent 1.1 percent

4.1 percent 15.3 percent 3.3 percent

Data source: Horizon Research Consultancy’s “Chinese Urban Resident Quality of Life Indicators Report” from 2007 and 2012

Figure 7.5 Symbols of happy old-age life as perceived by urban residents Data Source: Horizon Research Consultancy’s “Chinese Urban Resident Quality of Life Indicators Report” from 2012

pressure on the economy caused by an excessively aged population. Many European and North American nations have attempted to alleviate economic pressure by extending retirement ages. Nearly 40 percent of urban residents (39.6 percent) were aware of this international trend. However, urban residents’ attitudes toward extending retirement ages is negative, as

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most hope that the current retirement age level be maintained, or even that retirement ages be reduced. In comparison, urban residents 46 years and older are in support of maintaining the status quo (43.9 percent), whereas urban residents 45 years and younger are more in support of reducing the retirement age. This indicates that when the government is drafting retirement age policies, they make uniform sweeps, indiscriminately copy, or are hasty to see results. Instead, officials should place more consideration on public demands, such as society, the economy, the population, the household, and so forth, in order to find a wiser solution. 5

Growing Concerns about Public Security and the Credit Crisis

A comparison of the social problems that cause the strongest feelings of unsafety among urban residents in 2011 and 2012 indicate that the data composition of the two years is basically the same. 1.) Food and drug safety concerns have topped the list for four years running with an over 40 percent mention rate by respondents. 2.) Of the top four on the list, the three major concerns other than social disorder were related to social trust, such as food and drug safety, fake and sub-standard products, and all manner of fraud in society. One should also notice that in 2012, the sense of unsafety caused by social disorder, emotional conflict incidents, and so on, also increased from 2011 levels. In recent years, there have been many problems in society stemming from lack of trust. For that reason, in 2012’s survey we listed out 11 industries or

Figure 7.6 The social problems that caused the greatest feeling of unsafety as perceived by urban residents in 2011 and 2012 Data Source: Horizon Research Consultancy’s “Chinese Urban Resident Quality of Life Indicators Report” from 2012

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work units closely related to people’s lives and asked respondents to score their level of trust in them. The results were as follows. 1.) Public trust in public affairs is rather high. Out of 100 possible points, the government scored 76.1, the People’s National Congress (PNC)/Chinese People's Political Consultative Conference (CPPCC) 72.3 percent, and education 71.4 percent, all above 70 percent. 2.) Trust in the commercial realm is low. Excluding banks (71.8), the trust levels in all other industries were below 70. Public trust in insurance and the tourism industry were just above 60, while trust in the real estate insurance was below 60. Of the 11 industries/work units, the media ranked sixth, in an intermediate position. Overall, among the various media, urban residents place the most trust in television (63.1 percent), followed by newspapers (19.4 percent) and the Internet (12.3 percent). The proportion of trust in the Internet by young adults under 30 is higher (21.6 percent), placing it above newspapers in that demographic. We designed a scenario to determine the level of trust in the most symbolic traditional media and in new media by urban residents. After something occurs, 44.4 percent of Weibo microblog subscribers would be more likely to believe the information on microblogs than on Xinwen Lianbo [新闻 联播] (38.7 percent). .

Figure 7.7 The degree of trust in various industries of urban residents Note: the above scores were based in a 100-point assessment scale. The higher the score, the higher the level of trust. 100 points indicates total trust, and 1 point indicates no trust. Data Source: Horizon Research Consultancy’s “Chinese Urban Resident Quality of Life Indicators Report” from 2012

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High Government Approval Ratings for Governance and International Diplomacy and Rising Optimism among the Public

A scan of data from several years of the survey indicates that urban residents approve of the state’s development direction to a large degree. The approval rate has remained above 90 percent every year from 2007 to 2012 (91 percent→95.6 percent→97.6 percent→97 percent→94.2 percent→94.5 percent). Faith in the government’s management of affairs, particularly in its management of national economic development, increasing the nation’s international status, and so forth, has remained relatively high. However, years of data also demonstrate the following. 1.) The confidence of urban residents in the government’s handling of social affairs has consistently been lower than their confidence in the government’s handling of economic and international affairs. This is consistent with China’s current development stage in which social conflicts occur frequently. 2.) In 2012, confidence of urban residents in future economic development and increases to the nation’s international status has further increased, but confidence in management of social affairs has decreased. 3.) Compared with the high level of confidence in national development, urban resident confidence in future increases to living standards is insufficient. On the bright side, after drops in confidence in personal living standards from 2007 to 2009, the three year period from 2010 to 2012 saw consecutive increases.

Figure 7.8 Urban resident confidence in the state’s future development and in personal life standards development, 2006–2012 Note: Data from the figure were derived from a 5-point assessment scale. A score of 5 indicates full confidence, while 1 indicates zero confidence. Data source: Several years of Horizon Research Consultancy’s “Chinese Urban Resident Quality of Life Indicators Report”

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A comparison of urban resident confidence in various social affairs from 2008 to 2012 indicates the following. 1.) Public confidence in the government’s response to natural disasters and maintaining social order is high, consistently scoring 3.9 and above. 2.) Confidence in improving the social atmosphere and resolving employment problems is at an intermediate level. Confidence in increasing social fairness scored 3.72, while confidence in increasing social stability scored 3.84, also at intermediate levels. 3.) Owing to relative difficulty and a large area of involvement, public confidence in fighting corruption and resolving the rich-poor divide is low, scoring in at low levels for five years running. The dispute between China and Japan over the Diaoyu Islands in 2012 incited mass national emotions in China. A scan of 13 Horizon Research Consultancy surveys regarding “the least friendly nation to China” conducted in March of each year indicates that the U.S. was at the top of the list 13 years running, followed by Japan and Russia, which frequently traded off in spots two and three. In October 2012, however, Japan for the first time topped the list, with a historical high 92.3 percent mention rate. At the same time, Japan also topped the “most repugnant nation” list with an Table 7.5 Urban resident confidence in social affairs management, 2008–2012

Disaster response Social order Improving social atmosphere Resolving employment problems Anti-corruption Resolving the rich-poor divide Increasing social fairness Increasing social stability

2008

2009

2010

2011

2012

3.94 3.91 3.73

4.15 4.05 3.91

4.00 3.95 3.61

3.90 3.98 3.79

3.99 3.95 3.71

3.51

3.78

3.61

3.84

3.74

3.45 3.32

3.74 3.53

3.37 3.22

3.64 3.67

3.42 3.49

____ ____

____ ____

____ ____

____ ____

3.72 3.84

Note: data in the table were derived from a five-point assessment scale, with five being the highest score, indicating full confidence. Data source: Several years of Horizon Research Consultancy’s “Chinese Urban Resident Quality of Life Indicators Report”

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87 percent mention rate. Japan’s behaviors during the Diaoyu Islands incident are the primary reason for this result. China’s diplomatic relations grow more complicated daily, and Chinese territorial disputes with other nations grow more apparent daily. No matter what, however, 64.6 percent of urban residents expressed satisfaction with past government diplomatic performance, and 72.1 percent expressed confidence in the government’s diplomatic performance in the coming one to two years. Over half of urban residents (55.5 percent) were both satisfied with the government’s diplomatic performance in the past year and also confident about the government’s future diplomatic performance.

Chapter 8

The Chinese Senior Population’s Living Arrangements, Health, and Nursing Care Analysis of Data from the Sixth Population Census Zhang Yi* Abstract By analyzing data from the sixth population census conducted in 2010, we discovered the following. 1) The proportion of households containing persons over the age of 65 was higher in villages than in towns, and higher in towns than in cities. 2) Among the senior population, empty nest households grew nearly nine percent from 2000 to 2010. With the floating population has become the status quo, the proportion of empty nest households is increasing rapidly as the population grows ever older. 3) As the population ages, the health of seniors is dramatically decreasing, and the health of females is worse than that of men in every age group. 4) The health of seniors with spouses is better than that of seniors without spouses. 5) When they are unable to handle living alone, seniors primarily rely upon family members to sustain them. Female seniors rely on family members for life needs more than male seniors. The effects of pension insurance must be strengthened.

Keywords family living arrangements – health status – old-age support

Much previous research demonstrates that the family living arrangements and health status of seniors directly influence their senior care needs and their reliance upon external care resources. At the same time, however, care arrangements and the level of health of seniors exert a marked influence on their children’s employment opportunities and number of hours of their children can work. The significance of this influence is that the reliance of seniors on * Zhang Yi, researcher at the Institute of Sociology, Chinese Academy of Social Sciences.

© koninklijke brill nv, leiden, ���5 | doi ��.��63/9789004276536_008

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their family for care resources directly restricts the employment options and work arrangements of their children.9 For these reasons, the living arrangements, health, and senior care reliance of seniors will affect China’s future implementation of institutions for elderly care. In this chapter, we analyze the family living arrangements, the bodily health status, and the senior care reliance situation of seniors using data from sixth decennial population census. 1

The Family Living Arrangements of Chinese Seniors

In traditional Chinese society, life expectancy was extremely short. Around 1950, the average life expectancy for a child of zero years was only 35.10 Thus most seniors were not expected to live to 65, hence the popular expression that living to the ancient age of 70 was a rare accomplishment. As society has stabilized and the economy developed, Chinese average life expectancy has rapidly increased, up to 73.1 in 2009.11 As life expectancies for infants of age zero have increased, the life expectancies of other age groups have also grown. The results of the sixth population census in 2010 indicate that the proportion of seniors 60-years and older to the total population was 13.26 percent, and the proportion of seniors 65-years and older to the total population was 8.87 percent, making China’s aging population problems relatively mild compared to the rest of the world. However, China is still the world’s most populous nation, meaning that China is the nation with the most seniors 65-years and older, about 123 million in total. Increases to the senior population have on the one hand caused increases to the proportion of households containing seniors, and on the other hand caused an increase to the number of seniors living in empty nest households. 9  Jiang Cheng and Zhao Xiaojun 蒋承、赵晓军, “Zhongguo laonian zhaoliao de jihui yu chengben yanjiu 中国老年照料的机会与成本研究 [Research on the Opportunities and Costs of Old Age Care in China],” Guanli Shijie 管理世界 10 (2009). 10  Zhang Yi 张翼, “Zhongguo renkou kongzhi zhengce de lishi bianhua yu gaige qushi 中 国人口控制政策的历史变化与改革趋势 [Historical Changes to and Reform Trends of China’s Population Control Policies],” Guangzhou Daxue Xuebao广州大学学报 8 (2006), Social Science Edition 社会科学版. 11  National Population and Family Planning Commission, Development Planning and Information Division, China Population and Development Research Institute 国家人 口计生委发展规划与信息司中国人口与发展研究中心, Renkou he jihua shengyu changyong shuju shouce人口和计划生育常用数据手册 [Frequently Used Data Handbook for Population and Planned Birth],” (Beijing: China Population Publishing House: 2011).

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The Proportion of Households Containing Seniors to Total Households As demonstrated in Table 8.1, data from the sixth population census indicate that the proportion of Chinese households containing seniors 65-years and older to total Chinese households was 21.89 percent. That is to say that of all households nationwide, 21.89 percent are supporting at least one senior of 65-years or older. If we divide based on regions, that figure becomes 17.22 percent in cities, 19.56 percent in towns, and 25.94 percent in rural villages. Why is the proportion higher in villages than in towns and cities? A major reason lies in increases to the floating population. Data from the sixth population census indicate that the Chinese floating population was 221 million strong in 2010. Of that total, 170 million were rural citizens working in cities. As such, the severity of the aging problem in rural villages was worse than in cities. Thus the proportion of city households containing one senior of 65-years or older was 10.86 percent, but 13.26 percent in towns and 18.01 percent in rural villages. The proportion of households containing two seniors of 65-years and older was 6.30 percent for cities, 6.22 percent for towns, and 7.83 percent for rural villages. In the “three seniors of 65-years or older” category, we can see that though the figures are all low, there are more seniors in rural villages than in cities. 1.1

1.2 Rapid Growth of Senior Empty Nest Households Table 8.2 gives us an idea about the empty nest situation of seniors of 65-years or older. Here, we use households containing at least one senior of 65-years or older to calculate the proportion of senior empty nest households. The data Table 8.1

Proportion of households containing seniors 65-years and older to total Chinese households (%)

Nationwide Cities Towns Rural villages

1 senior 65-years or older

2 seniors 65-years or older

3 seniors 65-years Totals or older

14.79 10.86 13.26 18.01

7.02 6.3 6.22 7.83

0.08 0.06 0.08 0.10

21.89 17.22 19.56 25.94

Data source: calculated based on Tables 5-3 and 5-5 of the “All Data Tables” section of the 2010 Nian renkou pucha ziliao 2010年人口普查资料 [2010 National Population Census Materials]

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Table 8.2 Proportion of empty nest households containing 65-years and older seniors to total households containing 65-year and older seniors (percent) 2010 empty nest Living Empty nest households Living Empty nest households household with with totals minus children Living Husband Total children Living Husband Total 2000 empty alone and wife empty alone and wife empty household empty nest empty nest totals nest figures nest figures

Nationwide Beijing Tianjin Hebei Shanxi Inner Mongol. Liaoning Jilin Heilongjiang Shanghai Jiangsu Zhejiang Anhui Fujian Jiangxi Shandong Henan Hubei Hunan Guangdong Guangxi Hainan Chongqing Sichuan Guizhou Yunnan Tibet

Fifth Population Census, 2000

Sixth Population Census, 2010

77.17 75.00 71.80 74.61 73.00 75.41

11.46 11.9 12.96 11.89 13.96 11.4

11.38 13.09 15.24 13.5 13.03 13.19

22.83 25.00 28.20 25.39 27.00 24.59

68.23 65.22 60.15 65.61 64.82 59.61

16.40 15.98 18.10 16.51 17.82 18.55

15.37 18.8 21.74 17.88 17.35 21.83

31.77 34.78 39.85 34.39 35.18 40.39

8.94 9.78 11.65 9.00 8.18 15.80

72.92 80.14 78.79 70.63 72.52 64.88 76.1 79.63 84.01 63.95 78.13 81.25 81.09 79.56 80.37 79.52 81.8 83.99 82.47 86.59 93.19

10.47  7.82  8.32 13.73 13.34 20.1 11.19 11.64  8.49 17.51 10.29  9.52  9.76 12.86 10.98 11.32  9.46  8.73  8.36  6.85  5.93

16.61 12.03 12.89 15.64 14.14 15.02 12.71 8.73 7.49 18.55 11.59 9.23 9.15 7.57 8.65 9.16 8.74 7.29 9.18 6.55 0.88

27.08 19.86 21.21 29.37 27.48 35.12 23.9 20.37 15.99 36.05 21.87 18.75 18.91 20.44 19.63 20.48 18.2 16.01 17.53 13.41  6.81

61.5 68.31 64.13 59.49 64.34 55.62 65.65 71.16 78.61 54.6 70.67 73.2 73.84 76.76 74.12 71.18 65.8 71.52 71.64 82.07 92.71

17.05 14.35 16.49 18.18 17.28 25.03 17.23 17.08 11.26 22.1 14.37 13.54 14.14 14.92 15.06 17.86 20.24 16.49 15.18  9.24  6.1

21.45 17.34 19.38 22.33 18.37 19.36 17.12 11.76 10.13 23.31 14.96 13.26 12.02  8.32 10.83 10.96 13.97 11.99 13.18  8.7  1.19

38.50 31.69 35.87 40.51 35.66 44.38 34.35 28.84 21.39 45.40 29.33 26.80 26.16 23.24 25.88 28.82 34.20 28.48 28.36 17.93  7.29

11.42 11.83 14.66 11.14  8.18  9.26 10.45  8.47  5.40  9.35  7.46  8.05  7.25  2.80  6.25  8.34 16.00 12.47 10.83  4.52  0.48

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2010 empty nest Living Empty nest households Living Empty nest households household with with totals minus children Living Husband Total children Living Husband Total 2000 empty alone and wife empty alone and wife empty household empty nest empty nest totals nest figures nest figures

Shaanxi Gansu Qinghai Ningxia Xinjiang

Fifth Population Census, 2000

Sixth Population Census, 2010

82.99 90.46 90.03 83.86 82.13

74.62 81.43 81.71 68.51 65.66

8.49 5.03 5.48 7.01 9.6

8.52 4.51 4.48 9.13 8.27

17.01 9.54 9.97 16.14 17.87

12.7 12.68  9.2 9.37  9.54 8.75 13.45 18.05 19.3 15.04

25.38 18.57 18.29 31.49 34.34

 8.37  9.03  8.32 15.35 16.47

Data source: calculated based on Table 5-5 of the “All Data Tables” section of the 2010 Nian renkou pucha ziliao 2010 年人口普查资料 [2010 National Population Census Materials].

demonstrate that in 2000, single occupant empty nest households with at least one senior of 65-years or older accounted for 11.46 percent of all senior households, and 11.38 percent of empty nest households containing a senior married couple. Combined, the two accounted for 22.83 percent of nationwide senior-containing households. That is to say that among households containing seniors of 65-years or older, empty nest households accounted for more than one fifth of the nationwide households in 2000. However, the sixth national population census data indicate that the proportion of single-occupant empty nest households rose to 16.40 percent in 2010, while the proportion of married couple senior households hit 15.37 percent. The two combined totaled 31.77 percent. That is to say that at present, 31.77 percent of Chinese households containing seniors are empty nest households. Over the decade from 2000 to 2010, the proportion of empty nest senior households to total senior-containing households rose 8.94 percent. Major Disparities in Empty Nest Household Proportions between Regions 1.3.1 The Empty Nest Household Proportion of Some Provinces Exceeds 40 Percent At the time of the fifth national population census in 2000, the province with the largest rate of senior (65 years and older) empty nest households was 1.3

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Shandong at 36.05 percent, followed by Zhejiang at 35.12 percent and Shanghai at 29.37 percent. At the time of the fifth national population census in 2010, these remained the areas with the highest proportion of senior empty nest households, but the proportions had grown—to 45.50 percent for Shandong, 44.38 percent for Zhejiang, and 40.51 percent for Shanghai, growths of 9.35 percent, 9.26 percent, and 11.14 percent respectively from 2000. 1.3.2 Empty Nest Household Rates for Some Provinces below 20 Percent At the time of the fifth national population census in 2000, the provinces with the lowest senior (65-years and older) empty nest household rates were Tibet at 6.81 percent, Gansu at 9.54 percent, and Qinghai at 9.97 percent. At the time of the fifth national population census in 2010, the Tibet Autonomous Region’s senior empty nest household rate had grown to 7.29 percent, a growth of only 0.48 percent, but Gansu’s rate had risen 9.03 percent to 18.57 percent, and Qinghai’s rate by 8.32 percent to 18.29 percent. After the decade from 2000 to 2010, Yunnan’s rate was higher than only Tibet’s, coming in at 17.93 percent. 1.3.3

Some Provinces Experienced Growth of Senior Empty Nest Household Rates of 15 Percent As compared to the 2000 data, the provinces that experienced the most rapid growth to the senior empty nest household rates were Xinjiang, growing 16.47 percent, Inner Mongolia, growing 15.80 percent, Ningxia, growing 15.35 percent, and Heilongjiang, growing 14.66 percent. These comparisons demonstrate that regions with high senior empty nest household rates are concentrated along the eastern coastline, and that regions with low growth to this rate are primarily ethnic minority areas in the West. With the exception of Heilongjiang, the regions that experienced the fastest growth to this rate were three ethnic minority autonomous regions. Rapid development of society and the economy, changes to social structure, increasing levels of urbanization, and other factors have caused changes to the family concepts of both the floating population and the rest of the population. These may be the primary reasons behind the accelerating growth of the senior empty nest household rate. It is also important to note that although the degree of aging in some provinces is not high, family-dividing behavior has caused decreases to the rates of parents living together with children. At the same time, massive growth to the floating population, particularly increases to the proportion of rural youths leaving home to work, has led to an increased probability for senior empty nests (e.g. in Zhejiang). Of course, some seniors may voluntarily opt for an empty nest, as their habits and customs are different from those of the younger generation.

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The aging population and the empty nest phenomenon it has incited will certainly exert a great influence on community services and family support systems. These are exactly the phenomena that policies must target. 2

The Health Status of China’s Seniors

2.1 The Senior Health Statuses of Different Age Groups and Genders As the levels of dependence upon care resources of seniors of different health statuses and age groups are different, we must analyze the health statuses of Chinese seniors category by category. Table 8.3 demonstrates the percentage of seniors who find themselves healthy decreases as they enter higher age groups. For example, 60.77 percent of seniors in the 60–64 range find themselves healthy, but the rate falls to 48.36 percent for the 65–69 group, 35.24 percent for the 70–74 group, and 27.85 percent for the 75–79 group. The rates for the 80-plus groups are much lower still. A comparison of males to females indicates that males feel more healthy than females in all age groups, a striking difference from the common assumption. Table 8.3 indicates that in the 60–64 age range, the rate of males reporting themselves healthy was 64.70 percent, and 56.76 percent for females. In the Table 8.3 Proportions of seniors who believe themselves to be “healthy” to those who believe they are “unhealthy, unable to care for self” (%) Age group (years)

Subtotal

Healthy Male

Female

Unable to care for self Subtotal Male Female

60–64 65–69 70–74 75–79 80–84 85–89 90–94 95–99 100+

60.77 48.36 35.24 27.85 20.46 16.91 13.88 14.14 12.68

64.70 52.79 38.72 30.73 22.66 18.76 15.61 17.52 17.65

56.76 43.89 31.84 25.30 18.74 15.76 13.04 12.76 11.12

0.88 1.51 2.67 4.33 7.97 12.68 20.96 26.05 29.19

0.86 1.47 2.57 4.01 7.04 10.72 17.37 20.37 22.30

0.90 1.55 2.77 4.62 8.69 13.91 22.70 28.36 31.36

Data source: calculated based on Table 8-2 of the “8th Volume” of the 2010 Nian renkou pucha ziliao 2010 年人口普查资料 [2010 National Population Census Materials].

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65–69 range, 52.79 percent of males and 43.8 percent of females found themselves healthy. In the 70–74 range, 38.72 percent of males and 31.84 percent of females found themselves healthy. In the 90–94 range, 15.61 percent of males and 13.04 percent of females found themselves healthy. In the 95–99 range, 17.52 percent of males and 12.76 percent of females found themselves healthy. Why is it that the survival rate for senior females is higher than for males, but senior men report higher levels of health? One possible explanation is the nature of subjective evaluation. In general, men ignore most small non-severe illnesses. Females, on the other hand, are more aware of their health and might be more likely to report “unhealthy” even for non-severe illnesses. Another possible reason is that the mortality rate for males is higher than for females at elevated age ranges, which might eliminate the weaker members of the male sex, leaving behind healthier senior males. Among the seniors who reported “unable to care for self,” the data indicate the following basic trend. The percentage of seniors reporting inability to care for themselves increases with age. The strange bit is that the proportion of males who reported an inability to care for themselves is lower than the proportion of females who did so, and this is true for all age ranges. For example, in the 60–64 range, the percentage is 0.86 percent for males, and 0.90 percent for females. In the 75–79 range, the percentage is 4.01 percent for males, and 4.62 percent for females. In the 85–89 range, percentage is 10.72 percent for males, and 13.91 percent for females. In the 95–99 range, the percentage is 20.37 percent for males, and 28.36 percent for females. In the 100+ range, the percentage is 22.30 percent for males, and 31.36 percent for females. That is to say that this trend is extremely stable. In rather early research by Du Juan and Wu Chao, the two researchers very clearly described this structural situation.12 So is the proportion of males who report inability to care for themselves less than that of females? I believe that one reason is the higher mortality rate among males, meaning that more unhealthy men die and leave behind more healthy males. That’s because the higher the age range, the lower the male survival rate. Table 8.3 tells us something else of significance. In the general sense, most seniors don’t require too much external care in their healthy periods, and are generally able to rely upon themselves. Even among seniors of elevated age, the proportion of those able to provide for daily life on their own is rather high,

12  Du Juan and Wu Chao 杜鹏、武超, “Zhongguo laonianren de shenghuo zili nengli zhuangkuang yu bianhua 中国老年人的生活自理能力状况与变化 [The Situation of and Changes to the Ability of Self-care of Chinese Seniors],” Renkou yanjiu 人口研究 1 (2006).

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and the proportion of those who feel unable to care for themselves is not very high. Among seniors of 100-years and older, the male ratio of feeling incapable of caring for oneself is only 22 percent, and the female ratio only 30 percent. So healthy aging can be expected. 2.2 Marital Status and the Health of Seniors There is a strong positive correlation between marriage and the health of seniors.13 For example, having a spouse, or not, is a major factor that determines the health status of seniors. In both empty nest households or households where children still live, when the work pressure on children grows large, the burden of taking care of ill or disabled seniors often falls on the spouses. The survival rate for any married disabled person whose spouse remains healthy is longer than for unmarried disabled persons. The survival rate for married disabled people with unhealthy spouses, on the other hand, is limited. Therefore, the Chinese household model has evolved from the traditional emphasis on blood and clan relations and inheritance into one of respect for blood and clan relations as well as on marital relations. On the one hand, the relationship between parents and children doesn’t lie simply in economic dealings, but rather still consists of extremely close emotional interaction.14 However, the phenomenon of children living apart from their parents has caused reductions of support coming from the younger generation’s labor. On the other hand, the interdependence and mutual care between husband and wife has strengthened and forged a close “partnership relationship” as family sizes have shrunk. Especially at advanced ages, whether or not one has a spouse, and the nature of that spouse, are major indicators for whether one can peacefully enjoy later years. Given those circumstances, Table 8.4 demonstrates the following. First, those with spouses feel healthier. For males, the ratio of “feeling healthy” among those with spouses is 52.19 percent, down to 45.51 percent for the divorced, 32.02 percent for those with dead spouses, and 33.18 percent for those never married. The trend is the same among women. But a scan of the 13  Li Shuran, Li Ge, Chen Changhui, Zhang Weixi, Liu Mian, Xu Liang, Shan Shuwen, Wang Le, and Wang Lanxiang 李淑然、李格、陈昌惠、张维熙、刘棉、许亮、单淑文、 ​ 王勤、王兰香, “Beijing shi chengqu laonianren de jiating, hunyin, yu jiankang 北京市 城区老年人的家庭、婚姻与健康 [The Families, Marriages, and Health of Seniors in Beijing’s Urban Districts],” Zhongguo xinli weisheng zazhi 中国心理卫生杂志 5 (1991). Tan Xishun 谭西顺, “Laonianren de aiqing, hunyin, yu jiankang 老年人的爱情、婚姻 与健康 [The Love, Marriages, and Health of Seniors],” Baojian yiyuan 保健医苑 3 (2006). 14 The implementation of single child policies has caused children to be dependent on their parents, making this a dependence without any alternatives.

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Table 8.4 The marital and health statuses of seniors 60-years and older nationwide (%) Marital Status

Male

Female

Healthy Basically Unhealthy, Unhealthy, Sub- Healthy Basically Unhealthy, Unhealthy, Subhealthy

can care

cannot

for self

care for

total

healthy

can care

cannot

for self

care for self

total

self

Has spouse 52.19

35.80

10.03

1.98

100 46.16

40.70

11.20

1.94

100

Divorced 45.51 Spouse 32.02 dead Unmarried 33.18

38.46 41.71

13.76 21.38

2.27 4.88

100 43.15 100 28.70

40.54 43.27

13.69 22.33

2.62 5.71

100 100

39.22

23.85

3.74

100 34.11

39.18

19.92

6.80

100

Data source: calculated based on Table 8-3 of the “8th Volume” of The 2010 National Population Census Materials [2010 年人口普查资料].

“unhealthy, cannot take care of self” column indicates that those with spouses account for only 1.98 percent, the divorced for 2.27 percent, those with dead spouses 4.88 percent, and the unmarried 3.74 percent. That is to say that those with spouses feel healthier. Second, the proportion of those without spouses among those who feel “unhealthy” is much larger than the proportion of those with spouses. For example, the proportion of divorced men who feel “unhealthy but can care for self” is 13.76 percent, 21.38 percent for men with dead spouses, and 23.85 percent for never married men. That same rate for men with spouses is only 10.03 percent. The proportion of divorced men who feel “unhealthy, unable to care for self” is 2.27 percent, 4.88 percent for men with dead spouses, and 3.74 percent for never married men. For men with spouses, the ratio was only 1.98 percent. The same trend is exhibited among female seniors. If we were able to control age variables, we could produce useful data by examining the relationship between health and marital status of men and women. That is because the higher one’s age, the higher the likelihood that one’s spouse has died. However, there will be no sudden changes to the numbers of of old-age divorces or people who remain unmarried in old age. So, for seniors whose spouses have died, remarrying may allow them to increase their level of health and the likelihood that they can care for themselves. The problem now is that seniors often encounter interference from

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children when attempting to remarry, owing to questions of property inheritance, emotional issues between children and seniors, and so on. This has led to a loss of autonomy in marital issues for seniors and has given rise to a new phenomenon of “cohabitation” among seniors. These questions demand further research and exploration. 3

Primary Old-Age Support of Chinese Seniors

In traditional agricultural societies, or in societies of a relatively low level of industrialization, seniors are generally cared for by their adult married children and die natural deaths. Even prior to Reform and Opening, the vast majority of senior parents lived with their adult married children, giving rise to a situation in which children provide old-age care to their parents. The changes to social structure, floating population, family living arrangements, and other factors caused by industrialization and urbanization have accelerated the proc­ess of parents living apart from their adult children. This has made it very difficult to conveniently resolve the care needs of seniors—i.e. economic support, labor support, psychological comforting, and so on. This has given rise to supply shortages of resources for senior care. Although New Rural Collective Medical Scheme insurance and urban resident insurance have brought about institutional coverage, the institutions’ initial design of low payment standards and wide coverage have caused the vast majority of seniors to be reliant upon support from children or other family members for survival. During Healthy Years, Seniors Rely Primarily upon Labor Income and Retirement Pensions Table 8.5 demonstrates that if we divide the categories “healthy,” “basically healthy,” “unhealthy but able to care for self,” and “unhealthy and unable to care for self” into four different modes, or rather four different stages of life, the healthier a person is, the more able he is to rely upon “labor income” for his needs, and the more “unhealthy” he is, the more likely he is to rely upon family members for support. Among senior respondents who reported being “healthy,” 49.58 percent of males and 33.12 percent of females reported being able to rely upon their own “labor income.” The percentages of seniors relying primarily upon retirement pensions were smaller, 31.39 percent for males and 24.08 percent for females. Among seniors who reported themselves to be “basically healthy,” 31.38 percent of males and 19.16 percent of females relied primarily upon “labor income” 3.1

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Table 8.5 Primary source of livelihood for seniors 60-years and older of different health statuses Primary source of livelihood

Healthy Male

Labor income 49.58 Retirement pension 31.39 1.59 Minimum living allowance (government) Property income 0.45 Cared for by family 15.69 members Other 1.30

Basically Unhealthy, able Unhealthy, unable healthy to care for self to care for self Female Male Female Male Female Male Female

33.12 24.08 1.80

31.38 19.16 30.09 19.70 4.17 3.49

8.64 16.56 12.23

5.11 9.53 8.00

1.51 0.91 23.92 10.90 11.49 8.72

0.39 38.98

0.40 0.32 32.00 55.34

0.33 0.22 59.39 74.81

0.26 0.15 60.38 77.43

1.63

1.95

1.99

2.84

2.32

2.43

1.88

Data source: calculated based on Table 8-4 of the “8th Volume” of The 2010 National Population Census Materials [2010 年人口普查资料]. As the various fields were calculated separately, sometimes the totals do not come to 100 percent.

for life needs. Among seniors who reported themselves to be “unhealthy but able to care for self,” 8.64 percent of males and 5.11 percent of females relied primarily upon “labor income” for life needs. Among seniors who reported themselves as “unhealthy and unable to care for self,” 1.51 percent of males and 0.91 percent of females relied primarily upon “labor income.” Those Who Rely Primarily upon Other Family Members for Support when Unable to Care for Themselves As the percentage of “unhealthy” responses rises, the proportion of those relying upon “other family members for support” rises rapidly. Among seniors who reported themselves as “healthy,” only 15.69 percent of males and 38.98 percent of females were primarily reliant upon other family members for support. Among seniors who reported themselves “basically healthy,” 32.00 percent of males and 55.34 percent of females were primarily reliant upon other family members for support. Among seniors who reported themselves “unhealthy but able to take care of self,” 59.39 percent of males and 74.81 percent of females were primarily reliant upon other family members for support. And among seniors who reported themselves “unhealthy and unable to care for self,” 60.38 3.2

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percent of males and 77.43 percent of females were primarily reliant upon other family members for support. That is to say that for Chinese seniors, even those 60 years old and older, so long as they maintain their bodily health and ability to work, they can still rely primarily upon “labor income” as their primary source of livelihood. Only once they reach the “unhealthy” stage of their lives do they gradually begin leaving the labor pool and begin to rely on others, i.e. primarily relying upon family members to support their lives. For this reason, the older a senior becomes and the less he is able to care for himself, the more reliant he becomes upon other family members. Among all seniors who can rely upon other family members, the spouse is without a doubt the greatest source of reliance. Major differences between modern and classical agricultural society include improvements to medical care, reduced amounts of pregnancies, and reduced birth rates. This has greatly increased the survival advantages of females, and has even made average life expectancy longer for females than for males. Increases to the survival rates of senior married couples have greatly strengthened the survival abilities of the older generation. Due to the influence of only child policies, the early arrival of empty nests have caused the period of time during which husband and wife rely upon each other to support family life to grow longer. This has objectively alleviated the intergenerational dependence of seniors on senior care and has given rise to a situation of mutual care between senior married couples. It is precisely for that reason that many people believe that their marital relationships are more important than intergenerational blood relationships. As a result of the influence of the floating population, more of the phone calls of children to parents or visits home during holidays are nothing more than a psychological expression of family relations, whereas seniors have no choice but to look to their spouses for old-age care resources.15 15 Martin White once said that even following Reform and Opening, Chinese households still rely upon intergenerational support to resolve old-age care problems. He conducted his investigation in Baoding in 1994. At that time, the proportion of floating population was much lower, and most only children still had not become adults, and there was much to be desired on labor markets. Per his research, Baoding seniors had an average of 3.2 surviving children at that time, and most lived in the same city; 35 percent of parents lived with their married children in direct lineal households (the vast majority of which lived with their married children already). Those households in which parents and children did not live together experienced short-distance interaction. Martin White's research also revealed that only a quarter of parents had received cash support from their children, but nearly 20 percent of parents often gave cash to their children, and one third of parents helped their children with household chores (Martin White, 2005).

