Social and Economic Transitions in China and India: Welfare and Policy Changes 9811961239, 9789811961236

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Social and Economic Transitions in China and India Welfare and Policy Changes Edited by Keerty Nakray Zhang Yi John Clammer Wenjuan Zhang

Social and Economic Transitions in China and India

Keerty Nakray · Zhang Yi · John Clammer · Wenjuan Zhang Editors

Social and Economic Transitions in China and India Welfare and Policy Changes

Editors Keerty Nakray O. P. Jindal Global University Sonipat, India

Zhang Yi Chinese Academy of Social Sciences Beijing, China

John Clammer O. P. Jindal Global University Sonipat, India

Wenjuan Zhang O. P. Jindal Global University Sonipat, India

ISBN 978-981-19-6123-6 ISBN 978-981-19-6124-3 (eBook) https://doi.org/10.1007/978-981-19-6124-3 © The Editor(s) (if applicable) and The Author(s), under exclusive license to Springer Nature Springer Nature Singapore Pte Ltd. 2022 This work is subject to copyright. All rights are solely and exclusively licensed by the Publisher, whether the whole or part of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilms or in any other physical way, and transmission or information storage and retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology now known or hereafter developed. The use of general descriptive names, registered names, trademarks, service marks, etc. in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use. The publisher, the authors, and the editors are safe to assume that the advice and information in this book are believed to be true and accurate at the date of publication. Neither the publisher nor the authors or the editors give a warranty, expressed or implied, with respect to the material contained herein or for any errors or omissions that may have been made. The publisher remains neutral with regard to jurisdictional claims in published maps and institutional affiliations. This Palgrave Macmillan imprint is published by the registered company Springer Nature Singapore Pte Ltd. The registered company address is: 152 Beach Road, #21-01/04 Gateway East, Singapore 189721, Singapore

Dedicated to the people of China and India, may our people stand together in these difficult times of COVID-19 pandemic, climate change and social unrest. Let the indomitable human spirit overcome challenges with resilience and compassion.

Acknowledgements

We are grateful to the National Institute of Social Development, Chinese Academy of Social Sciences and Centre for China-India Studies (CICS), O. P. Jindal Global University, NCR Delhi for supporting two Joint Symposiums titled “Demography, Life-Course and the Welfare States in China and India: Social Transitions” were held both on November 7–8, 2017, at JGU and on December 2, 2018, at the Chinese Academy of Social Sciences, Beijing (China). During the symposium, CICS and NISD identified common theoretical themes underpinning the welfare state developments in China and India. The proposed chapters will incorporate these discussions. A special gratitude to Aleksandra Mineeva for being a great support in facilitating the workshops and the publication of this book. Without her, we would not have come so far. We hope that our collective scholarship will illuminate complex social problems that confront human society in these challenging times. As two large countries with diverse populations, we hold the key to severe global problems of absolute and relative poverty, youth precariousness, gender inequality, unemployment, income inequality, ageing population and climate change. We hope that our book is a contribution to teaching comparative welfare states in China and India.

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Contents

1

Introduction Keerty Nakray, Zhang Yi, John Clammer, and Wenjuan Zhang

1

Part I COVID-19 and the Welfare State 2

3

Response to COVID-19: China’s Major Social Security Measures and Policy Considerations Lianquan Fang and Yupeng Li Labour Markets of India During a Pandemic: Observations from an Ethnographic Survey: In Cities of Lucknow and Pune Narratives of Daily Wage Workers Across Mazdoor Mandis Deepanshu Mohan, Richa Sekhani, Jignesh Mistry, Advaita Singh, Snehal Sreedhar, and Shivani Agarwal

9

31

Part II Human Capital Developments in China and India 4

Divergence and Convergence of Policy Approaches in Universalizing Elementary Education in India and China Wenjuan Zhang

59

ix

x

5

6

7

CONTENTS

Transformation of China’s Employment Structure Since the Reform and Opening-Up Sun Zhaoyang

85

Opportunities and Challenges for Migrant Workers in Building a Well-off Society in an All-round Way Chen Yongyuan

107

China’s Population Changes During the Past Seven Decades and Its Future Policy Reform Zhang Yi

133

Part III Social, Cultural and Demographic Transitions and Welfare State Developments 8

The Process and Pattern of China’s Population Modernization Over the Past 40 Years of Reform and Opening: From Quantity Dividend to Quality Dividend Ge Yanxia

9

Religion and Social Policy: An Indian Perspective John Clammer

10

The Legacy of Traditional Artisanal Production in Modern India: Missing Linkages with Welfare Keerty Nakray

159 187

207 223

11

Right to Education of Persons with Disabilities Y. S. R. Murthy

12

Development of the Old-Age Security System for Building a Well-Off Society Wu Ying

241

Ageing, Demography, and Welfare States in China and India: Familial and Social Transitions Keerty Nakray

265

13

14

Conclusion Keerty Nakray

Index

299

301

Notes on Contributors

Agarwal Shivani is Senior Research Analyst, Centre for New Economics Studies, Jindal School of Liberal Arts and Humanities, OP Jindal Global University. Prof. Dr. Clammer John is a Professor at Jindal School of Liberal Arts and Humanities. He comes to the university after a long period in Japan as Professor of Comparative Sociology and Asian Studies at Sophia University and formerly Director of the Graduate School of Comparative Culture there, and as Visiting Professor at the United Nations University, Tokyo. He is a graduate of Oxford University and completed his D.Phil. degree there in Social Anthropology. Fang Lianquan is a Research Fellow at National Institute of Social Development, Chinese Academy of Social Sciences. He got his Ph.D. in Economics at Graduate School of the Chinese Academy of Social Sciences (GSCASS). His major research is Social Security topics and has published more than 100 articles in this field. Li Yupeng is a Ph.D. candidate at the School of Government, University of Chinese Academy of Social Sciences (UCASS). His research interests include social security and public administration. Mistry Jignesh is Senior Research Analyst and Visual Storyboard Team Lead, Centre for New Economics Studies, Jindal School of Liberal Arts and Humanities, OP Jindal Global University.

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NOTES ON CONTRIBUTORS

Mohan Deepanshu is an Associate Professor of Economics and Director, Centre for New Economics Studies, Jindal School of Liberal Arts and Humanities, OP Jindal Global University. Prof. Dr. Murthy Y. S. R. assumed charge as the First Vice Chancellor of RV University, Bangalore recently. As a former civil servant from the 1985 batch of IAS and Allied Services, he held many responsible and sensitive assignments including in the National Human Rights Commission, Prime Minister’s Office, President’s Secretariat and Cabinet Secretariat. Between 2009 and 2020, Dr. Murthy steered the O. P. Jindal Global University during its rapid expansion phase as a part of its top leadership team as the Registrar. He contributed to its rise in international rankings and becoming an Institution of Eminence (IOE). He holds a Bachelor’s and Master’s Degree in Statistics from the University of Madras, M.A. degree in Human Rights from the University of London and Ph.D. degree from the Tamil Nadu Dr. Ambedkar Law University, Chennai. ViceChancellor RVU. Nakray Keerty is a Professor at the Jindal Global Law School, NCR Delhi and Adjunct Faculty at Centre for Ethics, Yenepoya (Deemed to be University), Mangalore (India). She holds a Ph.D. in Sociology and Social Policy from Queen’s University Belfast, Northern Ireland. Based on her Ph.D. titled “Gender Budgeting and Its Implications on Social Policy: A Study of HIV/AIDS in India” and post-doctoral research, she has edited two books “Social Science Research Ethics for a Globalizing World: Inter-disciplinary and Cross-Cultural Perspectives ” (Routledge, New York) with Margaret Alston and Kerri Whittenbury and “Gender Based Violence and Public Health: International Perspectives on Budgets and Policies ” published by (Routledge, London). She has published in leading global journals on gender budgets, child sensitive budgets and comparative social policy. She has received research grants International Growth Centre, Foundation for Urban Studies, Social Policy Association (UK). Sekhani Richa is Senior Research Analyst, Centre for New Economics Studies, Jindal School of Liberal Arts and Humanities, OP Jindal Global University. Singh Advaita is Senior Research Analyst, Centre for New Economics Studies, Jindal School of Liberal Arts and Humanities, OP Jindal Global University.

NOTES ON CONTRIBUTORS

xiii

Sreedhar Snehal is Research Analyst, Centre for New Economics Studies, Jindal School of Liberal Arts and Humanities, OP Jindal Global University. Yanxia Ge is an Associate Research Fellow at the National Institute of Social Development, Chinese Academy of Social Sciences. She is a graduate of Graduate School of Chinese Academy of Social Sciences, where she completed her Ph.D. in demography. She has published widely across a range of areas including Population transformation, development sociology and social governance. Yi Zhang is a Research Fellow and Director at the National Institute of Social Development of the Chinese Academy of Social Sciences, China. He is the Vice President of Chinese Association of Sociology and the President of Beijing Association of Sociology. In recent years his research has focused on the fields of class structure, population studies and family sociology. Ying Wu is an Associate Research Fellow at the National Institute of Social Development, Chinese Academy of Social Sciences. She got Ph.D. in Sociology at Peking University. She is the author of four books and a number of articles in international renowned journals. Her major research covers social governance, urbanization, grassroots governance and community development. Yongyuan Chen is an Assistant Research Fellow at National Institute of Social Development, CASS, China. She is a graduate of Beijing Normal University, where she received her doctorate degree in Social Psychology. She has published widely across a range of topics in social and cultural psychology. Zhang Wenjuan is an Associate Professor and Assistant Dean for International Collaborations of the Jindal Global Law School in India. She is also leading the Center for India-China Studies at the O. P. Jindal Global University. She got her LL.M. degree from Columbia Law School in 2014 and Juris Master’s Degree from Peking University Law School in 2004. She was a visiting scholar of Yale Law School in 2012 and of Columbia Law School in 2006. She has her Marc Haas fellowship with the Brennan Center for Justice of NYU School of Law in 2015 and her PILNET fellowship in 2006–2007. Before joining the JGLS, she had been a well-respected public interest lawyer in China for over nine years.

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NOTES ON CONTRIBUTORS

Zhaoyang Sun is an Associate Professor at School of Global Education and Development, University of Chinese Academy of Social Sciences. He is a graduate of Warwick University, where he completed his Ph.D. in Sociology. He has published across a range of areas including social development, industry and labour relations, income distribution, ageing and elder care services.

List of Figures

Fig. 3.1 Fig. 3.2

Fig. 3.3 Fig. 3.4 Fig. 3.5 Fig. Fig. Fig. Fig. Fig.

3.6 3.7 3.8 3.9 3.10

Fig. Fig. Fig. Fig.

3.11 3.12 3.13 3.14

Unemployment rate in India (Source Centre for Monitoring the Indian Economy [CMIE]) Informal employment as a percent of total employment by region (excluding developed countries) (Source International Labour Organization [ILO]) Workers waiting for work opportunities at mazdoor mandis in Pune and Lucknow (Source Jignesh Mistry) Workers reaching the mandis in early hours of the day in search of work (in Lucknow) (Source Jignesh Mistry) The housing settlement of the daily wage workers in Lucknow (Source Jignesh Mistry) Age-wise distribution of respondents Distribution of educational status Most common job undertaken by respondents Labour charges per day across categories of workers Correlation between age and change in labour charges per day due to lockdown Monthly income and expenditure pre- and post-lockdown Monthly expenditure pre- and post-lockdown Monthly expenditure pre- and post-lockdown in Lucknow Monthly expenditure pre- and post-lockdown in Pune

32

37 39 40 41 42 43 44 45 47 50 51 51 52

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LIST OF FIGURES

Fig. 4.1

Fig. 4.2

Fig. 4.3

Fig. 6.1 Fig. Fig. Fig. Fig. Fig.

8.1 8.2 8.3 8.4 8.5

Fig. 8.6 Fig. 12.1

Fig. 12.2

Fig. Fig. Fig. Fig.

13.1 13.2 13.3 13.4

Literacy rate among populations aged 65 and above in India and China (Data from http://uis. unesco.org/en/country/cn?=undefined&wbdisable=tru e for China and http://uis.unesco.org/en/country/ in for India) Literacy rate for youths at the age of 15–24 in India and China (Data from http://uis.unesco.org/en/ country/cn?=undefined&wbdisable=true for China and http://uis.unesco.org/en/country/in for India) Literacy rate among population aged 15 and older in India and China (Data from http://uis.unesco.org/ en/country/cn?=undefined&wbdisable=true for China and http://uis.unesco.org/en/country/in for India) Size of migrant workers in China from 1979 to 2019 (stock) Downward trend of the total fertility rate Growth trend of life expectancy Population growth trend Changes of the population age structure Changes of China’s total dependency ratio since the reform and opening-up Changes in the urbanization ratio of permanent residents Since the reform and opening-up Scale and proportion of population aged over 65 in China from 1982 to 2020 (Source 2021 China Statistical Yearbook) Development of old-age insurance for urban and rural residents from 2012 to 2018 (Source National Bureau of Statistics) Chinese pension system reforms Milestones in China’s universal pension Chinese pension system Major milestones in Indian pension system (Source The Figures 13.1, 13.2 and 13.3 are complied by the author from China Labour Bulletin, 2012 and Figure 13.4 from various sources discussed in the text)

73

73

74 109 167 167 168 170 173 175

244

255 278 279 280

281

List of Tables

Table 2.1 Table 2.2 Table 2.3 Table 3.1 Table 3.2 Table 3.3 Table 5.1 Table 5.2 Table 5.3 Table 6.1 Table 7.1

Table 7.2 Table 7.3

A brief history of social security fees deduction Healthcare policies in the pandemic Active employment policy and unemployment protection during the pandemic Percent of total employment in parentheses (2017–2018) Mean monthly income from labour preand post-lockdown Mean Monthly Income and Expenditure (preand post-lockdown) China’ employment structure by urban–rural division, 1978–2019 China’s employment structure by sectors, 1978–2019 Structural deviation of industry and employment imbalance by sectors, 1978–2019 Size and Pattern of Non-agricultural Transfer of Rural Labour in China (2012–2019) Birth rate, death rate and natural growth rate during the initial period of the founding of the people’s Republic of China unit: ‰ Birth rate, death rate and natural growth rate during and after the three-year difficult period Unit: ‰ Birth rate, death rate and natural growth rate of Chinese population Unit: %

11 16 19 37 49 49 88 90 94 112

135 138 142

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LIST OF TABLES

Table 7.4 Table 7.5

Table 8.1 Table 8.2 Table 8.3 Table 8.4 Table 8.5

Table 8.6 Table 12.1 Table 12.2 Table 13.1 Table 13.2 Table 13.3

Total fertility rate in China from 1960 to 2017 (unit: people) Newly-born population, death population and net increase population in China since the reform and opening-up (Unit: ‰, 10,000 people) Four stages of transition of China’s population reproduction pattern Total dependency ratio of population over the years (unit: per cent) Urbanization ratio of permanent residents 1978–2018 (unit: per cent) Infant mortality rate in urban and rural areas monitored during 1991–2015 (unit: per cent) Enrolment rates for children of school age, and for primary school and junior high school graduates during 1978–2016 (unit: per cent) Cultural structure of population aged 6 years and above during 1982–2015 (unit: per cent) Basic old-age insurance for urban workers from 1989 to 2000 Basic old-age insurance for urban workers from 2000 to 2010 Illustrative pension systems for low and middle income countries Overview of Pension Systems in China and India (Helpage International, 2019) Major pension schemes in India

145

147 166 172 174 176

179 181 250 253 272 275 285

CHAPTER 1

Introduction Keerty Nakray, Zhang Yi, John Clammer, and Wenjuan Zhang

At the turn of the century, two large countries China and India were during economic, political and social transition. Each country with a unique historical trajectory, political and social determinants were breaking away from their traditional pasts and moving on the world stage as competitors to the Western world. At the heart of these changes were also massive poverty reduction in the two countries, with China leading the way. China and India are significant in terms of population

K. Nakray (B) · J. Clammer · W. Zhang O. P. Jindal Global University, Sonipat, India e-mail: [email protected]; [email protected] J. Clammer e-mail: [email protected] W. Zhang e-mail: [email protected] Z. Yi Chinese Academy of Social Sciences, Beijing, China e-mail: [email protected]

© The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2022 K. Nakray et al. (eds.), Social and Economic Transitions in China and India, https://doi.org/10.1007/978-981-19-6124-3_1

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numbers and density. Both the countries witnessed several demographic transitions in China and India, including ageing; changes in achievement of life-course milestones such as marriage and having children; increase in youth precariousness and low-quality employment; declining family fertility and improvements in life-expectancy; and rapidly ageing population and increasing dependency ratio. These changes have necessitated welfare state transitions within a short time in China, and India is moving towards universalising pensions and health insurance, upscaling skills training programmes and improving education infrastructure. The Fourth Industrial Revolution has unleashed new challenges such as massive automation and the application of artificial intelligence across varied sectors of education, information technology, medicine and biological research. Advanced economies have well-established welfare states, which albeit retrenchment, can assure their population with minimal levels of social security. However, these challenges are magnified in the context of large countries such as China and India, with varying national and subnational capacities to upscale and implement public policies within a short period. Noteworthy, China has undergone significant reforms since 1978 and expansion in the welfare state, with India still lagging. The Chinese welfare system is generous both in terms of coverage and generosity. It covers 1.3 billion people, and it pulled 800 million out of poverty by 2017, which contributed to a global decline in poverty—also meeting its commitment to the United Nations Millennium Development goals. By 2020, China will historically eliminate absolute poverty, which will be a significant moment in the history of the Chinese nation (Jing et al. 2019). China is an upper-middle-income country leading the global economy. It is improving the standard of living across the country. It has initiated successfully structural shifts in its economy from low-level manufacturing to more sophisticated manufacturing and services. It is one of the few countries globally with growth in 2020, and while China’s GDP is expected to return to its pre-pandemic level by mid-2021, the COVID-19 shock is expected to return to its pre-pandemic levels accentuated many pre-existing structural challenges (The World Bank, 2021).

Demographic Changes in China and India At the heart of the changes in China and Indian society is demography. Much less is known about it as a driver of policy changes in LMICs.

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One of the significant demographic achievements of China is linked to the one-child policy. According to the World Economic Forum (2021) (WEF), China and India’s policies are closely linked. China implemented the one-child policy in 1979 reversed in 2016. Nevertheless, it has a significant impact on China’s demography. However, one of the outcomes is that it is estimated by 2050 that, one-third of China will be over 60. Whereas the year 2050, it is estimated that India’s workforce age population will be comparable in size to that of China’s today—over 800 million people strong. The Indian workforce is expected to reach 800+ million people. However, considering changing technology and automation. Without policy interventions, this demographic dividend will be a demographic curse with widespread unemployment, disruption of cohesion and social disequilibrium. India must recalibrate its programmes for women’s empowerment, family welfare, education and employment. One of the major achievements in the demographic shifts in China and India is the emergence of the middle-class and related improvements in gender, education and health outcomes. China is now a moderately affluent society with a sophisticated welfare system. Lester Thurow, the eminent MIT economist: “A healthy middle class is necessary to have a healthy political democracy. A society made up of rich and poor has no mediating group either politically or economically” (Thurow 1984). The middle class serves as a glue for society, supports the sustenance of competitive capitalism and condones welfare programmes (Thurow 1984). According to the Pew Research Centre Analysis, China and India succeeded in slashing poverty in 2001–2011. From 2001 to 2011, the share of Chinese who are middle income jumped from 3% to 18%. Social mobility amongst Indians is much slower as the share of Indians who are middle income was almost unchanged, inching up from 1% in 2001 to 3% in 2011, the latest year for which data are available (Kochhar 2021). Indian society is marked by stark inequality; the top 1% of Indians are squeezing out the rest. According to Thomas Piketty, 1% of Indians earn 22% of the entire income pool, compared with 14% for China’s top 1% (The Economist, 2018). Most recent studies from PEW Research Centre show that the Indian middle class has shrunk by 32 million because of the COVID-19 pandemic. Globally, it implies that 60% of the global retreat is in the middle class (defined as people with incomes of $10.01–$20 a day). Also increase in participation in a social protection programme, Mahatma Gandhi National Rural Employment Programme (MNREGA), as many

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urban migrant workers have returned to rural areas. Chinese middle class has been less adversely impacted than the Indian middle class. The largest impact in China is the estimated addition of 30 million people to the lowincome tier (incomes of $2.01–$10 a day). The number of people in the middle-income tier likely decreased by 10 million, and poverty was virtually unchanged (Kochhar 2021). The most significant impact in China is the estimated addition of 30 million people to the low-income tier (incomes of $2.01–$10 a day). The number of people in the middleincome tier likely decreased by 10 million, and poverty was virtually unchanged.

Overview of the Chapters In line with the aims and objectives of the book, the chapters have been organised into three themes: (1) COVID-19 and Welfare State, (2) Human Capital Developments in China and India and (3) SocialCultural Changes and the Welfare States. Theme 1, COVID-19, and Welfare State, connects Chapter 2 by Lianquan Fang and Yupeng Li deals with the Chinese welfare responses to the COVID-19 pandemic, which has had devastating impacts on society. Chapter 3 by Deepanshu Mohan et al. deals with the migrant crisis in India resulting from a sudden lockdown announced by the Government of India. Theme two, human capital developments in China and India, brings together Chapter 4, where Wenjuan Zhang addresses the qualitative differences in providing free and universal education in China and India. In Chapter 5, Sun Zhaoyang discusses the transformation of China’s employment structure from a lowquality agricultural economy to a large global player in the manufacturing and service sector. Chapter 6 engages with the challenges of migrant workers and their social mobility in the moderately affluent Chinese society. Chapter 7 by Zhang Yi examines the success of China’s population policy in facilitating demographic changes and its future potential to address future development needs. Theme 3, Chapter 8 by Ge Yanxia addresses the questions of the modernisation of the Chinese population so that it indeed serves as a demographic dividend. Chapter 9 by John Clammer examines the continuing role of religion in meeting the welfare needs of Indian people. Chapter 10 by Keerty Nakray examines the legacy of traditional artisanal production in modern India and initiates new pathways of development. Chapter 11 by YSR Murthy focuses on the rights of disabled people

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in India. Chapter 12 by Wu Ying addresses the welfare needs of the ageing population. Chapter 13 by Keerty Nakray examines ageing and welfare state developments in China and India. Chapter 14 comprises the concluding part of this book.

References Jing, T. Kuhnle, S. Pan, Y. and S. Chen. 2019. Aging, welfare and social policy: China and the nordic countries in comparative perspectives, Cham: Springer Nature Switzerland AG Kochhar, R. (2021, March 18). In the pandemic, India’s middle class shrinks and poverty spreads while China sees smaller changes. Retrieved from PEW Research Centre: https://www.pewresearch.org/fact-tank/2021/03/18/ in-the-pandemic-indias-middle-class-shrinks-and-poverty-spreads-while-chinasees-smaller-changes/ The Economist. (2018, January 21). The elephant in the room: India’s missing middle class. Retrieved from https://www.economist.com/briefing/2018/ 01/11/indias-missing-middle-class The World Bank. 2021. The World Bank in China. [Online] Available at: https://www.worldbank.org/en/country/china/overview(Accessed 1 May 2021) Thurow, L. (1984, October 22). Business forum; The disappearance of the middle class. Retrieved from https://www.nytimes.com/1984/02/05/business/bus iness-forum-the-disappearance-of-the-middle-class.html World Economic Forum. (2021, October 21). This animation shows China and India’s populations are ageing at different rates. Retrieved from https://www. weforum.org/agenda/2020/01/demographics-china-india-diverging/

PART I

COVID-19 and the Welfare State

CHAPTER 2

Response to COVID-19: China’s Major Social Security Measures and Policy Considerations Lianquan Fang and Yupeng Li

Introduction The outbreak of COVID-19 has dramatically impacted all aspects of China’s economic and social life. In the face of the rapid spreading, extensive, and challenging public health emergency since the founding of the People’s Republic of China, the CPC Central Committee has taken decisive measures with solid leadership and the whole country has made great efforts to fight against the pandemic. Various efforts to prevent the pandemic spread have been supported by the resumption of business and industrial activities. In response to this crisis, China has introduced a series of emergency measures to protect people’s livelihood, stabilize

L. Fang (B) Chinese Academy of Social Sciences, Beijing, China e-mail: [email protected] Y. Li University of Chinese Academy of Social Sciences (UCASS), Beijing, China

© The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2022 K. Nakray et al. (eds.), Social and Economic Transitions in China and India, https://doi.org/10.1007/978-981-19-6124-3_2

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employment and promote economic recovery and growth. As a public institutional arrangement made by the state, social security stabilizes everyday economic activities and the safety net for people’s livelihood. Regarded as the “Second Finance” in the national public budget, it plays an even more critical role in the crisis, mainly in two aspects: reducing fees to mitigate the burden on enterprises and stabilize production and operation and increasing expenditure to help the affected, unemployed, and socially vulnerable groups to reduce repercussions on the society. Since its establishment in the 1990s, China’s social security system has undertaken many counter-cyclical tasks. The first time was to resist the impact of the international financial crisis that broke out in 2008. The central government introduced a social security policy based on “five postponements and four reductions”. The second time was to implement large-scale fee reduction policies under the background of supply-side reform in recent years. In 2020, the crisis of the COVID19 pandemic emerged suddenly and had a significant impact. The CPC Central Committee and the State Council undertook solid decisions and implemented a series of social security response measures with unprecedented coverage and intensity. Social security has played an essential role in protecting people’s livelihood, stabilizing society, and helping economic recovery in the fight against the COVID-19 pandemic, which is manifested in the reduction and exemption of social security fees, and strengthening the benefit guarantee in medical care, unemployment, and work injury, as well as the assistance to the unemployed, disadvantaged, and impoverished people affected by the pandemic. A Brief Review of the Social Security Fee Reduction Policies Since 2008 China’s social insurance system includes for old-age insurance, medical emergencies, unemployment, and work injury. The basic old-age and medical insurance are universally available to all residents, whereas the work injury and unemployment insurance cover various occupational groups. In terms of contribution rate: 16% of the old-age insurance is paid by the employer and 8% by the individual; the employer and 2% pay 10% of the medical insurance by the individual; the employer and 0.2% pay the 0.8% of the unemployment insurance by the individual (urban household registration) and zero by the individual (rural household registration); the employer pays 0.2–1.9% of the work injury insurance (Table 2.1).

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Table 2.1 A brief history of social security fees deduction Year

Events

Major policies

2008

Response to the impact of the international financial crisis Supply-side reform to reduce business cost

“Five-relief and four-reduction” on social insurance fees Reduction of pension contribution and unemployment insurance fees slightly The large scale of social insurance contribution reduction

2014–2018

2019–2020

Response to COVID-19

Source The authors

In 2008, for the first time, in response to the international financial crisis on China’s economy, the government implemented a series of counter-cyclical “five-postponement and four-reduction” policies of social insurance contributions nationwide. It stipulated that in 2009, enterprises unable to pay their contributions could apply to postpone their payments of five types of social security contributions for six months. Enterprises in difficulty could reduce four social insurance contributions except for pension insurance, up to 12 months. Since General Secretary Xi Jinping first proposed the New Normal in 2014 as a new governance philosophy, tax and fee reduction has always been one of the main tasks of the annual government work report and economic policy in the supply-side structural reform, and the work agenda of tax and fee reduction has been set every year. At the beginning of 2015, a new round of fee reduction policy with greater intensity and longer duration was launched. Then, in 2019, the “double reduction” policy was launched. The enterprise old-age insurance rate was reduced from 20% to 19%, and then to 16%. At the same time, an important measure to further reduce the contribution base has been taken (the contribution base has been updated from the average wage of urban non-private employees to the average wage of full-scale urban employees). More importantly, the “double reduction” policy is not a staged measure but a long-term strategic and institutionalized arrangement. From 2015 to 2020, six times the five social insurance fees have been reduced. The total rate of the five insurance fees was 43.2% at the end of 2014 (taking Beijing as an example, the same below), and it was reduced to 39.0% by the end of 2019. The enterprise contributions decreased from 32.7% in 2014 to 28.0% at the end of 2019, down by 4.7%. The first five fee reductions helped reduce the burden on enterprises by RMB 550 billion.

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For the fifth time in 2019, the old-age insurance was reduced by 3% (the contribution rate of enterprises in most provinces decreased from 19% to 16%), and the annual fee reduction was RMB 425.2 billion. The total fee reduction from 2015 to 2019 reached one trillion yuan (MOHRSS). The COVID-19 pandemic prevention measures, including social distancing, wearing masks, caused a noticeable impact on consumption, investment, import and export. Problems such as cash flow shortage, rising costs, and poor market expectations brought enterprises’ business resumption and common operation challenges. Especially for some labour-intensive manufacturing and daily service industries, due to the high proportion of labour costs, the business reopens faced strict requirements and great difficulty, and many employees were facing unemployment risks. In continuously reducing enterprises’ social insurance contribution burden for five consecutive years, the fee reduction to fight the pandemic and promote the resumption of work and production was more significant than in 2019. Notably, it is the first time since establishing a modern social security system after the reform and opening those contributions by enterprises were exempted. Major policies of social security reduction, exemption, and postponement during the 2020 pandemic: At the beginning of 2020, the Chinese government issued a series of new social security policies rapidly, given the difficulties in resuming business and production brought by the COVID-19 pandemic. According to the scientific spirit of “targeted, region-specific” prevention and control, the new policies mainly focus on reducing and exempting enterprise social insurance fees in stages, delaying payment of social insurance fees to support enterprises to resume business and production possible (Zheng 2020a). On February 18, 2020, the State Council’s executive meeting gradually reduced and exempted enterprise social insurance fees. On the 20th, the Ministry of Human Resources and Social Security and other two departments jointly issued the Notice on Phased Reduction and Exemption of Enterprise Social Insurance Fees (RSBF [2020] No. 11), stipulating that from February 2020, all provinces except Hubei can exempt the employer contributions of pension, unemployment and work injury insurance for small and medium-sized enterprises from February to June; the employer contributions of the three social insurances of large enterprises and other insured employers except government agencies and institutions can be halved, with the reduction period not exceeding three months; for Hubei Province, which is the most affected, the employer contributions of the three social insurances of

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all types of insured employers except government agencies and institutions shall be exempted, with the exemption period not exceeding five months; enterprises with heavy difficulties in production and operation affected by the pandemic can apply for deferred payment of social insurance fees, with the deferred payment period not exceeding six months in principle, and late payment fees shall be exempted during the deferred payment period. On the 21st, the National Medical Insurance Bureau and other two departments jointly issued the Guiding Opinions on Phased Reduction of Basic Medical Insurance Fees for Employees (YBF [2020] No. 6): stipulating that from February 2020, all localities can, under the premise of ensuring the long-term balance of fund income and expenditure, halve the employer contributions of the employee medical insurance, with the period not exceeding five months, and that all localities can extend the deferred payment policy according to the accumulated balance of funds. By June 2020, although the domestic pandemic prevention situation had stabilized and improved, small and medium-sized enterprises still faced tremendous pressure. They needed policy support due to internal and external factors, such as the supply and demand of the market being difficult to recover quickly in a short time and the pandemic spreading all over the world. Under this situation, the Ministry of Human Resources and Social Security, the Ministry of Finance, and the State Administration of Taxation issued the Notice on Extending the Implementation Period of Phased Reduction and Exemption of Enterprise Social Insurance Fees on June 22 (RSBF [2020] No. 49), which stipulates the extension of the implementation period of three social insurance fee policies for phased reduction and exemption of enterprises, and the permission for the delayed payment of enterprises with great difficulty in production and operation due to the pandemic; further extension of the policy of exempting the employer contributions of three social insurances for small and medium-sized enterprises; more flexible and transparent provisions on the exemption and delayed payment policies for individual industrial and commercial households and all kinds of flexible employees. Flexible and diverse forms of employment, such as self-employed, part-time employed, and new forms of employment, have absorbed many labourers, which is not only an essential part of promoting pandemic prevention and control and economic and social development but also an inherent demand for implementing the task of ensuring employment. Under the pandemic situation, it is difficult for flexible employees to pay total social insurance contributions on time. In this regard, the General Office of

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the State Council issued the Opinions on Supporting Multi-channel Flexible Employment (GBF [2020] No. 27), on July 28, further requiring increased support for flexible employment. At the same time, the assistance to those who have difficulty in flexible employment is improved. According to regulations, those who have difficulty paying basic old-age insurance fees in 2020 can voluntarily suspend payment. The social insurance fee reduction of 2020 is undoubtedly the largest in the domestic social insurance system history. During coping with the international financial crisis in 2008 and the fee reduction in 2015, the social insurance system never saw “exemption”. Therefore, the fee reduction this time is far more than before, almost equivalent to the total of six social insurance fee reductions in the past five years (Zheng 2020b), which is regarded as the most impressive action in the world. This fully reflects the government’s firm support for enterprises’ development and its confidence and determination to reduce the burden on enterprises and help them tide over difficulties. Given the pandemic faced by small and medium-sized enterprises, relevant departments continue to increase support for such enterprises in industries with more difficulty and implement enterprise-targeted, differentiated, and dynamic aiding time and place, to make great efforts to play off the emergency policies (Xu et al. 2020). By the end of September, the fee reduction policy had benefited 11.299 million enterprises, with a reduction or exemption of RMB 910.7 billion, deferred payment of social insurance fees of RMB 61.6 billion, and reduced enterprise contributions of RMB 232.2 billion, reducing enterprise costs by RMB 1,204.5 billion in total, including RMB 1,014 billion for old-age insurance and RMB 150 billion for medical insurance. It is estimated that the reduction and exemption policy will reduce the cost for enterprises by RMB 1.6 trillion in the whole year. The carryover effect is that the old-age insurance rates from January to April were lower than those in the same period of last year. The continuous staged reduction of and work injury insurance rates throughout the year are also calculated. The total annual cost reduction will reach RMB 1.9 trillion, equivalent to about a 13% of the income from five social insurance premiums last year, of which the old-age insurance will reduce the burden on enterprises by 84.1% (State Council 2020a). In addition to a large-scale social security fee reduction, the state has adopted several measures to ensure that social security benefits are paid sufficiently and on time and that benefits are not reduced despite the fee reduction, which fully reflects the advantages of the socialist system with

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Chinese characteristics. The fee reduction policy has dramatically reduced the burden on enterprises and effectively accelerated business and production resumption in various industries. According to China’s Ministry of Industry and Information Technology data, the business resumption rate of SMEs in China reached 91% in May, and the gap between the business resumption rates of various industries was further narrowing. Such efficient business resumption is inseparable from the policy of reducing social security fees and burdens. Analysis on Major Social Security Emergency Measures Adopted During the Pandemic Health care: multi-level security system service covers patients’ expenses: China’s multi-level medical security is a system that comprises mainly basic medical insurance, is backed by medical assistance, and developed together with supplementary medical insurance, commercial health insurance, charitable donation, and mutual medical assistance. Among them, the medical insurance for working urban residents and the medical care for non-working urban residents have covered all residents, playing an essential guaranteed role; serious illness insurance plays a complementary role in basic medical insurance; the medical assistance in the third section is a non-contributory social assistance system, with the funds coming from fiscal transfers, and its function is to subsidize patients with financial difficulty. The three, respectively, reflect the essential, inclusive, and beneficial-to-all functions. According to the Statistical Communique on the Development of National Medical Insurance in 2019 published by the National Healthcare Security Administration, 1.354 billion people participated in the national basic medical insurance at the end of 2019, with the coverage is over 95%. Among them, 329.25 million people were covered in medical insurance for urban employees and 1,024.83 million people covered in basic health insurance for rural and non-working urban residents; the number of people getting benefits and the medical expenses continued to increase, and the coverage of rural residents registered as impoverished over 99.9%. The comprehensive safeguard measures for poverty alleviation by medical insurance benefited nearly 200 million people in poverty, helping 4.18 million people who fell into poverty because of illnesses to get rid of poverty (NHSA 2020) (Table 2.2). Since the pandemic outbreak, the objective has been to prevent and control patients pandemics, and treatment has posed new challenges to

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Table 2.2 Healthcare policies in the pandemic Policies

Major measures

Medical cost reimbursement for COVID-19 patients

Basic expense is covered by medical insurance, and the government subsidies co-payment part Services are publicly provided and cost-free Costs are covered by work injury insurance and special subsidies

Virus checking and Vaccine inoculation Protections for doctors and nurses Source The authors

the medical security policy. Faced with this situation, the National Healthcare Security Administration and the Ministry of Finance issued the Notice on Doing Well in Medical Security for COVID-19 on January 22, 2020, and related additional notices. All confirmed COVID-19 patients can receive subsidies from the state for any medical bills not covered by basic medical insurance, serious disease insurance, or the medical assistance fund to implement comprehensive protection. The confirmed COVID19 patients receiving benefits in places where they were not registered for basic medical insurance will be treated first and settled later. The reimbursement will not implement the regulations on reducing the payment ratio for medical treatment in different places. Drugs and medical services used for confirmed COVID-19 patients can be temporarily included in the medical insurance fund’s covered expense. Based on whether the medical expenses of confirmed patients are required, the medical expenses of suspected patients should be effectively guaranteed. These measures unify and centralize the basic medical insurance, serious illness insurance and medical assistance, give full play to the overall function of medical security and its role in public health emergency management, and achieve the purpose of integrating resources and facilitating the insured (Lu 2020). During the first year after the pandemic outbreak, the medical bills of 58,000 inpatients with confirmed infections were settled by basic medical insurance, with a total expenditure of RMB 1.35 billion RMB 23, 000 per person. The average cost for treating COVID-19 patients in severe conditions surpassed RMB 150,000, and in some significant cases, the individual cost was even up to RMB 1 million, all covered by the state. From January to August, the medical insurance fund spent RMB 1,237.666 billion. Allocated by governments of all levels, a total of RMB

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110.48 billion was used to treat patients, assistance to families in difficulty, subsidies for medical personnel, and procurement of materials for pandemic prevention and control (State Council 2020b). Deepening the reform of the medical insurance system: In fighting the pandemic, many medical and related staff members, facing huge risks of self-infection, actively participate in the front line of pandemic prevention and control. To strengthen the protection of front-line personnel, the Ministry of Human Resources and Social Security, the Ministry of Finance and the National Health Commission jointly issued the Notice on Relevant Security Issues of Medical and Related Staff Infected by COVID19 while Performing Work Responsibilities (RSBH [2020] No. 11) on January 23 which stipulated that the situation that medical and related staff contract COVID-19 or die of COVID-19 due to performing their work responsibilities should be recognized as work injury. According to law, they can get benefits. For those who are not insured against work injury, the employer shall pay according to the legal standard, and the government shall subsidize the expenses at the same level. The prevention of pandemics requires a higher detection ability. In this regard, a notice issued by the National Healthcare Security Administration explicitly included the nucleic acid and antibody testing items and related consumables for SARS-CoV-2 into the catalogue of medical insurance diagnosis and treatment items at the provincial level, and simultaneously determined the payment conditions, thus ensuring sufficient testing capacity of the localities. In the second half of 2020, there have been localized cases of COVID-19 in many places in China (such as Dalian, Qingdao, Kashgar and Tianjin). The rapid whole-area nucleic acid sample detection in the related areas shows the rapid response and high detection efficiency, fully reflecting support for medical insurance policies. The relevant departments have also integrated the new problems and shortcomings of medical security during the pandemic into the process of deepening the reform of the medical security system, and by focusing on solving the problems concerning inaccessible and expensive medical resources, significant efforts have been made to reduce people’s burden of medical costs. According to the requirements and instructions of the Opinions of the CPC Central Committee and the State Council on Deepening the Reform of the Medical Security System issued on March 5 and the Government Work Report for 2020, the National Healthcare Security Administration and other departments have implemented a multiple and

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combined way of medical insurance payment mainly comprising diseasebased payment, accelerated the implementation of the unified coverage of insurance and interprovincial settlement of medical bills, and steadily and orderly promote the pilot work of direct settlement of outpatient expenses across provinces, steadily improved treatment guarantee, realized a smooth transition from personal accounts to outpatient settlement, specified the diagnosis and treatment plans, and standardized transfer treatment. The pace of reform has been accelerated to make the policies more convenient and beneficial to the people. Overall, the health care system has responded quickly to the pandemic, and a series of effective emergency policies have been issued to meet the anti-pandemic demand. The healthcare system provides high reimbursement rates for medical treatment expenses for the pandemic, ensuring that patients will receive medical treatment without worrying about medical expenses. These measures have fully embodied the policy orientation centred on people’s health and made significant contributions to protecting people’s lives and health and maintaining social harmony and stability.

Employment Protection Actively implementing policies for promoting employment: Affected by the pandemic, enterprises’ production and operation activities stagnated, which had a multi-level impact on employment. The delay in business resumption had a long-term negative impact on the labour participation rate. The employment opportunities for college graduates were blocked, which increased employment pressure, increased unemployment time of labourers in flexible employment, and the floating population dampened their employment enthusiasm. The life service industry and labour-intensive manufacturing industry were severely affected, with small and micro enterprises, individual industrial and commercial households, agricultural cooperatives, and farming households facing the risk of bankruptcy (Cheng Jie 2020) (Table 2.3). Because of the above problems and the requirements of key groups, compared with previous counter-cyclical policies, the government paid more attention to the externalities that may be brought by policy objectives and the pertinence and effectiveness of policies. The Government Work Report, released on May 22, 2020, clearly defines the policy objectives of ensuring employment: over nine million new urban jobs, a surveyed urban unemployment rate of around 6%, and a registered urban

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Table 2.3 Active employment policy and unemployment protection during the pandemic Policies

Major measures

Active employment market

Issue special government bonds for businesses with difficulties; social security protection for those maintaining job positions; finance credit support for SMEs Expand unemployment benefits to those temporary unemployed; provide subside for unemployed to maintain the basic living standard

Unemployment insurance protection

Source The authors

unemployment rate of around 5.5%. Another explanation is not putting forward the annual economic growth target. This is not only due to the global pandemic situation and the uncertainty of the economic and trade situation. Nevertheless, also, the requirement of guiding all parties to make sure stability in “six key areas” and effectively meet “six priorities”, exerting policy synergy, promoting local governments to change their development thinking, taking employment as the starting point of economic growth and taking a new path of the virtuous circle. The first was to implement a more proactive fiscal policy. The Government Work Report 2020 proposes that the deficit-to-GDP ratio in 2020 is projected at more than 3.6%, with a deficit increase of RMB 1 trillion yuan over last year. Besides, RMB 1 trillion yuan of government bonds for COVID-19 control will also be issued. The RMB 2 trillion will be transferred to local governments to benefit businesses and people directly. These funds should be primarily used to ensure employment, meet basic living needs, and protect market players. In 2020, it is planned to allocate RMB 3.75 trillion of local government special bonds for investment, among which RMB 600 billion will be allocated for investment in the central budget, focusing on new infrastructure, new urbanization and major projects involving the national economy and people’s livelihood, including installing elevators, developing various community services such as home care for the aged, dining and cleaning (Government Department 2020). All these labour-intensive service industries can effectively contribute to ensuring employment. The second was to

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support enterprises to stabilize jobs through social security relief policies. To achieve the policy goal of ensuring employment, the Ministry of Human Resources and Social Security has also issued a series of combined policies to reduce burdens, stabilize jobs and obtain employment, and adopt three supporting policies: deferring, returning and subsidizing. Enterprises with serious difficulties in production and operation affected by the pandemic can “defer” payment of social insurance fees, get the exemption of late payment fees during the deferred payment period, and benefit from the relaxed time limit social insurance contributions. For the insured enterprises that have temporary difficulties in production and operation but are expected to resume production and insist on no layoffs or fewer layoffs, the identification standard will be relaxed, and the highest standard of “returning” will be raised to 100% of the unemployment insurance premiums paid by enterprises and their employees in the previous year. Simultaneously, the training subsidies, job-seeking and entrepreneurship subsidies, and job-providing subsidies helped disadvantaged groups find jobs and maintain basic living standards. The third was to strengthen financial credit support for small and medium-sized enterprises. To increase financial support to keep business operations stable, the government emphasized that the growth rate of inclusive loans for small and micro enterprises in large state-owned commercial banks should be higher than 40%. The policy allowing micro, small, and medium businesses to postpone principal and interest repayments on loans will be extended until March next year. Other businesses facing financial difficulty can discuss similar terms with their creditors. Various financial departments took multiple measures to help the real economy resume business and production. The fourth was to promote new employment patterns. On July 15, 2020, the National Development and Reform Commission and other 12 departments jointly issued the Opinions on Supporting the Healthy Development of New Business Forms and Models to Activate the Consumer Market and Promote Employment (FGGJ [2020] No. 1157), emphasizing that more efforts are needed in exploring social security policies that can be applied to flexible employment patterns involving multiple platforms and employers. The policies and systems of labour rights and interests protection, fees payment and salary of flexible employees were improved, and corresponding responsibilities of platform enterprises in the protection of workers’ rights and interests were clarified. The fifth was to provide policy support to specific groups affected by the pandemic. For college graduates and building normalized

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service platforms, strengthening employment guidance and skills training, measures, such as expanding the recruitment of state-owned enterprises and institutions, grassroots projects, and postgraduates’ enrolment and degree programmes for junior college graduates, were also taken to ensure smooth employment. Migrant workers’ employment was promoted by guiding them orderly go to other places to work, encouraging them to find jobs locally and optimizing employment-related services. In implementing the policies mentioned above, priority was given to low-income families and families with zero-employment families. Great efforts of all the policies effectively protected key groups’ employment, stabilized the basic employment situation, and stabilised the overall employment situation. In the first three quarters of 2020, the accumulated expenditure of the unemployment insurance fund was RMB 149.17 billion, 3.53 million unemployed urban people found jobs, and 1.15 million people having difficulty securing jobs found employment. 8.98 million urban jobs were created in the first three quarters, achieving 99.8% of the annual target. The surveyed unemployment rate in urban areas was 5.4% in September, down 1.2% since February. One hundred seventy-nine million migrant workers were going out to work, an increase of two million from the end of the second quarter, and 29.34 million poor labourers went out for work 107.5% at the end of last year. In terms of promoting the reemployment of laid-off and unemployed people, 3.53 million unemployed people have been helped to find jobs, and RMB 85 billion for the employers’ portion of jobless benefits was handed back to 5.64 million businesses that did not lay off workers. A total of RMB 63.8 billion of employment subsidy funds was spent, benefiting 145 million employees (MOHRSS 2020). Increasing the coverage of benefits and expenditure of unemployment insurance: During the pandemic period, the surveyed urban unemployment rate increased worldwide, with the data from January to May 2020 of 5.3%, 6.2%, 5.9%, 6.0% and 5.9%, respectively (NBS 2020). In other words, the number of urban unemployed exceeded 26 million in both May and June, a new high in the past decade or so. To play the role of unemployment insurance during the crisis, the Notice on Expanding the Coverage of Unemployment Insurance (RSBF [2020] No. 40) was jointly issued by the Ministry of Human Resources and Social Security and the Ministry of Finance on May 29 made two significant improvements to expanding the eligibility and scope of unemployment insurance. First, the “unemployment subsidy” was provided in stages for the unemployed

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who did not meet the insurance conditions. According to the Regulations on Unemployment Insurance before, unemployed persons who had paid less than one year’s insurance contributions and interrupted their employment due to their wishes were not eligible for unemployment insurance benefits. It has now been adjusted as follows: from March to December 2020, such workers can apply for six months’ “unemployment subsidy”, with the standard not exceeding 80% of the local unemployment insurance. Second, the “temporary living allowance” was provided in stages for the unemployed migrant workers who did not meet the conditions for receiving the living allowance. According to Unemployment Insurance Regulations before, unemployed migrant workers who had worked continuously for one year could receive a one-time living allowance. It has now been adjusted as follows: from May to December 2020, unemployed migrant workers who have been insured for less than one year after January 2019 can be paid a “temporary living allowance” for no more than three months every month, concerning the local urban minimum living standard.

Social Assistance Strengthening social assistance: In the pandemic context, how to ensure poverty, the migrant worker’s who are caught in temporary difficulties and families with unique difficulties became the top priority in social assistance. In March 2020, the Circular of the National Leading Group on Prevention and Control of COVID-19 on Further Fulfilling the Work of Meeting Basic Needs of People in Difficulties during the Pandemic Prevention and Control Period (GFMD [2020] No. 9) proposed: ensuring the coverage and adequacy of social assistance and adjusting social benefits in time to cover the population who became poor or returned to poverty due to the pandemic; increasing assistance or temporary assistance to infected and affected families, as well as additional assistance to the stranded population; providing assistance to quarantined persons and their relatives (e.g. objects under guardianship or care); and increasing budget allocation and other administrative and social support measures for affected areas. As of September, the temporary price subsidy funds of RMB 19.09 billion have been distributed to households in need nationwide, such as those living on subsistence allowances and in extreme poverty, benefiting 310 million person-times. Due to the pandemic, 2.055

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million people were newly included in subsistence allowances, and 1.993 million people were provided temporary assistance from June to August. After the normalization of pandemic prevention and control, according to the problems and shortcomings of social assistance in the initial antipandemic stage, the General Office of the CPC Central Committee and the General Office of the State Council issued the Opinions on Reforming and Improving the Social Assistance System to improve further the system responsibility of the social assistance system. The Opinions emphasize that it is necessary to improve the disease-related emergency assistance and ensure that medical institutions treat first and charge later at emergencies such as sudden pandemics to alleviate people’s worries in need of medical treatment. It is necessary to do an excellent job rescuing people in difficulty in public emergencies such as major pandemics. It clarifies social assistance policies and measures and emergency assistance procedures during the emergency period. It stipulates that the security standards for assistance to poor people in affected areas should be raised, bringing people in difficulty due to public emergencies into the scope of assistance and strengthening the basic living security for the disadvantaged groups. Incoordination the roles between social assistance and social insurance system: In March 2020, the General Office of the State Council issued the “Implementation Opinions on Strengthening Employment-Stabilizing Measures in Response to the Impact of the COVID-19 Pandemic” (GBF [2020] No. 6) which stipulates that people who were still unemployed after the expiration of their period of receiving unemployment insurance and insured unemployed people who did not meet the requirements for receiving unemployment insurance benefits would be provided with unemployment subsidies to strengthen the basic living security of the insured unemployed. The National Healthcare Security Administration also emphasized medical assistance in adjusting the payment policy. The poor’s insurance payment policy was improved, and financial subsidies and social security funds would pay the social security fees for the needy. These policies complemented the social insurance system in a timely and effective manner and gave full play to the role of social assistance. On the other hand, the primary security level for retirees was improved. In 2020, the government increased the basic pension for retirees and the minimum basic old-age pension for rural and non-working urban residents. There are 283 million retirees in China, including 123 million with primary

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old-age insurance benefits for urban workers and 160 million with oldage insurance benefits for rural and urban residents (MOHRSS 2019). From 2005 to 2020, the pensions of urban retirees’ basic old-age insurance have been increased by “16 continuous times”, and by 2019, the per capita pension of urban retirees nationwide reached RMB 2,760. In the past 15 years, the average annual increase of basic pension for urban workers has always been higher than the consumer price index increase (CPI). Poverty alleviation: In 2020 is the concluding year of achieving the target of poverty eradication, and the impact of the pandemic has raised higher requirements for social assistance and poverty alleviation. In July 2020, the Ministry of Civil Affairs and the Ministry of Finance issued the Notice on Further Improving the Basic Living Security for the Poor People (MF [2020] No. 69), which stipulates that the coverage of the minimum living guarantee and the coverage of temporary assistance should be appropriately expanded to cover all families in difficulty. Assistance and support should be provided for people in extreme poverty, and care and services should be improved. The monitoring and early warning mechanism should be improved to pay close attention to those who have not been lifted out of poverty, the people who have been lifted out of poverty with a higher risk of returning to poverty, and the population with the risk of being registered as living under the poverty line. We should strengthen the investigation to ensure that not any household or individual is missed and extend the period of providing subsistence allowances to those who have been lifted out of poverty and whose per capita household income has exceeded the local minimum living standard to consolidate the achievements of poverty alleviation and ensure that the central government’s arrangements for tackling poverty are implemented. From 2015 to 2019, the population registered as living under the poverty line nationwide decreased from 55.75 million to 5.51 million, the incidence of poverty decreased from 5.7% to 0.6%, and the overall regional poverty was solved (People.com 2020). In 2020, China will eliminate absolute poverty under the current standards, achieve the poverty reduction goal of the 2030 Agenda for Sustainable Development of the United Nations ahead of schedule, and create a Chinese miracle in human anti-poverty history.