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The Proportion of Seniors Who Rely Primarily upon Retirement Pensions Remains Low Although retirement pensions are a source of livelihood seniors could not do without, the vast majority of seniors did not report them as the primary sources of their livelihood. For example, among seniors who reported themselves “healthy,” 31.39 percent of males and 24.08 percent of females rely primarily upon retirement pensions for life needs. Among seniors who reported themselves “basically healthy,” 30.09 percent of males and 19.70 percent of females rely primarily upon pensions. Among seniors who reported themselves “unhealthy but able to care for self,” 16.56 percent of males and 9.53 percent of females were primarily reliant upon pensions. Among seniors who reported themselves as “unhealthy and unable to care for self,” 23.92 percent of males and 10.90 percent of females were primarily reliant upon pensions. This demonstrates that the proportion of seniors in poor health reliant upon retirement pensions to total seniors is growing gradually lower. That is because although seniors nowadays can receive at least 55 yuan per month in retirement pensions under urban resident pension insurance and rural pension insurance, it is difficult for institutions with wide coverage and low payments to provide for basic life needs of unhealthy seniors. 3.3

The Proportion of Males Caring for Themselves in Old Age is Higher Than That of Females Table 8.5 demonstrates that the proportion of males relying primarily upon “labor income,” “retirement pensions,” “minimum living allowances,” and “property income” is higher than that of females. This illustrates that the wages of males during their career phases are higher than those of females. This in turn determines the senior care resources available to them in old age, which are naturally greater than those of females. During their working years, the wages of women are relatively low, making their retirement pensions low as compared to those of men, meaning the percentage of women who rely primarily on retirement pensions must be lower than that of men. Correspondingly, the percentage of women who report being dependent upon “other family members for support” during all phases of life is much greater than for men. In reality, the senior care model of empty nest seniors is beginning to transform from one whereby children take care of their parents to one in which senior couples care for each other, excluding single-habitant empty nest households. This is determined by the foundation of household structures. Something else we must note here is that another reason that more women report being reliant upon “other family members for support” is that female life expectancy is longer than male life expectancy. The more society develops, the 3.4

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more advantageous women’s “survival advantages” become, and thus the longer their average life expectancies. In old age, the longer one’s life expectancy, the longer one will have to rely upon family members. 3.5 Old-age Pauperization Becoming a Trend Table 8.6 demonstrates that seniors rely more upon subsistence allowances the older they become. That is because in China, today’s seniors have all gone through a long period of planned economy and public ownership and resource allocations. That means individual seniors hold little property of their own, causing many seniors to have difficulty in relying upon “property income” to support their lives. Given that condition, the only option other than “retirement pensions” is often “subsistence allowances.” In the 60–64 year old age group, 2.46 percent of males and 2.10 percent of females reported reliance upon “subsistence allowances,” up to 5.21 percent of males and 4.38 percent of females in the 70–74 range, and 6.31 percent of males and 6.16 percent of females in the 85–89 range. A fact that cannot be ignored is that as seniors gradually age, the proportion of seniors who rely primarily upon family members for support grows sharply. If you look at the “primarily rely upon other family members for life” column, you will discover that half of seniors 75-years and older require support from “other Table 8.6 The pauperization of seniors and their reliance upon family members (%)

60–64 65–69 70–74 75–79 80–84 85–89 90–94 95–99

Rely primarily upon subsistence allowances to live Subtotal Male Female

Rely primarily upon family members to live Subtotal Male Female

2.28 3.49 4.79 5.40 5.93 6.22 6.83 7.00

24.29 35.08 48.21 57.05 65.52 70.71 73.89 72.42

2.46 3.79 5.21 5.78 6.26 6.31 6.52 6.28

2.10 3.20 4.38 5.06 5.67 6.16 6.98 7.29

12.73 22.52 37.08 45.80 54.06 59.23 62.14 56.03

36.12 47.78 59.13 67.03 74.50 77.90 79.56 79.11

Data source: calculated based on Table 8-7 of the “8th Volume” of The 2010 National Population Census Materials [2010 年人口普查资料]. As the various fields were calculated separately, sometimes the totals do not come to 100 percent.

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family members.” Over half of females in age ranges from 70–74 and up rely primarily upon other family members for support. Thus, if expenditures of seniors of age exceeding 70 or 80 begin to rise as a result of illness or other factors, they will not be able to rely upon their children for senior care. If future pension fund increases are limited, the burden on children will be great indeed. 3.6 Rural Seniors Require the Support of Other Family Members China’s retirement pension institution was established primarily for urban systems. The government has opted for long-term implementation of the “using land to provide senior care” policies for rural residents. During the planned economy era, rural seniors relied primarily upon distributions of food via the “work points” earned by family members, in addition to certain amounts of food support given by production teams. No effective retirement pension institutions have been established following the implementation of the household contract responsibility system in the 1980s. Although new rural pension insurance has been gradually expanded since 2007 and achieved basic institutional coverage in 2011, the vast majority of seniors 60-years and older receive only 55 yuan in pensions per month. So extremely few seniors rely primarily upon pensions. Fewer than 2.50 percent of female seniors 60-years and older rely upon pensions to sustain their lives in all age groups. For those reasons, rural seniors have no choice but to rely upon other family members for support. Thus, the right side of Table 8.7 clearly demonstrates that as ages increase, over half of female seniors in the 65–69 range rely primarily upon other family members for support. About half of males in the 70–74 range require assistance from other family members for support. By comparing Tables 8.6 and 8.7, we can see that the proportion of Chinese rural seniors who rely upon other family members for support is much higher than the world average. 4

Conclusions and Policy Suggestions

Our analysis of data from the sixth national population census indicates the following. First, the proportion of village households containing seniors of 65-years and older is higher than that of town households, and the town proportion is higher than the city proportion. Second, over the decade from 2000 to 2010, the proportion of senior empty nest households grew nine percent. As the floating population has become status quo and as the degree of aging of the population grows greater, the proportion of senior empty nest house-

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Table 8.7 Chinese rural seniors’ dependence on retirement pensions compared to dependence on family members (%)

60–64 65–69 70–74 75–79 80–84 85–89 90–94 95–99 100+

Rely primarily upon retirement pension Subtotal Male Female

Rely primarily upon family members Subtotal Male Female

4.05 4.98 5.21 4.83 4.52 3.68 2.93 2.24 1.34

24.75 39.67 59.70 71.32 80.54 83.99 85.32

5.86 7.52 8.18 8.15 8.31 7.20 6.05 4.89 2.58

2.15 2.31 2.21 1.92 1.70 1.58 1.49 1.22 0.99

13.47 26.46 47.93 61.10 72.52 77.36 79.69

36.61 53.55 71.61 80.29 86.52 87.94 87.91

Data source: calculated based on Table 8-7c of the “8th Volume” of The 2010 National Population Census Materials [2010年人口普查资料]. As the various fields were calculated separately, sometimes the totals do not come to 100 percent.

holds will continue to rise rapidly. Third, as the population has aged, the health status of seniors has dramatically worsened, but females report being less healthy than males in all age ranges. Fourth, the health of seniors with spouses is better than that of unmarried seniors, divorced seniors, and seniors who have lost their spouse. Fifth, among seniors who are unable to take care of themselves and rely primarily upon family members for support, female seniors are more reliant upon family members than males. The effects of pension insurance need to be further strengthened. Those points have led us to our policy suggestions. First, as rural migrant laborers will continue to transfer into cities, the severity of the aging problem will grow more exaggerated in rural villages. This will cause rapid increases to the proportion of households containing seniors of 65-years and older. So government departments need to increase social support for in-home senior care to rural seniors in future social construction and social management. Second, the effects of the empty nest phenomenon among senior households will grow increasingly evident. However, the empty nests most deserving of attention are single-occupant empty nests, i.e. empty nests formed after children leave and a spouse dies, or in which children and a spouse move to other regions.

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This phenomenon has a direct influence on the quality of life of seniors. Given such conditions, seniors’ feelings of loneliness will grow gradually worse. An important component of community senior care centers or community family support system construction should be the strengthening of emotional solace given to single-occupant empty nest households. Third, there will be many more females than males due to aging at the top of the population pyramid and given the influence of gender-based advantages. The health status of females, however, will be worse than that of males. This will demand that household support systems provide more service projects targeted at female seniors. Fourth, as there will be no choice but to diminish the vertical blood relation reliance of households, i.e. reliance upon children for old-age care, the effects upon the old-age reliance of horizontal marital relationships, i.e. spouses, will strengthen. Given that condition, we will need to educate adult children to interfere less in remarriages of their senior parents. Fifth, even though China’s pension insurance system has achieved institutional complete coverage, the complete coverage/low payments model is still insufficient for resolving the economic support problems of seniors. The primary goal for the future when establishing sound and complete senior pension insurance institutions should be to increase the payment standards of new rural pension insurance and urban resident pension insurance.

Chapter 9

New Changes to the Employment Difficulties Experienced by University Graduates: A Longitudinal Study of Graduates of Twelve Higher Learning Institutions Li Chunling* Abstract As the scale of higher education in China has been greatly expanded, such problems of university graduates as employment and income, living conditions, social attitude, and so on, have garnered a considerable degree of attention. This chapter uses data from a longitudinal study conducted by the Institute of Sociology of Chinese Academy of Social Sciences and focus group interviews to analyze the suddenly occurring problems within and changes to the employment process of university graduates. It discovers that the attitudes of graduates are beginning to change. They are beginning to employ many different strategies, but it is still difficult for them to avoid such situations as social unfairness in employment and life. This chapter will call for overall reforms and innovations to relevant policies to resolve the employment problems faced by university graduates.

Keywords university graduates – employment – changes

Since government policies for increasing the enrollment of universities were implemented in 1999, China’s higher education institutions have grown rapidly, and the number of university graduates has grown yearly, up to 6.8 million in 2012, over eight times the 1998 figure. At the same time, China’s higher learning institution gross enrollment rates grew from about 10 percent * Li Chunling, researcher at the Institute of Sociology, Chinese Academy of Social Sciences.

© koninklijke brill nv, leiden, ���5 | doi ��.��63/9789004276536_009

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before policies for increasing enrollment to 26.9 percent in 2011. This indicates that over one fourth of Chinese young people are university graduates and will be the primary force guiding the future of Chinese society. At present, this community is facing severe employment pressure and competition. Employment difficulties are affecting the living status and value attitudes of university graduates and causing some graduates to fall into an unfavorable survival situation. In some cases they may even strengthen feelings of dissatisfaction and the incidence of extreme attitudes. In order to fully understand the employment circumstances and value attitudes of university graduates, the Chinese Academy of Social Sciences Institute of Sociology, Bureau of Youth and Societal Issues in 2010 began a longitudinal study and focus group interview that covered 12 institutions of higher learning (six Project 985 universities and six ordinary universities) with about 6000 graduates participating. The survey has helped us understand such situations of recent graduates as employment and income, life status and consumption pattern, love and marriage, internet behaviors, social and political behaviors, and so on. The survey began in 2003 (the first group of graduates after the implementation of increases to student enrollment). Two major focuses of the research were the employment situation and level of satisfaction of graduates. 1

The Key to Employment Difficulties Lies in Change

When the first group of graduates after the 2003 enrollment increases encountered employment difficulties, both graduates and their parents were caught unaware and found themselves incapable of responding. Enrollmentincreasing policies quickly reduced the status of university graduates from “the chosen” to “the most ordinary,” and it happened so fast that almost nobody was able to react in time. Graduates and parents at the time lacked experience in responding to competition on labor markets and had no previous experience to draw from. Labor markets also lacked sufficient channels and information to help graduates find work. Some graduates from affluent families stayed at home and lived off their parents, while others whose families could not support them had no choice but to register as unemployed. Some graduates remained unemployed or became “financially dependent on their parents” for years. In the following years, unemployment among university graduates grew worse by the year, and some graduates and their families developed deep resentment and began to feel highly dissatisfied with enrollment-increasing policies. However, there are currently changes taking place to the primary difficulties graduates experience in finding jobs.

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1.1 Changes to the Attitudes among Graduates A major reason behind the changes are fundamental changes to the attitudes of graduates. They’ve come to accept the reality of difficulty in finding jobs, particularly in light of the global financial crisis. In fact, the employment prospects for university graduates are better in China than in some developed nations. At the same time, graduates have universally lowered their employment expectations, and their wage demands for their first jobs have fallen greatly. Previously unacceptable positions of low prestige or low levels of technical skills have now become more acceptable. Figures 9.1 and 9.2 show the employment expectations of students currently attending universities and reflect that the vast majority of students have made ample psychological preparations for the difficulties they will experience in finding jobs. The students are willing to compromise with reality when unable to find a satisfying job. 1.2 Graduates are Employing Various Strategies in Response Students nowadays are employing various strategies to respond to employment pressures and are striving to increase their competitiveness and employability. Their strategies include applying for Party membership, taking the civil service examination, earn as many different types of certificates as possible, seeking internships, reading up on employment information, and so on. University graduates are now eager to join the Party. Nearly half of all graduates in the

Figure 9.1 Employment expectations of current college students

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Figure 9.2 Employment expectations of current college students

survey over the last three years have become Party members. Forty-one percent of graduates of universities in Project 985 universities are Party members, as are 37 percent of graduates of ordinary universities. Party membership is even higher among masters and Ph.D. students, exceeding two thirds for both categories. Most graduates have taken the tests for various professional certificates or licenses. For example, 28.6 percent passed the civil service exam, and 53.1 percent have taken and passed various levels of English proficiency exams; 25 percent have taken the TOEFL, GRE, IELTS, or other foreign language examinations; 35 percent have earned computer proficiency certification; 27.5 percent have obtained professional qualifications certificates (such as accountant credentials or economist credentials). About sixteen percent have obtained technical certificates (such as drivers license), and 15.3 percent have obtained other certifications. At the same time, many university students have tried to give themselves a competitive edge in the job market by participating in all manner of social activities and competitions, assuming leadership roles in student organizations, earning titles and awards. These developments have led to new changes to the employment prospects of university graduates. 1.3 Unemployment Rate is Not High, but Neither is Employment Rate The results of the survey indicate that at present the employment prospects for university graduates are as follows. The unemployment rate is not high, but neither is the employment rate, and many graduates are prolonging their

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educations (pursuing masters degrees or Ph.D’s, going abroad, or taking various professional training courses, and so on) to delay finding work. Half a year after graduation, 73.8 percent of 2011 graduates of universities in Project 985 have found jobs. Another 22.3 percent were pursuing advanced studies and 3.2 percent were unemployed, with 0.7 percent “young people who are financially dependent on their parents.” Half a year after graduation, 76 percent of graduates from regular universities were employed, 17.2 percent pursuing advanced studies, 6.3 percent unemployed, and 0.5 percent young people who are financially dependent on their parents. Survey results of several years of graduates indicate that the employment rate of graduates is 90 percent three years after graduation, and basically 100 percent after five years. 1.4 The Emergence of “Invisible Unemployment” Although the unemployment situation of university graduates is not dire, the phenomenon of “invisible unemployment” is beginning to emerge. About three fourths of this year’s graduates will be employed within half a year of graduation, and only half of the remaining one fourth will stay in school (postgraduate studies at home or abroad). The rest will neither work nor study. A minority of those remaining will be looking for work (those statistically registered as officially unemployed), but the majority will constitute the “invisible unemployed,” meaning they are waiting for a satisfactory job or education opportunity. Of course, those who do nothing at all (those young people who are financially dependent on their parents) constitute another minority, but the majority of those will be financially dependent on their parents while preparing for various examinations or taking professional training courses. If they find good work opportunities, they will seize them. This group, which will comprise about 10 percent of this year’s graduates for about a year, are the “invisible unemployed.” Mismatch between Supply and Demand of Skills Will Lead to Inconsistent Employment Rate Across the Board There are different employment rates for different academic tracks and different kinds of schools. It is not the case that better academic records or graduation from better schools necessarily yield higher employment rates. In fact, graduates from different academic programs and different kinds of schools exhibit a U-shaped curve of employment, high on both ends but low in the middle. The employment rates for masters graduates are lower than those for undergraduates and Ph.Ds, and the employment rate of graduates of the 211 Project universities is lower than for graduates of universities in the 985 Project and ordinary universities. The difficulties encountered by Masters graduates in 1.5

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Figure 9.3 What are the unemployed graduates of the year 2011 doing?

finding employment stem from excessively rapid growth in enrollment rates for Masters programs in recent years. Another reason is the mismatch between the what is taught in schools and what the market really needs. For a long time, graduate education has focused on training professional technicians and professional researchers. In recent years, however, the number of student enrolled in graduate programs have grown rapidly, and most technical and research positions have been snatched up by PhDs. It has been difficult for Masters graduates to compete for similar positions, but both the fields they have studied and the expectations of their schools make them unwilling to accept non-professional jobs or jobs in practical, applied fields. Graduates of universities in the 211 Project are experiencing difficulty in finding jobs for similar reasons. In the past, the number of 211 Project universities was small, the majority of which being well-known, and their graduates were generally highly competitive. At present, however, the numbers of Project universities have grown rapidly, and their diplomas are rapidly repreciating on the labor markets. Graduates from 985 Project universities are even more competitive and have squeezed into the employment space of graduates from 211 Project universities. The training objectives of 211 Project universities have not kept up with changes in market conditions. They persist in the ideology of researchbased universities training professional research talent, which has given rise to the employment difficulties of “being too choosy to find a job” for 211 Project university graduates.

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Relatively Low Profession-education Linkage Rates for Graduate Employment Have Made Some Call New Education Useless About a third of graduates at present are employed in fields not related to their fields of study, and for some majors, less than 30 percent of graduates end up finding jobs in that field. On August 14, 2012, China Education Online reported that only about a sixth of medical school graduates are employed in the medical field. At the same time, even those graduates employed in the field in which they majored are often unable to use the knowledge acquired from their studies, and university education is often unable to provide the applied, practical skills required by employers. Many employers are therefore unwilling to hire recent graduates, and many graduates feel that the professional knowledge they acquired in school is useless in helping them find jobs. Our survey data indicate that there is no significant correlation between grades graduates received in their major and their employment situation, and that grades exert no positive effect on the income growth or promotion of graduates within seven years of graduation. Many students are not satisfied with the education they received and think that the knowledge they acquired in school is useless. They are lackadaisical towards courses within their major, and divert most of their energies toward preparing for exams for postgraduate programs, studying foreign languages, obtaining certifications, part-time jobs, and so forth. The major reason for this phenomenon is that major curricula are often decided by the interests and professional knowledge of instructors, who seldom consider the employment needs of students. Teacher performance by the school encourage most instructors to place their energies on publishing papers and applying for research grants, at the expense of attention to the basic knowledge and applicable skills students really need to be ready for the job market. 1.6

Employment Satisfaction is Low, and Graduates Frequently Change Jobs Although most graduates can find work, about 50 percent of them are unsatisfied with the work they find. They complain of low income, poor benefits, mismatch with their fields of study, lack of development potential, etc. This has caused many graduates to frequently change jobs. Within half a year of graduation, 27 percent of graduates with a Bachelor’s degree change jobs, as do 48 percent of graduates of three-year technical colleges. Within three years of graduation, 61 percent of all graduates with a Bachelor’s degree change jobs at least once, as do 79 percent of graduates of three-year technical colleges. In 98 percent of job changes, the person quit instead of having been 1.7

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fired. Employers are greatly irked by this, and are as such even more unwilling to hire recent graduates. They are particularly unwilling to offer professional skills training to graduates lacking work experience and professional skills. They much prefer people with work experience. 2

Major Problems in the Employment Process and Their Consequences

The above phenomena demonstrate that the core of employment difficulties experienced by university graduates at present does not stem from unemployment or lack of jobs. The core of the problem is for graduates to find work that both fit their university training and are satisfactory. The employment difficulties of university students at present are primarily manifested in the various difficulties experienced in the course of job hunting. Those include unfair competition, lack of job information, high costs of employment, the risk of being swindled, instability in the early period of employment, lack of a sense of security, and a poor survival environment. 2.1 Unfair Employment Competition Generates Dissatisfaction Since the outbreak of the financial crisis in 2008, there have been obvious changes to the job-selection trends of university graduates. The most ideal employment choice has changed from high income positions in foreign companies to positions within the government that offer good benefits and stability (Party and government bureaus, public institution, and state-owned enterprises). Competition for government jobs is heated, and different from competition for foreign enterprise jobs. More important, it is often rigged, in which nepotism, quid pro quo and other irregularities are common. In the words of some graduates, one’s chances of securing a government job depends more on family connections than on anything else. The so-called equal opportunity search is in reality employers delivering the “right” job to those to whom jobs have been covertly promised through family connections. The other job applicants are no more than supporing actors in a show. Not even those whose test scores and interview performance place them in first place can be completely spared the need to pull strings from behind the scenes (through backdoor dealings or bribes) if they are to attain what they are entitled to. Although it is not clear exactly how pervasive this phenomenon really is, what is clear is that this is how graduates and their parents see it. Almost all graduates can relate some similar stories, some from personal experience, and some from the experiences of friends, classmates, acquaintances, or relatives. Only people “with

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guanxi [connections]” or “with backgrounds” can hope to enter public institution or state-owned enterprises. This fact is acknowledged by nearly all graduates. This phenomenon has made such a powerful impression on some parents they would openly declare some subject matters unsuitable for their children because they are meant to prepare students for government jobs which their children will have poor odds of getting given their own lack of connections. Many graduates feel the same way, that due to their lack of the “right” family backgrounds they do not dare to compete for such positions. Many people who fail to gain employment as public servants or in state-owned enterprises complain of shenanigans in the recruiting process, and most suspect those successful job candidates of having made use of family connections. This situation has aroused strong feelings of unfairness among many graduates. It has also caused them to doubt the fairness of the recruitment process for government and state-owned enterprise jobs. Those Seeking Employment Outside the Government Face Even More Severe Difficulties Before the university enrollment boom, most graduates sought government jobs, and only a small number were interested in other kinds of jobs. However, the majority of the latter group found employment in foreign enterprises or large private enterprises. In the wake of increased university enrollments, a growing number of graduates has tighten the job market, pushing more graduates to enter private small and medium enterprises. In recent years, larger numbers of university graduates are entering private enterprises, and fewer are going for government jobs (Party and government bureaus, public institution, and state-owned enterprises). In 2011, over half of university graduates worked in private enterprises. Of those, about 46 percent of graduates of ordinary universities, 23 percent of 985 Project university graduates, and the majority of graduates of professional and vocational colleges went to work in private enterprises. Given the deficiencies in the current labor market and shortcomings in the social management system, graduates employed in privately-owned small and medium enterprises experience many difficulties and risks in both work and life. For example, there has been incidents of graduates being swindled out of various service fees for such things as introduction, training, and physical exam by either employment agencies or or employers. Another example is the failure of some employers to enroll their employees in social security programs (including medical, social security, unemployment, workplace injury, and maternity insurance and housing provident fund). Some graduates also face chronic overtime and high real estate prices, and poor living conditions. Many looking to rent are taken advantage of by either real estate 2.2

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agents or landlords. When graduates experience such difficulties, unfair treatment, or illegal behavior, they are often unable to receive help from relevant government departments. Different from government jobs, which come with several levels of protections, those employed outside the government network (especially those employed in private small and medium enterprises) feel they are treated extremely unequally and vulnerable in both the labor market and society. They lack both a sense of security and a sense of belonging. The current social management system often provides a feeling of security, a sense of belonging, and social security via either the employer or residential and community systems, but it would seem that these two systems both exclude graduates employed outside the government. In one classic case, a female graduate employed in the government (in a public institution) becomes pregnant and needs to apply for a birth permit. It is quite easy for her to obtain the relevant documents (proving that it will be her first child from her first marriage) from her employer. But since her husband works for a small private company, he encountered difficulties in obtaining comparable documentations from the human resource department, which claims they have never done it before. The community committee where the couple lives (or where their hukou is registered) also refuses to provide certification as they do not understand the situation. Although this is an exceptional case, graduates employed outside of the political system often encounter obstacles when seeking public services and welfare, and in getting government agencies to take their requests seriously. The resultant feeling of being treated unfairly compounds pressure of life. The mobility of graduates employed in private small and medium enterprises is relatively high, and many do not work in the area of their hukou household registration. This group of people is often overlooked by the social management system. It is quite difficult for them to access the welfare or preferential treatment of the government (such as indemnificatory housing, low-cost housing, public rental housing, and so forth). These people are jealous of those working for the government working for the government, and think that the only way to gain such work opportunities is to “find guanxi [connections], use back channels, or give bribes.” Figure 9.4 shows the dissatisfaction of graduates employed in private enterprises and their living situations. Less than a third of respondents expressed satisfaction with their current circumstances. 2.3 Concerns of the “Lucky Fellows” within the Political System Nevertheless, all isn’t well for those working for the government either. Figure 9.4 shows that less than half of those working for the government expressed satisfaction with their current circumstance. Those graduates able to find

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Figure 9.4 Satisfaction levels of graduates employed in different work units in their survival situation

work opportunities in the government when they first enter the job market feel they are “lucky fellows,” as they don’t need to worry and try to stay afloat amid the fierce competition in the labor market like their classmates. However, after about five to seven years, some of these lucky fellows start worrying and become dissatisfied with their job. They complain that their work is boring and does not challenge them, that office politics are complicated, competition for promotions is unfair, salary is low, and so on. They begin to envy those classmates who have achieved success amid market competition, i.e. those who have succeeded as entrepreneurs and those who have worked their way up to managerial positions in large enterprises, for the higher income, greater challenge at work, and more room for personal development. Graduates are Unclear about Where to Settle Down and Face Uncertain Future Finding a job is merely the first step graduates take in their march into society. Thereafter they must consider both the direction of their futures and the places they wish to settle down. These are the primary sources of vexation for graduates for five to six years after graduation. High real estate prices and rents in large cities leave many graduates feeling unable to settle there permanently. Three or four years ago, many chose to flee large cities such as Beijing, Shanghai, and Guangzhou and settle in second- and third-tier cities. In the last two years, however, the “exodus” has reemerged. As job opportunities shrank in medium-sized and small cities, the prospects for personal development dimmed, and employment opportunities in those cities hinge even more on family backgrounds and social connections. Both graduates returning to large 2.4

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cities and those remaining in smaller cities are stuck between a rock and a hard place. Those remaining in large cities are deeply convinced that they cannot settle there forever. Those in small and medium-sized cities feel depressed and hopeless for their futures. Merely having a job and income enough for survival is far from enough to satisfy the needs of modern university graduates. What they want is a quality life and work with potential for development. Their life goal is to become a member of the middle-class or to enjoy the socalled “middle class quality of life.” The enormous disparity between their ideals and reality is a great cause of concern for them. In the last two years, large increases in living costs spurred by the financial crisis and further exacerbated employment instability have caused many graduates to feel that they need to spend more time realizing their dreams. Some graduates even feel that their dreams cannot be realized at all and become desperate. Employment Situations Affect Social Satisfaction Levels and Political Attitudes Our survey data indicate the clear correlation between employment situations and social attitudes. The worse the graduates’ work and life situations are, the less content they are with society, and the more critical they tend to be of the government. While in general, university graduates find the political and ideological indoctrination they are subjected to in school annoying, those working for the government are clearly more receptive to it than those who work outside the government system. Some of the latter feel deeply offended by official ideological propaganda. Some would even go so far as to attack or ridicule official media discourse. At the level of political attitudes, those working for the government are much more supportive of the current government than those employed outside the government system. There is more skepticism, distrust, and dissatisfaction among those employed outside the government, and some even applaud Western democratic systems. Many have adopted critical attitudes toward China’s social situation and political status quo. We discovered that their feelings of dissatisfaction were related to their living conditions. They feel that those working for the government enjoy more governmentprovided benefits (including some gray benefits), while they themselves have been excluded from such privileges, and their struggles on the competitive market go unnoticed. The social attitudes of those employed outside the system vary depending on the quality of their survival circumstances. Graduates with higher incomes and better employment prospects tend to be less fervent about political issues. Although some do applaud Western society, politics, and living environments, they think that China’s level of development and the general caliber of the population make it impossible for China to implement Western 2.5

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democracy at present. Graduates with lower incomes and whose employment and living situations are less stable tend to be more passionate when discussing current political problems. Their living environment also gives them opportunities to encounter society’s darker side and to experience or observe illegal behavior, abusive of power, or social unfairness. Owing to limited social circles and a lack of a sense of belonging, these people often spend large amounts of time on the Internet discussing political issues, writing passionately worded comments. A small portion of those people even express their openness to participating in mass actions either online or offline. The majority of those with decent employment situations tend to indicate either they would not participate or that it is something that requires careful consideration. 3

Implementing Comprehensive Reforms and Innovation to Relevant Policies, and Tackling the Employment Difficulties of University Graduates

The fundamental improvements needed for the difficulties of university graduates in finding employment are, of course, determined by the national economy. However, given current economic circumstances, the government, schools, and society can all take some measures to mitigate the employment pressures experienced by graduates, to improve their plights, and to increase their level of satisfaction with society. (1) There should be some adjustments to political ideology when it comes to mitigating the difficulties of university graduates in finding employment. We should turn our attention away from the unemployment and/or employment rates of recent graduates to increasing the level of fairness of competition for employment opportunities, to regulating the labor market, and to improving the social management system. This would improve the quality of employment of graduates, increase their level of job satisfaction, and help them overcome the difficulties they encounter at the beginning of their professional lives, particularly in the housing problems encountered by graduates in their first year or two out of school, and increase the fluidity, safety, and clarity of job information. (2) We should root out corruption and unfairness within job recruitment practices for positions in the government and promote fair competition for employment. While whatever bribery or corruption that happen in the recruitment process for government jobs may be moderate compared with what may be found in other fields, they do have a deep and significant impact on society. The first step graduates take upon entering society is competing for jobs. If they

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encounter unfairness on that very first step, it will affect how they view the fairness of the political system in the future, not to mention how they see the overall fairness of the social order and even their future social behaviors. (3) There must be adjustments made to the training objectives of universities. In addition to the objective of training specialized researchers, university education should pay more attention to fostering students’ practical technical skills demanded by the market, especially in undergraduate and masters education. At the level of curriculum design, the designer should appropriately calibrate the proportion of fundamental theory to practical applied learning. At the level of instructor allocations and evaluations, more resources and incentives should be provided for instructors to offer classes that meet market demands (current instructor evaluations focus mostly on research and publishing). At another level, we should notice that the majority of instructors may have been in the ivory tower of academia for too long to be up do date on the demands of the labor market, particularly in emerging industries that may change so fast they outpace universities’ ability to keep up with industry knowledge. Under such circumstances, universities should recruit qualified individuals from those industry frontline to teach part-time and help with curriculum design. (4) Universities should further expand employment guidance and services. At present, all universities have made great efforts at this level, but the feedback of graduates indicates that their achievements have been far from ideal. All universities should further increase the effectiveness of their employment services on the basis of the real needs of graduating students. They should not focus solely on the signing rates of students at the time they graduate. School officials can take the following concrete measures within their colleges and departments or at the major level, based on the feedback and opinions of their graduates. 1. The colleges and departments (or majors) of universities should establish long-term relationships with related enterprises and other organizations to assist students in getting internships and eventually jobs. Internship experience in major firms within an industry is greatly helpful to graduates in finding full-time jobs, but it is difficult for individual students to come by such opportunities on their own. Some departments or majors of some schools have already established good relationships with enterprises and other organizations, arranging internships for their students or recommending their graduates for employment after graduation. This represents an enormous boon for graduates. However, the majority of internships arranged by school officials at present are nothing more than a gesture, providing no real assistance to graduates.

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2. Universities should establish friendship networks between current students and alumni from the same departments. New graduates generally lack employment information and experience in finding jobs; so they are often disorganized in their job hunt. Employed alumni, by contrast, have lessons and experiences that they can share. Some new graduates manage to find work as a direct result of their relationships with alumni from their same programs, but at present these relationships are mostly of a private nature. Schools can institutionalize such ties, inviting graduates and alumni to return to the school to share experience or participate in socializing activities with current students. 3. Universities should establish files for graduates at the college and department level to provide graduates with follow-up services after they graduate. Graduates encounter the most difficulties with work and life in their first three years after graduation. The majority of graduates lives apart from their parents and other family members and often lack a support system. Departments and major fields can contact their graduates at regularly during their first three years after graduation to keep track of their plights and the difficulties they are encountering. This would allow the university to provide more effective assistance or counsel, or to bring about interactive assistance via social networks. Mentorship programs for current students may prolong follow-up services for graduates. (5) Improvements should be made to the social management system. Graduates employed outside the government should be covered by social services and welfare guarantee systems. Improvements should be made to the living conditions of graduates employed outside the government, such as to increase the level of trust in and identification with the Chinese Communist Party and the government. At present the social management system provides social support primarily via employment systems and residential community systems, but these two systems exclude large numbers of graduates employed in small and medium-sized private enterprises. These enterprises clearly cannot provide the same level of social support as public institutions and the government or large enterprises, and the scope of residential community service is limited primarily to long-term residents. Graduates, who are highly mobile and generally rent, are widely overlooked. This has caused them to experience a lack of sense of belonging, and makes them feel their social status is on par with that of migrant rural laborers. We can extend social management and social services to graduates employed in small and medium-sized private enterprises via the following four methods. The first is follow-up services for university graduates. The second is the establishment of targeted service organizations by relevant government organs (such as human resource, social security and civil affairs departments). The third is the activities organized by

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either the Chinese Communist Party or the Youth League. The fourth is the establishment of youth service and activity centers. At present, Party organizations in such cities as Guangzhou, Shenzhen, and Beijing are offering recreational services to young migrant rural laborers through youth centers. Such services should be extended to university graduates.

Chapter 10

Analysis of Internet-based Public Opinion in China, 2012 Zhu Huaxin, Liu Pengfei, and Shan Xuegang* Abstract The popularity of microblogs (Weibo, 微博) in China continued rising in 2012, so much that they have now become the engine driving online discourse. During this stage of social transformation, conflicts are arising everywhere. Mass incidents caused by environmental problems are on the increase. Public opinion regarding the Diaoyu Islands and South China Sea issues is heated, but a close analysis reveals that they are backed more by appeals for maintaining the people’s livelihood than by simple nationalistic appeals. The Weibo “national team” came to life with the opening of the official Weibo account of People’s Daily, or Renmin ribao [人民日报].

Keywords Internet-based public opinion – official Weibo – opinion leadership

1

Internet Public Opinion, Popular Appeals, and Hot Button Social Issues

Internet Public Opinion Continues Heating Up, and Social Pressure Has Yet to Be Alleviated In recent years the economy has grown rapidly, but social conflicts have been arising just as rapidly. The central government has hoisted high the flags of “Scientific Development” and “Harmonious Society,” and local governments and industry controlling departments have frequently had difficulty in breaking through existing interest group structures. There have also been increases to the factors behind the structure of sudden public opinion caused by 1.1

*  All three authors are public opinion analysts for people.com.cn’s public opinion oversight office.

© koninklijke brill nv, leiden, ���5 | doi ��.��63/9789004276536_010

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economic and social transformation. Those factors include the livelihood and interest protection of disadvantaged groups, overstepping of power of absence of public oversight, and interest struggles between different social groups. Of particular significance are grassroots struggles between the government and the people, in which the government suppresses the people’s rights to maintain stability. These conflicts rapidly ferment on the Internet into major public incidents, which end up testing the government’s credibility. As of June 30, 2012, China’s Internet penetration rate was 39.9 percent,16 much lower than in the U.S., the UK, Japan, or South Korea (all of which stand at 70 percentor higher). However, China’s online discussion space is by far the world’s largest, and also the strongest. The fundamental reasons for the high level of development of Internet public opinion are insufficient “rule-by-law” during this social transition stage, severe weakening of the functions of public oversight as a result of particular emphasis on public opinion by the traditional media, and the Internet’s becoming the only reliable channel for the masses to express their appeals. The Internet’s restoration to its original function as society’s vessel for sharing true opinions is beneficial to promptly discovering problems, mitigating conflicts, and alleviating social pressure. To this end, we conducted a survey involving three BBS forums, two Weibo microblog sites, and two social networking sites (SNS), gathering information on 20 hot button issues this year (see Table 10.1). For these 20 incidents, we disregarded the quantity of new entries on social networking sites, all of which exceeded 1 million posts. There were 14 topics on the Internet that hit the 1 to 10 million post mark, only one more than the 13 of 2011. Netizens Stir Dissent on Major Issues at Home and Abroad, and Democratic Themes are Most Striking In 2012, central and local government fiscal and taxation departments exerted financial leverage, which led to dual drops in CPI and PPI, leading to rising trends for real estate prices, electricity prices, and oil prices. There are, however, disparities in the data between urban resident experiences and psychological expectations of daily consumption and government data. The prize money of 7.5 million yuan awarded with the Nobel Prize for Literature to Mo Yan is enough to purchase only a 120 square meter apartment within Beijing’s third ring road. The Internet has given rise to voices from all manner of people who “can’t take it anymore.” Many flaws in government administration 1.2

16  China Information Network Information Center, “Di 30 ci zhongguo hulianwangluo fazhan zhuangkuang tongji baogao [The 30th Chinese Internet Development Situation Statistics Report 第 30 次中国互联网络发展状况统计报告],” July 19, 2012.

Incident

Diaoyu Islands & anti-Japan parades

London Olympics

Linkage of Shenzhou #9 and Tiangong #1 space station

Huangyan Island (Scar­bor­ough Shoal) & S. China Sea situation

A Bite of China

Mo Yan’s winning the Nobel Prize for Literature

#

1

2

3

4

5

6

1,260,000

42,300

2,240,000

121,000

448,000

2,240,000

tianya.cn

1,650,000

1,360

143,000

7,340

26,400

206,000

kdnet.net

Table 10.1 Top 20 online discussion topics in 2012

3,450

708

61,600

2,570

5,070

113,000

bbs.people.cn

6,204,462

10,747,662

10,007,209

35,157,797

55,562,228

68,463,301

Sina Weibo

1,872,400

371,200

5,532,000

3,422,700

12,868,900

52,958,600

Tencent Weibo

386,000

71,700

579,000

72,700

393,000

740,000

Renren

23,300

250,000

302,000

447,000

6,530,000

52,700,000

Kaixin

11,399,612

11,484,930

18,864,809

39,231,107

75,833,598

177,420,901

Total

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169

Incident

The case of Zhou Kehua

Fang-Han war

The Wang Lijun/ Bo Xilai incident

Major rain storms in Beijing

Poisoned capsules and “the shoes are busy”

E-merchant price wars

Funny commissioner becoming a “cousin”

#

7

8

9

10

11

12

13

382,000

87,100

1,660,000

660,000

126,000

152,000

80,800

tianya.cn

25,000

645

15,100

39,900

32,800

51,900

19,200

kdnet.net

Table 10.1 Top 20 online discussion topics in 2012 (cont.)

5,900

589

2,210

3,660

8,160

2,920

3,280

bbs.people.cn

3,034,127

5,079,242

4,874,332

3,722,233

7,271,540

9,083,229

5,839,215

Sina Weibo

1,232,800

755,700

374,000

1,170,000

1,080,000

144,000

2,358,600

Tencent Weibo

4,890

13,200

298,000

61,000

155,300

31,100

21,700

Renren

36,000

12,700

63,700

2,420,000

46,400

34,300

1,650,000

Kaixin

4,720,717

5,949,176

7,287,342

8,076,793

8,720,200

9,499,449

9,972,795

Total

170 Zhu, Liu and Shan

Incident

The incident in Wukan, Guangdong

The incident in Shifang, Sichuan

Compelled labor of a Shaanxi woman

The Duodipu Fund­raising case

The collapsing bridge in Harbin

Major shopfront closings in Shenyang

Zhang Lili, most beautiful teacher

#

14

15

16

17

18

19

20

36,400

114,000

68,700

545,000

48,200

38,600

3,0400

tianya.cn

1,960

5,880

6,710

48,600

4,840

7,210

9,290

kdnet.net

490

632

1,950

3,210

546

1,434

574

bbs.people.cn

892,480

987,222

1,242,917

1,057,293

1,848,717

1,580,787

2,881,361

Sina Weibo

137,000

159,500

381,400

47,100

147,100

746,000

51,400

Tencent Weibo

16,900

46,700

24,800

125,000

5,650

12,200

8,170

Renren

15,600

6,750

125,000

58,900

152,000

15,100

6,650

Kaixin

1,100,830

1,320,684

1,851,477

1,885,103

2,207,053

2,401,331

2,987,845

Total

Analysis Of Internet-based Public Opinion In China, 2012

171

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have been revealed, particularly in food and drug safety. After the gutter oil incident in 2011, China Central Television (CCTV) this year uncovered the poisoned capsules scandal, again shocking the nation. Jokes were making the rounds on the Internet about leather shoes, which allegedly share the same raw material with those poisoned capsules. According to one “They are used for formal attire, for housework, for trekking in the mountains, for treading in the waters, and for making yoghurt and capsules. The year 2012 has been a busy one for leather shoes.” The State Food and Drug Administration has since revoked the drug manufacturing permits of three capsule-manufacturing companies. Such incidents as that of the Shifang Molybdenum Copper project in Sichuan in July, the paper plant waste scandal in Qidong City, Jiangsu province, and the PX project in Ningbo City, Zhejiang province in October have given rise to a host of mass environmental protests, giving rise to a prevailing attitude of NIMBY (not in my backyard).17 The PX project in particular has drawn repeated protests from 2007 to 2011, from Xiamen all the way to Dalian. In neither the hasty green-lighting of the project nor the hasty cancellation of the same did the government follow democratic procedures. This has given common folk the idea that if they don’t protest, their issues won’t be resolved, and the louder they protest, the faster and more thorough the resolution will be. This crisis resolution model is quite destructive and costly. We must thus establish institutionalized platforms for open and fair discussions about public policies. In 2012, “coerce” (in all its forms) has been a hot word, most frequently in association with “forced evictions for land appropriation,” and “family planning,” despite drops in the number of incidents of both. A woman seven months pregnant in Zhenping County, Shaanxi Province was coerced into aborting her child, and a police officer in Panjin, Liaoning Province shot a local amid protests regarding coercive land appropriations. Such incidents all incite doubt and criticism in public discourse circles. Opposing Corruption on the Internet is Becoming Professionalized, Common, and Entertainment-Oriented The Internet has served as a close overseer of society. Such formerly insignificant details as a watch, a belt, a box of expensive cigarettes, or a facial expression have all become plain to see as a result of “the information effect” of the Internet. They may all become fuses that explode the widespread blight of 1.3

17  This refers to the negative effect caused by concerns of locals regarding trash dumps, nuclear power plants, crematoriums, and other such projects on personal health, environmental quality, or asset values. This gives rise to the “Not In My Back Yard” attitude, which sometimes incites mass protests or even impassioned struggles.

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corruption. Some have joked that “in the Weibo era, officials can no longer make a living.” At the scene of a tragic car accident in Yan’an, Shaanxi Provincial Safety Oversight Bureau director Yang Dacai smiled inappropriately, after which he was the target of an Internet manhunt, or “human flesh search,” through which netizens discovered he wore several expensive wristwatches. A watch appraisal expert who goes by the online handle “Manager Hua Lost his Golden Clasp” and other netizens then estimated that Yang could not have afforded such watches on his official salary. Liu Yanfeng, a student at the China Three Gorges University, demanded that the Shaanxi Provincial Department of Finance and Safety Oversight Bureau publicize Yang’s salary. In the end the local Commission for Discipline Investigation had no choice but to investigate Yang. Officials have repeatedly become targets of investigation in recent years. From incidents such as the Communist Youth League scandal of Wang Liya, former deputy party secretary of Shijiazhuang City, to the post-90 generation girl Wang Xi of Xiangtan, Hunan being provisionally appointed deputy director of a regional Development and Reform Bureau, to “corruption in personnel usage is the biggest form of corruption,” all incite rage among the common people. From “Uncle Wristwatch” to “Uncle Apartments” (a high-level Guangzhou cadre discovered to own two apartments), the Internet is directly responsible for uncovering a slew of corruption scandals and isserving as a warning to the weak spots of institutionalized corruption. “Beautiful People” a Common Phenomenon; Improvements Will Require Institutional Support 2012 saw the most instances of both the Internet and traditional media crowning “most beautiful” people, generally for heroic acts. In Hangzhou, Wu Bin, a bus driver killed in the line of duty, was honored with the label the “most beautiful driver.” Zhang Lili, a teacher in Jiamusi, Heilongjiang Province, was labeled “most beautiful teacher” for saving the lives of her students while disregarding her own safety. Then there is “Big-Brother-Hold-You-Up” Zhou Chong, who saved the life of a young boy dangling from an apartment terrace in Guangzhou. There were also the private car owners who drove helpless passengers to the airport for free after the Beijing rainstorms on July 21. The Internet has now become an information hub and spiritual home where the Chinese people keep watch on one another and help one another. There are also many metaphors and spittoons for “bad habits in the Chinese style” on the Internet. For example, “crossing the street Chinese style” means gathering a large enough crowd to blunder into traffic, regardless of traffic signals. “Picking up the kids Chinese style” means chaos at the entrance to 1.4

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schools when parents riding all manner of vehicles arrive shouting as though in a wet market. In this era of social transition, how can we avoid the “broken windows” phenomenon, maintain social order and good habits, and increase the level of culture of our citizens? Rethinking of rationality, rules, ethics, and rule-by-law are all signs that the attitudes of the Chinese people are becoming more mature. There are More International Discussion Topics and Popular Appeals Based in Concerns for Livelihood China’s international status rose during the global financial crisis as Chinese leaders visited Europe “toting their moneybags.” Chinese people now desire more fervently than before to be understood and respected by other countries. For that reason, they can become impassioned when discussing encroachments on their national territory by other nations. The patriotic themes of 2012 were different from those surrounding the Beijing Olympics in 2008. Although there was passion in the streets during the torch relay, not to mention the sudden boycotting of Carrefour, these forms of expression were by and large peaceful. In the end, the theme was one of welcoming visitors from around the world, and the Chinese nation comported itself with the demeanor of a major nation. In contrast, the South China Sea issues and the disputes over the Diaoyu Islands have left netizens feeling constrained, frustrated, and angry. Nationalistic sentiments are a two-edged sword. Amid the anti-Japan riots in Xi’an, Changsha, Zhuzhou, Shenzhen, Jiangmen, and other cities on September 15 and 16, mobs vandalized Japanese made cars and shops carrying Japanese products. Li Jianli, driver of a Japanese car, was injured in an attack with a U-lock by Cai Yang, a “post-90” Henan peasant. Cai had spent two years suspended in the sky over Xi’an painting buildings, where he “almost fell on his head and suffered a concussion.” Previously he had urinated inside his manager’s Audi sedan, which made him “feel great.” Having nobody to vent to, he spent all his leisure hours playing war video games.18 Cai finally found a way to vent his frustrations during the events of mid-September. A microblog post by Hunan Provincial Discipline Investigation Commission cadre Lu Qun (who goes by the handle yulizaitu [imperial censor on the prowl]) revealed that 47 youths had been arrested in connection with vandalizing. During the course of questioning, officers discovered that 12 did not even 1.5

18  Chen Ming and Intern Xi Yihao, “Zachezhe Cai Yang shengcun suipian [砸车者蔡洋生 存碎片 The fragmented Existence of Car-breaker Cai Yang],” Southern Weekend 南方周 末, October 1, 2012.

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know where the Diaoyu Islands were located. This further proves that the real motives for a large portion of anti-Japanese rioters were not nationalistic, but rather a way to express their gripes over the rich-poor disparity and their livelihoods. Those who broke the law during the riots must be prosecuted, but society must deeply rethink the hopeless plight of disadvantaged groups and find solutions for helping them and rectifying injustices. 2

The Internet-based Public Opinion Ecology in 2012

2.1 Expression of Online Popular Appeals in the Mobile Era As of the end of June 2012, there were 538 million netizens in China. Of those, the ranks of rural netizens grew the fastest, up to 146 million.19 The number of mobile Internet users rose to 3.88 million, and the number of mobile Weibo users grew to 170 million. Expressions of popular appeals on the Internet have now formally entered the mobile interaction era. The mobile Internet has entered a phase of explosive growth. The governments of major cities such as Beijing, Shanghai, Guangzhou, and others have announced plans to build “wireless cities.” The development of new technology has both increased the number of people participating in public discourse and augmented the frequency and strength of online discourse by making it convenient to access the Internet anywhere, anytime. Growth in new Weibo accounts is slowing, but the influence of Weibo microbloggers continues to grow. Weibo microblogs are now the driver of and major platform for social discourse. Some ministerial-level officials take 15 minutes out of every day to have Weibo experts explain hot trends, in order to cultivate the habit of officials’ using Weibo microblogs. Amid the Wang Lijun scandal, traditional media and official information channels were conspicuously absent, but netizens made abundant use of microblogs, SNS sites, forums, and other websites, becoming a “self-made media” which excavated the truth while official outlets dared not. Some people even shirked off reliance upon traditional news outlets and exhibited an unprecedented aptitude for public discourse.

19  China Internet Network Information Center 中国互联网络信息中心 (CNNIC), “Di 30 ci zhongguo hulianwangluo fazhan zhuangkuang tongji baogao 第 30 次中国互联网络 发展状况统计报告 [The 30th Statistical Report on the Development of the Chinese Internet],” July, 2012.

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The “Post-90” Generation are Going Online and Entering the Social Stage In 2012, as the first batch of post-90 students graduated from universities, a generation 600,000 strong, almost the same age as Internet itself, entered society. Young netizens possess dynamic thinking and rich information channels, and their life patterns are closely tied to the Internet. Online idioms such as “Du Fu is busy” and “what do you think, Yuan Fang?” have become popular symbolic language for this group. During the Wukan incident in Guangdong, the Weibo accounts of one 15-year old boy, which went by the handles “wukan jijing [Wukan Chicken Bouillon]” and “wukan aiguo qingniantuan [Wukan Patriotic Youth Brigade],” were for a time the only means Wukan residents had for communicating with the outside world. The first to take to the streets in the Shifang Molybdenum and Copper incident were middle school students. The “sign-raising big brother” made famous by his opposition to spending enormous sums of money to renovate Guangzhou metro stations was a first-year university student by the name of Chen Yihua. The 120,000-strong protests against “citizen education” in Hong Kong were launched by Huang Zhifeng and two other middle school students on their Facebook accounts. Young netizens are deft at using the Internet and participating in public discourse, and the post-90 generation is now entering the fray of online public discourse. The sense of individual rights of youths has been accompanied by positive declarations regarding “matters at hand.” However, the over-zealous behaviors of some youths participating in environmental protests or antiJapan riots were the cause for concern and negative discourse. Different from “public knowledge activists” who hold to perches on Sina Weibo and other ideological or cultural websites, grassroots netizens commonly call themselves “diaosi [diao being a vulgarity—translator’s note],” causing great shock to adult society. This vulgar word reflects the self-deprecation and self-decompression of the people who use it, as well as combining feelings of bitterness, hate, and interest all in one. It is more an expression of “collective concern” at the unequal distribution of opportunities for social development. The “diaosi attitude” was even addressed in the 18th National People’s Congress Special Edition of the Renmin ribao[人民日报] on January 3. The government and all of society need to strive to uphold fair starting points and equal distribution of opportunities, and give youths a feeling of safety in their employment, a feeling of warmth in society, and a sense of belonging in their own nation. 2.2

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2.3 Social Solidarity of the Middle Class is in Need of Overhaul There is rampant inequality in the current stage of China’s economic and social development, and it is possible that the rich-poor gap will continue to grow. Mass incidents will continue to grow in quantity, and all areas of society are concerned about falling into the “middle income trap.” We must urgently bring about the formation of a large, stable middle class rich in the spirit of compatriotism. The Wenzhou railway tragedy in 2011, for example, touched upon the safety and dignity of the middle class. This trend will continue in 2012. Many in business circles feel empathy for Wu Yingyin, resident of Dongyang City, Zhejiang who was sentenced to death for fundraising fraud. Under mounting public pressure, the Supreme People’s Court did not uphold the death sentence, but rather sent him back to Zhejiang for retrial, after which his death sentence was remanded. Closely related is the recent phenomenon of private Wenzhou businessmen “hitting the road” when their capital cycles are not able to keep up with business expenses. Premier Wen Jiabao publicly admitted at the NPC and CPPCC that “the development of private financing is still not suitable for the needs of the development of our economy and society.” Now the People’s Bank of China and the China Banking Regulatory Commission are considering launching a private finance pilot in Wenzhou. Shenyang businessmen are concerned that the government will overstep the limitations of the law in their fines and penalties in order to mitigate public fiscal gaps. As the saying goes, “the whole city is full of curtained doors.” The problem of mass store closings by private store owners is more severe than the mass incidents set off by “social loafers.” Merchants are the economic backbone of any government, and in this case they have cast a vote of no confidence in that government. 2.4 The Irrationality of Online Debate The first major online hot button topic of 2012 was the “Fang-Han war” incited by Mai Tian and Fang Zhouzi’s doubting of Han Han’s authorship of popular books in a scandal that came to be known as “ghostwriter-gate.” A war of invective ensued between fans of Fang and fans of Han. As the debate heated up, many began spewing prose laced with subjective feelings, displaying an utter lack of respect for objective scientific rationality. Some “opinion leadership” even became involved in the debate. Although netizens often mock the heavyhanded approach of officials when they try to meddle in online affairs, these netizens actually submitted a below-standard test sheet themselves during the “Fang-Han war.”

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Weibo is a platform for social participation, but it also possesses a “toxic side.” A single Weibo post is limited to 140 characters, suitable only for writing a conclusion, and far from sufficient for evidentiary argumentation. The Zhongguo qingnianbao [中国青年报] once published an analysis that concluded that Weibo users “listen to half, understand a quarter, do zero thinking, and react double.” In order to mitigate Weibo’s toxicity, we could encourage a linking of long microblog posts with shorter posts. This would enable microbloggers to get their thoughts in order and settle their emotions. The earliest Weibo player “hecaitou [Fixed Menu Head]” announced his departure from the Weibo world in October. He cited as a reason his concerns that the fragmented reading style of microblog posts “harms the brain,” is quick to incite anger, makes the incredible too easy to believe, and makes concentration impossible. Of late, online discourse is becoming increasingly heated, in some cases even devolving into “Weibo challenges.” Actually, most netizens are concerned for their country and their people, and gradually lose their patience after years of interest battles and social conflicts. It thus becomes easy for them to become “doctors” who transfer their rage into a kind of “prescription medicine.” Some public knowledge activists active on the Internet, traditional media, and social forums have been demonized. Nowadays the moniker “public intellectual” is taking on a negative spin. Left-wing netizens are actively putting them down on the one hand, while other public intellectuals are losing their grasp on the national condition and on the complexity of reform. In almost all instances they speak to the worst aspects of any scenario and stray far from the real needs and psychological capabilities of the masses. Both right-wing and left-wing netizens have expanded the space for social discourse in both directions, regardless of the immaturity or absurdity of some of their positions. This has led to more free-flowing information and more open thought. Online debates are a manifestation of the vitality of Chinese online discourse. But there are still difficult questions we must answer, particularly in the realm of “opinion leadership” for netizens, such as how to better use online rights to free speech and how to better highlight social responsibilities. Online Rumors Must Be Quelled by “Ecological Clean-Ups” That Blend Hard and Soft Methods We currently lack powerful restrictions at the legal and ethical levels for anonymous online postings and frequent deep interactions between netizens. For this reason the Internet may become a hotbed of lies and radicalism. Though netizens doubt the position that “social stability, and even national security, may be destroyed with the click of a mouse,” they should admit that such 2.5

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rumors as “blood transfusions cause AIDS” and “female university student has kidneys extracted when seeking employment” are harmful to the social order and may easily lead to impetuousness and disharmony in society. In 2012, the government made major strides in punishing those who propagate rumors that “had adverse influence on society.” In March 2012, the netizens responsible for “creating and propagating the rumor that military vehicles would be entering Beijing and that Beijing was in imminent danger” were arrested and punished, and 16 websites with lax regulation, including Meizhou Window, 528 Forum and others were closed. Both Sina and Tencent shut down all Weibo microblogs for three days. Incomplete data indicate that from January to May 2012, state Internet information oversight departments and public security organs erased over 210,000 online rumors of all varieties, shut down 42 websites, and confirmed the resolve and strength of the government in attacking rumors and cleaning up the Internet. However, heavy-handed measures are not the only option available for cleaning up the Internet. The government is more in need of the ability to check and balance itself when it comes to the Internet, where “the unknown far exceeds the known.” Increases to netizens’ ability to differentiate between power, media literacy, and social responsibility, the appearance of government organs to oversee rumor-refuting, information dissemination, and rumors about public personalities, gains to the self-discipline of “opinion makers,” and the sense of responsibility the media now has toward operators and regulators are all essential links in the “ecological clean up” chain for the Internet. One cannot blame online rumors and radicalism entirely on the disorderly nature of the Internet. The root of violent thinking online lies in social problems that have not been effectively resolved in the real world and in the fact that the government has yet to make transparent information that should be known by all. 2.6 Online PR is Becoming a “Sunshine Industry” Online public relations means projecting a corporate image using hightechnology methods on the Internet. Online PR has given birth to new modes of thinking, as well as new strategies and new media.20 However, this new industry often masquerades as something it is not, owing to some inappropriate interest relationships. The group of professionals whose job it is to make posts and reply to comments online have been dubbed the “online navy.” The purpose of their job is to make their employers look good 20  See the “online public relations” entry on the Baidu encyclopedia at http://baike.baidu. com/view/1046461.htm.

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online, as well as to benefit their companies. Some among them go so far as to maliciously speculate for ill-gotten gains, or propagate false rumors about their “online adversaries.” Master Kong Foods was reported to be a Japaneseheld company, and so fell victim to the anti-Japan fervor. The perpetrator of that rumor was none other than a rival corporation. Some companies take up the banner of “public opinion overseers” and undertake great amounts of for-profit online work, which largely consists of the deleting of unsavory or negative posts. Malicious online PR has caused damages on both sides in many online battles between corporations. Its destructive effects on the nascent online environment cannot be underestimated. Now online PR is considered a “sunshine industry,” onto which the government is applying rigid oversight in addition to the industry’s own efforts in self-discipline. In June 2011 alone, five websites undertaking illegal online PR work were closed in accordance with the law. 3

The Role and Effects of “Opinion Making” in Online Forums

3.1 Online “Opinion Leadership” is Becoming More Diversified by the Day “Opinion leadership” on the Internet refers to paying attention to quotidian social and public issues and intellectuals of interest in the humanities, including vast groups of professional academics, media personalities, and elite from various industries active online. We also consider actress Yao Chen to be an “opinion maker,” since she often participates in discussion of public issues on her Weibo, on which she reposts entries about rescuing endangered children, saving sick people, protecting the environment, and so forth. She also participates in discussion about such human rights issues as forced demolition of housing. We do not consider sports star Liu Xiang, who does maintain a popular microblog but seldom participates in discussions of public issues, to be an “opinion maker.” Grassroots-level citizens can also become “opinion makers.” On the evening of August 24, 2012, a renowned grassroots netizen known as “zuoyeben [homework notebook]” returned to Sina Weibo and wrote a post entitled, “I’d like to hug 3 million people.” The entry was reposted 238,000 times and garnered 149,000 comments in one day. His followers jumped from 2.92 million before his account was shut to 3.3 million in that day (now up to 4.21 million). This young chap from Qingdao has won the love of the online masses with his sincerity and his intractable nature. If we agree that intellectual netizens can summon the winds that blow across the ocean, then we should go further to

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say that grassroots netizens are like the ocean currents that pass beneath the waves, guiding the course of history. At present, almost all interest groups and levels of society have found “opinion leadership” at their online levels. The Internet is now a relatively stable, multi-level public domain. Our professional analysis of 10 “opinion leaders” has revealed that the largest group of opinion leaders is media figures, followed by academics, authors and independent writers, party and government cadres, entrepreneurs and businesspeople, public welfare figures, lawyers, actors, online celebrities, and so on. In addition, over 30 percent of “opinion leaders” possess two to three social identities (see Figure 10.1). “Opinion Making” and Traditional Media are Jointly Molding Mainstream Public Opinion On the American microblog Twitter, the 20,000 or so elite users comprise only 0.05 percent of total users, but they account for half of all reposting and comments on the site. China’s Sina Weibo is similar, in that about 300 “opinion makers” control discussion to a great degree and have gained for themselves a strong voice. 3.2

Figure 10.1

The top 100 industries of “opinion leadership”

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Figure 10.2 Effects of traditional media and “opinion leadership” on public opinion in recent years (of 120 sampled incidents)

Per the “two tier communications” hypothesis popular in communications studies,21 news incidents don’t directly reach the masses, but it is the preliminary interpretation and distilled value judgment of them by some self-appointed folk experts that are filtered down to them. They are highly credible with the public, and some are even followed blindly. It may seem that the billions of netizens in the world are all speaking with different voices, but in reality it is the “opinion leaders” who set the stage and control the discourse. Today, the only power equal to online opinion leaders is the traditional media. Traditional media possess prestige in news investigation, and are able to confirm or refute reports propagated online. The value judgments of the traditional media give a sense of ideological security to older generations (see Figure 10.2). Thus, those online hot button topics which deviate from the endorsement of traditional media generally do not become mainstream public opinion. A special tactic used by some local governments in responding to public opinion crises is to order the traditional media to stay out of the fray, and let the fire ignited by netizens burn out on its own.

21  This theory was extrapolated from Paul Lazarsfeld’s theory regarding the U.S. presidential election in his book The People’s Choice, 1940.

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New Interaction between Officials and Citizens Caused by Weibo

Government Credibility is Facing Challenges from the “Tacitus Trap”22 In June 2012, the Henan Provincial Party Committee secretary was personally inspecting mountain regions in the city of Luoyang when he encountered a sprawling, beautiful field of wheat. Spurred by sudden emotion, he left his car and cut down some wheat. In the online postings that followed, the party secretary was accused of “grandstanding,” and even mocked for his poor posture when harvesting the wheat. After the shooting of Chongqing gangster Zhou Kehua, the netizen known as “Chen Zihe” wrote an entry wondering if the deceased had actually been a plain-clothes policeman from Hunan. The rumor then spread like wildfire, growing more exaggerated with every reposting, until there were widespread reports that a Hunan policeman named Chen Zihe had been mistakenly killed in Chongqing. Despite the Chongqing police department’s repeated affirmations that Zhou Kehua’s DNA and fingerprints had matched those of the deceased, there were still widespread doubts among netizens. These incidents demonstrate that the Chinese government has fallen into a “Tacitus Trap.” To mitigate the lack of credibility in government departments among netizens, the government must cause the masses to deeply understand the complexity of public administration, so that they rationally, calmly view the various problems that occur in society during this period of transformation. The government must also overcome its bad habit of being secretive amid major events and communicate more openly and transparently with the masses. The most popular communication tool presently available to officials is government Weibo microblogs. 4.1

Government Official Weibo Accounts are Less for Information Dissemination and More for Public Interaction American sociologists Allport and Postman invented a formula for rumors: R = I x A, where R is the rumor, I is its importance, and A is its ambiguity. The importance and uncertainty of an event in its early stages lead very easily to the spreading of rumors. The best method for refuting a rumor, then, 4.2

22  In the Tacitus Trap, once a government department loses credibility, whether by intentionally lying or by a misinterpretation of the truth, all its future actions will be seen as either deceptive or malicious, regardless of their true nature.

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is to establish authoritative, prompt channels for the dissemination of information. That causes A to fall to zero, reducing the power of the rumor to zero. Government Weibo accounts are a convenient means of targeting important issues and eliminating their ambiguity. Government Weibo accounts opened by officials at all levels of the party and government grew rapidly in 2012. There were 50,947 officially registered party and government accounts registered on Sina Weibo as of September 2012,23 as well as over 48,050 on Tencent Weibo as of July 20, 2012.24 Government Weibo accounts have become one of the most concentrated means used by party and government organs to respond to public opinion. The State Council Public Report [国务院公报] microblog, which promptly disseminates major state directions and policies,went live on January 10. It garnered 230,000 followers on its first day, making it the most followed government Weibo to date. After the Shenzhen traffic accidents of May 26, the Shenzhen police Weibo account issued several posts, and officials even conducted an online interview, in which they dispelled the many concerns regarding the accidents one by one. Shenzhen police also convened four press conferences in conjunction with related department to report on the progress of the investigations, better mitigate the concerns of the public, and win back their credibility in public matters. During the rainstorms of July 21 in Beijing, emergency phone numbers were not the only option available to imperiled citizens. Many also alerted officials of their situations by commenting on the @Beijing Press Bureau Weibo [@北 京发布](1.96 million followers), @Beijing Public Security Weibo [@平安北京] (4 million followers), @Beijing Fire Department [@北京消防] (1.87 million followers) and other official Weibo accounts. The public has already acknowledged the government’s presence on Weibo, which has made positive interaction between the public and officials possible. On the second day of the rains, some car owners discovered that traffic violation fines had been affixed to their cars, which they were forced to abandon on the streets due to the inclement weather. Multitudes of them appealed in comments on the microblog of Wang Hui, director of the Beijing Press Bureau [@北京王惠] (1.62 million followers), 23  “Xinlang fabu disan jidu zhengwu weibo baogao zhengwu weibo zhong jiceng weibo zhan bacheng 新浪发布第三季度政务微博报告政务微博中基层微博占八成 Sina Issues Third Quarter Report, Grassroots [Weibo Accounts account for 80 percent of Total],” Beijing ribao [北京日报], October 30, 2012. 24  “Tengxun 2012 shangbannian zhengwu weibo fazhan baogao 腾讯 2012 上半年政务 微博发展报告 [Tencent Government Weibo Development Report, First Half 2012],” http://z.t.qq.com/zt2012/2012half/index.htm.