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Summary and Prospect The COVID-19 pandemic, which broke out in China at the beginning of 2020, is the fastest spreading, most extensive, and most challenging public health emergency China has encountered since it found the People’s Republic of China. China’s social security system has comprehensively responded during the pandemic, including the institutional system’s emergency response and some temporary emergency measures. Since the second half of 2020, pandemic prevention and control have entered a normal state. As for the restoration of the economy, China has made outstanding performance over the pandemic period. Since the third quarter of 2020, the GDP growth rate has turned positive, the first among large economies globally. In 2020, GDP increased 2.3%, and as a result, GDP per capita exceeded 10,000 Dollars. Although the domestic pandemic has been fully controlled, China still faces grim challenges of preventing and controlling the international pandemic. With the return of normalcy, the temporary measures might be reconsidered or withdrawn. As the economic and social development gradually returns to normal, the individual social security measures adopted during the pandemic prevention and control period need to be reconsidered. Some emergency and temporary measures need to be taken be withdrawn. The 14th FiveYear Plan period is the first five-year planning period after China has achieved a “moderately prosperous society” in all respects, a necessary period for promoting the national governance system and modernizing the governance capacity and a period that various social security systems are becoming more mature and fixed. In the new era, China’s economic and social development will enter a new structural adjustment period, when the employment and population structures will continue to change, and the social security system reform will face new environments and constraints. In the long run, the reform of perfecting the multi-level sustainable social security system during the 14th Five-Year Plan period will still be a challenging task. To this end, the Proposals of the Central Committee of the CPC for Formulating the 14th Five-Year Plan (2021– 2025) for National Economic and Social Development and the Long-Range Objectives Through the Year 2035 (referred to as the Proposals) puts forward the reform direction of the future social security system: to establish a fair, unified and sustainable multi-level social security system that covers the whole people and makes overall plans for urban and rural areas; to promote the transfer and continuation of social security and

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improve the financing and treatment adjustment mechanism of primary old-age care and basic medical insurance; to bring pension schemes under national unified management and implement the gradual delay of the statutory retirement age; to develop a multi-level and multi-pillar old-age insurance system; to advance the overall planning of basic medical insurance, unemployment insurance and work injury insurance at the provincial level, improve the medical insurance and assistance system for significant diseases, implement the interprovincial settlement of medical treatment, steadily establish a long-term care insurance system, and actively develop commercial medical insurance; and to improve the social security system for flexible employees. The following prospects and suggestions are put forward. Firstly, during the pandemic prevention and control phase, various new social security policies should be implemented in three aspects: fee reduction, detailed rules and strengthened treatment guarantee. The first is to introduce supporting measures for policies related to exemption, reduction, and deferred payment of social security contributions should be sped up. All localities should faithfully carry out the guidelines of the central government and implement the detailed rules of various policies, such as the definition and classification of small and medium-sized enterprises, the simplification of the procedures for enterprises’ application for exemption, reduction and deferred payment, and the guarantee of social security services in particular periods. The second is to introduce further the implementation mechanism of “classified policies for targeted exemption and reduction” to strengthen the policy effectiveness. The new social security policy is classified and implemented according to the enterprise scale. However, as different industries are affected by the pandemic, the reduction and exemption policies need to be differentiated in detail. For example, some “seriously hit” industries such as transportation, tourism, hotel, catering, retail, and leasing should enjoy more significant exemptions and reductions. Some large enterprises should also be included in all exemptions and reductions. Also, it is not appropriate for some less affected or unaffected enterprises to adopt a “one-size-fits-all” approach. An exit mechanism should be established in the future, where enterprises should independently apply according to their degree of difficulty. The third is to strengthen the protection of treatment expenditure to meet needs during the pandemic period. We should increase expenditure on medical insurance and work injury insurance, include the treatment cost

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of COVID-19 in the medical treatment catalogue, and provide exemption and reduction to the expenses borne by patients to increase the reimbursement ratio of significant medical expenses. Regarding unemployment insurance, efforts should be made to hand back jobless benefits to businesses that do not lay off workers and provide on-the-job training. Living allowances should be given to employees in difficulty during the pandemic prevention period. In terms of old-age insurance, the critical point is to raise funds through multiple channels to ensure timely and complete payment. Also, considering the impact of the pandemic on poverty alleviation, we should strengthen social security assistance, focusing on protecting families who become unemployed and living in difficulties due to the pandemic, to realize the poverty reduction goal in 2020. Secondly, the social security system parameters should be “institutionalized” in due course by taking the opportunity of a fee reduction. It has been more than five years since January 2015 when staged fee reduction was announced, and we should consider fixing various insurance rates. First, this “unexpected” incident has become a stress test for the fee reduction for five years from the fee reduction during the pandemic. The results show that the solid phase cost reduction measures should be implemented urgently on this “benchmark” and recover after the pandemic subsidies. Compared with the five-year fee reduction, the society would form a “psychological set” that only this fee reduction is “temporary”. Second, in terms of system construction, the “double reduction” of oldage insurance implemented in June 2019 exceeded expectations, the fee reduction in the past year was almost equal to the sum of the previous four years, and it was a long-term institutional arrangement. Third, from the perspective of social expectation demand, enterprises need stable social expectation and “policy reassurance”, which is of great significance to business operation, for waiting for postponement every year is not conducive to long-term success decision-making of enterprises. Thirdly, social security contributions collection should be made more legalized and standardized. The normalized fee reduction demands more internal strength for various social insurances: First, it is necessary to determine the contribution base for the five social insurances. Since establishing the social insurance system, there has always been a great distance between the actual contribution base and the proper wage level, leading to the actual rate being much lower than the nominal rate. Determining the contribution base does not mean raising the collection level and

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increasing the burden on enterprises. On the contrary, it means improving compliance and creating conditions for a more significant fee reduction. Because the old-age insurance has the most significant reduction in fees and the substitution rate is the most obviously influenced, a new parameter adjustment formula should be issued accordingly. This is a public choice, a top-level design, and a scientific attitude of adhering to actuarial balance and institutional sustainability as an inevitable result of a fee reduction. Third, for unemployment insurance and work injury insurance, although the rates have been declining continuously in the past five years, and the scope and intensity of expenditure have been increasing year by year, the targeting degree of the newly covered population is still low. The groups that need it have not been fully covered, so improving the targeting degree of the beneficiary population is the main direction of the reform of these two systems. Fourthly, the reform of the social security system should be promoted to improve the sustainability of the social security fund. The large-scale social security fee reduction during the 13th Five-Year Plan period and the special measures adopted during the pandemic have pressured the social security fund’s financial sustainability. The following suggestions are put forward to improve the financial situation of social security revenue and expenditure. First, the overall planning level of various social insurances should be improved, and the adjustment ability of social security funds among regions enhanced. During the 14th Five-Year Plan period, the basic old-age insurance will be under unified national management, and the medical insurance, unemployment insurance and work injury insurance will be under unified provincial management. Second, during the 14th Five-Year Plan period, the delayed retirement policy should be put on the agenda, radical promotion be implemented, and a flexible retirement system. The third is to adjust the parameters of various social security systems. After the fee reduction, we should reconsider the reform of social security benefits calculation and payment standards, appropriately reduce the pension calculation and payment coefficients, extend the payment period, establish a mechanism to ensure whoever pays more or longer gets more insurance benefits, and improve the system’s financial, actuarial balance ability. The fourth is to expand the coverage of social security utilizing the national enrolment plan, focusing on the flexible employment groups under the new employment patterns, improving the quality of enrolment and increasing the income of the social security system.

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References Cheng Jie (2020). Impact of COVID-19 Pandemic on Employment and Countermeasures. China Development Observation (Z2), 40–42. CNKI:SUN:FZGC.0.2020-Z2-013. Government Department (2020). Government Work Report 2020, http://www. gov.cn/guowuyuan/zfgzbg.htm Lu Quan (2020). Give Full Play to Medical Security in Public Health Emergency Management. China Health Insurance (03), 8–9. CNKI:SUN:YLBX.0.202003-008. MOHRSS (2019). Press Conference of the Ministry of Human Resources and Social Security for the Fourth Quarter of 2019, http://www.china.com.cn/ zhibo/content_75607861.htm#fullText MOHRSS (2020). Press Conference of the Ministry of Human Resources and Social Security for the Third Quarter of 2020, http://www.mohrss.gov.cn/ SYrlzyhshbzb/dongtaixinwen/fbh/202010/t20201023_392929.html NBS (2020). Official website of the National Bureau of Statistics, http://www. stats.gov.cn/ NHSA (2020). The Statistical Communique on the Development of National Medical Insurance in 2019, http://www.nhsa.gov.cn/art/2020/6/24/art_ 7_3268.html People.com (2020). People’s Views of People’s Daily: Get Rid of Poverty and Strive for a Moderately Prosperous Society in All Respects, http://opinion. people.com.cn/big5/n1/2020/1113/c1003-31929238.html State Council (2020a). Fighting Covid-19 China in Action, http://www.scio. gov.cn/zfbps/32832/Document/1681801/1681801.htm State Council (2020b). White Paper of Fighting Covid-19 China in Action, http://www.scio.gov.cn/zfbps/32832/Document/1681801/1681801.htm Xu Yude, Zhang Siliang & Xu Feifei (2020). Small and Medium-Sized Enterprises Should Handle Three Relationships to Solve the Pandemic Dilemma. Fiscal Science (05), 26–32. https://doi.org/10.19477/j.cnki.10-1368/f. 2020.05.004 Zheng Bingwen (2020a). “Accurate and Classified Implementation” of New Social Security Policy for Work and Production Resumption. China Business News, A06. Zheng Bingwen (2020b). No Growth Rate Target and Support for Employment: New Ways of Market-Oriented Reform in a Virtuous Circle to Deal with Crises—Understanding After Studying the Government Work Report. Insurance Studies (06), 3–19. https://doi.org/10.13497/j.cnki.is.2020.06.001

CHAPTER 3

Labour Markets of India During a Pandemic: Observations from an Ethnographic Survey: In Cities of Lucknow and Pune Narratives of Daily Wage Workers Across Mazdoor Mandis Deepanshu Mohan, Richa Sekhani, Jignesh Mistry, Advaita Singh, Snehal Sreedhar, and Shivani Agarwal

Introduction The recent COVID-19 pandemic has brought multi-layered vulnerabilities across the social, political, humanitarian, ethical, and economic dimensions of people’s everyday lives. While many countries followed strict lockdowns, control on mobility, economic and social activity, and

D. Mohan (B) · R. Sekhani · J. Mistry · A. Singh · S. Sreedhar · S. Agarwal Centre for New Economics Studies (CNES), Jindal School of Liberal Arts and Humanities, O. P. Jindal Global University, Sonipat, India e-mail: [email protected] A. Singh e-mail: [email protected] © The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2022 K. Nakray et al. (eds.), Social and Economic Transitions in China and India, https://doi.org/10.1007/978-981-19-6124-3_3

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social distancing requirements, India adopted a very stringent lockdown on 24 March 2020, with only four hours of notice given to the entire population (Ghosh 2020). India’s strategy failed to consider the socioeconomic contexts and characteristics of life and work for most people in India. The pandemic and lockdown fallouts have been immense and have adversely impacted the lives and livelihood of marginalized communities. The International Labour Organization (ILO) in March 2020 had estimated that globally, more than 25 million jobs are at risk due to the COVID-19 outbreak (ILO 2020a). Every four in five people (81percent) of the global workforce are currently affected by the lockdowns (ILO 2020a, b) in various countries, including the United States, the UK, Canada, and most European and Asian Economies. According to the Centre for Monitoring the Indian Economic (CMIE), the economic crisis laid by COVID-19 increased the unemployment in India to 23.52% in April 2020 (CMIE 2020) compared to 7% last year. Figure 3.1 shows the unemployment trends in India during and post-lockdown period.

Fig. 3.1 Unemployment rate in India (Source Centre for Monitoring the Indian Economy [CMIE])

S. Sreedhar e-mail: [email protected]

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Given the fragmented nature of a dualistic labour market, the coexistence of a modern-formal sector alongside an overwhelmingly large unsecured-informal sector. The formal working space also called the “organized” sector, consists of licensed organizations that pay taxes and are obliged to adhere to the labour laws, providing well-paid employment. The informal sector, as defined in the resolution of the 15th International Conference of Labour Statisticians (ICLS), January 1993 (ILO 2018), consists of unincorporated household enterprises which differ from formal enterprises in terms of technology, economies of scale, use of labourintensive processes, and the virtual absence of well-maintained accounts. In most cases, the workers employed in the unsecured-informal sector lack dignity of labour, social security, and decent and timely wages but, in some cases, have even lost the right to be called “workers”. With over 90% of the entire workforce being informal (defined as those without any social and legal protection), and 75% of the workforce engaged in self-employment and casual wage employment, India is an outlier among low-middle income countries (Mehrotra 2019). The lockdown severely impacted all these workers, depriving them of paid employment without warning and impacting their income. The absence of or scarcity of public assistance and lack of state support forced many to borrow extensively through informal channels to make ends meet, leaving most of them highly indebted. According to an Action Aid India Survey (2020), more than 75% of the informal sector workforce lost their livelihood and access to essential services, including food consumption (Action Aid 2020). The informal sector’s loss of income was equally disastrous, with a study estimating a total wage loss amounting to Rs 635.53 billion, which is almost equivalent to the annual union budget allotted for the employment guarantee scheme—Mahatma Gandhi National Rural Employment Rural Guarantee Act (MGNERGA) in 2020–2021 (Estupinan and Sharma 2020). A recent estimate suggested that the worst affected informal workers are casual or daily wage workers who could not access government relief packages due to inadequate relief or lack of ration cards or any safety net (Mehta and Kumar 2020). Informal workers include garbage collectors, transport labour, street vendors, stall and market salespersons, painters and building structure cleaners, housekeeping and restaurant serviceperson, domestic and related helpers, construction labour, etc. More importantly, these workers, many of them migrants, were stuck in areas away from their families, but they were also out of a job that paid

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for their daily subsistence. As a result, the next few months witnessed an exodus of migrant workers from cities to their hometowns and villages post the lockdown announcements. Many undertook long, desperate journeys on foot in the absence of any means of transportation. Since August 2020, when “unlocking” allowed for some activity to resume for an economic recovery to begin, the daily wage shramiks (translates to workers in Hindi) continued to suffer acute economic distress. Due to limited job prospects, travel restrictions, and poor execution of government support policies (Mohan et al. 2021). Given this background, the chapter aims to analyse the socio-economic impact of the lockdown on daily wage workers (shramiks) in the Indian cities of Lucknow and Pune. As per this study, the daily wage workers are defined as gathering at the labour mandis 1 or labour chowks in search of daily work. A private contractor comes to the mandis and hires the worker of their choice. Both skilled and unskilled workers, including masons, plumbers, carpenters, and construction workers, come to the mandis searching for regular employment. Given that the nature of employment is informal and not governed by any law, the trials and tribulations of these workers’ communities—dependent on daily work and wages for survival— worsened since the lockdown was announced. Only fleeting moments of respite. We conducted a temporal analysis of a pre- and post-lockdown impact on the daily wage workers’ income and expenditure in the two cities. A random survey of 1952 workers from these cities reveals how the nature of work, labour charges per day, the average number of working days, income earned and expenditure on basics, including food rations, rent, medicines, children’s school fees, conveyance, etc. were altered or impacted by the lockdown. Since many of these workers depend on loans and borrowings to meet their family needs, the study’s findings also provide an insight into the borrowing trends of these workers in both pre- and post-lockdown phases. The two cities have been selected because of the logistical ease of access, specifically during pandemic times when mobility has been 1 An unregulated point of meeting or adda for daily wage workers, who visit these points from afar every day in search for daily wage work, mostly in areas of construction, etc. 2 The survey included 200 interviews. However, due to discrepancies in few of the interview, only 195 could be used for the final analysis.

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restricted. Lucknow and Pune—in their respective region—attract the maximum amount of intra-state and inter-state migrant workers and rely on them for most industrial, manufacturing, and construction work (see Chen Yongyuan in Chapter 6). Though spaced over two months, January 2021–February 2021, the study is limited due to limited access to the workers, lack of gender diversification in the sample set, and no interaction with the private contractors. The field researchers visited the mazdoor mandis at various locations within the two cities to conduct in-person interviews with a semi-structured questionnaire to collect the data. The chapter’s structure is as follows: The first part of the chapter provides a background to informal economy and highlights the impact of lockdown on informal workers in India and globally. This is followed by an analytical description of the findings inferred from the interviews conducted in different urban cities (Lucknow and Pune). The final chapter concludes.

A Brief Glance at the Informal Economy While there is no universally accepted definition for the concept “informal economy”, it accommodates considerable diversity in terms of workers, enterprises, and entrepreneurs with identifiable characteristics. The term “informal economy” is preferable to “informal sector” because the workers and enterprises in question do not fall within any one sector of economic activity but cut across many sectors (ILO 2002). The role of the informal sector in the developing economies has oscillated from treating it as a backward sector holding back the economic development to the one that has helped the economy to develop with relatively low demands for capital goods (see Mazumdar 1976; Bromley 1978; Gerxhani 2004). Unlike the formal sector, which is seen as a profit-maximizing capitalist sector, the informal sector is seen as a pre-capitalist form of production that employs migrants from rural areas and workers who do not find employment in the formal sector. Migrants who do not find work in the formal urban sector also enter the urban informal sector, which is meant to “wait for unemployment” (Hart 1973). Authors have also debated whether workers in the informal sector live in poor conditions or have made a conscious choice to live a comfortable life (Meng 2001; Perry et al. 2007). In some countries, the term is considered synonymous with “underground”, “shadow”, or “grey” economy.

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The workers employed in the informal sector are not recognized, registered, regulated, or protected under any labour legislation and social protection, leading to ambiguity in their employment status. Thus, they fail to enjoy or exercise any fundamental rights of workers. Unsafe and unhealthy working conditions, low level of skills and productivity, low or irregular incomes, lack of access to information, finance, etc., are some of the characteristics of the vulnerabilities that these workers witness. The sector remains vastly underestimated and often not recorded in the national account. Given the importance of the sector evaluated from an economic and public policy viewpoint, the ILO in 2018 estimated that more than a 61% of the world’s employed population is making their living through the informal sector (ILO 2018). The proportion of informal employment varies across regions, with sub-Saharan Africa and Southern Asia employing the highest share of workers in the informal sector, as shown in Fig. 3.2. Employment in India is also overwhelmingly informal. As per the periodic labour force survey conducted in 2017–2018, more than 90% of the workers are employed in informal sector which includes “all unincorporated private enterprises owned by individuals or households engaged in the sale and production of goods and services, operated on a proprietary or partnership basis and with less than ten total workers, as well as domestic workers, contributing family workers, casual day workers and workers in the formal sector with no social security benefits provided by the employer” (Raveendran and Vanek 2020). The largest employment category is the informal construction workers employing 11% of the total workers, as shown in Table 3.1. Even today, the two crucial legislations, the Employee’s State Insurance Act 1948 (which provides medical, sickness, maternity, and disablement benefits) and the Employee’s Provident Fund & Miscellaneous Provisions Act, 1952 (which provides retirement benefits) are only applicable to industrial establishments employing more than 10 workers and, therefore, do not cover most establishments in the country. The remaining workers under the informal sector are not covered under these acts. However, the government is in the process of enacting the uniform labour code and redefining existing laws. Given the persistence of informality globally, the informal economy workers are the sector/people first to bear the grunt of any economic shock, including the recent pandemic.

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Fig. 3.2 Informal employment as a percent of total employment by region (excluding developed countries) (Source International Labour Organization [ILO])

Table 3.1 Percent of total employment in parentheses (2017–2018) Worker group Home-based worker Domestic worker Street vendor/ market trader Waste picker Informal constructiona Informal transporta All groups

Total

Women

Men

9.1 1.1 2.6 0.5 11.2 4.4 133.275 (28.9)

16.4 3.2 1.1 0.7 4.9 0.1 27.770 (26.5)

6.9 0.5 3 0.4 13.1 5.6 105.505 (29.6)

a Includes all informal workers in the general industry category. All other groups potentially include

both formal and informal workers Source WIEGO Statistical Brief No 24

Impact of a Curfew-Style National Lockdown on India’s Informal Economy It is estimated that 1.6 billion of the informal workers would lose their livelihoods because of the COVID-19 crisis (CGAP 2020). The second edition of ILO Monitor, titled “COVID-19 and the world of work”, stated that the number of workers in the informal economy affected by the lockdown and other containment measures is substantial in India, Nigeria, and Brazil. An estimate suggests that about 71% of the informal

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sector, or over 17 million workers in Brazil, will suffer the unemployment shock (Cereda et al. 2020). About 93% of the world’s workers faced some workplace closure (ILO 2020a, b) and the second quarter of 2020 saw a 17.9% drop in the estimated number of working hours in South Asia (International Labour Conference 2020). The Global Wage Report revealed that about two-thirds of the countries have decreased or slower average wage growth (ILO 2020a, b). The lost income of workers for a few countries, including Kenya, Myanmar, and Peru due to lockdown measures (see Chapter 2: Lianquan Fang and Yupeng Li), would mean an increase in more than 56 percentage points in relative poverty. Many countries implemented various policies, including wage subsidies or credits to support workers. However, they were primarily directed towards the formal economy. The absence of minimum wage support or the weak capacity for enacting and enforcing labour laws further aggravated the situation, especially for those employed in the informal sector. India’s informal economy has also faced the grunt of the lockdown. For instance, a study conducted by Idea for India found that about 65–85% of the informal workers in Delhi lost their jobs or income during the lockdown period (Afridi et al. 2020). The income loss of workers during the lockdown among the poorer section of Uttar Pradesh, Bihar, and Madhya Pradesh was more than 3% of GSDP, while it was estimated to be less than 2% of the GSDP in Maharashtra, Tamil Nadu, and Kerala, which were 13–48 percentage points higher than those for formal workers. These workers suffered much greater earning losses and received limited financial assistance without social protection. The informal workers’ inability to work from home and under social distancing measures had further put them in a disadvantaged position than the formal workers. The LSE-CEP Survey of 8,530 workers showed that the informal workers saw unemployment rates where 13–48 percentage points were higher than those for formal workers (Bhalotia et al. 2020), with a mean earning loss for informal 63.3% as compared to 17.3% for formal workers. Despite the sharp decline in wages and earnings, relief measures received from the officials were either delayed or inadequate (Ray and Subramanian 2020). Lockdowns also exposed the vulnerability of urban casual workers, many of whom are migrants (Haan 2020) and resulted in the worksite’s shutting down. In several cases, their contractors went missing, or employers expressed the inability to pay wages. Struggling to access food, water, and sanitation and running out of money to pay rent,

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it became almost impossible for many to survive in cities without social networks and social security. They were forced to return to their village in desperation with little choice. Due to limited data on inter-state migration and employment in informal sectors, it is difficult to estimate the number of migrants who lost jobs and accommodation during the pandemic and returned home. However, the ILO’s estimate suggested that close to five million migrants were impacted (Figs. 3.3 and 3.4). Given this background, we have documented and archived 195 daily wage workers’ narratives through a randomized survey across the mazdoor mandis of Lucknow (UP) and Pune (Maharashtra). We aim to understand the extent to which the current economic crisis is affecting the workers’ daily work prospects and incomes; and how little or no state support has forced many to borrow extensively through informal channels for making their ends meet, leaving them most highly indebted. These workers hail from various surrounding and distant states or areas. They find accommodation on empty plots with the owners’ permission to stay on account of goodwill or find a small jhuggis (slum dwellings) on the outskirts (see Fig. 3.5). They leave their homes early in the morning searching for work

Fig. 3.3 Workers waiting for work opportunities at mazdoor mandis in Pune and Lucknow (Source Jignesh Mistry)

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Fig. 3.4 Workers reaching the mandis in early hours of the day in search of work (in Lucknow) (Source Jignesh Mistry)

and line up at places destined for hiring workers. It is even more challenging for the workers who commute daily to find work. When railways’ functioning has been affected, the workers spend around five times more on transportation. If they cannot find work, the added expenditure only adds to their debts. Consequently, they return to their so-called homes and are left to somehow secure a meal for their family for that night. These workers live on the edge of hunger, bringing a meal to the table based on what they can earn on the very same day. The mandis (translates to local markets) that were surveyed in Pune and Lucknow include a. Wajre Bridge MazdoorAdda on Pune-Bangalore Highway, West Pune, b. BhumkarchowkMazdoorAdda (PMA-Wakad-Hinjewadi IT Park area) on Pune-Mumbai Highway, North Pune, c. BanerMazdoorBanerMazdoorAdda (Baner-SUS road area), Central North, d. KatrajchowkMazdoorAdda (Katraj-Ambegaon area), South Pune, e. VanazMazdoorAdda (Kothrud area), Central Pune,

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Fig. 3.5 The housing settlement of the daily wage workers in Lucknow (Source Jignesh Mistry)

f. Pune District Court MazdoorAdda (Shivajinagar area), Central Pune and g. MundhwaMazdoorAdda (Solapur-Ahmednagar-Kharadi bypass area), East Pune. h. Engineering College Chauraha, Lucknow i. Aliganj, Lucknow j. Daliganj, Lucknow

Analytical Findings The analytical findings from the 195 interviews from the mazdoor mandis (workers markets) in Lucknow and Pune provide a temporal analysis of the COVID-19 impact on work income and expenditure daily wage workers cities. The interview’s city-wise sample size includes 95 respondents from Lucknow and 100 respondents from Pune, with only 10% of all the respondents being females. The interviews were conducted in January in Lucknow and in February in Pune. Therefore, the responses provide a point-in-time analysis that may not apply to the situation at present.

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61-70

5

51-60

6

41-50

23

31-40

87

25-30

53

18-24

19

Below 18

2 0

20

40

60

80

100

Fig. 3.6 Age-wise distribution of respondents

Profile of the Respondents The respondents’ age-wise distribution, depicted in Fig. 3.6, shows that the maximum number of respondents belong to the age group of 31– 40 years. Around 45% of the respondents are uneducated, while 35% have completed primary education. Only two workers have completed higher education, and one worker has a graduation degree (as shown in Fig. 3.7). According to the marital status, 153 respondents are married, 40 are unmarried and 2 are widowers. Nature of Work Daily wage work is a broad category that encompasses various types of labour such as construction, masonry, painting, tile, marble, masonry, painting, tile, marble, etc. Seventy-seven percent of the respondents are construction workers, as seen in Fig. 3.8. All the women interviewed are also construction workers. Painting and masonry cumulatively cover 15% of the total respondents. The other categories include painters, plumbers, porters, farmers, tiles, and marble workers. In two of the cases, it is

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Higher Secondary 1%

43

Graduate 1%

Secondary 18% Uneducated 45%

Primary 35%

Fig. 3.7 Distribution of educational status

also observed that construction workers are also working as electricians and security guards. The nature of work for most respondents, both pre-lockdown and post-lockdown (when the lockdown restrictions were moderated), remained unchanged. Number of Workdays With lockdown restrictions being moderated in the cities, many workers have returned to their employers to find that their old jobs are not available anymore. The survey reveals that the availability of work has become staggered. Some workers can find work on a particular day but may struggle to get work for the next few days or weeks. During the prelockdown period, the workers could find work for 20–25 days in a month, but in the post-lockdown era, they only managed to get work for 10– 15 days. Due to the complete lockdown, the respondents reported no

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0.5

7.2

8.7

6.2

77.4

construction labour

Mason

Construction Contractor

Painting Labor Others

Fig. 3.8 Most common job undertaken by respondents

working days during the first and second lockdown phases. In Lucknow, on average, the number of workdays declined from 21 days in the prelockdown phase to nine days post-lockdown, while in Pune, the working days declined from 26 to 16 days. With a few workers specializing as masons, construction workers, marble and tile workers, and plumbers, most experienced a sharp fall in employment, even after November 2020 (when restrictions had eased up to a great extent), with little repair work and construction projects being undertaken by the private builders. “Since the time of COVID-19 lockdown, there has been a severe crisis of employment opportunities in local labour markets. Getting work for even two days a week is difficult for us. Daily wages too, for any work possible, have dipped by half”, says Rajesh Sing, a young worker in Lucknow.

Furthermore, difficulties in travel and commute for most workers— primarily to go back to their homes and then to return to cities—have translated into a rise in travelling expenses from Rs 1300 to Rs 1600 on average per month, as per data on transport expenses for each worker

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from Lucknow. Weary of spending extra on conveyance during financial distress, workers were forced to accept intermittent unemployment periods. A few interviews indicated that there were also instances where daily wagers with more prominent families in cities, considering not getting employed for a more extended period and without support to travel back home, some migrants preferred staying back in the migrated city. Thus, they had to beg because they could not pay the train fare to go back home (and state buses were not operational for a long time). Wages/Labour Charges Per Day Apart from the change in the number of working days, roughly all the workers faced a reduction in the wage rates. The average labour charges per day before the lockdown stood at Rs 430 and fell to Rs 390 postlockdown, as shown in Fig. 3.9. However, Lucknow’s fall in labour charges per day was 17% compared to 2% in Pune. This fall indicates a fall in wage rate that could have been brought upon by changes in inflationary pressures, and primarily a fall in demand for labour due to delay or cancellation of the construction projects. It is also interesting to observe the impact of lockdown on the various categories of workers. The survey findings reveal that Masons were the worst affected, observing a decline of 19% in their labour charges per day, followed by painters (13%) and construction workers (7%). The workers in the other categories saw a decline of 12% in their wages.

labour charges per day

700 600 500 400 pre-lockdown

300

post-lockdown 200 100 0 Mason

Painting Labour

Construction Labour

Other

Fig. 3.9 Labour charges per day across categories of workers

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Usually, wage determination in each labour market depends on numerous factors: nature of work, identity, the average experience of the worker in a vocation, home state of the worker, and more. The survey finding from Pune reveals that workers who have worked in the city for a longer duration (e.g. ten years) began their wage negotiations at a higher wage. The payment structures are not time-based (as per the countable days of work)—some workers get (or got) paid for the day regardless of the amount of work done, whereas, for others, their wages are directly proportional to the effort and work performed. For example, we observed that brick carriers at construction sites get paid for every floor they carry the bricks to; therefore, the more bricks they carry, the higher their total wage. The rate for carrying bricks to the first floor is around Rs 1 in Pune, which increases with each floor (the rate for carrying bricks to the second floor is Rs 1.5, etc.) Haroon, a mason from Lucknow, said, “Ever since COVID has begun, there is not much happening. Earlier people used to employ us, but now they are afraid to do so. If a contractor’s project is on, which is very rare, they come to seek for us, but there is hardly any work for small-time workers”.

Factors affecting wage rates: • The worker’s city or location seems to affect the wage rates. On average, wages declined by 17% in Lucknow as compared to 2% in Pune. • According to different types of work, the change in the wage rates was reflected in masons (who have the maximum wage rate) suffering the highest fall in wage rates on average of Rs 126. Meanwhile, construction workers faced a smaller decline of Rs 27 and painting workers a slightly larger fall of Rs 63. The correlation coefficient3 is 0.1676, which suggests that while the type of work does

3 The correlation coefficient is a statistical value that measures the relationship and

linear interdependence of any two variables. If any two variables are positively correlated, the coefficient will be positive and vice versa, therefore, the value of the correlation coefficient runs from −1 to 1. Squaring the correlation coefficient gives us R2 , which measures the strength of the relationship between the two variables and not the direction of the correlation.

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influence the change in wage rate, it is weakly correlated with the variable. • Another variable with a positive correlation with the change in labour charges is age, though the variation is relatively small, as shown in Fig. 3.10. This implies that older workers suffered a relatively more significant decline in their wage rates due to the lockdown compared to workers in younger age categories. The squared correlation coefficient for age is 0.069 (the correlation coefficient is 0.263). This value implies that for every unit increase in age, the change in wage rate is Rs 0.263. This value’s economic significance is that age exhibits neither a strong nor a weak positive correlation with the change in daily labour charges. Counterintuitive to general perception, the worker’s educational qualification does not strongly correlate with the change in labour rates in this case. The correlation coefficient between the two is 0.0196. The secondary-educated workers experienced a significant decrease in wage 70 60 50

R² = 0.0692

Age

40 30 20 10 0 -400

-200

0

200

400

600

800

Change in Labour Charges per day (pre and post lockdown)

Fig. 3.10 Correlation between age and change in labour charges per day due to lockdown

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rates, with Rs 92. On the other hand, unemployed workers did not suffer the smallest decline in wage rates, and workers with primary education witnessed the smallest decline in wage rates (of Rs 25). This weak correlation is further supported because educational qualification is not the primary determinant of income in manual and physical labour cases. Hence, education’s effect on wages earned would be primarily indirect. For example, more educated workers may negotiate better and hence earn higher. From the above observations, though age and education impact, they are not that significant a factor. This can be attributed to the extensive labour supply, resulting in more bargaining power for the employer and relatively inflexible low wage rates. Despite so many factors influencing the wage rate, there is limited variation in the daily wage within the same work category. Construction workers, on average, were paid between Rs 400-and 500 days before the pandemic, and painters were paid around Rs 500–600 daily. This was consistently seen in most mazdoor mandis across Lucknow, which, for construction work, are found to have relatively fixed wages rates—workers here prefer not taking up the job than working at a lower wage rate. In an environment of such strong wage inelasticity of labour supply, a 7% fall in the overall wage rate now can be considered alarming, reflecting a sharp decrease in demand for (construction) worker services. Households Income and Expenditure The decline in labour charges/wages per day also impacted monthly income, allocating expenditures. The survey findings showed that the monthly income from labour decreased 50% from the pre-lockdown income of Rs 10,434 to the post-lockdown income of Rs 5244, as shown in Table 3.2. The mean monthly income from labour declined by 64% in Lucknow compared to 37% in Pune. Besides earnings from labour, some respondents also highlighted secondary sources of income and other household members contributing to the household income. The mean monthly income from labour and other sources declined by 66% in Lucknow compared to 32% in Pune, as shown in Table 3.3. In several cases, it is observed that the additional source of income has declined or is negligible post-lockdown. Laxmi Rathod, a female worker in her 20s from Pune’s mazdoor mandi, says, “We did not even get a single rupee during the lockdown. Whenever

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Table 3.2 Mean monthly income from labour pre- and post-lockdown Cities

Pune Lucknow Total

Mean monthly income from labour (pre-lockdown)

Mean monthly income from labour (post-lockdown)

11,248 9577.053 10,433.95

Percent fall in income from labour −37.9001 −64.3721 −49.7375

6985 3412.105 5244.359

Table 3.3 Mean Monthly Income and Expenditure (pre- and post-lockdown)

Lucknow Pune

Mean monthly income (pre-lockdown)

Mean monthly expenditure (pre-lockdown)

Mean monthly income (post-lockdown)

Mean monthly expenditure (post-lockdown)

12,486.35 11,268.00

8768.93 6027.70

4202.28 7565.00

13,253.49 5752.40

we went and begged for some money or support, we were beaten up by the police. Despite that, we desperately had to beg to find some food4 ”.

The decline in income has also altered or impacted household expenditure. The total income exceeds the total expenditure in the pre-lockdown phase. However, the monthly expenditure exceeds the monthly income post-lockdown phase, as shown in Fig. 3.11. As analysed from the aggregate expenditure allocation from each worker’s household expenses, it was attributed to rental costs, healthcare costs, children’s education, and conveyance costs (that have substantially increased now). Both cities’ observations reveal that the mean monthly expenditure exceeds income in Lucknow, while expenditure declined in Pune. Postlockdown, Lucknow’s monthly expenditure has increased by 51% while it has fallen in Pune by 4.5%.

4 https://www.youtube.com/watch?v=A2gPfx9AOCI.

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Fig. 3.11 Monthly income and expenditure pre- and post-lockdown

Expenditure Composition The pie chart below shows all the components of household spending pre- and post-lockdown for the two cities. Given the lack of complete data on conveyance expenditure, we have a restricted sample size of 79 in Lucknow and 37 samples from Pune. Overall, the health expenditure has risen significantly from 23% in pre-lockdown to 40% in post-lockdown, as shown in Fig. 3.12. The daily wage worker household would spend on health care also increased due to a rise in the average spending on medicines from Rs 1,900 before the pandemic to Rs 4,700 per month. This increased spending was evident for those availing private healthcare services for maternal patients, pregnant women, or treating non-COVID19-related ailments for the elderly in the household. While we notice significant changes in expenditure patterns, we still need to account for inter-cities disparities. In Lucknow, the daily wage workers spend most of the income on health expenditure and ration, as shown in Fig. 3.13. Data reveals a rise in health expenditure from 31 to 48% and a fall in the ration (food expenditure) of about 21%. Comparing this with overall expenditure preand post-lockdown, we notice that most health expenditure change is driven by worker’s data from Lucknow. The data also reveals a decline in education expenditure from 5% in the pre-lockdown state to 2% in the

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Conveyance 13% Electricity and Gas 9%

Ration 36%

Education 5%

Health 23%

Conveyance Electricity 10% and Gas 7% Education 2%

Ration 29%

Health 40%

Rent 14%

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Rent 12%

Fig. 3.12 Monthly expenditure pre- and post-lockdown

post-lockdown phase in Lucknow. From the 48 participants in Lucknow, mean educational expenditure fell from Rs 528 to Rs 323 per month. This reflected how many low-income parents took their kids out of school (as schools shut and classes went online) or could not educate them (without a smartphone). In Pune, the expenditure on ration, education, and conveyance has increased, while expenditure on rent has come down, as can be seen in Fig. 3.14. Conveyance 14%

Electricity and Gas 8%

Ration 33%

Education 5% Health 31%

Rent 9%

Fig. 3.13 Monthly expenditure pre- and post-lockdown in Lucknow

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Electricity and Gas 12% Education 2%

Conveyance 5%

Ration 39%

Health 5%

Conveyance 8% Electricity and Gas 12% Education 4% Health 5%

Rent 37%

Ration 43%

Rent 28%

Fig. 3.14 Monthly expenditure pre- and post-lockdown in Pune

Borrowings An International Labour Organization (ILO) report suggests that informal workers “have low productivity, low rates of savings and investment, and negligible capital accumulation”. The dearth of savings and rising prices leave informal workers no civil option besides borrowing. The survey in these two cities also reveals that, on average, the borrowings increased from INR 8000 in pre-lockdown times to INR 14,000 in the post-lockdown phase. The increase in borrowing was because of the fall in income levels and some cases, a simultaneous rise in expenditure. Almost every borrower, as studied, availed more significant sums of money through intra-community borrowings at informalized interest rates, as borrowing institutionally through banks was not possible (due to lack of proper paperwork and security ownership). As reported (Centre for New Economics Studies 2021) by workers in our, this pattern of “informal lending”, in most cases, a lender charged 5% for every Rs 100 taken as a loan. The increase in medical expenses and household weddings (primarily for dowry-related expenses, where “marriages had been already fixed before the pandemic”) are cited as the most common reasons for borrowing. The data also reveals a positive correlation between the dependency ratio and the amount borrowed during the pandemic. The correlation coefficient is 0.15 suggesting a significant correlation implying that families with more dependent members had a greater tendency to borrow. The respondents mentioned that other factors affecting the change in loans taken are the number of members in the household in need of healthcare and the government’s aid.

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Conclusion Through a detailed ethnographic analysis undertaken for daily wage workers (as part of India’s large informal economy base) across two cities in India, one observes that the informality is not only restricted to the nature of work for the workers but also embedded in the resources like land, housing, nutrition, borrowings, etc. The COVID19-associated lockdown made the poverty and vulnerabilities of millions of daily wage workers visible. The sharp fall in employment followed by a decline in daily wages and income has altered India’s daily wage workers’ expenditure pattern. The survey revealed an increase in the worker’s household expenses attributed to debt-interest-related payments, rental costs, healthcare costs, children’s education, and conveyance costs (substantially increased post-lockdown). During a pandemic struck catastrophe, the “aam” worker was forced to become more and more “nirbhar” (translates to depend) on debtentrapping, ultra-exploitative, asset-owning class of workers (and informal money lenders), which has only made their living condition worse over time. Despite the government’s efforts to ensure food security during the months of the lockdown and after, most workers could not avail the benefits of receiving ration packages. The interference of bureaucratic intermediaries and the need for an ID and paperwork to receive food packages resulted in more workers being forced to fend for themselves (Mohan et al. 2021). Poonam Sahu, a daily wage worker from Lucknow, presents5 : As far as I am concerned, the government in person about providing (food) aid and have been living through a horrid period government measures are to be seen, and any way.

can say whatever on paper or support. Daily wage workers and none of the announced it didn’t help the workers in

The observations and analysis discussed highlights an urgent need for policymakers, agencies of the state (including non-state actors) to use some of the empirical details highlighted here to take the scope of this analysis further in formalizing means of social justice, ensuring basic

5 https://www.youtube.com/playlist?list=PL8RbNXSvnr8S7Nl6nebNdy5Y22SPs 4KHR.

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standards and rights for daily wage workers who currently lie outside the domain and means of social security. The study and the interviews conducted also provide a scope for further research investigation in studying these unsecured workers’ socio-economic position, especially women who work outside the regulated, formal sectors of the economy. Those who seek to understand the impact on these workers may widen the informational domain of assessment by including more subjective information and cities that see the inflow of migrant workers in India.

References Action Aid Association (2020). “Workers in the Time of COVID-19” a report released on survey of 11,537 informal workers across India. 13 August. https://www.actionaidindia.org/press-release/workers-time-covid-19-reportreleased-survey-11537-informal-workers-across-india/. Accessed on 9 March 2020. Afridi, F et al (2020). How has Covid-19 crisis affected urban poor? Findings from a phone survey - II. Ideas for India. 11 May. https://www.ideasfori ndia.in/topics/poverty-inequality/how-has-covid-19-crisis-affected-urbanpoor-findings-from-a-phone-survey-ii.html. Accessed 2 March 2021. Bhalotia, S et al (2020). City of dreams no more: The impact of Covid-19 on urban workers in India. Centre for Economic Performance. September. https://cep.lse.ac.uk/pubs/download/cepcovid-19-008. pdf. Accessed 2 March 2020. Bromley R (1978). Introduction—The urban informal sector: Why is it worth discussing? World Development 6(9/10): 1033–1039. Centre for New Economics Studies (2021). Daily wage workers. Youtube. 26 February. https://www.youtube.com/playlist?list=PL8RbNXSvnr8S7Nl6n ebNdy5Y22SPs4KHR. Accessed on 20 February 2021. Cereda et al (2020). COVID-19, labour market shocks, and poverty in Brazil: A microsimulation analysis. World Bank. https://openknowledge.worldb ank.org/bitstream/handle/10986/34372/COVID-19-Labour-Market-Sho cks-and-Poverty-in-Brazil-A-Microsimulation-Analysis.pdf?sequence=1&isAllo wed=y. Accessed 1 March 2021. CGAP (2020). Relief for informal workers: Falling through the cracks in the COVID-19 crisis. COVID Briefing. August. https://www.cgap.org/sites/ default/files/publications/2020.COVID_Briefing_Informal_Workers.pdf. Accessed on 8 March 2021. CMIE (2020). Unemployment rate in India. https://unemploymentinindia. cmie.com/. Accessed on 10 March.

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Estupinan, X and Sharma, M (2020). Job and wage losses in informal sector due to the COVID-19 lockdown measures in India. August 25. https://ssrn. com/abstract=3680379, https://doi.org/10.2139/ssrn.3680379. Accessed on 10 March 2021. Gerxhani K (2004) The informal sector in developed and less developed countries: A literature survey. Public Choice 120: 267–300. Ghosh, J (2020) A critique of the Indian government’s response to the COVID19 pandemic. Journal of Industrial and Business Economics 47: 519–530. Haan, A (2020) Labour migrants during the pandemic: A comparative perspective. The Indian Journal of Labour Economics 63: 885–900. 19 October. Hart, K (1973). Informal income opportunities and urban employment in Ghana. The Journal of Modern African Studies 11(1): 61–89. ILO (2002). Resolution concerning decent work and the informal economy. https://www.ilo.org/public/english/standards/relm/ilc/ilc90/pdf/pr25res.pdf. Accessed 8 March 2020. ILO (2018). Women and men in informal economy: A statistical picture. International Labour Office. https://www.ilo.org/wcmsp5/groups/public/---dgr eports/---dcomm/documents/publication/wcms_626831.pdf. Accessed on 7 March 2021. ILO (2020a). COVID-19 and the world of work: Impact and policy responses. 18 March. https://www.ilo.org/wcmsp5/groups/public/---dgr eports/---dcomm/documents/briefingnote/wcms_738753.pdf. Accessed on 10 March 2021. ILO (2020b). Short-term policy responses to COVID-19 in the world of work. International Labour Organisation, New Delhi. 30 March. https://www.ilo. org/wcmsp5/groups/public/---asia/---ro-bangkok/---sro-new_delhi/doc uments/publication/wcms_739454.pdf. Accessed 1 March 2021. ILO (2020c). Global wage report 2020c–21: Wages and minimum wages in the time of COVID-19. International Labour Office, Geneva. https://www.ilo. org/wcmsp5/groups/public/---dgreports/---dcomm/---publ/documents/ publication/wcms_762534.pdf. Accessed on 6 March 2021. Mazumdar, D (1976). The urban informal sector. World Development 4(8): https://doi.org/10.1016/0305-750X(76)90047-4Economy, 655–679. Swarajya Magazine. April 22. https://swarajyamag.com/economy/covid19-lockdown-impact-estimating-the-job-losses-in-indias-informal-economy. Accessed on 10 March 2021. Mehrotra, S (2019). Informal employment trends in the Indian economy: Persistent informality, but growing positive development, Employment Policy Department Employment Working Paper No. 254, International Labour Office. Mehta, B and Kumar, A (2020). Covid-19 lockdown impact: Estimating the job losses in India’s informal.

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Meng, X (2001). The informal sector and rural–urban migration—A Chinese case study. Asian Economic Journal 15(1): 71–89. https://doi.org/10.1111/ 1467-8381.00124 Mohan, D et al (2021). Declining wages, no government aid: Daily wage workers are stuck in a deep crisis. The Wire. 28 February. Perry GE, Maloney WF, Arias OS, Fajnzylber P, Mason AD, and SaavedraChanduvi J (2007) Informality: Exit and exclusion. Washington, DC: The World Bank. Raveendran, G and Vanek, J (2020) Informal workers in India: A statistical profile. Women in Informal Employment: Globalizing and Organizing. August. https://www.wiego.org/sites/default/files/publications/ file/WIEGO_Statistical_Brief_N24_India.pdf Accessed on 6 March 2021. Ray, D and Subramanian, S (2020) India’s lockdown: An interim report. Indian Economic Review. https://doi.org/10.1007/s41775-020-00094-2

PART II

Human Capital Developments in China and India

CHAPTER 4

Divergence and Convergence of Policy Approaches in Universalizing Elementary Education in India and China Wenjuan Zhang

Introduction The promotion of free and universal education has been embraced by the UN Declaration of Human Rights (1948) and the Convention on the Child’s Rights (1989). As the most populous and largest developing countries globally and as the state parties of the CRC, India and China have substantially committed to promoting free and universal education in each context. India and China share similarities in population scale, development stage, and uneven development reality across their extensive territory. However, we must admit that India and China are pursuing significantly different paths for their political modernization, with China adopting the constitutional governance of the party-state based on Marxism-Leninism and India pursuing liberal democracy based

W. Zhang (B) O. P. Jindal Global University, Sonipat, India e-mail: [email protected]

© The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2022 K. Nakray et al. (eds.), Social and Economic Transitions in China and India, https://doi.org/10.1007/978-981-19-6124-3_4

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on democratic socialism. The social and demographic convergence and the divergence of political modernization shape the policy agenda-setting and the implementation of universalization of elementary education (UEE) in both contexts. According to the Rand Report, “China has outperformed India in primary and secondary education along a broad spectrum of access, quality, and delivery indicators” by 2008 (Goldman et al. 2008, p. xi). Some scholars have tried to explore why China outperformed India for elementary education. Scholars have identified one key fact China prioritizes elementary education at the earlier nation-building stage while India prioritizes higher education (Rao et al. 2003). Empirical research proves that the less developed a country is, the more it will benefit from the investment in primary education and female education, while with the level increase of development, the returns from primary education decline (Psacharopoulos and Patrinos 2018). The empirical data collaborates the assumption that policy choice, especially agenda priority, differentiates India and China in the policy outcome of UEE. To identify proper factors or elements for a meaningful explanation, the paper gets insights from the public policy theories. Various scholastic efforts in the field of public policy theories have been made from stage heuristic approach to more complicated approaches such as multiple streams framework (MSF), punctuated equilibrium, policy networks, social construction, institutional analysis, and development (IAD), the advocacy coalition framework(ACF) (Sabatier and Weible 2014). MSF has been widely used (Béland and Howlett 2016). It identifies three process streams that influence the policy agenda-setting: that influence the policy agenda-setting: politics stream, the policy stream, and the problem stream (Kingdon 2013). Only the three streams join together, it is more possible to open a policy window (Kingdon 2013, pp. 165–195). Based on the MSF and other theories, the author would argue that the two critical factors of ideas and power structure might be able to help explain the divergence of agenda-setting. The paper would first trace the policy evolving process in each context and then develop a comparative analysis in the following parts.