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after which Wang reported the situation to the city government, which then announced that all fines issued on that day were to be rescinded. In the face of online suspicion, the Beijing city government for the first time in the history of New China issued the names and identities of seven deceased victims. In July 2012, people.cn’s Public Opinion Oversight Bureau issued the “Sina Government Weibo Report for the First Half of 2012.” There were official Weibo accounts of different quantities and natures in all 31 of China’s provinces, autonomous regions, and cities under the direct control of the central government. There were more official accounts at all levels of government, not just in public security, but also in press bureaus, tourism bureaus, Communist Youth League organizations, and others. Popularity growth was especially for the municipal government Weibo accounts @Beijing, @Shanghai, @Nanjing, and @Chengdu. These accounts, with their millions of followers, explored new routes for governments to act as their own media outlets and for interaction between citizens and governments. In addition to disseminating information about policies, providing services that make the people’s lives easier, and hosting posts that create an image of closeness between the government and the people, government Weibo accounts are also playing ever more important roles amid sudden incidents. In fact, party and government organs are now often required by regulations to proactively issue posts on official microblogs. On June 11, the city of Wuhan was covered in a cloud of smog, which the online rumor mill attributed to the explosion of a local chemical plant. Local party and government organs, and relevant enterprises came together to refute the rumor on their Weibo microblogs. Joining the fray were such organizations as the Hubei Provincial Fire Department, the Wuhan City Environmental Protection Bureau, the Wuhan Meteorological Service, Charming Green Mountain, Happy Wuhan Steel, and others. During the “golden week” of the national holiday, drivers can find upto-date information on road conditions from official Weibo microblogs as well as from traditional traffic radio channels. In fact, public security bureau microblog staff are extraordinarily busy during public holidays, often working overtime. 4.3 Their Weibo Accounts are Showcasing Officials in their “Public Servants” Role Another major class of government microblogs is Verified personal Weibo accounts of party and government cadres, and other public officials. Per data provided by Sina, there were 17,815 certified Weibo accounts of public officials on their site as of the end of September 2012. They varied in rank from provincial-level officials to street policeman. As more and more party and

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government cadres and public officials make using Weibo accounts a habit, they will better display their true natures as “public servants” to the masses. This will be beneficial to mitigating the widely held opinion that official communications are “stiff and inhuman.” In February 2012, Shanghai resident Qin Ling wrote on his microblog that he had been unable to get his father, in late stage of cancer, admitted into a hospital. City Party Secretary Yu Zhengsheng responded to Qin on the @Shanghai city government Weibo and had Qin’s father admitted to a hospital, where he spent the last few hours of his life. This has become a positive story about the government becoming closer to the people in government circles. The Tencent Weibo microblog of Zhejiang provincial NPC Standing Committee member and provincial Organization Department director Cai Qi has garnered 800,000 followers. It’s not only his high rank, but also his unassuming, amiable style that has made him so popular online. In March 2012, before attending the National People’s Congress and the National People’s Political Consultative Conference in Beijing in his capacity as an NPC delegate, he asked for his followers to give him suggestions for government directions in his comments. He received volumes of responses. During the National Day holiday in 2012, deputy director of the Shaanxi Provincial Public Security Bureau Chen Li passed a sleepless night after public discourse began regarding the Huashan incident. He relayed information to tourists via his personal Weibo account and even publicized his personal cell phone number, making himself into a communication bridge between tourists at the one end and the media at the other. On October 30, deputy party secretary of the Politics and Law Committee of Hanshou County, Hunan “responded to the call of netizens” by publicizing his family assets on his Weibo account. Those assets included seven old houses, a piece of real estate valued at 400,000 yuan in the county seat, and 20,000 yuan given as dowry for his daughter’s wedding. This incited a fervent reaction, and once again caused netizens to raise expectations for the publicizing of assets of public officials. “Internet Politics” Have Been Extended from Emergency Management to Institution Establishment Can all local governments extend the concept of “online participation in governance” from mere emergency response management to institutional construction? Can they improve operations within the system? Can they promote “good governance” and “benevolent administration?” Some pilot areas have already made efforts in these areas. 4.4

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The Nanjing Municipal Party Committee has established municipal, district, and departmental information liaison institutions via the @Nanjing city government official Weibo account. One netizen reported that a nine-year-old girl was helping her mother sweep the streets since her registration status prevented her from attending local schools. Within 15 minutes, all levels of local government investigated the claim and then refuted it as false, deleting the offending post immediately. The municipal government of Huizhou, Guangdong has launched the “Huizhou Online” platform for public participation in government. Officials there have promised that for all ordinary questions posted, relevant departments must make a response within five work days. All questions that remain unanswered after five work days will be marked with a yellow light and a red light after 15 work days. The government is also making responses to online questions, an assessment criterion for promotions within the city’s party and government organs. If we agree that the current system is typified by a top-down approach to authority, we can also conclude that “online participation in governance” is a bottom-up approach to popular participation. Not only does it represent a posture of being closer to the people and willingness to provide aid in individual cases, but it also can increase the flexibility of the system and propel the government to evolve a step closer to the level of democratic governance. We are still awaiting breakthroughs in the process of proceduralizing and institutionalizing the inclusion of popular opinions into policymaking. 5

New Phenomena and New Problems Brought about by New and Old Media

5.1 The Rise of the Weibo “National Team” In July 2012, the Renmin ribao [人民日报, People’s Daily] opened its own official Weibo account. The @People’s Daily [@人民日报] microblog does not avoid current conflicts in society, and it dares to tread in sensitive areas, such as the number of deaths in the Beijing rainstorms, the Qidong incident, the Qiaojia explosion incident, Liu Xiang’s withdrawal from competition, the “protect the Diaoyu Islands” movement, the Ningbo PX project, and other items of widespread interest. The paper has made many incisive comments on its microblog, including “without first-class sewers, you can’t have a first-class city,” “if you revere the people, revere the law, and revere public opinion, then those in power won't slip into anomie, and the people’s hearts won’t be scattered,” and so on. In so doing, they have called for the system

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to take more responsibility and for the people to give the system warmth and trust. As the Party kicked off the 18th Party Congress, the Renmin Ribao Weibo account had over 2.8 million followers. This was an important time, because after the 64 year history of the Renmin Ribao, its daily issuance was only 2.8 million copies. The Weibo account took only four months to achieve that number of followers. This is the most astonishing accomplishment of the party’s literature and propaganda strategy since the founding of the Jiefang Ribo [解放日报, Liberation Daily] in Yan’an. It is as though they have founded another Renmin Ribao right on Weibo. The Xinhua News Agency runs such microblogs as @Xinhua China Online Events [@新华社中国网事] and @Xinhua Viewpoints [@新华视点]. China Central Television (CCTV) runs such microblogs as @CCTV News [@央视 新闻] and @CCTV Commentators [@央视评论员]. The Central People’s Broadcasting Station runs such blogs as @Voice of China [@中国之声] and others. In the scandal where a China Southern Airlines flight attendant was beaten, the propaganda department of the Guangzhou Yuexiu District Party committee flatly denied that Fang Daguo, a member of the District Standing Committee and the Armed Police Government Committee, had hit a woman. At the same time, reporters for @Xinhua China Online Events published the “Xinhua version of the truth.” Thereafter, such microblogs as @Xinhua China Online Events and @Xinhua Guangdong Speedy News [@新华社广东快讯] posted the comment “one must ask three times to arrive at the truth.” During the anti-Japan riots of September 15 to 18, @People’s Daily and @Xinhua China Online Events came together with many official government Weibo bloggers to implore the people to be patriotic within reason and to obey the law. When the mobs had worked themselves into a frenzy, these micro­ blogs were effective at restraining popular sentiments and in helping local governments promptly take action to control the situation. The emergence of central-level media Weibo microblogs and central focus news websites has changed the sloth and aphasia of mainstream media outlets in responding to online hot button issues. They dare to directly confront problems and maintain social justice, and they have been upheld by the masses. They have increased the power of mainstream media to guide public discourse. 5.2 The Global Times and Hu Xijin Incident are Worthy of Attention In recent years, the Huanqiu ribao [环球日报, Global Times] and huanqiu. com have defended government actions in the real name registration requirement for blogs, the highspeed train derailing, China’s high speed rail strategy, the American ambassador’s grandstanding, and other incidents. In such

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sensitive issues as the Chen Guangcheng scandal and others, they have made breakthroughs in traditional restrictions by “poking through the paper window.” They have attracted articles penned by independent academics and striven to create a literary platform that is inclusive. The personal Weibo account of Huanqiu ribao chief editor Hu Xijin now boasts 2.73 million followers, and Hu frequently engages in discussions with independent-leaning netizens. One could say that the Huanqiu ribao has created a kind of discourse system within the political system. In the eyes of some netizens, the Huanqiu ribao is nothing more than a party rag. In reality, as a marketized newspaper under management of the Renmin ribao, it has quietly brought about modern transformation in values, changed the traditional concept of party and government administration into one where national interests are of utmost importance, and forged an ideology that challenges that of the “universal values” espoused by intellectuals. It is particularly attractive to those grassroots groups who are unable to engage in market competition and are nostalgic for the days of the planned economy. During this stage of social transformation, base-level conflicts grow more heated daily. Some common folk have fallen into despair, and the intelligentsia is becoming more radical daily. Given that, we must make further explorations into how to make innovations tothe internal discourse system, how to develop sincere and effective dialogue between officials and the people, and how to resolve such complicated problems as the system’s delegation of power, oversight of the news media, and the baseline of government ethics. At the present moment, media within the political system have become more dynamic than marketized media. Some even claim that the media and public opinion forums are facing a crisis of “state gains and popular losses.” State gains are worthy of encouragement, as media within the political system are benefiting from cracks in the system to gain more room to operate. However, popular losses are cause for alarm. Newspapers in the “Southern” family were silent in such cases as the Beijing rains and the Tang Hui case. Such papers as the Dongfang ribao [东方日报] have come under fire for their bravery in printing the truth. An ideal media and public opinion environment would be one in which media within the political system and marketized media are allowed to coexist. That would allow for a harmonious existence between government propaganda and the voice of the masses. “News-ization” of Media Discourse on Weibo Raises New Ethical Questions In August 2012, former Peking University professor Zou Hengpu claimed on his personal Weibo that deans, professors, and department heads of that university 5.3

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were flirting with cafeteria servers. His entry was reposted nearly 30,000 times. The details of the “five W” incident were severely lacking, but many media outlets reported on it as a real story. The claims were never verified, and Professor Zou later admitted that exaggeration “has always been my literary style.” Amid the poisoned capsules scandal, CCTV anchor Zhao Pu released up-tothe-minute data on his V-certified Weibo microblog, including a text message from an investigating reporter that read, “Don’t eat old yogurt (that has gone solid) or jelly. That goes especially for children. Behind the scenes it’s terrible, no details now.” This entry was reposted 130,000 times, and Zhao was eventually punished by CCTV. Many netizens sympathize with and support Zhao, but the question of how reporters report news in “self-media” has become a point of serious debate in news circles. Before CCTV aired the official report, Zhao had no right to issue the results of his colleague’s investigations in his own name. It’s impossible to make sense of major events that touch on food safety, drug safety, and general public health using only 32 characters in a micro­ blog post. It is, however, easy to incite widespread panic. So we must proceed carefully. In the Reuters News Agency’s “Guidelines for Online Reporting,” the agency clearly instructs its reporters to keep private and company accounts separate. “It’s extraordinarily easy to repost or share a link, but if the contents of that link are found not to be true, or if they lead people to think you have a bias for one side of a debate, your reputation and that of Reuters will be harmed,” read the guidelines. It would seem that the self-discipline and institutional discipline of Weibo microblogs held by media personnel present a new challenge. Renmin ribao and CCTV have already established their own guidelines for online reporting. 6

Internet Public Opinion Outlook for 2013

Weibo and Other Social Networking Platforms Will Overturn the Public Opinion Order Such mobile social networking applications as Wechat, Miliao, Momo, Feiliao, and others have become popular among youths, as they allow instant voice, text, video, and picture communication. They are particularly advantageous for chatting, making friends, holding meetings, and raising support among the community. 6.1

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We predict that in 2013, mobile social networking apps will enter a phase of explosive growth, and accounts for all manner of social networking apps, especially Wechat, will grow by great margins. We further predict that these will exert great influence amid public incidents and hot button topics. More government organs, media, and celebrities will enter forums of social discourse in droves, and this will catalyze new models for public information dissemination and rewrite the public discourse order. People’s Livelihood and Public Administration Might Become Hot Button Issues The new crop of party and government leaders will face complex situations both at home and abroad. They must continue maintaining stable, rapid development of the nation. The inheritance of and innovations to guiding government principles by both the central and local governments will incite widespread attention to domestic public discourse. With Obama’s reelection, the U.S. will return to the Asia-Pacific region. The financial crisis lumbers on, and as instability in neighboring nations increases, nationalistic topics amid online discourse may continue or even become more radicalized in 2013. With increased pressure from the down-sliding economy, questions of the people’s livelihoods may incite social crises. Such livelihood topics as goods prices, real estate prices, medicine, and education will remain hot topics on the Internet. Easing restrictions on the people’s livelihood and reordering the bureaucracy will be two keys to recapturing the people’s hearts. 6.2

6.3 There Will Be a Continued Expansion of Space for Public Opinion “Opening up to the Internet” and returning to the original, true opinion structure of society will be the prerequisites and guarantees for the planning and implementation of all new government measures. By observing and measuring popular opinions on the Internet and popular opinion in society, the government can deeply control the structure of social conflicts and find innovative measures for improving public administration. The government will place even more emphasis on the establishment of online platforms, and operating space for public discourse oversight will grow larger. The government will use the Internet to adjust social relationships, mitigate social resistance, and bring about flexible maintenance of stability and dynamic maintenance of stability. At the same time, as the Internet becomes the primary vehicle for public discourse, there will be more heated debates between segments holding different values and different directions. We think there will be more behavioral art such as “Weibo battles” and others.

Chapter 11

Differentiation of Economic and Political Status of Chinese Private Entrepreneurs Zhang Houyi and Lü Peng* Abstract Based on the Chinese Private Enrepreneurs Survey, we discovered that private business owners have ramped up political pursuits within their economic differentiation. About one third of private business owners are members of the Chinese Communist Party (CCP), and the more assets one owns, the more likely he or she is to be a member. Since 2002, 50 to 60 percent of private business owners with party membership have established party organizations in their companies, and the ratio of companies containing party organizations owned by non-party members to the total number of companies is growing between two to three percent annually. Seventy percent of party member private entrepreneurs personally serve as party chiefs in their companies. In addition, there has been a significant increase to the number of private business owners willing to join the Party.

Keywords private business owner – rights – appeals

Between the victorious convening of the Party’s 17th National Congress of the Chinese Communist Party and the victorious convening of the Party’s 18th National Congress of the Chinese Communist Party, China went through five years in which the private economy faced both challenges and opportunities. In the face of a complex, mercurial international environment, preserving proper economic, social, and political rights of private business owners in China is of particular significance to promoting the growth of the private *  Zhang Houyi, researcher at the Sociology Institute of the Chinese Academy of Social Sciences; Lü Peng, associate researcher at the Sociology Institute of the Chinese Academy of Social Sciences.

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economy. The achievements of the private economy over the past five years have been related to a certain degree to more effective protection of the legitimate rights of private business owners. Some problems and predicaments in the private economy can be mitigated to differing degrees by improving environment for the performance of various rights of private business owners. Based on that understanding, we will review the usage of economic, social, and political rights of private business owners over the five-year span from 2007 to 2012. We will both assess their economic differentiation statuses and analyze the changes and trends of their political identities. All data used in our analyses—unless otherwise specified—come from the United Front Work Department of the CPC Central Committee, the China Federation of Industry, the All-China Federation of Industry and Commerce, the State Administration for Industry and Commerce, and the “Chinese Private Business Owner Sampling Survey Data” as conducted in the “Chinese Private Business Owner Research,” organized by the Chinese Private Economy Research Institute. For more information about the data sampling, sample characteristics, and weighting used in this survey, please see the comprehensive analysis report issued annually by the Chinese Private Business Owner Research Group [中国私营企业研究课 题组]. We will give no more superfluous details here. 1

Increasing Diversity in Social Statuses among Private Business Owners

Since the 1990s, differences between private business owners have continued to grow, in economic indicators such as their net worth and share of private capital, and in social and political indicators such as class identity, lifestyle, and political treatment. Such differentiation has required that we assess the overall situation of private business owners from their perspectives as both owners of private property and as operators of businesses, and that we perform classification analysis on their economic and social statuses. Objective indicators indicate that most private business owners are widely considered to belong to the “mid echelon” or even “upper echelon” of the economic hierarchy. Data from the “Chinese Private Business Owner Sampling Survey” in 2010 indicate that in 2009, the highest household income among those surveyed was 80 million yuan. The average income was 297,000 yuan, and the standard deviation was 1.453 million yuan. This fact alone demonstrates that there is little significance to speaking about the social and economic status of private business owners in generalities. We employed a partitioning method to divide private entrepreneurs into classes based on their net worth. The five

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groups into which we subdivided them are: less than 1 million yuan, 1 to 5 million yuan, 5 to 10 million yuan, 10 to 100 million yuan, and over 100 million yuan. Table 11.1 demonstrates the household incomes and household expenditures of the various classes of private business owners from the 2009 survey. One should note that the differences between private business owners at different levels of net worth are apparent. The average total household income for business owners with a net worth of 1 million yuan was 165,000 yuan, up to 368,200 at the 10 to 100 million net worth level, and 1.2761 million at the over 100 million net worth level. As those surveyed may have had psychological misgivings about reporting high incomes, real disparities may be even greater. We can also see that there is no great disparity between the expenditures of mid to small net worth level private business owners and average urban resident household expenditures. The average annual household living expenditures of private entrepreneurs in the net worth class of under 1 million was 73,400 yuan, up to 85,100 at the 1 to 5 million net worth level. That figure jumps significantly at the 10 to 100 million level, up to 145,500, and then to 274,100 at the over 100 million level. These figures may reflect conservative personal assessments on the part of the business owners surveyed, but they still demonstratea great differentiation in the consumption levels of private business owners. Table 11.1 Household and living expenses of private business owners at different levels of net worth ( figures given in 10,000 yuan) Net worth

Total family income in 2009 Total household living expenses in 2009 Entertainment and health expenditures in 2009 Education and study expenditures in 2009

Under 1 million

1 to 5 million

5 to 10 million

10 to 100 million

Over 100 million

16.50

21.20

27.27

36.82

127.61

7.34

8.51

11.09

14.55

27.41

1.97

2.03

2.56

3.33

6.48

2.18

2.46

3.09

4.09

8.91

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Outside of objective economic indicators, subjective assessments of personal status on the part of private business owners is an important indicator through which we came to understand their social status. Past research has demonstrated that most private business owners assess themselves as being of middling status. In the Sampling Survey, we divided social status into 10 classes and asked respondents to pick the one they felt best represented their status in the social hierarchy as compared to other members of society. In order tomore clearly demonstrate relevant patterns, we then condensed the ten classes into three: 1 to 3 as “high,” 4 to 7 as “mid,” and 8 to 10 as “low.” We then conducted analysis on the personal assessments of economic, social, and political status as reported by business owners in the survey. Table 11.2 demonstrates survey results from 2009. Over 65 percent of respondents in the under 1 million net worth category reported themselves as being of “middling” status, with about 50 percent reporting their political status as “middling” or “low.” Between 1 million and 100 million, over 60 percent, and sometimes 70 percent, of respondents reported “middling” economic, social, and political status. There was a great increase to the proportion of respondents reporting their social status as “high” among business owners of net worth over 100 million, in excess of 50 percent. The proportion of that group reporting “high” political status (36 percent) was less than that reporting “middling” political status (52.8 percent). This may indicate that these individuals maintain hope of elevating their personal political status. Table 11.2 Assessments of personal status by private business owners of different net worth (%)

Net worth (yuan)

Under 1 million 1 to 5 million 5 to 10 million 10 to 100 million Over 100 million

Assessment of economic status

Assessment of social Assessment of status political status

High

Mid

High

6.4 13.4 18.8 29.4 52.0

65.4 28.3 7.3 65.7 27.0 6.7 49.5 43.8 74.7 12.0 12.4 73.5 14.1 9.9 63.5 26.6 70.5 10.8 20.9 69.1 10.0 19.1 61.1 19.8 63.2 7.4 26.4 65.3 8.3 21.6 59.7 18.7 45.6 2.4 50.4 44.8 4.8 36.0 52.8 11.2

Low

Mid

Low

High

Mid

Low

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Chinese Communist Party Membership among Private Business Owners Increasing Yearly

The aspirations of private business owners to increase their political status has been deemed important by both the Communist Party Central Committee and all levels of party organizations. This was proven by the proportion of party members attending this year’s 18th National Congress of the Chinese Communist Party. In 2002, members of the 16th National Congress of the Chinese Communist Party revised the party’s constitution, classifying private business owners as “advanced elements of other social strata” and one of the “six major new social strata,” thus allowing them to become party members. Also beginning in that year, the allowance of private business owners to serve as National Congress delegates became institutionalized. There were a total of seven private entrepreneurs among delegates tothe 16th National Party Congress. That number rose to 17 in the 17th National Congress and 34 in the 18th National Congress. The foundation of increases to the number of private business owner NPC delegates is a relatively high proportion of party membership among this group. Table 11.3 demonstrates that from 2006 to 2010, there were some fluctuations to the proportion of party members among private business owners, but the numbers remained for the most part stable: 36.4 percent in 2006, 33.5 percent in 2008, and 39.8 percent in 2010. Although the 2010 level marked a new high, it remains to be confirmed if this reflects reality or only a statistical deviation. Nevertheless, conservatively speaking, it is now a fixed trend that about one third of business owners in the survey are party members. Table 11.3 Changes to political status of private business owners (%) Political status

1995

1997

2000

2002 2004 2006 2008 2010

CCP member Democratic party member Communist Youth League member

17.1 5.0

16.6 19.8 Unknown 6.7

29.9 33.9 36.4 33.5 39.8  5.7 6.7  5.5  7.0  5.5

4.5

Unknown Unknown  2

6.8

4.5  7.7 Unknown

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Table 11.4 Party membership rates among private business owners of different net worth (%) Political status

CCP member Democratic Party member Masses

Net worth Under 1 million

1 to 5 million

5 to 10 million

10 to 100 million

Over 100 million

33.2  4.1

36.9 6.1

48.4 5.8

49.4 7.1

53.2 9.5

62.6

57.0

45.8

43.6

37.3

In Table 11.4, we used 2009 data as our basis to determine whether there are deviations in party membership levels between different levels of net worth of private business owners. This table demonstrates that there are higher levels of party membership among private business owners of greater net worth, with membership rates climbing from 33.2 percent at the under 1 million level up to 53.2 percent at the over 100 million level. It is also interesting to note that there is a similar trend for membership of the Democratic Party, with a 4.1 percent membership rate at the under 1 million level and a 9.5 percent membership rate at the over 100 million level. Of course, the reasons behind this phenomenon are complex, and so we cannot establish a cause-effect relationship for political status based simply on the net worth of business owners. 3

Private Entrepreneurs More Willing to Become Party Members

Over the years of the survey, we’ve asked private business owners their willingness to join the party, albeit using different interrogative methods. The question on the survey in 2008 was phrased, “if you are not a party member, have you submitted your party membership application?” In 2010, the question was phrased, “do you hope to join the Chinese Communist Party?” Strictly speaking, the question “are you willing to join the Chinese Communist Party” reflects a subjective attitude, whereas the question “have you submitted your party membership application?” reflects objective behavior. That is to say, it reflects a more proactive attitude. For that reason it is easy to understand the near 10 percentage point divergence between respondents who responded

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“willing to join the party” in 2010 (22.6 percent) and those who answered yes to “I have submitted a party membership application” in 2008 (10.3 percent). Nevertheless, we can still conservatively claim that in the past five years, approximately 40 percent of non-party member business owners were willing to join the party, and about 15 percent have submitted applications for joining the party. In addition, the 2010 survey also asked business owners their willingness to join the Democratic Party. Of all respondents, 203, or 4.4 percent responded affirmatively, 18.2 percent less than willingness to join the Chinese Communist Party. This is even lower than the figure recorded in 2000 for the same question (176 affirmative respondents, 5.7 percent). We can thus infer—with consideration for the influence of statistical deviations—that willingness of private business owners in the past 10 years to join the Democratic Party has not exhibited any marked growth. We already know that of the 4433 survey respondents in 2010, 1838 were Chinese Communist Party members, and 2595 were not members of the Chinese Communist Party (254 were members of the Democratic Party, and 2341 either had no party affiliation or refused to answer). Further analysis demonstrates that of the non-CCP members, 979 (38 percent) were willing to join the CCP, and 192 (7 percent) were willing to join the Democratic Party. That is to say that among non-CCP member business owners, there is more willingness to join the CCP than to join the Democratic Party, although there were some individual instances of willingness to join either party. In addition, 29 Democratic Party members (11 percent of all members in the survey) expressed the desire to join the CCP. 4

Party Construction in Private Businesses and Corporate Governance Structures

There is a strong connection between whether a private business owner is a party member and whether there are any party organizations within his enterprise. As demonstrated in Table 11.5, the proportion of party member business owners whose businesses contain party organizations is over 50 percent higher than the proportion for non-party members. In 2006, there were party organizations within 56.1 percent of businesses owned by party members, 56.3 percent in 2008, and 48.8 percent in 2010. Those rates were 22.4 percent, 26.8 percent, and 24.3 percent among non-party member business owners in the same years.

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Table 11.5 Changes over the years to corporate party organizations in ccp-member-owned enterprises and non-ccp-member-owned enterprises (%) 1993

2000 2002 2004 2006 2008 2010

Proportion of CCP member-owned 12.1 39.0 49.7 51.2 56.1 56.3 48.8 enterprises with party organizations to all enterprises  2.7 12.1 17.9 19.4 22.4 26.8 24.3 Proportion of non-CCP memberowned enterprises with party organizations to all enterprises Proportion as compared to all  3.9 17.5 27.5 30 36.7 47.8 35.1 enterprises

One can see from Table 11.5 that there has been a trend since 2002 by which 50 to 60 percent of private enterprises owned by party members contain party organizations. This trend may be related to the aforementioned entry of a large amount of “reform” enterprises. The ratio of non-party member enterprises containing party organizations has grown about two to three percent every two years since 2002, and the fluctuation in 2010 may be attributable to the data. We require further analysis to determine what reasons are prompting growth of party organizations in enterprises owned by non-party members. In general, as demonstrated by Table 11.5, the proportion of private enterprises containing party organizations has grown steadily since 2002. The ratio was 27.5 percent in 2002, 30 percent in 2004, 36.7 percent in 2006, and 47.8 percent in 2008. In consideration of the situation in 2010, we can conservatively clam that about 30 to 40 percent of private business owners have at present established party organizations in their enterprises. At another level, one should note that about 40 to 50 percent of private enterprises owned by party members do not contain party organizations. In reality, as demonstrated by past researchers, one factor determining whether private business owners will establish party organizations in their enterprises is their attitude toward establishing party organizations. Another factor is whether the enterprise employs enough party members to adhere to the basic requirements for establishing party organizations. The surveys in 2006 and 2008 both inquired as to the number of CCP members employed by private business owners. The data indicate that 31.7

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percent of private businesses employed no CCP members in 2006, down to 16.6 percent in 2008. If we take “no response” to mean a complete lack of CCP member employees, the figure was 64.3 percent in 2006 and 36 percent in 2008, a drop of 28.3 percent. The total number of CCP members employed by private businesses is not large, and those members who are employed in private businesses are highly dispersed. The median answer for number of CCP members employed in private businesses was two in 2006 and three in 2008. The average was 7.6 in 2006 and 9.7 in 2008, and the standard deviation was 22.9 in 2006 and 29.6 in 2008. The Chinese Communist Party Constitution stipulates that “all enterprises, villages, organs, schools, research institutes, neighborhoods, People’s Liberation Army companies, and other grassroots units containing three or more formal party members should establish grassroots party organ­izations.” The reality, however, is that not all enterprises employing three or more party members have established party organizations. We must perform further analysis to determine whether other factors (such as the professional experience inherent to an individual enterprise, whether it has been reformed, its industrial distribution, its region, and so forth) have played a role. Figure 11.1 demonstrates changes over the years to the establishment of party organizations and other governance institutions in private enterprises. We found that first, the proportion of enterprises containing party

Figure 11.1 Proportions of party organization establishment among private business owners over the years

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organizations has basically maintained a rising trend in the past ten years, which proves that internal organization construction of private enterprises is being ever improved. Second, enterprises are becoming more passionate about establishing organizations related to “modern corporate systems,” and less passionate about “political organizations.” This fact is demonstrated by the large degree by which boards of directors and boards of supervisors out number party organizations in enterprises. The number of enterprises in the survey containing boards of directors grew from 47.6 percent in 2002 to 57.8 percent (a 10.2 percent increase), while the proportions for boards of shareholders grew from 34 percent to 57.1 percent (an increase of 23.1 percent). There was, however, only a 7.2 percent increase to the proportion of enterprises containing party organizations from 2002 to 2010, and workers’ representative assemblies increased by only 4.3 percent over that period. It is note worthy that there are two exceptions here. The first is that the ratio of enterprises with boards of supervisors has been consistently low, about on par with the ratio of those enterprises with party organizations at about 30 to 40 percent from 2006 to 2010. The second is the high incidence of unions in private enterprises, consistently above 50 percent these last five years. We must conduct further studies to determine if this is the result of increases to “reform” enterprises among the survey samples (it is possible that some “reform” enterprises had previously established union organizations) or the result of efforts and promotions of the All-China Federation of Trade Unions (ACFTU). In summary, Figure 11.1 provides us with a more complete and direct understanding of the arrangement of party organizations within private enterprises. It is also worthwhile to note that among those private enterprises that do contain party organizations, the owners themselves serve as the organization’s party committee secretary in nearly 70 percent of cases (453 people or 67.7 percent in 2008, and 496 people or 66.7 percent in 2010). We must perform further analysis to determine what kind of private business owner is most likely to serve as the head of a corporate party organization. We observed no apparent connection between the existence of party organizations in an enterprise and whether major enterprise policies are determined by the owner directly. That is to say that private enterprise decision-making authority is more closely related to corporate governance structures, and is not very closely related to such political organizations as party organizations. For rhetorical purposes, we here insert the results of an “attitude test.” The survey asked respondents in 2008 and 2010 “what higher-level party organ­ ization’s management of party organizations in private enterprises would

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be more beneficial?” In 2008, 38.6 percent chose the response “local party committee,” down to 35.4 percent in 2010. Another 37 percent chose “local industrial and commercial party federation” in 2008, up to 42.3 percent in 2010. In 2008, 23.6 percent chose “individual private association party organization,” down to 21.2 percent in 2010. In 2008, 0.8 percent chose “other (such as a party community workers’ committee),” up to 1.2 percent in 2010. Further analysis demonstrates that these attitudes have no relation to whether the private business owner personally serves as secretary of the enterprise party organization. If we held that responses of “local industrial and commercial party federation” and “individual private association party organization” reflected a certain degree of “willingness to self-administer,” then we would see that this proportion has exceeded 60 percent in both surveys (60.6 percent in 2008 and 63.4 percent in 2010). 5

Appraisals of the “36 Non-public Economy Articles”

In February 2005, the State Council issued the Opinions Regarding Encouraging, Supporting, and Guiding Non-Public Economic Development in Individual Private Enterprises [关于鼓励支持和引导个体私营等非公 有制经济发展的若干意见]. This is the first central government document to encourage development of the non-public economy since the founding of New China. The document contained 36 articles, and so has been called “Non-public Economy 36 Articles” for short. In the survey in 2006 and 2010, we asked respondents to appraise the Articles (in 2008 we asked respondents for their appraisal of the Labor Contract Law). The actual questions posed in both years were slightly different. The question in 2006 was, “have there been improvements to the development environment for private businesses in the year since the 36 Articles were issued?” There were 10 questions, each of which could be graded between 1 to 4 (marked improvements, some improvement, none, and situation worsened). In 2010 the question was, “In the five years since the State Council issued the ‘Opinions Regarding Encouraging, Supporting, and Guiding Non-public Economic Development in Individual Private Enterprises,’ all local governments and relevant departments have established a series of accompanying policies. Do you think that accompanying policies in any domain have been effective in improving the corporate operations environment?” There were nine questions on that survey, graded from 1 to 3 (marked effects, effects not marked, and none). Table 11.6 presents the combined results.

203

Differentiation of Economic and Political Status of Chinese Table 11.6 Assessments of the “36 non-public economy articles” (%) Question

Variable

2006

2010

measurements Frequency

Percentage

Frequency

Percentage

747

23.7

2300

56.1

1985

62.9

1543

37.6

406 17

12.9 .5

260

  6.3

358

11.9

1591

39.2

1676

55.6

2042

50.3

938 40

31.1   1.3

428

10.5

Improving government regulation methods and standardizing fee-collection behavior

Marked 470 improvements/ effects Some improvement/ 1760 effects None 686 Situation worsened 75

15.7

1616

40.9

58.8

1971

49.9

22.9   2.5

366

9.3

Strengthening guidance and policy coordination

Marked 371 improvements/effects Some improvement/ 1883 effects None 644 Situation worsened 19

12.7

1740

43.5

64.6

1940

48.5

22.1 .7

321

8.0

Relaxing market entry thresholds

Improving the financing environment

Marked improvements/ effects Some improvement/ effects None Situation worsened Marked improvements/ effects Some improvement/ effects None Situation worsened

* Explanation: The actual answers contained in the 2010 survey for the first fourquestions were “effects marked,” “effects not marked,” and “no effect.” The answer of “progress made” is different from the 2010 answer of “effects not marked.” The first is an affirmative response, while the second is a negative response. Thus strictly speaking, it is difficult to consider them to reflect the same attitude. The inclusion of “situation worsened” into “no effect” would also cause problems.

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As there were some deviations in the scale of the two survey into attitudes, it is not proper for us to make substantive comparisons between them. However, in the four years since the issuing of the 36 Articles, the results of the implementation of the 36 Articles by private enterprises have not brought about a steep increase in negative criticism, but the general public has called the regulations a situation of “state gains and popular losses.” In reality, if we observe the response “none,” we will discover that there has been a great decrease to the proportion of people who responded with the negative response of “none.”

Chapter 12

2012 Peasant Development Report Fan Ping* Abstract The year 2012 saw China’s ninth consecutive year of bumper crop. This achievement can be attributed to advances in China’s agricultural modernization of recent years, as well as in major adjustments to the distribution of China’s agricultural production capacity. Persistent changes to the employment structure of the rural labor force have on the one hand helped increase occupational differentiation for rural workers and on the other greatly changed the source structure of income for the rural population. Rural society is currently in a key era of modernization, and both rural public welfare and rural social organizations are steadily growing steadily. However, the high incidence of social conflicts and degree of tension in rural areas deserves serious attention.

Keywords agricultural modernization – distribution of agricultural production capacity – occupational diversification of farmers – rural social transformation

China marked its ninth consecutive year of bumper crop in 2012. The state further strengthened policies designed to benefit and enrich farmers and greatly increased investments towards resolving the “Three Rural Issues.” Overall rural agricultural economy maintained steady growth. A regional distribution of agricultural production capacity is beginning to take form, and there have been marked increases to both the scale of agricultural operations and the level of agricultural mechanization. Rural incomes are growing rapidly. Advances in agricultural technology have helped improvethe social service system for agricultural production. The peasant population continues to differentiate internally, and both moving among multiple jobs—both agricultural and non-agricultural—and professionalization of scale operations have *  Fan Ping is an associate researcher at the Sociology Institute of the Chinese Academy of Social Sciences.

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become widespread. Rural incomes are growing faster than urban incomes, but since baseline of rural incomes was low to begin with, urban-rural income disparity continues to grow in absolute terms. Moving among multiple jobs in different sectors and professionalization of scale operations are coming to coexist in agricultural operations, and there have been marked increases to the levels of agricultural technology and agricultural mechanization. Levels of public services provided in rural communities are on the rise, and basic guarantees have been established. All farmers are now beginning to benefit from social security. At the same time, transformation of rural villages has begun to accelerate. The awareness among rural residents of land usage rights and community resource interests has hightened, but there are still frequent conflicts over excessively low compensations for requisitioned land. 1

Agricultural Modernization and the Distribution of Agricultural Production Capacity

In 2012, China’s agricultural production developed steadily, and marked the ninth consecutive year of grain yield increases. Cotton, oil crops, and sugar crops yields remained steady. Aggregate yield of sugar crops grew. The livestock industry maintained steady development, and the dairy industry’s aggregate production increased. Aquatic food production grewsteadily, and the animal husbandry industry maintained steady growth throughout the year. The development of agricultural production in China owes much to advances in agricultural modernization and recent adjustments to the regional distribution of agricultural production that have proven particularly effective in facilitating increases in agricultural yield. 1.1 Advances in Agricultural Modernization The most prominent manifestations of the development of agricultural modernization are increases to the level of agricultural mechanization and advances to the organization of agricultural production. At the agricultural mechanization level, progress has been rapid since entry into the 21st century. From 2001 to 2011, the total capacity of nationwide agricultural machinery rose from 551.721 million kilowatts to 977.347 million kilowatts, an increase of 77.1 percent. The number of large and mid-sized tractors grew from 829,900 to 4,406,471, 4.3-fold increase. The number of small tractors grew from 13,050,840 to 18,112,663, a 38.8 percent increase. The number of diesel-powered irrigators grew from 7,285,693 to 9,683,914, a 32.9 percent increase. The effective area of

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land under irrigation grew from 54,249,400 hectares to 61,681,600 hectares, an increase of 13.7 percent, and electricity consumption in rural areas grew from 261.08 billion kilowatt-hours to 713.96 billion kilowatt-hours, a 1.7-fold increase. Sustained increases to the level of agricultural mechanization have laid a solid foundation for agricultural development. The primary manifestation of organization of agricultural production is the development of specialized farmer cooperatives. In recent years, specialized farmer cooperatives have grown rapidly. As of the end of the first quarter of 2012, the total registered number of such cooperatives was 552,000; their membership over 43 million households, about 17.2 percent of all rural households. Specialized cooperatives have now become the principal body of modernized agriculture in Chinese rural villages. The industry distribution of specialized farmer cooperatives is broad, as they touch on crop and livestock raising, processing, and the service industry. Of those, the farming industry accounts for about 44 percent, and the livestock raising industry accounts for 29 percent. They cover such major products as grains, cotton, edible oils, meat, eggs, dairy, fruits, vegetables, tea, and so forth, and are gradually expanding into such domains as agricultural machinery, plant protection, folk arts, tourism, recreational farming, and so on. As the abilities of these cooperatives gradually increase, more and more cooperatives will provide more than merely technical and information services and extend into supply of means of agricultural production and provision of systemic prevention and clean-up services. They will also extend from pre-production and mid-production services into such post-production services as packaging, warehousing, processing, and shipping. Some are even beginning to establish internal credit cooperative services. As of the end of 2011, 48.9 percent of specialized farmer cooperatives provided integrated production and sales services, and 111,000 cooperatives had established processing enterprises. They had also established 26,000 outlets in urban communities. Many cooperatives have strengthened horizontal alliances and cooperation and have transformed individual cooperatives from “small sampans” to “large fleets.” They have also strengthened their market competitiveness. As of the end of 2011, there were 2140 cooperative associations of all varieties around the country. The emergence of allied cooperatives all over China has further increased the degree of agricultural organization. The Jiangsu provincial government has guided and supported specialized cooperatives in the establishment of sales cooperatives to integrate product sales. There are now 73 such cooperative alliances in that province, selling products of 1285 specialized farmer cooperatives in urban outlets. They earned 740 million yuan in 2011.

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Some specialized farmer cooperatives have also established credit services. The number of rural cooperatives offering credit and financing services has doubled. Their growth rate is much faster than that of such official rural financing institutions as village and town banks. They have driven growth in the rural financing industry. Investigations by relevant departments have found that 18.4 percent of cities and counties investigated contained specialized farmer cooperatives offering credit and financing services. In those counties, there was an average of 58.5 rural cooperatives that engaged in credit and financing services. Those cooperatives are able to meet the credit demands for the growth of agricultural production to a large degree. On the whole, China’s specialized farmer cooperatives are transforming from a model of quantitative expansion toward a model of both quantitative expansion and quality improvement. They are also changing from a model of focusing on joint production to a model of integrated production and sales and from single factor cooperation toward multi-factor cooperation in labor, technology, capital, land, and so forth. At the same time, such factors of these cooperatives as integrated land usage, capital, and technology are driving expansion of superior and particular industry scales and the formation of matching industries. This has effectively driven growth to operations of appropriate scale in agriculture. As of the end of 2011, specialized cooperatives were involved in 30.55 million mu of land, 13.4 percent of China’s total quantity of transferred arable land. New Development in the Distribution of Agricultural Production Capacity The most prominent manifestation of changes to the distribution of agricultural regional production capacity is the increase to the concentration level of China’s grain production. In recent years, the degree of concentration of China’s grain production has fluctuated but generally displayed a rising trend. The concentration index in rice production grew from 47.63 in 2000 to 47.92 in 2010. Research indicates that the concentration index for wheat production has risen markedly, while for corn production it picked up considerably between 1978 and 1990, but thereafter began a slow decline. This indicates that the degree of concentration in the production of corn is gradually decreasing. Among all varieties of grain crops, the degree of concentration is lowest for rice production, highest for wheat, with corn somewhere in between. Regional distribution of grain production has become increasingly concentrated. One can portray changes to the regional grain production situation using indicators for the degree of production concentration, 1.2

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where production concentration refers to ratio between the production of a given product in a given region and its production nationwide. China’s grain production is gradually becoming more concentrated in the northeastern and central regions. Decreasing grain production concentration in the east is the most striking. The concentration degree there fell from 41.06 in 1978 to 31.2 in 2010. Decreases have been fastest in Jiangsu, Zhejiang, and Guangdong. On the other hand, grain production concentration has been increasing in the central China, which currently accounts for about half of the country’s aggregate grain production. The margin of growth has been most significant in such provinces as Henan, Heilongjiang, and Jilin. Grain production concentration in western regions has been in a general statemild fluctuations, but in the past 10 years it has begun falling, especially in Sichuan, which ranked number one in grain production in 1978 but is now only fifth. Rice production concentration in the east has been falling for a long time, its production concentration indicator falling from 43.52 percent in 1978 to 30.67 percent in 2010. Decreases have been the greatest in Guangdong and Zhejiang. Rice production concentration in the central region has risen consistently since 1978, with the region accounting for over half of national aggregate in 2010. Rice growing in regions in the south regions with favorable conditions continue to be strong and steady. The importance of the northeastern as a major rice producing region is growing. The region currently produces about 10 percent of the nation’s aggregate rice output, and the region is making rapid progress in large-scale farming and agricultural mechanization. Changes in the western region have been relatively slow by comparison. Wheat production has also grown consistently in terms of its level of concentration. Overall, more wheat production is shifting toward central China. Fluctuations in wheat production concentration in the east have been mild, but there has been an overall decline over the past 10 years. Rising trends in central China over the past 10 years have been striking, with the region’s wheat production concentration level growing from 37.31 percent in 2000 to 44.58 percent in 2010. Concentration levels of wheat production in such provinces as Henan and Anhui have grown consistently. Wheat production in the wester regions, however, has decreased markedly, with the largest margin of decrease in such provinces as Sichuan, Shaanxi, and Gansu. Corn production has gradually shifted toward the northeast and the Central Plains. Corn production concentration level in the eastern region has decreased markedly, but increased markedly in the central region, where it grew from 41.62 percent in 2000 to 50.47 percent in 2010. Now central China accounts for over half of nationwide corn production. Heilongjiang and Jilin

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are numbers one and two in corn production, which has grown in those two provinces consistently in recent years. Corn production in the western region has gradually decreased, amid fluctuations. State Policies for Assisting Farmers Facilitate Agricultural Modernization and Increases in Production Capacity At present, the state’s various policies to help farmers are slanted toward major grain producing regions and large-scale grain farms. In 2012, Document Number One issued by the central government—historically the one document dedicated to issues related to agriculture, famers and rural areas—demanded that all new agricultural subsidies “tilt toward primary production regions, largescale farms, and specialized farmer cooperatives.” This year, there has been slight growth to all agricultural subsidies, with particular increases to subsidies for large farms and family farms with production specialities. In 2012, on average each household received 304 yuan in various forms of subsidies, a yearon-year increase of 8.1 percent. All county governments surveyed reported offering subsidies for purchasing agricultural machinery, and the scale of said subsidies continues to grow. Of all counties investigated, 26.4 percent prioritized large grain farms, family farms, and specialized farmer cooperatives for comprehensive agricultural subsidies. There have been some problems in the implementation of the “Three Rural Issues” policies, primarily in the slow disbursement of subsidy payment. Central Document Number One in 2009 proposed “gradual phasing out of the requirement for matching contribution toward the national grain fund from primary production regions,” but 15.1 percent of counties investigated were still subject to such requirement. Another 10.0 percent of counties were still making matching contributions towardirrigation projects at the county level and below. Disbursement has been tardy of the initial capital for establishing production bases in the northeast, Inner Mongolia and the Yangtze basin for high quality soybean and rapeseed low in both euricic acid and glucosinolates, and cotton production bases throughout the Yangtze basin and the regions of the Yellow, Huaihe, and Haige Rivers. In 2012, there was an 18.1 percent reduction to central and provincial level fiscal investments and a 22.7 percent decrease in county-level investments over the previous year toward five key livelihoodimprovement projects” into the same. In addition, state fiscal investments into agriculture in some regions has shown mild decline. Policy implementaion is unevent between regions, and some measures for benefitting farmers have not yet been put in place. 1.3

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Differentiation among Farmers

In recent years, there has been a sustained trend of differentiation among China’s farmer population, primarily in two areas. The first one is the sustained growth of holders of rural hukou but who reside in cities and work in nonagricultural sectors. Second, As rural family income increases on the whole, it has also shown notable trends toward increasing differentiation and structural adjustments. Non-Agricultural Employment of Farmers Continues to Grow, Driving Diversification of Jobs for Rural Population Increases in the number of rural population entering non-agricultural sectors have accelerated the growth of occupational diversification for this group. From 1984 to 1988, the amount of labor absorbed by township enterprises grew from 52.08 million to 95.45 million, representing an average annual increase of 10.84 million, or 16.4 percent. In fact, the number of people employed by township enterprises nationwide at the time was comparable to the number of people employed in public institutions (99.84 million). From the late 1980s through the 1990s, township enterprises’ role as the chief sector to absorb rural surplus labor gradually diminished, and more and more of the rural population would opt to look for employment opportunities away from their hometown. At that time, China’s farmers’ professions further diversified as they began to enter many more fields and sectors than they had before. That trend has persisted to the present. The results of an investigation by the National Bureau of Statistics indicate that at the end of the third quarter 2012, there were a total of 168.67 million rural laborers who had left their home village to seek employment, a year-on-year increase of 3.0 percent. Although national GDP growth had slowed slightly as compared to 2011, the number of rural laborers leaving their home to find employment remained unaffected. Per a classical survey conducted by the Ministry of Agriculture’s Rural Economy Institute at fixed observation points in villages around the nation in August 2012, 3.5 percent of rural laborers employed outside their native areas opted to return home due to poor performance of the enterprises they worked for. Economic growth remained rapid in China’s central regions, which were able to absorb more labor supply. Although the contributions of the eastern region to employment growth decreased, there was a labor shortage, most notably technical workers in non-specialty fields. Data from the Sixth National Population Census in 2010 indicate that of all people employed in the rural areas, 74.78 percent were in farming, forestry, animal husbandry, and fishery, a drop of 6 percent from 2006. Another 2.1

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15.64 percent were employed in production, shipping, and machinery operation, an increase of 5.2 percent over 2005. Another 6.53 percent were employed in the commercial and service industries. Very few people employed in the rural areas were professional technicians, office workers, or government employees, CPC organizations, state-owned enterprises, or public institutions. There has been a significant increase in the proportion of people with rural household registration wroking in non-agricultural sectors. There are wide disparities in the occupational diversification among farmers between regions. In regions where industrialization and urbanization have been slow, so too has the occupational diversification occupational diversification of farmers. Table 12.1 demonstrates that a smaller proportion of the population is engaged in agriculture in provinces such as Zhejiang and Shandong, where economic growth is relatively high. In central provinces such as Hebei and Henan, about 40 percent of the total populations are engaged in agriculture. The western province of Sichuan is a large exporter of rural surplus labor, but the percentage of its population engaged in agriculture remains high. For many years, Yunnan has been the Chinese province with the highest percentage of its population engaged in agriculture. Economic development and rural resident quality of life standards there are relatively low. Table 12.1 Economic situations and proportions of population engaged in agriculture in some regions, 2010 Zhejiang Shandong

Per capita GDP (yuan) Rural resident consumption level (yuan) Percentage of employed population engaged in agriculture (%)

Hebei

Henan

Sichuan

Yunnan

50932

40891

28384

24561

21370

15715

9878

5733

3867

4061

4748

3603

15.9

35.4

38.8

44.9

42.9

59.4

Data source: China Statistical Yearbook 2011.

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A major factor affecting rural population’s citizen occupational diversification is the rate of urbanization in all areas. Relevant statistics indicate that there is a close correlation between the degree of occupational diversification of rural citizens and the degree of urbanization in a given province. The larger the cities in a region and the more area they occupy, the greater the proportion of rural population in that region who will be employed in non-agricultural enterprises, showing a higher degree of occupational diversification. Rural Resident Incomes Continue Growing, Faster Than Income Growth for Urban Residents In 2012, rural resident incomes maintained rapid growth, and at rates higher than those for urban incomes. In the first three quarters, rural resident per capita cash income was 6,778 yuan, a real growth of 12.3 percent. It is possible that nationwide rural resident net income growth will be near 10 percent for the year. Rural resident incomes are growing 2.5 percent faster than urban resident incomes, and the disparity between urban and rural incomes has shrunken from 2.77:1 last year to 2.72:1 this year, a record low in recent years. That ratio has been shrinking continuously for the past three years, demonstrating that state policies of integrating urban-rural economic and social development, proactively adjusting income distribution, and protecting and improving rural livelihoods through feasible means have worked. This also demonstrates that the urban-rural relationship is becoming better and more harmonious. Of course, this conclusion is based only in observations of the margin of increase to urban and rural resident incomes. If we look only at absolute numbers, the urban-rural disparity continues to grow. 2.2

Structural Adjustment to Rural Resident Income Continues, and Income from Non-Agricultural Work Continues to Grow Income structure for rural residents reflects the changes to the engagement of China’s rural labor force in other professions. Table 12.2 demonstrates for rural residents, the contribution of growth in their income from agricultural work toward the growth in their total household income is falling. All other incomes are growing steadily, and wage income is growing the fastest. Changes to the structure of sources of rural resident household net incomes indicate two major characteristics of occupational diversification for the rural population. The first is that fewer rural citizens are engaged in agriculture and more are engaged in other professions. The second is that income from non-agriculture sector jobs is growing rapidly and making up a larger portion of their aggregate income. Occupational diversification is instrumental for increasing income for the rural population. 2.3

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Table 12.2 Per capita rural net income and breakdown by sources (Unit: yuan) 1990 Net income Wage income Household business net income Agricultural income Industrial income Construction industry income Transportation, shipping, or postal income Wholesale, retail, and food & beverage income Culture, education, and health industry income Property income Transfer income

3

1995

2000

2005

2008

2010

686.31 1577.74 2253.42 3254.93 4760.62 5919.01 138.8 353.7 702.3 1174.53 1853.73 2431.05 518.55 1125.79 1427.27 1844.53 2435.56 2832.8 344.59 9.15 12.18

799.44 13.63 34.53

833.93 1097.71 1426.96 1723.49 52.67 61.13 81.59 93.32 46.73 47.12 67.41 88.75

13.45

27.76

63.63

84.19

103.82

125.40

12.69

34.26

78.54

108.55

142.09

186.43

—

—

6.86

10.13

16.89

21.56

— 28.96

40.98 57.27

45.04 78.81

88.45 147.42

148.08 323.24

202.25 452.92

Rural Society’s Modernization is Accelerating

In 2012, there was steady development in rural public interest enterprises and social enterprises. Data indicate that 92 percent of counties investigated have been included within the scope of the “one matter, one discussion [一事一议]” fiscal incentive and subsidy pilot for the construction of rural public welfare. As compared with the previous year, per capita education expenditure for elementary and middle school students increasedly slightly, and 95 percent of counties investigated provided living assistance for students from low-income families and boarding in school dormitories. There was a 14.6 percentincrease over the previous year to rural subsistence assistance at the county-level in 2012, and subsistence subsidies funding levels grew 16.8 percent. The margin of growth for overall expenditures for rural subsistence assistance exceed that for subsistence assistance, and there was significant increase to the share of the population receiving rural subsistence assistance. In 2012, 93 percent of counties investigated increased their funding for the New Rural Cooperative Medical Scheme.

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Restructuring of Chinese rural community social management methods and the transformation of rural traditional society into a modern community society have brought deep social changes to China’s countryside. In recent years, the rural public services system has made some great achievements. Rural infrastructure has been further advanced, and rural quality of life has been greatly improved. However, there has still been no fundamental change to the imbalanced nature of public services. Such factors as insufficient supply, an imbalanced supply structure, and unequal supply have made supply efficiency rates low. This remains a predicament which rural public services suppliers must face directly. In recent years, large amounts of China’s rural population have relocated. The various interest relationships in the countryside are becoming increasingly complex. The concepts of rural citizen participation, upholding of rights, and democracy are growing ever stronger, and agriculturally employed people are entering an era of diversification. This has driven rural development into a stage of accelerated transformation. China’s rural society faces many serious problems and challenges in this stage of accelerated transformation. The fundamental characteristics of China’s modernization are urbanization, industrialization, marketization, and agricultural modernization. In the course of development, land has become both an important resource and a means of macroeconomic regulation, which has caused deep changes to both the amount of arable land and rural social relations. A large portion of rural social conflicts is attributable to problems in the allocation of land resources. Land rights are becoming a central issue affecting rural social relations and social order. The amount of social conflicts caused by land rights disputes is on the rise. As the scale of disputes grows, so will the difficulty of coordination and resolution. To properly resolve these problems, we must not only use the ever-improving social security system to support rural villages and the rural population, but also help or guide the rural population in the reasonable use of resources, respond to the needs of social development, and increase the value of the rural population in the current job market. We must help them adapt to new development in the countryside and creatspace for development. At the level of agricultural production, we must continue to drive large-scale operations. This is a necessity for the development of the economy and society, a requirement of agricultural modernization, and the only choice for China’s rural reforms if it is to shift from increasing proactivity of production toward increasing land production efficiency.

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References Li Yibo et al. 李逸波等, “Zhongguo nongmin zhiye fenhua xianzhuang fenxi [中国农 民职业分化现状分析, Analysis of the Current Differentiation of Professions among China’s Peasants],” Diaoyan shijie 调研世界, (2012): 10. National Bureau of Statistics 国家统计局, Zhognguo Tongji Nianjian《中国统计年 鉴》[China Statistical Yearbook]. Zhongguo Tongji Chubanshe, several years. Rural Economy Research Institute, Ministry of Agriculture 农业部农村经济研究中 心, 2012 nian nongcun zhengce zhixing baogao 2012 年农村政策执行报告 [Rural Policy Execution Report, 2012]. Tan Zhixin et al. 谭智心等, “Zhongguo liangshi shengchan quyu buju de yanbian tezheng ji chengyin fenxi 中国粮食生产区域布局的演变特征及成因分析 [The Evolution Characteristics and Causal Analysis of the Distribution of China’s Grain Producing Regions],” Diaoyan shijie 调研世界 (2012): 09. Yan Xianpu 严先溥, “Dui woguo jumin xiaofei nengli de jiben panduan yu sikao 对我 国居民消费能力的基本判断与思考 [Fundamental Evaluations and Reflections on China’s Resident Consumption Capacity],” Diaoyan shijie 调研世界 (2012): 07.

Chapter 13

Labor Relations Regulations and Institutions amid Slow Economic Growth, 2012 Qiao Jian* Abstract China’s economic growth slowed in 2012, but the employment situation was not severely affected. Wages continued to grow, and income distribution reform plans will soon be issued. Progress has been smooth in increasing the coverage of and collecting payments for workers’ social insurance, and we have basically achieved a full coverage of urban-rural residents’ pension insurance. Overall employment safety for workers has stabilized, and new labor protection laws are constantly issued. There has been a stable growth to labor disputes, and “new workers” and “new blue-collar” workers now constitute the principal force of China’s labor. At the same time, there has been a new progress in collective labor relations and regulations and institutions, and the focus of which has been on driving industry collective bargaining. Revisions to the Labor Contract Law will soon be issued, placing rigorous controls on labor dispatching. Overall, reversals in supply and demand on labor markets and policies for establishing harmonious labor relations are gradually beginning to make an effect. They are the two major reasons behind the stability in China’s labor relations.

Keywords labor relations – new workers – “new blue-collar” workers – labor dispatching

*  Qiao Jian is associate professor and director of the labor relations department at the China Institute of Industrial Relations.

© koninklijke brill nv, leiden, ���5 | doi ��.��63/9789004276536_013

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Current Status of the Laborer Population

The Employment Situation Has Not Been Markedly Affected by Economic Slowdown Since 2012, China’s economic growth has slowed, and its overall downward trend rather marked. GDP growth slowed from 9.2 percent in the fourth quarter of 2011 to 8.2 percent in the first quarter of 2012, then to 7.6 percent in the second quarter and 7.4 percent in the third. The primary reason for the slowing is a decrease to the growth of exports and to real estate investments. An economic downturn has a slowing effect on supply and demand on labor markets. According to an analysis conducted by the MOHRSS Market Information Monitoring Center of job supply and demand information compiled by government-run job placement service centers in 102 cities, there was a reduction to market demand for labor and an increase in jobseekers in the second quarter of 2012 as compared to the first quarter. A comparison of supply and demand reveals that in the 102 investigated cities, employers used government-run job placement service centers to recruit a total of 6.335 million workers of all types. There were 6.037 million jobseekers on the market, and the ratio of vacant jobs to jobseekers was about 1.05, a reduction of 0.03 from the second quarter, and a year-on-year decrease of 0.02. Figure 13.1 demonstrates that there has been a significant decrease since the second quarter of 2009.25 As of the end of the third quarter in 100 investigated cities, enterprises were recruiting 6.433 million workers of all categories, and there were 6.10 million jobseekers. The ratio of vacant jobs to jobseekers was 1.05, same as the second quarter. Among 95 cities, labor demand in the third quarter reduced by 413,000, or 6.8 percent, and the number of jobseekers fell by 266,000, or 4.6 percent. Both demand and supply of labor declined. Of all labor demand, 98.4 percent was concentrated in secondary and tertiary industries. As compared to the second quarter and the same period in 2011, there was a drop to the proportion of demand in secondary industries, but a rise to that in tertiary industries.26 1.1

25  “2012 nian di’er jidu bufen chengshi gonggong jiuye fuwu jigou shichang gongqiu zhuangkuang fenxi 2012 年第二季度部分城市公共就业服务机构市场供求状况分析 [Analysis of Job Supply and Demand Information Compiled by Government-run Job Placement Service Centers in Select Cities, 2nd Quarter 2012],” Zhongguo jiuyewang 中国就业网 [chinajob.gov .cn], accessed July 30, 2012. 26  “2012 nian di’er jidu bufen chengshi gonggong jiuye fuwu jigou shichang gongqiu zhuangkuang fenxi 2012 年第二季度部分城市公共就业服务机构市场供求状况分析 [Analysis of Job Supply and Demand Information Compiled by Government-run Job Placement Service

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At the end of July and beginning of August 2012, one could observe in newspaper reports a trend among migrant laborers in some regions in which they return to their native places.27 However, results from a MOHRSS investigation into 600 enterprises in 20 provinces in August show that enterprises were employing approximately the same number of people as in the previous year, and that there had been no major layoffs. There was also an increase to job shift among rural surplus labor. There was not a large increase to the number of migrant laborers returning home in June and July in 2012 than that of in 2011, and there was no major trend among migrant laborers to return home in those months.28 On the whole, supply and demand are balanced on labor markets, but as compared with the same period in 2011, there have been increases to labor demand. Nonetheless, the overall employment situation remained basically stable. From January to September, urban employment figures grew by 10.24 million, and 4.32 million had previously been unemployed. Another 1.35 million people with employment difficulties found jobs. All these figures exceeded this year’s targets. At the end of the second quarter, the nationwide registered unemployment total was 9.18 million people and the urban registered unemployment rate was 4.1 percent. The rate for the third quarter was also near 4.1 percent, and is the same for the end of 2011.29 Data from some provinces indicate that the university graduate initial employment rate is slightly better than in 2011, with a 94.65 percent rate in Guangdong, an 84.85 percent rate in Sichuan, and an 89.88 percent rate in Jiangsu, all of which being higher than the 2011 nationwide average of 77.80 percent. However, the economic downturn is continuing to exert a negative influence on employment, manifested primarily in the decreases to new urban employment since April and May,

Centers in Select Cities, 2nd Quarter 2012],” Zhongguo jiuyewang 中国就业网 [china job.gov.cn], accessed July 30, 2012. 27  “Judi chuxian nongmingong fanxiangchao fanxiangzhe gaibian guxiang jiushijie 局地出 现农民工返乡潮返 乡者改变故乡旧世界 [Rural Migrant Workers Returning Home in Droves and Changing the Status Quo in Their Hometown],” Lianzheng liaowang 廉政 瞭望 (2012): 19. 28  Ministry of Human Resources and Social Security (MOHRSS), “Guonei weichuxian daguimo caiyuan he fanxiang xianxiang 国未出现大规模裁员和返乡现象 [So Far No Major Layoffs or Returns Home in China],” http://www.china.com.cn, accessed September 10, 2012. 29  MOHRSS, “2012 nian disan jidu xinwen fabuhui 2012 年第三季度新闻发布会 [Third Quarter Press Conference, 2012],” http://www.china.com.cn, accessed October 25, 2012.

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Figure 13.1 Changes to supply and demand in select cities from 2011 through the second quarter of 2012

particularly in eastern regions, as compared to the same period in 2011. Labor demand is also on the decline.30 The primary reason that the economic downturn hasn’t exerted a severe influence on employment is a reversal to the supply and demand relationship on labor markets. Data from the Sixth National Population Census indicate that the total birth rate fell to 1.4 over 1996–2010. According to United Nations population growth criteria, birth rates under 1.5 are below the population replacement level. Since 2000, the growth rate of China’s working-age population has begun to slow, down to about one percent annual average. In 2011, the 15 to 64 year-old working age population accounted for only 74.4 percent of the total population, its first drop in history. It is predicted that by 2015 there will be negative growth to that segment of the population, and labor resources, particularly rural surplus labors, will gradually become of “limited supply.”31 With the shift of labor toward China’s central and western regions, this has to a great extent mitigated the problem of insufficient job vacancies caused by the slowing economy. Of course, there is time lag between changes in employ30  MOHRSS, “Jingji zengsu fanghuan dui jiuye de yingxiang zhubu xianxian, jiang zhongdian zuohao gaoxiao biyesheng jiuye gongzuo 经济增速放缓对就业的影响逐步显现 将重点做好高校毕业生就业工作 [The Effects of Economic Slowing on Employment Gradually Appear, Work Focus Placed on University Graduates],” MOHRSS official website, accessed September 12, 2012. 31  All China Federation of Trade Unions (ACFTU), “ ‘Shi’erwu’ shiqi woguo laodong guanxi yingxiang yinsu ji fazhan qushi ‘十二五’ 时期我国劳动关系影响因素及发展趋势 [Factors Behind and Development Trends of Chinese Labor Relations During the Twelfth Five-year Plan Period],” Gongyun yanjiu 工运研究 (2012): 16, 4.

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ment rates and those in economic growth rates. We must continue to observe the situation.32 Wages Continue to Rise, and Income Distribution Reform Plans are to Be Issued Over this past year, though economic growth has slowed, wages have continued to rise rapidly. In 2011, the national average for wages for employees of publicly-owned enterprises in urban areas was 42,452 yuan, a year-on-year increase of 5,305 yuan, 14.3 percent, and a 0.8 percent increase to the growth rate. In 2011, the nationwide urban average annual salary of people who work at privately owned enterprises was 24,556 yuan, a year-on year increase of 3,797 yuan, 18.3 percent, and a 4.2 percent increase to the growth rate.33 As of the end of September, 2012, 18 provinces had adjusted minimum wage standard, which grew in those provinces by an average of 19.4 percent, a smaller increase over the same period in 2011. At present, Shenzhen’s monthly minimum wage standard of 1,500 yuan is the nation’s highest, as is Beijing’s hourly minimum wage standard of 14 yuan. As of the end of September, 20 provinces had issued 2012 minimum wage guidelines, with the average increase to previous baselines being around 14 percent.34 The two above indicators are both significantly higher than GDP growth over the same period. Over the first three quarters, per capita urban income was 20,190 yuan, of which per capita disposable income was 18,427 yuan, a year-on-year nominal growth of 13.0 percent and a real growth of 9.8 percent after adjustment for inflation, meaning a 2 percent year-on-year growth rate increase. Of per capita urban income, wage saw a year-on-year increase of 12.7 percent. Over the first three quarters, the average monthly income of rural migrant laborer was 2,249 yuan, a year-on-year increase of 13.0 percent. From January to September, 1.2

32  “Xinwenban jieshao 2012 qiansan jidu guominjingji yunxing qingkuang 新闻办介绍 2012 前三季度国民经济运行情况 [The State Council Press Office Introduces the Operations Situation of the Private Economy in the First Three Quarters],” accessed from www.gov.cn, on October 18, 2012. 33  “2011 niandu renliziyuan he shehui baozhang shiye fazhan tongjigongbao 2011 年度人 力资源和社会保障事业发展统计公报 [Statistical Report on the Development of Human Resources and Social Security Enterprises in 2011]” 2012年6月5日, accessed from http://www.gov.cn on June 5, 2012. 34  “Renli ziyuan he shehui baozhangbu 2012 nian disanjidu xinwenfabuhui 人力资源和 社会保障部 2012年第三季度新闻发布会 [Ministry of Human Resources and Social Security 2012 Press Conference],” accessed from http://www.china.com.cn on October 25, 2012.

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the consumer price index (CPI) experienced a year-on-year increase of 2.8 percent.35 However, since the end of 2011, suffering from the effects of such factors as the European and American debt crises and appreciation of the renminbi, some small and medium-sized labor-intensive enterprises, principally in export processing, encountered difficulties in financing support, rising costs, reductions in orders, and so on. They experienced additional difficulties in maintaining operations, and there was an increase to the number of enterprises that either fell behind in wage payments or absconded. Of all workers who did not get paid on time, 90 to 95 percent were migrant laborers.36 There are reports that during the first month and half in 2012, the total amount of delayed wage payment that was finally disbursed was on the order of nearly 2 billion yuan, affeting nearly 600,000 workers in 15 provinces, municipalities, and regions, including Guangdong, Yunnan, Hunan, and Tianjin. This shows the magnitude of the problem.37 During the National People’s Congress (NPC) and the Chinese People’s Political Consultative Conference (CPPCC) held in 2012, resolving the problem of unpaid wages to migrant laborers became a hot-button topic.38 An official of MOHRSS claimed that his ministry was going to draft the “Regulations on Guarantee for Wage Payment”

35  “Xinwenban jieshao 2012 qiansanjidu guomin jingji yunxing qingkuang 新闻办介 绍 2012 前三季度国民经济运行情况 [The State Council Press Office Discusses the National Economy’s Operation Situation in the First Three Quarters of 2012],” accessed from http://www.gov.cn on October 18, 2012. 36  ACFTU, “Qiye qianxin shenzhi taoni xianxiang shangsheng 企业欠薪甚至逃匿现象 上升 [Increases in Incidents of Companies Owing Salary or Even Going into Hiding],” http://www.caixin.com, accessed on December 30, 2011. 37  Hao Hong 郝洪, “Kao shenme genzhi qianxin ‘bingzao’ 靠什么根治欠薪 ‘病灶’ [What Can We Use to Eradicate the Problem of Delinquency in Wage Payments?],” Renmin ribao 人民日报, January 20, 2012. 38  “Xiugai ‘laodong baozhang jiancha tiaoli’, tisheng xingzheng qiangzhiquan, chafeng e’yi qianxin qiye” 修改《劳动保障监察条例》，提升行政强制权，查封恶意欠 薪企业 [Ammending Rules for Supervision of Labor Protection, Increasing the bite of Administrative Regulations, Shutting Down Enterprises in Chronic Wage Payment Delinquency] http://www.acftu.org/template/10004/file.jsp?cid=222&aid=85259; “Jiejue tuoqian nongmingong gongzi yao duizhengxiayao” 解决拖欠农民工工资要对症下药 [Eradicating Wage Payment Delinquency: Tailoring the Medicine to Suit the Disease], http://202.123.110.3/2012lh/content_2088714.htm; “Genzhi tuoqian nongmingong gongzi wanji xu moliang ‘falü lijian’ ” 根治拖欠农民工工资顽疾需磨亮 “法律利剑” [Stamping out Wage Payment Delinquency Requires Laws with Teeth], http://news.xinhuanet .com/politics/2012lh/2012-03/12/c_111642508.htm.

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[工资支付保障条例], which would give concrete explanations and operable measures for the “criminalization of not wage payment delinquency.”39 Shortly before the Lunar New Year, former Premier Wen Jiabao specified that the overall plan for income distribution reform would be drafted and issued in the fourth quarter. This led to a new round of social discourse. In the China Wage and Salary Development Report [中国薪酬发展报告] published in 2011 by the Labor Wages Institute of MOHRSS, officials noted that wages in some monopolistic industries were growing excessively fast. In the past five years, the wages of senior managers in said industry were growing markedly faster than common workers, and the income disparity was not shrinking gradually but rather growing quickly. Wages of senior managers were in some cases 4553 times those of migrant laborers. According to an investigation by the ACFTU, wages of 20 percent of workers have not increased at all in five years.40 An investigation which I conducted into worker income situations in a district of Beijing indicates that levels of feeligns of satisfaction with the current state of income distribution are low among surveyed workers, with only 15.4 percent expressing satisfaction.41 At a forum for non-Party members, former President Hu Jintao noted that restoring fairness must be the emphasis of income distribution reforms.42 This represented a change to the previous policy which emphasized increaseing the size of the cake , and marked the direction for income distribution reforms. It has been revealed that the reform plan will list a timetable and road map for income distribution reforms. Of those, adjustments to initial income distribution will be by far the most important component of future income distribution reforms.43

39  MOHRSS, “Jinkuai chutai qianxin ruzui caozuo banfa 尽快出台欠薪入罪操作办 法 [Pass Operable Measures for Criminalizing Wage Payment Delinquency as Fast as Possible],” Xinjingbao 新京报, December 26, 2011. 40  “Renliziyuan yu shehui baozhang bu baogao cheng liangcheng zhiyuan wunian nei congwei zhang gongzi 人力资源与社会保障部报告称2成职工5年内从未涨工资 [MOHRSS Report Claims 20 percent of Workers Have Had no Wage Increases in 5 Years],” Nanfang ribao 南方日报, October 18, 2012. 41  “Beijingshi haidianqu laodongzhe shouru zhuangkuang diaocha yanjiu 北京市海淀区 劳动者收入状况调查研究 [Investigation and Research into the Income Situations of Laborers in Haidian District, Beijing],” Working Thesis, 2012. 42  Hu Jintao 胡锦涛, “Shouru fenpei gaige yao gengzhong gongping 收入分配改革要更重 公平 [Income Distribution Reforms Must Be More Fair],” Jingji cankaobao 经济参考报, June 23, 2010. 43  “Shouru fenpei wenti yuanyin tanxi: jingji tizhi biduan qianghua bugong 收入分配问 题原因探析：经济体制弊端强化不公 [Analysis of the Reasons behind Income

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Coverage of Workers’ Social Insurance Expands, Near-Universal Coverage Achieved for Pension Insurance for Urban and Rural Residents The progress of workers social insurance is presented as follows. First, the country has basically achieved universal coverage of pension insurance for urban-rural residents. As of the end of September, total enrollment in new rural insurance and urban resident pension insurance has covered 449 million people, with 124 million urban and rural seniors receiving monthly pension payout. Second, insurance coverage and social insurance payout continued to grow. As of the end of September, among urban workers, basic pension insurance covered 298.75 million people, a growth of 14.84 million over 2011, basic medical insurance covered 529.06 million people, a growth of 55.63 million over 2011, unemployment insurance covered 149.16 million people, a growth of 5.99 millionover 2011, workplace injury insurance covered 185.67 million people, a growth of 8.71 million over 2011, maternity insurance covered 150.74 million people, a growth of 11.82 million over 2011. From January to September, total revenue of the five social insurance funds were 2.0407 trillion yuan, a year-on-year increase of 24.6 percent, and the total amount of payout was 1.58898 trillion yuan, a year-on-year increase of 23.2 percent. In addition, more rural migrant laborers were enrolling into the five insurance programs. As of the end of September, nationwide, the numbers of rural migrant laborers covered by pension medical, unemployment and workplace injury insurances were 44.53 million, 49.22 million, 26.09 million and 69.95 million, representing increases over 2011 of 3.13 million, 2.81 million, 2.17 million and 1.67 million, respectively.44 The first step of the plan that comes next is to promote construction of the social insurance system, including the drafting of unemployment insur­ ance regulations, basic medical insurance regulations, and maternity insurance measures. The next step will be to increase coverages of workers of the non-public sector, peeople without permanent jobs and rural migrant laborers. Owing to pressure from population aging and fiscal shortcomings in pension funds, postponing the retirement age became a major social and policy issue in 2012. However, different social groups disagree on this issue. 1.3

Distribution Problems: Economic System Corruption Becoming Worse],” http://www .people.com.cn, October 24, 2012. 44  “Renli ziyuan he shehui baozhang bu 2012 nian disan jidu xinwen fabuhui 人力资源和 社会保障部 2012 年第三季度新闻发布会 [MOHRSS Press Conference, 3rd Quarter 2012],” http://www.china.com.cn, October 25, 2012.