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Policy Approaches for Universalizing Free Education in India and China Universal Nine Years of Compulsory Education in China: The Evolving Process of Policy and Strategies From 1949 till now, China has practised the party-state’s political structure, which places political power in the Communist Party of China (CPC) and state administration power with the National People’s Congress (NPC), privileging political authority over administrative authority (Backer 2012). While the Cultural Revolution has caused constitutional disorder, the political order remains stable, and the CPC’ leadership is still firmly held. Through the CPC’s political authority, the state could redirect to the market economy from 1978. This is the historical and political background for us to understand the education policy evolvement. From 1949 to 1978: Ideological Commitment Through the Egalitarian Model CPC believe the social revolution through fundamental class alteration, and the mobilization of the peasantry as its mass base helps the CPC gain power. From the beginning to 1978, CPC applied an egalitarian socialist model that focused on reducing adult illiteracy and promoting access to primary education. The Common Programme of the Chinese People’s Political Consultative Conference (1949) set education as a state policy, and the Constitution (1954) provides it as a fundamental right. In practice, the CPC defines being literate as reading1000–1500 Chinese words. The efforts to reduce illiteracy can be summarized into three focuses: “1) To reform the language, reform the orthography, or both; 2) To reform and expand the formal school system; 3) To create new techniques for non-school (“social”) education for both children and adults to supplement the inadequate formal system” (Hayford 1987, p. 5; Ye 2020, p. 59). 1978–2000: Achieve NYCE in Decentralized Way with Some Attention to Least Developed Areas The redirected Chinese social and economic development model started with the Open Up and Reform Policy proposed by the CPC led by Deng Xiaoping in 1978. The egalitarian model was slowly replaced by

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the “market-preserving federalism” (Qian and Weingast 1996), or nonuniform efficiency-oriented competitive model in terms of education (Hayford 1987, pp. 13–14) (Hannum 1999). The census of 1982 shows that disparities in illiteracy have already started. For example, big cities and east coast areas reached 80% while literacy in the minor developed areas was about 50–60%, with other areas in the middle (Jowett 1989, pp. 420–421). In order to constitutionalize the new direction, the Constitution (1982) was made to replace the Constitution 1978 and revive the Constitution (1954), which was once thrown away by the Cultural Revolution. The significant difference between the Constitution (1982) and education is that it sets it both a fundamental duty and a fundamental right with concrete state mandates. From 1982 to 2000, the critical focus of Chinese education policy was to achieve the two goals of enabling universal access to NYCE and removing illiteracy of adolescents and young people, short named “Realization of Double Basis” (“Liang Ji” in Chinese) as the priority of the education policy (Chen et al. 2018, p. 9; Wang and Si 2020). To get the local attention to the priority of elementary education, in 1985, the CPC issued the Decision on the Reform of Education System (Hereafter referred to as the CPC Decisions), which sets a more ambitious goal of universalizing nine years of compulsory Education (NYCE) above the constitutional mandate of universalizing primary education. To implement the CPC decision, the NPC passed the Compulsory Education Law in 1986 to provide a legal instrument for the implementation. Several other policies came after to prioritize NYCE over higher education at this stage when resources are limited (Liu and Wang 2016, p. 182). For example, the 14th CPC Report (1992) proposed reforming the education system by strengthening compulsory education. In 1993, the State Council issued the Chinese Education Reform and Development Guidelines, which proposed roughly realizing Double Basis’s goal before 2000. In the National Conference on Education (1994), the Central Government emphasized that compulsory education should be a priority. After that, the CPC and the Chinese government put the CPC Decision to draw the education reform and development blueprint pragmatically. Then the policy was implemented through the CPC’s political supervision, the NPC’s legal supervision, and the State Council’s Administrative Supervision. The CPC Decision set three stages to achieve compulsory education based on economic development for the implementation. One-fourth of

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urban and developed areas in east coast provinces and a few developed inner land areas should universalize NYCE by 1990. Nearly half of the country should universalize NYCE for towns and small cities with middlelevel economic development by around 1995. For the left one-fourth of most minor developed areas, they should try to universalize primary education and extend to senior primary education as early as possible. It also provides that the Central Government should provide different kinds of support for least developed areas to universalize NYCE. However, during the early stage, especially from 1981 to 1990, the maximum financial contribution was from town-level Government and self-governing communities (Zhou 2006). Data shows that from 1981 to 1991, 35.7 billion RMB was from government finance and 70 billion RMB was from society to innovative old school facilities, especially in the least developed areas (Wang 2013, p. 4). The localization of financial burden creates severe challenges for the least developed areas. Starting from 1995, there has been extra attention to the financial challenges in the least developed areas. In 1995, the Central Government started Financial Transfer to Least Developed Areas (862 counties) for Implementing NYCE in these areas. From 1995 to 2000, 3.9 billion RMB (about 500 million US Dollars) was transferred to the least developed areas (Council, G. C. o. S. 2006b). In 2005, the Central Government started another programme named Two Exemptions and One Subsidy for students in poverty (Council, G. C. o. S. 2006a). “Two Exemptions” mean exempt textbook fees and miscellaneous fees. “One Subsidy” is to give living subsidy to students who need residential study in the least developed areas. By 2000, the literacy in China reached 90.9%, and Gross Enrolment Ratio (GER) for primary (I–VI) reached 98.95%, and GER for secondary (VII–XI) reached 98.1% (MoE 2004). However, by 2004, China still had eight per cent of areas in the least developed areas not universalizing NYCE (MoE 2004). From 2000 Till Now: Focus on Removing Rural/Urban Disparities and Move the Quality to Next Level After evaluating “Realization of Double Basis”, the Centre tries to secure the continuous efforts of strengthening NYCE locally through policy signals and financial restructuring. In 2001, the State Council issued Decisions on Reforming and Developing Primary Education which clearly emphasizes that NYCE should still be the priority. It is the priority before 2010. The investment in NYCE was further prioritized during the 11th

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Five-Year Plan (2006–2010), with over 50per cent of the financial investment in all types of education (Liu and Wang 2016, p. 182). However, the more effective way is to shift up the government level for the financial responsibility of NYCE from 2001 (Zhu 2018, p. 13). In 2006, a financial assurance mechanism for NYCE was formulated. In 2008, the Chinese Government further abolished miscellaneous and textbook fees in rural and urban areas, making the NYCE completely free. The free education for citizens has been achieved incrementally: (1) no charge of tuition fees but allowing the charge of miscellaneous fees and textbook fees before 2006; (2) to exempt all of them also with living subsidy for residential students in the least developed areas from 1995 to 2006; and (3) to exempt all of them in rural areas and then to the whole country by 2008. The narrative has been substantially shifted from efficiency to fairness (Zhang 2020). The key discussion in this period is around rural/urban educational disparities, regional disparities in education facilities and quality of teachers, education access for children with disabilities, migrant children, and children in poverty (Li, Yuxiang 2002). In 2006, the Compulsory Education Law was substantially revised (with further minor revisions in 2015 and 2018). The major focus of the 2006 revision is to ensure equitable education development, such as reducing the disparity across regions and the disparity between rural and urban (MoE 2016). It confirmed the financial responsibility would be shifted from selforganization community and local governments to provincial and national Governments (Li et al. 2019). Nevertheless, new challenges are still there, especially for the problems caused by urbanization and migration. For example, it caused the closing of 270 thousand schools from 2001 to 2013 in rural areas (Li and Zhu 2016, pp. 115–116). Meanwhile, migrant children faced numerous challenges for NYCE access in cities due to the Hukou system and the rural/urban divisions in resources allocation (Zhang 2017). In addition, at this stage, 12 years of universal education have also been discussed. The debatable part is to universalize the three years of preschool education or the three years of senior secondary education. Among the various challenges, the major one is rural/urban disparities. Based on the panel data analysis of the 31 provinces across mainland China from 2005 to 2014, the gap in investment across East Coastline provinces, least developed areas in the west part of China and provinces in the middle part of China has been substantially dropped (Xiao and

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WU 2018, pp. 22–24). The empirical research also shows that the investment disparities per student between rural and urban are expanding (Xiao and WU 2018, p. 22). The equity focus has shifted from regional to rural/urban disparities. One of the critical reasons for the gap expansion of financial investment in rural and urban areas was caused by the financial structure for compulsory education in rural areas (Dou 2017). The data shows investment in rural NYCE was mainly from the Government at the town level and county level, while the burden from provincial and national Governments was below 10%, which happened even after the revised Compulsory Education Law in 2006 (Dou 2017, p. 74). So in 2015, the State Council issued another Notice [SC 2015 No. 67] to address the financial issues for compulsory education in rural areas. It said the Central Government would set the standard of investment per student, and the funding would be from Central Government and Local Government (SC 2015). The Central Government will burden 50% for developed areas, 80% for least developed areas, and 60% for the left (SC 2015). We can find the logic of universalizing free education in China. The political structure and the re-adjusted focus of CPC directly impact Chinese education policy, especially for universalizing free education. Before 1978 it applied an egalitarian socialist model and focused on reducing adult illiteracy and promoting access to primary education, especially in cities, while after 1978, the education model shifted to a nonuniform efficiency-oriented competitive model (Hayford 1987, pp. 13– 14) (Hannum 1999). From 2000, through taxation reform, the central government was involved more in public service delivery, including access to education which aims to reduce regional and rural/urban disparities. The policy approach to universalizing NYCE is well planned and monitored. First, it is coordinated to mobilize the attention while being implemented decentralized. The CPC announces the explicit goal of NYCE and uses the power of vertical promotion to mobilize the local leader’s attention to the NYCE. The NPC provides the legal instrument through legislation. Moreover, the central government uses evaluation to monitor the implementation. Second, the implementation plan is very pragmatic. The first is to divide stages to enable education access into east coast areas, least developed west areas, and the left part in the middle based on economic power (Chen et al. 2018). Then it is further divided into rural and urban for equity and quality of NYCE. Before 2000, the main task was to enable access in terms of timing, while

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after the 2000s, the focus was on equitable development and quality (Wang and Si 2020; Zhang 2020). In order to make it more equitable, the responsible authority for the finance has been shifted from townlevel government and local self-autonomous communities to national and provincial Governments (Li et al. 2019; Song et al. 2018). In 2015, the Central government burdened at least 50% of the total. Universal Elementary Education in India After Independence: The Evolving Process of Policy and Strategies India’s nation-building is based on unity in diversity. To accommodate this, it pursues parliamentary government plus judicial review for horizontal power distribution and a centre-oriented quasi-federal structure. It has shifted from one dominating party in the early few decades to multiparty politics in the 1990s and judicial activism from the 1980s. It also started economic liberalization in 1991. We should take this background to trace India’s universalization of education policy. 1947–1989: Clear Constitutional Mandate with Weak Implementation Unlike China, which has several versions of the Constitution in the first three decades, the Constitution (1950) has enabled a stable constitutional order with a parliamentary democracy based on universal franchise and independent judicial review. Art. 45 of the Constitution provides that “The State shall endeavour to provide, within ten years from the commencement of this Constitution, for free and compulsory education for all children until they complete the age of fourteen years ”. Compared to the provision related to universal education in the Chinese Constitution (1982), Article. 45 seems obvious, with a specific mandate targeting a specific population group. In addition, during the first three to four decades, Indian Congress Party has the hegemony (1952–1967) at the national and state levels and the majority at the national level (1967–1989) to rule the country (Sridharan 2011). From the Chinese perspective, one-party domination can be a positive signal for ensuring policy consistency. However, the clear mandate and the party ruling stability have not enabled the smooth implementation in a coordinated and planned manner. It is true that the National Policy of Education (1968) was passed, which promised a radical reconstruction of the education system based on the Kothari Committee (1964–1966) Report (Kothari 1966, p. xi). However, the implementation is a big issue. By 1971, the literacy in India had just reached 34.45%, with

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a significant gender disparity (male 60% v. female 27.9%) (GOI 2002). Then criticism was pointed to the federal structure of only placing the responsibility of school education on the state list as we know India has a federal structure. Art. 246 of the Constitution divides legislative power into three lists: union, state, and concurrent. The implementation of universal education was initially placed with states on the State list as No. 11. The 42nd Amendment in 1976 was made to implement better the education policy, which moved education and a few other items from the state list to the concurrent list. Education, including school education, is placed as Item 25 on Concurrent List, which means both federal and state governments would have the power and responsibility to ensure universal education. However, “it did not result in any marked changes in the immediate aftermath” (Sripati and Thiruvengadam 2004). In 1986, another National Education Policy was made, which focused on the school provision in rural areas and addressed disparities such as the education access for women, scheduled castes, and scheduled tribes (GOI 1992a). In Section 1.8, it pointed out the problems of Policy 1968 that “the general formulations incorporated in the 1968 Policy did not, however, get translated into a detailed strategy of implementation, accompanied by the assignment of specific responsibilities and financial and organisational support ” and tried to solve it (GOI 1992a, p. 3). Despite the further efforts of NEP 1986, the literacy in India by 1991 was just 52.21% (GOI 2002) which is less competitive than other developing countries (Sripati and Thiruvengadam 2004, p. 151). Why cannot a clear constitutional mandate and one-party domination significantly reduce illiteracy in India during the first four decades? Two more perspectives could help us read the Constitution and India’s politics more nuancedly. On the one hand, we need to know that there is a good hierarchy in the Indian Constitution that fundamental rights in Chapter III (more of civil and political rights) is above other rights in Chapter IV, Directive Principles of State Policy (more of economic, social and cultural rights) (Sripati and Thiruvengadam 2004, p. 149). On the other side, the enforceable mechanisms are different. According to Art. 37, the critical difference between fundamental rights and the rights in Chapter IV is whether the judiciary can enforce them. For the rights in Chapter IV, the Constitution expects states to apply them through legislation (Choudhry et al. 2016, p. 644). On the other side, even though India’s Congress

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Party dominated during the first few decades of independence, scholars argued that Nehru, as the first Prime Minister, “concentrated on higher education and ignored primary education” (Parekh 1991). Adding these two reasons, we may get more clues as to why elementary education was not well developed in India. 1990–2009: Political Will Strengthened in Multi-Party Competition and Confirmed by Constitutional Amendments From 1989, India entered the era of a coalition government based on multi-party competition at both the national and sub-national levels, primarily shaped by communal and caste-based politics (Sridharan 2011). From 1989 to 1990, Indian politics entered the era of a multi-party coalition named United Front under the leadership of V. P. Singh of the Janata Dal Party, which started implementing the Mandal Commission Report in 1990 for giving reservations to lower castes in public universities and public employment. Even if the government was replaced by the new election in 1991, the caste-based politics continued, which helped drive the public attention to education. Meanwhile, in 1991 India had a significant economic transformation that started with economic liberalization 1991, which created incentives for the public to understand the private returns of education. Implementing the Mandal Report and the economic liberalization creates public awareness towards education which further drives political will through elections (Chauhan 2008). In 1992, when the Indian Congress Party re-won the election, it further revised the NEP 1986 into NEP (1992 revision) with Programmer of Action (1992), which placed a more significant focus on elementary education’s universalization (UEE). Considering the significant challenges of school availability despite fast expansion and the high percentage of drop out, up to 75%, the NEP 1992 and the Programme of Action in 1992 announced: “an unqualified priority to the UEE” (GOI 1992b, p. 15). It streamlines the elementary education structure, the critical focus of UEE, the facility expansion for UEE and informal education to reduce illiteracy; sets the goal of education investment to reach 6% of national income during the Eighth Five-Year Plan. It has set the blueprint for the implementation in staged ways, such as ensuring the universalization 11 years old by 1995 and 14 years old by the end of the twentieth century (GOI 1992b, p. 16). It further singles out the nine least developed states in UEE (GOI 1992b, p. 16). It sets a more significant level of education access in rural areas and for women and lower castes. In

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1995, a Mid-day Meal Scheme was launched to attract more impoverished children to attend schools (Cheruvalath 2014, p. 621). Meanwhile, through judicial activism, India has shifted from parliamentary democracy to juristocracy (Baxi 2016). The government’s political will could be more institutionalized through the Apex Court and the Constitutional Amendment than the ruling party’s attention. To make it enforceable through courts, the Supreme Court of India has also made efforts to interpret Art. 21 Right to Life (Ramamoorth and Raman 2001). In 1993, the Supreme Court announced that education for up to 14 years was a fundamental right in J. P. Unnikrishnan V. State of Andhra Pradesh JT (1993 (1) SC 474) (Ramamoorth and Raman 2001). The education investment has also been increased with the political attention paid to the UEE. “[T]he share of elementary education in total educational expenditure increased from 45.6 in 1990–91 to 48.3 per cent in 1995–96 and further to 49.8 per cent in 2003–04” (Reddy 2008, p. 49) That means from 1990; it changed the trend that “as much as 25–30 per cent of combined central and State education expenditure over 40 years was allocated to higher education” (Mehrotra 2006, p. 267). Finally, in 2002, through the 86th Constitutional Amendment, 21A was inserted into the Constitution, which provides that “The State shall provide free and compulsory education to all children of the age of six to fourteen years in such manner as the State may, by law, determine”. From then on, free and universal education for kids from six to fourteen becomes a fundamental right in India. The combined efforts of the Government and the Apex Court have made a significant difference. By 2001 consensus, India’s literacy level reached 65.38% overall, with male literacy at 75.96% and female literacy at 54.28% (GOI 2002). The literacy improvement for women with 14.97% and rural areas with 14.7% is unprecedented. To better implement the 86th Amendment, from 2003, two primary efforts have been made. One is to have the initiative Sarva Shiksha Abhiyan (SSA) for UEE. The other is to pass the Child’s Right to Free and Compulsory Education Act in 2009. SSA was launched in 2001–2002 to implement better the 86th Constitutional Amendment, an initiative to “universalize and improve quality of education through decentralized and context-specific planning and a process-based, timebound implementation strategy” (MHRD 2004, p. 1). This initiative has some highlights: (1) bottom-up approach with involvement of Panchayati Raj Institutions, School Management Committees, Village and Urban Slum Level Education Committees, (2) time-bound (UEE by 2010);

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(3) partnership among union government, state governments and local governments; and 4) attention to both access, equity and quality of UEE (MHRD 2004, p. 2). SSA has particular time-bound objectives: such as (1) All children complete five years of primary schooling by 2007; (2) All children complete eight years of elementary schooling by 2010; (3) Bridge all gender and social category gaps at the primary stage (I–V) by 2007 and at elementary education level (I–VIII) by 2010; and (4) Universal retention by 2010 (MHRD 2004, p. 2). In 2009, the Parliament passed the Right of Child to Free and Compulsory Education Act (revised in 2012) with the legislative goal to enable children between the ages of six and 14 years to receive free and compulsory elementary education in a neighbourhood school. Art. 8 and 9 provide that state government and local authority’s joint responsibility ensure free and compulsory education up to 14 years old. Article. 7 also provides that the Central and State governments co-burden the Compulsory Education’s financial responsibility. Through the critical efforts of SSA and the Right of Child to Free and Compulsory Education Act, the UEE significantly progressed between 2002 and 2011. Based on the 2011 census, literacy in India reached 74.04%, with a women’s literacy rate of 65.46% (GoI 2011, p. 101). It is worthy of applause that gender and community disparity have been substantially addressed. For example, for upper primary (VI-VIII), the girl is as 81.4 is almost equal to boy’s 82.5 while in 2001–2002 it is still 67.8 (boys) to 52.1 (girls) (MHRD 2014, p. s8). Through the Kasturba Gandhi Balika Vidyalaya (KGBV) programmes in backward blocks, the GER for scheduled castes and scheduled tribes have had a significant improvement for girls (MHRD 2014, pp. s9, s10). From 2010 Till Now: More Attention to Quality and Equity However, the challenges are poor facility quality and learning disparities, especially for government schools. According to the ASER’s sample survey, till 2018, schools with boundary walls were just 64.4%, and those with usable girls’ toilets just reached 66.4% (ASER 2019). According to U-DISE 2016–17 data, “nearly 28percent of India’s public primary schools and 14.8percent of India’s upper primary schools have less than 30 students”, and 85,743 schools just have one teacher (GOI 2020, p. 28). The more challenging part for government schools is the quality and accountability of teachers (Cheruvalath 2014; Mehrotra 2006). So parents prefer sending their kids to private unaided schools (Cheruvalath

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2014, p. 622). Even though the 2009 Act requires private unaided schools to at least accept a 25% of kids from “weaker sections and disadvantaged groups”, with implementation problems (Anderson and Lightfoot 2019, p. 22). Besides, various reports also point out the learning crisis in primary schools. It is estimated that over 50 million students in primary schools have not attained foundational literacy and numeracy (GOI 2020, p. 8). On 29 July 2020, the Government of India passed the National Education Policy, which set India’s education vision till 2040. One of the focuses is restructuring the school education, emphasizing foundational education (3–8 years old) and early child care (0–3 years old) (GOI 2020, pp. 7–8). To address the learning crisis identified by civil society, No. 2 of the NEP 2020 calls for a national urgency to enable students to attain foundational literacy and numeracy. NEP No. 2.2 proposes that the Government shall develop an implementation plan right after passing the NEP and set it as the highest priority to achieve it by 2025 (GOI 2020, p. 8). It also mentions the role of teachers, curricula, ECCE and health and nutrition in achieving the foundational literacy and numeracy in other parts of NEP No. 2 (GOI 2020, pp. 8–9). NEP No.3 mainly deals with school drop-out (GOI 2020, pp. 10–11). NEP No. 3.1 sets the goal of 100% of GER from preschool to secondary education (3–18 years old) by 2030 (GOI 2020, p. 10). NEP No. 4 deals with the curriculum, which will match the restructuring of the school structure and make the school education holistic, integrated, enjoyable, and engaging (GOI 2020, pp. 11–20). NEP No. 5 is about teachers, and No. 6 is about equitable and inclusive education. No. 7 is about better resource mobilization for schools, and No. 8 is about standard-setting and accreditation. For the impact of the NEP, more time is needed to assess it. We get the following clues from a closer look at the policy evolvement process. First, universal education for kids (6–14) was mentioned in the Constitution (1950) but functioned effectively until it became a fundamental right. Indian Congress Party, based on the philosophy of Nehru, has not placed primary education as a priority until after the 1990s. The caste-based politics and the judicial activism finally drove the UEE as a political priority and reached the unprecedented in 2002 with the 86th Constitutional Amendment and the launch of the SSA Initiative. Second, India has also made a pragmatic strategy in implementing UEE, from universalization of provision to universalization of enrolment,

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to the universalization of retention. It focuses on the disparities of access and retention for girls and students from backward societies since the 1990s, which largely contribute to the realization of UEE. Finally, the Indian’s right approach instead of state welfare policy to UEE also has some side effects. From one side, the puzzle of defining education as merely a fundamental right is whether children and parents can give up their fundamental right. On the other side, the run-away of the middleclass from the poor quality of government schools makes the government school reform challenging, making “free education” problematic. The NEP is trying to fix it. However, we need more time to observe the effect of NEP 2020 on fixing the problems.

Comparative Analysis Data Comparison and Analysis Literacy is a valuable tool to compare educational achievement, but we must keep in mind that the use of illiteracy in each context is different, and even in the same country in different statistics, it might also be different. The difference is caused by various reasons, such as the definition of literacy and the different use of numerator and denominator. Therefore, some scholars argue that there is no meaningful unitary literacy rate (Hayford 1987, p. 3). Since the late 1970s, United Nations have set up a standard for data collection to enable consistent and comparable data analysis (UNstas 1980, p. 88; 2017, p. 217). This is why UNESCO uses the data to compare and expect to use the literacy in different years across different ages to understand the patterns of policy achievement in both contexts. In this part, we first use the UNESCO data to track the trends of UFE and then develop the analysis. The Trend of UFE in India and China See Figs. 4.1, 4.2, and 4.3. Comparative Analysis From the Figs. 4.1, 4.2, and 4.3, we can get some comparative analysis as follows: First, from the Figure 4.1, the data about literature for adults over 65 in 1980s, we could find that both India and China almost have the same beginning in terms of adult literacy. Data collected by scholars also shows

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Fig. 4.1 Literacy rate among populations aged 65 and above in India and China (Data from http://uis.unesco.org/en/country/cn?=undefined&wbdisa ble=true for China and http://uis.unesco.org/en/country/in for India)

Fig. 4.2 Literacy rate for youths at the age of 15–24 in India and China (Data from http://uis.unesco.org/en/country/cn?=undefined&wbdisable=true for China and http://uis.unesco.org/en/country/in for India)

that in 1951, both India and China had illiteracy above 80% (GOI 2002, p. 1; Hayford 1987, p. 2; Liu and Wang 2016, p. 180). In terms of female literacy, India is slightly better than that in China while male literacy in China is better than that in India. Second, from Figure 4.2, we could find that the gender disparity of literacy in China was much smaller than in India for adults aged 15– 24. It implies that China had made more effective efforts to reduce

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Fig. 4.3 Literacy rate among population aged 15 and older in India and China (Data from http://uis.unesco.org/en/country/cn?=undefined&wbdisable=true for China and http://uis.unesco.org/en/country/in for India)

gender disparity from 1980s. Some scholars argue that egalitarian society is effective in reducing gender disparity however I would argue it is questionable. For example, Emily and Yu’s research with data from 1949 to 1985 shows that gender inequality in China’s education is positively related to the egalitarian socialist model and negatively related to the liberal competitive model (Emily and Yu 1994, pp. 94–95). Emily did another research on the link between political climate and rural/urban disparities in China, data from 1949 to 1990 also shows the same pattern (Hannum 1999, p. 209). Some other scholar also claimed that the egalitarian socialist model for education before 1978 in China substantially contributed to literacy increase and gender disparity in literacy (Lavely et al. 1990). However, if we read the data in Figure 4.1 and 4.2, we would find that market economy helps close gender disparity more effectively than the egalitarian era. If we further read Figure 4.3, the gender disparity for adult literacy (15 and above) in 1980s we would find that gender disparity in China and India is almost the same or even if China is worse than that in India in 1980s. One counter argument for this might be that egalitarian model could be effective in reducing disparity while China has experienced famine, anti-rightists and culture revolution which undermined the achievement. At least, we would put a question mark on the argument if egalitarian model is more effective in reducing gender disparity for literacy. Third, the political will and legal instrument for universal education matter greatly for the progress evidenced in India and China. Indian literacy increased faster after 1992, with a more significant increase after

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2002, which echoed the political will to prioritize UEE in the 1992 NEP revision and the Supreme Court’s efforts to make elementary education a fundamental right. Another more applaudable achievement, especially after 2002, is that the gender disparity of literacy has been substantially reduced and reached almost 0 in 2018 for the youths aged 15–24. If we treat the solid political will from the 86th Constitutional Amendment as the starting point, achieving it takes about 16 years. In China, the political will to promote NYCE was explicitly announced in 1985, and the Compulsory Education Law was passed in 1986. It almost reached 100% literacy in 2002, and the gender gap reduced to almost 0 for the youth aged 15–24 simultaneously. From 1985 to 2002, it is 17 years. The only difference is that the CPC’s political will was expressed in 1985, and the legal efforts were taken in 1986. However, India took ten years from the political will in 1992 to the Constitutional Amendment in 2002. Finally, we need to note that the standard for being literate in China is slightly higher than in India. The Indian Government explained the census 2011, “a person aged seven and above, who can both read and write with understanding in any language, is treated as literate. A person who can only read but cannot write is not literate. In the censuses before 1991, children below five years of age were necessarily treated as illiterates” (GoI 2011). In terms of the definition of illiteracy, China uses illiteracy with knowledge of fewer than 500 Chinese characters and halfilliteracy with knowledge of fewer than 1500 Chinese characters from the 1982 Census (Jowett 1989). Before 1982, the adult illiteracy group was 13 years old and above; after 1982, it was 15 years old and above, which is in line with the UN definition. Explanations for the Policy Divergence: Ideas and Power Structure From the above-mentioned comparative analysis, the convergence is that once the political is combined with the proper legal or constitutional instrument, universal education can be efficient and effective. The divergence is about the timing for agenda-setting and the policy approaches. Based on the MSF and other theories, we identify two factors to explain agenda-setting: ideas and power. Both countries treat elementary education as the way for individuals to get freedom and as the basis for economic development. However, resources need to be prioritized even within the education system when resources are limited. Why and how

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urgent to universalize primary education are primarily influenced by the ideas and the power structure to enable the agenda-setting. Ideas for Elementary Education for Nation Building To lift people out of poverty and have fast economic development, both turn to socialism, albeit in different forms and levels (Zhang 2019, pp. 43–44). In this socialist ideology, they “must balance the need for economic development against an inherently political agenda of reducing inequality” (Hannum 1999, p. 193). However, they pursue different social revolution strategies such as violent revolution v. electoral democracy and social justice through transcendental institutionalism v. realization and social justice through transcendental institutionalism v. realization-focused comparison, making their policy approach very different in many ways (Zhang 2019). “The Communist Party had an ideological commitment to fundamentally altering class relationships” (Unruhe 2010). The ultimate CPC strategy is to achieve a revolution in education (Hayford 1987, p. 12). CPC’s ideology commitment requires elementary education to be the priority despite the education model changes. China started with an egalitarian socialist model and then shifted to a liberal competitive model after 1978 but with policy interventions to reduce inequality to keep the socialist nature (Emily and Yu 1994; Hannum 1999). In the egalitarian model, the CPC focused on reducing illiteracy through informal ways and promoting universal access to primary education even during the political turmoil. After 1978 it prioritized efficiency over equity but still prioritized NYCE over higher education. However, in India, the ideology for nation-building was very different. Unlike CPC’s path of social revolution through fundamental alteration of class relationships, Constitution Assembly led by the Indian Congress Party believed that universal franchise is the pillar for social revolution (Granville 2009). In addition, even though Indian Congress Party values socialism and has dominated politics from 1952 to 1989, Nehru’s philosophy of nation-building treats socialism very differently. Nehru treats socialism as an instrument for economic prosperity instead of as a way of cultivating civilized virtue (Parekh 1991). Instead, his philosophy of nation-building based on industrialization and scientific temper drove him and his party to focus more on higher education than elementary education (Parekh 1991).

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Power Structure for the Agenda Setting and Implementation In China, the Party dominates the State, and then the State dominates the society (Zheng 2010). This model has pros and cons. It can be used for good, such as the universalization of NYCE, or wrong, such as the Cultural Revolution. In terms of the vertical power structure, Section 4 of Art. 3 of the Chinese Constitution 1982 adopted the principle of “giving full scope to the local authorities’ initiative and enthusiasm under the unified leadership of the central authorities”. At the early stage of universalizing the NYCE, the Central Government almost completely shifted the responsibility to the Local Government. However, since officials’ promotion is nationalized and is in the hand of the CPC, local authorities must take serious of CPC’s decision. “[D]ecentralization of power combined with central control over personnel and promotion plays in Chinese governance”, which enables China to “have more decisive policy initiative and execution than in India” (Bardhan 2009, pp. 353–356). Indian constitutional governance is based on parliamentary Government plus judicial review, enabling policy debates and the further judicial screening of the policy. However, the function of democracy is not short of flaws in the Indian context. “[C]onstitution-making and democratization occurred simultaneously” which makes democracy “instituted in a difficult setting: poor and illiterate; divided by caste, religion and language; burdened by centuries of tradition” (Khosla 2020, p. 6). “The great puzzle of Indian democracy is why the poor, so assertive when election time comes, often do not punish politicians who are ineffective at resolving the endemic problems of poverty, disease, and illiteracy” (Bardhan 2009, p. 351). It is also noteworthy that the caste politics in more than the last two decades “has largely confined itself to the ambition of gaining access to power rather than any substantial agenda of social transformation” (Mehta 2003, p. 53). For the vertical power structure, India has a quasi-federal structure. Even though the Central has more power than other federal structures, China is still more challenging to centralize political will towards the central agenda on UEE if there is insufficient financial support to create incentives. Ideas matter why the duty approach works in China while the fundamental rights strategy works in India. Chinese traditional culture values collectivism over individualism. “[C]ollectivism emphasizes that there can be no rights without duties, in other words, that the protection of the individual interest is subordinated to the imperatives of the collective

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interest” (Feron 2015, p. 91). India follows the ideology of liberal democracy, which places fundamental rights at the top of the rights hierarchy. Besides, the most authoritative body for policy implementation in China is the Executive, while it is through the Supreme Court in India. It is relatively more straightforward for the executive to implement a citizen’s duty rather than a citizen’s right in the Chinese context. In India, since the most authoritative body for policy implementation is the Supreme Court, the fundamental right should be the best strategy to get priority.

Conclusion By analysing the policy evolvement in both contexts, we can say that once there is enough political will and proper legal or constitutional instruments, universalization of elementary education can be achieved efficiently and effectively despite their cultural tradition and power structure. China first identifies regional disparities and then shifts to rural/urban disparities. India identifies rural/urban disparities but primarily focuses on gender and disadvantaged disparities. The policy approaches are different but work well in each context. However, what differentiates them is the agenda-setting. This paper argues that ideas and power structure matter in terms of the timing for translating policy ideas into proper policy agenda. Universal access to elementary education as the priority is because of the CPC’s ideological commitment and as the only ruling party in China. However, in India as a liberal democracy, the prioritization of policy issues the liberal democracy with rich wide varieties in India needs more nudge from different stakeholders. Therefore, China has been ahead of India in universalizing elementary education for about 15 to 20 years.

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Unruhe, J. (2010). Contrast India & China What Revolution Makes A Difference. Retrieved from https://maoistrebelnews.com/2010/07/20/contrastindia-china-what-a-difference-revolution-makes/. UNstas. (1980). ST/ESA/STAT/SER.M/67 principles and Recommendations for Population and Housing Census 1980. New York: United Nations. UNstas. (2017). Principles and Recommendations for Population and Housing Census Revision 3. In (Vol. ST/ESA/STAT/SER.M/67/Rev.3). New York: United Nations. Wang, D. (2013). Review of Development in Chinese Compulsory Education Reform and Related Expectations 中国义务教育改革发展的回顾与展望. China Education Science (4), 4–23. https://doi.org/10.13527/b.cnki.educ. sci.china.2013.04.001. Wang, T., & Si, X. (2020). The Evolution and Development of China’s Compulsory Education Policy in the Past 70 Years 七十年来我国义务教育政策的演 变与发展. Modern Education Management (6), 34–40. https://doi.org/10. 16697/j.1674-5485.2020.06.006. Xiao, T., & WU, Z. (2018). Research on the Balance Situation of Funding Investment for Every Student in the Rural Compulsory Education in China— Based on Panel Data of 31 Provinces Between 2005 and 2014 中国农村义 务教育生均经费投入的均_省略__ 2014 年全国31省的面板数据. Theory and Practice of Education, 38(28), 22–27. Ye, F. (2020). The Magnificent Campaign for Eradicating Illiteracy in the PRC 中华人民共和国的文化壮举_扫盲运动. Beijing Achieves (2), 59–60. Zhang, H. (2017). Opportunity or New Poverty Trap: Rural-Urban Education Disparity and Internal Migration in China. China Economic Review, 44, 112– 124. https://doi.org/10.1016/j.chieco.2017.03.011. Zhang, K. (2020). The Game Between Efficiency and Fairness: The Change of Compulsory Education Policy in China in the Past 70 Years 效率与公平的博 弈_我国义务教育政策变迁 70 年. Education and Teaching Research, 34(6), 25–38. https://doi.org/10.13627/j.cnki.cdjy.2020.06.005. Zhang, W. (2019). Constitutional Governance in India and China and Its Impact on National Innovation. In K.-C. Liu & U. S. Racherla (Eds.), Innovation, Economic Development, and Intellectual Property in India and China—Comparing Six Economic Sectors (pp. 39–67). Springer Open. Zheng, Y. (2010). The Chinese Communist Party as Organizational Emperor— Culture, Reproduction and Transformation. Routledge. Zhou, F. (2006). Rural Fee Reform and the Changing Relationship Between State and Peasant 从汲取型政权到 “悬浮型” 政权——税费改革对国家与农 民关系之影响. Sociological Studies, 3(1), 1–38.

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Zhu, W. (2018). Review and Outlook on the Financial Assurance Mechanism for Compulsory Education in Rural China from 1978–2018 改革开放 40 年我 国农村义务教育经费保障机制的回溯与前瞻. China Education Studies (12), 12–17.

CHAPTER 5

Transformation of China’s Employment Structure Since the Reform and Opening-Up Sun Zhaoyang

Introduction President Xi Jinping pointed out in the nineteenth CPC National Congress report that ‘we must give high priority to employment and pursue a proactive employment policy, striving to achieve full employment and create better quality jobs. We will launch vocational skills training programs on a big scale, pay more attention to tackling a structural contradiction in employment, and create more jobs by encouraging business start-ups’. The contradictions in employment are evidenced by the people’s difficulty in finding jobs despite the high demand for qualified candidates. This is due to unbalanced industrial sector growth and uneven regional development. Therefore, agricultural labour does not shift linearly to the industry or service sector, and labour transferring across regions and industries positively affects economic development.

S. Zhaoyang (B) School of Global Education and Development, University of Chinese Academy of Social Sciences, Beijing, China e-mail: [email protected]

© The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2022 K. Nakray et al. (eds.), Social and Economic Transitions in China and India, https://doi.org/10.1007/978-981-19-6124-3_5

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There are some structural contradictions such as a series of economic and social institutional obstacles that have led to high enterprise and capital liquidity and low workforce mobility, which has caused imbalances in labour supply and demand as well as in industrial and regional structure and hindered sound and rapid development of economy (see also Mohan’s chapter). Therefore, China should recalibrate supply-side structural reforms and build a moderately prosperous and developed country.

Characteristics of Labour Flow One of the crucial characteristics of reform and opening-up is that it breaks the employment restrictions and encourages the labour force mobility from rural areas to cities, from agricultural to non-agricultural sectors and from the central and western to the southeast regions. The labour flow has led to factor reallocation, making factors transfer from low-productivity sectors to high-productivity sectors, from the low end of industries to the high end, improving the average labour productivity and allocation efficiency (Cai 2017), which strongly accelerate the economic development. Flow from Rural to Urban Before the reform and opening-up, China was a predominantly agricultural country with a weak foundation in the industrial and service sectors. It implemented the centrally planned economy and urban–rural dual structure system, which strictly restricted the flow of labour from rural areas to cities and vice versa. The Chinese household contract responsibility system was first adopted in 1978 (the household responsibility system was an agriculture production system that allowed households to contract land, machinery and other facilities from collective organizations). As peasants can keep all products from their land after submitting a certain amount due to the local collective organization, which owns the land, instead of giving all products to the collective organization in the previous commune system, they are more motivated to pay attention to the production process and receive more crop from the same land. The result was that much fewer peasants were required in the land, which released massive peasants from agricultural production and created a huge

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labour surplus that were waiting to be reallocated. It facilitated a marked rise of township and village enterprises. Township and village enterprises became the sectors with the fastest employment growth in the early stage. Further, the government stepped up the reform in finance and taxation, foreign trade, foreign exchange, housing and medical care. It encouraged the development of nonpublic sectors like private enterprises. The economic reform in rural areas and expansion of township and village enterprises have made some villages close to cities in the suburb to be gradually urbanized. Together with such change, more large-scale urbanization was promoted through urban construction, small-town development and establishment of special economic development zones. In the face of globalization and international division of labour, China has taken over the industrial transfer of ‘four little dragon’ (North Korea, Singapore, and Hong Kong and Taiwan of China) in Asia, joined the World Trade Organization (WTO) and encouraged an export-oriented economy. The export has stipulated labour-intensive industries, such as toys, textile, clothing, leather, furniture, etc. These efforts have created cities’ jobs, increasing the demand for surplus rural labour. The number of urban employees rose from 95.14 million in 1978 to 442.47 million in 2019, with an annual average growth of 8.27 million. According to 2020 Survey Report on Migrant Workers, China had 285.60 million rural migrant workers accounting for about 64.5% of total urban employment, including 169.59 million outgoing migrant workers (whose hukou are not at the locality where they work) and 131.01 million migrant workers in their local cities.1 In 2014, the urban employment percentage was above the rural employment rate, and the growth rate has speeded up, as shown in Table 5.1. Billions of labourers flowing from rural areas to cities annually have continuously fuelled China’s economic development and driven the development of rural areas through wage and technical backflow. Flow from Agriculture to Non-agricultural Industries Since the reform and opening-up, China’s economy has realized two-digit annual average growth, upgraded to a higher level and continuously optimised its industrial and employment structures. In 1978, China had a 1 The report can be found at State Council website http://www.gov.cn/xinwen/202104/30/content_5604232.htm, May 12, 2021 logged on.

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Table 5.1 China’ employment structure by urban–rural division, 1978–2019 Year

1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998

Employment (million)

Percentage (per cent)

Urban

Rural

Urban

Rural

95.14 99.99 105.25 110.53 114.28 117.46 122.29 128.08 132.93 137.83 142.67 143.9 170.41 174.65 178.61 182.62 186.53 190.4 199.22 207.81 216.16

306.38 310.25 318.36 326.72 338.67 346.9 359.68 370.65 379.90 390.00 400.67 409.39 477.08 480.26 482.91 485.46 488.02 490.25 490.28 490.39 490.21

23.7 24.4 24.8 25.3 25.2 25.3 25.4 25.7 25.9 26.1 26.3 26.0 26.3 26.7 27.0 27.3 27.7 28.0 28.9 29.8 30.6

76.3 75.6 75.2 74.7 74.8 74.7 74.6 74.3 74.1 73.9 73.7 74.0 73.7 73.3 73.0 72.7 72.3 72.0 71.1 70.2 69.4

Year

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Employment (million)

Percentage (per cent)

Urban

Rural

Urban

Rural

224.12 231.51 241.23 251.59 262.3 272.93 283.89 296.3 309.53 321.03 333.22 346.87 359.14 371.02 382.4 393.1 404.1 414.28 424.62 434.19 442.47

489.82 489.34 486.74 481.21 475.06 469.71 462.58 453.48 443.68 434.61 425.06 414.18 405.06 396.02 387.37 379.43 370.41 361.75 351.78 341.67 332.24

31.4 32.1 33.1 34.3 35.6 36.8 38.0 39.5 41.1 42.5 43.9 45.6 47.0 48.4 49.7 50.9 52.2 53.4 54.7 56.0 57.1

68.6 67.9 66.9 65.7 64.4 63.2 62.0 60.5 58.9 57.5 56.1 54.4 53.0 51.6 50.3 49.1 47.8 46.6 45.3 44.0 42.9

Resource National Bureau of Statistics, http://data.stats.gov.cn

total employed population of 401.52 million and a GDP of RMB367.87 billion, among which the primary industry accounted for 70.5% and 27.2%, respectively. The extremely low-labour productivity has severely impaired economic efficiency. The experiences of developed countries show that only the development of industry and service can realize the transformation from a poor country to a modern one, enhance economic strength and improve people’s living standards. From 1978 to 2019, the total employed population of China has increased averagely by 9.86 million per year, among which the agriculture employment annually dropped by 2.16 million, while the employment in industry and service sectors has grown annually by 3.50 million and 7.76 million. Till 2019, the employment in three sectors is 194.45 million, 213.05 million and

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367.21 million in Table 5.2. The service sector has become the largest source of employment. The coordination of sector and employment has been improved. The coordination between sector and employment can be measured through the coordination coefficient, calculated by the equation: Hx y = /∑ ∑n ∑n n 2 2 i=1 G i i=1 L i . H xy refers to the sector-employment i=1 (G i L i )/ coordination coefficient; G i refers to the percentage of sector i in total output; and L i refers to the percentage of sector i in total employment. The coefficient ranges between 0 and 1; the higher the coefficient, the better the sector and employment are matched. Using data of sector GDP and employment, the coefficient of China can be calculated and mainly rises after the reform began. From 1978 to 2003, this coefficient ranged between 0.69 and 0.81. Though the agriculture in the total output has declined continuously from 27.7% to 12.3%, the proportion of people employed by agriculture has consistently been above 50%. The industrial structure and employment structure have not changed simultaneously. Meanwhile, many industrial enterprises have been shut down due to the reform of state-owned enterprises at the end of the 1990s, which led to a sharp decline in the employed population in the industrial sector and has intensified imbalance in the employment. The service sector has absorbed some of the excess labour from agriculture and industry. As a result, the sector-employment coefficiency in industry has improved, positively affecting the Chinese economy. This has facilitated urbanization as well, reducing labour availability hindrances for industries. This is reflected in the coefficient of 0.94 in 2019. Flow from Central and West Regions to Southeast Regions Under the national policy’s support of reform and opening, the southeast coastal areas of China, relying on their strengths in geographical location, population aggregation and historical traditions have actively participated in the international industrial division of labour. The township and village enterprises, joint ventures and private enterprises, which proliferated, led to huge demand for the labour force. Young rural populations in comparatively poor central and western regions were attracted by higher incomes offered by the labour shortage in the southeast provinces. The ‘rush of rural migrant workers’ accelerated urbanization and rapid development of private enterprises. In 2009, the number of outgoing migrant

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Table 5.2 China’s employment structure by sectors, 1978–2019 Employment (million)

1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Percentage (per cent)

Agriculture

Industry

Service

Agriculture

Industry

Service

283.18 286.34 291.22 297.77 308.59 311.51 308.68 311.30 312.54 316.63 322.49 332.25 389.14 390.98 386.99 376.80 366.28 355.30 348.20 348.40 351.77 357.68 360.43 363.99 366.40 362.04 348.30 334.42 319.41 307.31 299.23 288.90 279.31 265.94 257.73 241.71

69.45 72.14 77.07 80.03 83.46 86.79 95.90 103.84 112.16 117.26 121.52 119.76 138.56 140.15 143.55 149.65 153.12 156.55 162.03 165.47 166.00 164.21 162.19 162.34 156.82 159.27 167.09 177.66 188.94 201.86 205.53 210.80 218.42 225.44 232.41 231.70

48.90 51.77 55.32 59.45 60.90 66.06 77.39 83.59 88.11 93.95 99.33 101.29 119.79 123.78 130.98 141.63 155.15 168.80 179.27 184.32 188.60 192.05 198.23 201.65 209.58 216.05 227.25 234.39 241.43 244.04 250.87 258.57 263.32 272.82 276.90 296.36

70.5 69.8 68.7 68.1 68.1 67.1 64.0 62.4 60.9 60.0 59.3 60.1 60.1 59.7 58.5 56.4 54.3 52.2 50.5 49.9 49.8 50.1 50.0 50.0 50.0 49.1 46.9 44.8 42.6 40.8 39.6 38.1 36.7 34.8 33.6 31.4

17.3 17.6 18.2 18.3 18.4 18.7 19.9 20.8 21.9 22.2 22.4 21.6 21.4 21.4 21.7 22.4 22.7 23.0 23.5 23.7 23.5 23.0 22.5 22.3 21.4 21.6 22.5 23.8 25.2 26.8 27.2 27.8 28.7 29.5 30.3 30.1

12.2 12.6 13.1 13.6 13.5 14.2 16.1 16.8 17.2 17.8 18.3 18.3 18.5 18.9 19.8 21.2 23.0 24.8 26.0 26.4 26.7 26.9 27.5 27.7 28.6 29.3 30.6 31.4 32.2 32.4 33.2 34.1 34.6 35.7 36.1 38.5

(continued)

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Table 5.2 (continued) Employment (million)

2014 2015 2016 2017 2018 2019

Percentage (per cent)

Agriculture

Industry

Service

Agriculture

Industry

Service

227.90 219.19 214.96 209.44 202.58 194.45

230.99 226.93 223.50 218.24 213.90 213.05

313.64 328.39 337.57 348.72 359.38 367.21

29.5 28.3 27.7 27.0 26.1 25.1

29.9 29.3 28.8 28.1 27.6 27.5

40.6 42.4 43.5 44.9 46.3 47.4

Resource National Bureau of Statistics, http://data.stats.gov.cn

workers, those who have rural hukou and leave the local county where their hukou registers, reached 145.33 million, among which proportions of migrant workers working in the eastern, central and western regions are 63.7%, 21.9% and 14.4%, respectively.2 The promulgation of the industrial upgrading and transformation policies and policies promoting central and western region development has made these areas more attractive to the labourer. In 2019, the outgoing migrant workers were 169.59 million, among which the proportion of workers from the eastern, central and west regions are 27.3%, 40.4% and 32.3%, respectively.3 Though the number is lower than the highest record, the eastern regions are still the main places where migrant workers gather.

Furthering Reform and Structural Contradiction in Employment The ‘demographic dividend’ has disappeared while deepening reform and opening. The transferring of potential rural surplus labour nearly ended. Industrial upgrading and transformation still have a long way to go. Some new problems have emerged in labour flow, and the structural contradiction has become prominent.

2 The data can be found at National Bureau of Statistics website http://www.stats.gov. cn/ztjc/ztfx/fxbg/201003/t20100319_16135.html, May 12, 2021 logged on. 3 The data can be found at State Council website http://www.gov.cn/xinwen/202104/30/content_5604232.htm, May 12, 2021 logged on.

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An Imbalance Between Labour Supply and Demand The main problem of employment has gradually changed from oversupply of labour force to structural difficulty in matching of labour supply and demand since the beginning of the twenty-first century. For further encouraging migration from rural to industry and service sectors, government pursued proactive employment policies and removed institutional obstacles that hindered free market labour flow. Though China’s overall employment elasticity is not very high and has even declined, the role of agriculture in promoting employment and reform of the labour market have, to a certain extent, covered the actual relations between economic growth and employment that China’s economic growth has always created many jobs (Zhang 2009). Though the supply and demand contradiction of aggregate employment has been eased since the twentyfirst century, the structural contradictions in employment have become increasingly prominent (Zhang and Wu 2005). It can be seen from the dual conflicts of ‘hard to find jobs despite the high demand and hard to hire qualified employees despite the high supply’. The former refers to the shortage of low-skill rural migrant workers, while the latter refers to college graduates’ difficulty in finding jobs. The job vacancies-to-seekers ratio is used to measure supply and demand balance in the labour market, which is the ratio of job vacancies to job seekers. The job vacancies-to-seekers’ ratio had always been below 1 in China before 2008; the labour supply is above the demand, primarily due to the nearly unlimited labour supply formed by urban–rural segmentation. After the global financial crisis in 2008, many rural migrant workers returned to their hometowns, while the economic recovery demanded more labourers afterwards. The job vacancies-to-seekers’ ratio reached 1.39 in 2011 and dropped slightly in the next few years, but it increased again and hit 1.52 in 2019. We can see those labour-intensive enterprises demanding lowskill, low-cost and low-wage workers have an enormous labour shortage; meanwhile, modern advanced manufacturing and emerging industries have a massive demand for highly skilled labourers. So far, China has about 165 million technicians, among which more than 47 million are senior technicians and only account for 6% of the employed population. In contrast, the job vacancies-to-seekers’ ratio of technicians in the labour market has been maintained above 1.5, and senior technicians even above 2, which means the imbalance between supply and demand

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is persistently high (Lu 2018). Many new graduates cannot find expected jobs for labourers with tertiary education due to the mismatch between labour market requirements and their skill levels. This is caused by an unreasonable degree of specialization, labour market segmentation, industrial upgrading and transformation of employment structures. Such structural unemployment (economy shift creates a mismatch between workers’ skill supply and employers’ skill demand) and frictional unemployment (when workers leave their old jobs but have not yet found new ones) have become the more significant problems faced by college graduates. It is estimated that the urban youth unemployment, population aged between 16 and 25 amounted to 4.99 million, and the unemployed population aged between 16 and 34 amounted to 11.16 million, with the unemployment rate of 16.9% and 6.17% in their respective age group; both are above the surveyed unemployed rate of 5% in China (Sun 2018). Imbalance of Industrial Employment Structure The structural deviation can measure the extent of industry-employment structure imbalance, which the equation can calculate Di = GL ii /G /L − 1. Where G i (i = 1, 2, 3) refers to the added value of sector i; L i (i = 1, 2, 3) refers to the employment number of sector i; G refers to the total GDP; and L refers to the total employment. If the deviation is positive, it means the value-added percentage of sector i is more significant than its proportion of employment, indicating that labour productivity is high and inward labour transfer is possible; if the deviation is negative, it means that labour productivity is low, and outward labour transfer is possible. According to the broad international experience, the deviation of the primary industry is negative, while the industry and service sector deviation is positive. Along with the increase in GDP per capita, the three sectors’ structural deviation is prone to be zero, which indicates that the labour force has transferred gradually from agriculture to non-agricultural sectors, so the three sectors’ labour and output tend to reach a balance (Kuznets 1985; Chenery and Syrquin 1988). The structural deviation of agriculture is all negative, which means labourer has been transferring out of the sector for over 40 years, as shown in Table 5.3. However, the agriculture sector still employs a significant portion which should be moved into the industrial and service sectors. By the end of 2019, the agricultural sector still had an

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employed population of 194.45 million, accounting for 25.1% of the total employment, among which young labour people accounted for a small proportion. Primarily, this can be attributed to the first generation of rural migrants, primarily born in 1950s and 1960s, to leave cities due to lack of skills and hukou and return to villages to engage in agriculture work. While young rural migrants, who are mostly born after the 1980s, or those who are born and raised in cities with rural hukou, want to work in cities and are unwilling to go back to the countryside for having no agricultural skills. The structural deviation of the industry sector is positive and goes down. The deviation dropped from 1.76 in 1978 to 1.11 in 2003. While China’s entry into the World Trade Organization (WTO) has led to the expansion of the labour-intensified, exported-oriented industries, improvements in education have enhanced workers’ skill levels in Table 5.3 Structural deviation of industry and employment imbalance by sectors, 1978–2019 Year

Agriculture

Industry

Service

Year

Agriculture

Industry

Service

1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998

−0.61 −0.56 −0.57 −0.54 −0.52 −0.51 −0.51 −0.55 −0.56 −0.56 −0.57 −0.59 −0.56 −0.60 −0.64 −0.66 −0.64 −0.62 −0.62 −0.64 −0.66

1.76 1.67 1.64 1.51 1.42 1.37 1.16 1.05 0.99 0.95 0.95 0.96 0.92 0.94 0.99 1.06 1.03 1.03 1.00 0.99 0.95

1.02 0.77 0.71 0.67 0.68 0.63 0.59 0.75 0.74 0.71 0.71 0.80 0.75 0.82 0.80 0.63 0.49 0.36 0.29 0.33 0.39

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

−0.68 −0.71 −0.72 −0.73 −0.75 −0.72 −0.74 −0.75 −0.75 −0.74 −0.74 −0.74 −0.73 −0.72 −0.70 −0.69 −0.69 −0.69 −0.72 −0.73 −0.72

0.97 1.02 1.01 1.08 1.11 1.04 0.98 0.89 0.75 0.73 0.65 0.62 0.57 0.49 0.46 0.44 0.40 0.38 0.42 0.45 0.42

0.43 0.45 0.49 0.48 0.43 0.35 0.32 0.30 0.32 0.29 0.30 0.27 0.24 0.26 0.21 0.18 0.18 0.19 0.17 0.16 0.14

Resource National Bureau of Statistics, http://data.stats.gov.cn. Author calculated it

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the labour force. As the labour demand and supply are better matched, the structural deviation declined rapidly to 0.38 in 2016. However, the imbalance caused by China’s industrial structure upgrading faster than the employment structure has gradually increased in the past few years and reached 0.42 in 2019. The structure deviation of the service sector has illustrated a downward trend, from 1.02 in 1978 to 0.14 in 2019. The industrial and employment structure can coordinate well because of the high employment elasticity, diversified employment channels and low entry barriers. The upgrading and transformation of the industry and services have posed a high demand for skilled labourers, while the shortage of skilled labourers has become the industry’s main obstacle for further advancement. Imbalance of Regional Employment Since the reform and opening, the labour force moved from central and western regions to the eastern coastal regions, thus alleviating the employment stress of the central and western regions and promoting the optimal allocation of labour. Though the government also encourages young labourers to return to rural areas to start new business, their will is not strong. In the past twenty years, the central government has issued many policies and spent large amount of investment to boost the economic growth in the central and west regions, while these reforms have created increasing demands for labour force in such areas. However, most labourers moving to southeast coastal regions are unwilling to return to the central and east areas due to lower wages and less work opportunities. Meanwhile, the rural areas do not have a surplus labour force supply to match the labour shortage in central and western regions for the change of demographic structure. In terms of regional disparities, eastern coastal regions have the well-coordinated industrial structure and employment structure, followed by the central regions as compared with the western regions, especially the southwestern regions and northwestern regions with the least coordinated industrial structure and employment structure, which shows that the imbalance of regional economy still exists. Along with the continuous improvement in the economic structure of the eastern regions, the central and western regions will become the leading region for the evolution of the industrial structure and employment structure (Shan and Zhang 2018).