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Official and experts are largely in favor of postponing thee retirements, whereas most opposition comes from working people.45 Workers’ Safety Improves Steadily, and Many New Labor Protection Laws are Passed According to materials from the State Administration of Workplace Safety (SAWS), workplace safety in China is on the whole improving. For nine years beginning in 2003, there have been “double drops” in both the number of safety incidents and the number of deaths from major accidents.46 From January to March 2012, there were two major coal mine accidents and nine large coal mine accidents nationwide, with a coal death toll of 289, a year-onyear reduction of 45. In the first quarter, there were 13,427 deaths from accidents nationwide, a year-on-year reduction of 1354 from 2011. Of those, the death toll from work-related traffic accidents in passenger or freight transport was 3,764 people, and the death toll from work-related fires was 24 people. The death toll from railway accidents was 302 , and the death toll from accidents involving agricultural equipment was 16. With 1,160 deaths, Guangdong led all other provinces in death roll from all kinds of accident in the first quarter.47 Over the first three quarters, there were year-on-year reductions to major accidents and death toll of 21.3 percent and 15.3 percent, respectively. The safety situation in key industries also improved, with a 32.6 percent year-on-year reduction in coal mine accidents, and a 43.6 percent year-on-year reduction in fire-related incidents.48 “The 2012 China Workplace Balance Index Research Report” [2012 年度 中国职场人平衡指数调研报告] indicates that the average working hours of Chinese workers are 8.66 hours a day. It further indicates that 30 percent 1.4

45  Wang Xiangqian 王向前, “Zhuanjia cheng guanyuan zhuanjia duo zancheng yanchi tuixiu, fanduizhe duowei gongren 专家称官员专家多赞成延迟退休反对者多为工人 [Experts Claim Most Official Experts Support Delayed Retirement, Most Opponents are Workers],” http://www.dahe.cn, July 14, 2012. 46  “Xinwenban jieshao jinnianlai quanguo anquan shengchang ongzuo qingkuang 新闻办 介绍近年来全国安全生产工作情况 [State Council Press Office Discusses Nationwide Safe Production Work Situation],” www.gov.cn, August 24, 2012. 47  “Diyi jidu meikuang siwang renshu 289 ren, fasheng 2 qi meikuang zhongda shigu 第一季度煤矿死亡人数 289 人发生 2 起煤矿重大事故 [289 Coal Mine Deaths and 2 Major Coal Mine Accidents in 1st Quarter],” http://www.people.com.cn, April 27, 2012. 48  Ma Kai 马凯, “Quebao quannian anquan shengchan xingshi chixu wending haozhuan 确保全年安全生产形势持续稳定好转 [Maintaining Sustained, Stable Improvements to Yearlong Safe Production],” www.chinasafety.gov.cn, October 17, 2012.

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of workers’ working hour exceed 11 hours of per day,49 and overtime work is becoming an egregious problem. Another report, “The 2012 Survey on WhiteCollar Workers and their Health” [2012 关爱职场白领、关注白领健康调 查] indicates that two thirds of workers surveyed thought themselves to be in suboptimal health. The top three reasons for their poor health were work stress, environmental pollution, and lack of exercise. A world renowned research institution came to similar conclusions, namely that the level of stress endured by office workers in China in the past year was highest in the world. Enormous work stress causes 600,000 premature deaths from overwork every year in China.50 National People’s Congress delegates from Guangdong province suggested publishing medical laws, and standards for death from overwork, and listing death from overwork as an officially recognized occupational disease.51 In response to the high incidence of occupational disease, the 24th meeting of the 11th Standing Committee of the National People’s Congress passed a resolution to amend “the Law of the People’s Republic of China on the Prevention and Control of Occupational Diseases” [职业病防治法]. In the resolution, the Standing Committee clearly proposed the establishment of a new mechanism of a responsibility system for work units, oversight by administrative organs, industry self-regulation, worker participation, and social oversight.52 In April 2012, the State Council issued a new edition of “The Special Rules for the Labor Protection of Female Workers” [女职工劳动保护特别规定]. As compared with the previous edition, the new edition heightened the role of employers as the principal body of responsibility and strengthened their legal obligations and made legal obligations more clear and precise. The protection of female workers is more complete and fair and the level of protection is also 49  “Diaochaxianshiwoguo baifenzhisanshi yuangong meiri gongzuo chao 11 xiaoshi 调查 显示我国 30 % 员工每日工作超 11 小时 [Investigation Reveals that 30 percent of Chinese Workers Work In Excess of 11 Hours Daily],” www.cnr.cn, April 30, 2012. 50  “ ‘Yalishanda’ beihou de jiti jiaolügan zhide jingti ‘压力山大’ 背后的集体焦虑感值得 警惕 [Collective Concerns Behind ‘Great Pressure’ Worthy of Alarm],” Zhongguo qingnianbao 中国青年报, October 28, 2012. 51  “Guangdongsheng rendadaibiaojianyi jiang guolaosi liewei zhiyebing 广东省人大代表 建议将过劳死列为职业病 [Guangdong Provincial People’s Congress Recommends Including ‘Death from Overwork’ as Occupational Disease],” Guangzhou ribao 广州日报, January 17, 2012. 52   “Woguo xiufa qianghua yongrendanwei zhiyebing fangzhi zeren 我国修法强化用 人单位职业病防治责任 [China Revising Laws to Strengthen Responsibility of Employing Units for Prevention of Occupational Illness],” http://www.xinhuanet.com, December 31, 2011.

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increased.53 In order to strengthen social oversight of safe production and encourage workers to report the risks of major safety production incidents and illegal behaviors, SAWS and the Ministry of Finance jointly issued a new “Rules for Rewarding Reporting of Workplace Safety Violations” [安全生产举 报奖励办法] in May 2012. The Measures stipulate that in all cases in which a report is found to be true, the person who reported it in his true name will be given a cash reward by the safety oversight department that processes the safety report.54 1.5

Steady Growth in the Number of Labor Disputes, and the Incidence of Labor Stoppages Remains Stable

There has been a steady and mild growth to the incidence of labor disputes in 2012 as compared with 2011, owing to the slowing growth of the economy. From January to September, there was a total of 479,000 cases reported labor/ human resources disputes at nationwide dispute resolution bodies of all levels, a year-on-year increase of 11.9 percent. The disputes have affected 660,000 workers, a year-on-year increase of 19.4 percent.55 In terms of the types of labor disputes, taking Beijing as an example, there, about 60 percent of disputes are related to wages and overtime pay, and about 24 percent are related to economic compensations. In order to obtain advantages for themselves, claimants use such methods as appealing or writing petitions to higher authorities in relevant departments and the media, to generate social attention, and eventually to increase the pressure on the agencies hand­ ling their cases. In addition, there have been marked increases to the number of cases involving the democratic rights of laborers, social insurance, disputes of enterprises which have declared bankrupcy, and disputes concerning senior managers, which demonstrates the characteristics of labor disputes amid economic slowdown. The rapid growth of labor dispatching has become the major reason behind the increased incidence of labor disputes. Functional overlaps 53  Lin Yanling 林燕玲, “Nüzhigong laodong baohu tebie guiding 女职工劳动保护特别 规定 [Special Regulations for Protection of Female Laborers],” Renmin ribao 人民日报, June 14, 2012. 54  “Liangbumen guanyu yinfa anquan shengchan jubao jiangli banta de tongzhi 两部门 关于印发安全生产举报奖励办法的通知 [Notice Regarding Rules for Rewarding Reporting of Workplace Safety Violations Issued by Two Departments],” http://www.gov .cn, May 4, 2012. 55  MOHRSS 3rd Quarter Press Conference, October 25, 2012.

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between administrative and executive legal bodies in the handling of labor disputes have made resolution of such disputes more difficult.56 In terms of mass incidents, from January to August 2012, there were over 120 collective work stoppages involving 100 people or more attributable to wage disputes, and 270 collective work stoppages involving 30 people or more in 19 provinces, with Guangdong leading the rest. These numbers were roughly unchanged from 2011, when economic growth was stable. That is no easy feat. Research demonstrates that most strikes in 2010 and 2011 occurred in the third and fourth quarters, but in 2012, there was a significant increase to the number of strikes during the first quarter. Most strikes took place in the south and east, but the trend was spreading to the rest of the nation. Most strikes occured in the manufacturing industries and the transportation industries. In terms of the types of ownership structure, most strikes occured in foreign-owned enterprises, especially in Japanese-owned enterprises, but the social effects of strikes in state-owned enterprises are greater. A media report indicates that strikes involving 500 or more people most frequently happened, coming in at 47.15 percent of the total strikes. The report also indicates that of all strikes, those lasting for two to five days account for 40.74 percent of the total, and that 50.69 percent of strikes are related to the two major appeals for wage increases and unpaid wages, followed by appeals for economic compensations after dismissals, work time disputes, social insurances, and so on. This demonstrates that the demands of workers for a sense of safety, communication, and fairness, have come under attack.57 In 2012, taxi drivers went on the waves of massive strike aimed at improving their working conditions. The incident with the farthest reaching effects was the united labor stoppage of a portion of Beijing taxi drivers in 2012 before the NPC and CPPCC. This directly led to the issuance of the “Notice Regarding Harmonious Labor Relations in the Development of the Taxicab Industry” [关于 56  “Beijingshi fayuan 2011–2012 niandu laodong zhengyi anjian de shenli qingkuang, wenti he duice yijian 北京市法院 2011–2012 年度劳动争议案件的审理情况、问题和 对策意见 [The Trial Situation, Problems, and Countermeasures for Labor Disputes in Beijing City Courts 2011–2012],” found within the Beijing dishisijie laodong renshi zhengyi anli yantaohui huiyi cailiao 北京市第十四届劳动人事争议案例研讨会会议材料, September 2012. 57  Ge Yuhao and Chen Liwen 葛玉好、陈力闻, “Nongmingong jiti laodong zhengyi tedian yu guilü 农民工集体劳动争议特点与规律 [The Characteristics and Patterns of Migrant Laborer Collective Labor Disputes],” from the Nongmingong jiti loading zhengyi yufang tiaojie gongzuo yanjiu xiangmu lunzhenghui huiyi cailiao 农民工集体劳动争议 预防调解工作研究项目论证会会议材料, edited by the labor relations department of the China Renmin University, March, 2012.

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在出租汽车行业开展和谐劳动关系创建活动的通知],58 which demands to develop harmonious labor relations in the taxicab industry by organizing activities for two years following March 2012. It also called for promoting the establishment of modern corporate governance structures and labor contract institutions, the implementation of labor protection laws, policies, and regulations, and the standardization of enterprise operations and labor usage. All requirements aim at protecting the legal rights of taxi drivers. However, as of today, taxi drivers continue to strike to improve their rights, and few companies have thoroughly implemented the requirements of the document. Strikes at Foxconn and Motorola were typical of such labor stoppage. On September 23, there was a confrontation between thousands of employees and security guards at Foxconn’s Taiyuan plant. The incident reflected the workers’ dissatisfaction with their wages and treatment, and the tedious nature of their jobs.59 There were also turmoils and strikes among Foxconn employees at the Chengdu and Zhengzhou plants before and after the Taiyuan incident. For example, at the Zhengzhou plant, the management of Foxconn and Apple Inc, increased their quality demands on workers, making it nearly impossible for them to make such products.Workers of Foxconn were not even allowed to take leave during the National Day Holiday in 2012. The confluence of all these factors led to the strike.60 Analysts think the problems of Foxconn are not only related to working arrangement and management institutions, but also directly related to the strategy of outsourcing for the major multinational corporations. In the global production chain of the electronics industry, Apple Inc and other brand name companies have excessively lowered product prices and shortened production times, causing those manufacturing companies to illegally employ child laborers under 16 years old and exert such unreasonable production conditions as low wages and long working hours. This has been severely injurious to the rights of workers. Local governments abuse their power in attracting investments from companies such as Foxconn, sometimes using administrative orders to help Foxconn to resolve labor supply problems. 58  “Notice Regarding Harmonious Labor Relations in the Development of the Taxicab Industry 关于在出租汽车行业开展和谐劳动关系创建活动的通知,” MOHRSS website, February 29, 2012. 59  “Fushikang taiyuan changqu gongren qun’ou: buyingxiang iPhone 5 shengchan 富士康 太原厂区工人群殴：不影响 iPhone 5 生产 [Mass Fights at Former Foxconn Factory, Not to Affect iPhone 5 Production],” 21 shiji jingji baodao 21 世纪经济报道, September 25, 2012. 60  “Xiaoxicheng fushikang Zhengzhou gongchang fasheng da guimo chongtu 消息称富士 康郑州工厂发生大规模冲突 [News Breaks of Major Conflict at Foxconn Zhengzhou Factory],” http://www.sina.com.cn, October 6, 2012.

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This has not only given rise to problems of use of child labor, but also resulted in social injustice.61 In addition, more and more young workers are no longer willing to sacrifice their personal lives for low wages, and their awareness of their rights continues to grow. For all these reasons, and given recent labor shortages, Foxconn’s model is becoming increasingly tenuous. Motorola’s simple and rigid methodology of laying off workers for economic reasons has reflected insufficient management experience of that company in dealing with economically-motivated layoffs amid an economic downturn. The layoffs have led to strong protests among workers who are just dismissed. This experience should serve as a lesson to other enterprises.62 In terms of the legislation and regulation, “Regulations for Resolving Enterprise Labor Disputes within Enterprises through Arbitration” [企业劳动 争议协商调解规定] issued by MOHRSS went into effect on January 1, 2012. The core of these Regulations lies in urging enterprises to establish labor dispute resolution mechanisms and to provide channels for laborers to express appeals related to their interests. This may serve as the first line of defense in preventing and managing labor disputes. In addition, academics are calling for an acceleration to collective labor dispute legislation and the promotion of the role of trilateral labor relations coordination mechanisms in resolving major labor conflicts. This is the most important component of improving labor dispute resolution mechanisms at present.63 “New Workers” and “New Blue-Collar Workers” Make Up the Largest Segment of the Workforce In 2012, many media outlets used the term “new workers” when discussing the plight of migrant laborers.64 This term is an objective reference to the new generation of rural migrant laborers who cannot return to their native villages and must integrate into their new urban surroundings. The term also refers to 1.6

61  “Liang’an sandi 20 suogaoxiao diaoyan fushikang 19 ge changqu zhiyi difang zhengfu wei fushikang zhaogong 两岸三地 20 所高校调研富士康 19 个厂区质疑地方政府为 富士康招工 [Researchers at 20 Universities Question Local Government Involvement in Foxconn Recruiting at 19 Factories],” http://www.ifeng.com, September 26, 2012. 62  Cai Changchun 蔡长春, “Motuoluola caiyuan tuxian gonghui jiazhi 摩托罗拉裁员凸显 工会价值 [Motorola Layoffs Demonstrate Value of Unions],” Fazhi zhoumo 法治周末, August 29, 2012. 63  “Zhuanjiatan: woguo jiti laodong zhengyi de yufang yu guizhi 专家谈：我国集体劳 动争议的预防与规制 [Expert Discussion: Prevention and Regulation of Chinese Collective Labor Disputes],” Zhongguo laodong 中国劳动 6 (2012): 12. 64  Li Beifang et al. 李北方等, “Xin gongren, zenmeban? 新工人，怎么办 [What to Do About New Workers?],” Nanfengchuang 南风窗 21 (2012): 39.

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the equal living standards, work equality, dignity, and rights of self-expression owed to these workers. In the opinion of the Tsinghua University’s “New Generation of Rural Migrant Laborer Research” group, as compared with the generation of rural migrant laborers born before 1980, the new generation not only is larger in size, but also has different characteristics as a social group. For example, these young workers had already learned how to live in cities while in schools, i.e., prior to entering factories. School education has a great significance for the particular social characteristics of the new generation of rural migrant laborers. Most of them use the Internet, meet with friends and colleagues after work, and spend money on leisure activities. Their urban lifestyle is a key determinant of personal development expectations. They have different relations from the older generation with urban-rural relationships, enterprises, and the state. The new generation of rural migrant laborers often engages in collective protest activities, and there have been fundamental changes to the appeals they raise. These are primarily demonstrated in their active demands for large increases to wages, the reorganization of labor unions, the implementation of collective negotiation mechanisms on wages, and so on. Researchers think that the government and enterprises should directly face the new social characteristics of the new generation of rural migrant laborers and gradually abolish the “rural migrant laborer production system.” They should give rural migrant laborers identities of “enterprise citizens” in factories and “community citizens” in the communities in which they live.65 “The Investigation into the Love and Marital Conditions of the New Generation of Migrant Laborers” launched by the All-China Women’s Federation indicated that most rural migrants tended to identitfy themselves as “migrant workers” or just “workers,” and as “floating population” or “new urban residents.” They are least able to stand being “looked down upon as rural migrant laborers.” Most of those people are at “intermediate” or “low” levels of acclimation to their cities, and they hope to settle in cities, and further hope that the government could help migrant laborers “enjoy equal social insurance” and “have equal chance to apply for public rental houses.” They hope the government could “facilitate the children of “Guangdong yong yidi wugong renyuan qudai nongmingong chengwei 广东用异地务 工人员取代农民工称谓 [Use of External Labor Replaces Term Migrant Laborer in Guangdong],” Guangzhou ribao 广州日报, April 13, 2012. 65  Tsinghua University “New Generation of Migrant Laborers Research” Group, “Xinshengdai nongmingong de kunjing yu chulu 新生代农民工的困境与出路 [Difficulties and Solutions for the New Generation of Migrant Laborers],” Zhongguo gaige 中国改革, September 17, 2012.

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rural migrants to attend nearby schools and kindergartens” and “facilitate rural migrant families to possess urban household registrations. They also hope “the non-governmental organizations could play a role in helping rural migrants,” and so forth.66 The night before the NPC and CPPCC in 2012, an online survey launched by the Gongren ribao [工人日报] and other institutions shows that the 10 major topics concerning people’s livelihood that workers hoped to receive the most attention at the NPC and CPPCC were medical reforms, food safety, price stabilization, improvements to the social security system, dual pension scheme, the establishment of wage increase mechanisms, protection against occupational diseases, disbursement of delinquent wages owed to rural migrant laborers, reduction of industry disparities, and controls on the real estate market.67 Over the last year, local governments have made new progress in advancing equalization of basic public services for rural migrant laborers and in balancing urban-rural development. In March 2012, the fifth meeting of the 11th Chinese People’s Political Consultative Conference (CPPCC) was held to discuss proposals of “balancing urban-rural social development and helping rural migrant laborers to integrate into cities.” Huang Ming, Deputy Minister of The Ministry of Public Security thereupon revealed that a draft of “Rules Regulating Residence Permits” [居住证管理办法] will be submitted to the State Council for approval in 2012. Such places as Shanghai, Zhejiang, and Guangdong have actively implemented residence permit institutions, including the school enrollment of floating population, social insurance, applying for drivers license, handling housing procedures, and so forth.68 The government in Guangdong launched the “Realize Your Dream Program” in 2012. The Program is a cooperation between Peking University and six cities in Guangdong, including Guangzhou, Jiangmen, and Zhongshan. After rigorous qualifications testing and on-the-spot confirmations, 3500 workers of the new generation get the chance to take the college entrance examination through a 66  “Diaocha xianshi duoshu xinshengdai jincheng wugongzhe xiwang zai chengshi dingju 调查显示多数新生代进城务工者希望在城市定居 [Survey Indicates that Most New Generation of Laborers Wish to Settle in Cities],” http://www.people.com.cn, December 8, 2011. 67  Zhang Qinwei 张钦徽, “Jinnian lianghui zhigong zui guanxin de shida wenti jiexiao 今年两会职工最关心的十大问题揭晓 [The Ten Major Concerns of This Year’s Plenary Session Workers],” Gongren ribao 工人日报, March 2, 2012. 68  Minister of Public Security, “ ‘Juzhuzheng guanli banfa’ jinnian shangbao shending《居住 证管理办法》今年上报审定 [The ‘Residence Permit Administration Measures’ to be Submitted for Approval This Year],” Beijing wanbao 北京晚报, March 10, 2013.

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special channel.69 The Beijing municipal government issued the “Regulatory Rules for Application, Eligibility Verification, and Allocation of Beijing Public Rental Housing” [北京市公共租赁住房申请、审核及配租管理办法]. The document is a unified set of elgibility requirements for non-local citizens by registration, based on incomes. The new standards are the same as local registered citizens. This brought about fairness in the allocation of public rental housing.70 The government in Guangdong in 2012 will recruit 3317 grassrootslevel public servants from among migrant laborers and further relax the points system for obtaining local household registrations. It will also accelerate the establishment of institutions whereby migrant laborers enjoy basic public services based on their occupations and years worked.71 Wang Yang, Secretary of Guangdong Provincial Party Committee, has proposed that there must be a new order established, one suitable to today’s society—open and mobile such as it is—and that institutions should be designed to help migrants integrate into their host cities. Wang also proposed that platforms should be given to migrants to express their appeals and that the government explores the establishment of mutual aid organizations for migrant laborers. All of Wang’s proposals are aimed to strengthen the governance of the migrants and services afforded to the migrant population.72 In addition to “new workers,” “new blue-collar” workers are another concept garnering increasing attentions in society. The emergence of the “new bluecollar” worker group is the result of urban economic growth and industrial restructuring. As compared with “old blue-collar” workers, who are mainly employed in construction and manufacturing industries, “new blue-collar” 69  “2012 yuanmeng jihua guangdong 3500 min gongren canjia teshu ‘gaokao’ 2012 圆梦计 划 广东3500 名工人参加特殊 ‘高考’ [3500 Guangdong Workers Take Special ‘Gaokao’ in the 2012 Realize Your Dream Program],” Zhongguo Qinnianbao 中国青年报, August 31, 2012. 70  “Feijingji shenqing gongzufang xiangshou jingji daiyu, Beijing jumin jinqi keshenqing 非京籍申请公租房享京籍待遇北京居民今起可申请 [Non-Beijing Registered Citizens Receive Same Treatment as Registered Citizens in Applying for Public Rental Housing, Beijing Residents may Apply This Year],” Beijing chenbao 北京晨报, December 1, 2011. 71  “Guangdong yong yidi wugong renyuan qudai nongmingong chengwei 广东用异地务 工人员取代农民工称谓 [Use of External Labor Replaces Term Migrant Laborer in Guangdong],” Guangzhou ribao 广州日报, April 13, 2012. 72  Wang Yang 汪洋, “Yao kefu ‘gaige pilaozheng’ fangzhi ‘jingshen xiedaizheng’ 要克服 ‘改革疲劳症 ‘防止’ 精神懈怠病’ [We Must Overcome ‘Reform Fatigue Syndrome’ and ‘Spiritual Sluggishness Syndrome’],” Nanfang ribao 南方日报, September 14, 2012.

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workers are concentrated in mid- and low-level of service industries, and they characteristically work short-term stints, at flexible, and diverse positions. Works with these features include self-employment, labor dispatch, and non-conventional employment, and so forth. Their primary mode of activity invovled in these jobs is interpersonal interaction. There have been marked increases to participation of female workers. There has been a reduction to unions, so they opt for individual labor relations negotiations. They are primarily employees of the commercial service industry and the emerging health and nursing industries, such as real estate agents, sales representatives of malls, merchandisers, couriers, taxi drivers, stylists, masseurs (and masseuses), doulas and nannies, care workers, and so on. The 2012 Report on Chinese Urban New Blue-Collar Workers [2012 中国都市新蓝领生存报告] published by ganji.com indicates that among “new blue-collar” workers, masseurs (and masseuses) earn the highest average monthly salaries at 4681 yuan. Thereafter comes, in order, chefs, stylists, surveyors, store managers, taxi drivers, nannies, and couriers. The Report also indicates that the three major reasons for “new blue-collar” workers to leave their jobs are low wages, lack of future, and unhappiness.73 In addition, large cities still impose many restrictions towards migrant laborers and university students on public service policies such areas as household registration [hukou], housing, medicine, children’s education, and so forth. Local governments and enterprises are even more lacking of human resources plans and training policies for “new blue-collar” workers. Deepening of economic reforms has made labor relations of some worker groups more complex. In some cases, there are no laws upon which they can rely. We are badly in need of legislations and policies to protect the rights of workers affected by public institution reforms, and standardization of their labor relations. Other workers’ rights also should be protected, such as those of over 500,000 rural electricians, 3.3 million insurance sales persons, over 2 million taxi drivers, an increasing number of students and even child laborers (owing to the effects of labor shortages), housekeepers, production line workers, military employees, social tour guides, professional athletes, laborers dispatched abroad, and so forth.

73  Shao Lanjie 邵蓝洁, “Xinlanling shengcun zhuangtai saomiao 新蓝领生存状态扫描 [Brief Overview of Survival Situation of New Blue-collar Workers],” Beijing shangbao 北京商报, September 5, 2012.

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Collective Labor Relations and the Progress in Their Coordination and Regulation

Unionization with Chinese Characteristics, and the Growing Presence of Grassroots Unions Running Popular Elections In January 2012, the “Resolution Regarding the Study and Implementation of the Road for Union Development Under Socialism with Chinese Characteristics” [关于学习宣传实践中国特色社会主义工会发展道路的 决议] was passed at the sixth executive meeting of the ACTFU’s Fifteenth Assembly. The Resolution symbolizes a further clarification and development of union work on the basis of guiding thoughts and theories. The Resolution proffers that this theory has resolved the period’s major questions of “what kind of unions should be built, and what development road should be taken for unions?” Since 2012, to address the economic downturn and its negative effects on company operations and workers’ rights, the ACFTU launched avant-garde activities of “face to face, heart to heart, and providing real service to workers at the grassroots level” in order to improve the work style of union cadres in serving the grassroots and workers. In the first half of the year, unions in all localities have visited 913,500 households of workers and laborers duirng hard times, distributing condolence payments and economic assistance funds of 855 million yuan. They resolved 95,000 outstanding problems of both enterprises and workers, such as improvements to shantytowns in industrial and mining areas, improvements to indemnificatory housing supply and distribution, the construction of union assistance rights-upholding and economic succor stations in industrial zones with concentrated populations of workers and migrant laborers.74 At the level of union establishment and member development, the ACFTU has seized opportunity to facilitate joint construction by the Party and unions during existing drive toward ths ame goal, requiring union organizations to display their signs and union chairmen to show their identify.” In Shanxi they have demanded that union chairmen within enterprises publicize their office telephones and cell phone numbers. Union cadres now must all wear badges 2.1

74  “Wang yupu tongzhi guanyu jinnian yilai gonghui gongzuo qingkuang he xiabannian gongzuo anpai de baogao 王玉普同志关于今年以来工会工作情况和下半年工 作安排的报告 [The Report of Comrade Wang Yupu Regarding the Work Situation of Unions This Year and the Work Plans for the Second Half of This Year],” Gonghui gongzuo tongxun 工会工作通讯 22–23 (2012): 10–12.

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and issue contact cards to strengthen their sense of personal responsibility.75 The ACFTU has promoted the permanent member representative institution in unions within communities, towns, and townships of Jiangsu. It has chosen 10 cities in five provinces to launch county-level and below industry union cooperation pilots, and it has established this work as the pivotal work in union construction for the year. Their experience includes establishing industry union leagues with the backing of industry administrative and regulatory departments or industry associations, commercial organizations, or party organizations. Their experience also includes relying on support of major enterprises in the industry to create union leagues in regions that for the moment lack industry associations or commercial associations but boast high industry or enterprise concentration. In some particular neighborhoods and professional markets, they have experience in relying on communities and markets to establish union leagues. They also have experience in sometimes relying upon existing industrial unions to create county-level and below industry union leagues.76 In addition, they have expanded channels for union enrollment by dispatched laborers on the basis of the specific requirements for enrollment, management and rights protection.77 As of the end of June 2012, non-public enterprises had established 3.4353 million unions, a union founding rate of 82.73 percent, with union membership of 99.2901 million workers, a membership rate of 72.95 percent.78 Also, 81.2 percent of 180,800 foreign invested enterprises had established unions.79 In response to demands of the workers, Shenzhen unions have actively and reliably promoted direct elections of union chairmen in enterprise unions. 75  “Shanxi yaoqiu shi wan gonghui ganbu gongbu shouji haoma 山西要求 10 万名工会干 部公布手机号码 [Shanxi Government Demands 100,000 Union Cadres to Announce Their Cell Phone Numbers],” http://www.chinanews.com, March 18, 2012. 76  Duan Dunhou 段敦厚, “Zai quanguo chanye gonghui tuidong pubian jianli gonghui zuzhi gongzuo huibao huishang de jianghua 在全国产业工会推动普遍建立工会组织工作 汇报会上的讲话 [Speech Given at Annual Work Conference for Nationwide Promotion of Unions in All Industries],” Gonghui gongzuo tongxun 工会工作通讯 5 (2012): 4. 77  Ibid. 78  Pan Yue 潘跃, “Gongzi jiti hetong fugai zhigong poyi, zhongdian tui laowu paiqiangong ruhui 工资集体合同覆盖职工破亿重点推劳务派遣工入会 [Over 100 Million Workers Covered by Collective Wage Contracts, Focus on Promoting Inclusion of Dispatched Workers in Unions],” Renmin ribao 人民日报, July 19, 2012. 79  ACFTU, “Mingniandi 95 percent zaihua waiqi jian gonghui 明年底 95 percent 在华外企 建工会 [95 percent of Foreign Enterprises in China to Establish Unions by End of Next Year],” http://www.people.com.cn, July 24, 2012.

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For example, on March 29, dissatisfied with their current wages and benefits, employees of the Oumu Electronics Company of Shenzhen demanded wage increases and improvements to benefits. But as the labor and management were unable to reach an agreement, over 700 Oumu workers organized a labor stoppage and staged peaceful protests outside the company’s gates. During that time, the workers found that the union sided with the company and thus did not identify with the union. So they demanded changes to the union. On May 27, the workers elected a new union chairman and core union membership through two rounds of voting, which were entirely conducted on the basis of democratic procedures, one vote per member.80 Their elections demonstrate that there have been marked increases to the new generation of workers’ sense of rights, of equality, and of coming together to accomplish a common goal, owing to increases to the levels of culture and urbanization. This is one of the primary reasons behind the growing phenomenon of direct union elections. This experience, fomented by pressure exerted by the workers themselves, has become the union reform direction preferred by Shenzhen union leadership. At present, Shenzhen city and district level unions have proposed rigorously implementing democratic processes on the basis of the demands of the Union Law, to ensure that the right to nominate and elect leadership of unions remains with the workers, especially within the 163 corporate unions in which labor-capital conflicts have occurred in 2012, including Hailiang Storage and Pepsi Cola. The year 2012 saw active reforms and innovations to social organizations and regulatory systems. The Ministry of Civil Affairs has, on the basis of research and negotiations, made new progress in creating a single registration system, clarifing the division of labor, improving cooperation and coordination, and supervision and regulation in accordance with the law. As of July 1, all industry associations, chambers of commerce located outside their jurisdictions, and all manner of social organizations in Guangdong province no longer need to registration under affiliation with an existing organization, but can directly apply for registration at the local civil affairs bureaus.81 In May 2012, the Guangdong provincial bureau of the ACFTU led the establishment of a league of workers service social organizations to act as a hub for social 80  “Shenzhen waiqi oumu gonghui zhuxi zhixuan beihou 深圳外企欧姆工会主席直选背 后 [Behind the Direct Selection of the Union Chairman of Shenzhen Foreign Enterprise Oumu],” Nanfang ribao 南方日报, June 5, 2012. 81  Hu Shuli, Ren Bo, and Lan Fang 胡舒立、任波、蓝方, “Minzhengbuzhang tan ‘jieshe’ 民政部长谈 ‘结社’ [Civil Affairs Minister Discusses ‘Associations’],” http://www.caixin .com, March 26, 2012.

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organizations providing services to workers. The league was founded with both group membership and individual membership institutions, and is composed of professionals from around the province in workers social service organizations, experts from research organizations, and all concerned with the development of workers. The league’s mission is to serve workers, especially migrant laborers, in order to foster their development and standardize leadership of worker services on the basis of NGO experience. The ultimate goal of the league is to establish harmonious labor relations as its baseline.82 This presages the entry of workers social organizations entering a new phase of development. Issues we must deeply explore in the future include the following: how to handle the interactive relationship between unions and laborer NGOS, how to best make use of each organization’s proactivity and unique advantages, and how to maintain worker teams and social stability. Clarifying the Meaning of Harmonious Labor Relations, and Focusing on Industry-Wide Collective Negotiation According to the ACFTU’s explanation of the theory of “trade unions under socialism with Chinese characteristics,” the establishment of harmonious labor relations will require the following: setting objectives of standardization and orderliness, justice and reasonableness, mutual benefit and win-win, and harmony and stability, and using rule-by-law to standardize the construction, operation, and dispute resolution of labor relations. In maintaining the work structure of party leadership, government responsibility, social coordination, and worker and enterprise participation, unions cannot take excessively zealous measures, but must rather use negotiations, coordination, and communication to resolve labor disputes. Unions must amply make use of trilateral government-workers-capital mechanisms and joint meetings between unions and the government to do the following: strengthen the construction of coordination institutions for collective labor relations, actively promote both the universal union pentration among enterprises and the universal implementation of collective bargaining, and enterprisers-union cooperation, and allow all to share in the benefits.83 2.2

82   “Guangdongsheng zhigong fuwulei shehui zuzhi lianhehui zai Guangzhou chengli 广东省职工服务类社会组织联合会在广州成立 [Guangdong Provincial Worker Service Social Organization Association Established in Guangzhou],” Guangzhou ribao 广州日报, May 17, 2012. 83  “Zhonghua quanguo zonggonghui guanyu xuexi xuanchuan shijian zhongguo tese shehui zhuyi gonghui fazhan daolu de jueyi 中华全国总工会关于学习宣传实践中国 特色社会主义工会发展道路的决议 [The Resolution of the ACFTU Regarding the

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In order to promote collective bargaining between labor and capital, first, all levels of People’s Congress and government should establish sound laws and institutions. So far, 24 provinces have issued documents for the development of labor-capital collective bargaining, and 25 provinces have established rules or regulations for collective contracts. Also, five provinces have issued local labor-capital collective bargaining regulations. MOHRSS is currently researching the inclusion of collective contracts legislation within the legislative agenda for the Twelfth Five-year Plan. In addition, in March 2012, the six departments jointly issued the Enterprise Democratic Management Regulations [企业民主管理规定], which marks that for the first time in 26 years that China has completely standardized enterprise management institutions in the form of formal regulations on the basis of worker representative assemblies. It has broken through the limitations of enterprise ownership and clarified that non-public sector enterprises also must implement democratic management.84 Second, all local governments must pool their knowledge and promote the work of labor-capital collective bargaining. So far, 31 provinces have established local three-year plans for the promotion of the work of laborcapital collective bargaining, and 15 provinces have included labor-capital collective bargaining into assessment criteria for officials. Twenty-eight provincial unions have established leadership small groups, and 22 provinces have convened on-site conferences and experience-sharing conferences. Thirteen provinces have included whether they engage in labor-capital collective bargaining among the criteria for being name outstanding enterprises, and 9 provinces have established regular supervision and inspection institutions. ACFTU data indicate that as of the end of 2011, collective labor-capital contracts covered a total of 1.742 million enterprises, a year-on-year growth of 56.1 percent, and 104 million people, a year-on-year growth of 37.3 percent.85 Because of the large number of non-public small and medium-sized enterprises and the difficulty of independently developing collective Development of Unions of Socialism with Chinese Characteristics by Studying Real Lessons from Propaganda],” Gongren ribao 工人日报, January 9, 2012. 84  “Liu bumenzhengshixiafa ‘qiyeminzhuguanli guiding’ 六部门正式下发《企业民主管 理规定》 [Six Departments Formally Issue ‘Democratic Administration Regulations for Enterprises’],” http://www.people.com.cn, March 31, 2012. 85  “Wang yupu tongzhi guanyu jinnian yilai gonghui gongzuo qingkuang he xiabannian gongzuo anpai de baogao 王玉普同志关于今年以来工会工作情况和下半年工作安 排的报告 [The Report of Comrade Wang Yupu Regarding the Work Situation of Unions This Year and the Work Plans for the Second Half of This Year],” Gonghui gongzuo tongxun 工会工作通讯 22–23 (2012): 13–14. However, MOHRSS admits to only 1.028 million collective labor contracts filed over that period.

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bargaining one enterprise at a time, unions in all localities have made new progress in covering small and medium enterprises by launching industrywide labor-capital collective bargaining. The scope continues to grow. Progress has come quickly in such areas as Tianjin, Hebei, Shanxi, Liaoning, Henan, Hubei, Hunan, Hainan, and Sichuan. Representative cases of progress in that field include labor-capital collective bargaining in the food and beverage industry of Wuhan, the signing of the nation’s first provinciallevel industry labor-capital collective contract in the hotel and food and beverage industry of Hainan, and labor-capital collective bargaining in the machinery industry of Dalian. The Wuhan food and beverage industry collective contract was agreed upon in March 2012 and stipulated that salaries of employees in the food and beverage industry must increase by not less than 9 percent annually.86 The levels at which collective bargaining are being conducted have continuously risen. They began at the town and township level and have gradually moved up, to the municipality and even provincial levels. The scale of industry labor-capital collective bargaining is also growing. The Wuhan food and beverage industry collective contract will cover about 450,000 workers in that industry. The Dalian machinery industry collective contract will affect 1663 enterprises and 410,000 workers, and the Shenyang food and beverage industry collective contract will cover 210,000 workers in that industry. More workers are being included, and more enterprises are being covered. Most industry labor-capital collective bargaining are concentrated in the food and beverage and service industries, the coal mining and extraction industry, the hardware and construction materials industries, and so forth. They are also being extended into the machinery manufacturing industry and high-end services industries. Data indicate that labor-capital collective bargaining have been conducted in 43 Beijing industries, including construction, food and beverage, housekeeping, nursing care, and so on, affecting 828 enterprises and 24,300 workers. Explorations into principal negotiations bodies have been flexible and diverse. Principal negotiating bodies have been determined by such methods as “the top represents the bottom” or “the top participates in the bottom” in situations in which there is no clear principal body for negotiations. Breakthroughs have been continuously made in the contents of negotiations. In the development of labor-capital collective bargaining, all local governments have made the establishment of work quotas, work hour and hourly rates the focuses of 86  “Gongzijitixieshang ‘wuhanyangben’ 2012 ban chulu 工资集体协商 ‘武汉样本’ 2012 版 出炉 [2012 Version of Collective Wage Bargaining ‘Wuhan Style’ Published],” Changjiang ribao 长江日报, April 20, 2012.

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negotiations and have to tried to include the scope of negotiations items that pertain to laborer rights. Negotiations strategies and tactics are becoming more mature daily. In Tangshan, Hebei, where there are differences in job positions and enterprise productivity, officials have implemented the “threethree institution” (having equal number of front-line workers, technicians, and management staff, and equal number of enterprises of high, medium, and low productivity). Tangshan officials have directed that all work units establish price-fixing bodies in order to safeguard the representative nature and universality of industry price-fixing negotiations.87 On the whole, the development of labor-capital collective bargaining has achieved the win-win results of increasing incomes of workers, greatly reducing industry labor disputes, and effectively standardizing the competition order of enterprises within the same industry. There are 15 Articles to the Wuhan City Food and Beverage Industry Labor-Capital Collective Contract [武汉市餐饮行业工资专项集体合同], all of which make stipulations regarding issues that are the most central, most direct, and most realistic to workers. The Contract increases the industry’s minimum wage standard to 130 percent of the city government mandated minimum wage standard and stipulates that wage increases for industry workers in 2012 be not less than nine percent. After the electrical wiring and cable industry of Simen Town, Yuyao City, Zhejiang Province conducted its labor-capital collective bargaining, worker wages in the industry rose by an average of 20 percent. There was a year-on-year drop in labor disputes of 54.5 percent, and employee turnover fell from 15 percent to 5 percent. Over the course of six consecutive years of industry labor-capital collective bargaining, the plating industry of Pizhou City, Jiangsu increased industry-wide productivity by an annual average of 18 percent. Wages increased an annual average of 23 percent, and turnover in the industry fell from 60 percent to below 10 percent.88 Promotion of the multilevel, conjoined, three-dimensional collective bargaining system, which has given rise to “region-wide discussion of baselines, industry-wide discussion of standards, and enterprise-wide discussion of growth,” has effectively increased the quality of labor-capital collective bargaining. Self-initiated movements of laborers to protect their rights, particularly in Guangdong’s Pearl River Delta region, are increasingly shifting toward collective bargaining and collective action, and workers are persevering until the

87  ACFTU, “Hangye gongzi jiti xieshang fazhankuai xiaoguohao 行业工资集体协商发展 快效果好 [Industry Collective Bargaining: Efficienc and Effective],” Gonghui gongzuo tongxun 工会工作通讯 9 (2012): 17–20. 88  Ibid.

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bitter end to maintain their rights.89 A rather representative case is the collective bargaining conducted at the Shenzhen Shajing Huangpu Guanxing plant. The inability of workers to have their appeals satisfied caused the over 1000 employees of that company to strike for half a month. Thereafter, with the assistance of attorneys and collective efforts by worker representatives, an agreement was reached after three rounds of negotiations. One might say this is an example of workers using their actions and power to construct a collective bargaining mechanism.90 Although great strides have been made in labor-capital collective bargaining and the supply/demand situation on labor markets is extremely beneficial to labor, this institution has still not become the most important in labor relations coordination. Problems lie mostly in the incomplete nature of relevant laws and regulations and existing laws’ lack of bite, particularly for the following reasons. Legal mechanisms for resolving collective disputes have not yet been established. The institutions cover only a small segment of society. Some enterprises and workers lack proactivity. Unions have played a suboptimal role in the process. The negotiations abilities and tactics of worker representatives are in need of improvement, and there are limitations to the methodology and results of negotiation procedures. We must urgently improve institutions and make new innovations to resolve the aforementioned issues. 3

Revising the Labor Contract Law and Standardizing Labor Dispatching91

According to an inspection conducted by the NPC in July 2011, fully implementing the Labor Contract Law [劳动合同法] has now become a consensus among enterprises, and there have been great improvements to corporate compliance with the law. However, some small and medium-sized enterprises have low contract signage rates, and abuses of labor dispatching are rampant. 89  “Zhusanjiao: laodongzhe jiti tanpan weiquan cheng chaoliu 珠三角：劳动者集体谈判 维权成潮流 [Pearl River Delta: Wave of Collective Labor Bargaining],” Yangcheng wanbao 羊城晚报, May 7, 2012. 90  Wang Jiangsong 王江松, “Cong guanxingchang shijian kan gongzi jiti tanpan—Duan Yi lüshi zhuanfang 从冠星厂事件看工资集体谈判—段毅律师专访 [Looking at Collective Wage Bargaining in the Guanxing Factory Incident—an Interview with Attorney Duan Yi],” Zhongguo gongren 中国工人 5 (2012). 91  By chapter author, “Zenyang zhiliao laowu paiqian zheke ‘duliu’ 怎样治疗劳务派遣这 颗 ‘毒瘤’ [How to Treat the ‘Malignant Tumor’ of Labor Dispatching?],” Jingji cankaobao 经济参考报, May 8, 2012.

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This has more or less become the mainstream labor usage model among enterprises and public institutions since the outbreak of the 2008 financial crisis. It is a major problem impacting the harmony of labor relations and the stability of the employment rate. For that reason, the NPC Standing Committee will make revisions to the Labor Contract Law at the end of 2012, with a focus on standardizing labor dispatching. Labor Dispatching is Now a Popular Means to Skirt the Law and Has Caused Instability in Labor Relations In traditional labor relations, there is a bilateral employment relation whereby employers hire, and laborers work. However, labor dispatching has given rise to a trilateral hiring relationship among labor dispatchers, companies that use that labor, and dispatched laborers themselves, separating those who do the hiring from those who use the people hired. In Western nations, labor dispatching is primarily a means to reduce labor costs, but labor dispatching in those nations accounts for only a small proportion of total labor usage. During the late 1990s, in order to serve the development of large state-owned enterprises and resolve their job vacancy problems, labor dispatching was widely used in the petroleum, petrochemical, telecommunications, banking, and power industries. This led to the inclusion of specific limitations on the use of this practice within the Labor Law. However, the implementation of the Labor Law in 2008, as well as enterprises’ avoidance of fixed-term contracts and the global financial crisis, caused unprecedented growth in labor dispatching, which became the subterfuge for enterprises to prolong workers’ probation periods and delay or even avoid signing fixed-term contracts. It was also a way for enterprises to reduce their legal liability toward workers and the costs of labor. As the new wave of labor dispatching occurred primarily in mainstream enterprise employment positions, the “Rules for the Implementation of the Labor Contract Law” [劳动合同法 实施条例], which went into force in September 2008, were unable to define what it means for a job position to be temporary, auxiliary and replacement in (the three essential properties of dispatch work), causing more rampant abuse of labor dispatching. Since the outbreak of the global financial crisis, use of labor dispatching has grown rapidly among Chinese enterprises. Per ACFTU estimations, 13.1 percent of all enterprise employees in China are dispatched labor, about 37 million in total. Dispatched labor accounted for 25 percent of surveyed workers in Shanghai, an increase of 36.1 percent over 2007. As of the end of 2010, 50 percent of Tianjin enterprises were using dispatched labor, a total of 400,000 workers, a 10-fold increase since 2000. Dispatched labor was used 3.1

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universally in tertiary industries. Among the 20 major industry classifications of the domestic economy, labor dispatching was observed in 16, of which 11 industries exhibited labor dispatching in over 20 percent of enterprises. Most dispatched laborers are first-line workers, and most are rural migrants.92 Research indicates that in most situations, the companies that use dispatched labor enter labor agreements with labor dispatching organizations, usually fixed-term contracts of two years or longer. Most dispatched labor workers are dispatched to the frontline, and fill positions such as communications workers, bank receptionists, metal casters, machinery processors, gas station attendants, and so on. Some also work in logistical or auxiliary positions. Remuneration for dispatched workers is generally higher than the local minimum wage and is disbursed paid monthly. Even their social insurance fees are paid on time.93 The major problems are with labor dispatching are as follows: nonstandardized use of labor in enterprises, widespread usage of dispatched labor in positions that are not temporary, auxiliary and replacement, non-signage of labor contracts, high workloads, poor workplace safety and health conditions, inadequate protection of economic and democratic rights of dispatched labor, low wages, incomplete and low levels of social security, unequal pay for equal work, and unequal opportunities for party admission, union admission, group admission, promotions, and work appraisals.94 Specific Contents of the Ammended Labor Contract Law (Draft) and Other Suggestions According to an initial resolution passed at the 27th meeting of the Eleventh NPC Standing Committee, the “Ammended Labor Contract Law (Draft)” [劳动合同法修正案 (草案)] will standardize labor dispatching in the following ways. First, it will rigorously standardize labor dispatching and re-introduce the administrative permit institution. It will regulate the establishment of labor dispatchers, which must process administrative permits with labor administration departments in accordance with the law, and raise their registered 3.2

92  ACFTU Labor Dispatch Problem Group, “Dangqian woguo laowu paiqian yonggong xianzhuang diaocha 当前我国劳务派遣用工现状调查 [Investigation into the Labor Dispatching in China Today],” Zhongguo laodong 中国劳动 5 (2012): 23–24. 93  MOHRSS Labor Science Institute, “Laowu paiqian yanjiu baogao 劳务派遣研究报告 [Labor Dispatching Research Report], working thesis, 2009. 94  All China Federation of Trade Unions Labor Dispatch Group, “Dangqian woguo laowu paiqian yonggong xianzhuang diaocha 当前我国劳务派遣用工现状调查 [Investigation into the Labor Dispatching in China Today],” Zhongguo laodong 中国劳动 (2012): 5, 24–25.

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capital requirement from 500,000 yuan to no less than 1 million yuan. It will require that companies using dispatched labor establish labor dispatch management mechanisms that comply with the law. Second, it will limit the scope of labor dispatching positions to those that have the three essential properties of being temporary, auxiliary and replacement. The ammended law recommends that instead of requiring that “in general,” positions that have these properties be eligible for labor dispate, which is ambiguous, “only” such positions should be. It will define “temporariness,” “auxiliariness” and “replacement” as follows. Temporary positions are those whose duration is no longer than six months; Auxiliary positions are those which provide services to primary positions within a company; Replaclement positions are those whose occupants are meant to be substitutes for a regular staff member who is, due to either maternity, education , vacation, or some other kinds of leave, is unable to work for a short period of time. Third, it will further uphold the rights of dispatched laborers to equal compensation for equal work. As many companies using dispatched labor offer different levels of wages and benefits to employees under the labor contract system and dispatched laborers, the ammended law will further regulate the agreements which labor dispatchers and companies enter, as well as the contracts signed with dispatched laborers, stipulating that dispatched laborers receive equal compensation for equal work in any kind of organization to which they are dispatched. Fourth, it will increase penalties on enterprises which violate labor laws. For egregious violations of the law by labor dispatchers and companies using dispatched labor, the original fine of not less than 1000 yuan and not more than 5000 yuan per person will be increased to 5000–10,000 yuan per person. Further, the business license of the labor dispatcher may be revoked. Any company which engages in labor dispatching without a permit will be punished by labor administration departments, have all illicit earnings seized, and be fined.95 To further standardize labor dispatching, I make the following recommendations. First, legislation should clearly mandate that companies using dispatched labor establish institutions whereby dispatched laborers may become regular employees of an enterprise after a certain number of years, in order to encourage enterprises to use workers with long-term contracts and promote integration of the two systems. 95  Ammended Labor Contract Law (Draft) 劳动合同法修正案（草案）条文, accessed from www.npc.gov.cn on July 6, 2012.

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Second, government departments in charge of this should stipulate a the scope of permissible use of labor dispatching regulations, i.e. positive lists (that identify the kinds of work for which it is applicable) or negative lists (that identify those areas and kinds of work for which it is clearly nont applicable). They may also impose limitation to the total number of dispatched laborers or its size as a proportion to the total staff in given industries or enterprises. Third, they should give equal consultative rights to the unions or worker representative assemblies of companies that use dispatched labor, meaning that internal members of those companies will decide for themselves if labor dispatching should be used, and if so, the time, number, and proportions of dispatched labor to be used. Fourth, they should implement a record-filing system for the usage of dispatched laborers and establish statistics-compilation systems for the usage of dispatched labor, in order to better regulate implementation conditions. Conclusion In 2012, it would seem that neither worker condition nor labor relations were greatly affected by economic slowdown. Instead, the year saw steady development in both in a positive direction. How can we explain this? First, reversals to supply and demand on labor markets played a decisive role. We can even forecast that in the forseeable future they will continue to guide wages and other labor conditions onto a path of sustained improvements. Second, laws and regulations that mean meant to help establish harmonious labor relations and joint efforts to improve both labor and wage conditions have yielded some results. These two factors together determined the stability in China’s labor conditions during the economic downturn. References All China Federation of Trade Unions (ACFTU) Research Bureau 全国总工会研 究室, “2011 nian gonghui zuzhi he gonghui gongzuo fazhan zhuangkuang tongji baogao 2011 年工会组织和工会工作发展状况统计公报 [Statistical Report on the Development Situation of Union Organizations and Union Work in 2011],” Gongyun yanjiu 工运研究, (2011): 11. All China Federation of Trade Unions, Zhongguo tese shehui zhuyi gonghui fazhan daolu xuexi duben 中国特色社会主义工会发展道路学习读本 [A Reader for the Road for Union Development Under Socialism with Chinese Characteristics]. (Beijing: Zhongguo Gongren Press, 2012.

Chapter 14

Statistical Overview of Social Development Zhang Liping* 1

Economic Development

Chinese economic growth is stable. As of the end of the third quarter of 2012, national GDP was 32.0692 trillion yuan. Calculated based on constant prices, that’s a year-on-year growth of 7.7 percent. Growth in primary industries was 4.2 percent, 8.1 percent in secondary industries, and 7.9 percent in tertiary industries (see Figure 14.1).

Figure 14.1

Changes to total gdp and growth rates Data source: Data from 1978 to 2011 come from the Zhongguotongjinianjian 2012 《中国统计摘要 2012》[China Statistical Yearbook 2012] (Beijing: ZhongguoTongji Press) 2012. Data from 2012 come from the official website of the National Bureau of Statistics: http://www.stats.gov.cn/tjsj/

*  Zhang Liping is an associate researcher at the Sociology Institute of the Chinese Academy of Social Sciences.

© koninklijke brill nv, leiden, ���5 | doi ��.��63/9789004276536_014

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The total value of retail sales is an important indicator for analyzing how people live, the public’s spending power, currency in circulation, and other issues. At the end of 2011, total value of retail sales was 18.44 trillion yuan. As of the end of October, the total for year 2012 was 16.83558 trillion, a year-on-year increase of 14.1 percent. Of that total, urban retail sales totaled 14.94753 trillion yuan, a year-on-year increase of 14.2 percent, and rural retail sales totaled 2.25895 trillion yuan, a year-on-year increase of 13.3 percent. Retail sales of consumer goods grewfaster than food and beverage sales, which generated revenue of 1.88805 trillion yuan, a year-on-year increase of 13.3 percent. Total sales of commercial goods was 14.94753 trillion yuan, a growth of 14.2 percent. Over the first eight months of 2012, monthly growth held steady around 1.6 trillion yuan, up to 1.8 trillion and higher beginning in September. Year-onyear growth in 2012 has hovered in the 13 to 15 percent zone, lower than in 2011 (see Figure 14.2). As the effects of the global financial crisis have continued to spread, the internal and external environments for the development of trade have become complicated and stark. There have been decreases in both imports and exports, and trade deficits are growing. As of October, 2012, total import and export value was USD $3.161567 trillion, a year-on-year growth of 6.3 percent. Of that figure, exports accounted for USD $1.670901 trillion, a growth of 7.8 percent, and imports for USD $1.490665, a growth of 4.6 percent (see Figure 14.3).

Figure 14.2

Changes to total retail sales of consumer goods in society Data source: National Bureau of Statistics, official website

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Figure 14.3

Changes to total imports and exports Data source: Data from 1990 to 2011 come from the Zhongguotong­jinianjian 2012《中国统计摘要 2012》[China Statistical Yearbook 2012] (Beijing: ZhongguoTongji Press) 2012. Data from 2012 come from the official website of the General Administration of Customs of the People’s Republic of China (www.customs.gov.cn/default.aspx?tabid=400)

Figure 14.4

New urban employment and reemployment Data source: Data from 1990 to 2011 come from the Zhongguotongjinianjian 2012《中国统计摘要 2012》[China Statistical Yearbook 2012] (Beijing: ZhongguoTongji Press) 2012. Data from 2012 come from the Ministry of Human Resources and Social Security

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Labor and Employment

Employment in China is overall stable. From January to September 2012, nationwide urban employment increased by 10.24 million people. Urban reemployment grew by 4.32 million people, and 1.35 million people with employment difficulties found employment (see Figure 14.4).

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Urban registered unemployment figures decreased in the late 1970s but grew again in the mid 1980s. The urban registered unemployment rate exceeded 5.0 percent in the early era of Reform and Opening, fell to 1.8 percent in 1985, rose again to 3.0 percent in 1996, then again to 4.0 percent in 2002, and rose slightly thereafter. As of the end of September, 2012, the urban registered unemployment rate was 4.1 percent. Surveyed unemployment rates in the same years were all higher than registered unemployment rates (see Figure 14.5). Wage levels of workers employed in urban work units have grown rapidly in recent years. In 1995, average annual wages in state-owned work units were 5553 yuan, 3934 in urban collective units, and 7728 in other work units. In 2011, average annual wages in state-owned work units were 43,483 yuan, 29,781 yuan in urban collective units, and 31,323 yuan in other work units (see Figure 14.6). Since the implementation of the minimum wage system, all 31 provinces have instituted minimum wage standards, but with great disparities between regions. Data from 2012 indicate that the highest monthly minimum wage standard in the nation was in Shenzhen, at 1500 yuan. The highest hourly wage standard for part-time laborers was in Beijing, at 14 yuan (see Figure 14.7).

Figure 14.5

Urban registered unemployment numbers and rates Data source: Data from 1978 to 2011 come from the Zhongguotongjinianjian 2012《中国统计摘要 2012》[China Statistical Yearbook 2012] (Beijing: ZhongguoTongji Press) 2012. Data from 2012 come from the official website of the Ministry of Human Resources and Social Security (http:// www.mohrss.gov.cn)

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Figure 14.6

Average monetary wages in urban work units Data source: Data from 1978 to 2011 come from the Zhongguotong­jinianjian 2012《中国统计摘要 2012》[China Statistical Yearbook 2012] (Beijing: ZhongguoTongji Press) 2012

Figure 14.7

Minimum wage standards around the nation Data source: Information organized from all regions

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The employment rate for rural non-agricultural workers continues to increase. The number of employed migrant workers increased from 225 million in 2008 to 253 million in 2011, with an increase in the number of migrant workers who work away from home from 140 million to 159 million (see Figure 14.8).

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Figure 14.8

Numbers and structure of rural migrant laborers Data source: 2011 Nian woguo nongmingong diaocha jiance baogao 《2011年我国农民工调查监测报告》[2011 Chinese Rural Migrant Laborer Survey Report], accessed from the National Bureau of Statistics website (http://www.stats.gov.cn/tjsj/)

Figure 14.9

Industries employing rural migrant laborers Data source: 2011 Nian woguo nongmingong diaocha jiance baogao《2011 年我国农民工调查监测报告》[2011 Chinese Rural Migrant Laborer Survey Report], accessed from the National Bureau of Statistics website (http://www.stats.gov.cn/tjsj/)

Statistics from 2011 indicate that 36 percent of rural migrant laborers were employed in the manufacturing industry, the most of all industries. Another 17.7 percent were employed in construction, 12.2 percent in resident services and other services, and 10.1 percent in wholesale and retail sales (see Figure 14.9).

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Urban and Rural Resident Lives

Urban and rural resident incomes maintained sustained growth and there were significant improvements to urban and rural living standards, but the urban-rural gap remains. At the income level, per capita urban resident disposable income grew from 11,759.5 yuan in 2006 to 21,808.8 yuan in 2011. Rural resident household net incomes grew from 3587 yuan to 6977.3 yuan over that same period. A look at income rate growths indicates that in 2010 and 2011, rural resident income growth was faster than urban resident income growth (see Figure 14.10). There are also great disparities within both urban and rural income levels. Quintile urban-rural resident household income data indicate that in 2005, high urban income earners earned 5.7 times as much as low urban income earners. The proportion fell thereafter, down to 5.35 in 2011. The high-low disparity among rural income earners is even higher, with the high income earners earning 7.26 times as much as low income earners. This disparity continued to increase thereafter, to 8.38 in 2011 (see Figure 14.11). As the people’s living standards have increased, there have been both quantitative growth to resident consumption levels and changes to the consumption structure. Data from recent years indicate that per capita urban consumption expenditures grew from 8697 yuan in 2006 to 15,161 yuan, and that

Figure 14.10 Changes to urban-rural resident income and expenditures, 2006–2011 Data source: Zhongguotongjinianjian 2012《中国统计摘要 2012》 [China Statistical Yearbook 2012] (Beijing: ZhongguoTongji Press) 2012

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Figure 14.11 Urban resident household disposable incomes and rural resident household net incomes by quintile Data source: Zhongguotongjinianjian 2012《中国统计摘要 2012》 [China Statistical Yearbook 2012] (Beijing: ZhongguoTongji Press) 2012

per capita rural resident living consumption expenditures increased from 2829 yuan in 2006 to 5221 yuan. In the structure of urban resident household consumption, there have been fluctuations to food expenditures in recent years, from 35.8 percent in 2006 down to 35.7 percent in 2010, and back up to 36.3 percent in 2011. From 2006 to 2011, transportation and telecommunications expenditures increased from 13.2 percent to 14.2 percent. Clothing expenditures increased from 10.4 percent to 11 percent, and there were decreases to the proportion of expenditures going toward housing and health care. The largest category of rural consumption expenditures from 2006 to 2011 was food expenditures, which fell from 43 percent to 40.3 percent over that period. Rural housing expenditures grew from 16.5 percent to 18.4 percent. Transportation and telecommunications expenses remained stable around 10 percent, and medial expenses increased from 6.8 percent to 8.4 percent (see Figure 14.12).

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Figure 14.12 Per capita urban resident consumption expenses and per capita rural resident living consumption expenses (yuan) Data source: Zhongguotongjinianjian 2012《中国统计摘要 2012》 [China Statistical Yearbook 2012] (Beijing: ZhongguoTongji Press) 2012

The consumer price index (CPI) is an indicator for measuring price fluctuations based on prices of products and services related to resident living. CPI exhibited a year-on-year growth of 4.5 percent in January 2012, with the yearon-year growth rate falling in every subsequent month, down to 1.7 percent in October. In months with relatively high CPI, the effects of increases to food prices were stronger. Most notably, vegetable prices rose continuously, 23 percent in January and 31 percent in June. This exerts a great influence on the lives of the masses, particularly those with low incomes (see Figure 14.13). The quality of housing conditions is an important indicator inquality of life. In recent years, the total area of newly constructed housing in both urban and rural areas has increased yearly, with growth in total area of new rural housing outpacing that of new urban housing. The average urban per capita housing area grew from 24.5 square meters in 2002 to 32.7 square meters in

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Figure 14.13 Changes to CPI and some food price indicators Data source: National Bureau of Statistics website (http://www.stats.gov .cn/tjsj/)

Figure 14.14 Area of urban-rural newly constructed housing and per capita area of housing Data source: Zhongguotongjinianjian 2012《中国统计摘要 2012》 [China Statistical Yearbook 2012] (Beijing: ZhongguoTongji Press) 2012

2011, a growth of 8.2 square meters over 10 years. The rural average per capita housing area grew 9.6 meters from the 2002 level to 36.1 square meters in 2011 (see Figure 14.14).

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Social Security and Social Organizations

In recent years, China has made outstanding achievements in social security system construction. The five major social insurances have become its foundation. The New Rural Cooperative Medical Scheme, special social care, and social assistance are its supplementary social security system. The system has been established such that there is a new order in which the old are taken care of, the sick are treated, the unemployed are assisted, and those on hard times are given subsistence allowances. As the social security system’s construction has progressed rapidly, coverage of different kinds of social insurance programs has grown consistently, with the numbers of people enrolled in them growing continuously. Urban basic pension insurance enrollment increased from 174.88 million in 2005 to 257.07 million in 2010, and to 298.75 million at the end of September 2012. That represents an increase of 120 million people over less than six years. Urban basic medical insurance enrollment grew from 137.83 million people in 2005 to 529.06 million in 2011, a 3.8-fold increase. Enrollment in unemployment insurance, workers injury insurance, and maternity insurance also grew, all to different degrees. As of September 2012, enrollment in unemployment insurance had grown from 106.48 million in 2005 to 149.16 million, workers injury insurance enrollment from 84.78 million to 185.67 million, and maternity insurance enrollment from 54.09 million to 150.74 million (see Figure 14.15).

Figure 14.15 Social insurance enrollment figures Data source: Data from 2005 to 2010 came from Zhongguotongjinianjian 2012《中国统计摘要 2012》[China Statistical Yearbook 2012] (Beijing: ZhongguoTongji Press) 2012. Data from 2011 and 2012 came from the official website of the Ministry of Human Resources and Social Security (http://www.mohrss.gov.cn)

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In 2012, China basically achieved complete coverage of new rural and urban resident social pension insurance. As of the end of September, 2012, there were 449 million people enrolled in all insurances (urban and rural), and 124 million enrolled in urban and rural monthly-payment pensions. The promotion of new rural pension insurance has had a major effect on the total coverage of pension insurance. In June 2012, there were 360 million people enrolled in rural pension insurance, with 110 million receiving monthly pension payments (see Figure 14.16). The adequate standards of living program (subsistence subsidies) is an important component of the social aid system, by which efforts are made to resolve the living difficulties of people living in poverty. In 2007, an adequate standards of living (subsistence subsidy) program was instituted in rural villages nationwide. Initial enrollment in that year was 53.06 million, and 52.51 million in 2012. Enrollment figures for urban adequate standards of living insurance in the past five years have hovered in the 22 to 23 million range, with the final figure in the third quarter of 2012 at 21.34 million. The five rural insurances include centralized support and decentralized support, both of which combined for total enrollment of 5.033 million in 2006, up to 5.51 million in 2011 and 5.439 million in the third quarter of 2012 (see Figure 14.17).

Figure 14.16 Number of people enrolled in rural pension insurance and number of people receiving monthly pension payments Data source: Ministry of Human Resources and Social Security website (http://www.mohrss.gov.cn)

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Figure 14.17 Urban-rural minimum living guarantees Data source: “Shehui fuwuye tongji jibao (2012 nian san jidu)” “社会服务业 统计季报（2012 年三季度）” [Quarterly Social Service Industry Statistical Report (3rd Quarter 2012)], Ministry of Civil Affairs website (www.mca.gov .cn/article /zwgk/tjsj)

Figure 14.18 Urban minimum guarantee average standards and expenditure levels Data source: “Shehui fuwuye tongji jibao (2012 nian san jidu)” “社会服务业 统计季报（2012 年三季度）” [Quarterly Social Service Industry Statistical Report (3rd Quarter 2012)], Ministry of Civil Affairs website (www.mca.gov .cn/article /zwgk/tjsj)

Adequate standards of living are the key link to measuring urban-rural adequate standards of living institutions. The standards increased from 150 yuan in 2004 to 318.3 yuan in 2012, with the urban minimum standard of monthly per capita expenditures growing from 65 to 234 yuan (see Figure 14.18).

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Owing to rural economic development and the implementation of a series of measures for assisting the poor, the number of people living in poverty in China has fallen from 250 million in 1978 to 14.79 million in 2007. In 2008, after the poverty line was increased to 1196 yuan, the number of people living in poverty increased to 40.07 million. After the poverty line was increased to 1274 yuan in 2010, the number of people living in poverty was 26.88 million. The qualification standard for state rural poverty alleviation programs was established as a per capita net income of 2300 yuan (based on fixed 2010 prices) in 2011. Per the new standards, 122.38 million rural citizens were qualified for assistance (see Figure 14.19). Accelerations to the construction of social welfare and services infrastructure have practically improved and increased the living standards of the elderly, orphaned and disabled children, and the handicapped. After 2008, the number of beds provided by social care institutions exceeded 3 million, up to 3.964 million in 2011. Of that total, the number of beds for elderly and handicapped persons grew from 2.657 million to 3.762 million (see Figure 14.20).