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However, after 2008, China’s export industries were damaged due to the World Financial Crisis. The labour-intensive manufacturing in the southeastern coastal regions suffered a labour crisis due to the rising price of domestic resources and raw material, and labour costs. In 2008, the number of migrant workers exceeded 130 million, but about 60% of them returned home during the 2009 Spring Festival, up by 10% as compared with the 2008 Spring Festival, and the time of return has lasted remarkably.4 Efforts to shift the labour-intensive industries from the southeastern coastal regions to the central and western regions were unsuccessful. Inter-provincial employment still accounted for nearly 60% of rural migrant workers, which is mainly due to three reasons. Firstly, the homogenous industrial structure of different regions hinders the regional transfer of industry; secondly, labour-intensive industries in the southeastern coastal regions benefit from the low transportation cost for the well-constructed road and rail transportation network; and thirdly, the transfer of rural surplus labours has depressed the wages of migrant workers. Therefore, these industries face less cost pressure in the southeast regions (Li and Yuan 2010).

Causes of Contradiction The transformation of population structure, unmatched educational structure, slow upgrading of industrial structure, low level of urbanization rate and household registration system restriction are all attributable to the restricted further labour force flow. Transformation of Population Structure China enters the stage of ‘low fertility, low mortality and low growth’ in terms of population structure. Two prominent characteristics are the decline in the proportion of the youth and the arrival of an ageing society. China’s working-age population began to decline after reaching 1.006 billion in 2013, while the total dependency ratio rose from the lowest

4 Latest Survey Report on the Impact of Financial Crisis on Employment, Ministry of Human Resources and Social Security, 2009, http://www.mohrss.gov.cn/mohrss/Des ktop.aspx?path=mohrss/mohrss/InfoView&gid=1797bb22-6a46-4fc9-a46f-b16dcbb83 d0b&tid=Cms_Info.

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34.2% in 2010 to 41.5% in 2019.5 Among the total employment, the proportion of the age cohort between 16 and 24 drops from 12.9% in 2002 to 7.6% in 2019. Moreover, the population age cohort between 16 and 35 dropped from 46.4% to 33.6%.6 Thus, the tendency of decreasing the number of young labourers is apparent. Meanwhile, the elder population aged above 65 will reach 190.64 million, respectively, 13.5% of the total population in 2020,7 far above the international standard of 7%, which indicates that China has entered the ‘ageing society’ before it reaches the living standard of developed countries. The decline in the young population and increase in the aged population signify the weakening of the labour flow. Surplus labours transferrable from rural areas are nearly empty. Though the agricultural section still has a significant amount of working population, an insufficient supply of young labourers will become a long-term trend due to the continuous decline in the proportion of young and newly born populations in rural population structure. There is little potential to transfer rural surplus labour (Fang and Han 2013). In 2019, China had a rural population of 551.62 million, among which the proportion of the population aged between 0 and 19, and 20 and 39 was 19.27% and 21.93%, respectively, down by 14.36 and 12.02 percentage points as compared with 2001.8 The decline in the proportion of the population aged between 0 and 19 will influence young labourers’ future supply, while the age group between 20 and 39 implies that the supply of young adult labours has been influenced. However, the proportion of the population aged between 40 and 59 and above 60 has risen from 21.8% and 10.7% to 29.6% and 20.9% at the same period. Though the proportion of male employed populations aged between 40 and 59 and female employed populations aged between 40 and 55 have risen, peasants above 40 are less likely to work in cities as they do not have the necessary education, skill or hukou and housing. 5 Data can be found at the website of National Bureau of Statistics, http://data.stats. gov.cn. 6 Data can be found in China Population and Employment Statistical Yearbook 2003– 2020, China Statistical Press. 7 Data can be found in http://www.stats.gov.cn/tjsj/zxfb/202105/t20210510_181 7181.html, May 12 2020 logged on. 8 Data can be found in China Population and Employment Statistical Yearbook 2002– 2020, China Statistical Press.

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Meanwhile, urban enterprises require young adult labours aged below 40 years old. Some enterprises even advertise to recruit workers aged under 35; for another, peasants above 40 are less willing to go out for a living and prefer to stay in their hometown, work and live in a relatively stable environment. Therefore, in terms of the labour supply and demandcomparison, though China’s rural surplus labour has not been entirely empty, there is little potential for continuous transferring labour from rural areas. Unmatched Structure of Education and Market China has made the 9-year education compulsory and expanded the higher education since the 1990s, which has generally improved the education level of all population. In 2019, 22.8% of the total employed population has college and above education, which was only 6.6% in 2006, and the figure is 34.2% increased from 15.8% in urban area.9 The new generation of rural migrant workers’ education level is significantly higher than their parents, and some of them were born and grew up in cities and hope to stay after coming to cities, work and live like their urban peers in cities. However, their desire to flow upward in the labour market is frustrated by the shortage of necessary skill training and pressure from the group with higher education. China’s reform in higher education has not delivered enough skills needed by the market, though it enables more people to access tertiary education. The market dominates labour resources allocation, but the college education system is seriously disconnected from the labour market. The degrees and majors are still centrally planned by government bureaus in college education, and the course arrangement cannot simultaneously reflect the diversified demands of the market. College graduates are highly homogenized and have poor practical skills ready for work. College graduates compete for the same job as the market does not have abundant high-skill jobs due to China’s position at the lower end of the supply chain (Zhang 2009). From 2018 to 2020, college graduates are 7.53 million, 7.59 million and 7.97 million, with an annual average growth rate of 2.9%. The expansion of tertiary education and employment pressure has impelled more undergraduates to take postgraduate studies 9 Data can be found in China Population and Employment Statistical Yearbook 2007– 2020, China Statistical Press.

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to add marginal advantage in the job-seeking market, but this has just delayed their entry into the labour market and created new competition for people with similar postgraduate education background. There are two types of flow in the labour market, including the ‘push up’ formed by the upward flow of rural migrant workers and the ‘push down’ formed by the downward flow of college graduates, so there are lots of labourers crowded in the middle layer of the market. Lowend enterprises cannot hire highly educated workers due to low labour productivity and poor wages, while high-end enterprises cannot offer college graduates enough jobs. The gap between skilled workers needed by enterprises and the skills of workers trained by public education has led to the structural contradiction of employment. For example, a job survey conducted in the top ten cities across China showed that over the past three years, the vacancies-to-seekers’ ratio of jobs which do not require high education, such as sales and exhibition staff, simple manual workers, restaurant attendants, security personnel, etc., generally is above 3, while the demands for high educational background, such as financial accountants, administrative staff, secretary, etc., are the least needed, namely there is an oversupply.10 It is evident that there is still a considerable gap between our education system, skill training system and industrial development and market needs. Slow Upgrading of Industrial Structure The imbalance between industry and employment is attributed to two reasons. First, the lag between industrial transformation and upgrading, which requires improvements in technical skills. Further, due to capitalintensive production, there is less capacity for industry sector to absorb such labour. Though labourer’ wages grow slowly, enterprises still have a narrow profit margin due to insufficient technological innovation and upgrading restrictions. Secondly, regarding policies, China’s industrial sector’s industrial concentration has picked up after 1992. Large enterprises obtained policy support in restructuring, funding source, preferential imports, exports, etc. However, the absence of policies favourable to the development of small and medium-sized enterprises have reduced the labour absorption capacity of the industry sector (Zhang 2007). 10 Data can be found at http://www.mohrss.gov.cn/SYrlzyhshbzb/zwgk/szrs/sjfx/ 202007/t20200727_380800.html, May 12, 2021 logged on.

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Small and medium-sized enterprises are the key force in employment in developed countries for their low capital occupation and strong employment capacity. However, small and medium-sized enterprises in China are restricted by discriminative policies, such as access control, financing difficulties, strict regulation, etc., which have greatly influenced their development scale and labour absorption capacity. Besides the structural contradiction in employment and frictional unemployment due to demographic factors, the government development and business operation strategies are also attributable to the imbalance. The government has constantly developed labour-intensive industries to create more jobs and solve the employment problem. The central and western regions have strived to develop the labour-intensive industries while taking over the transferred industries and formed the rush for building economic development zones, which led to the transfer of labour-intensive industries from southeastern regions to central and western regions, from big cities to small cities, and consequently high demand for unskilled labourer. Meanwhile, neither local governments nor enterprises are eager to raise labour productivity to avoid large investment in technology development, which makes the industrial transformation and upgrading become hollow promises to be carried out. Local governments are mainly concerned about GDP growth and stable employment and are not enthusiastic about industrial upgrading, because the enhanced capital intensity and labour productivity will reduce job amount accordingly. Moreover, enterprises are not eager to accelerate technical innovation because they can still benefit from sufficient orders and cheap labourers that can bring reasonably profits. Low-end, labourintensive enterprises cannot attract enough workers for the low wages, while college graduates with regular higher education cannot find jobs matching their speciality and expectation, leading to the mismatch of employment structure. Low Level of Urbanization Rate China’s urbanization rate is still quite below that of developed countries, which has slowed down the industrial structure upgrading. Chinese government has firmly propelled urbanization after the reform and opening-up and has emphasised the new urbanization since the eighteenth CPC National Congress. The overall urbanization rate by the permanent resident is 63.9% in 2020 increased from 52.6% in 2012 with

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an annual average growth of 1.4%.11 Though the rural employment rate dropped gradually from 76.3% in 1978 to 42.9% in 2019, there is still a rural population of 332.24 million, among which 194.45 million works in the agricultural sector. In the process of reform, the absolute surplus of agricultural labour, scarcity of land resources and low average productivity of rural land have led to the deviation in employment structure (Wang and Fan 2017). Meanwhile, the deviation of employment structure has hindered the adjustment labour force among different sectors, which on the other hand slowed down the urbanization progress (Wu and Wang 2004). After 2012, along with the acceleration of the urbanization process, the number of urban employees has maintained rapid growth. The flow of surplus agricultural labourers to cities has provided a large amount of cheap labour for China’s economy growth, and facilitated the development of labour-intensive industries. Along with the continuous expansion of economy, the impetus of economic growth has changed from capital driving to total factor productivity driving, and the strength of competition has changed from low price and low cost to higher marginal labour productivity, while population transferred from agriculture can only flow to low-skilled labour-intensive industry due to long-term market discrimination and low-skill level. On the one hand, low-end industries have gradually transferred or disappeared as government’s attempt to accelerate industrial transformation and upgrade intense competition in international markets. Meanwhile, many rural migrant workers are on the edge verge of unemployment for failing to upgrade their skills to adapt to the new industry market requirements and are unable to return to the countryside for agricultural work for no experiences in agricultural production. These workers have struggles unable to receive public welfare in cities when they have no urban hukou. It is very hard for them to be integrated into the city, and they are discriminated in terms of employment opportunity, skill and job choice, when competing with urban residents in the labour market. Most of them work at the low end of labour market in cities, which leads to new dual segmentation in cities besides the urban–rural dichotomy. The development of high-tech industries is undermined by the shortage of skilled workers, and the increasing labour cost will make China gradually lose its strength in labour-intensive industries. The 11 The data can be found at http://www.stats.gov.cn/tjsj/zxfb/202105/t20210510_ 1817176.html, May 12, 2021 logged on.

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reform of the labour market demands accelerating economy upgrading and industrial structure advancement. Such changes are echoed with changes in the mode of production and the economic growth model through TFP driving forces, fostering high-skilled workers and increasing technology contribution. Existing Institutional Barriers To promote labour flow, government has gradually removed many barriers, which are the main rules in the planned economy system, such as coupon system that people use to consume, commodity grain system that government bureaus buy crops from peasants and sell to urban residents, employment allocation system that all level government allocate workers to certain jobs, etc. The government has also made attempts in the household registration system: firstly, the attempt to empower urban governments to decide on the reform of the household registration system by taking small towns as a trial; secondly, the reforms in urban employment, social insurance and welfare system, which has created an institutional environment for the flow of rural labourers to cities (Cai 2007). Nevertheless, the household registration system (hukou) has become the biggest institutional obstacle for furthering the free labourer’s flow. Labours generally flow to sectors with higher labour productivity, and the industry sector has the highest labour productivity. However, it has not become the sector accepting most labours because of institutional reasons, such as the restriction of hukou system on the free flow of labour force (Yuan et al. 2016). As a result of the household registration system, the urban–rural segmentation still exists for rural migrant workers in education, medical care, social insurance, employment, etc. The citizenization of more than 200 million migrant workers is progressing slowly, making it difficult to fastly speed up urbanization rate. The nineteenth CPC National Congress report proposes strengthening and developing a social security system to develop a universal and sustainable multi-tiered social security system that covers the entire population with access to the defined rights and responsibilities in both urban and rural areas. The full coverage on total population and unified management of pension and medical insurance are necessary measures to eliminate the urban–rural segmentation. To a certain extent, establishing a comprehensive social security system can offset the adverse impact of the lagging reform in the household registration system on labour flow and secure

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the employment of rural migrant workers before they obtain the urban hukou.

Conclusions and Policy Implications China’s economy still has a strong and solid foundation for further growth, which requires to deepen reforms on labour-force free flow and employment structure to support industrial upgrading and industryemployment balance. This chapter brings forward five suggestions: Firstly, to deepen the reform of the household registration system to completely break the labour market segmentation, eliminate the institutional restrictions on trans-regional free flow of labour force, intensify incentives for transfer of rural labours, enable labour flow reasonably between cities and rural areas, regions and sectors, establish the market price signal to guide the allocation of labour resources, and promote better allocation of labour resources across the country. It includes accelerating citizenization of rural migrant workers to enable migrant workers in cities to enjoy the same treatment in employment, medical care, children’s education, social insurance and other public services as urban residents, and promoting integrated urban–rural development through improving the employment policy system for urban–rural integration to secure equal employment opportunities for urban and rural labours and offering convenient public employment services to urban and rural labours, such as employment information, training information, policy consultation, job description, etc. Secondly, to encourage the upgrading of industry and service sectors, enhance employment elasticity and create more jobs in high-productivity industries. It needs to develop service sectors covering both labourintensive sub-sectors demanding low-skilled workers and capital-intensive or technology-intensive sub-sectors demanding high-skilled workers. To solve the employment difficulty of college graduates, it is necessary to accelerate the development of high value-added sectors in the service sectors, such as information, computer, software, cultural creativity, finance, etc. These sectors have characteristics of high knowledge intensiveness, low energy consumption, low emission and high-added values. It is necessary to stabilize and improve the industry sector, especially manufacturing. Though the industry sector offers fewer jobs than the service sector, its role in stabilizing the overall employment, especially in international competition and national economic security, cannot be ignored.

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It suggests to prioritize the development of capital-intensive high-end manufacturing industry to enhance industrial upgrading, consider the middle and low-end manufacturing and construction industries and provide low-skilled workers with more employment channels while continuously improving labour quality. Thirdly, to implement the rural vitalization strategy. It is important to modernize agriculture to raise labour productivity and realize a scale economy through transferring property rights. The enormous productivity gap between China’s agriculture and non-agricultural sectors means a huge opportunity for improving the agricultural labour productivity. It should develop the industry and service sectors in the central and western regions to attract transferred agricultural labour to return from the southeast regions and provide new transferred agricultural labours with jobs domestically to reduce trans-provincial massive flow. In recent years, along with the industrial gradient shifts among regions, the backwardness advantage of the central and western regions has emerged and created more jobs than the eastern regions. From 2012 to 2019, the percentage of rural migrant workers who are working in the eastern regions drops from 64.7% to 53.1%, while that of central and western increased from 17.9% to 24.8% and from 17.1% to 22.1%.12 Thus, further, the enhancement of industry upgrading in the central and west regions will increase local employment. Fourthly, to the reform education system adapting to the market. The college graduates’ employment and employment quality should be paid more attention to unemployment and employment difficulty of college graduates. It is necessary to strengthen the statistics and prediction of human resource demands, deepen higher education reform and align the university education to the market demand. It should improve the importance of higher vocational education in higher education system, respect the university-operating autonomy and adjust majors and enrolment scale considering market’s needs. Meanwhile, government should increase investing in education, offer more financial support for students from poor families, adjust the structure of universities and allow students to enjoy certain freedom in the transfer of university and majors (Ma and Zhang 2017). Also, it should optimize the entrepreneurship service 12 The data can be found at the website of National Bureau of Statistics, http://www.stats.gov.cn/tjsj/zxfb/201305/t20130527_12978.html, http://www. stats.gov.cn/tjsj/zxfb/202104/t20210430_1816933.html, May 12, 2021 logged on.

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aiming at college graduates to provide more effective, flexible and diversified services. Finally, to strongly encourage non-state sectors. It should strengthen support to small and micro-enterprises to give full play to the advantages of small and micro-enterprises, such as low-capital investment, low-technical barrier and low-skill requirements. It needs to improve the systems and policies to create fair and encouraging environment for the development of medium, small and micro-enterprises for enhancing their strengths in boosting employment at low costs. Local governments should realize that the advantage of demographic dividend no longer exists, while the future trend is to increase high-productivity, high-skill technology-intensified sectors.

References Cai Fang: Labour Market Development and Employment Changes in China, Economic Research Journal, 2007 Issue 7, Pages 4–14. Cai Fang: Analysis on the Effect of China’s Economic Reform—From the Perspective of Labour Reallocation, Economic Research Journal, 2017, Issue 7, Pages 4– 17. Shan Liang, Zhang Tao: Research on the Spatiotemporal Evolution of Coordination Between China’s Industrial Structure and Employment Structure, Chinese Journal of Population Science, 2018 Issue 2, Pages 39–49. Fang Xingming, Han Xiaona: Research on the Adjustment of Employment Structure and Industrial Structure for Changes in Labour Supply and Demand, Population Journal, 2013 Issue 2, Pages 60–70. Hollis B. Chenery, Moises Syrquin: Patterns of Development: 1950–1970, 1988, Beijing: Economic Science Press. Li Wenxing, Yuan Zhigang: Imbalanced Employment Structure of China: Status quo, Causes and Adjustment Policies, Contemporary Finance & Economics, 2010 Issue 3, Pages 10–17. Lu Aihong: Q4 Press Conference of the Ministry of Human Resources and Social Security, http://www.mohrss.gov.cn/SYrlzyhshbzb/zxhd/zaixianzhibo/201 801/t20180126_287509.html, Jan. 26, 2018. Ma Li, Zhang Liancheng: Relations among the Structure of Tertiary Education, Industrial Structure and Employment Structure, Population & Economics, 2017 Issue 2, Pages 77–89. Wang Li, Fan Xufei: Research on Coordinated Development Between China’s Employment Structure and Urbanization, Rural Economy, 2017 Issue 11, Pages 69–74.

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Wu Hongluo, Wang Laifa: Analysis on Correlation between Urbanization and Deviation of Employment Structure, Southeast Academic Research, 2004 Issue 1, Pages 77–83. Simon Kuznets: Economic Growth of Nations: Total Value of Output and Production Structure, 1985, The Commercial Press. Sun Zhaoyang: Labour Migration and Employment Structure Conflict, Study & Exploration, 2018, No.12, Pages 50–56. Yuan Xiaoneng, Zheng Wenming, Zhong Yijing: Analysis on the Effect of Changes in China’s Employment Structure on the Labour Productivity, Journal of Nanjing University of Finance and Economics, 2016 Issue 4, Pages 28–35. Zhang Chewei, Wu Yaowu: Analysis on the Form and Trend of Urban Labour Supply and Demand, Chinese Journal of Population Science, 2005 Issue 5, Pages 12–21. Zhang Chewei: Economic Growth and Employment in China Over the Past 30 Years: Pursuing for a Flexible and Safe Labour Market, China Industrial Economics, 2009 Issue 1, Pages 18–28. Zhang Xiaoxu: Thoughts on the Relationship Between Employment Growth and Change in Industrial Structure in China, Statistics & Decision, 2007 Issue 24, Pages 90–93.

CHAPTER 6

Opportunities and Challenges for Migrant Workers in Building a Well-off Society in an All-round Way Chen Yongyuan

Introduction “Migrant workers”, who appeared because of China’s modernization and industrialization, are a unique group of people from China’s economic and social transformation. With China’s rapid industrialization, urbanization, marketizations and globalization since the reform and opening to the outside world, the rural–urban segregated labour market structure gradually broke down, resulting in the transfer of many migrant workers to non-agricultural sectors. This promoted urban and rural economic and social development and changed society’s landscape (Lu & Song, 2009). Theoretically, migrant workers refer to the labourers in rural Hukou who have been transferred from agriculture, or in other words, peasants who have worked in non-agricultural sectors locally or outside their hometown

C. Yongyuan (B) National Institute of Social Development, CASS, Beijing, China e-mail: [email protected]

© The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2022 K. Nakray et al. (eds.), Social and Economic Transitions in China and India, https://doi.org/10.1007/978-981-19-6124-3_6

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for more than six months (Zhang & Yang, 2013). Many factors have contributed to the appearance of migrant workers, including the change of the segregated-to-integrated institutional arrangements in urban and rural areas and the dual economic structure transition from agriculture to industry. The academic community has been paying close attention to migrant workers since their emergence in the 1980s and has contributed its knowledge and power with outstanding academic achievements in advising governments on introducing relevant policies and systems to address the issues of migrant workers. As China entered a new socialism era, the principal contradiction became between unbalanced and inadequate development and the people’s ever-growing needs for a better life. Addressing issues concerning migrant workers is vital to narrowing the rural–urban development gap, lifting the rural population and all counties out of poverty and achieving the regional poverty-alleviation objectives. In order to build a well-off society, it is essential to identify their characteristics, development trends and role in urban and rural development. This will provide theoretical support and policy basis for China in achieving socialist modernization. a. Size and change migrant workers since the plan for building a welloff society was implemented. The concept of a “well-off society”, originating from the Book of Rites, reflects Confucianism’s “all under heaven are one family” thought. “Building a well-off society” was first proposed by Comrade Deng Xiaoping in 1979 following New China’s founding proposed by Comrade Deng Xiaoping in 1979 following New China’s founding during his meeting with the then Prime Minister of Japan Masahiro Ohira when describing the objective of modernization. Comrade Deng Xiaoping frequently cited the concept during the following period from 1979 to 1992, when the trans-century development strategy for building a well-off society, known as the “Three-Step” development strategy, was conceived. In the report of the 15th CPC National Congress taking place in 1997, Comrade Jiang Zemin put forward the new historical task of “building a well-off society”, and in the report of the 16th CPC National Congress, the requirements for building a well-off society in terms of economy, politics, culture and sustainable development. On 1 June 2020, “QIUSHI” magazine published an article titled “Issues Concerning Addressing the

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Size of migrant workers (unit: 10,000 people) 40000 30000 20000 10000 0 1975

1980

1985

1990

1995

2000

2005

2010

2015

2020

Fig. 6.1 Size of migrant workers in China from 1979 to 2019 (stock)

Weakness in Building a well-off Society in an All-round Way” written by Xi Jinping, General Secretary of the CPC Central Committee, President of China and Chairman of the Central Military Commission. These development goals and critical tasks set by leaders of the Party Central Committee and the state served as a basis for the division of stages for building a well-off society, that is, to build a well-off society with adequate food and clothing by 1990; to build an overall well-off society by 2000, and to build a well-off society in an all-round way by 2020. Based on these stages divided, the size, pattern, geospatial distribution, demographic characteristics and changes of migrant workers were summarized and presented in Fig. 6.1.1 Stage 1: Build a Well-off Society with Adequate Food and Clothing (1979–1990) According to the Food and Agriculture Organization of the United Nations, the Engel’s coefficient of 30–40% indicates a well-to-do standard of living; 40–50% a moderately well-off standard of living; and 50–60%, barely meeting daily needs. Data from the National Bureau of Statistics showed that the spending on food as a proportion of the total 1 Source: Data for the period 1978–2008 were derived from China Agriculture Yearbook, quoted from Tong (2010); Data for the period 2009–2019 were derived from the Migrant Workers Monitoring Report (2009–2020) issued by the National Bureau of Statistics of the People’s Republic of China. According to Tong, about 233.91 million rural labour force transferred to non-agricultural sectors in 2008, which was very close to the figure of 225.42 million given by the National Bureau of Statistics of the People’s Republic of China in the Migrant Workers Monitoring Report. Given that the definition of migrant workers given by the two sources was basically the same, the two sets of data were used simultaneously for comparison.

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household expenditure was 54.5% for urban residents and 54.86% for peasants in 1990, marking the achievement of the objective of the first stage in building a well-off society firstly proposed in 1979. This period also marked China’s reform and opening-up, and development of the market-oriented economy. Due to the government’s relaxed restrictions on the transfer of rural labour force, the size of migrant workers increased from 19.53 million in 1979 to 86.73 million in 1990 (Tong, 2010). The main characteristics of migrant workers during this period were as follows. Firstly, in the early days, peasants mostly flowed into nearby towns to take jobs in the secondary and tertiary industries, which was known as “local transfer”, but gradually, more and more peasants flowed into big cities and settled down there, which was known as “trans-regional transfer” (Duan & Gao, 2011). Secondly, inspired by neighbours, more labour force joined the trans-regional transfer. As a result, many groups or communities consisting of people from the same village were formed in big cities, such as the “Henan Community” in Nanjing City and the “Zhejiang Community” in Beijing City (Song, 1995), accompanied by the phenomenon of blind flow. Thirdly, as the priority development areas designated by the central government development areas, the eastern coastal areas became the leading destination for the rural labour force from populous provinces, including Sichuan, Hunan and Hebei. Fourthly, the proportion of men was significantly higher than that of women, and most of them were young men aged 15–30. Stage 2: Building an Overall Well-off Society (1991–2000) Guided by Comrade Deng Xiaoping’s strategic thought on building socialism, China had achieved the objective of quadrupling the GNP by the end of the last century to enable people to reach a well-off standard of living (He, 2003). This was a new milestone in the development history of the Chinese nation. The main characteristics of migrant workers during this period were as follows. Firstly, the size of migrant workers expanded rapidly to hit a peak in the early 1990s. However, the financial crisis in Asia in the late 1990s led to reduced labour demand in labour-intensive processing industries in the eastern part of China, so the transfer of migrant workers to non-agricultural sectors slowed down. By the year 2000, migrant workers reached 149.65 million (Tong, 2010). Secondly, although the migration of the rural labour force was dominated by local transfer throughout the 1990s, the trans-regional transfer

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started to boom, known as “The tide of migrant workers” (Wei et al., 2012). Thirdly, in terms of geographical distribution, due to the uneven economic development of China, migrant workers typically migrated from west to east. The Beijing-Tianjin-Hebei Region, Pearl River Delta, Yangtze River Delta and Xinjiang became the four major inflow regions for the labour force, while the provinces in central China became the main outflow regions (Huang, 1998). Fourthly, most migrant workers were still young and middle-aged men, like the previous period. Stage 3: Building a Well-off Society in an All-round Way (2001–2020) The year 2020 is decisive in building a well-off society in an all-around way. During the past 20 years, migrant workers showed the following characteristics and trends. Firstly, the size of migrant workers showed a rapid expansion from 157.78 million (Tong, 2010) in 2001 to 290.77 million in 2019 (National Report on Migrant Worker Monitoring and Survey, 2011). However, due to the global financial crisis in 2007, which led to the massive shut down of labour-intensive enterprises in the eastern part of China, the size of migrant workers shrank from 236.62 million in 2007 to 233.91 million in 2008 (Tong, 2010). In 2010, with the recovery of China’s economy, which created more jobs, the size of migrant workers went up again. Secondly, with the relocation of labour-intensive enterprises in the central and Western parts of China, “five small inflow centres” in the Shandong Peninsula, Central and Southern Liaoning, Chengdu and Chongqing, Middle Inner Mongolia and the north of Tian shan regions were formed, in addition to the “four major inflow regions” (Jiang, 2018). Thirdly, young, educated and skilled new-generation migrant workers accounted for an increasingly significant proportion (Wei et al., 2012). Fourthly, the number of labour force migrating to cities declined as a proportion of the total labour force in trans-regional transfer. The new-generation migrant workers accounted for more than half of the total number. The Migrant Workers Monitoring Report 2018 showed that the new-generation migrant workers born in and after 1980 accounted for 51.5% of the country’s total, of which “post-80s” accounted for 50.4%; “post-90s” accounted for 43.2%; “post00s” accounted for 6.4%, and the proportion of peasants aged over 50 continued to increase (Table 6.1).

16,336 16,610 16,821 16,884 16,934 17,185 17,266 17,425

2012 2013 2014 2015 2016 2017 2018 2019

9,925 10,284 10,574 10,863 11,253 11,467 11,570 11,652

Local non-agricultural transfer of rural labours (10,000 persons) 26,261 26,894 27,395 27,747 28,187 28,652 28,836 29,077

Total size of non-agricultural transfer of rural labours (10,000 persons) 3.9 2.4 1.9 1.3 1.5 1.7 0.6 0.8

Growth rate for non-agricultural transfer of rural labours (%) 62.2 61.8 61.4 60.8 60.1 60.0 59.9 59.9

Trans-regional transfer Percentage (%)

37.8 38.2 38.6 39.2 39.9 40.0 40.1 40.1

Local transfer Percentage (%)

Source National Report on Migrant Worker Monitoring and Survey, issued by the National Bureau of Statistics of the People’s Republic of China (2012–2019)

Trans-regional non-agricultural of rural labours (10,000 persons)

Size and Pattern of Non-agricultural Transfer of Rural Labour in China (2012–2019)

Year

Table 6.1

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b. Evolution of policies concerning migrant workers since the plan for building a well-off society was implemented. The migrant worker system from China’s transition from a planned economy to a socialist market economy was initially designed as an expedient but gradually evolved into an institutional arrangement (Yang, 2013). Since the emergence of massive migrant workers in the 1980s, the central government and the competent authorities have formulated policies and measures to guide migration and employment and safeguard their rights and interests. By reviewing such policies and measures, this paper seeks to provide an insight into the development course of migrant workers from the institutional perspective. i. Economic development and local transfer of rural labour force (1979–1990) In December 1978, the Third Plenary Session of the 11th CPC Central Committee passed the strategic decision of reform and opening and called on the Party and the state to shift the focus of work to economic development. Initially, the reforms were carried out in rural areas and state-owned enterprises. Since 1984, with the deepening of industrialization and reform in the urban economic system, there has been a strong demand for labour in cities. The Chinese government issued a series of new policies to clearly define the scope of work for peasants in cities and regulations on settling down peasants in small towns to guide the massive rural labour force migration. In 1984, Prof. Zhang Yulin first used the term “migrant workers” to describe peasants working in the secondary and tertiary industries. Since then, the term got popular. In the following years, China dynamically adjusted the labour force management methods considering the size of labour transfer and capacity of local governments in transport, social governance and labour management. In 1985, the state issued the No. 1 Central Document to allow peasants to work in cities on the premise that they would take care of their food. In 1989, the General Office of the State Council issued the Emergency Notice on Strictly Controlling Outflow of Migrant Workers, and the Ministry of Civil Affairs and the Ministry of Public Security issued the Notice on Further Controlling the Blind Flow of Migrant Workers; in 1991, the General Office of the State Council issued the Notice on Discouraging Migrant Workers from

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Blindly Flowing into Guangdong. Unlike the early 1980s, no universal population and labour policies were applied to migrant workers during this period, and obstacles to the transfer of the rural labour force were removed as the subsistence materials became marketable. However, based on social costs in socialization, the governments were more supportive of local transfer of surplus rural labour force and were very cautious about trans-regional transfer in terms of institutional arrangements (Jiang, 2018). ii. Urbanization and restricted trans-regional transfer of rural labour force (1991–2000) In the 1990s, as China pushed forward with industrial transformation and urbanization, the policies restricting resource flow were relaxed, resulting in the quick flow of resources into cities. In 1992, the voucherbased supply system, an obstacle to the transfer of rural labour force, was cancelled, so migrant workers working in cities could freely purchase food and daily necessities with cash. Deng Xiaoping’s “Southern Tour Speeches” and the 14th CPC National Congress, which formally decided to establish a socialist market economy and a modern enterprise system in state-owned enterprises, led to dramatic changes in supply and dramatic changes in supply–demand in the labour market. In this context, China started to implement the employment system that requires trans-regional migrant workers to obtain employment certificates or cards and reform the household registration system in small towns (Li, 2012). In 1994, the Ministry of Labour released the Interim Regulations on Management of Trans-provincial Migrating Rural Labour Force; in 1995, the General Office of the CPC Central Committee and the State Council forwarded the Opinions of the Central Committee for Comprehensive Treatment of Social Security on Strengthening Management of Floating Population; in 1997, the State Council forwarded the Scheme for Piloting the Reform of Household Registration System in Small Towns and Opinions on Improving Rural Household Registration System, to allow eligible rural population working and living in small towns to become permanent residents in such towns, in order to promote the orderly migration of surplus rural labour force to nearby towns. This also significantly promoted the trans-regional transfer of the rural labour force. In the 1990s, in some developed regions or provinces and cities with many laid-off workers, the

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local governments introduced policies to restrict labour access to ease the employment pressure (Jiang, 2018; Cai et al., 2008). Meanwhile, to help the surplus rural labour force in China’s central and Western parts find jobs; the central and local governments also introduced a series of policies to encourage their migration to developed areas (Cai, 1995). In summary, amid the rapid urbanization in the 1990s, the Party Central Committee and governments at all levels introduced a series of policies to regulate the local transfer and restrict the trans-regional transfer of rural labour force. The size of migrant workers flowing into cities was regulated through the labour market access policies rather than strict restrictive measures. iii. Industrial transformation and upgrading and massive trans-regional transfer of labour force (2001–2020) Globalization exerted an increasingly significant impact on China’s social systems in the twenty-first century. In 2001, China acceded to the World Trade Organization, marking its integration into the market economy. Since then, plentiful jobs were created in labour-intensive industries in coastal areas. Besides, the thriving real estate industry and a series of regional revitalization strategies initiated by the central government (such as the Western Development Strategy in 2000, the Old Northeast Industrial Base Revitalization Strategy in 2003, and the Rise of Central China Strategy in 2005) also drove up the demand for labourer force and promoted their trans-provincial migration. This posed a significant challenge to the governments for social governance. China vigorously adjusted the rural labour force trans-regional transfer policies in this context. In 2002, the 16th CPC National Congress report pointed out that, due to the industrialization and modernization, the transfer of surplus rural labour force to non-agricultural sectors, and from rural areas to urban areas were inevitable” (Jiang, 2002). The No. 1 Central Document, Opinions of the CPC Central Committee and the State Council on Increasing Peasants’ Income in 2004, and the Opinions on Solving the Problems Concerning Migrant Workers issued by the State Council in 2006 also called on local governments to include the expenditure on providing vocational training, children’s education, labour security and other services for migrant workers in cities into the regular financial budget. In 2010, the State Council used for the first time the

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term “new-generation migrant workers” in the No. 1 Central Document, Opinions of the CPC Central Committee and the State Council on Intensifying the Coordinated Development of Urban and Rural Areas to Further Consolidate the Foundation for Agricultural and Rural Development, calling for tailored measures to be adopted to help new-generation migrant worker better integrate into the society. Unlike the practice in the previous period, the central government introduced policies supporting the trans-regional transfer of the rural labour force. The institutional arrangements are no longer designed to restrict but provide customized services for migrant workers through public service programmes. In the new era, the Party Central Committee and the State Council introduced a “new human-centred urbanization strategy” (Li, 2014) to control large cities’ population size strictly. Simultaneously, the government gradually relaxed the restrictions on settling down migrant workers in small and medium-sized cities, so as to guide the orderly flow and urbanization of the rural population. In 2014, the Party Central Committee and the State Council introduced a series of effective policies, including the National Plan on New Urbanization (2014–2020), the Opinions on Further Implementing the Reform of Household Registration System, the Opinions on Better Serving Migrant Workers and the Notice on Implementing Fiscal Policies in Favour of Urbanization of Migrated Rural Population. During this period, a significant shift in policy was that the central government proposed and urged governments to take more resolute, robust and comprehensive measures to protect the rights and interests of migrant workers. Firstly, in terms of employment, favourable policies were introduced to promote employment of migrant workers and university students, establish connection between migrant workers and employers, provide vocational training for migrant workers, encourage “mass entrepreneurship and innovation” and new sectors like household services, e-commerce, express and logistics, create jobs for migrant workers in cultivating new growth drivers and promote poverty alleviation through employment and foreign labour cooperation, to help migrant workers find jobs through multiple channels. Secondly, in terms of rights protection, the central government released the Opinions on Comprehensively Addressing the Late Payment of Wages to Migrant Workers to introduce relevant measures to protect the rights of migrant workers, including establishing and improving the real-name migrant worker management system, opening a particular bank account for wage payment, establishing

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a wage security deposit system, improving the synergy between administrative law enforcement and criminal justice, establishing a “blacklist” of late payers and a collective punishment mechanism and strengthening the provision of public legal services such as legal aid for migrant workers. Furthermore, the central government urged local governments to implement the “equalization of public service”, requiring them to provide the population with a residence permit, equal access to public services, health and family planning services and housing and relax the requirements on settling down of migrant workers in towns and cities. Finally, to tackle problems caused by the migration of the rural labour force, the government also introduced policies to help children of migrant workers gain access to schooling and the college entrance examination, strengthen the care of left-behind children in rural areas, help left-behind women increase their income and help the elderly in rural communities. However, the actual effect of such policies was mainly dependent on how the central government and local governments coordinated “people”, “money” and “power”. A typical problem arose: better public services provided by the local government would attract more migrant workers and increase the local government’s financial pressure, which is a dilemma in policymaking. On the other hand, the number of jobs available decreased with industrial upgrading, “destocking” in the real estate industry, and the manufacturing industry’s transfer to big cities. As a result, some peasants living in cities chose to return to their hometowns to start a business, forming a “reverse flow” of the rural labour force. Therefore, in addition to promoting urbanization of migrant workers, the government also introduced policies to encourage the rural population to work locally or nearby. In 2015, the General Office of the State Council successively released the Opinions on Supporting Migrant Workers and Other People to Return Home to Start Business and the Opinions on Facilitating the Integrated Development of Primary, Secondary and Tertiary Industries in Rural Areas. In 2016, it released the Opinions on Supporting the Start-up and Innovation of Returned Migrant Workers to Promote the Integrated Development of Rural Primary, Secondary and Tertiary Industries in Rural Areas. In 2017, it released the Opinions on Strengthening the Implementation of Innovation-Driven Development Strategies to Promote Mass Entrepreneurship and Innovation Further. In 2017, the 19th CPC National Congress passed the decision of building a well-off society in a all-round way and a modern socialist China by following the three-step strategy and an overall plan for advancing the great cause of socialism with

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Chinese characteristics in the new era, while calling for establishment and improvement of an integrated rural and urban development mechanism to promote employment and business start-up of migrant workers through multiple channels and speed up the urbanization of the migrated rural population to address better the migration of rural labour force in the new era (Xi, 2017). c. Changes in the social mentality of migrant workers since the plan for building a well-off society was implemented The psychological changes in the rural labour force during their transfer to the secondary and tertiary industries in China resulted from the interaction between their life course and dramatic social changes.2 The difference in psychological features among migrant workers among the old-generation, new-generation and second-generation reflected the difference in individuals and different social and cultural backgrounds at different times. There is evidence of the psychological features of migrant workers on the Internet, which may be accessed by entering the keywords like “migrant workers”, “new urbanites”, “rural-urban floating population”, and “migration of agricultural population” on the HowNet (i.e. CNKI). By reviewing such literature, the present article found that the study of psychological features of migrant workers covers and goes beyond their migration pattern, well-being, identity in status, social integration, and their fights for rights. In summary, they mainly studied the changes of migrant workers in the following three aspects. i. Change from survival-based motivation to development-based motivation In the early stage of the reform and opening, migrant workers in China left their hometowns to seek jobs in the secondary and tertiary industries they were unfamiliar with for higher economic returns. As life got 2 With the evolution of state policies, the name of migrated rural labour force was changed from “migrant labourers”, “migrant workers”, “urban-rural floating population”, to “new urbanites”. Given that the migrant workers defined by the National Bureau of Statistics have the same connotation with the rural labour force described in this article, the term “migrant workers” is used to refer to the same group of people in this paper:

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better, the new-and second-generation migrant workers no longer limited their pursuit of personal development and freedom (Luo & Wang, 2003). They had more diversified development needs, such as culture, sense of accomplishment, self-actualization, meaning and moral consciousness. The following two factors mainly contributed to the changes in migrant workers’ social mentality.3 Firstly, according to Maslow’s hierarchy of needs, when people’s needs for survival and safety are met, the development needs begin to emerge, such as self-esteem, sense of meaning and self-actualization. Therefore, from the individual hierarchy of needs, psychological needs are the inevitable outcome of developing a personal life course. Secondly, from the perspective of internal characteristics of migrant workers, the second-generation migrant workers received a better education than the first-generation. This would bring them improved working and living conditions and a more vital consciousness of independence and rights. They would be more proactive in the face of the urban–rural divide, income inequality and social discrimination. Moreover, with the extensive attention from the media, academic community and public welfare organizations, the new-and second-generation migrant workers have more channels to express their appeal for self-development. The existing academic research reveals the changes in the developmental need of migrant workers from different angles. Li and Tian (2011) found that increased life pressure and enhanced awareness of individual rights greatly impacted the social attitude and behaviours of the newgeneration migrant workers. In their research, Jin and Cui (2013) found that achievement motivation had a significant impact on the subjective well-being of the new-generation migrant workers, and the strength of social support and the downward social comparison would further intensify such impact. Lu and Pan (2014) studied the consciousness of the right and collective struggle of the second-generation migrant workers and found that failure to mitigate or redress the damage to the interests of migrant workers in the production relations would trigger their negative emotions even their collective struggle. Liang (2018) found that the factors affecting the subject well-being of migrant workers had undergone significant intergenerational changes from economic adaptation to social adaptation, psychological adaptation, institutional adaptation, etc.

3 Social mentality is a terminology in research area of social psychology. It refers to the thinking style, attitudes, beliefs and values holds by the individuals and social groups.

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ii. Transition from rural identity to semi-urbanite identity Wang (2010) pointed out that migrant workers working in cities were not the immigrants who settled down according to the Hukou policy but people who temporarily changed their residence place for employment. However, as time went by, the pattern of migration changed, which led to the emergence of a new type of immigrants, who left both the land and their hometown, and thus had a different perception of their status as rural people or urbanites. Although they worked in cities, they still travelled between cities and the countryside like migratory birds. Due to their early experience in farming and rural living habits, which were quite different from those of urbanites, they were more inclined to recognize themselves as rural residents. With the advancement of urbanization in China, many new-and second-generation migrant workers have little or no experience in farming. Although they have adapted to urbanites’ living habits, the Hukou system is still a barrier preventing them from becoming thorough urbanites. This status caught between rural people and urbanites is called “semi-urbanization” (Wang, 2001). The semi-urbanization or semi-citizenization is in contrast with complete urbanization and citizenization. This means that although the new-and second-generation migrant workers, who have long lived in cities and have a stronger attachment to cities, want to gain the urbanite status, which is considered superior in the traditional social culture to enjoy the exclusive rights endowed to urbanites, they have no such rights. The inconsistency between the expectation and reality makes them feel more like semi-urbanites—specifically, the lack of such rights in work and housing. As most migrant workers take up marginalized jobs in construction and service industries introduced by fellow villagers, wages are unstable, and largely dependent upon their employers and local governments. Problems such as different pay for the same work and late payment of wages happened occasionally. For example, Cai et al. (2009) studied the payment of wages to migrant workers engaged in road and bridge construction and found that contractors would follow the “counterdifferential pattern” logic when the project’s funds were not available to transfer the labour risk to migrant workers. On the contrary, workers with urban Hukou had access to unemployment relief, employment training, re-employment services and other social welfare stipulated by law, which could somewhat reduce their

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employment risks. On the one hand, migrant workers were disadvantaged as low-income groups and migrants. On the other hand, migrant workers could not afford to buy or rent houses in the face of soaring housing prices in cities. Even if they temporarily settled down in urban villages or the outskirts, they had to move frequently due to the demolition caused by urban expansion. Moreover, as they did not have urban Hukou, they could not enjoy the housing security benefits as urbanites. In the twenty-first century, although the central government introduced a series of policies to improve the employment and housing benefits of migrant workers, these policies were hard to be implemented in some large cities where the population was strictly controlled. So far, many empirical studies have also revealed from different perspectives the “semi-urbanite identity” of the new-and second-generation migrant workers (Lu & Pan, 2014; Li & Tian, 2001; Xiong, 2009). Li and Tian (2001) compared the difference and the identity in status between the old-generation migrant workers and the new-generation migrant workers based on data from the Chinese Social Survey 2011 and found that compared with the old-generation, the new-generation migrant workers were inclined to be urbanites, instead of rural people. Moreover, a, more significant proportion of the new-generation migrant workers identified themselves as urbanites. However, further analysis showed that migrant workers deemed their urban integration and urbanite identity as segregated status; they believed that the social life they were integrated into was not the mainstream one. However, at the bottom of the society, so they were also in the “semi-urbanite” status. Expanding from individual needs to family needs. With the new-and second-generation migrant workers becoming the mainstay, family migration replaced individual migration as the primary form of migration. According to the national China Migrants Dynamic Survey from the National Health and Family Planning Commission, among the total labour-age floating population in 2015, more than 50% were new-generation migrant workers, and more than 50% of families had three or more family members living in the same city (Yang & Li, 2017). This means that migrant workers have changed their pursuit from personal development to family development since the attributes and characteristics of migration typically reflect the social mentality of migrants. Many reasons contributed to the change of social mentality. Firstly, from the economic rationality perspective, in a developing country

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without sufficient unemployment security and other social security, migration was considered a reasonable option for changing families’ living condition reasonable option for changing families’ living conditions (Stark & Bloom, 1985). However, the early household registration and employment systems restricted and suppressed such need, which was not unleashed until the institutional constraints were relaxed with the advance of the national urbanization strategy. Secondly, when the first-generation of migrant workers left their hometown to work in cities, most wanted to try their luck, lacking an understanding of the working environment and social environment in cities, so they dared not take families with them. The economic and social capital they accumulated laid a solid foundation for the family migration of the new-and second-generation migrant workers. Finally, the new-and second-generation migrant workers had less contact with the countryside and had shifted their social network to cities or outskirts in the hope of changing their centre of life to cities. This also created needs for housing, medical care and schooling. In recent years, the research found that the new-generation migrant workers were more willing to migrate with families than the oldgeneration. Shao and Zhang (2012) analysed the migration of families before and after 1980 based on the data from the Dynamic Monitoring of Flowing Population 2010, which is provided by the Migrants Service and Management Department of the National Health and Family Planning Commission. Results showed significant differences between migration patterns before and after 1980: the scope of migration only had a significant impact on the tendency of family migration before 1980, while having no impact after 1980; among the floating population before 1980, the number of migrating families is negatively correlated with the education level; among the floating population after 1980, the number of migrating families increased with the education level (especially when the first mover in the family received higher education). This led to the conclusion that family migration after 1980 was both a process of intergenerational change and intergenerational inheritance. Sheng and Zhang (2015) analysed the data from the Chinese Household Income Project 2009 (CHIP), and found that the annual household income, rather than the individual monthly income, had a significant impact on the subjective well-being of the new-generation migrant workers. Based on the data from the China Migrants Dynamic Survey 2014 provided by the Migrants Service and Management Department of the National Health and Family Planning Commission, Yang and Li (2017) found that the

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new-generation migrant workers were more willing to stay in cities than the old-generation by considering the household income, current residence of children, housing and social insurance and other factors about family development. However, the new-and second-generation migrant workers showed noticeably weakened attachment to their families during the early years. They were not close to their parents on the one hand; on the other hand, they were too young to take care of their own families. After joining the workforce, they started under pressure from their parents (Chen, 2019). Therefore, even if more and more new-and second-generation migrant workers migrated with their families, it did not mean the intergenerational issues had adequately been addressed, or the children and the elderly had appropriately been arranged. This posed a more significant challenge in fostering good social mentality and governance. This is by far a new research field, awaiting more exploration in future. d. Opportunities and challenges for migrant workers in the new era The 19th CPC National Congress pointed out that as China entered a new socialism era, the principal contradiction became the one between unbalanced and inadequate development and the people’s ever-growing needs for a better life. To address the contradiction, we should pay close attention to the characteristics and trends of migrant workers. To this end, the three opportunities and challenges faced by migrant workers in the new era were analysed, and suggestions were made from social governance. i. Slower growth in the number of migrant workers and agricultural mechanization The urbanization rate of developed countries worldwide was above 80%, while that of China by 2018 was less than 60%, indicating a large room for non-agricultural transfer of rural labourers. However, the distribution of the labour force in China showed that the labour force engaged in agriculture was declining year by year, posing a challenge for agricultural development. Besides, the surplus rural labour force that could be transferred to the secondary and tertiary industries was also on the decline due to decreased young, middle-aged and newborn population in

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rural areas. Tong et al. (2011) pointed out the potential of rural labour transfer in China in the next 20 years using China Statistical Yearbook and the Fifth Census data. They concluded that after the deduction of the labour force for agriculture, the rural labour force available for nonagricultural transfer would decrease from 310–350 million in 2010 to 100–250 million in 2030. With the size of possible labour transfer in future deducted, the total potential for non-agricultural transfer of rural labour is expected to be exhausted in 2020 when a well-off society in an all-round way is built. The end of an unlimited supply of rural labour force in China brought challenges and opportunities to all industries. The government work report in 2019 proposed “to advance the mechanization of entire agricultural production processes and develop family farms and peasants’ cooperatives”. Agricultural mechanization is a powerful instrument to advance rural modernization. In modernized countries, the proportion of labour force engaged in agriculture to the total labour force is roughly equivalent to that of agriculture’s output value to the GDP, and a large amount of labour force is released to other industries. Therefore, accelerating agricultural mechanization is vital to promoting rural revitalization and coping with the declining agriculture practitioners and ageing agricultural population. For example, by analysing the ageing agricultural population in South Korea, Zhou pointed out that the popularization of agricultural machinery prolonged ageing peasants’ years and increased the number of agriculture practitioners, thus alleviating the shortage of agricultural population (Zhou, 2017). Besides, agricultural mechanization could also help address labour competition between traditional agriculture and secondary and tertiary industries. In China, a country with diversified farming seasons, migrant workers often need to return to the countryside to help their family with farming. With the advancement of agricultural mechanization, some labour-intensive links (such as seeding and harvesting) could be outsourced to machinery service providers to cope with the seasonal labour shortage in the secondary and tertiary industries. Therefore, in this sense, the machinery service market’s scale development is vital to agricultural mechanization. ii. Counter-urbanization and professional peasants

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Berry (1976) proposed the very influential concept of counterurbanization to refer to and explain the migration of many Americans from large cities to small and medium-sized cities and rural areas in the 1970s. Since the reform and opening and the advance of urbanization in China, most migrant workers left the countryside and entered cities. Simultaneously, the population flow in the opposite direction also occurred during different stages of building a well-off society, gradually unfolding the prologue to the “counter-urbanization” in China (see also Mohan in this volume). In 2018, when attending the group deliberation of Guangdong Delegation for the National People’s Congress during the China’s NPC and CPPCC Sessions, General Secretary Xi Jinping proposed that, both urbanization and counter urbanization should be promoted simultaneously. In China’s context, the counter-urbanization was an outcome of urbanization after its development for a certain period and was the higher development stage. According to the report of World Urbanization Prospects (2018), China’s urban population is 60%, still lower than most of the other advanced countries. Thus, XE “urbanization” in China still goes a long way. Li believed that although rural tourism, leisure and elderly care programmes were prevalent, “counter-urbanization” was not yet the general trend (Li, 2018). To advance the counter-urbanization, efforts were needed to lift restrictions on Hukou, ensure the property rights of rural residents and increase investment in human capital for the migrant workers who move back to their hometown. The 2030 Agenda for Sustainable Development Declaration views economic growth and decent work as mutually reinforcing, and such claim is further reiterated particular significance to ILO’s Decent work and Fair Migration Agendas, such as facilitating orderly, safe, regular and responsible migration and mobility of people, including through the implementation of planned and well-managed migration policies.4 As for such concerns, the Chinese Government also launched several policy interventions. For instance, in January 2017, the Ministry of Agriculture issued the National Plan on the Development of New-Type Professional Peasants for the Thirteenth Five-Year Period, proposing to train more than 20 million new-type professional peasants by 2020. The government will endeavor to cultivate the newtype of professional peasants, who were well educated and versed in 4 Source: https://www.ilo.org/africa/areas-of-work/labour-migration/policy-framew orks/WCMS_671735/lang--en/index.htm.