Figure 14.19 Rural poverty alleviation standards and numbers of poor people Notes: 1. Rural poverty figures from before 2007 reflect the absolute rural poverty situation calculated based on rural poverty standards. 2. From 2008 to 2010, rural low-income earners were included within statistics for the poor, making the data for these years incomparable with the data from before 2008. 3. In 2011, the State raised the qualification standard for State poverty alleviation programs to annual per capita net income of 2300 yuan (based on 2010 fixed prices). Per this new standard, there were 122.38 million people qualified for such programs at the end of 2011. Data source: National Bureau of Statistics, Zhongguotongjizhaiyao 2012 《中国统计摘要 2012》 [China Statistical Abstract 2012], (Beijing: ZhongguoTongji Press): 2012

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Institutions for self-autonomy of grassroots citizens have gradually improved. As of September 2011, there were 592,000 village committees and 88,000 residential committees nationwide (see Figure 14.21).

Figure 14.20 Beds provided by social care institutions Data source: Zhongguotongjinianjian 2012《中国统计摘要 2012》 [China Statistical Yearbook 2012] (Beijing: ZhongguoTongji Press) 2012

Figure 14.21 Changes to the numbers of village committees and residential committees Data source: Zhongguotongjinianjian 2012《中国统计摘要 2012》 [China Statistical Yearbook 2012] (Beijing: ZhongguoTongji Press) 2012

Index 11th Chinese People’s Political Consultative Conference (CPPCC) 129, 177, 222, 228, 232 11th Standing Committee of the National People’s Congress 226 16th National Congress 1–2 18th National Congress 1–2, 192, 196 18th National People’s Congress 17, 21, 68, 176 18th National People’s Congress Report 17, 19, 21, 49 2009 State Essential Medicines Catalogue 72 2010 National Population Census Materials 135, 137, 139, 142, 144, 147, 149 2012 China Workplace Balance Index Research Report 225 2012 Survey on White–Collar Workers and their Health 226 211 Project 155–156 26th meeting of the Standing Committee of the Eleventh National People’s Congress 54 985 Project 155–156, 159 ACTFU’s Fifteenth Assembly 235 adequate standards of living 258–259 adequate standards of living program 258 aging population 61, 82, 86, 123, 125–126, 134, 139 agricultural mechanization 205–207, 209 AIDS 179 All-China Federation of Industry and Commerce 193 All-China Federation of Trade Unions (ACFTU) 17, 201, 223, 235–239, 243 All-China Women’s Federation 231 Allport 183 American 62, 106, 127, 181, 183, 188, 222 Anhui 27, 29, 136, 209 anti-Japan riots 174, 176, 188 Apple Inc 229 Armed Police Government Committee 188 Australia 82 Auxiliary positions 244–245

basic health services 74, 80, 84, 86 basic medical insurance 6, 12, 20, 57–59, 68, 71, 224, 257 basic medical insurance payments 68 basic medical insurance pilots 71 basic pension funds 67–68 basic pension insurance 6, 12, 20, 56, 62–63, 66, 68, 224, 257 basic pension payments 55–56 Basic pensions 56 Basic Public Health Projects 73, 80–81, 84 bei piao [北漂, drifting northward] 98 Beijing 27–28, 60, 63, 103, 117, 136, 161, 166, 168, 170, 173–174, 179, 184–187, 189, 221, 223, 227–228, 233, 240, 250 Beijing municipal government 233 Beijing Olympics 174 Beijing Press Bureau 184 birth rate 145, 220 blue-collar 104, 217, 230, 233–234 “broken windows” phenomenon 174 Bureau of Youth and Societal Issues 152 Central Document Number One 210 Central Military Commission 66 Central Peopleʼs Broadcasting Station 188 changes 4, 10–11, 17, 24–25, 36–42, 44, 46–48, 62–63, 70, 78, 81, 84, 91, 93, 100, 115–116, 118, 124–125, 138, 142–143, 151–154, 156–158, 193, 196, 199–200, 205, 208–209, 213, 215, 220, 231, 237, 247–249, 253, 256, 261 Changsha 174 Chengdu 117, 185, 229 child labor 229–230, 234 China Banking Regulatory Commission  177 China Central Television (CCTV) 172, 188, 190 China Education Online 157 China Federation of Industry 193 China Federation of Trade Unions (ACFTU) 17, 201, 223, 235–239, 243 China Internet Network Information Center (CNNIC) 8, 175 n. 19

264 China Southern Airlines 188 China Three Gorges University 173 China Wage and Salary Development Report 223 China’s Social Insurance Law 60 Chinese Academy of Social Sciences Institute of Sociology 133, 152 Chinese Communist Party (CCP) 6, 55–56, 71, 165–166, 192, 196–200 Chinese Communist Party Constitution 200 Chinese Communist Party members 196, 198 Chinese Communist Party’s Politburo Standing Committee and State Council 56 Chinese Democratic League 64 Chinese Economic Census 42 Chinese Economy and Society 1–2 Chinese Peopleʼs Political Consultative Conference (CPPCC) 129, 177, 222, 232 Chinese Private Business Owner Research 193 Chinese Private Business Owner Research Group 193 Chinese Private Business Owner Sampling Survey 193 Chinese Private Business Owner Sampling Survey Data 193 Chinese Private Economy Research Institute 193 Chinese Social Development 8, 15, 125 Chongqing 27, 29, 79, 136, 183 Civil Affairs departments 8, 125, 127, 165 Clothing consumption 30 coal mine accidents 225 Collective Labor Relations 217, 235, 238 commercial insurance organizations 64–65, 76, 90 Commission for Discipline Investigation 173 communications 31–32, 182, 186, 244 communications expenditures 31–32, 254 Communist Party Central Committee 6, 196 Communist Youth League 173, 185, 196 community citizens 231 community health services 82 compensation system 19 confidence 35, 117–120, 122, 124–125, 130–132, 177

index conflicts 16–17, 61, 130, 167–168, 178, 187, 189, 191, 205–206, 215, 230, 237 Consumer Confidence 35, 117–119, 120, 122, 124–125 consumer price index (CPI) 9, 119, 124–125, 168, 222, 255–256 Consumer Spending 22–23, 26, 28–29, 33, 37 Consumer Spending Level 26, 28 consumption capacity 35–38 consumption demand 18, 34, 37–38 consumption disparities 26 consumption expenditure ratios 36 consumption expenditures 3–4, 26, 30, 253–254 consumption growth 15, 36 Consumption Levels 3, 11, 28, 194, 253 consumption markets 36–38 consumption rates 34 consumption ratio 30 consumption structure 23, 29, 37–38, 253 Consumption Trends 33–34, 36 consumption–driving policies 37 corruption 163, 172–173 CPC Central Committee 72, 193 credit crisis 128 Dalian 117, 172, 240 demand structure 36 Democratic Party 197–198 Development and Reform Bureau 173 diaosi 176 Diaoyu Islands 131–132, 167, 169, 174–175, 187 dispatched labor 236, 243–246 dispatched laborers 236, 243–246 Disposable Income 3, 11, 23–24, 26–27, 33, 35, 43–45, 48–49, 58–59, 221, 253–254 Disposable Incomes 254 Distribution of Agricultural Production Capacity 205–206, 208 distribution of China’s agricultural production capacity 205 distribution structures 19 distributive structure of income 15 District Standing Committee 188 domestic demand 18 Dongfang ribao 189 Dongyang 177

index drug-commissions policy 89 Durable consumer goods 30–31, 38 ecological civilization 20–21 ecological clean up 179 ecological clean-ups 178 economic differentiation 192–193 Economic growth 2, 8–10, 15–18, 21, 23, 34, 36–37, 66, 211–212, 217–218, 221, 228, 233, 247 economic growth rate 8, 10, 33, 221 economic restructuring 8, 15–17 education system 5, 13 Eleventh NPC Standing Committee, the “Ammended Labor Contract Law (Draft)” 244 emergency management 8, 186 Employment 1, 4, 5, 10–11, 13–19, 51, 61–62, 82, 89, 95–96, 102–103, 105–107, 118, 122–123, 131, 133–134, 151–159, 161–165, 176, 179, 211, 217, 219, 234, 243, 249 employment growth 10, 211 employment policies 10, 19, 51 employment rate 4 , 154–155, 243, 251 employment rates 4, 61, 102, 155, 163 Employment satisfaction 157 employment structure 4, 11, 16, 18, 205 employment systems 105, 165 Empty nest household rates 138 empty nest phenomenon 139, 149 energy structure 18 Energy-saving Products Benefit the People Program 37 Engel coefficients 36 Engel coefficient 3 Enrollment-increasing policies 152 enterprise citizens 231 Enterprise Democratic Management Regulations 239 enterprise income share 42–43 enterprises 5, 11, 16, 19, 39, 42, 44, 51, 53–54, 56, 60, 62, 64–66, 68, 90, 106, 108, 158–161, 164–165, 185, 199–202, 204, 207, 211–214, 218–219, 221–222, 227–228, 230–231, 234–236, 238–246 environmental protection 20–21, 123, 185 essential medicines program 72–74, 79–80, 84

265 European 62, 106, 222 European and American debt crises 222 Export growth 2, 15 Fairness 19–21, 50, 53, 61–62, 74, 84, 93, 131, 159, 163, 164, 223, 228, 233 fairness and justice 1–2, 21 family living arrangements 133–134, 143 Fang-Han war 170, 177 Feiliao 190 Fewer rural migrants 108 fifth national population census 137–138 financial crisis 2, 8, 153, 158, 162, 174, 191, 243, 248 financially dependent on their parents 152, 155 fiscal expenditures 13, 18, 55, 64 fiscal investments 64, 88–89, 210 fiscal subsidies 78–79, 83 floating population 8, 79, 95–96, 99–100, 102, 133, 135, 138, 143, 145, 148, 231–232 Floating Population Dynamic Oversight Data 95 floating population management 8, 14 Food and drug safety 122–123, 128, 172 Food consumption 30 Foxconn 229–230 Gansu 26, 54, 138, 209 GDP growth 9, 11, 17, 36, 211, 218, 221 General Political Department 66 General practitioners (GPs) 80, 82–83, 86–87 General Staff Headquarters of the People’s Liberation Army 66 Gini coefficients 45 global financial crisis 2, 8, 15, 174, 243, 248 Global Times 188 Gongren ribao 232, 239 n. 83 government 18–19, 39, 42, 44, 55–56, 60, 62–65, 67–68, 71–73, 75, 77–78, 80–81, 83–84, 86–89, 91–93, 96, 128–132, 148–149, 151, 158–163, 165, 167–168, 172, 175–177, 179–189, 191, 202, 207, 210, 229, 231–234, 238–241, 246 Government compensations 73 government income share 42–43

266 grain production 3, 9, 208–209 grassroots 73, 82, 86, 168, 176, 180–181, 189, 200, 233, 235, 261 Grassroots communities 7–8 grassroots healthcare provider reforms 80 grassroots healthcare providers 70, 73–74, 79–81, 83–86, 93–94 Grassroots healthcareservice 74, 84 grassroots medical and health centers 72 grassroots medical services 73, 79–80, 85, 87 grassroots medical services reforms 80, 86 grassroots medicine 70 grassroots organizations 73, 82, 84 grassroots public health services 73, 85 gray benefits 162 GRE 154 gross domestic product (GDP) 2–3, 9, 11, 13, 17, 19, 23, 33, 36, 39–44, 48, 51, 77, 211, 218, 221, 247 Growth Rates 4, 8–10, 18, 33, 36, 47, 221, 247, 255 Guangdong 62–64, 176, 187–188, 209, 219, 222, 225–226, 228, 232–233, 237–238, 241 Guangdong Provincial Party Committee 233 Guangzhou 117, 161, 166, 173, 175–176, 188, 232 guanxi [connections] 158–160 Guiding Opinions Regarding Reform Pilots to Public Hospitals 73 Guiding Opinions Regarding the Development of Urban-Rural Major Illness Insurance Work 76 Guiding Opinions Regarding the Promotion of Reforms to New Rural Cooperative Medical Scheme Payment Methods 76 Guizhou 26, 78, 86 Hainan 240 Hangzhou 173 Harmonious Society 167 health 6, 32, 74, 81–82, 86, 103, 126, 134, 140, 142, 145–146, 190, 226, 234, 244 health of seniors 81, 133, 141, 149 health services 70, 72–74, 79–82, 84–86, 93 Health Status 133–134, 139, 141, 150, 172 health system 71, 74, 84 healthcare 4–5, 8, 33, 36, 69, 71, 77, 254 healthcare reform 70–72, 74, 77, 86–87, 90, 92–94 healthcare service system 70, 72

index Healthcare system 5–6, 33, 70–72, 74 healthcare system reforms 6, 70 Hebei 55, 212, 240–241 Heilongjiang 26, 138, 173, 209 Henan 64, 174, 209, 212, 240 Henan Provincial Party Committee 183 Home appliances to the countryside 37 “home appliances to the countryside” policy 37 Home ownership 108–109 Hong Kong 90, 176 hospital management institutions 89 household consumption 9, 23, 33–34, 37–38, 122 household consumption capacity 37–38 household consumption rates 33 household consumption structures 38 household expenditures 194 household income 5, 36, 39, 42 household income share 42 Household Life Consumption 36 Household Net Incomes 213, 253 household registration 96–98, 106–107, 212, 232–233 household registration [hukou] 95, 234 household registration [hukou] system 14 household registration system 14, 19, 97, 105 household registrations 8, 14, 95, 160 household structures 146 household support systems 150 household wealth 3 households 3, 13, 16, 26, 31–32, 36, 39, 42, 44, 123, 133–135, 137–138, 141, 145–146, 148–150, 207, 210, 235 houseslaves 35 housing and residential surroundings 32 housing units 13, 32, 34, 109 Hu Jintao 49, 223 Hu Xijin incident 188 Huanqiu ribao 188–189 Huashan incident 186 Hubei 185, 240 hukou 14, 95, 160, 211, 234 Hunan 173, 183, 186, 222, 240 Hunan Provincial Discipline Investigation Commission 174 IELTS 154 illness insurance 53, 57–58, 65, 69, 76

index Implementation Plan for the Recent Priorities of the Health Care System Reform (2009–2011) 72 Income distribution 11, 15, 19, 21, 39, 42–45, 48–51, 65, 89, 213, 223 income distribution reform 39, 50–51, 64, 217, 223 income elasticity 36 income growth rates 33 income inequality 46, 51 income tax 43, 51 indemnificatory (guaranteed) and comfortable housing project 13 industrialization 33, 41, 143, 212, 215 Institute of Sociology of Chinese Academy of Social Sciences 151 Internet politics 186 Internet Public Opinion 167–168, 190 Internet-based Public Opinion 167, 175 Investigation into the Love and Marital Conditions of the New Generation of Migrant Laborers 231 invisible unemployed 155 invisible unemployment 155 Japan 33, 131–132, 168 Jiangmen 174, 232 Jiangsu 27, 29, 64, 78, 136, 172, 207, 209, 219, 236, 241 Jiefang Ribo 188 Jilin 27, 29, 136, 209 Labor 8, 10–11, 16–20, 89–90, 104–105, 141, 205, 208, 211–213, 217–220, 229–230, 237, 239, 242–244, 246, 249 labor compensations 14, 19, 33, 40, 48, 50 Labor Contract Law 108, 202, 217, 229, 242–244 Labor demand 11, 218–220 labor dispatch 234, 246 Labor Dispatching 217, 227, 242–246 labor disputes 16, 217, 227–228, 230, 238, 241, 245 labor income 39–40, 143–146 labor income share 39–40, 48 Labor Law 243 labor market 10–11, 16, 145 n. 15, 152, 156, 159–161, 163–164, 217–220, 242, 246 labor protection laws 217, 229

267 labor quality 18 Labor Relations 15–16, 217, 220 n. 21, 228–230, 234–235, 238, 242–243, 246 labor share 40–41 labor stoppages 16, 227–229, 237 labor structure 18 labor training system 18–19 labor-capital collective bargaining 239–242 labor-intensive industries 16, 102, 104, 109, 222 land distribution 20 Law of Diminishing Marginal Propensity to Consume 34 Lee Kyu-hung 60, 240 Liaoning 27, 136 Liberation Daily 188 life consumption expenditures 3–4 life expectancy 33, 61–62, 134, 145–147 living arrangements 133–134, 143 Living standards 2–3, 23, 32, 49, 101, 119, 130, 231, 253, 260 local pension insurance funds 68 Luoyang 64, 183 Macau 90, 106 Marital status 141–142 marketization 7, 18, 88, 90, 215 maternity insurance 6, 12, 60, 115, 159, 224, 257 MCA data 7–8 medical and health maintenance expenditures 32 medical and healthcare service 70, 72 medical and public health services 81 medical assurance 71–80, 84, 93 medical assurance expenditures 73 medical assurance system 71–72, 74–75, 78–79 medical insurance 6, 12, 20, 57–59, 64, 68–69, 71, 74–80, 89, 114, 126, 224, 257 medical insurance funds 58, 69, 87 medical insurance system 58, 71 medical services 6, 30, 69, 72–73, 78–82, 85–88, 93 medical system reforms 64 medicine and health levels 32 microblogs 129, 167, 175, 179, 183, 185, 188, 190 microeconomic indicators 117–118 middle income trap 177

268 migrant laborer pension insurance 57 migrant laborers 4, 10, 20, 59, 67, 98, 108, 149, 219, 222–224, 230–234, 238, 252 migrant population 95, 97–98, 233 migrant workers 51, 110, 231, 251 Migrants 95–115, 232–233, 244 Miliao 190 Military Personnel Insurance Law of the People’s Republic of China 54 minimum living allowances 146 minimum wage standard 11, 36, 221, 241, 250 minimum wage system 250 Ministry of Agriculture’s Rural Economy Institute 211 Ministry of Civil Affairs (MCA) 7–8, 15, 76, 87, 237 Ministry of Education (MoE) 5 Ministry of Finance (MoF) 10, 13, 66, 227 Ministry of Health 87–88 Ministry of Housing and Urban-Rural Development (MOHURD) 12 Ministry of Human Resources and Social Security (MOHRSS) 10, 22, 55, 219 n. 28 mobile Internet 8, 175 mobile Weibo 175 moderately prosperous (xiaokang) society 1–2, 17, 19, 21, 54 Modernization 205–206, 210, 215 MOHRSS Market Information Monitoring Center 218 Momo 190 Mongolia 138, 210 Motorola 230 Nanjing Municipal Party Committee 187 National Audit Office 54 National Bureau of Statistics 9, 11, 23, 59, 95, 211 National Congress 21, 129, 192, 196 National Council for Social Security Fund 63 national fixed asset investments 9 National People’s Congress 186, 222, 226 National Population and Family Planning Commission 95, 134 n. 11 National Social Security Fund Council 62 national team 167, 187 Net Income 11, 24, 26, 33, 47–49, 58, 213, 253, 260

index Netizens 168, 173–183, 186, 189–190 new blue-collar 217, 233–234 new blue-collar workers 217, 233–234 New Generation of Rural Migrant Laborer Research 231 new healthcare reform 70, 92–94 new rural collective medical institutions 6 New Rural Collective Medical Scheme 143 New Rural Cooperative Insurance 58 new rural cooperative medical institutions 6 New Rural Cooperative Medical Insurance 57, 114 New Rural Cooperative Medical Scheme (NRCMS) 20, 57, 67, 71, 75–76, 78–79, 214, 257 New Rural Insurance Scheme 55 New Rural Social Pension Insurance 6, 54–55 New rural social pension insurance pilots 54 New workers 217, 230, 233 NGO 238 NGOS 238 Ningbo 172 Ningbo PX project 187 Ningxia 138 non-Party members 192, 198–199, 223 Non-public Economy 36 Articles 202 non-public enterprises 236 non-rural household registration 96–97, 106–107 non-rural hukou household registration 95 non-rural migrant 97–100, 102–115 Non-rural migrants 97–100, 102–115 Notice Regarding Actively and Safely Promoting Reforms to the Household Registration System 14 Notice Regarding Harmonious Labor Relations in the Development of the Taxicab Industry 228 NPC 177, 186, 196, 222, 228, 232, 242–244 occupational diversification 211–213 official Weibo 167, 184–185, 187 old blue-collar 233 Old-Age Care 35, 61, 117, 125–126, 143, 145, 150 Old-age pauperization 147 Old-age pension 20, 53, 56–57

index old-age pension system 53 old-age pensions 56 Old-Age Support 143 online participation in governance 186–187 Online PR 179–180 Online public relations 179 opinion leaders 181–182 Opinion Leadership 177–178, 180–181 opinion maker 179–181 Opinion Making 180–181 Opinions of the Chinese Communist Party Central Committee and State Council Regarding Deepening Reforms to the Medical and Health-Care System 6 Opinions of the CPC Central Committee and the State Council on Deepening the Health Care System Reform 72 Opinions Regarding Comprehensive Reform Pilots to County-Level Public Hospitals 88 Opinions Regarding Encouraging, Supporting, and Guiding Non-public Economic Development in Individual Private Enterprises 202 Oshima index 45–46, 49 Oshima indices 45–46 Oumu Electronics Company 237 Overall Life Satisfaction 117–118 overtime pay 227 Panjin 172 Party Members 154, 192, 199–200 Party membership 153, 192, 196–198, party organizations 166, 192, 196, 198–201 Party’s 16th National Congress 1–2 Party’s 17th National Congress 192 Party’s 18th National Congress 192 Party’s 18th National People’s Congress 17 Party’s 18th People’s National Congress 17 Pearl River Delta region 241 peasant population 205 Peking University 189, 232 pension fund 53, 57, 61–63, 67–68, 148, 224 pension insurance 6, 12, 20, 54–55, 57, 61, 65, 69, 114, 133, 146, 148–150, 217, 224, 257–258 pension insurance fund 62–63, 68 pension insurance institutions 12, 66–67, 150 pension insurance mechanisms 69

269 pension insurance system 56, 67, 150, People’s Bank of China 177 People’s Congress 17, 19, 21, 49, 54, 68, 176, 186, 222, 226, 239 People’s Daily 167, 187–188 People’s Daily, or Renmin ribao 63, 167, 176, 187–190 people’s livelihood 1–2, 4, 13, 51, 56, 60–61, 64, 167, 191, 232 People’s National Congress (PNC) 21, 129 per capita urban disposable income 11 per capita urban resident disposable income 23, 47, 253 personal expenditures 73 Pingshan 55 Pizhou City 241 planned economy era 148 Planning and Implementation Scheme of Deepening Medical and Health System Reforms During the Twelfth Five-year Plan Period 90 poor-rich divide 119 population ages 113 population structure 64, 70, 84, 93 positions 11, 19, 62, 89, 153, 156, 158–159, 161, 168, 178, 234, 241, 243–245 post-80 generation 99 Postman 183 poverty alleviation programs 260 poverty line 260 PPI 168 price coefficient data 9 price fluctuation endurance 119 Primary income distribution 39, 42–44, 48, 50 primary industries 4, 9, 247 Private Business Owners 192–199 private enterprises 53, 56, 65–66, 68, 106, 159–160, 165, 199–202, 204 Private fixed asset investments 9 production concentration 208–209 property income 24–25, 50, 146–147 prosperous [xiaokang] society 1–2, 17, 54 protect the Diaoyu Islands 187 Provisional Measures for Urban Enterprise Worker Basic Pension Insurance Relationship Transfer and Continuance 66

270 public fiscal transference income 20 public health service 72, 80, 86 public health services 73–74, 79–81, 84–85 public healthcare services 72 Public hospitals 70, 72–74, 78–79, 83–84, 87–94 public intellectual 178 public opinion 10, 59, 167–168, 180, 182, 184–185, 187, 189 Public Opinion Oversight Bureau 185 Public Security 118, 179, 184–186, 232 public servants 159, 186, 233 public service management 65 public welfare 14, 70, 72–73, 88, 90, 181, 205, 214 PX project 172, 187 Qidong 172, 187 Qinghai 54, 79, 138 quality of life 3, 23, 30, 38, 101, 117, 150, 162, 212, 215, 255 real estate prices 13, 23, 34, 109, 119, 159, 161, 168, 191 Realize Your Dream Program 232 redistribution 19, 50, 84 reemployment 249 Reform and Opening 2, 26, 105, 143, 145 n. 15, 250 Regional Income Disparities 47 Regulations for Resolving Enterprise Labor Disputes within Enterprises through Arbitration 230 Regulations on Guarantee for Wage Payment 222 Regulatory Rules for Application, Eligibility Verification, and Allocation of Beijing Public Rental Housing 233 Renmin ribao 63, 167, 176, 187–190, 222 n. 37, 227 n. 53, 236 n. 78 Replace the Old with the New 37 Residence Permits 232 resident household consumption 254 resident income 11, 19, 23–26, 30, 33, 39, 45–50, 64–65, 213, 253 Resident Income Disparities 39, 45–49 Resident Income Growth 33, 47, 50, 253 resident income levels 11, 30, 48–49

index resident income ratio 47 resident incomes 11, 19, 23–24, 26, 39, 46–47, 50, 65, 213, 253 resident living standards 23 residential community systems 165 residents’ pension insurance 217 Residents’ Quality of Life 29 Resolution Regarding the Study and Implementation of the Road for Union Development Under Socialism with Chinese Characteristics 235 retail sales 11, 248, 252 retirement age 53, 61–62, 126–128, 224 retirement pension funds 68 retirement pension institution 148 Retirement Pensions 56, 143, 146–147 Reuters News Agency 190 Rules for Rewarding Reporting of Workplace Safety Violations 227 Rules for the Implementation of the Labor Contract Law 243 rural and non–rural migrants 102, 108, 114–115 rural economic development 20, 47, 260 rural household consumption 23, 33, 38 rural household registration 96–97, 106–107, 212 rural households 3–4, 16, 23, 31–33, 36, 38, 96–97, 106–107, 207 Rural incomes 15, 26, 39, 49, 205–206, 213 Rural Insurance 55, 57, 67–68, 224, 258 rural laborer employment 10 rural laborers 10, 12, 14, 20, 165–166, 211 rural migrant laborer production system  231 rural migrant laborers 4, 20, 59, 67, 98, 149, 224, 230–232, 252 Rural migrants 97–100, 102–104, 106–115, 231–232, 244 rural poverty alleviation 15, 20, 260 rural public services system 215 rural quality of life 215 rural resident disposable income 3 rural resident incomes 11, 23, 25, 39, 45–49, 65, 213, 253 rural resident net income 47, 213 rural social security 6 rural workers 205

index SARS 2, 5 Satisfaction with Life Scale 118 SAWS 225, 227 Scientific Development 167 Scientific Development Perspective 18, 21 secondary and tertiary industries 4, 62, 218 secondary industries 4, 9, 218, 247 senior care reliance 134 senior empty nest household rate 138 senior empty nest household rates 138 senior empty nest households 135, 138, 148 senior empty nests 138 senior health statuses 139 senior population 133–134 service consumption demand 38 Shaanxi 27, 29, 137, 171–173, 186, 209 Shaanxi Provincial Department of Finance and Safety Oversight Bureau 173 Shaanxi Provincial Public Security Bureau 186 Shaanxi Provincial Safety Oversight Bureau 173 Shandong 27, 29, 136, 138, 212 Shanghai 26–29, 63, 78, 103, 117, 136, 138, 161, 175, 185–186, 232, 243 Shanxi 27–28, 136, 235, 236 n. 75, 240 share of disposable income 44, 49 share of income 44 share of primary income 42, 44 Shenyang 117, 171, 177, 240 Shenzhen 63, 166, 174, 184, 221, 236–237, 242, 250 Shifang Molybdenum Copper project 172 Sichuan 27, 29, 54, 136, 171–172, 209, 212, 219, 240 Simen Town 241 Sina Government Weibo Report for the First Half of 2012 185 Sina Weibo 169–171, 176, 180–181, 184 sixth national population census 137, 148 Sixth National Population Census 211, 220 sixth population census 133–137 social aid system 258 social assurance 71 Social Care Institutions 260–261 Social conflicts 16–17, 130, 167, 178, 191, 205, 215 social construction 1–2, 21, 149

271 social fairness 19, 21, 61, 131 social fairness and justice 1, 21 social injustice 230 social insurance 6, 12, 43, 53–54, 59–60, 63–66, 69, 75, 114–115, 217, 224, 227–228, 231–232, 244, 257 Social Insurance Agreement between the Government of the People’s Republic of China and the Government of the Republic of Korea 60 social insurance fee 63 social insurance fees 63–64, 244 social insurance welfare 43 Social Interaction 112 social management 2, 7–8, 14–15, 149, 165, 215 social management system 159–160, 163, 165 Social management system reforms 14 Social Medical Assurances 75 social networking sites (SNS) 168, 175 social organization management 8, 14 Social Security 12–14, 19, 53, 59, 114, 257 social security fees 43, 63 social security fund 63 social security growth 64 social security system 2, 6, 8, 12, 20, 23, 35–36, 51, 54, 56, 64–65, 114, 215, 232, 257 Social Security Trust Fund 62 Social stability 54, 117, 119, 122, 131, 178, 238 social structure 138, 143 social transition 168, 174 social welfare 6, 71, 78, 103–104, 113, 260 social welfare treatment 79 South China Sea issues 167, 174 South Korea 33, 60, 168 Special Rules for the Labor Protection of Female Workers 226 State Administration for Industry and Commerce 193 State Administration of Foreign Exchange (SAFE) 3 State Administration of Workplace Safety (SAWS) 225 State Basic Public Health Service Norms (2009) 72 State Basic Public Health Service Projects 72 State Council 54–56, 62, 202, 226, 232

272 State Council endorsed the Twelfth Five-year Plan Planning Compendium for Social Insurance 53 State Council General Office 14, 66, 88 State Council General Office Notice Regarding Opinions of Comprehensive Reform Pilots to County-level Public Hospitals 74 State Council General Office Opinions on the Establishment and Improvement of Compensation Mechanisms for Grassroots Medical and Health Organizations 73 State Council Guiding Opinions Regarding the Establishment of the General Practitioner Institution 82 State Council issued the Opinions Regarding Encouraging, Supporting, and Guiding Non-Public Economic Development in Individual Private Enterprises 202 State Council Public Report 184 State Council Resolution to Further Strengthen Rural Healthcare Work 71 State Essential Medicine Work Committee 80 State Essential Medicines Catalogue 80 state fiscal investments 210 State fiscal revenues 3, 10 State Food and Drug Administration 172 State Planning Compendium for Mid and Long Term Education Reforms and Development (2010–2020) 13 State Population and Family Planning Commission (SPFPC) 96 state-owned enterprise 106 state-owned enterprises 51, 106, 158–159, 212, 228, 243 state-owned enterprises (SOEs) 5 stoppages 227–228 structure of primary income 44 subsistence allowances 147, 257 subsistence subsidies 214, 258 sunshine industry 179–180 supply structure 36–37, 215 Supreme People’s Court 177 Tacitus Trap 183 Taicang 64 Taiwan 90, 106

index Taiyuan 229 Tangshan 241 taxicab industry 229 Temporary positions 245 tertiary industries 4, 9, 62, 102, 103, 218, 244, 247 The 2012 Report on Chinese Urban New BlueCollar Workers 234 The China Health Statistical Yearbook 75, 91 n. 8 The employment situation 152, 217–218 The Law of the People’s Republic of China on the Prevention and Control of Occupational Diseases 226 The Measures for Fluidly Linking Up Pension Insurance Institutions Between Public Institutions and Private Enterprises 66 The Ministry of 10, 12, 15, 53, 55, 66, 75–76, 87–88, 211, 227, 232, 237, 249–250, 257 The New Rural Cooperative Medical Scheme 20, 57, 67, 71, 214, 257 Three Rural Issues 205, 210 three-three institution 241 Tianjin 27–28, 79, 136, 222, 240, 243 Tibet 27–28, 54, 136, 138 TOEFL 154 transfer income 24–25, 214 Transportation 4, 29, 31, 86, 104, 109, 111, 228, 254 transportation expenditures 31 Tsinghua University 231 Twelfth Five-year plan 53–54, 82, 90, 239 Twitter 181 two in-sync’s 19 UK 33, 82, 168 Uncle Apartments 173 Uncle Wristwatch 173 unemployment 4, 6, 10, 12, 20, 60, 114–115, 152, 154–155, 158–159, 163, 219, 224, 250, 257 unemployment and/or employment rates 163 unemployment insurance 6, 12, 20, 60, 114–115, 224, 257 Unemployment rate 4, 10, 154, 219, 250 Unfair employment 158 unhealthy 139–146 Union Law 237

273

index United Front Work Department 193 University graduates 10, 51, 151–156, 158–159, 162–163, 165–166 urban and rural communities 7 Urban and rural consumption levels 11 urban and rural grassroots community construction 7 urban and rural income and consumption 23 Urban and rural minimum life insurance 6–7 urban and rural resident income levels 11, 48 Urban and Rural Resident Incomes 11, 23–24, 47, 65, 213, 253 urban and rural resident per capita incomes 19 urban basic medical insurance 6, 257 urban household consumption 33, 38 urban incomes 39, 206, 213 urban resident disposable income 3, 23, 47, 253 urban resident insurance 67–68, 78, 143 Urban Resident Social Pension Insurance 6, 12, 55, 258 Urbanization 7, 19, 50, 138, 143, 212–213, 215, 237 U.S. 33, 62, 131, 168, 182 n. 21, 191 U.S. pension funds 62 Wage Regulations 19 wage share 40 Wang Lijun scandal 175 Wang Yang 233 Wechat 190–191 Weibo 129, 167–171, 173, 175–176, 178–179, 180–181, 183–191 welfare institutions 78 Wen Jiabao 56, 65, 177, 223

Wenchuan earthquake 2 Wenzhou 177 wireless cities 175 worker basic pension insurance 6, 12, 56, 63, 66 workers injury insurance 20, 257 workplace injury insurance 6, 12, 114–115, 224 Work-related Injury Insurance Regulations 59 work-related insurance fund 59 work-related insurance system 59 Wuhan 117, 185, 240–241 Wuhan City Food and Beverage Industry Labor-Capital Collective Contract 241 Xi’an 117, 174 Xiamen 117, 172 Xibaipo 55 Xinhua News Agency 88, 188 Xinjiang 27, 29, 54–55, 96, 137–138 Xinwen Lianbo 129 Yan’an 173, 188 Yin Weimin 60 Youth League 166, 173, 185, 196 Yunnan 27, 29, 54, 136, 138, 212, 222 Yuyao City 241 Zhanjiang 64 Zhejiang 27, 29, 136, 138, 172, 177, 186, 209, 212, 232, 241 Zhejiang provincial NPC Standing Committee 186 Zhengzhou 229 Zhenping 172 Zhongguo qingnianbao 178 Zhongshan 232 Zhuzhou 174