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technology, farming and management through training. This required increased human capital input and support to help farmers improve their farming skills, expand operations and increase profit to develop a batch of large farmer households competent in farming and operations. The internet should also be leveraged to facilitate market elements flowing into the countryside and help peasants develop sidelines such as homestays, online stores selling agricultural products and rural leisure programmes to improve their income through multiple channels. Also, attention should be paid to the motive of migrant workers for returning to their hometown (see Mohand et al. for discussion on migration in India). From the perspective of personal meaning construction, the phenomenon of migrant workers returning home to start a business was an internal valued behaviour. In a qualitative case study, Lin found that young migrant workers returning home to start a business were pursuing a better life under family ethics. This implied they wished to obtain sufficient economic returns for a better life through starting a business (Li, 2019). Therefore, to advance rural revitalization under the trend of counter-urbanization, attention should also be paid to the social mentality of migrant workers. The institutional arrangements should be made to enable peasants to make their dreams come true after returning home, thus continuously empowering rural revitalization. iii. Urbanization of migrant workers According to the National Plan on New Urbanization (2014–2020) released by the Party Central Committee and the State Council in March 2014, the permanent urban residents in China accounted for 53.7%, while the population with urban Hukou only accounted for 36%, indicating that more than 200 million permanent urban residents had not yet become urbanites covered by social security. There were three fundamental propositions concerning the advancement of migrant workers: One was to constantly improve the fundamental rights and interests of migrant workers in various fields. The second and the third propositions were to pay attention to the heterogeneity within migrant workers, with a focus on the peasants who were “closest to urbanites” and migrant workers who had not established a formal employment relationship or had not been covered by the government supervision system and were engaged in the low-level and marginalized occupations (Li, 2016).

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Under the first proposition, the two primary concerns were the social security XE “social security” and career development of migrant workers XE “migrant workers”. As migrant workers in cities had no social security and other benefits (such as homesteads) associated with rural Hukou, they needed to gain access to social insurance, medical insurance and endowment insurance in cities. For example, studies showed that the new-generation migrant workers’ access to endowment insurance in cities would significantly promote their integration into the urban communities and positively impact their psychological identification about settling down in cities (Zhao & Zhou, 2018). Unlike most urban residents who had received regular education and training required for career development, most migrant workers were ill-educated, which prevented them from working in specialized fields and turning human capital into occupational strength so as turning human capital into occupational strength to achieve upward class mobility. Therefore, to advance citizenization of migrant workers, the government, corporate and social resources should be further mobilized to provide continuous education for migrant workers and their children. The second proposition focused on the “closest to urbanites” peasants. Although migrant workers had somewhat realized social mobility upward, they were not considered the critical players in cities but as the “minority” and “marginalized group”. Therefore, to advance citizenization of this group of peasants, connections should be established between them and urban residents to truly participate in and share public life in cities participate in and share public life in cities. A series of measures such as institutional arrangements, industrial support, cultural construction and social network remodelling should be adopted to satisfy the needs of migrant workers in life and work, stimulate and help them better integrate into city life. The third proposition focused on the impact of flexible work on migrant workers in recent years. On the one hand, under the flexible employment model, migrant workers had greater autonomy, freedom and flexibility in arranging their work time, and more opportunities to change their status in employment (such as changing from being employed to self-employed), thus having more channels to become urbanites; on the other hand, migrant workers under this mode had to face unstable income caused by varying workload, prolonged working time and absence of social security, etc. (De Stefano, 2013). With the development of China’s platform economy, more and more rural migrant workers became online

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takeout deliverymen, “tidal workers”, Didi drivers, WeChat merchants and Taobao shop owners. In changing employment mode, enabling migrant workers to gain the actual urbanite status and treatment while expanding more jobs is an urgent concern to be addressed by society in future.

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Song, L. (1995). The Formation of Migrant Worker Boom, Trend and Countermeasures. Social Sciences in China. 4, 78–91. Stark, O., & Bloom, D.E. (1985). The New Economics of Labour Migration. American Economic Review. 75(2), 173–178. Tong, Y., Zhu, Y. & Zheng, D. (2011). Analysis of the Potential and Trend of Non-agricultural Transfer of Rural Labours in China in the Next 20 Years. Population Research. 35(4), 56–65. Tong, Y. (2010). Estimated Size of China’s Rural Labour Force Transfer to Non-agricultural Sectors and Change Process Analysis. Population Research. 5, 68–75. Wang, C. (2001). Relationship Between the Social Identity of the Newgeneration Rural Migrants and Urban-Rural Integration. Sociological Research. 3, 63–76. Wang, C. (2010). Sociological Analysis of the Process and Problems of Urban Integration of the New-generation Migrant Workers. Youth Exploration. 3, 5–15. Wei, L., Fermi, A., & Wen, S. (2012). The Impact of Flow of Migrant Workers on Industrial Transformation, Taking China in the 1990s as an Example. Development Economics Research. 1, 286–297. Xi, J. (2017, October 28). Secure a Decisive Victory in Building a Well-off Society in an All-round Way and Strive for the Great Success of Socialism with Chinese Characteristics for the New Era—A Report Delivered at the 19th National Congress of the Communist Party of China. Retrieved from http://cpc.people.com.cn/n1/2017/1028/c64094-29613660.html. Xiong, Y. (2009). Urbanized Children, Urban and Rural Cognition and Identity Consciousness of Children of Migrant Workers. China Village Discovery. 2, 2–11. Yang, G. (2013). Analysis of Spatial Pattern and Flow Field of China’s Floating Population. Chinese Youth Research. 4, 29–35. Yang, Q., & Li, P. (2017). The Family Development Capacity of the Newgeneration Migrant Workers and Their Willingness to Reside in Cities—An Empirical Study Based on the Data from the 2014 “China Migrants Dynamic Survey”. China Youth Study. 10, 50–57. Yue, Z., Wang, H., & Li, S. (2017). Flowing Population Integration Policies and Migrant Workers’ Social Integration. Journal of Jiangsu Administration Institute. 5, 83–90. Zhao, J., & Zhou, D. (2018). Endowment Insurance, Settlement Expectation and Integration of the New-generation Migrant Workers into Cities. Journal of Agrotechnical Economics. 10, 36–47. Zhang, X., & Yang, S. (2013). Concepts, Data and Topics in the Research of Floating Population. Chinese Journal of Population Science. 6, 102–112.

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Zhou, J. (2017). The Possibilities and Significance of Agriculture Against the Backdrop of Aging Population—Taking Korean Agriculture as an Example. Population and Development. 6, 36–45.

CHAPTER 7

China’s Population Changes During the Past Seven Decades and Its Future Policy Reform Zhang Yi

Introduction In history, China’s population accounted for about a large part of the world’s population for an extended period. After the Opium War, China’s population continued to grow due to its vast base despite multiple wars. After the founding of the People’s Republic of China in 1949, as the frequent wars were eliminated, peasants were allotted arable land; workers were given employment opportunities; and people’s subsistence was guaranteed. China had the necessary conditions for the rapid growth of the population. The improved medical and health conditions and the control over infectious diseases helped eliminate digestive and respiratory diseases on a large scale. As a result, the birth rate rose rapidly while the mortality rate decreased, creating the so-called population explosion potential. The rapid population growth broke the original structure of population and means of subsistence, thus bringing pressure to improve the national

Z. Yi (B) National Institute of Social Development, CASS, Beijing, China e-mail: [email protected]; [email protected]

© The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2022 K. Nakray et al. (eds.), Social and Economic Transitions in China and India, https://doi.org/10.1007/978-981-19-6124-3_7

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economy and people’s lives. The government had to adopt policies to restrict births. The population policy also significantly impacted future social and economic development (see Wu Ying Chapter 12 and Nakray Chapter 13 also).

From Encouraging Birth to Restricting Birth (1949–1957) China saw the fragile foundation of the national economy when the People’s Republic of China was founded. However, the establishment of grass-roots political power, price stability and reform of rural and urban economic systems injected new vitality into Chinese society. The transformations of rural and urban economic ownership fundamentally changed China’s social economy’s structure and nature. After the strifetorn period, new policies improved life expectancy with more marital stability and better fertility rates. Table 7.1 shows that although the birth rate in 1949 was as high as 36‰, the natural growth rate was only 16‰ because the year’s death rate was as high as 20‰. From 1950 to 1954, the birth rate remained stable at around 37‰, but the natural population growth rate increased from 19‰ in 1950 to 24.79‰ in 1954 because the death rate decreased from 18‰ in 1950 to 13.18‰ in 1954. The birth rate data, death rate and natural growth rate for respective rural and urban populations before 1953 are unavailable. However, the data for 1954 shows that during this period, the birth rate in urban areas was much higher than that in rural areas, while the mortality rate in urban areas was much lower than that in rural areas, which led to faster population growth in urban areas than that in rural areas. It shows that the compensatory fertility in the period of social stability after wartime subsided to an extent. Why did the population multiply? The main reasons are as follows. First, the government encouraged childbirth using policy to meet people’s needs for a stable and peaceful life after wartime. After the founding of the People’s Republic of China, as peasants were allotted land and workers got stable employment, people strongly desired to marry and have children. To encourage childbirth, the Ministry of Health issued the Measures for Restricting Abortion of Women Cadres in Government Institutions and the Interim Measures for Restricting Birth Control and Induced Abortion. Second, people’s actual age of first marriage was young. Although the Marriage Law of the People’s Republic of China,

20.00 18.00 17.80 17.00 14.00 13.18 12.28 11.40 10.80

16.00 19.00 20.00 20.00 23.00 24.79 20.32 20.50 23.23 42.45 40.67 37.87 44.48

Birth rate

36.00 37.00 37.80 37.00 37.00 37.97 32.60 31.90 34.03

Towns Natural growth rate

Birth rate

Mortality rate

National

8.07 9.30 7.43 8.47

Mortality rate

34.38 31.37 30.44 36.01

Natural growth rate

Source Page 90 of China Statistical Yearbook 1987 , published by China Statistics Press in 1987

1949 1950 1951 1952 1953 1954 1955 1956 1957

Year

37.51 31.74 31.25 32.81

Birth rate

Counties

13.71 12.60 11.84 11.07

Mortality rate

23.80 19.14 19.40 21.74

Natural growth rate

Table 7.1 Birth rate, death rate and natural growth rate during the initial period of the founding of the people’s Republic of China unit: ‰

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promulgated on 1 May 1950, stipulated that the legal age of marriage for women was 18 and that for men was 20, there was still a process from the promulgation of the Marriage Law to it becoming a norm that could indeed bind the parties of the marriage. Early marriage was quite common for both men and women in rural areas.1 Early marriage and no contraceptive measures increased childbirth. Such a ‘population explosion’ was also widespread in Europe and America after World War II. However, as the most populous country, China’s ‘population explosion’ was more significant in scale and influence than the countries with smaller populations. Third, establishing medical and epidemic prevention systems rapidly reduced the infant mortality and improved the newborn population’s survival rate. The dramatic increase in population in the successive years helped gradually transform the policy of encouraging childbirth into restricting childbirth. In 1954, the Ministry of Health issued the Measures for Contraception and Induced Abortion, which allowed contraceptives to be sold and improved the management of induced abortion. In 1956, the Ministry of Health issued the Notice on Abortion and Sterilization Operation, requiring all localities to set up guidance clinics for contraception, train technicians and publicists, and do well in providing contraceptives. Although the birth control policy was implemented, the effect was not good. The main reason for the decline in the fertility rate in rural areas lies in institutional reform in rural areas rather than the influence of the birth control system. Even during the early years after the founding of the People’s Republic of China, however, the birth policy was loose; the problems brought about by the continuous population growth, especially the contradiction caused by the population growing faster than the productivity and the means of subsistence, led to the central government’s quick adjustment to the population policy, at least emphasizing the importance of birth control in understanding. However, no strong enforcement measures were taken then, so the population’s natural growth rate remained high for a long time. This period featured the nature of healthy childbirth. Because of the better living conditions and medical and health conditions in urban areas, the population growth was faster than that in rural areas.

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The Situation in the ‘Three-Year Difficult Period’ and the Subsequent Population Rebound (1958–1976) The track of population growth and shrinking often relates closely to the track of social and economic development. The population declined rapidly from the 1960s to the end of the Cultural Revolution. Of course, in the ‘three-year difficult period’ from 1959 to 1961, China’s population—mainly the decline of the rural population growth rate—primarily originated from the influence of ‘famine’. As shown in Table 7.2, between 1956 and 1979, the decreasing birth rate and the increasing death rate at the county level led to a loss in population. Especially in 1960, the county’s death rate exceeded 28.58‰, while the county’s birth rate was only 19.35‰ in the same year, resulting in a negative population growth rate of –9.23‰. Even in 1961, the county level’s population growth rate only reached 2.41‰ in China through gradual recovery. Due to the impact of the ‘three-year difficult period’, the government had to make significant economic adjustments in 1962,2 leading to gradual improvement in the following years. The population also gradually returned to a high growth trend. Therefore, 1962 was a crucial turning point in China’s population growth history. Before that year, the birth rate and natural growth rate in towns were higher than those in counties, and after that year, the birth rate and natural growth rate in counties were higher than those in towns. From 1962, China saw a new round of compensatory childbirth upsurges after the ‘famine’, bringing about a more significant ‘baby boom’. Nevertheless, the general trend was the declining national birth rate, from 43.37‰ in 1963 to 19.91 ‰ in 1976, a sharp decline of 23.46‰. Therefore, China completed its historical process of population transformation from the decline of the birth rate in the ‘three-year difficult period’ to the subsequent upsurge of compensatory childbirth and the gradual decrease of the birth rate. There would be no subsequent great demographic transition without the Cultural Revolution. During the whole Cultural Revolution period, to control the population size and resolve the contradiction between the rapid population growth and the gradual growth of living resources, the government called on the people of the whole country to implement family planning and later marriage and later childbearing. It advocated the birth control policy with the slogan, ‘It is OK with one child, just right with two, and too many with three.’

24.78 20.86 18.02 37.01 43.37 39.14 37.88 35.05 33.96 35.59 34.11 33.43 30.65 29.77 27.93 24.82 23.01 19.91

14.59 25.43 14.24 10.02 10.04 11.50 9.50 8.83 8.43 8.21 8.03 7.60 7.32 7.61 7.04 7.34 7.32 7.25

10.19 −4.57 3.78 26.99 33.33 27.64 28.38 26.22 25.53 27.38 26.08 25.83 23.33 22.16 20.89 17.48 15.69 12.66

10.92 13.77 11.39 8.28 7.13 7.27 5.69 5.59

5.35 5.29 4.96 5.24 5.39 6.60

21.3 19.3 17.35 14.50 14.71 13.12

Mortality rate

29.43 28.03 21.63 35.46 33.33 32.17 26.59 20.85

Birth rate

Natural growth rate

Birth rate

Mortality rate

Towns

National

15.95 14.01 12.39 9.26 9.32 6.52

18.51 14.26 10.24 27.18 37.37 24.90 20.90 15.26

Natural growth rate

31.86 31.19 29.36 26.23 24.17 20.85

23.78 19.35 16.99 37.27 43.19 40.27 39.53 36.71

Birth rate

Counties

7.57 7.93 7.33 7.63 7.59 7.35

14.61 28.58 14.58 10.32 10.49 12.17 10.06 9.47

Mortality rate

24.29 23.26 22.03 18.60 16.58 13.50

9.17 −9.23 2.41 26.95 32.70 28.10 29.47 27.24

Natural growth rate

Birth rate, death rate and natural growth rate during and after the three-year difficult period Unit: ‰

Source Page 90 of China Statistical Yearbook 1987 , published by China Statistics Press in 1987

1959 1960 1961 1962 1963 1964 1965 1966 1967 1968 1969 1970 1971 1972 1973 1974 1975 1976

Year

Table 7.2

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In retrospect, the rapid population growth in the early stage of this period depended on the rapid decline of mortality and the ‘barefoot doctor’ system that controlled the spread of infectious diseases, thus gradually extending the average life expectancy of Chinese people. China began to change from an agricultural society’s population growth pattern to that of the industrial one. The main reasons for the decline of the population growth rate in the later period of this period are as follows. First, the effective control by the grass-roots organizations. The ‘threelevel’ modes of people’s communes, production brigades and production teams strengthened the organization of grass-roots society. The population growth was effectively controlled thanks to ‘doing ideological work’ by Women’s Federation directors, promoting publicity to the masses and strengthening the family planning system in political movements. Second is the implementation of the policy of later marriage and later childbearing. The policy of ‘later marriage and later childbearing’ carried out during the Cultural Revolution broke the pattern of legal marriage age; the actual registered marriage age was mainly about 25 for men and 23 for women. The marriage age was even older in the municipalities directly under the central government, such as Beijing, Shanghai and Tianjin. Third, the goal of population control was put forward in the 4th FiveYear Plan. The 4th Five-Year Plan (1970–1975) proposed that China should strive to reduce the natural growth rate of the urban population to about 10‰ and that of the rural population to about 15‰. This is the first time that the goal of population control was put forward in the Chinese government’s formal document. In fact, by 1976, the population growth rate of towns and counties had been reduced to 6.52‰ and 13.5‰, respectively, which exceeded the planned population control goal.

The Implementation of the Family Planning Policy and the Arrival of the Low Birth Period (1978–2000) After the Cultural Revolution, the control of population growth was continued. To speed up economic development and reduce the negative impact of population growth on per capita indicators, the 5th Five-Year Plan proposed reducing the natural growth rate of the town population

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to 6‰ and that of the county to 10‰. In 1978, the government advocated for a couple to have one child or two at most.3 To achieve family planning goals, during the 5th Five-Year Plan period, the CPC Central Committee issued the Open Letter to All Communist Party Members and Communist Youth League Members on Controlling Population Growth in 1980. The open letter optimistically estimated the effect of implementing the family planning policy on population development and the national economy and specifically answered some questions about the family planning policy. The open letter also said that ‘the “ageing” of the population will not appear in this century, because at present about half of the population in China are under 21 years old, and elderly people over 65 account for less than 5%. The ageing phenomenon will not appear until 40 years at the earliest (i.e. 2020). We can take measures in advance to prevent it.’ This open letter, initially a call aimed at Communist Party and Communist Youth League members, subsequently became a system for ordinary people. Therefore, the first few years of reform and opening saw the strictest family planning system, but the results were far from the system designer’s expectations. After the Cultural Revolution, three major events had a far-reaching influence on childbirth. In September 1980, the third session of the 5th National People’s Congress passed the new Marriage Law of the People’s Republic of China, which clearly stated that the new Marriage Law would come into force on 1 January 1981. This law changed marriage’s legal age from 20 for men and 18 for women to 22 for men and 20 for women. Second, in 1982, the household contract responsibility system was implemented nationwide; that is, all the collective production organization mode, including the people’s commune, production brigade and production team, was divided into households for farming in the form of responsibility farmland,4 which objectively expanded the freedom of production and promoted the initiative of social mobility. Third, in October 1983, the CPC Central Committee and the State Council issued the Notice on Separating Government Administration from Commune Management and Establishing Township Governments, which abolished the people’s commune system and rebuilt towns and townships based on people’s communes as the rural grass-roots administrative unit. Objectively, the restraint degree of grass-roots organizations weakened. New marriage law laws led to more marriages, reconstructed the old notions of familism and associated children with more happiness in rural areas. The new marriage law increased the number of marriages in China

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in the following years, and the household contract responsibility system deconstructed the organization mode of rural grass-roots production teams and production brigades, motivated the return of the tradition of familism and stimulated the popularity of the ideological concept that a more prominent family means greater power and more children equals more happiness. Table 7.3 shows that the natural growth rate was 12‰ in 1978, 11.61‰ in 1979 and 11.87‰ in 1980, but it increased to 14.55‰ just in 1981. After the family planning system became the basic national policy, the natural growth rate rose in towns and counties instead of falling. The birth rate in counties reached 21.55‰ in 1981 and 21.97‰ in 1982, and that in towns was 16.45‰ in 1981 and 18.24‰ in 1982. Although hard work made the numbers go down to some extent, the birth rate in counties rebounded to 21.94‰ in 1986, and that in towns to 17.39‰. Because it was difficult to achieve the goal of ‘controlling the total population within 1.2 billion by the end of this century’, and because the cadres for family planning encountered great resistance—the number of people who ‘avoided being caught while violating the family planning policy’ among the floating population gradually increased, the central government began to gradually review the original system design and adjust the family planning policy objectives. In 1986, the total population control target at the end of the twentieth century (the year 2000) was extended to about 1.2 billion, and in 1987 to about 1.25 billion. In the implementation of the family planning policy, the government also changed its working style and gradually promoted the ‘three insists’ (insisting that the Party and government leaders at all levels should take overall responsibility, insisting on the current family-planning policy and insisting on the established population control objectives), ‘three focuses’ (focusing on publicity and education, focusing on contraception and focusing on regular work) and ‘three combinations’ (combining family planning work with economic development, with help with peasants’ better-off lives and with building civilized, happy families). Through these institutional reforms, the goals for the excessively radical tasks were adjusted to a level that was readily accepted by the masses, and the ‘two changes’ were realized, namely, the change from simply focusing on family planning to comprehensively managing the population problem, and the change from focusing on social constraints to the working mechanism of combining interest orientation with social constraints and unifying publicity and education, comprehensive services

1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997

Year

18.93 18.25 17.82 18.21 20.91 22.28 20.19 19.90 21.04 22.43 23.33 22.37 21.58 21.06 19.68 18.24 18.09 17.70 17.12 16.98 16.57

6.87 6.25 6.21 6.34 6.36 6.60 6.90 6.82 6.78 6.86 6.72 6.64 6.54 6.67 6.70 6.64 6.64 6.49 6.57 6.56 6.51

12.06 12.00 11.61 11.87 14.55 15.68 13.29 13.08 14.26 15.57 16.61 15.73 15.04 14.39 12.98 11.60 11.45 11.21 10.55 10.42 10.06

5.51 5.12 5.07 5.48 5.14 5.28 5.92 5.86 5.96 5.75

5.78 5.71 5.50 5.77 5.99 5.53 5.53 5.65 5.58

16.73 16.14 15.49 15.47 15.37 15.13 14.76 14.47 14.52

Mortality rate

13.38 13.56 13.67 14.17 16.45 18.24 15.99 15.00 14.02 17.39

Birth rate

Natural growth rate

Birth rate

Mortality rate

Towns

10.95 10.43 9.99 9.70 9.38 9.60 9.23 8.82 8.94

7.87 8.44 8.60 8.69 11.31 12.96 10.07 9.14 8.06 11.64

Natural growth rate

23.27 22.80 21.17 19.09 19.06 18.84 18.08 18.02 17.43

19.70 18.91 18.43 18.82 21.55 21.97 19.89 17.90 19.17 21.94

Birth rate

Counties

Birth rate, death rate and natural growth rate of Chinese population Unit: %

National

Table 7.3

6.81 7.01 7.13 6.91 6.89 6.80 6.99 6.94 6.90

7.06 6.42 6.39 6.47 6.53 7.00 7.69 6.73 6.66 6.74

Mortality rate

16.46 15.79 14.04 12.18 12.17 12.04 11.09 11.08 10.53

12.64 12.49 12.04 12.35 15.02 14.97 12.20 11.17 12.51 15.20

Natural growth rate

142 Z. YI

15.64 14.64 14.03

6.50 6.46 6.45

9.14 8.18 7.58

13.67 13.18

Birth rate

Natural growth rate

Birth rate

Mortality rate

Towns

National

Note The data of towns and counties in 1987 and 1988 are unknown

1998 1999 2000

Year

5.31 5.51

Mortality rate 8.36 7.76

Natural growth rate 17.05 16.13

Birth rate

Counties

7.01 6.88

Mortality rate

10.04 9.25

Natural growth rate

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and scientific management. Only in this way did the birth rate begin to turn down. Through hard work, China’s population gradually changed from a high birth rate, low mortality rate and high natural growth rate to a low birth rate, low mortality rate and low natural growth rate. China’s total population reached 1.267 billion in 2000, a number larger than 1.2 billion but smaller than 1.3 billion, and saw a low fertility level. According to the 2000 census, China’s fertility rate dropped to about 1.4, with 0.9 for cities, 1.2 for towns and 1.6 for villages. Judging by region, the lowest total fertility rate went to Beijing and Shanghai, both of which were 0.7, while the highest went to Guizhou and Tibet, both of which were 2.4.5 However, most demographers and government officials did not believe this data obtained through the census and thought the low total fertility rate was due to the under-reporting of children under 10. The relevant government departments’ documents always determined the total fertility rate as about 1.8. Because of widespread doubts about the authenticity of census data and sample survey data, China did not adjust its family planning policy in time and continued to implement the original policy for a long time, even after 2000, which eventually led to a sharp decline in the population. There is no need to criticize predictive research and think tank research results. In the context at that time, many factors should have caused this problem. If the government had learned some lessons from Japan and South Korea’s policy adjustment when the low fertility level came, China could report a slight decline in its children population (Table 7.4).

The Maintenance of Low Fertility Level and the Adjustment of Population Policy (2001–2018) After the census in 2000, if the government could rationally look at the meagre total fertility rate obtained from the census and correctly estimate the outstanding achievements made in the compulsory implementation of the family planning system, The Law on Population and Family Planning of the People’s Republic of China might not have been promulgated, and even if it had been promulgated, it would not be in the text structure of such expression as it is now. Unfortunately, still worrying about the recurrence of population problems, the government hoped to make

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Table 7.4 Total fertility rate in China from 1960 to 2017 (unit: people) Year

World bank

Year

World bank

1960 1961 1962 1963 1964 1965 1966 1967 1968 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979

5.748 5.919 6.089 6.237 6.346 6.396 6.375 6.286 6.133 5.92 5.648 5.322 4.956 4.57 4.181 3.809 3.472 3.18 2.938 2.753

1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999

2.63 2.57 2.56 2.582 2.623 2.661 2.675 2.654 2.593 2.489 2.35 2.187 2.021 1.868 1.739 1.639 1.571 1.527 1.503 1.494

National Bureau of statistics

2.3

1.56

Year

World bank

National Bureau of statistics

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

1.497 1.508 1.524 1.54 1.554 1.565 1.572 1.577 1.581 1.586 1.59 1.594 1.599 1.604 1.61 1.617 1.624 1.631

1.22

1.34

1.18

1.047

Source https://data.worldbank.org/indicator/SP.DYN.TFRT.IN? Locations = CN, the data of the National Bureau of Statistics of China, arranged according to previous censuses or one-per cent national sample census data

great efforts to consolidate the so-called hard-won achievements. Therefore, this law6 was promulgated in December 2001, stating explicitly that ‘the state shall maintain the current birth policy, encourage citizens’ later marriage and later childbearing, and advocate one couple have one child; those who are by the provisions of laws and regulations can apply for the birth of a second child”. In 2005, the one-per cent national sample census results continued to show that the total fertility rate was 1.34. The results of the sixth census in 2010 once again proved the stability of the data trend. In that year, the total fertility rate was only 1.18, of which the rate for cities was 0.88, for towns 1.15 and for rural areas 1.43. Although relevant departments still chose to doubt these data, the academic circles began to believe them increasingly or doubt the rationality of the original family planning policy.

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The one-per cent national sample census data in 2015 proved that China’s total fertility rate was only 1.047, the lowest level globally. However, still, no one believed this data. The controversy still went on. However, the central government gradually accepted the proposal of reforming the current family planning policy. In November 2013, the 3rd Plenary Session of the 18th CPC Central Committee adopted the CPC Central Committee’s Decisions on Several Major Issues of Deepening Reform, which proposed that ‘a couple can have two children if either of them is an only child’. At the beginning of 2014, provincial people’s congresses successfully adopted new family planning regulations and implemented new population control policies. Table 7.5 shows that influenced by this policy, the number of births in 2014 reached 16.92 million (the National Bureau of Statistics data was 16.87 million), higher than 16.44 million in 2013. Unexpectedly, the number of births in 2015 dropped to 16.55 million, lower than 2014. The dividend of the ‘twochild fertility policy for a couple where either the husband or the wife is from a single-child family’ had only been released for one year. Therefore, at the end of 2015, the CPC Central Committee responded quickly, and the 5th Plenary Session of the 18th Central Committee decided to adhere to the fundamental national policy of family planning, improve the population development strategy, fully implement the policy that a couple can have two children and actively take actions to deal with the ageing of the population. In December 2015, the Standing Committee of the National People’s Congress reviewed the draft amendment to the Law on Population and Family Planning. In January 2016, the CPC Central Committee pointed out that no approval is required to have a second child. In 2016, China’s newly born population rose to 17.91 million (the number released by the National Bureau of Statistics was 17.86 million), an increase of 1.31 million over 2015. However, the policy dividend did not continue to increase as predicted by many people, and the number of births in 2017 decreased to 17.28 million (the data released by the National Bureau of Statistics was 17.23 million). Many people explained that the birth peak caused by the policy dividend might appear in 2018, but the number of births began to decline again in 2018, to only 15.27 million (the number released by the National Bureau of Statistics was 15.23 million). Why did the birth rate continue to fall after the policy was loosened? The main reasons are as follows.

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Table 7.5 Newly-born population, death population and net increase population in China since the reform and opening-up (Unit: ‰, 10,000 people) Year

1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Birth rate Mortality Natural Total rate growth population rate 18.25 17.82 18.21 20.91 22.28 20.19 19.90 21.04 22.43 23.33 22.37 21.58 21.06 19.68 18.24 18.09 17.70 17.12 16.98 16.57 15.64 14.64 14.03 13.38 12.86 12.41 12.29 12.40 12.09 12.10 12.14 11.95 11.90 11.93 12.10

6.25 6.21 6.34 6.36 6.60 6.90 6.82 6.78 6.86 6.72 6.64 6.54 6.67 6.70 6.64 6.64 6.49 6.57 6.56 6.51 6.50 6.46 6.45 6.43 6.41 6.40 6.42 6.51 6.81 6.93 7.06 7.08 7.11 7.14 7.15

12.00 11.61 11.87 14.55 15.68 13.29 13.08 14.26 15.57 16.61 15.73 15.04 14.39 12.98 11.60 11.45 11.21 10.55 10.42 10.06 9.14 8.18 7.58 6.95 6.45 6.01 5.87 5.89 5.28 5.17 5.08 4.87 4.79 4.79 4.95

96,259 97,542 98,705 100,072 101,654 103,008 104,357 105,851 107,507 109,300 111,026 112,704 114,333 115,823 117,171 118,517 119,850 121,121 122,389 123,626 124,761 125,786 126,743 127,627 128,453 129,227 129,988 130,756 131,448 132,129 132,802 133,450 134,091 134,735 135,404

Newly Death born population population 1,757 1,738 1,797 2,093 2,265 2,080 2,077 2,227 2,411 2,550 2,484 2,432 2,408 2,279 2,137 2,144 2,121 2,074 2,078 2,048 1,951 1,842 1,778 1,708 1,652 1,604 1,598 1,621 1,589 1,599 1,612 1,595 1,596 1,607 1,638

602 606 626 636 671 711 712 718 737 734 737 737 763 776 778 787 778 796 803 805 811 813 817 821 823 827 835 851 895 916 938 945 953 962 968

Net increase population 1,155 1,132 1,172 1,456 1,594 1,369 1,365 1,509 1,674 1,815 1,746 1,695 1,645 1,503 1,359 1,357 1,344 1,278 1,275 1,244 1,140 1,029 961 887 829 777 763 770 694 683 675 650 642 645 670

(continued)

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Table 7.5 (continued) Year

2013 2014 2015 2016 2017 2018

Birth rate Mortality Natural Total rate growth population rate 12.08 12.37 12.07 12.95 12.43 10.94

7.16 7.16 7.11 7.09 7.11 7.13

4.92 5.21 4.96 5.86 5.32 3.81

136,072 136,782 137,462 138,271 139,000 139,540

Newly Death born population population 1,644 1,692 1,659 1,791 1,728 1,527

974 979 977 980 988 995

Net increase population 669 713 682 810 739 532

Source The data of 1978 to 2015 are from the China Population and Labour Statistical Yearbook 2016.The data from 2016 to 2018 are from the Statistical Bulletins of National Economic and Social Development of the People’s Republic of China. The birth population, death population, and net increase population are calculated according to the total population and the corresponding birth rate, mortality rate and natural growth rate. The calculated data here is slightly different from the National Bureau of Statistics data because the latter is rounded

First, the annual number of marriages has kept decreasing. Women born while implementing the one-child policy after the publication of the open letter in 1980 reached the age of marriage and childbearing. Throughout the 1980s, the annual births were almost 23 million, but after the 1990s, the annual new births dropped to between 19 and 21 million and presented a decreasing trend. When the ‘post-85 s’ and ‘post90 s’ began to get married, the number of first marriages each year began to drop sharply. The reduction of the first marriages will reduce the birth rate after the first marriage and the whole society’s birth rate in the longterm trend. Second, the number of women of childbearing age has gradually decreased. The women of childbearing age now are just the same group born during the strict implementation of the original family planning policy. The rise in sex ratio at birth during the implementation of the onechild policy (i.e. the sharp rise of the number of boys born for every 100 girls) broke the original relative balance.7 After the 1980s, the rise of the sex ratio at birth led to the insufficient women population of marriageable age, thus making it difficult for some men to get married and have children because they could not find spouses. Third, the rise of the divorce rate and postponed first marriage age are two significant factors. Urbanization, popularization of higher education,

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post-industrialization and the growth of women’s income, and normalized population mobility have increased the divorce rate and delayed the first marriage age of women. These factors postponed women’s first marriage age rapidly. From 1990 to 2017, the average age of women’s first marriage was postponed from 21.4 to 25.7, and the average age of the first childbearing increased from 23.4 to 26.8. In some big cities or megacities, women’s first marriage age was even older. The postponed first marriage age will inevitably raise the age of the first childbearing accordingly and shorten the childbearing period of women of marriageable age, thus reducing society’s birth rate. Fourth, the rising cost of living has reduced childbirth desire. Since the reform and opening, China has seen urbanization. In 1978, China’s urbanization level was only 17.9%, but it rose to about 59.6% by the end of 2018. Young people who are initially urbanized need to take care of their parents in their hometowns (the family planning policy reduces the number of siblings and increases their burden of providing for the aged.), and they also need to raise their children and meet the current consumption needs. Simultaneously, the rising urban housing prices and the high price of consumer goods make it difficult to raise their fertility desire. With easy access to increasingly various contraceptive devices, the reduced willingness to childbirth directly reduces the birth rate. Fifth, the improved childbirth environment inhibits society’s childbirth demand. They are implementing the ‘two-child fertility policy for couples where either the husband or the wife is from a single-child family’, and the ‘universal two-child policy’ is challenging to release a sustained birth dividend. One of the crucial reasons is the practical difficulty in attending kindergarten or school, getting employed, raising children and getting medical services. Small families and mobility have led to fewer support systems available to couples than in the 1980s. Most young couples cannot afford the rising price of nanny services. Strict discipline and extended time in the workplace have shortened young people’s leisure time, so they do not have time to take care of children. They were raising a child from birth to schooling until college graduation will cost parents a lot. Therefore, building a family-friendly society conducive to childbirth is necessary, whether in the workplace or family life. Because of the above problems, the actual fertility rate is much lower than the policy fertility rate. Once a country or society falls into a ‘low birth trap’ with a total fertility rate lower than 1.5 or 1.4 for a long time, it will persistently be caught in the trap instead of jumping out of it. This

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terrible condition will affect the age structure and support structure of the population, accelerate the ageing of the population, reduce the size of the labour force supporting the whole society, form extremely high pension liabilities and finally lead to the transition from the stage of population dividend to that of population debt. Thus, a pattern will be formed where the population ageing comes before the society gets wealthy, and the demographic structure will be degraded to the one prone to creating a ‘middle-income trap’.

Reforms of the Family Planning Policy and Future Population Policy China’s family planning policy is a policy experiencing ‘trial and error’ and ‘correction’ in practice. From the birth control at the beginning to the later ‘It is OK with one child, just right with two, and too many with three’, to the ‘only child’ policy in the 1980s and finally to the ‘universal two-child policy’ at present, the population policy has seen a process of social reflection. This process has always been accompanied by the contradiction of pressure between the supply of means of subsistence and the population size and structure at different stages of economic development; the contradiction between the fundamental national policy of family planning and family’s preference in family planning; and the contradiction between the debate of the academic circles on the family planning policy and the government’s adherence to the stability of the family planning policy. Whether it is birth control or family planning, the system design’s original intention is to relieve the pressure of population growth on national economic development. The contradiction between the production and reproduction of population and the production and reproduction of material goods was the principal social contradiction for all countries after the Second World War. After the war, the ‘population explosion’ was also the largest in the short term in the history of the world population. To solve the problem of population pressure, China had to choose the birth control policy and family planning policy due to its productivity and economic and social development level. In fact, under the system of ‘mobilizing resources for major undertakings’, the birth control and family planning policy controlled the population growth rate, effectively relieved the pressure of population stock and population increment on the supply of means of livelihood,

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improved people’s living standards and helped China in transforming from an agricultural country to an industrial one, basically establishing an industrial system with Chinese characteristics, and completing the transformation of the GDP’s dependence on agriculture to industry and then to post-industry. The family planning policy reduced the size of families, eased the pressure of family childcare, and enabled families to accumulate funds and concentrate the funds on their children, thus successfully promoting the nine-year compulsory education successively increasing the enrolment rates of high school and higher education, and facilitating China’s transformation from a populous country to a powerhouse in terms of human resources. The family planning and one-child policy also dispelled the prevailing feudal society’s idea that men are superior to women. They increased the enrolment rate of girls and young women of all ages, thus enhancing women’s human capital and narrowing the gender gaps in education, employment and occupation. While reducing the birth rate, the family planning policy significantly reduced the coefficient of child dependency ratio of the whole society, eased raising children and promoted social development. Family planning and pregnancy examination quickly reduced the maternal mortality rate and the congenital disability rate and ensured the foetus’s health. Besides, the family planning policy also extended women’s employment time, improved their family status and social status, and extensively promoted social progress and development. The policy difference in family planning between urban and rural areas accelerated cities’ ageing, present the demand space of the labour force for migrant workers to enter cities after the reform and opening, and accelerated China’s urbanisation. In a word, the family planning policy gradually showed its positive significance in the later stage of its implementation. It continuously provided demographic dividends during rapid economic development. During China’s economic and social transition, especially the period of transition from high-speed growth to high-quality development, has made an indelible contribution to China’s modernization. However, while performing positive functions, the demographic transition also potentially derived its adverse functions and increasingly showed such functions. Practice in the population has proved that the faster the positive function is created by demographic change, the faster the possibility of its negative function will appear. The demographic transition is promoted by social development and family planning. When formulating

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population policies, the government and academic circles attached importance to the government’s guiding role but ignored the role of the market and society to a certain extent. The population growth restrained from the 1980s gradually reduced the later supply of labour force. After 2000, the net decrease in the labour force problem gradually appeared, and the problem of the net decrease in the employed population arose in 2018— the current population ageing results from fewer births after the 1980s and the 1990s. China is now one of the fastest ageing countries in the world population history. The only reliable conclusion drawn from the effect of population intervention in various countries is: The government can effectively reduce the fertility rate, but it is difficult to increase the fertility rate through stimulation because the implementation cost of the policy of childbirth encouragement is far greater than the policy cost of restraining birth. At present and in the future, as the population born in the period of high fertility gets to the retirement age, the ageing will accelerate. In particular, the ageing at the top of and the contraction at the bottom of the population pyramid will have a more profound negative impact, and China will see a faster ageing process during the 14th FiveYear Plan period. After the demographic dividend subsides, China will see a long race between population ageing and scientific and technological progress. If scientific and technological progress outpaces population ageing, the development will be relatively smooth. Otherwise, the development strategy needs a long-term fluctuating adjustment. In this case, the future population policy will have to be substantially adjusted in the following aspects. First, to repeal the Family Planning Law in due course. Besides, we should abolish the collecting social support fees, clear up the provisions of birth control in all laws, regulations and government documents, and change the population policy of birth control or losing birth control into a policy of allowing free birth. Second, regulations protecting families who have lost their only child should be promulgated. Material and psychological humanitarian support should be provided for those vulnerable families who abided by the family planning policy and claimed the one-child certificate (whether passively or actively), but whose only child suffered accidental casualties. Third, to build a fertility-friendly society. We should improve public social services, promote the equalization of basic public services, modernize the community governance system and governance capacity, and truly implement the call put forward by the 19th National Congress

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of the CPC for enabling people to easily get access to services related to childcare, education, employment, medical care, old-age care, housing, and vulnerable group care, to build a family-friendly society or a fertilityfriendly society. Fourth, to establish free public kindergartens throughout the country. The government should popularize public kindergartens and encourage private enterprises to set up nurseries or kindergartens by purchasing admission quotas. The policy of charging differential admission fees should be formulated according to the family income, and the lowincome families should be exempted from admission fees or pay less. When the national strength reaches an established level, free public kindergartens should be implemented to reduce families’ pressure on childcare. Fifth, to establish a family-based collection system for individual income tax. To a certain extent, the tax burden should be reduced, or the tax threshold should be raised for those who report tax returns as couples or families living with their children. Moreover, the tax burden should be further reduced for families with a second child. The negative income tax system should be implemented for families with three or more children. For families whose per capita disposable income does not reach a certain standard, their income should be supplemented to an approved standard. Sixth, to encourage local governments to introduce policies of stimulating childbirth. Before adopting the birth-stimulating policy across the country, we can first carry out pilot projects in megacities, the areas with a high-ageing population, providing living allowances for newly born children. Because of the primary stage of socialism,’s characteristics, we can provide the living allowances with a set amount for families with a second child. Seventh, to legalize children born out of wedlock. Children born in wedlock or out of wedlock should be treated equally. With the rapid increase in the divorce rate, gradual delay of marriage age and individualization of the social life unit, whether being born in wedlock should no longer be regarded as legally differently, and equal status should be given to illegitimate and legitimate children. Eighth, to actively develop robot industries such as artificial intelligence. This aims to raise production efficiency, shorten working hours, reduce human consumption, extend holidays and improve people’s quality of life.

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The above suggestions can be summarized as the following ‘three steps’. The first step is to abolish the original policy of restricting childbirth after building a moderately prosperous society in 2020; the second step is to build a family-friendly society from 2021 to 2025, aiming to gradually but effectively reduce the cost of childcare; and the third step is to implement a population policy that encourages childbirth after 2026, providing minor children with specific living allowances and other possible social services starting from the second child, to encourage fertility from the stock and increment of women of childbearing age.

Notes 1. According to the data of one thousandth national sample census in China organized and implemented by the former State Family Planning Commission in 1982, the average age of first marriage for women increased from 18.57 in 1949 to 19.57 in 1960, and to 23.05 in 1980, and decreased slightly to 22.82 in 1981. By analyzing the data of the fifth census, Wang Yuesheng found that among the couples who got married from 1950 to 1954, 30% of men and 25% of women were below the legal marriage age. Wang Yuesheng. People’s First Marriage under Legal Marriage Age and Policy Marriage Age [J]. Chinese Journal of Population Science, 2005(6). 2. In fact, an adjustment began to be made in the economic policy in 1960, seeing some economic progress. To recognize the difficult situation and vigorously promote economic construction, Liu Shaoqi decidedly made a decision on economic adjustment at the “Seven Thousand People Congress” in 1962. 3. See the Report of the 1st Meeting of the Leading Group for Family Planning of the State Council approved and transmitted by the Central Committee of CPC in October 1978. 4. It refers to the so-called policy of household production quota in the rural reform, whose core is that ‘the rest of grain, after turning over the specified quota to the state and the collective, all belongs to peasants themselves’. Chinese peasants’ enthusiasm for production, which was suppressed by the policy of ‘eating from the same big pot’ and ‘egalitarianism’ for a long time, was liberated in this system reform, thus quickly solving the issue of food security that had plagued China for thousands of years. 5. Source: Handbook of Commonly Used Data on Population and Family Planning [M], edited by Development Planning Department of the National Population and Family Planning Commission and China Population and Development Research Center. Beijing: China Population Publishing House, 2006: 105. The academic circles calculated the sampled data of the

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fifth census in 2000, and found the total fertility rate was 1.22, less than 1.3. 6. It came into effect on 1 September 2002. 7. The normal sex ratio at birth is 103 and 107, and being over 107 means a high sex ratio at birth, and below 103 means a low sex ratio at birth. If it is between 103 and 107, because the mortality rate of male infants or boys is higher than that of female infants or girls, the age ratio and sex ratio during the marriage and childbearing ages will tend to be balanced.

PART III

Social, Cultural and Demographic Transitions and Welfare State Developments

CHAPTER 8

The Process and Pattern of China’s Population Modernization Over the Past 40 Years of Reform and Opening: From Quantity Dividend to Quality Dividend Ge Yanxia

Introduction China has made remarkable economic and social development achievements over the past 40 years of reform and opening. According to the academic community, studying the driving force behind China’s rapid economic and social development, the demographic dividend has been a major contributing factor and playing an increasingly important role in long-term development. The traditional demographic dividend was a phenomenon that occurred when the proportion of the working-age population in the total population was large and the dependency ratio was low, which was favourable for economic development. High savings, high

G. Yanxia (B) Chinese Academy of Social Sciences, Beijing, China e-mail: [email protected]

© The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2022 K. Nakray et al. (eds.), Social and Economic Transitions in China and India, https://doi.org/10.1007/978-981-19-6124-3_8

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investment, and high growth characterize the whole nation’s economy. When the proportion of the working-age population in the total population reached a new high around 2010, the traditional demographic dividend was fully released, propelling the economic development. Statistics showed that in 2010, the traditional demographic dividend contributed more than a quarter of China’s per capita GDP. However, the traditional demographic dividend did not last long. Around 2010, with the decrease in the population dependency ratio, the traditional demographic dividend window gradually closed. It was urgent to seek the secondary driving force for economic development in this context. In essence, the traditional demographic dividend is a quantitative dividend, incapable of reflecting the economic and social benefits brought about by the improved quality of the population. With a broader connotation extending beyond “quantity” to include “quality”, the new demographic dividend may reflect the long-term sustainable economic and social benefits brought about by the population’s improved physical, scientific, and cultural quality. The demographic dividend, which has changed from quantity to quality, would profoundly impact economic and social development in the long term. The traditional and the new demographic dividend are two correlated development stages and two critical components of population modernization. Population modernization describes demographic transition features, while demographic dividend describes the positive economic and social effects of the demographic transition. The demographic dividend reflects the social and economic benefits of population modernization. Therefore, population modernization and demographic dividend are conceptual frameworks derived from the exact origin. Analysis of the process of population modernization will provide an insight into the demographic dividend and contribute to future economic and social development. Based on Alex Inkeles modernization theory, this article will examine China’s evolution in three stages of the demographic and modernization process. It will draw attention to shifts in reproductive patterns, improvements in human capital, scientific temperament, and population physical quality. The chapter also draws attention to problems encountered during opulation modernization were identified opulation modernization process, population modernization and the mid- and longterm countermeasures proposed to promote China’s economic and social transformation and development.

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Basic Connotations and Theoretical Frameworks for Analysis of Population Modernization Population modernization is a component and the main driving force of economic and social modernization. Alex Inkeles firstly proposed the concept of population modernization in his book “Population Modernization—Psychology, Thought, Attitude, and Behavior”. Although the international community and some countries or regions did not use the concept of population modernization, they attached due importance to it during economic and social development. Later, scholars conducted further analysis and research on the concept of population modernization and related categories and propositions. In this article, the theory of population modernization was reviewed in economic and social development, and the existing theoretical frameworks and indicator systems were summarized to form an integrated theoretical framework for analysis of population modernization.

Basic Connotations of Population Modernization Modernization has remained a significant national development goal since the founding of New China. To achieve the grand vision of modernization, China launched the “four modernizations” drive and the “three-step development strategy” in the new period of reform and opening. Modernization involves all aspects of social life, including economic modernization, social modernization, political modernization, cultural modernization, and lifestyle modernization. Population modernization is the prerequisite and foundation to achieving the above goals. Without population modernization, the modernization efforts would be skewed towards materials while ignoring human development, the most active social productive force. So, what is population modernization? Population modernization refers to changing demographic factors to adapt to development. Theoretically, Chinese scholars have developed the concept and theory of population modernization based on the western population and modernization theories. Population modernization refers to the combination of western modernization and population theory. This theory is essential to and is an indispensable part of these two theories. China’s large population poses a problem in modernization in economic, social, political and cultural aspects. China has the most diverse complex problems as

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a country with the largest population globally. Addressing these problems is vital to China’s modernization drive. The famous demographer Prof. Liu Zheng (1992), in the article Population Modernization and Priority Development of Education, alluded that China has directed population modernization as a scientific strategy through law. Due to population modernization’s theoretical value and practical significance, it is necessary to comb through and summarize relevant research on this aspect. With the advancement of China’s modernization, population modernization will become a hot topic among theorists and policymakers and serve as a basis for formulating policies concerning China’s population and economic and social development.

Theoretical Frameworks for Analysis of Population Modernization There are four major theoretical frameworks for analysing population modernization. The primary analytical framework was based on these four theoretical frameworks. 1. The analytical framework proposed by Liu Zheng. Liu (1994) believed that population modernization mainly involved two aspects: (a) modernization of reproduction patterns of the population, to achieve the modern pattern of lower levels of natural growth rate because of birth rate and mortality rate which is compatible with the modern technology-based economic and social development; and (b) modernization of population quality, which is necessary in a modern technology-based economic society. Modern technological society requires high-quality human capital that can develop new inventions, technologies, materials, processes, and products. 2. The theoretical framework proposed by Zha Ruichuan. Zha (1994) believed that population modernization is reflected in the following five aspects: (a) natural population changes. Specifically, the mortality rate went down significantly, followed by the birth rate, then because of their changes, the natural growth rate went up and then down, and finally formed a pattern of the low fertility rate, low mortality rate, and low growth rate. (b) Changes in the population age structure. Due to the declining birth rate and natural mortality rate, the proportion of the low-age group in the total

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population decreased, narrowing the bottom of the pyramid-shaped population age structure. (c) Changes in the physical population quality of the population. Initially, the illiterate population accounted for a large share of the total population, then the proportion of the educated population increased, especially the highly educated population, along with the average education level of the total population. (d) Changes in the distribution of population in industries. With the advancement of agricultural mechanization and modernization, the proportion of the population engaged in agriculture fell sharply, along with the absolute number of agriculture practitioners. The proportion of the secondary industry population, such as manufacturing, and the tertiary industry, such as service, increased successively. (e) Changes in the migration of population. In the age of the agricultural economy, the population migrated from affluent to poor areas; in the industrial economy, the population migrated from sparsely populated agricultural and rural areas to densely populated industrial and commercial areas and cities. 3. The theoretical framework proposed by Zhang Kaimin. Zhang’s theoretical framework mainly involved the following three aspects: (a) the fertility pattern of the modern population. The higher productivity level required a lower fertility rate and higher population quality. (b) The composition of the modern population includes age, industrial, and urban–rural composition. Among them, the industrial composition was closely related to urban–rural composition. (c) Quality of modern population, including physical, intellectual, and social quality. Among them, social quality refers to the ideological and ethical standards. 4. The theoretical framework proposed by Wang Xueyi. Wang (2003) believed that fertility modernization and population urbanization should be extracted from under and combined with the modernization of population reproduction pattern, modernization, and population quality to form a new analytical framework. The theoretical framework proposed by Wang mainly involved: (a) Modernization of population reproduction pattern; (b) Modernization of population quality; (c) Modernization of population structure; (d) Urbanization of population; and (e) Modernization of fertility. By and large, the modernization of population reproduction pattern, the modernization of population structure, and the modernization of

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population quality, as the theoretical core of population modernization, can basically cover the connotations and reflect the main characteristics of population modernization, and thus can serve as the main frame for analysis of population modernization. Seen from the stage of population modernization, both the modernization of population reproduction pattern and the modernization of population quality may be achieved in modern society with the advancement of science and technology. The difference between the two is that the former focuses on natural population changes while the latter focuses on changes in population quality. Amid the rapid advancement of industrialization, urbanization, marketization, knowledge enhancement, and IT application, the critical role of modernization of population quality in achieving economic, social, and institutional modernization became more apparent than ever before. According to Liu (1986), the modernization of population quality, as the core of population modernization, was a process of improving the physical, cultural, and scientific quality and the ideological and ethical standards of the population to enable them to adapt to the economic and social modernization constantly. Among them, the physical and cultural quality were becoming increasingly important during population modernization. Therefore, the theoretical framework for analysis of the population modernization as used in this article mainly involved the following four aspects: a. Modernization of population physical quality: The overall physical health of the population depends on the individuals’ physical and psychological health. Therefore, the reduction in infant morbidity and mortality rates and general improvements in life expectancy lead to a better quality of life. b. Modernization of population cultural quality: The cultural quality of the population refers to the education level, knowledge, scientific and technological level, production experience, and labour skills of a population. Economic and social modernization depends on the overall cultural quality of the population. Modernization characteristics include the extended average years of educational attainment, popularization and improvement of compulsory education, vocational education, and the decline in the number and proportion of the illiterate and semi-illiterate. In the Chinese context, the

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reforms and opening led to the interaction between human development, the economic and social modernization as the foundation and prerequisite to each other.

Main Path of China’s Population Modernization Modernization of population’s Reproduction Pattern The modernization of the population’s reproduction pattern is a transition process from traditional to modern. Primarily, it refers to the decline in birth and death rates, a sign of social and economic development. Unlike that in western countries, modern industrialization, population urbanization, and improvements in cultural quality, China’s demographic transition was the fertility transition that transcended social and economic development. The transition of population reproduction patterns can be divided into different stages. The United Nations proposed a typical fourstage division method in 1990: (a) during the pre-transition stage, the birth rate and the mortality rate were high; the total fertility rate (TFR) was above 6.5, the average life expectancy was below 45 years, and the population growth was slow, so the population reproduction was of the traditional pattern. (b) In the early stage of transition, during which the birth rate and the mortality rate began to decline, the latter ahead of the former, the TFR was between 4.5–6.5; the average life expectancy was between 45–55 years and the population growth accelerated. The transition of mortality rate mainly marked this stage, and the population reproduction was of the transitional pattern. (c) The later stage of transition, during which, the birth rate and the mortality rate declined rapidly, the TFR was between 2.5–4.5, the average life expectancy was between 55–65 years, and the population growth slowed down. The mainly marked is this stage, and the population reproduction was also of the transitional pattern. (d) Low birth rate and low mortality rate stage, during which the TFR was below 2.5, the average life expectancy was above 65 years, and the population growth rate was low, so the population reproduction was of the modern pattern. Using the four-stage division method proposed by the United Nations, and based on the central nodes, the transition of China’s population reproduction pattern was divided as follows. The period before 1960 was the pre-transition stage, during which the birth rate and the mortality rate were very high. The total fertility rate of women of childbearing age was

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above 6.5, and the average life expectancy was less than 45 years. The period from 1961 to 1970 was the early stage of transition, during which the birth rate and the mortality rate began to decline significantly, TFR fell from about 6.5 to about 4.5, the average life expectancy increased from 45 to 55 years, and the population growth accelerated. The period from 1971 to 1990 was the late stage of transition, during which the birth rate and the mortality rate saw a further decline, TFR dropped from about 4.5 to about 2.5, the average life expectancy increased from 55 to 65 years, and the population growth slowed down. After 1990, China entered a modern population reproduction stage featured by a low birth rate and the low mortality rate. TFR dropped to below 2.5, the average life expectancy was above 65 years, and the population growth was slow (Table 8.1). As seen from the indicators, the total fertility rate over the past few decades declined far faster than expected. Since New China’s founding, the total fertility rate of women of childbearing age had dropped rapidly from above 6 to the replacement level of 2.3 in the 1990s and around 1–1.5 after 2000. The driving force behind the rapid decline in fertility mainly came from (1) Administrative constraints of family planning policies; (2) Improved medical and health conditions, declined infant mortality rate, and declined willingness to give birth; (3) Enhanced education level of the population, delay in the age of first marriage, and modernization of childbearing culture and behaviours (Fig. 8.1). Over the past few decades, the health of China’s population has improved significantly, with a marked decline in the mortality rate of Table 8.1 Four stages of transition of China’s population reproduction pattern Stage

Corresponding period

Total fertility rate

Average life expectancy

Pre-transition stage

Before 1960

Above 6.5

Early stage of transition Late stage of transition Low birth rate and low mortality rate stage

1961–1970 1971–1990 1990

4.5–6.5 2.5–4.5 Below 2.5

Less than 45 years 45–55 years 55–65 years Above 65 years

Note There is a slight difference between the period corresponding to the total fertility rate and the period corresponding to the average life expectancy during some stages, and the larger values of the corresponding periods are presented in the table above

8

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6.45

6 4

2.31 1.34

2

2014

2011

2008

2005

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1989

1986

1983

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1974

1971

1968

1965

1962

1959

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1953

1.29 1950

0

1.37 1.5

Total fertility rate

Fig. 8.1 Downward trend of the total fertility rate

infants, young children, and the elderly and an extension of the average life expectancy. Since New China’s founding, the average life expectancy of China’s total population has increased from 35 years in 1950 to 67.8 years in 1982 and 76.34 years in 2015 (Fig. 8.2). The birth rate of China’s population declined from 37% in the early years of New China to 18% in the early stage of reform and opening, and then to 12% in 2015. The mortality rate declined from 20% in the early years of New China to 6.2% in the early stage of reform and opening, and then to 7% in 2015. The natural growth rate declined from 16% in the early years of New China to 12% in the early stage of reform and opening, and then to 5% in 2015. The total population grew from 542 million in 100

Life expectancy ( years)

80

67.8

68.55

71.4

74.83

76.34

60 40

35

20 0 1950 1982 2010 2015 1950⾛ 1982⾛ 1990 1990⾛ 2000 2000⾛ 2010⾛ 2015⾛

Fig. 8.2 Growth trend of life expectancy

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100Mn

‰ 50

16 14

43.6

37

13.75

12 10

33.5

40 30

20

20

8 12.4

6

16

4

5.42

7.58

10

6.21 4.96

2

-10 2015

2012

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2003

2006

Mortality rate(‰)

2000

1997

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Birth rate (‰)

1985

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1979

1973

1970

1964

1961

1958

0955

1952 1949

Total population at year end (100Mn)

1967

0

0

Natural growth rate (‰)

Fig. 8.3 Population growth trend

the early years of New China to 963 million in the early stage of reform and opening 1.375 billion in 2015 (Fig. 8.3). Modernization of Population Structure Modernization of population structure refers to a proportional relationship between various demographic categories based on economic, social, and demographic dimensions, including age, sex, and urban–rural divide. It refers to the natural structure of the population, such as age structure, sex structure, and urban–rural distribution (Liu 1986). The transitions in these categories are the best predictors of modernization. As a longterm trend of population development, structure is vital to achieving the modernization and sustainable development. Among all the elements of the population structure elements, age and sex are the most fundamental. The ideal age structure is featured by “low population growth and long lifespan”; the low population growth refers to the low growth of the annual newly born population (birth rate 14.0% ~ 16.0%); both the rapid growth (a birth rate higher than 16.0%) and the negative growth (birth rate lower than 14.0%) of the annual newly born population will deteriorate the population structure. Under the ideal sex structure, “the number of men and women of the same age group are equivalent or close”.

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Population Age and Sex Pyramid The Fig. 8.4 is the age and sex pyramid of China’s population in recent decades, in terms of sex, the number of men and women of the same age group in China’s total population are close, without showing obvious imbalance. In terms of age, the trend of “low population growth and long lifespan” became more evident over time. The birth rate gradually dropped from 20% in the early stage of reform and opening to 16% in 1997 and to 14.0% in 2000. The average life expectancy of the population gradually increased from 68 years in the early stage of reform and opening to 71 years in 2000 and to 77 years in 2015. During the period from 1978 to 2000, the age structure of China’s population developed towards ideal. After 2010, as the birth rate dropped to below14%, the population’s age structure started to deviate, showing a trend of deterioration (Fig. 8.4). Population Age Structure and Opportunity Window During the modernization of population reproduction pattern, the decline in the mortality rate taking place earlier than that in the birth rate would lead to a younger age structure favourable for economic and social development, or a “population opportunity window”. The term “population opportunity window” first appeared in the World Development Report 2002 and the State of the World Population, which claimed that the economically backward countries could speed up development to narrow the gap with developed countries by taking advantage of the historical “population opportunity window” brought about by the demographic transition. The “population opportunity window”, or the golden age structure, shall be fully utilized to promote economic development. The rationale behind this is that during the modernization of the population reproduction pattern, the birth rate decline does not coincide with but earlier than the population ageing. As a result of the population change, an “olive” shaped age structure with a large middle part and two small ends which is favourable for economic development would be formed, in which the proportions of minors and the elderly in the total population are low and will remain so for an extended period before the country enters the ageing society. As this age structure formed during the modernization process of the population reproduction pattern is favourable for economic development, demographers call the corresponding period a “population opportunity window” or a “golden age structure period”. A country or region should take the initiative to utilize the golden age structure period to promote economic development. The dependency

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80+ 75-79 70-74 65-69 60-64 55-59 50-54 45-49 40-44 35-39 30-34 25-29 20-24 15-19 10-14 5-9 0-4 10%

1990

70岁 60岁 50岁 40岁 30岁 20岁 10岁

5%

0%

80岁

5%

10%

1500

0岁

80岁

2000

70岁

1500

80岁

1982

60岁

50岁

50岁

40岁

40岁

30岁

30岁

20岁

20岁

10岁

10岁

0岁

0

1500

1500

0岁

1500

2010

70岁

60岁

0

0

1500

Fig. 8.4 Changes of the population age structure

ratio mainly determines the influence of the population age structure upon economic development. With a lower dependency ratio, the population age structure will provide a golden age for a country to develop its economy. Many countries have benefited from the population age structure of the population opportunity window for economic take-off and development from a historical perspective. A higher dependency ratio in a country or region would stunt economic growth. According to the demographic statistics, following the rapid demographic transition, China entered a period with the lightest population

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burden, which is also a strategic period of building an all-around well-off society (Yu 2003). From 1980 to 2010, China’s working-age population aged 15–59 years increased at an average annual growth rate of 1.8% and the non-working-age population (younger than 15 years and older than 60 years) had a stable average annual growth rate of -0.2%. The “scissors gap” formed by the two different growth trends indicates a decline in the dependency ratio and an adequate labour force supply. Table 8.2 shows the changes in China’s total dependency ratio since the reform and opening. China’s total dependency ratio went down from 77.4% in 1978 to 34.2% in 2010 and then slowly went up to 37.91% in 2016. The continued decline in the total dependency ratio would create a favourable demographic condition for economic and social development. Statistics showed that in 2010, the traditional demographic dividend contributed more than a quarter of China’s per capita GDP (Fig. 8.5). Population Urbanization and Urban–Rural Composition The urban–rural duality is an essential dimension of the population shifts. At the of modernization is urbanization. As a result of decisions and arrangements made by the Party Central Committee and the State Council under the strong leadership of Comrade Xi Jinping to promote new urbanization and sustainable urban development since the 18th CPAC National Congress, China’s urbanization level has been further enhanced, with a marked increase in cities’ overall strength and public service capabilities, all-round progress of urban social undertakings and further improved living standards of urban residents, marking another solid step towards achieving new urbanization with Chinese characteristics. Table 8.3 shows changes in China’s urbanization ratio of the permanent residents since the reform and opening, reflecting the modernization process of urban–rural composition over the past few decades. In general, China’s urbanization ratio of permanent residents gradually increased from 18% in 1978 to around 50% in 2010, and 60% in 2018. The modernization level of the urban–rural population composition was greatly improved through the reform and opening, and the public services and other resources became more accessible (Fig. 8.6, Table 8.3).

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Table 8.2 Total dependency ratio of population over the years (unit: per cent)

Year

Total dependency ratio

1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

77.40 69.30 68.20 66.50 62.60 59.20 57.80 56.10 53.30 51.80 51.20 50.98 50.86 50.82 50.78 49.91 49.33 50.22 48.81 47.00 46.50 46.14 42.56 42.05 41.74 40.54 38.63 38.80 38.30 37.90 37.40 36.90 34.20 34.40 34.90 35.30 36.20 37.00 37.91

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100 80

Total dependency ratio

60 40 20 0 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016

Fig. 8.5 Changes of China’s total dependency ratio since the reform and opening-up

Modernization of Population Physical Quality As a result of the long-term low fertility rate during the modernization of the population reproduction patterns, families changed their pursuit of children from quantity to quality, creating a favourable condition for improving the population quality. Thanks to China’s social and economic development and progress in the medical and health sector, especially the medical insurance systems, including the new rural cooperative medical schemes, as well as efforts to promote equal access to essential public health services and significant projects to subsidize hospital childbirths for rural pregnant and lying-in women over the past 40 years of reform and opening up, the health conditions of women and children have been greatly improved to be among the best of developing countries. The infant mortality rate, the maternal mortality rate, and the average life expectancy are the three generally accepted indicators of the health of a country’s population and are also indicators of the UN Millennium Development Goals. The three indicators of China are in the front rank among developing countries and have reached the average middle- and high-income countries. Statistics showed that in 1978, China’s infant mortality rate was 41.02%, and by the early 1990s, the rate was 39.9%. In 2017, it dropped to 6.8%, specifically 4.1% in urban areas and 7.9% in rural areas. The control measures from 1978 to the early 1990s, the mortality rate of children below five years dropped from 61.0% in 1991 to 9.1% in 2017, 4.8% explicitly in urban areas and 10.9% in rural areas. Thanks to the pregnancy risk screening and evaluation system, the high-risk case

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Table 8.3 Urbanization ratio of permanent residents 1978–2018 (unit: per cent)

Year

Urbanization ratio of permanent residents nationwide

1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

17.92 19.99 19.39 20.16 21.13 21.62 23.01 23.71 24.52 25.32 25.81 26.21 26.41 26.94 27.46 27.99 28.51 29.04 30.48 31.91 33.35 34.78 36.22 37.66 39.09 40.53 41.76 42.99 44.34 45.89 45.68 46.59 49.95 51.27 52.57 53.73 54.77 56.10 57.35 58.52

(continued)

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Table 8.3 (continued)

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Year

Urbanization ratio of permanent residents nationwide

2018

59.58

Urbanization ratio of permanant residents nationwide

100.00% 50.00% 2016

2018

2014

2012

2008

2010

2006

2004

2000

2002

1998

1996

1992

1994

1990

1986

1988

1984

1982

1978

1980

0.00%

Fig. 8.6 Changes in the urbanization ratio of permanent residents Since the reform and opening-up

management system and the critical illness treatment system, the safety control was moved forward to hold the safety baseline. In addition, the maternal mortality rate has been dramatically reduced in all provinces and cities of China since the reform and opening. Statistics showed that the maternal mortality rate dropped from 88.8/100,000 in 1990 to 19.6/100,000 in 2017, specifically 16.6/100,000 in urban areas and 21.1/100,000 in rural areas. The increased system management rate of pregnant and lying-in women and the hospital delivery rate, especially in rural areas, contributed to the decline of maternal mortality rates (Table 8.4). Modernization of Population Cultural Quality The core of modernization is the modernization of population or the modernization of population quality. The long-term low fertility rate in the modernization of the population reproduction pattern would generally lead to a stable age structure, which serves as the basis for formulating long-term education plans to improve population quality further. Since the reform and opening-up, China’s education has been dramatically improved. Following the establishment of the socialist market economy system, and in the international context of fierce economic and technological competition, and the national context of a large population, a

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Table 8.4 Infant mortality rate in urban and rural areas monitored during 1991–2015 (unit: per cent)

Year

Total

Urban area

Rural area

1978 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

41.02 50.2 46.7 43.6 39.9 36.4 36 33.1 33.2 33.3 32.2 30 29.2 25.5 21.5 19 17.2 15.3 14.9 13.8 13.1 12.1 10.3 9.5 8.9 8.1 7.5

17.3 18.4 15.9 15.5 14.2 14.8 13.1 13.1 11.9 11.8 13.6 12.2 11.3 10.1 9.1 8.0 7.7 6.5 6.2 5.8 5.8 5.2 5.2 4.8 4.7 4.2

58.0 53.2 50.0 45.6 41.6 40.9 37.7 37.7 38.2 37.0 33.8 33.1 28.7 24.5 21.6 19.7 18.6 18.4 17.0 16.1 14.7 12.4 11.3 10.7 9.6 9.0

Note The data about maternal and children health in the Table above were from the areas monitored by the National Health and Family Planning Commission. There were 81 monitoring points during 1990–1995, 116 during 1996–2006, and 336 in 2007 and later Source National Health and Family Planning Commission, China Health and Family Planning Statistical Yearbook 2016

weak economic foundation and inadequate per capita resources, the Party Central Committee proposed to develop the economy by relying on scientific and technological advancement and improved labour quality and put education high on the development strategy, to rejuvenate China through science and education. Following the Third Plenary Session of the 11th CPC Central Committee, China accelerated its pace in implementing the

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strategy of rejuvenating the nation through science and education by prioritizing education as proposed by the central government. Comrade Deng Xiaoping proposed that education should be geared to the needs of modernization, the world, and the future. The Decision of the CPC Central Committee on Reform of the Education System issued in 1985 clearly stated that “Throughout the entire process of reforming the education system, we must keep in mind that the fundamental purpose of the reform is to improve the all-round quality of the nation and to produce more outstanding personnel”. The political report at the 13th CPC National Congress pointed out that “the development of science and technology, the revitalization of the economy, and the progress of the entire society depend on the improvement of quality of the workforce and cultivation of a large number of qualified personnel”. The report at the 14th CPC National Congress reiterated that “the scientific and technological progress and economic and social development ultimately depend on the improvement of quality of the workforce and the cultivation of many qualified personnel”. The report at the 15th CPC National Congress further pointed out that “the modernization drive in our country depends largely on the improvement of the all-round quality of the people and the development of human resources”. In this way, the population quality is closely linked with China’s modernization and human resources. In the new era, the new central collective leadership with General Secretary Xi Jinping as the core attached even greater importance to improving the ideological and ethical standards. The scientific and cultural quality of the people proposed a people-oriented Scientific Outlook on Development, while calling for efforts to unswervingly implement the strategy of rejuvenating the nation through science and education and the strategy for developing a quality workforce by building a large contingent of high calibre, innovative personnel, and treating such personnel as the most precious wealth for career development. The report at the 18th CPC National Congress in November 2012 repeatedly emphasized the strategic importance of improving the overall quality of the population and identified it as the core of the economic and social development. “We should pursue at a faster pace the strategy of training competent personnel as a priority to build a large contingent of such personnel and turn China from a country with large human resources into one with a large pool of competent professionals”. The report at the 19th CPC National Congress in 2017 proposed to promote

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educational equality and train socialist builders and successors with an allround moral, intellectual, physical, and aesthetic grounding in addition to a hard-working spirit, and take the education, especially the education in the central and western regions and rural areas as the critical element of efforts to achieve a decisive victory in the fight against poverty. The modernization of population quality has become an essential part of China’s efforts to build a well-off society and achieve socialist modernization. Over the past 40 years of reform and opening-up, China has made considerable progress in education, with the overall quality of the population significantly improved. During the period from 1980 to 1985, primary education was popularized. In 1984, the enrolment and completion rates of primary school-age children nationwide exceeded 95%, and schools in various forms were established using the “four measures” and under the guidance of the “walk on two legs” thoughts. The payment and competence of teachers were improved. From 1986 to 2000, nine-year compulsory education was popularized. In 2000, the goal of “popularizing nine-year compulsory education” was fully achieved, with its coverage and the gross enrolment rate of junior high schools above 85%. Six milestones have been achieved during the education development: the Compulsory Education Law was introduced; a plan to “popularize the nine-year compulsory education and eliminate illiteracy among the young and middle-aged in the western region” as the priority for education development was formulated; after the year 2000, the plan to popularize and strengthen the nine-year compulsory education was implemented; in the twenty-first century, the coverage of nine-year compulsory education was further expanded; in 2006, the Standing Committee of the National People’s Congress revised the Compulsory Education Law; and by the end of 2007, the coverage of the nine-year compulsory education reached 99.3%, with the number of counties covered accounting for 98.5% of the national total, achieving leapfrog development in compulsory education (Table 8.5). Over the past 40 years of reform, China has made remarkable achievements in education development. By the end of 2017, there were 513,800 schools and 270 million students of all types and levels nationwide. There were 16,268,900 full-time teachers. 218,900 schools were providing compulsory education nationwide, with an enrolment number of 33.137 million and students of 145 million. There were 24,600 high schools nationwide, with an enrolment number of 13,824,900 students of 39.799 million. The total number of higher education students reached

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Table 8.5 Enrolment rates for children of school age, and for primary school and junior high school graduates during 1978–2016 (unit: per cent) Year

Net enrolment rate for children of school-age

1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

94.0 93.0 93.0 93.0 93.0 94.0 95.3 95.9 96.4 97.2 97.2 97.4 96.3 96.8 97.2 97.7 98.4 98.5 98.8 98.9 98.9 99.1 99.1 99.1 98.6 98.7 99.0 99.2 99.3 99.5 99.5 99.4 99.7 99.8 99.9

Proportion of primary school graduates entering junior high schools 82.7 82.8 75.9 68.3 66.2 67.3 66.2 68.4 69.5 69.1 69.3 70.5 74.6 77.7 79.7 81.8 86.6 90.8 92.6 93.7 94.3 94.4 94.9 95.5 97.0 97.9 98.1 98.4 100 99.9 99.7 99.1 98.7 98.3 98.3

Proportion of junior high graduates entering senior high schools 40.9 37.6 43.1 31.5 32.3 35.5 38.4 39.4 37.8 35.7 34.4 34.9 40.6 42.6 43.6 44.1 47.8 50.3 49.8 51.5 50.7 50.0 51.2 52.9 58.3 59.6 63.8 69.7 75.7 80.5 82.1 85.6 87.5 88.9 88.4

(continued)

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Table 8.5 (continued) Year

Net enrolment rate for children of school-age

2013 2014 2015 2016

99.7 99.8 99.9 99.9

Proportion of primary school graduates entering junior high schools 98.3 98.0 98.2 98.7

Proportion of junior high graduates entering senior high schools 91.2 95.1 94.1 93.7

37.79 million, with the gross enrolment rate up to 45.7%. After the 1980s, China’s vocational and technical education developed fast. A vocational education system consisting of higher vocational education, secondary vocational education, and primary vocational education was gradually formed. As a result of the deepened reform in education, vocational education expanded quickly, providing more dynamic, flexible, and targeted courses. By the end of 2017, there were 10,700 secondary vocational schools nationwide, including 3346 regular specialized secondary schools, 2,490 skilled workers schools, and 1218 adult specialized secondary schools. The enrolment of secondary vocational schools was 5.8243 million, accounting for 42.13% of high schools’ total enrolment. In addition, the non-government funded education flourished. There were 177,600 non-government funded schools of all types and at all levels nationwide, accounting for 34.57% of the national total, with an enrolment number of 17,218,600 students of 51,204,700. The modernization of the cultural and scientific quality of the population may be measured by the cultural capital (educational level), the illiteracy rate (or literacy rate), the proportion of people receiving university education or above (or the proportion of the literate population), the proportion of college students, the proportion of people with secondary education, the proportion of people engaged in scientific and technological research and application, in the total population, and the composition of scientific researchers and technical personnel, and the educational attainment composition of the labour force. The educational attainment composition of people aged six years and above is the most common indicator. Table 8.6 shows the educational attainment composition of people aged 6 years and above, drawn from previous censuses and sample

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Table 8.6 Cultural structure of population aged 6 years and above during 1982–2015 (unit: per cent) Indicator

1982

1990

2000

2010

2015

Proportion of unschooled population Proportion of population with primary school education Proportion of population with junior high school education Proportion of population with senior high school education Proportion of population with college education and above Total

31.87 39.94

20.60 42.27

9.54 38.18

5.00 28.75

5.69 26.22

20.03

26.50

36.52

41.7

38.22

7.48

9.04

11.95

15.02

16.44

0.68

1.59

3.81

9.53

13.33

100

100

100

100

100

surveys since the reform and opening. As shown in Table 8.6, since the reform and opening, the population’s educational attainment composition has been constantly upgraded, with a decline in the proportion of the poorly educated population and an increased proportion of the well-educated population. Among them, the proportion of unschooled population dropped rapidly from 31.87% in 1982 to 6.69% in 2015; the proportion of the population with primary education dropped from 39.94% in 1982 to 26.22% in 2015; the proportion of the population with junior high school education rose from 20.03–38.22%; the proportion of the population with senior high school education increased from 7.48 to 16.44%; and the proportion of the population with college education increased from 0.68 to 13.33%.

Conclusions and Suggestions Modernization is essentially the modernization of population or modernization of population quality. China’s population modernization process may be roughly divided into three stages since the reform and opening. The first stage is to consolidate the results of the demographic transition, i.e., the transition of the population reproduction pattern from “high fertility rate, high mortality rate, and low growth rate” to “low fertility rate, low mortality, and low growth rate”. During this stage, the proportion of the working-age population in the total population continued to increase, creating a favourable demographic condition for accelerated

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economic and social development. The second stage is characterized by continuous improvement of the population’s physical quality and ageing. This trend is carried forward into the coming stage. The third stage is characterized by continuous improvement of the population’s scientific and cultural quality, increasing the proportion of the well-educated and highly skilled personnel in the total population. From this perspective, China’s population modernization process is transitioning from a “quantity dividend” to a “quality dividend”. However, China’s overall population modernization level remains low. China has completed the demographic transition, and the fertility transition does not mean that it has achieved population modernization. Although China has made remarkable achievements in population modernization, it also faces many problems and challenges. As seen from the trend of social and economic modernization, the population has played an increasingly important role in social and economic development. With the advent of the era of the knowledge economy, the world economy is increasingly driven by technology, knowledge, and information, so the population’s knowledge and innovation capabilities have started to play a decisive role in economic and cultural development. The modern global enterprises, the world industry and the world economy, are increasingly dependent upon human resources for survival and development. Social modernization cannot be done without the modernization of population quality. The current difficulties and problems concerning population and economic and social development can be addressed by speeding up the population modernization to continuously improve the physical and cultural quality of the population to provide a better demographic environment for achieving the goal of completing modernization in all respects by the middle of the twentyfirst century. This is also vital to achieving China’s goal of sustainable development. How to address the current problems encountered during the process of population modernization and economic and social modernization, and how to improve the physical and cultural quality of the population are vital issues to be studied in the future population modernization. The investment in population and human capital, especially in the latter, will promote the physical and cultural quality of the population. Unlike the investment of human, material, and financial resources to maintain the survival and development of the population, the investment in human capital focuses on the development of human resources, i.e., education,

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training, and health of the population. The investment in human capital will profoundly impact the improvement of population quality and thus must be valued highly during modernization.

References 2002 World Development Report Translation Team, 2002 World Development Report: Establishing a Market System, China Financial & Economic Publishing House, December 2002. Alex Inkeles (author), Yin Lujun (translator), Population Modernization— Psychology, Thought, Attitude, and Behavior, Sichuan People’s Publishing House, 1985 edition. Alex Inkeles, David H. Smith (author), Gu Xin (translator), From Traditional Population to Modern Population: Changes of Individuals in Six Developing Countries, China Renmin University Press, 1992 edition. Chen Chunyan, Li Xiaodong, Li Xiaohu, Tang Wei, Li Fenghua, Analysis and Evaluation of Differences in Population Modernization in Various Prefectures and Cities in Xinjiang, Northwest Population Journal, Issue 7, 2017 Chen Jingxin, Dai Ming, Hong Yeying, The Status Quo of Population Modernization in Southwest China and the Countermeasures, Productivity Research, October 2014. Chen Junwu, Wang Yalong, Analysis and Reflection on the Process of Population Modernization in Gansu Province, Development, Issue 2, 2015. Chen Youhua, Research on the Evaluation Index System of Population Modernization, Chinese Journal of Population Science, Issue 3, 2003. Chen Youhua, Wu Kai, Analysis of the Impact of Population Modernization on Population Structure, Issue 3, 2007. Gary S. Becker, An Economic Analysis of Fertility, Demographic and Economic Change in Developed Countries, New York: Columbia University Press, 1960. Gu Baochang, Population Modernization is the Fundamental Goal of Population Research and Population-related Work, from China Population Modernization: Challenges and Prospects, Population Research, Issue 1, 2001. He Manlin, Chen Li, Wang Daben, Clustering Analysis of Main Components of Differences in the Regional Levels of China’s Population Modernization, South China Population, Issue 9, 2003. Huang Jianyuan, Yang Fei, Comments on Population Modernization: Based on Comparisons among Jiangsu, Zhejiang, Shanghai, Beijing, Guangdong, Shandong, and the Whole Country, Northwest Population Journal, Issue 4, 2008. Huang Rongqing, Population Modernization: An Indefinable Concept, from China’s Population Modernization: Challenges and Prospects, Population Research, Issue 1, 2001.

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Ministry of Education of the People’s Republic of China, Educational Statistics Yearbook of China, People’s Education Press, June 1, 2018. Li Jingneng (editor), Modern Western Population Theory, Fudan University Press, 2004 edition. Liu Zheng, Dictionary of Demography, People’s Publishing House, June 1986 edition Liu Zheng, Selected Works of Liu Zheng, China Population Publishing House, 1994 edition. Liu Zheng, Population Modernization and Priority Development of Education, Population Research, Issue 2, 1992. Mu Guangzong, Miao Jingrui, Population Modernization and Fertility Modernization: The Fundamental Goals of Population Development and Family Planning, Population Journal, Issue 12, 2002. Peng Xizhe, Innovative Attempts of Chinese Demographers: Humble Opinions on Population Modernization, from China Population Modernization: Challenges and Prospects, Population Research, Issue 1, 2001. Wang Fang, Relationship between Urbanization and Population Modernization, from China’s Population Modernization: Challenges and Prospects, Population Research, Issue 1, 2001. Wang Mengkui, China’s Reform over the Past 30 Years, China Development Press, July 2007. Wang Xiuyin, Thoughts on Population Modernization, Population Research, Issue 4, 2002. Wang Xueyi, Research on the Effects of Population Modernization: Analysis from the Perspective of Population Control, Theory and Reform, Issue 11, 2004. Wang Xueyi, Research on the Construction of the Population Modernization Measurement Indictor System, Population Journal, Issue 7, 2006a. Wang Xueyi, Research on Population Modernization, China Population Publishing House, 2006b edition. Wu Xiaolan, A Quantitative Study on China’s Fertility Modernization, Population and Economy, Issue 1, 2001. Xu Su, Li Xiang, Research on the Process of Population Modernization in Jiangsu Province, Population and Society, Issue 6, 2014. Yang Hua, The Core of Modernisation: Modernisation of Population Quality, Journal of Guangxi University (Philosophy and Social Sciences Edition), Issue 6, 1999. Yu Xuejun, China’s Demographic Transition and the “Strategic Opportunity Period”, Chinese Journal of Population Science, Issue 1, 2003. Zhang Kaimin, Socialist Market Economy and Population Modernization, Social Science, Issue 5, 1994.

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Zhang Xiulan, China’s Education Development and Policies over the Past Thirty Years, Social Sciences Academic Press, December 2008 edition. Zhou Yanyan, Population Modernization and Economic and Social Development System Model Construction and Empirical Analysis, Statistics and Decision, Issue 5, 2014. Zha Ruichuan, Population Modernization, Population and Family Planning, Issue 3, 1994.

CHAPTER 9

Religion and Social Policy: An Indian Perspective John Clammer

Introduction While not entirely neglecting the role of religion, social policy research has not, for the most part, given it a very central place. However, religious beliefs and institutions play a significant role in almost all contemporary Asian societies’ sociology and culture. Because that role substantially impacts politics and public policy, including social policy, this paper will examine the role of religion in structuring (or undermining) social policy, particularly in the provision of social services, in a range of Asian societies. The work in the Middle East, particularly that of Rana Jawad and collaborators, has shown how Islam has shaped what might be termed the “Middle Eastern Welfare State”. Buddhism has played a similar role in parts of Southeast Asia, although along different channels, Theravada Buddhism has not fully worked out social theory to the extent that Islam does. In East Asia (including Singapore), varieties of what some

J. Clammer (B) O. P. Jindal Global University, Sonipat, India e-mail: [email protected]

© The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2022 K. Nakray et al. (eds.), Social and Economic Transitions in China and India, https://doi.org/10.1007/978-981-19-6124-3_9

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have called the ‘Confucian Welfare State’ have been delineated, if not consistently applied systematically in practice. As some of these societies (China in particular) transition to a more market-based political economy, religion’s role in social service provision is also undergoing substantial shifts. India occupies an exciting position in this spectrum of possibilities—a large country with diverse religions and a pluralistic legal structure reflecting and complicating that diversity, and one in which religion still plays a vital cultural and political role. The paper will sketch out this diversity and then raise the question of religious organisations’ role in providing social services, including education, in the country and the extent to which religious agencies supplement or even replace state-provided services, particularly in areas where these are weak or non-existent. Recent events in India have illustrated the extent to which guru-led movements and the formation of social movements, ashrams, schools and hospitals through such agents have impacted the provision of social services and have, in some cases, led to conflicts with the State as such movements have become virtual alternatives to the State and have engaged in activities of dubious legality. Whether this reflects the state’s failure to make adequate social welfare provisions or the growing influence of social movements outside the State is an interesting question that the paper will address. The Indian case also outlines a model for analyzing broader issues of religion-society interaction that relate directly to social policy issues. Since religion is closely implicated in kinship, caste, personal and regional identity, and is frequently highly politicized and is tied to major political points of contention such as separatism in some areas of India, the character of political parties and movements, and citizenship. In conclusion, the paper will offer a theory of religion-social policy interaction and indicate how varieties of experience and history across Asia need to be incorporated into such a model. The State, Welfare and Civil Society Until recently, it was widely agreed that the State was expected to be the primary welfare provision provider. The immediate post-World War 2 period saw, initially in Britain and soon afterwards elsewhere in Europe (the Scandinavian countries in particular), the emergence of the Welfare State as a seemingly immutable fixture in the political and social landscape. Nevertheless, today, this picture has to be radically revised: the Welfare State, even in its European manifestations, is in retreat in the face

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of budget cuts, privatization and shifts in political ideologies. Outside of Europe, except for former European settler colonies and, to some extent, Japan, the concept was largely unknown. Even in thriving Asian economies such as Singapore, with its extensive social policy initiatives in areas such as housing and education, the assumption has always been that it is the individual, not the State, who is ultimately personally responsible for such provisions as post-retirement savings, health and housing costs, even when the physical infrastructure is largely provided by the State and not by private market forces. Much of the rest of Asia (the primary focus of this essay) is, or has been until recently, divided, except for the capitalist ‘Little Dragons’ (South Korea, Taiwan, Hong Kong and Singapore) between a Communist East Asia with its command economies and centralized political authority, and the vast ‘developing’ sector comprising most of South Asia (India, Sri Lanka, Pakistan, Bangladesh, Sri Lanka and Nepal) and much of Southeast Asia, including the Philippines, Indonesia, Thailand and the formerly communist polities of Laos and Cambodia. Within this latter zone, there have been pockets of conspicuous economic success—Malaysia, for example, and the rather particular case of Brunei with its oil-based economy—but throughout the region, an exciting mix of private capitalism and state-led initiatives and controls. In all cases, there is the almost total absence of any concept of state-led welfare, except in a minimalist sense, and no sign at all of anything approximating in either theory or practice of the once-vaunted European Welfare State model. The result has been a complex mix of social policy initiatives and provisions. In almost all cases, it is the State that has provided a basic infrastructure of schools, hospitals and clinics, State-funded universities, and some form of emergency provision in the event of natural disasters, and staff in the form of teachers, nurses, primary healthcare workers and others to man (or usually to women) such institutions. Sometimes additional facilities in the form of hostels, the mid-day meal program in Indian public schools or the Rural Employment Act, is designed to provide up to a hundred days of paid work to at least one member of impoverished families in India. However, beyond these, welfare provision is often weak or non-existent. For the elderly, the chronically sick, widows or orphans, the long-term care of victims of natural disasters, tribal communities, or special groups such as migrant workers and their children, often permanently illiterate as no educational or hostel arrangements exist for their circumstances. There are usually two justifications

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for this lack of provision—either the pleading of poverty on the part of the government (the problems are too big and tax revenue too low) or ideological, that it is not the role of the State but private individuals to make adequate provision for illness and old age (all this despite the vast “defense” budgets of many of these same States). Inserted into these arguments has been the increasingly heard claim that it is now, in the era of neoliberal capitalism, the market’s role in providing such provision. Indeed, many of us with email accounts are likely to find ourselves bombarded with unsolicited advertisements for life and health insurance schemes, offers of loans, health check-up opportunities at private hospitals, credit-card offers, dietary advice and similar ‘lifestyle’ suggestions available to those with sufficient income, credit-worthiness and language ability to avail themselves of such possibilities, few or any of which are available to the poor, the marginalized, the illiterate or those without access to such market information. It is reasonable to argue that since the 1960s, there has been a general retreat from the idea, even if it existed in the first place, that the State or even markets are capable of (or even responsible for) providing welfare to the bulk of the population. Especially in societies such as (affluent) Japan with its ageing society and increasing pressure on State pensions and health insurance, or in poorer ones where budgetary constraints, despite populist moves such as the one by the current BJP government of India, to introduce universal health care (in theory, but certainly not in practice such a provision already exists for education) is usually invoked to explain lack of action on the ground. The situation in India is further complicated because welfare provision is a function of the individual states, not of the Centre, and widespread variations exist within the country as to the degree to which state governments have exercised any initiatives towards expanding welfare provisions (Singh 2015). In some cases, in non-communist Asia, Third Sector Organizations (TSOs) or Civil Society Organizations (CSOs) have emerged to address this shortfall, whether they be local ones or international non-governmental organizations (INGOs) such as Oxfam or the Save the Children Fund. There are exciting implications of this: welfare if it existed at all, and where it did as the virtual monopoly of the State, is now increasingly ‘privatized’, either becoming the goal or the responsibility of the NGOs and the market and as such being produced, created and constructed along lines that may or may not align perfectly with State policy or ideology. If a particular NGO’s ideology is of considerable variance with that of the State, the

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possibility of a conflict of goals and the emergence of ‘alternatives’ to the State apparatus are genuine possibilities. This creates a fascinating situation—one in which the State may not, be an adequate provider of welfare, and maybe happy to relinquish responsibility to civil society actors, it almost always nevertheless wishes to in some way maintain control over such activities since, even if they do not threaten, certainly provide a kind of parallel governance structure to that of the formal government itself (Pestoff et al. 2012; Hasan and Onyx 2010; Broadbent and Brockman 2011). CSOs themselves vary considerably in their interventions, based variously on geographic reach, the scale of their operations, the types of interventions that they specialize in and their target populations (humanitarian aid, children, AIDs sufferers, etc.), and the ethnic, religious and political make-up of the societies in which they operate, for example, in multi-ethnic Singapore, where State welfare provision is weak, but oversight is robust and Muslim welfare organisations reach and only seek to help the local Malay and Indian Muslim populations. Many of these CSOs are religious organizations—either focused on their co-religionists or with a solid and unconcealed religious ideology (the NGO Christian Aid, for example) while spreading their largesse to disadvantaged groups of all or any religion, without, unlike more openly ‘evangelical’ groups of Christian, Muslim or Hindu orientation, having any conversion or re-conversion intentions. Given the strength of religion in most Asian societies, the interesting question arises of the role of religion, and specifically of religiously based CSOs, in promoting welfare throughout the region, whether for ideological motives of their own or with genuinely humanitarian motives, often to fill the yawning gaps left by the failure of States to make adequate welfare provision for their populations. Religion and/Development: Implications for Welfare? The subject of religion about development, a previously very neglected perspective, has significantly entered the discourse of development studies (for a good survey, see Tomalin 2013). While not precisely the same as social welfare studies, there are many overlaps between the two perspectives, and on the emphasis on both emergence of FBOs (Faith-Based Organizations) as the providers of development assistance, many of which are identical to welfare schemes—healthcare provision, water, agriculture, local energy systems, gender equality issues and education—and overlap with them in many respects. While the notion of the ‘rolling back of

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the state’ in the Global North is not necessarily applicable in the Global South, where the State tends to be either weak or authoritarian, or both— the latter being in some cases a result of the recognition of the reality of the former—the proliferation of NGOs, both local and international, and many of them funded from the Global North has created a new dynamic in welfare provision. However, this is an ambiguous situation in many respects. While many have argued that NGOs are both less corrupt and more efficient in delivering welfare/development goals than State agencies and bureaucracies (Lewis and Kanji 2009; Desai 2008) and the strengthening of civil society organizations is consequently being taken as a goal by donor agencies in the North (Mercer 2002), other problems potentially arise. These include non-accountability, lack of local ‘ownership’, corruption, lack of trained leadership and management skills, and unfamiliarity with local cultures. For these and other reasons (most usually fear of their potential political influence), governments throughout the region have increasingly put curbs on the activities, especially of INGOs or ones associated with international networks (for example the environmental Greenpeace network or the human rights organization Amnesty International) even when these have local chapters and have in many cases made it virtually impossible or illegal for them to receive funds from abroad. Sometimes hiding behind the smokescreen of fear of terrorism, such state interventions have severely curbed NGOs’ activities and social impact in many documented cases. Naturally, such strictures have less impact on indigenous NGOs that do not receive overseas funds, even though other legal and bureaucratic barriers may well exist. However, an exciting situation arises with local FBOs since these are both ‘native’ and reflect or embody a significant aspect of local culture. To attempt to control them may easily be meddling in religious sensitivities, a potentially politically and socially dangerous thing to do. However, here we confront another paradox: certain FBOs may well be encouraged or tolerated when these are politically useful (as is apparent in the Hindutva movements welcomed by the current BJP government in India or the toleration of intolerant monk-led Buddhist movements in Sri Lanka). In contrast, others may be suppressed when thought to be politically unacceptable by the regime in power. History has shown religion as a volatile material to be handled with care. Given the deep religiosity of many Asian societies, the question still arises of the social role of religion and its relation to welfare provision in this specific

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case. Many kinds of agencies may provide such services. However, religious ones stand out as a significant sector here, not only by their numbers but by the fact that they are ‘values-led’ (i.e. motivated by solid religious sets of belief) and that they have a complex relationship to local social structures, often being specific to a particular religious/ethnic community and thus ‘particularistic’ in their welfare provision, targeting only members of their faith community. Their existence throws up essential questions about inter-religious and inter-ethnic relations, social cohesion, sources of social and political tension, access to or exclusion from social and developmental resources, and the responsibilities of the State, the putative first provider of welfare provisions. However, here we must introduce a distinction of levels. If one exists, the dominant religion may shape welfare provision at a national level. A prime example of this is the ‘Middle Eastern Welfare State’ identified by Rana Jawad and collaborators (Jawad 2012; Jawad and Yakut-Cakar 2010; Pavolini et al. 2017) in which Islam has shaped approaches to welfare across a range of societies in which secular and religious authorities are in a merged theory (the actual practice is of course somewhat different). The Koran contains specific injunctions about charity, tithing, the welfare of widows and orphans, and a range of ideas which have emerged in the notion of an ‘Islamic Economics’; these revealed concepts have profoundly influenced the meaning and practice of welfare. Similar, although perhaps weaker, ideas can be found in the predominantly Catholic countries of Latin America, the Philippines and among Jewish communities in Israel and elsewhere, especially among the more Orthodox. This is the level of broad ‘ideology’: ideas of welfare derived from a background theology, the influence of which is apparent but rather indirect in societies where many would consider themselves to be secular people or little observant of their ‘official’ religion. The other, more ‘empirical’ level is actual practice on the ground. The two levels influence each other in a variety of ways: sometimes very directly as concrete expressions of the religious ideology, sometimes very indirectly as a mere influence or conceptual grounding for a set of practices that are only weakly linked to the formal ideology, which may itself be vague in its specific recommendations for action. An excellent example of this latter was the (now largely abandoned) attempt by the Singapore government to promote welfare and social cohesion through Confucianism. This illfated move, and the attempt to build a ‘national ideology’ on this basis (Clammer 1993), was part of a more significant move in East Asia at

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the time to rehabilitate Confucius, who had got a consistently bad press during the era of the Cultural Revolution in China, and to seek a new set of shared values based on a body of ideas that could be interpreted as either secular or religious, depending on one’s perspective. The rather banal exhortations that emerged (‘respect your elders’ and the like) did little more than strengthening the idea in some minds that there are only a very vague set of precisely ‘Asian Values’. Nevertheless, the idea of a Confucian basis for behaviour in general and welfare provision continues to exist as a kind of ‘background noise’ about debates in China, Singapore, Japan and South Korea. It is probably detectable in Vietnam if one looks closely enough and penetrates behind the Marxist curtains that veil the deep grammar of a society profoundly influenced by Chinese culture over centuries (Tu 1996). Cases in Point A brief survey of FBOs devoted to welfare provision may give some idea of the genre’s nature and the forms of religious-based initiatives. There are many, and here only a tiny sample can be examined, but a working typology can be derived. Some are well known and have attracted literature, one such example being the Sarvodaya Shramadana movement, founded in Sri Lanka by A.T. Ariyaratne in 1958 on Buddhist and Gandhian principles and which is a significant provider of development projects and self-empowerment programmes in local villages (Zadek and Szabo 1993; Ariyaratne and Macy 1992). In this case, Theravada Buddhism, as practised by the majority of Sinhalese Sri Lankan villagers, supplemented with ideas drawn from Gandhi in India and the economic ideas of his sadly neglected follower J.C. Kumarappa, provide the ideological basis for extensive village development work and humanitarian assistance (for instance in the aftermath of the 2004 Indian Ocean tsunami), entirely in keeping with the cultural values and orientation of what are regarded as less ‘recipients’ than partners in a self-development and empowerment process (Ariyaratne 1982). The importance of such a ‘bottom-up’ approach is underlined by many of the respondents cited in the World Bank’s preparatory report for the 2000 edition of its annual World Development Report, significantly entitled Voices of the Poor (Narayan et al. 2000a, b), who constantly cited religious factors, made statements of faith and referred to local religious institutions as much more reliable and noncorrupt dispensers of welfare than government agencies and as a large part of their conception of well-being and happiness. This is perhaps not

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surprising given the pervasive role of religion in many ‘developing’ societies and the fact that a 44 nation survey by the Pew Research Center clearly showed (based on 2002 data) that religion was considered a unimportant part of life by many respondents in western Europe (France, for example, scoring the lowest at just 11%, and even putatively Catholic Italy coming in at only 27%, Pakistan registered 91%, Indonesia 95% India 92%, Bangladesh 88% and the Philippines 88%, with the lowest scoring counties being Korea at 25%, Vietnam at 24% and Japan at just 12%. There was, in other words, a strong correlation between ‘developing’ status and a weak state (in terms of welfare provision) and a significant concern with religion, the same pattern holding for Africa and Latin America (Pew Research Center 2002). In the belief that FBOs are more efficient in delivering development outcomes, the United Kingdom has promised to double its aid funding to such organizations (DFID 2009, 2012). The number of such FBOs, many of them having their origin in charities, is legion, as is their welfare delivery nature. Christian Aid, for example, is focused on poverty reduction, healthcare provision, children and humanitarian aid, as are other explicitly Evangelical organizations such as World Vision and Tearfund. Wat Thamkrabok in Saraburi, Thailand, is one of a network of Buddhist temples devoted to detox programmes for former drug addicts, and others in the same network work with people with AIDS. Muslim organizations work at both international (for example, Islamic Relief: see Benthall and Bellion-Jourdan 2003) and local levels, as illustrated in the case studies of Nida Kirmani in Pakistan (Kirmani 2002). The Islamic case is interesting (a bit repetitive) as it is supported both by specific religious injunctions (relating to charity, for example) and by a growing body of thought and writing on Islamic economics, which provides a theoretical basis for welfare and development work and potentially alternative economics to classical Western thinking. The Hindu case is interesting (repetitive), with few international Hindu charitable organizations. Many of those who do exist are devoted as much to promoting a particular brand of politics in India as they are in dispensing aid (Kurien 2004). The Indian Case It is always dangerous (maybe alternative word—it is naïve) to generalize about India—a vast country with many languages, ecological zones, religions, regional differences and cultural variations. Nevertheless, regarding the relationship between religion and welfare, it provides an interesting

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case in which the various forms of religiously based welfare can be seen in action, plus a few endogenous to the sub-continent. For example, to build on the final comment of the preceding paragraph, many Indian welfare organizations are also highly political ones, engaged in both charitable, disaster relief and development work and in the promotion of a particularly virulent form of Hindu nationalism opposed even to the existence of other religions in India, and especially Islam and Christianity, for example the Vishwa Hindu Parishad (VHP) and the Rashtriya Swayamsevak Sangha (RSS). The latter, in 2019, was busily engaged in a public relations’ exercise (no doubt not unrelated to the impending 2019 General Election) trying to rebrand itself as a reasonable and inclusive social movement rather than as the ideological source of Right-wing Hinduism. Behind this is the India-wide and ancient practice of charity on the part of almost all religious persuasions—the free or very cheap public canteens run by followers of the leading South Indian female guru Amma, the fact that any Sikh gurdwara or temple will have langar or ‘free kitchen’, where visitors will be fed for free regardless of their religion or caste, a tradition traceable to the first Sikh guru, Guru Nanak, in the sixteenth century and continuing down to this day. In part, such largesse is attributable simply to the charitable impulses found in almost all religions, especially about the needy of their faith communities. Nevertheless, it must be admitted that, in India, it also reflects the State’s weakness in terms of welfare provision. Considering this, the ‘guru phenomenon’ is worth examining, in this case, the welfare provision that the State is inefficient in delivering. Social movements in India have often, in the past as well as in the present, been based on the teachings of guru—teacher and religious leader. The medieval Bhakti movements were usually associated with a charismatic devotional poet (Ramanujan 1973). Many other movements, often egalitarian and anti-caste, have followed in that tradition, often merging religions—Sufi and Hindu, for example (Sikand 2003), and one of the primary examples that still flourishes especially in Maharashtra is the movement that formed around the poet and religious ecstatic Kabir, probably of Muslim parentage, but who lived equally among Hindus and who has left both a large body of devotional songs, still much read and performed today, and an active social movement, especially strong among Scheduled Caste and formerly ‘untouchable’ communities in western India (Lorenzen 1987; Hess 2015). The re-emergence of Buddhism among communities similarly situated low in the formal

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caste hierarchy, a movement initiated by the celebrated conversion of the ‘untouchable’ leader Dr B.R. Ambedkar, shows similar dynamics (Jondhale and Beltz 2004). Other social movements that have combined an anti-caste orientation with welfare delivery and self-empowerment activities include the movement initiated by Sri Narayan Guru in Kerala, where it is still strong, and the Swadhyaya movement initiated by Pandurang Shastri Athavale, the latter being an empowerment and capacity-building movement promoting not only welfare but also ecological responsibility, social equality, a sharing economy and innovative agricultural practices (Srivastava 1998). Contemporary examples abound and illustrate several aspects, not all of them positive. Here I will take three living examples. The first is that of the yoga guru Swami Ramdev, who, having built an early reputation based on his yoga teachings, soon developed numerous political affiliations and then an extensive business empire based on ayurvedic foodstuffs (Patanjali Ayurveda Limited) and has recently become the subject of a planned 85-episode TV “biopic”—“Swami Ramdev—Ek Sangharsh” in Hindi. Yoga teachings have been the basis for the rise of many gurus to both local and international fame. More than one has turned that fame into personal riches and extensive business and real estate holdings while almost always maintaining a charitable dimension to their activities. The well-known Patanjali brand is available all over India, in local shops and dedicated stores, and the smiling face of the guru looks down on passersby from advertisements all over the country. A similar smiling bearded face that is almost as familiar (especially in south India) is that of the guru Sri Sri Ravi Shankar, who operates from a vast and expanding ashram close to Bangalore. His movement, known as “The Art of Living”, has many international and local Indian devotees. His teaching, based on meditation techniques and disseminated through numerous books, CDs and DVDs, is a kind of ‘feel good’ teaching, and the good feeling is enhanced for those who can afford it by an ayurvedic resort adjacent to the main ashram, and numerous ‘Divine Shops’ selling not particularly healthy cookies and snacks, Indian style clothes and souvenirs, but including of course portraits of the guru himself. The centre of the ashram is a large, multi-storied mediation hall where the more spiritual aspects of the teachings are carried out and spaces for more individual yoga. The Art of Living has spilt out beyond the ashram’s boundaries into numerous social welfare activities, including schools, an ayurvedic hospital, free clinics in the surrounding villages and agricultural and irrigation initiatives. It is

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widely rumoured that the guru’s ambition to win the Nobel Peace Prize is something that cannot be achieved by spiritual activities alone, however helpful they may be to the psychological health and peace of devotees. In the Ravi Shankar case, we see an apparent merging of yoga’s ‘spiritual’ and welfare dimensions and the provision of health care and education. So far, the ‘Art of Living’ movement appears benign, and is not overtly political (although it has political connections with the local powers that be, almost a necessity in India), is not stridently anti-caste or notable for revolutionary ideas about transforming the Indian social structure, and is not, despite its activities in retailing mostly daily necessities and the works and sayings of the guru, developing a significant business presence. Part of its main local economic impact (apart from bringing numerous devotees from around India and abroad and creating local employment) has been buying up land to pursue the movement’s educational and agricultural initiatives. While allegedly ecological in outlook, the movement was implicated in 2017 with considerable damage to the Yamuna River floodplain in Delhi, where a massive rally was carried out, trampling the delicate environment, leaving mountains of trash and polluting the river itself. Moreover, unfortunately, a less benign example can be seen in the rise and spectacular fall of the guru Gurmeet Ram Rahim Singh, sentenced in 2017 to 20 years of imprisonment for rape and implication in the murder of a journalist who was investigating his activities. This guru, who had appeared in Bollywood style movies starring himself, had taken over a slight movement, the Dera Sacha Sauda, founded in 1948 by a genuine ascetic named Mastana Balochistani as a kind of local resistance movement to the totalizing claims of mainstream Hinduism, Sikhism and Islam (the ashram is situated on the border of the Sikh-dominated Punjab and mainly Hindu Haryana) and teaching meditation, recitation of sacred words and avoidance of self-indulgence (and from making religious monetary donations). Even after Singh took it over, and eventually greatly expanded physically to finally comprising virtually a small town, the new guru, while in actuality pursuing a personal lifestyle of wealth, fame and high-level political connections, still maintained the multireligious character of the movement, and recruited members from Dalit (‘untouchable’), working-class and poor Sikh and Muslim communities as well as Hindus. This was not only because of the religious tolerance of the movement but also because it provided drinking water and always langar (free kitchen in keeping with Sikh custom), clinics and schools. For the

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excluded sectors of Indian society, such an inclusive and welfare providing facility naturally proved very popular. At the time of his fall from grace guru, Singh numbered hundreds of thousands of devotees among his fans and followers, in some cases fanatical enough to arm themselves and defy the police at the time of his trial and sentencing. As the political scientist Rajeev Bhargava has argued in a newspaper article, such movements are sociologically very significant in India, revealing that they do not only depict the failure of the State to provide the kinds of welfare facilities that these ashrams do but vividly illustrate the complexities of the wider society itself—its multi-religious character, the domination of many of those religions by elites, the persistence of caste (itself closely related to religion and practices of exclusion of women and lower castes in general), poverty, the illusions fostered by Bollywood movies that now penetrate to almost every village and slum, and the attractions of movements that may offer both salvation and food, a respected identity denied to one by the larger society based on caste or gender. As Bhargava points out, the poor and excluded also have a spiritual life and will naturally look for contexts in which it can be expressed and practised. While recognizing the importance of folk and guru-based religious orders, not least in their ‘welfare’ functions however, the Singh case illuminated some of the very unsavoury aspects of some such movements, including ‘intra-religious domination’, in this case, the exploitation of female members even to the point of rape, the humiliation of those out of favour for whatever reason, internal discrimination and enormous privileges accruing to select leaders (in this case mainly Singh himself). In the past, it was not uncommon to speak of ‘rice Christians’—low caste people or tribals who would at least superficially convert to gain material benefits. The same logic is true in some contemporary guru movements, but with the often-unread small print, many such movements manifest cult-like characteristics: they are tough to leave (Bhargava 2017). The ‘guru phenomenon’ is essential in India because of its widespread nature (and there are many others than those discussed who have achieved national and international fame—Sai Baba who was based until his relatively recent death in Bangalore in south India, or Osho, who created a large and still flourishing ashram in Pune in west India to name just two of the most prominent, the latter still enjoying a substantial afterlife through his many books available around the world in several languages. It continues to be important not only because of its role as a significant welfare provider but also because of its links to politics on the one

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hand and big business on the other (and in India, the two are often closely aligned: McKean 1996). Almost all gurus are Hindu. This, too, is significant for a variety of reasons. Despite the Hindu base of many guruled movements, many are religiously inclusive. Even when a formal guru system exists, as with the Sikhs, the feeding of non-members is institutionalized as a vital part of the religion’s ethical structure. Some are inclusive of caste and class or are anti-caste and against the elite domination of the formal religions and the concentration of wealth and power that often goes together. Guru-led movements are a significant aspect of Indian social structure and constitute ‘alternative’ or anti-structural movements. Both elements and the dialectical relationship between them illustrate one of the significant ways welfare is delivered outside formal state channels. While the evidence is ambiguous, it may provide a more effective means of delivery in a country like India than State-led and bureaucratic approaches (Gibelman and Gelman 2003). Welfare, Diversity and Culture It is important to remember that India is a large and diverse country, with significant regional differences in languages, cultural diversity, ethnicity, and local expressions of religion and politics. Tamil Nadu is a very different place culturally and politically (and even climatically) from the ‘Hindi Belt’ northern states such as Bihar or Uttar Pradesh. Reflecting this, we find that within the country, there are substantial differences in levels of social development and welfare policies between states that can be traced to different histories, in some cases environmental factors, and indeed to the fact that welfare is devolved to the individual states and is not primarily a concern of the Centre. In a substantial book devoted to why different states within the same country have evolved such different welfare regimes, Prerna Singh traces this to ‘sub-nationalism’ or shared solidarity within individual states (Singh 2015). Thus, for example, the southern State of Kerala, justly celebrated for its high levels of literacy and socially inclusive welfare programs, while undoubtedly enjoying rates of economic growth partly fuelled by remittances from the Gulf and elsewhere (by the 2000s, its real state domestic product for agricultural workers, usually among the most impoverished groups was two and a half times that of Bihar and exceeded only by Tamil Nadu), cannot have its welfare policy success explained only in economic terms. Instead, political processes including the fact that for much of its post-independence

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history Kerala has had a “liberal” Marxist government committed to social inclusion, the presence of a large Christian population and a substantial Muslim one (over 22% of the population) with its own religiously sanctioned philanthropic and charitable institutions, the existence of social movements such as the Sri Narayana Guru movement which is anti-caste, gender-inclusive and egalitarian in ethos and, very significantly, local elites committed to collective welfare rather than to private personal gain have triggered strong welfare regimes in both Kerala and Tamil Nadu, exemplary cases when compared with Uttar Pradesh, Bihar or Rajasthan, at least until very recently when some of those ‘backward’ states have begun to catch up. This whole phenomenon Singh summarizes: ‘The cases of Tamil Nadu and Kerala show how the glue of subnational solidarity can play a critical role in facilitating social development. In both states, sub-nationalism emerged due to the strategic calculation of interest-maximizing elites locked in competition for sociopolitical power and once established, however, a cohesive subnational identity fostered shared solidarity, perceptions of shared needs and goals, and a sense of mutual obligation. Elites came to redefine their welfare to advance individual or group interests and collective subnational welfare. Elite support for public welfare pushed these regions’ governments to prioritize social development through substantial increases in the budgetary outlays on education and health. This was a necessary condition for subsequent gains in social development’ (Singh 2015: 11). Unfortunately, however, Singh does not trace any of this solidarity to culture, including, in both the cases of Tamil Nadu and Kerala, an attachment to the regional languages (and even hostility to Hindi, something even more marked in the neighbouring State of Karnataka) and the anti-caste movements that have been an essential part of relatively recent history. Moreover, caste and religion are intimately connected, and the erosion of caste implicitly undermines social hierarchies. This is important in the larger national context. As Singh also notes, ‘The establishment and maintenance of democratic institutions in India in the context of low levels of economic development and high levels of ethnic diversity has been widely studied and lauded…. However, while India has been relatively successful in guaranteeing civil and political rights, it has failed miserably in ensuring even a minimal range of social rights for its citizens’ (Singh 2015: 14). It is into this vacuum that religiously motivated welfare has flowed. Where the provision of public goods is weak, other agencies

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tend to arise to fill at least some of the gap, a phenomenon that does not necessarily increase ethnic polarization. However, they may weaken it by establishing cross-religious bonds, especially when a more inclusive national identity is present (Charnysh et al. 2015). This is especially true when other civil societies or social capital sources are unavailable. Given religion’s cultural and sociological significance in Indian life, it is not surprising that it emerges as an extra-state welfare provision source. This substantially contradicts Singh’s position, however, that ‘in contrast to the conventional explanations of civil society either as a product of autonomous private initiative or of antecedent civic practices, the emergence of civil society organizations in the Indian context was endogenous to the development of political parties’ (Singh 2015: 56). There are many issues tied up with religion, including its potentially adverse effects on communal relations, or the use of a particular religion as a tool of nationalism, thereby excluding members of other religious groups from full citizenship. But there are positive ones too, including evidence that religious diversity encourages competing religious organizations to provide more in the way of social welfare provision (Chaves and Gorski 2001), that religious participation is an essential form of and generator of social capital, and that religious diversity encourages the election of minority leaders who are likely to promote social services to their constituencies, which being minorities are likely to be poor, while at the same time prioritizing the reduction of potential inter-religious conflict by the equitable provision of public goods across communities (Singh 2015: 231–232). Identifying the basis of solidarity is essential, and the evidence from India and many other countries and regions, mainly Muslim or Catholic majority ones (Quebec, for example), is that it is precisely religion that provides this sense of solidarity. Religious diversity is undoubtedly a double-edged sword, but there is evidence that particularly in the absence of State provided social welfare, religious organisations frequently fill the gap and create or reinforce the “pro-social” behaviour that politics and other social institutions fail to generate. The cohesiveness of the political community (as distinct from economic development, ideologies of the political parties in power, ethnic diversity, or the strength of civil society), as hypothesized by Singh (2015) is the source of variations in social welfare provision in India is undoubtedly a factor but by no means the only one. She overlooks two essential aspects of the nature of ethnic identity (its sources and sociological and cultural basis) and civil society’s nature. In both cases in India, an essential element in religious

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identity. Despite the formally secular character of the State as formulated by Nehru and the founders of modern India, the country is one of the least secularized in the world. Religion lies at the basis of its festivals, holidays, dress codes, diets, its dances and most of its classical music, its architecture, its ethnic diversity, its public and private rituals, and the cosmologies on which a huge number of its citizens organize their lives, businesses, reading and relationship to nature (on the latter, an essential theme, see for example Krishna 2017). Moreover, given the intensely social nature of religion, it is not at all surprising that it also expresses itself in social welfare activities, particularly in instances where it is very ethical teachings encourage or demand charity, care of the weaker sections of society and the pursuit of social and economic justice, as is usually the case. The Indian case is exciting and instructive in this context, mainly as it represents what the leading Indian sociologist T. N. Madan has termed a secular state but a religious society (Madan 1997: 236). The result has been what Madan terms a “crisis of Indian secularism”, since despite Nehru’s emphasis on industrialization and economic growth, the State has failed to deliver comprehensive welfare to vast sections of the population. In fact, significant (religious) minorities such as Muslims still experience widespread poverty and other forms of social deprivation and political exclusion (Metcalf 2009). The anthropological and religiousstudies literature on Indian religions (and on the connections between religion and caste, gender, marriage, and numerous other features of the society) testifies to the continuing and largely undiminished role of religion in India. A sociologist of Europe is unlikely to turn to religion as the entry point or frame of her study of the society; a scholar of India is very likely to do so. This essay has simply highlighted one aspect of this immensely complex and diverse phenomenon: notably how, in the absence of adequate state-led welfare provision, it is often religious organizations that step in to fill, at least partially, the gap. The significance of institutions and movements that have few direct equivalents in European sociology—the guru, ashrams, mosques and temples, religious movements and social movements based on religion, and anti-caste movements with many social spillovers, including the promotion of music, song and performance (Hess 2015)—all prove to be foundational to the understanding of Indian society. Embedded in all this is the question of the social roles of religion, one of which—the provision of social welfare to

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members and often to non-members too—is an important aspect of religious practice in a polity in which the State has so often failed to reach the neediest and the most excluded. That fact alone is likely to be sufficient to ensure the vitality of religion in India for a long time to come.

References Ariyaratne, A.T. (1982) In Search of Development: The Sarvodaya Shramadana Movement’s Efforts to Harmonize Tradition with Change. Moratuwa (Sri Lanka): Sarvodaya Press. Ariyaratne, A.T. and Joanna Macy (1992) “The Island of Temple and Tank: Sarvodaya: Self-Help in Sri Lanka”. In M. Batchelor and K. Brown (eds.) Buddhism and Ecology. London: Cassell, pp. 78–86. Benthall, Jonathan and Jerome Bellion-Jourdan (2003). The Charitable Crescent: Politics of Aid in the Muslim World. London: I.B. Taurus. Bhargava, Rajeev (2017) “In Defiance of Organized Religion”. The Hindu. Sunday 3 September, p. 13. Broadbent, Jeffrey and Vicky Brockman (eds.) (2011) East Asian Social Movements: Power, Protest and Change in a Dynamic Region. New York, Dordrecht and London: Springer. Charnysh, Volha, Christopher Lucas and Prerna Singh (2015) “The Ties that Bind: National Identity Salience and Pro-Social Behavior Towards the Ethnic Other”. Comparative Political Studies, 48 (3), 267–300. Chaves, M. and Philip S. Gorski (2001) “Religious Pluralism and Religious Participation”. Annual Review of Sociology, 27, 261–81. Clammer, John (1993) “Deconstructing Values: The Establishment of a National Ideology and its Implications for Singapore’s Political Future”. In Garry Rodan (ed.) Singapore Changes Guard: Social, Political and Economic Directions in the 1990s. Melbourne: Longman Cheshire and New York: St. Martin’s Press, pp. 34–51. Desai, Vandana (2008) “The Role of Non-governmental Institutions”. In Vandana Desai and Robert B. Potter (eds.) The Companion to Development Studies. 2nd edn. London: Hodder Education, pp. 525–530. DFID (2009) Eliminating World Poverty: Building Our Common Future. London: Department for International Development, White Paper. DFID (2012) Faith Partnership Principles: Working Effectively with Faith Groups to Fight Global Poverty. London: Department for International Development. Gibelman, Margaret and Sheldon R. Gelman (2003) “Should We Have Faith in Faith-Based Social Services? Rhetoric versus Realistic Expectations”. Nonprofit Management and Leadership, 13 (1), 49–65.

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Hasan, Samiul and Jenny Onyx (eds.) (2010) Comparative Third Sector Governance in Asia: Structure, Process and Political Economy. New York, Dordrecht and London: Springer. Hess, Linda (2015) Bodies of Song: Kabir Oral Traditions and Performative Worlds in North India. New York: Oxford University Press and Ranikhet: Orient Black Swan. Jawad, Rana (2010) “Religion and Social Policy in the Middle East: The (Re)Constitution of an Old-New Partnership”. Social Policy and Administration, 44 (6), 658–672. Jawad, Rana (2012) “Social Policy in Middle Eastern Societies”. In P. Alcock, M. May and S. Wright (eds.) The Student’s Companion to Social Policy. 4th Ed. Chichester: Wiley, pp. 477–494. Jondhale, Surendra and Johannes Beltz (eds.) (2004) Reconstructing the World: B.R. Ambedkar and Buddhism in India. New Delhi: Oxford University Press. Kirmani, Nida (2002) “The Role of Religious Values and Beliefs in Charitable and Development Organizations in Karachi and Sindh, Pakistan”. Development in Practice, 22 (5–6), 735–748. Krishna, Nanditha (2017) Hinduism and Nature. Gurgaon: Penguin Random House India. Kurien, Prema (2004) “Multiculturalism, Immigrant Religion and Diasporic Nationalism: The Development of an American Hinduism”. Social Problems, 51 (3), 362–385. Lewis, David and Nazneen Kanji (2009) Non-governmental Organizations and Development. Abingdon and New York: Routledge. Lorenzen, David N. (1987) “Traditions of Non-caste Hinduism: The Kabir Panth”. Contributions to Indian Sociology, (n.s.), 21 (2), 263–283. Madan, T.N. (1997) Modern Myths, Locked Minds: Secularism and Fundamentalism in India. New Delhi: Oxford University Press. McKean, Lise (1996) Divine Enterprise: Gurus and the Hindu Nationalist Movement. Chicago: Chicago University Press. Mercer, Claire (2002) “NGOs, Civil Society and Democratization in the Developing World: A Critical Review of the Literature”. Progress in Development Studies, 2 (1), 5–22. Metcalf, Barbara D. (2009) “Hindu Ethnonationalism, Muslim Jihad and Secularism: Muslims in the Political Life of the Republic of India”. In Knut A. Jacobsen (ed.) Modern Indian Culture and Society, Volume 3: Religion. London and New York: Routledge, pp. 71–96. Narayan, Deepa, Raj Patel, Kai Schafft, Anne Rademacher and Sarah KochSchulte (2000a) Voices of the Poor: Can Anyone Hear Us? New York: Oxford University Press for the World Bank.

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Narayan, Deepa, Robert Chambers, Meera Kaul Shah and Patti Petesch (2000b) Voices of the Poor: Crying Out for Change. New York: Oxford University Press for the World Bank. Pavolini, E., D. Beland and R. Jawad (2017) “Mapping the Relationship Between Religion and Social Policy”. Journal of International and Comparative Social Policy, 33 (3), 240–260. Pestoff, Victor, Taro Brandsen and Bram Verschuere (eds.) (2012) New Public Governance: The Third Sector and Co-Production. New York and Abingdon: Routledge (Routledge Critical Studies in Public Management). Pew Research Center (2002) “US Stands Alone in Its Embrace of Religion Among Wealthy Nations: Overview”. www.pewglobal.org/2002/12/19 among wealthy nations. Ramanujan, A.K. (Trans. and Ed.) (1973) Speaking of Shiva. New Delhi: Penguin Books India. Sikand, Yoginder (2003) Sacred Spaces: Exploring Traditions of Shared Faith in India. Gurgaon: Penguin Random House India. Singh, Prerna (2015) How Solidarity Works for Welfare: Subnationalism and Social Development in India. New York: Cambridge University Press. Srivastava, Raj Krishan (ed.) (1998) Vital Connections: Self, Society, God: Perspectives on Swadhyaya. New York and Tokyo: Weatherhill. Tomalin, Emma (2013) Religions and Development. Abingdon and New York: Routledge. Tu, Wei-Ming (ed.) (1996) Confucian Traditions in East Asian Modernity: Moral Education and Economic Culture in Japan and the Four Mini-Dragons. Cambridge, MA: Harvard University Press. Zadek, S. and S. Szabo (1993) “Buddhist Organization: The Case of the Sarvodaya Shramadana Movement”. London: New Economics Foundation, Value-Based Human Organization Working Paper Series 2.

CHAPTER 10

The Legacy of Traditional Artisanal Production in Modern India: Missing Linkages with Welfare Keerty Nakray

Introduction At the heart of India’s non-farm rural economy are the traditional artists who engage in craft production to earn a livelihood. The creative works of these artists are a vital reminder to India’s popular imagination of its illustrious past and the subsequent colonial disruption. Despite their enormous contribution to the Indian cultural legacy, their lives are marked by precarity and struggle to access new markets and upgrade skills in a

The chapter is originally inspired by Aleksandra Mineeva and her Instagram account textiles_india_project. She has been great support for this chapter. K. Nakray (B) O. P. Jindal Global University, Sonipat, India e-mail: [email protected]; [email protected]

© The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2022 K. Nakray et al. (eds.), Social and Economic Transitions in China and India, https://doi.org/10.1007/978-981-19-6124-3_10

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competitive space. The rejuvenation of this sector can lead to the development of a non-traditional economy in the villages and urban periphery. It requires a paradigm shift from looking at that economy purely in binary terms of the formal and informal economy, which is counterproductive. Public policy must be pluralistic and promote the rejuvenation of livelihoods, social cohesion, cultural identity and emotional justice. However, redrafting this livelihood strategy needs a reimagination of current employment and welfare policy approaches. More importantly, these artists form a means of continuity and social reproduction of India’s culture. Therefore, integrating them into the national development vision is essential. Diversity marks India’s artisanal economy and intertwines with social justice, cultural identity, psychological well-being and economy. As discussed, traditional artists form an essential link to India’s cultural and religious traditions and art forms the foundation for the community and social cohesion, strengthening economic progress. In 2019 at the 74th session of the UN General Assembly, 2021 was declared the International Year of Creative Economy for Sustainable Development (UNESCO 2021). SDG 8 have highlighted the importance of decent work, which aims to ‘promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all’. Overall, the global market for creative goods has doubled from US$208 billion in 2002 to US$509 billion in 2015. It generates 30 million jobs worldwide and employs more people aged 15−29 than any other sector (UNESCO 2021). Undeniably, UNESCO describes that culture and creativity have been the cement that binds together not only hearts and souls but also societies and nations (UNESCO 2021). According to official estimates, India is home to seven million artisans. However, data from unofficial sources indicate that the artisan strength is as high as 200 million. India has 2308140 artisans, it is estimated. With almost INR 11097288 expenditure on financial support to artisans under challenging circumstances from 2014–2015 to 2017–2018 (Ministry of Statistics, GOI 2019a, b). The artisanal economy represents a complex challenge to Indian public policy. Often it is associated with impoverished rural and urban artists who form the underbelly of India’s informal economy. The informal and unorganised nature of the expansive artisanal economy results in inaccuracy and distortion in numbers (India Brand Equity Foundation 2021). India’s growth rate is marked as ‘jobless growth’. The Periodic Labour Force Survey (2017–2018) showed a shrinking share of the labour force

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and rising unemployment. The labour force participation rate (% of people working or seeking work in the above 15 years age category) was 55%, which declined to 49.7% in 2018. With unemployment estimates among the urban women at 19.8% and rural women at 17.3%, rural men at 10.5% and urban men at 9.25%, bearing the burden of unemployment (Kannan and Raveendran 2021). The focus on informal employment in agriculture alone misses the extent of informality in the urban economy and manufacturing, which is the organised economy (The Hindu Business Line 2021). India’s artisanal wealth includes 3000 craft forms, working with papiermâché in Jammu and Kashmir, thangka painting in Ladakh and Himachal Pradesh, phulkari and bagh textiles in Punjab. It is estimated that Indian Handicraft exports reached Rs. 25,706.3 crore (US$ 3.5 billion) in 2019– 2020 (India Brand Equity Foundation 2021). Overall, there are efforts to connect these artists with funds, market intelligence and poor institutional growth. The scales of production are often weighed against the artists— however, innovative pathways and opportunities are being conceptualised for them. The chapter explores the notions of waged labour on the Khatris traditional artisans who work with block print textiles in the Indian states of Gujarat, Bagh—Madhya Pradesh and Rajasthan. It goes beyond the livelihood challenges of these traditional artists, and it explores the potential of these artists to be at the core of the reimagination of economic paradigms that value people with indigenous knowledge. Theoretically, we use the Marxist lens to explore the artist’s work in the modern political economy along with Micheal Hertzfield global value chains. Taking further the above discussion, chapters present block printing from two major perspectives: 1. New economic employability models and pathways to recognise selfeducation models of skilling of artisanal communities. 2. Examining the artisanal work from the perspectives of work and welfare with a focus on plurality, diversity and mutual respect. Although the cultural value of the work of the artisans, their labour remains on the back burner. The artisanal economy does provide a means to survival for the whole family and communities. It has important implications for welfare; therefore, the government plays a vital role in facilitating their work and recognising its cultural and emotional value.

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Artisan Labour in Indian Capitalist Economy: Theoretical Understanding In his classical thesis, Max Weber highlighted that culture was one of the primary determinants of modern progressive economic development (Weber 1946). V. W. Ruttan (1989: 1385) believes that cultural endowments contribute to constraining or facilitating economic growth, but he recognises that ‘culture matters’ remain pervasive in the underworld of development thought and practice (cited from Meier 2005). Jeffrey Sachs (2000) went beyond traditional drivers to development and addressed political factors and poor economic institutions rather than culture per se that lie behind lagging economic development (Sachs 2000). In early modernisation and development theories, culture impedes the western-styled development process and is associated with kinshipbased informal institutions. Informal institutions form the caveat to social norms and cultural ethos in which individuals shape their behaviour. Often the presumption is that cultures that value the preservation of community and kinship transmission over individual merit undermines capitalist entrepreneurship and innovation. Informal institutions shape everyday economic behaviour regarding attitudes to thrift, mutual trust, respect and cooperation. These values constitute the intangible foundation for formal institutions, which are expressed as constitutions, laws and regulations that protect and recognise property rights, individual liberty, and freedom in written and oral forms. The economy’s advancement requires transitioning from clan and community-based interactions to more complex interactions between individuals based on merit. These interactions are based on more formal rules of economic development and social justice. However, the transition from community-based informal institutions to legal bureaucracies is not smooth. Therefore, culture does get integrated into the formal advanced economic development pathways in complex ways (Meier 2005). Initially, Keith Hart first coined the informal sector in 1971 based on his research Ghana but became commonplace after an ILO mission in Kenya in 1972 (King 1987). In his book, Kenneth King, Jua Kali Kenya: Change and Development in An Informal Economy 1970–1995 (King 1996) in which, he provides a detailed account of the black African jua kali activities (e.g., Tin lamp making), which have their origins in the Indian (a term also used in Swahili—wahindi—and should be read as Asian) craft communities. These activities provide apprenticeships and

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entrepreneurial training for the future generation of informal sector operators. The underlying point that drives the book is that the informal economy is not homogenous but alive and provides a livelihood strategy to millions of Africans, and it should not be separated as an anomaly from the modern economy. The 2002 International Labour Conference (ILC) Resolution on Decent Work and the Informal Economy marked a breakthrough in analysis—providing a framework that recognised the diversity and heterogeneity of actors and activities in the informal economy and broadened its parameters. It established that informality exists across sectors and, importantly, also includes casualised and precarious work within the formal economy (International Labour Organisation 2012). Theoretically, dualism is central to understanding the ‘formal-informal dichotomy’. It refers to the plurality of economic activities that are undertaken within a given geographical space. These activities include various organised service sector activities alongside peripheral or marginalised extra work. Caroline Moser discusses the persistent problems of poverty and unemployment and holds an alternate view on structural transformation; poverty and unemployment cannot be alleviated within the existing dependent capitalist social formation. From this perspective, ‘the condition of the masses in the Third World is not purely a matter of material want, but also of subordination, oppression, exploitation and disregard’ (Moser 1978). The original conceptualisation of Keith Hart’s dualist informal and formal sector model between wage-earning and selfemployment, with the key variable being the degree of rationalisation of work, in other words, whether labour was recruited on a permanent and regular basis for fixed reward (Moser 1978). India’s traditional craft seems to be part of a dual economy dilemma as it includes traditional artists who sell their products to the formal market’s organisations and cooperatives. Artisanal work is creative and labour intensive, and it requires skills that are often transmitted from kinship. In purely economic terms, some artists fit into the ‘intermediate sector’ as they have better incomes than their formal sector counterparts, whereas some are on the brink as they do not have patronage or market skills. This work is often seasonal, and these artists undertake other economic activities such as agriculture or migrant labour. The specific peculiarities of this work set it apart from the subsistence informal labour economy (Terry 1999). The Communist Manifesto (1848), popularised as ‘workers of the world, unite!’—explicitly invoked the global power of their prophecy. In

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his visibly different reflection on the nature of the human species and the waged labour, Karl Marx develops Hegel’s and Feuerbach’s concept of estrangement.1 While earlier thinkers were concerned with human estrangement from our human essence due to the fast social development, Marx gives an even more detailed account of this phenomenon on the example of a worker in a condition of collective waged labour. Marx describes four ways in which the process of estrangement or alienation takes over the life of a wage labourer: the worker is alienated from the product of his labour; the worker is alienated from the production process, the worker is alienated from his fellow workers. In essence, the worker is alienated from being a human being with social interactions with people and their intuition and creativity. Karl Marx develops Hegel’s and Feuerbach’s concept of estrangement, which is distinct from alienation. At the heart of estrangement is the lack of coherence between individual capabilities and how they must live. Marx made a clear distinction between the terms ‘estrangement’ (Entfremdung) and ‘alienation’ (Entausserung), and the two terms should not both be translated as alienation. ‘Entfremdung’ is a state of mind and alienation is a process (Arthur 1986). It is intertwined with the objectification [Vergegenständlichung] of labour which is no longer connected with the worker as it is appropriated by the capitalists (Arthur 1986). The current use of ‘estrangement’ as a social-psychological state of mind is also linked to collective social-economic structural changes born out of capitalism. Marx’s critique of capitalism is that it removes human beings from the process of production and the end products. The worker earns a wage for participating in the production process by coercive subordination to the capitalist. Beyond the worker’s lifelong wages are unlikely to add up to capitalist wealth. Also, the difference between use and exchange value, the worker produces commodities that have both use and exchange value in the society. The abolition of involuntary labour is the core of workers’ exploitation and alienation (Wallimann 1981). Home-based artists are distinct from factory workers, as they are not hurdled together to create products for economies of scale. The artisanal rationale is antithetical to mass-produced products accessible to large populations often across the world. At the heart of capitalist production is the exploitation of workers by paying minimal wages for maximum work 1 K. Marx (1959). Economic and Philosophic Manuscripts of 1844. Economica, 26 (104), p. 379.

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which is standardised and does not require creativity. India’s informal labour economy is supplementary to the formal economy and remains subjected to exploitation. The dispersal of the working class or, in some instances, the failure of the working class to aggregate in the first place results in the breaking of labour’s resistance to exploitation by capital (Basole and Basu 2011). Marx’s communism emphasises cooperation in the production process which is not proper to exploitative labour relations with significant economies of scale, unlike the artisanal economies. Artisanal economies present the unique nature of labour skills often transmitted from one generation to another. Eric Hosbwan distinguishes artisans and labour aristocrats (Hobsbawn 1984). In the nineteenth century, artisans were a distinctive group belonging to the privileged strata of labour aristocracy in British society. As (Hobsbawn 1984) elaborates that the artisan’s sense of independence was, of course, based on more than a moral imperative. Concerning artisan labour is distinctive as it is the essential means of production. However, to the capitalist, the hand tools impede the dominance of the machines which can mass-produce without the need for individualised creativity and innovation. Therefore, good work became a liability to the wealthy capitalist (Hobsbawn 1984). In this political economy, primitive accumulation in Marxist terms does add conceptual caveats to the cultural economy of the traditional Khatris. Primitive accumulation thus involves a coerced enclosure of the commons to establish the rule of private property. In the current scenario, wherein it is art created by kinship and community groups gets violently subsumed within institutions of global capitalism. Making it hard for Khatri art as it struggles to find a place within established economic institutions (Varma 2013). Historical Determinants of Deindustrialisation Jawaharlal Nehru’s classic Discovery of India (1947) attributed the ruralisation of Indian economy due to the destruction of artisanal employment due to tariff protection (Nehru 1947). Similarly, the nineteenth-century nationalist Dadabhai Naoroji, the deindustrialisation in India was a result of industrial advances in Britain, which led to competitive prices in textiles, metal products and other manufacturers in world markets (Clingingsmith and Williamson 2005). In mainstream Indian history, the conflict between artisan labour and unskilled factory work is dominant. The artists were pushed into coercive factory labour, which was

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low value and did not require specific skills. Artisans do not produce mass-produced goods, and neither do they have complex value chains for global markets. Neither can they adapt to changing tastes. As Roy (2020) discussed, the decline of artisanal work in the Indian context is explained in two significant schools of thought, deindustrialisation and proto-industrialisation. To sum up; deindustrialisation is flawed because it assumes that all handmade technology is unskilled and inferior. Proto industrialisation is flawed because it does not show how crafts can continue against machines. Roy (2020) illustrates that social movements like Swadeshi, in short, harmed rather than helped the handloom weaver as it undermined the unique aspects of Indian weavers’ skills, which are superior to machinemade products. Industrialisation provided opportunities for upskilling to workers or lower prices as handlooms are skills intensive and require an intuitive understanding of handlooms and cultural contexts. These skills were transmitted through kinships, and caste and often involved the familial division of labour. Therefore, individual skills intersect with social and cultural capital (Roy 2020). Michael Herzfeld, in The Body Impolitic developed a theory of ‘global hierarchy of value’ that ‘subjects the physical existence and moral worlds of ordinary people to a logic that renders them subordinate’ (Herzfeld 2004, p. 4). Artisans are subjected to deskilling in the modern world. The deterioration reflects the overall lives around us as our everyday lives are shaped by universal values devoid of any authenticity. As Herzfeld (2004) refers to Eric Hobsbawm and Terence’s ‘the invention of tradition’, e word ‘heritage’ is ae word ‘heritage’ reflects the local’s globalisation. The artists’ complex body politics of memoirs is intertwined with new global politics of cultural hegemony. The artisanal skills are transmitted through an apprenticeship which is less valued than religious education. Similarly, artists are spatially confined compared to the elites, and their bodies become the site of a highly complete commodification of stereotypical selves. Global capital hegemony trains the body to conform to bourgeois expectations of emotions and skills. Therefore, Herzfeld critiques the emergence of designers in urban metropoles who mediate between rural or urban periphery-based traditional artisans and the aesthetics of the global value chains. Exporters and factory owners are more likely to have the resources and the incentives to do so (Gupta 2011). In their work (Heller et al. 2017) examine focus on discourses on the authenticity of the artisanal bodies. Often they are pushed into

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the complex politics of national belonging, community traditions and economic notions of modernisation. Their selves are marginalised so are their emotions. Legal Barriers One of the key barriers the informal economy faces is the regulation and legal tools used to include and exclude it. The legality approach focuses on the economic value of the informal sector and its implications for addressing poverty and social justice. In contrast, illegality approach alludes to the legal and institutional frameworks that form the basis for the commodification of work (Lagos 1995: 112). In the Indian context, indigenous artisanal work is often learnt and transmitted via familial, kinship, caste, or socio-religious objectives. Historically, it was created for consumption and sales for specific purposes. In the modern sense, commercialisation poses challenges for the artisanal economy. Often as Indian art does not have clear authorship or explicit creativity (Saikia 2019). In 2012, the Indian Copyright Act was amended in rather innovative ways to help protect the rights of film musicians and scriptwriters. Unfortunately, those amendments do not require aid artists immediately, and initiatives such as FabIndia have created successful business models with the artisans. Due to the difficulty of doing business in India, it is difficult for artists to become entrepreneurs or proprietors individually. The Geographical Indicators of Goods (Registration and Protection) or G.I Act were revised in 2003, is one of six Trade-Related Intellectual Property Rights (TRIPS) of which India is a signatory. It is difficult for artists who speak vernacular languages and dialects to submit applications (Edwards 2016). Understanding Khatri’s Block-Printing: A Case-Study of Revival Ajrakh is—sided, block-printed textileworn by Khatri castes of cattle herders in the desert regions of Kachchh and Thar in northwest India and Sindh Pakistan. It depicts geometric and floral designs printed on both sides of the cloth and are dyed with indigo and madder. In the last few decades, Ajrakh has transformed from localised rural block print to global and national attire trendy among the elites. Edwards (2016) has traced this success to early government initiatives such as Gurjari and the role of three fashion houses.

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On the one hand, it presents successful models of the artisanal economy, but on the other hand, it represents the dichotomy faced by the artists in maintaining authenticity and commercialisation. Ajrakh in Gujarat—and Bagru in neighbouring Rajasthan—were in that tiny minority of highly successful handicrafts. The craftsmen printed the patterns by hand, using blocks, and their work became so popular in the 1990s that they were able to swap their mud huts for brick-and-concrete homes (a sure sign of prosperity in rural India) as orders poured in from the US, UK, Canada, Australia and France. Now, their profits are drying up. Ajrakh has an illustrious history of 2000 years. Bagh prints trace their origins to the Baghini River, and the nearby Bagh caves (third & fifth century A.D., with rich carvings and paintings dedicated to both Hindu Buddhist deities) got their name from the baghs or tigers that inhabited the region. The river in the area Baghini special Ismail Sulemanji Khatri was an Indian artisan, primarily known for his invention of the Bagh print. The khatri community, which comprises the ‘chhipas’ or printers, came here about 400 years ago from Larkana in Sindh, famous for its Ajrak prints. He improved upon the red and black dyes previously used and developed new vegetable-based dyes. His primary innovation was creating the Bagh Print on different types of cloth by printing on them (Chouhan 2019). The Khatri’s was gifted land by Rao Bharmalji, who ruled the district between 1586 and 1631. They established their villages, predominantly around Banni, Asia’s most extensive grassland, which has supported the pastoral activity since Harappan society. Historically, Thus the Khatris clientele consisted chiefly of Hindu herders such as Rabaris and Ahirs, Marwada Meghwals, leather artisans and cattle herders, and Muslim herding clans such as Jat, Mutwa, Node, Raisputra, Haliputra, and Hingorja. Each Khatri community specialised, producing only the range of goods required by their client castes in a limited catchment area (Edwards 2005). Ajrakh is closely associated with caste, status and cultural identity. The onslaught of industrialisation led the Khatris’s to leave the occupation, and Gandhi’s swadeshi brought attention to the locally produced handicrafts. The role of these initiatives was to help reposition these crafts in the emerging urban and overseas markets in which there was a desire for exotic artefacts and ‘ethnic’ fashion, as well as environmentally friendly products (Clifford 2012). One of the state initiatives, Gurjari was established to address the needs of artists and rural development. Mahatma

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Gandhi and the influential art historian, Ananda Coomaraswamy, at the heart of these initiatives, who stressed the importance of India’s cultural identity. In the 1970s, Gurjari linked rural artisans with the National Institute of Design, Ahmedabad. In theory, Gurjari did aim to maintain authenticity without any disruption to artisanal creativity. ‘Artisans are invited to the crafts museum only for a month because a longer stay would “uproot” them from their environment, “spoil” their technique and alter their attitude toward sales’ (Edwards 2005). NID along with the All India Handicrafts Board (1952), the Central Cottage Industries (1960s), the National Crafts Museum (1956), and individual state-level craft development organisations (1960s onwards) were set up to recalibrate India’s rural artisanal economy. The state organisations, such as the Gujarat State Handicrafts and Handlooms Development Corporation (est. 1973), commonly known as ‘Gurjari’, under the leadership of Managing Director, Brij Bhasin, were to play a vital role in rural and economic development (Edwards 2016). Pero is a successful fashion label by designer Aneeth Arora in 2008–2009 whose Ajrakh collection hit New Delhi fashion week in Autumn–Winter 2011. Aneeth Arora, trained in the National Institute of Design (NID) was a part of the modernising agenda of Jawaharlal Nehru. In more recent times, some organisations, such as the Indian Ethnic Co. led by Hetal and Lekhinee Desai are using Facebook and WhatsApp to connect artisans with markets. The clothing brand is nearing Rs 10 crore in turnover in just four years and processes 3000 monthly orders (yourst ory.com). Another initiative Kala Raksha Vidhyalaya opened its doors to artisan students: traditional weavers, ajrakh printers, bandhani artists, and embroiderers, with no further age or formal education (Frater 2012). KRV aims to balance economic and cultural empowerment. In 2010, Kala Raksha launched the concept Artisan Design, a trademark to certify that a product is an artisan’s creative innovation. They work with the understanding that the artists produce quality work but lack marketing skills which designers from metropoles have (Frater 2012). One of the significant challenges facing the Khatris is that the Gujarat earthquake in 2001 altered the chemical composition of the local water high in iron content and unsuitable for dyeing. The new villages of ‘New Dhamadka’, or Ajrakhpur, started in May 2001 and were organised on religious and caste lines (Edwards 2005). The Khatris settled in villages around Khavda and Dhamadka because the river provided good quality water required for the dyeing and washing the fabric. These rivers have

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since dried up, and the water is now extracted from deep underground wells. The problem of the increasing scarcity of water is a threat to the continuation of naturally dyed Ajrakh and various strategies are in place to overcome this, such as the implementation of irrigation systems which will be discussed in Chapters 3 and 6. Water scarcity is among various environmental factors that have affected the production of ajrakh, a major one being the earthquake of 2001. The epicentre was the state capital Bhuj and villages all over Kutch and beyond experienced devastating effects, Dhamadka being one such place. Thus, in the years following the earthquake, a new village was built to house the Khatris and provide a communal space helping rebuild livelihoods by providing more employment opportunities to local communities through the training of ajrakh. This village was named Ajrakhpur (literally translated to ‘place of ajrakh’ [Clifford 2012]). Along with challenges of access to economic markets, climate change and depletion of water tables are pushing the Ajrakh craftsmen to buying lands to dig wells for water. As it takes thirteen litres of water to produce one block of printed cloth. The water levels deplete by 10 feet every year due to unpredictable monsoons. The increasing cost of producing Ajrakh is leading designers to opt for digital prints (Doshi 2016). Policy Implications and Concluding Remarks There are public policy shifts in favour of the artisans with some government initiatives such as Ambedkar Hastship Vikas Yojana, which includes the Dastkar Shashtikaran Yojna, which facilitates the formation of the self-help groups. It provides additional human resources development, infrastructure, technology support, etc. For block printing: the central states Gujarat, Rajasthan, Punjab, West Bengal and Andhra Pradesh. The local government agencies play a vital role in supporting the traditional block printers.

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Source Gujarat—Block-printing—Government And NGO Support For Block Printing | strandofsilk.com Historically, the National Institute of Fashion Technology (NIFT) and National Institute of Design (NID) have played a vital role in product design and development, marketing and promotion. The Ministry of Rural Development has a self-employment programme, Swarnajayanti Gram Swarozgar Yojana (SGSY), which provides support assistance to Below Poverty Line (BPL) families with bank credit for micro-enterprises (Strands of Silk 2021; Anon. 2021). As discussed, the artists face several challenges in India, including climate change, access to markets and sustainable livelihoods and deskilling. This is attributable to India’s modernist development orientation, which often undervalues traditional artefacts for mass-produced goods. It is in India’s interest to develop multi-faceted policy strategies and artists to address sustainable development questions. Artists are an integral part of India’s informal economy. They represent an essential component of India’s missing link with its economy, culture and society. Indian society is marked by diversity and plurality, often overlooked in mainstream public policy. At the heart of artisanal economy is the individual artists’ unique skills, which is acquired through an elaborate system of social learning. That is, undertaken in families, kinship and community inter-and intra-generationally. Intrinsic in this skill acquisition inter-personal relations. Within the modernist

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framework, often valued skills are the ones achieved through formal training and can be commodified in mainstream markets. These include proprietary, entrepreneurship and marketing. Though efforts are being made to enumerate and extend work opportunities to traditional artists— we might often overlook the question of authenticity. These initiatives might be devoid of rich oral history traditions, life histories, the informal transmission of social skills and networks. Drawing from Marxist traditions of estrangement, the new paradigms of work and welfare need to recognise the artists as representative as unique groups, which help understand work as a multi-faceted and, most importantly, intrinsic to individual and community identity. COVID-19 pandemic has dealt a heavy blow to the informal economy; therefore strategies to recalibrate should include these artisanal economies. Dani Rodrik has discussed that developing countries must focus on smaller and informal firms owing to large technological shifts. These firms will be significant in providing livelihoods to low- and middle-income families. Considering these developments, artisanal economies provide one of the pathways of workfare and welfare (Rodrik 2021).

References Arthur, C. (1986). Dialectics of Labour: Marx and his Relation to Hegel. Oxford: Basil Blackweel. Basole, A., & Basu, D. (2011). Relations of Production and Modes of Surplus Extraction in India: Part II – ‘Informal’ Industry. Economic and Political Weekly, 63–79. Chouhan, K. (2019). Historical View on Block Printing Technique and its Used in Bagh Print. International Journal of History and Cultural Studies (IJHCS), pp. 71–74. Clifford, R. (2012). An Investigation into the Development of Traditional Indian Textile Designs for New Markets, With Specific Focus on the Ajrakh Block Printing of Gujarat. Manchester: Manchester Metropolitan University. Clingingsmith, D., & Williamson, J. (2005). India’s Deindustrialization in the 18th and 19th Centuries*. Massachussets: Harvard University. Doshi, R. (2016, October 1). In Arid Kutchh, A Craft Popular with Designers Faces Threat from Climate Change. Retrieved from Hindustan Times: https://www.hindustantimes.com/india/in-arid-kutchh-a-craft-popular-withdesigners-faces-threat-from-climate-change/story-FHT0Ede1yrKkQgE2Ll Bf2H.html

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Edwards, E. (2005). Contemporary Production and Transmission of Resist-Dyed and Block-Printed Textiles in Kachchh District, Gujarat. Textile, Vol 3, Issue 2. Edwards, E. (2016). Lasting Impressions: Indian Block-Prints and Global Trade. Crosscurrents: Land, Labor, and the Port. Textile Society of America’s 15th Biennial Symposium. Savannah, GA, October 19–23, 2016 (pp. 97–107). Savannah. Frater, J. (2012). Kala Raksha: From Cultural Identity to Intellectual Property. Textile Society of America Symposium, https://digitalcommons.unl.edu/cgi/ viewcontent.cgi?article=1684&context=tsaconf Gupta, N. (2011). A Story of (Foretold) Decline: Artisan Labour in India. Manchester: Brooks World Poverty Institute. Heller, M., Pietikäinen, S., & da Silva, E. (2017). Body, Nature, Language: Artisans to Artists in the Commodification of Authenticity. Anthropologica, 114–129. Herzfeld, M. (2004). The Body Impolitic: Artisans and Artifice in the Global Hierarchy of Value. Chicago: The University of Chicago Press. Hobsbawn, E. (1984). Artisan or Labour Aristocrats. The Economic History Review, 355–374. India Brand Equity Foundation. (2021). Indias’s Handcraft Crafts: A Sector Gaining Momentum. [Online] Available at: https://www.ibef.org/blogs/ india-s-handicraft-crafts-a-sector-gaining-momentum International Labour Organisation. (2012). The Informal Economy and Decent Work: A Policy Resource Guide Supporting Transitions to Fomality, Geneva: International Labour Organisation. Kannan, K., & Raveendran, G. (2021). Jobless growth becomes more systemic. [Online] Available at: https://www.thehindu.com/opinion/op-ed/joblessgrowth-becomes-more-systemic/article28391822.ece King, K. (1987). Training For the Urban Informal Sector in Developing Countries: Issues for Practitioners, Geneva: International Labour Office. Lagos, R. (1995). Formalising the Informal Sector: Barriers and Costs. Development and Change, pp. 111–131. Meier, G. (2005). Biography of a Subject: An Evolution of Development Economics. New York: Oxford University Press. Ministry of Statistics, GOI. (2019a, October 1). Number of Artists Who Have Availed Benefits of Artists Received Pensions from 2017–17 to 2018–19. Retrieved from Ministry of Statistics, GOI: https://data.gov.in/resources/ number-artists-who-have-availed-benefit-artist-pension-and-total-amount-rel eased-ministry

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Ministry of Statistics, GOI. (2019b, October 1). Statewise Data of Handicraft Artisans Under PAHCHAAN Initiative. Retrieved from Ministry of Statistics: https://data.gov.in/resources/state-wise-data-handicrafts-artisans-underpahchan-initiative-04022019-ministry-textiles Moser, C. (1978). Informal Sector or Petty Commodity Production: Dualism or Dependence in Urban Development?. World Development, pp. 1041–1064. Nehru, J. (1947). The Discovery of India. London: Meridian Books. Rodrik, D. (2021, October 10). The Metamorphosis of Growth Policy. Retrieved from Project Syndicate: https://www.project-syndicate.org/commentary/ new-growth-policies-for-developing-countries-by-dani-rodrik-2021-10 Roy, T. (2020). The Crafts and Capitalism: Handloom Weaving Industry in Colonial India. Oxford: Routledge. Ruttan, V. W. (1989). Institutional innovation and agricultural development. World Development 17(9): 1375–1387. Sachs, J. (2000). Notes on a New Sociology of Economic Development. In: Culture Matters. New York: Basic Books, Perseus Books Group, pp. 29–44. Saikia, N. (2019). The Tensions Between Indian Art and Indian Law. [Online] Available at: https://copyright.lawmatters.in/2019/01/the-ten sions-between-indian-art-and.html Strands of Silk. (2021, October 10). Retrieved from Gujarat - Block-printing Government and NGO Support for Block Printing | strandofsilk.com Terry, M. (1999). The Economic and Social Significance of the Handicraft Industry in Botswana. London: The School of Oriental and African Studies. The Hindu Business Line, (2021). [Online] Available at: https://www.thehin dubusinessline.com/opinion/jobless-growth-continues-in-india/article20407 376.ece1 UNESCO. (2021). Culture in Public Policy. [Online] Available at: https://en. unesco.org/culture-development/public-policies Varma, R. (2013). Primitive Accumulation. Third Text, 748–761. http://dx.doi. org/https://doi.org/10.1080/09528822.2013.857902 Wallimann, I. (1981). Estrangement: Marx’s Conception of Human Nature and the Division of Labor. New York: Syracuse University. Weber, M. (1946). From Max Weber: Essays in Sociology. London: Oxford University Press.

CHAPTER 11

Right to Education of Persons with Disabilities Y. S. R. Murthy

The empirical evidence does not back the long-standing assumption that the development of modern health facilities will decrease the rate of disability. The disabled population in the world has increased from 10% to 15% in a decade from 2001 to 2011 (reference). According to World Health Organisation, nearly one billion people are disabled globally (WHO 2011). It is the most significant minority which still stands marginalized and deprived of political and socio-economic rights. The disability rights movement has succeeded in bringing this marginalization to the centre stage of the inclusion debate. The Convention on the Rights of Persons with Disabilities (CRPD) is a testament to the movement’s most significant achievement. It shifted the focus from a medical model of disability to a social construct of disability. Its ratification by results from most countries reflects the growing international consensus that disability results from various social and environmental barriers that

Y. S. R. Murthy (B) RV University, Bangalore, India e-mail: [email protected]

© The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2022 K. Nakray et al. (eds.), Social and Economic Transitions in China and India, https://doi.org/10.1007/978-981-19-6124-3_11

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must be removed to make society inclusive. Education is the primary tool through which this section of society can obtain the means to participate fully in their communities. The international framework has duly recognized this vital importance of education and obliged the state parties to provide for it through various conventions and treaties.

International Framework Several international human rights standards protect the right to education of persons with disabilities. An analysis of these international legal instruments will highlight how the international framework has gradually moved from ‘right to education’ to ‘right to inclusive education’ and the crucial role of CRPD in this regard. Article 13 of the International Covenant on Economic, Social and Cultural Rights, 1966 (ICESCR) requires the states’ parties to recognize the right to education of every person. Thus, states parties to the Convention shall ensure that primary education is ‘compulsory and available free to all’ and secondary and higher education is ‘available and accessible to all.’ The Article reflects one of the United Nations’ aims: human rights and fundamental freedoms for all regardless of distinctions. The right to education is a key to achieving the goal of Article 26 (2) of the Universal Declaration of Human Rights, 1948 (UDHR), which refers to the promise of enabling ‘all persons to participate effectively in society.’ The General Comment 5 to the ICESCR titled, ‘Persons with Disabilities’ recognizes that ‘persons with disabilities can best be educated within the general education system’ and obliges the state to follow the Standard Rules,1 which provide that ‘states should recognize the principle of equal primary, secondary and tertiary educational opportunities for children, youth and adults with disabilities in integrated settings.’ The Salamanca Declaration, 1994, adopted by the World Conference on Special Needs Education held in Salamanca, Spain, encourages the states to design education systems to respond to the diverse needs of all so that all students can be accommodated in regular schools. The Convention on Rights of Child, 1998 (CRC), also obliges the state to

1 Standard Rules on the Equalization of Opportunities for Persons with Disabilities, annexed to General Assembly resolution 48/96 of 20 December 1993 (Introduction, para. 17).

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recognize the right to education and provide for it based on equal opportunity under Article 28. It became the first international instrument to include ‘disability as a ground of discrimination’ prohibited in enjoying the rights guaranteed under the Convention. It obliges the state parties under Article 23 to ensure that “[…] disabled child has effective access to and receives education […]” It has been ratified by all the countries in the world, barring two.2 The right to education for disabled people has been on the international agenda for a long time as reflected in the above-mentioned international instruments. However, disability was not the focus in all these instruments. It was made a primary issue in the Convention on the Rights of Persons with Disabilities, 2006 (CRPD). This development is significant because it brought disability, invisible for a long time, into the international human rights law framework. It marked the shift from a medical model of disability to a social construct of disability. This social model is reflected in the definition of disability adopted in the CRPD. According to Article 1 of CRPD, persons with disabilities are ‘those who have long-term physical, mental, intellectual or sensory impairments which, in interaction with various barriers, may hinder their full and effective participation in society on an equal basis with others.’ For the first time, the focus of the definition of ‘persons with disabilities in CRPD is not on disability per se but the physical, mental, attitudinal, and other societal barriers. The CRPD provides for the right to education under Article 24, which provides that ‘States parties shall ensure an inclusive education system at all levels and lifelong learning.’ In what can be regarded as a significant departure, CRPD provided for the ‘right to inclusive education’ instead of ‘right to education’, which dominated the discourse under the previous conventions. The concept of inclusive education has not been defined in CRPD. However, General Comment No. 9 to CRC explained that inclusive education is a set of values, principles and practices that seek meaningful, effective and quality education for all students, that does justice to the diversity of learning conditions and requirements not only of children with disabilities but for all students. The essence of this definition is well reflected under Article 24 (2) of CRPD. According to this, states parties must ensure that: 2 United States of America and Somalia. Available at, https://treaties.un.org/Pages/ ViewDetails.aspx?src=IND&mtdsg_no=IV-11&chapter=4&lang=en.

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• Education is accessible to people with disabilities in their community. • A reasonable accommodation is provided according to specific requirements. • Individual support measures are provided to facilitate effective education. • Appropriate measures are taken to facilitate the learning of Braille, alternative script, augmented modes and sign language. The agenda of disability education also became a part of intellectual property discourse as stringent IP rules hindered the production of works designed to benefit blind, visually impaired and otherwise print disabled people. The hindrance was removed with adopting the Marrakesh Treaty on 27 June 2013. It sets a range of limitations and exceptions to the copyright rules. This exception thus permits the reproduction and distribution of published works in formats accessible to disabled persons. Disability has become central to the development agenda adopted by the United Nations member states in September 2015, more commonly known as the 2030 Agenda for Sustainable Development. The agenda has a set of 17 goals known as Sustainable Development Goals (SDGs). The agenda has made 11 explicit references to disability, and goal 4 provides more specifically for ‘Quality Education’ for all, which requires the implementation of Article 24, CRPD in its complete sense. Thus, it has become significant for states to provide inclusive education progressively to fulfil their Agenda of sustainable development by 2030.

National Framework The Constitution of India, 1950 (the Constitution), included the right to education as a directive principle of state policy under Article 45 until it was amended in 2002. Before the amendment, it read as ‘state shall endeavour to provide… free and compulsory education for all children until the age of fourteen years.’3 However, the Supreme Court in ‘Mohini Jain v. the State of Karnataka’ (1992 AIR 1858) and ‘Unni Krishnan v. State of Andhra Pradesh’ [(1993) 1 SCC 645] elevated its status to 3 After the Eighty Sixth Constitutional Amendment, 2002, it reads as-

Article 45—Provision for early childhood care and education to children below the age of six years—The State shall endeavour to provide early childhood care and education for all children until they complete the age of six years.

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a fundamental right under Chapter III. Subsequently, the Constitution (Eighty-Sixth Amendment) Act was passed in December 2002, which inserted Article 21-A in Part III of the Constitution by which the right to education became a fundamental right under Article 21 dealing with the right to life personal liberty.

Legislative Framework The Right of Children to Free and Compulsory Education Act, 2009 (RTE Act) was the enabling legislation to provide for the fundamental right under Article 21-A. Section 3 of the Act guaranteed that ‘every child of age six to fourteen’ shall have a right to free and compulsory education. For children with disabilities, the Act provided that such children will pursue education by the provisions laid down in the Persons with Disabilities (Equal Opportunities of Rights and Full Participation) Act, 1995 (PWD Act). The Republic of India (India) ratified the CRPD on 1 October 2007. However, a national legislative framework concerning the rights of persons with disabilities has been in existence since 1995 with the PWD Act’s enactment. The act provided for the right to education under Section 26. However, the legislation is flawed, among others, in two respects. Firstly, the definition of ‘a person with a disability’ under Section 2(t) as “[…] a person suffering from not less than forty per cent of disability […]” followed the medical model, and it was thus exclusionary as opposed to the inclusive definition under the CRPD. Secondly, the aim of the right to education provided under the PWD Act, 1995 was integration and not inclusion.4 Since the existing legal framework did not comply with international law, the PWD Act, 1995 was repealed, and the Right of Persons with Disabilities Act, 2016 (RPWD Act) was enacted to fulfil the obligations under the CRPD. The RPWD Act provides for an inclusive definition of persons with disability along the lines of CRPD.5 It also

4 Section 26(b), the appropriate governments and the local authorities shall “endeavour to promote the integration of students with disabilities in the normal schools,” The PWD Act, 1995. 5 Section 2(s), ‘person with disability’ means a person with long-term physical, mental, intellectual or sensory impairment which, in interaction with barriers, hinders his full and effective participation in society equally with others, The RPWD Act, 2016.

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provides for ‘inclusive education’6 of persons with disability. Section 16 provides that all educational institutions funded or recognized by the government have to provide inclusive education, for which they shall:1. admit children with disability without discrimination 2. make buildings accessible 3. provide reasonable accommodation specific to individual requirement 4. ensure that education is imparted in appropriate languages for persons who are blind and deaf 5. detect learning disabilities and take measures to overcome them 6. provide transportation facilities monitor their participation and progress. The RPWD Act also provides for reservations in higher educational institutions. Section 32 states that all government institutions of higher education or institutions receiving aid from the Government shall reserve not less than 5% seats for persons with benchmark disability. Besides the PWD Act, the Rehabilitation Council of India Act, 1992 (RCI Act) was enacted to set up a statutory organization, the Rehabilitation Council of India (RCI). It was mandated to regulate and monitor professionals and personnel’s training and promote research in rehabilitation of persons with disabilities and special education. Further, the National Trust for the Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation and Multiple Disabilities Act, 1999 (The National Trust Act, 1999) was enacted to set up a statutory body mandated to ‘enable and empower persons with disabilities to live as independently and as fully as possible within and as close to their community to which they belong.’

Policy Framework The policy framework in India has witnessed a similar transition from integrated to inclusive education. The National Policy on Education, 1986, provided for special schools for severely handicapped children. The education of children with mild disabilities was only provided for when it 6 Section 2(m), ‘inclusive education’ means a system of education wherein students with and without disability learn together and the system of teaching and learning is suitably adapted to meet the learning needs of different types of students with disabilities, The RPWD Act, 2016.

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was feasible. It focused more on vocational training for the disabled and ensured that adequate arrangements were made in this regard. The goal of inclusive education was focused more on the National Policy for Persons with Disabilities, 2006. It recognizes such persons as a viable resource for the nation and seeks to create an environment where equal opportunities are provided to facilitate their full participation in society. The policy recognizes children with disabilities as the most vulnerable group who require special attention. It seeks to ensure inclusive and effective access to education and specialized rehabilitative services for children. A barrierfree environment conducive to the above goal is also the subject matter of that policy. Inclusive education is now part of the planned goal of inclusive development. The 12th five-year plan for 2012–2017 has provided for a scheme of ‘Inclusive Education for Disabled at Secondary Stage’ under Rastriya Madhyamik Shiksha Abhiyan. It also subsumed all ongoing initiatives to include persons with disabilities under an umbrella initiative called ‘Inclusion of Persons with Disabilities in Higher Education.’ This initiative shall provide incentives and required support to students with disabilities, give higher education institutions the support and policy direction to make them more disability-friendly, use a more sensitive curriculum to disability issues and specify minimum standards for physical accessibility person with a disability.

Gap in Dejure Position and Defacto Reality The aspirational goals of the CRPD of ‘inclusive education,’ reflected in India’s national framework through RPWD and policies discussed above, have failed to translate into reality. It has thus remained a distant goal for disabled persons in India. The education status of the disabled population has remained very low, and the schools have failed to fulfil this legislative goal of inclusive education. This dismal situation is reflected in the poor employment status.

Current Education Status of the Disabled Population The correlation for both children and adults between low educational outcomes and having a disability is stronger than the correlation between low educational outcomes and other characteristics such as gender, rural,

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residence and low economic status (WHO 2011, p. 206). In India, out of 121 crore people, 2.68 crore persons are disabled (Census of India 2011). This is an underestimate for various reasons, and NGOs working at the grass-root level believe that the actual magnitude is much higher. Census 2011 showed that only 61% of disabled children are attending educational institutions. Out of them, 57% are male. The literacy rate of the disabled population is shallow (55%) compared to the total population (74.4%). The main reason for the low literacy rate of persons with disabilities is education remaining inaccessible for children with disabilities and even more for children with multiple disabilities and intellectual disabilities. 54% of children with multiple disabilities and 50% of children with mental illness have never attended any educational institution (Census of India 2011). The present enrolment status of intellectually disabled children shows that the education system in India remains intellectually driven. Thus, the education system’s focus is not on the potential of disabled children but their limitations (National Disability Network 2019). The highest number of disabled people are in the age group of 10– 19 years (46.2 lakhs), followed by the age group of 20–29 years (41.9 lakhs) and 30–39 years (36.4 lakhs) (Census of India 2011). Education is thus very essential to exploit this demographic dividend, even in the disabled population. However, it is a matter of deep regret that only 74,317 persons with disabilities are enrolled in higher education (All India Survey on Higher Education, 2017–2018, p. 54). Higher education is far more inaccessible as compared to primary education. The dropout rate in the disabled population rises significantly as education rises. Among the total disabled persons, 45% are illiterates, 13% have completed matric/secondary education, and only 5% are graduates (Census of India 2011). The poor educational statistics is reflected in the employment status of the disabled population. The Census of 2011 has highlighted that out of the total workable disabled population, only one-third are working. Those who are working are also majorly working either as agricultural labourers (31%), cultivators (23%) and in household industries (4%). The most unfortunate is the situation of disabled children. One in every 25 disabled children in the age group of 0–14 years is working.

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Inclusive Education: A Distant Goal in Reality The CRPD has shifted the focus from integrated education, focusing merely on providing access to mainstream education to inclusive education. The latter focuses on reforming the education system through a diversified curriculum, reasonable accommodation, physical accessibility and change in attitude according to the different needs of children with disability. Such an environment ensures that a child with a disability develops to his maximum potential. The RPWD Act attempted to follow the CRPD and made inclusive education a legislative reality. The legislative transition from integrated to inclusive education under RPWD does not reflect the practical reality in India. According to the Parallel Report submitted to the Committee on Rights of Persons with Disabilities by the National Disability Network, only 1% of total teachers in India have received inclusive education training. Braille books are available only in 7% of the total schools in India. The percentage of schools that adhere to inclusive education is dismally low. Primary Schools Upper Primary Schools Secondary Schools Higher Secondary Total

60% 28% 7% 5% 21%

The percentage of schools providing physical accessibility to the disabled population, a legal mandate under the RPWD Act for fulfilling the goal of inclusive education, is almost negligible. Most schools provide ramps in the name of physical accessibility. The situation of other facilities is discussed below: Schools having handrails Schools having disability adaptable labs Schools having disability adaptable lavatory

10% 4% 8%

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Current Challenges to the Goal of Inclusive Education The gap between the dejure and defacto position analysed in the previous section calls for an analysis of the current situation to look for its reasons. This section shall explore the reasons that stand as a challenge to the unfortunate situation.

Constitutional Exclusion of PWDs Under A.15 & A. 16 Article 15 of the Constitution of India ‘prohibits discrimination on the grounds of religion, race, caste, sex or place of birth.’ Disability is not included as a ground for discrimination under Article 15. Even when providing for non-discrimination regarding access to public places like ‘shops, public restaurants, hotels and palaces of public entertainment,’ disability is excluded. Further, Article 15(4) and Article 16(4) of the Constitution have enabled the state and central government to reserve seats for educationally and socially backward classes. J. Chinappa J. Reddy in ‘K.C. Vasanth Kumar & Anr. v. State of Karnataka’ (AIR 1985 SC 1495) has concluded that the factors determining socially backward classes are poverty, caste, occupation and habitation. J. Venkataramiah in the same case has emphasized on caste as the only factor of social backwardness. Thus, the factor of disability has been excluded from the indicators of social backwardness. Though the RPWD Act has introduced the reservation of 5% for persons with benchmark disability, it cannot be challenged if it is not commensurate with the proportion of disabled persons in the total population.

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Exclusionary Approach Under the RPWD Act The RPWD Act is flawed in its approach to inclusive education. It has classified the disability into three types:Person with benchmark disability7 —a person with not less than 40% of disability. Person with disability8 —physical, mental, intellectual and sensory impairment which hinders the full participation in society. Person with disability with high support needs9 —person with benchmark disability certified under Sect. 58.10 While the definition of ‘person with disability’ is inclusive and is thus in compliance with CRPD, the definition of ‘person with benchmark disability’ still follows the medical model of disability and is exclusionary in its approach. The same exclusionary approach is followed regarding inclusive education as Section 16 provides that the appropriate government ‘shall endeavour’ to provide inclusive education for children with disability. The phrase ‘shall endeavour’ leaves a legal scope by which the government shall take steps through schemes and policies for inclusive education but is not legally obliged to ensure that such a goal is fulfilled. Further, the fundamental right of education guaranteed under Article 21-A is only provided to persons with benchmark disabilities. The RTE Act, 2002 provides that concerning children with disability, the provisions

7 Section 2(r), the RPWD Act, 2016. 8 Section 2(s), the RPWD Act, 2016. 9 Section 2(t), the RPWD Act, 2016. 10 (1) Any person with specified disability, may apply, in such manner as may be

prescribed by the Central Government, to a certifying authority having jurisdiction, for issuing of a certificate of disability. (2) On receipt of an application under sub-section (1), the certifying authority shall assess the disability of the concerned person in accordance with relevant guidelines notified under section 56, and shall, after such assessment, as the case may be— (a) issue a certificate of disability to such person, in such form as may be prescribed by the Central Government; (b) inform him in writing that he has no specified disability. (3) The certificate of disability issued under this section shall be valid across the country.

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of PWD Act (now, RPWD Act) shall be followed. However, Section 31 of the RPWD provides that ‘every child with benchmark disability between the age of six and fourteen shall have the right to education.’ Thus, this section excludes all children who have a disability of less than 40%. This is in clear violation of their fundamental right to education. The same exclusionary approach is followed while providing for reservations in higher education as the same is only provided for persons with benchmark disability. This provision has ensured that the same exclusionary approach is contrary to the inclusive goal of CRPD. The RPWD Act was enacted to ensure greater compliance with CRPD as the PWD act followed medical model of disability. While the RPWD Act has included an inclusive definition of persons with disability, the provision for right to education follows the same exclusionary approach as was followed in the PWD Act. It, therefore, stands as a legislative barrier to the goal of inclusive education.

Poor Implementation of the RPWD Act The RPWD Act under Section 66 provided that every state shall constitute a State Advisory Board. These bodies are crucial for the effective implementation of RPWD Act. They have been mandated under Section 71 to advise the State Government on policies and legislation, develop state policies, take up the cause for PWDs with the authorities, recommend steps to increase accessibility and monitor and evaluate the impact of the national legislative framework. However, only 50% of states in India have notified the constitution of such boards. For states that have notified, the notification is not fully compliant with the statutory requirements of membership under the RPWD Act (DRIF, NCPEDP, NCRPD 2018, p. 7). The implementation at the District level is even poorer as only four states11 have constituted District Committees (DRIF, NCPEDP, NCRPD 2018). Further, under Section 88(1) of the RPWD, each state government shall constitute a State fund. As of December 2018, two years since the notification of the Act, only five state governments (Himachal Pradesh, Madhya Pradesh, Odisha, Tamil Nadu, Uttarakhand) have constituted such a fund. The amount allocated under such funds is also meagre.

11 Chandigarh, Madhya Pradesh, Meghalaya, Odisha.

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Odisha has only allocated 2 crores; Himachal Pradesh has allocated five crores; and Tamil Nadu has allocated ten crores. Madhya Pradesh and Uttarakhand have notified the constitution of State fund but have not allocated any amount to it (DRIF, NCPEDP, NCRPD 2018). Section 7 of RPWD provides for the appointment of a Nodal Officer in the District Education Office. He is mandated to deal with all the matters relating to the admission of children with disabilities and providing them with the facilities they need in school. The provision is crucial for providing an inclusive education as such an appointment is crucial for delivering services suitable to the diversified need of disabled students. However, only four states12 have appointed a nodal officer (DRIF, NCPEDP, NCRPD 2018). Avoidable confusion over dual control Education of persons with disabilities is under the control of two ministries, creating administrative confusion. While special schools come under the Ministry of Social Justice and Empowerment (MSJE), mainstream education is the Ministry of Human Resource and Development (MHRD) responsibility. The responsibility of inclusive education, which is the culmination of both mainstream and special education thus, comes under the sphere of both. The confusion as to administrative control creates serious problems. A single focused machinery can only remove this barrier to work on inclusive education. The biggest challenge this poses is the lack of good data. None of the ministries keeps exclusive data concerning inclusive education. Such absence can lead to further policy paralysis concerning inclusive education, pushing this goal even further. Further, for such education to be effective, coordination is required between MHRD and MSJE and other welfare ministries for women, children, and the health sector. There is no such inter-ministerial coordination mechanism in place. The absence of a proper regulatory framework results in non-enforcement of accountability for non-implementation of any inclusive education programme.

Statistical Crisis of Data The only source of data on disability in India is the Census of 2011. However, the census used the exclusionary definition of disability

12 Delhi, Madhya Pradesh, Meghalaya (8 out of 11 districts) and Odisha.

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provided in the PWD Act. This Act only recognized seven types of disabilities, later increased to 21 under the RPWD Act, 2016. Thus, the census doesn’t present an accurate picture of the situation of the disabled population in India. If taken according to the new and comprehensive definition provided under the RPWD, the actual numbers might be worse. There is no information on the amount spent on inclusive education. As mainstream education is the responsibility of the Ministry of Human Resource and Development (MHRD) and special education for the disabled is under the Ministry of Social Justice and Empowerment (MSJE), any information explicitly about inclusive education is unavailable. There is no report either by the MHRD of the learning outcomes of children with disability in mainstream education, or by the MSJE of the impact of special education. A similar lack of information is also witnessed in tertiary education. The University Grants Commission (UGC) started a scheme in 2008, the Higher Education for Persons with Special Needs, which provided enabling units, physical accessibility, and special equipment. However, annual reports of UGC mention no information regarding the number of universities that have been provided grants under this scheme (National Disability Network 2019, p. 29). Further, while an analysis can be drawn from the Census of India about the barrier disability creates in achieving education for a person, similar data is not available for minorities. There is no reflection in any survey on how disability creates a further impediment in securing the right to education for the already marginalized communities of India.

Lack of Resources One of the major hurdles in making inclusive education possible in India is the lack of resources. A number of researchers13 have pointed out that while inclusive education was the focus of several schemes post Sixth Five Year Plan, constraints of resources was a major barrier as such 13 Alur, M. (2002). Introduction: The social construct of disability. In S. Hearty & M. Alur (Eds.), Education and children with special needs (pp. 21–22). New Delhi: Sage; Bhatnagar, N., & Das, A. K. (2013). Attitudes of secondary school teachers towards inclusive education in New Delhi, India. Journal of Research in Special Educational Needs; Das, A. K., Gichuru, M., & Singh, A. (2013). Implementing inclusive education in Delhi, India: Regular school teachers’ preferences for professional development delivery modes. Professional Development in Education, 39(5), 698–711.

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schemes couldn’t be implemented successfully for this reason. For inclusive education to be completed, India needs to spend Rs. 3000 on every child every year and Rs. 1000 on teacher training and learning material for every child, every year.14 While, there is no data to analyse if such requirement is met, the funding for education of disability has remained lower than even the targeted continuously for 2015–2016, 2016–2017 and 2017–2018.15 No information could be gathered from the analysis of budget expenditure on education of MHRD as education for disability is the responsibility of MSJE. Thus, the reports of MHRD only provide segregated data on elementary, secondary, adult education, language development, university education, technical education and general education.16

Lack of Trained Workforce The parallel report discussed above disclosed that only 1% teachers in India are trained in inclusive education. Thus, a majority of regular school teachers have not received adequate training in inclusive education which makes it unfair to demand such services from them. Further, the available research has concluded that while teachers in India philosophically support the idea of inclusive education, they strongly contend its ability of successful implementation.17 Such attitude also causes hindrance in their adaptability to the needs of disabled children.

Subsistence Over Education High incidence of poverty has also posed a difficult challenge to inclusive education in India. The World Bank studies reveal that one in every

14 Jangira N.K. (2002), Special Education needs of children and young adults: An unfinished agenda. In S. Hegarty & M. Alur (Eds) Education and children with special needs (pp. 67–76). New Delhi; Sage. 15 Ministry of Social Justice and Empowerment, Annual Report, 2017–2018. 16 Ministry of Human Resource and Development, Analysis of Budgeted Expenditure

on Education, 2013–2014 to 2015–2016, Department of Higher Education, Planning, Monitoring and Statistics Bureau, New Delhi. 17 Jha, M. M. (2002). School without walls: Inclusive education for all. Oxford: Heinemann; Das, A. K., Kuyini, A. B., & Desai, I. P. (2013). Inclusive education in India: Are the teachers prepared? International Journal of Special Education, 28(1), 27–36.

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five persons in India is poor, which means around 270 million Indians are poor. While the Census of India has not segregated the poverty data for disabled population, G.N, Karna in his book18 reveals that the large number of persons with disabilities live in families where income is significantly low. Thus, the majority of these children become part of child labour force out of compulsion. Subsistence takes precedence over education. India received 250 recommendations during its third review of the Universal Periodic Review (UPR) mechanism of the Human Rights Council. It received 12 recommendations regarding persons with disabilities. It has accepted 11 of these recommendations except one of Guatemala which recommended India to ratify the Optional Protocol for the Convention on the Rights of Persons with Disabilities (Noted). A list of other accepted recommendations regarding persons with disabilities:Honduras—Adopt a comprehensive national plan on inclusion in order to combat persisting inequality, paying particular attention to persons in vulnerable situations such as women, children, persons with disabilities and minorities (Accepted). Germany—Implement a human rights-based holistic approach to ensure access to adequate housing as well as to adequate water and sanitation, including for marginalized groups, Dalits, scheduled castes, the homeless, the landless, scheduled tribes, religious and ethnic minorities, persons with disabilities, and women (Accepted). Lao—Continue efforts to ensure that the universal healthcare scheme covers disadvantageous groups, including persons with disabilities and persons living in remote rural areas, who will face obstacles in accessing basic healthcare services (Accepted). Mexico—Increase investment in universal, mandatory and free education by giving priority to measures to eradicate discrimination and exclusion that affect girls, children with disabilities, Dalits and marginalized groups (Accepted).

18 Karna, G. N. (1999). United nations and rights of disabled persons: A study in Indian perspective. New Delhi: A.P.H. Publishing Corporation.

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Thailand—Establish a monitoring mechanism to oversee the implementation of Accessible India campaign to prevent exploitation and protect persons with disabilities (Noted). Libya—Continue efforts to promote opportunities for persons with disabilities to benefit from development gains (Accepted). Oman—Continue efforts aimed at improving the access of persons with disabilities to education, vocational training and health care (Accepted). Qatar—Expand the integration of persons with disabilities into programmes and plans for sustainable development (Accepted). China—Take holistic measures to protect the rights of persons with disabilities, the elderly and vulnerable groups (Accepted). Columbia—Continue policies aimed at ensuring the enjoyment of the rights and freedoms of persons with disabilities and access to resources and services under the Accessible India Campaign (Accepted). Australia—Ensure that girls with disabilities are afforded the same right to education as all children (Accepted).

References Census. (2011). Registrar General of India, Ministry of Home Affairs, Government of India, Available at: http://www.censusindia.gov National Disability Network. (2019). Parallel Report of India on the Convention on Rights of Persons with Disabilities. All India Survey on Higher Education. (2017–2018). Ministry of Human Resource Development, Department of Higher Education. DRIF, NCPEDP, NCRPD. (2018). Two Years of the Rights of Persons with Disabilities (RPWD) Act, 2016—Status of Implementation in the States and UTs of India. World Health Organisation. (2011). World Report on Disability 2011, see Preface, p. 11.

CHAPTER 12

Development of the Old-Age Security System for Building a Well-Off Society Wu Ying

Origin of the Issue When Deng Xiaoping met with Japanese Prime Minister Masayoshi Ohira in 1979, he first put forward the concept of “Xiao Kang (a well-off society)” according to China’s actual development. In 1982, the 12th National Congress of the Communist Party of China put forward that “a well-off society” should be the whole Party’s strategic goal and the whole people by the end of the twentieth century, and the term “welloff society” was officially established. In the late 1970s, China saw a weak economic foundation, unbalanced development, various defective systems, and people without enough food and clothing. The concept of a “well-off society” set a practical goal for China at that time. During the 40 years’ struggle, we have developed from “a well-off society with adequate food and clothing” to “a generally well-off society” in the process of steadily advancing the well-off society construction, and then

W. Ying (B) National Institute of Social Development, CASS, Beijing, China e-mail: [email protected]

© The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2022 K. Nakray et al. (eds.), Social and Economic Transitions in China and India, https://doi.org/10.1007/978-981-19-6124-3_12

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to a critical period of building “a well-off society in all respects” after the 18th National Congress. As an essential mechanism of redistribution, social security is the fundamental guarantee to ensure that all people share the fruits of economic and social development, and it is also the effective institutional support to achieve a balanced, coordinated, and sustainable well-off society in all respects. It has a primary position in building a well-off society in all respects. In view of the increasing aging of the Chinese population and the rising demand for old-age care, correctly solving the social problems brought by aging and meeting the various needs of the elderly have become an essential dimension of China’s long-term stability and people’s well-being. Therefore, the construction and improvement of the old-age security system is a cornerstone of social security, influencing the building of a well-off society in all respects. Looking back on building a well-off society, we can find that the oldage security system has gradually been built in the process of enriching and perfecting the concept and practice of building a well-off society. After the founding of the People’s Republic of China, a social security system covering the urban state-owned departments was quickly established, and the Labor Insurance Regulations of the People’s Republic of China was promulgated in 1951. However, its coverage was limited, and with systemic lapses. With the strategic goals of reform and opening and building a well-off society, the policy focus of economic and social development changed, and so did the original structure of supply and demand for old-age security. In building a well-off society, this study analyzes and summarizes the development characteristics and achievements of the old-age security system and puts forward the key points of the old-age security construction in the new era because of the existing problems. This paper reviews the start, development, and perfection of the old-age security system in the past 40 years, reviews the achievements of the old-age security combined with relevant policy documents, analyzes the current challenges of old-age security, and puts forward the prospect of China’s old-age security system after finishing building the well-off society in all respects.

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Old-Age Security as a Key Part in Building a Well-Off Society The old-age security system in urban and rural areas is always an essential part of building a well-off society in all respects due to the pressure and challenge of providing for the aged brought by the change of population structure, the long-term lag of the rural old-age service, and the structural change of the urban old-age supply system brought by the economic and social reform. First, the population’s aging and the resulting needs for old-age security are the challenges China must face when building a well-off society. In the 1980s, when the concept of well-off society is put forward, the population aged 65 and above was about 5%. With the slow growth rate of the aged population and more social development potential brought by the high birth rate, China’s population structure was still at the youth stage, so the population structure had not yet brought about the urgent need old-age security. From 1990 to 2000, with the elderly aged 65 and above increasing from 5.6 to 7.0%, China became an aging society. The rapidly growing elderly population and the sharply declining birth rate reduced the social development potential, so the problem of providing for the aged became increasingly apparent. After 2000, China’s population aged more rapidly. In 2020, the elderly aged 65 and above rose to 13.5%, and the issue of elderly care became acute (see Fig. 12.1). In fact, from the 1980s to the mid-twenty-first century, China’s population aging has been significantly faster than economic development (Mo, 2009), and the uncoordinated structure of the aging population with the existing socio-economic system and policies (Peng & Hu, 2011) has dramatically affected China’s economic development. How to deal with the aging of the population and develop the old-age security system are significant challenges China must face in building a well-off society. Secondly, the long-term lag of rural old-age security makes it necessary to value the construction and improvement of the rural old-age security system in a well-off society to pursue shared prosperity and overall development. In 1956, the Five-Provision System, which was implemented through the Model Regulations of Advanced Rural Cooperatives in 1956, marks the rural old-age care system’s beginning. It mainly undertook helping the widowed elderly in rural areas and was organized and implemented by the people’s commune. However, with the disintegration of the people’s commune, the reform of the household registration system

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20 0

0 1982

1990

1995

2000

2005

2010

2015

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Population aged 65 and over (million) Percentage of population aged 65 and over(%)

Fig. 12.1 Scale and proportion of population aged over 65 in China from 1982 to 2020 (Source 2021 China Statistical Yearbook)

accelerated the flow of rural young and middle-aged laborers to cities, the reform of taxes and fees emptied the guarantee capacity of the village collective economic organizations, and the government undertook several adjustments to five-provision funds. The rural five-provision system was once paused, shrunk, and recovered and was finally determined as the assistance to people in extreme difficulty (Zheng, 2009; Chang, 2016). In rural areas, most older adults, except widowed ones, rely on familybased care and rural collective welfare for elderly care. However, with the function declining of rural family-based care and the dual challenges of “getting old before getting rich” and “getting old before getting ready,” China’s rural areas are faced with a series of elderly-care risks such as poverty risk, health risk, care risk, institutional risk, and social security risk (Lu & Zhang, 2018). In a well-off society in all respects, there must be a sustainable multi-tiered social security system that covers the entire population in urban and rural areas, with clearly defined rights and responsibilities, so it is imperative to establish and improve the rural oldage security system. From the new rural cooperative medical system in 2002 to the rural minimum living security system in 2007, and the new rural social old-age insurance system in 2009, the rural social security

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system has gradually been established and developed to build a well-off society. However, although the new rural social pension insurance has helped the rural elderly with their economic independence to get rid of the excessive dependence on their children, there are still some problems in the implementation, such as difficulties in handling and management services, fund management, weak awareness of insurance, and information asymmetry (Deng & Xu, 2010; Chang et al., 2014). Under the trend of integrated social security and equalized essential public services between urban and rural areas, the rural old-age security system still needs to be continuously improved with the complete construction of a well-off society. Finally, the old-age security supply’s structural changes in the economic and social reform also pressure the urban old-age security system reform. Before the reform and opening up, the financial crisis of the urban social security system appeared. The expansion of social security coverage made the government overburdened. The original “state and enterprise insurance” was changed to simply “enterprise insurance.” The urban social security system got into a predicament (Zheng, 2009). The old-age security based entirely on “work-unit,” which is a grass-roots organization, relies too much on the unit where the laborer is located, and the income level of individuals depends entirely on the work-unit, resulting in significant differences in income (Wu, 2017: 795). This problem was not evident in the early stage of building a well-off society. However, with the increasing number of older adults, this old-age security model that relies on the work-unit faces more pressure. At the same time, with the advancement of the reform of the work-unit system, the transfer of property rights of state-owned enterprises involved the change of labor contracts and the connection of social insurance relations among employees, and the work-unit no longer provided comprehensive shelter for social security and welfare for employees as before. However, the reform of the old-age security system in public institutions, which started under the pressure of financial pressure and fairness, needed to face multiple goals, such as ensuring personal living standards, ensuring the fairness of reform, and improving the supporting capacity of the old-age insurance fund (Gao, 2010). Therefore, in building a well-off society, urban old-age security constantly faces new problems and challenges, such as solving the transformation from a work-unit retirement system to social pooling system, adjusting the “dual-track system” of retirement, and exploring occupational annuities, and faces continuous reform pressure.

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At the beginning of the construction of a well-off society, how to break the predicament of the original system and gradually develop an old-age care system suitable for the national conditions became a critical link of ensuring social development and stabilizing people’s livelihood. In the “the five-pronged approach” and in building a well-off society in all respects, the modernization of the old-age security system is a vital part of social construction and an essential indicator of building a well-off society all respects.

Development of the Old-Age Security System in Building a Well-Off Society in All Respects Getting Started: Establishment of the Old-Age Security System After the Gang of Four’s downfall, the Third Plenary Session of the CPC’s 11th Central Committee decided to “shift focus of the whole Party’s work to economic construction” to realize continuous GDP growth and steady increase in the economy, it was imperative to continue to adhere to the four cardinal principles and develop productive social forces.1 The 13th National Congress in 1987 further put forward the Three-Step Development Strategy to realize modernization. By the 1990s, people’s lives had changed from destitution to subsistence. Therefore, the period from 1979 to 1990 can be regarded as “a well-off society with adequate food and clothing,” when the focus of national work was mainly to construct the economic system and improve economic benefits. From the demand for old-age security, at the end of 1990, the population aged 65 and above in China was only 5.6%. Therefore, China’s population structure had not yet aged, and China-focused more on productivity and economic construction. The construction goal of oldage security mainly focused on making up the old security system’s defects and establishing an old-age security system suitable for China’s national conditions. The old-age security system was in the initial stage of construction. On the macro-policy of old-age security, the 6th Five-Year Plan put forward that “several nursing homes and rest homes should be developed

1 Writing group of Transcript of Deng Xiaoping’s Speeches: Transcript of Deng Xiaoping’s Speeches (Three Volumes), Red Flag Press, 2018 edition, Page 9.

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appropriately, and workers and cadres should be arranged for recuperation and rest by stages.”2 The 7th Five-Year Plan put forward that “to establish and improve the social security system, we should proceed from China’s current national conditions and national strength, and the scope, projects and standards of implementation should not exceed the affordability of enterprises and individuals. The standards of retirement pensions for employees of enterprises and institutions should be different according to the characteristics of different economic situations.” During the 7th Five-Year Plan period, “the embryonic form of social security system can be established first, and then gradually improved with the development of the economy.”3 At this stage, China’s old-age security’s development achievements were mainly in the formulation of retirement policies and the state’s pilot reforms in some places. The Interim Measures of the State Council on Retirement and Resignation of Workers promulgated in 1978 stipulated retirement conditions, retirement fees and other standards. In 1984, aiming at the polarization in enterprise pension, a pilot project of social pooling of state-owned enterprises’ retirement expenses was carried out in Sichuan, Guangdong, Jiangsu, and Liaoning. In 1986, the Interim Provisions on the Implementation of Labor Contract System in State-owned Enterprises put forward the labor contract system for some new employees, and their pension expenses were provided by the social pooling (Wu, 2017: 797). County-level old-age insurance planning began to be widely carried out all over the country. In the same year, rural oldage insurance began to be explored, to establish an unprecedented social security system, protect disadvantaged groups and maintaining social stability (Wu, 2018). In the initial stage of China’s old-age security system, the state formulated and promulgated a series of relevant policies, establishing the old-age security system as the primary leading builder. In 1989, the number of people covered by the old-age insurance for urban workers 2 Office of National People’s Congress Financial and Economic Committee: Compilation of Important Documents of the Five-Year Plans for National Economic and Social Development since the Founding of the People’s Republic of China, Beijing: China Democracy and Legal Publishing House, 2008 edition, Page 429. 3 Office of National People’s Congress Financial and Economic Committee: Compilation of Important Documents of the Five-Year Plans for National Economic and Social Development since the Founding of the People’s Republic of China, Beijing: China Democracy and Legal Publishing House, 2008 edition, Page 313.

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in China was 57.103 million, and the pension expenditure was 11.88 billion yuan. The coverage of the old-age security system was simple and small. Most of it was to ensure people’s basic living needs, and a diversified social security system had not yet been established. At this stage, it was mainly the pay-as-you-go system based on benefits, namely the intergenerational transfer payment that the workers of the previous generation were supported by the contributions of those of the current generation. Stable Growth: Developing the Old-Age Security System After the goal of subsistence was achieved, the Outline of the Ten-Year Plan and the 8th Five-Year Plan for National Economic and Social Development adopted in March 1991 at the Fourth Session of the Seventh National People’s Congress gave a new expression to a well-off life: “What we call a well-off life adapts to the development level of China’s productive forces and embody the basic principles of socialism. The improvement of people’s life includes both the improvement of material life and the enrichment of spiritual life, not only the improvement of residents’ consumption level but also of their social welfare and working environment.”4 The connotation of a well-off society was developed, marking the second stage of a generally well-off society. During this period, the emphasis was on the establishment of the economic system and the improvement and enhancement of various developments. Through ten years of reform and opening, China’s economic construction went out of the trough and gradually became stable. With the economic and social development, the construction of oldage security entered a stage of stable development and improvement. In terms of the macro-policy, the 8th Five-Year Plan emphasized “establishing and improving the systems of old-age insurance and unemployment insurance, gradually improving the social security system, gradually establishing an old-age insurance system among all kinds of urban workers and self-employees, expanding the coverage of unemployment insurance, and adopting the policy of active guidance according to different conditions and possibilities in different places, and gradually establishing 4 Office of National People’s Congress Financial and Economic Committee: Compilation of Important Documents of the Five-Year Plans for National Economic and Social Development since the Founding of the People’s Republic of China, Beijing: China Democracy and Legal Publishing House, 2008 edition, Page 213.

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different forms of old-age security systems in rural areas.”5 The 9th Five-Year Plan identified the development direction of old-age security, emphasizing “vigorously developing the social security system, speeding up the reform of systems of old-age, unemployment and medical insurance, and initially forming a multi-level social security system combining social insurance, social relief, social welfare, special care and placement, social mutual assistance and personal savings accumulation guarantee.”6 The achievements in the modernization of the old-age security system are mainly in improving the system and the expansion of coverage. On the one hand, the old-age insurance system has been improved. China set the reform goal of “combining contributions from various sources in society with personal accounts” in 1993 and determined the plan of transition from a pay-as-you-go system to the semi-accumulation system of “combining social pooling with individual pension accounts” in 1997 (Wu, 2018). In 1999, the No. 37 Document of the Ministry of Labor and Social Welfare, Notice on Issues Related to the Establishment of Provincial Overall Planning System of Basic Old-Age Insurance, pointed out that: “It is necessary further to improve system of provincial-level management of old-age insurance funds and enhance the ability of fund adjustment. It is necessary to formulate measures for the management and use of provincial adjustment funds and improve management and use transparency. The basic pension for retirees must be paid in full and on time by provincial social service institutions.”7 The promulgation of this policy improved the fairness of old-age insurance, safeguarded the rights and interests of the insured, and reflected the state’s efforts to ensure the smooth operation of the old-age security system during this period. The Decision of the Central Committee of the Communist Party of China on Several 5 Office of National People’s Congress Financial and Economic Committee: Compilation of Important Documents of the Five-Year Plans for National Economic and Social Development since the Founding of the People’s Republic of China, Beijing: China Democracy and Legal Publishing House, 2008 edition, Page 225. 6 Office of National People’s Congress Financial and Economic Committee: Compilation of Important Documents of the Five-Year Plans for National Economic and Social Development since the Founding of the People’s Republic of China, Beijing: China Democracy and Legal Publishing House, 2008 edition, Page 169. 7 LSBF [1997] No. 37: Notice on Issues Related to the Establishment of Provincial Overall Planning System of Basic Old-Age Insurance, the website of the Ministry of Human Resources and Social Security of the People’s Republic of China, http://www.mohrss.gov. cn/gkml/zcfg/gfxwj/201407/t20140717_136211.html, December 30, 1992.

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Table 12.1 Basic old-age insurance for urban workers from 1989 to 2000

People covered (million) Total income (billion yuan) Total expenditure (billion yuan)

1989

1992

1995

1998

2000

57.103 14.67 11.88

102 31.68 27.79

109.79 97.07 84.73

112.03 145.9 115.16

136.18 227.8 211.5

Source National Bureau of Statistics

Issues Concerning the Establishment of Socialist Market Economic adopted at the Third Plenary Session of the 14th CPC Central Committee also proposed a multi-level social security system should be established. On the other hand, the coverage of old-age care has constantly been expanded. With the establishment and gradual improvement of the old-age security system, the number of people covered by the old-age insurance for urban workers increased from 57.103 million in 1989 to 136.18 million in 2000, and the total pension expenditure also increased from 11.88 billion yuan to 211.5 billion yuan (see Table 12.1). Unlike the emphasis on system establishment in the previous period, the old-age security in this period embodied social justice and had an incentive mechanism to encourage people to work hard, which was conducive to long-term economic development (Wu, 2017: 797). At this stage, the state actively improved the old-age security system to ensure that the system was fairer and more transparent to safeguard the rights and interests of the insured. However, the old-age security system in this period still has some problems, such as being fragmented, imperfectly developed and the existence of urban–rural differences. How to eliminate the urban–rural differences in old-age security, improve the system and coordinate the old-age security with the whole society were unsolved problems. Gradual Perfection: Improving the Old-Age Security System The Proposal of the Central Committee of the Communist Party of China on Formulating the 10th Five-Year Plan for National Economic and Social Development in 2001 pointed out: “We have achieved the first two strategic goals of modernization. As the economy and society have developed in an all-around way, and the people, overall, achieved a well-off

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standard of living, we now begin to implement the third strategic deployment.”8 From then on, China entered the third period of building a well-off society in all respects. Building a well-off society in all respects requires a breakthrough in economic construction with a medium-to-high speed of growth and continuous improvement of people’s lives. The 19th National Congress of the Communist Party of China proposed that a well-off society in all respects should significantly enhance people’s sense of gain and establish a social security system covering urban and rural residents (Xi, 2017). In the first decade of building a well-off society in all respects, the national planning for the old-age security system still maintained the development demand of “striving for progress while maintaining stability,” to solve the remaining problems in the previous stage and pave the way for the next decade. In macro-policy, China’s economic and social development’s primary objective during the 10th Five-Year Plan period was a relatively sound social security system and substantial progress in improving the socialist market economic system. As an essential pillar of the socialist market economic system, a perfect social security system is related to the overall situation of reform, development, and stability. It is necessary to adhere to the basic old-age insurance system for urban workers that combines various sources in society with personal accounts.9 The 11th Five-Year Plan emphasized perfecting and optimizing the old-age insurance system, requiring that “the coverage of social security should be expanded, the medical coverage rate of new rural cooperatives reach over 80%, and the number of poor people continues to decrease. In terms of rural social security, we should actively establish and explore the rural old-age insurance system that is compatible with the level of rural economic development and other insurance measures, and establish a basic new rural cooperative medical system.”10 In 2006, the 8 Office of National People’s Congress Financial and Economic Committee: Compilation of Important Documents of the Five-Year Plans for National Economic and Social Development since the Founding of the People’s Republic of China, Beijing: China Democracy and Legal Publishing House, 2008 edition, Page 79. 9 Office of National People’s Congress Financial and Economic Committee: Compilation of Important Documents of the Five-Year Plans for National Economic and Social Development since the Founding of the People’s Republic of China, Beijing: China Democracy and Legal Publishing House, 2008 edition, Page 88. 10 Office of National People’s Congress Financial and Economic Committee: Compilation of Important Documents of the Five-Year Plans for National Economic and

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11th Five-Year Plan for the Development of China’s Aging Cause (2006– 2010) emphasized that we should establish a social security system for the elderly that is compatible with the economy and society and connected with other security systems, basically establish a relatively complete system of policies and regulations on aging, improve a coordinated and efficient aging work system that is compatible with the aging of population, and actively promote the infrastructure construction for the convenience of the elderly.11 The achievements of the reform of old-age security at this stage lay mainly in two aspects. First, the old-age insurance system for urban workers had been improved, and the overall plans for old-age security of urban and rural residents made. The Notice on Improving the Basic OldAge Insurance Policy for Urban Workers issued in December 2001 clarified the policy for the new situations and problems arising from the old-age insurance work, further improving urban workers’ social security system. The State Council’s Decision on Perfecting the Basic Endowment Insurance System for Enterprise Employees promulgated by the State Council in December 2005, based on drawing on the experience of the Northeast pilot project and in-depth investigation and demonstration, promoted new progress in enterprise old-age insurance. At the end of 2009, the new rural social old-age insurance was implemented. The old rural oldage insurance with “full individual contributions” was changed into a new rural old-age insurance integrating “individual contributions, collective assistance and government subsidies” (Wu, 2018). The “new rural insurance” policy is another farmer-benefiting policy made by the CPC Central Committee and the State Council after abolishing agricultural tax and implementing direct agricultural subsidy, the new rural cooperative medical system and rural minimum living allowance. It is an essential measure for the state to eliminate the urban–rural dualization, promote social equity, and improve the old-age security system (Deng & Xue, 2010). The implementation of the new rural social old-age insurance system and the improvement and promulgation of various systems have ensured the smooth modernization of the old-age insurance system and Social Development since the Founding of the People’s Republic of China, Beijing: China Democracy and Legal Publishing House, 2008 edition, Page 62. 11 QGLLWF [2006] No. 7: The 11th Five-Year Plan for the Development of China’s Aging Cause (2006–2010), http://www.china.com.cn/policy/txt/2006-12/12/ content_7493038.htm, December 12, 2006.

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Table 12.2 Basic old-age insurance for urban workers from 2000 to 2010

People covered (million) Total income (billion yuan) Total expenditure (billion yuan)

2000

2003

2006

2009

2010

136.18 227.8 211.5

155.06 368 312.2

187.66 631 489.7

235.5 1,149.1 889.4

257.07 1,342 1,055.5

Source National Bureau of Statistics

laid a solid foundation for establishing the old-age security system in the next decade. In 2010, the number of people covered by the new rural insurance was 102.768 million, and in 2011, the number increased to 326.435 million. After 2012, the new rural insurance was incorporated into the old-age insurance for urban and rural residents, which significantly improved the integration of urban and rural social security. Second, the coverage and expenditure of old-age care had increased year by year. At this stage, the number of people covered by old-age insurance for urban workers in China increased from 136.18 million in 2000 to 257.07 million in 2010, with the annual pension expenditure increasing from 211.5 billion yuan to 1055.5 billion yuan (see Table 12.2). In the second decade of building a well-off society in all respects, the social old-age security system covering urban and rural residents had been established, and the old-age security system in China had developed from “getting stable” in the second stage of building a well-off society to a new journey of “getting complete” in the third stage. In 2011, the 12th Five-Year Plan for the Development of China’s Aging Cause (2011–2015) proposed “establishing a basic framework for coping with the aging of the population, improving the social old-age security system covering urban and rural residents, improving the basic medical security system for the elderly, basically establishing the network of home-based care and community care service, fully implementing the planning standards for the construction of elderly-friendly facilities in newly built communities, and increasing cultural, educational and physical fitness facilities for the elderly.”12 Compared with the previous requirements of “expanding the

12 GF [2011] No. 28: Notice of the State Council on Issuing the 12th Five-Year Plan for China’s Aging Cause, the website of the central people’s government of the People’s Republic of China, http://www.gov.cn/zhengce/zhengceku/2011-09/23.htm , September 23, 2011.

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coverage of old-age security and improving the social security system,” the plan of this period clearly put forward “the full coverage of the new rural social old-age insurance system, fully implementing the provinciallevel management of old-age insurance funds for urban workers and realizing the state-level management of basic pensions,”13 “establishing a fairer and more sustainable social security system, realizing the state-level management of the basic pension for employees, establishing a reasonable adjustment mechanism for the basic pension, broadening the investment channels of social insurance funds, and developing occupational annuities, enterprise annuities and commercial old-age insurance.”14 The introduction of these policies made clear the development direction and goal of the old-age security system. During building a well-off society in all respects, China’s old-age insurance system has been developed in an all-around way in terms of coverage, guarantee diversity, overall planning level, and government administration. First, in terms of the coverage of old-age care, according to the Statistical Bulletin on the Development of Human Resources and Social Security in 2019 issued by the Ministry of Human Resources and Social Security, by the end of 2019, the number of people covered by old-age insurance for urban workers in China had increased from 102 million in 1992 to 434.88 million. The annual pension expenditure increased from 27.79 billion yuan in 1992 to 4922.8 billion yuan. The number of urban and rural residents covered by old-age insurance had increased from 483.695 million in 2012 to 523.917 million in 2018, and the pension expenditure increased from 114.97 billion yuan to 290.55 billion yuan (see Fig. 12.2). At the same time, in September 2009, China began to implement the new rural social pension insurance pilot program’s first batch, covering about 10% of counties in China. In 2010, the pilot program of new rural insurance was expanded to about 23% of counties. In 2010, the State Council deployed the national pilot program of social old-age insurance for urban residents and decided to speed up the 13 The 17th Central Committee of the Communist Party of China: Suggestions of the Central Committee of the Communist Party of China on Formulating the 12th Five-Year Plan for National Economic and Social Development, People’s Daily, October 28, 2010, Page 001. 14 The 18th Central Committee of the Communist Party of China: Suggestions of the Central Committee of the Communist Party of China on Formulating the 13th Five-Year Plan for National Economic and Social Development, People’s Daily, November 4, 2015, Page 001.

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53

350

52

300

51

250

50

200

49

150

48

100

47

50

46

0 2012

2013

2014

people with old-age insurance (million)

2015

2015

2017

2018

Annual pension expenditure (billion Yuan)

Fig. 12.2 Development of old-age insurance for urban and rural residents from 2012 to 2018 (Source National Bureau of Statistics)

pilot program of new rural insurance and start the pilot program of urban residential insurance. In July 2012, the new rural insurance and urban residential insurance systems were fully implemented in all county-level administrative regions in China, and the two systems covered all over China from September of the same year. In February 2014, the new rural insurance was incorporated into the old-age insurance system for urban and rural residents. Second, regarding the diversity of old-age security, the General Office of the State Council issued Some Opinions on Accelerating the Development of Commercial Old-Age Insurance in 2017, stating that “the development of commercial old-age insurance is of great significance for improving the multi-level old-age security system, promoting the multi-level diversified development of the old-age service industry, further safeguarding and improving people’s livelihood, and promoting social harmony and stability.”15 Third, as for the level of overall planning, given the problem that the gap of dependency ratio of old-age insurance between regions was widening due to the accelerated aging of the population and increased 15 GBF [2017] No. 59: Some Opinions of the General Office of the State Council on Accelerating the Development of the Commercial Old-age Insurance, the website of the central people’s government of the People’s Republic of China, http://www.gov.cn/zhe ngce/content/2017-07/04/content_5207926.htm, July 4, 2017.

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mobility, a central adjustment system of old-age insurance funds has been set up since 2018, to alleviate the imbalance of old-age insurance funds between provinces and regions and enhance the sustainability of the basic old-age insurance system. Fourth, as for constructing the government social security system’s administrative style, the service-oriented government construction has gradually been improved, and the materials and certificates that the masses need to provide for handling social security matters are simplified. The construction of the social security legal system has also seen significant progress. In December 2019, the State Council promulgated the Regulations on Guaranteeing the Wage Payment of Migrant Workers, and the Ministry of Human Resources and Social Security also formulated the Interim Provisions on the Administration of Professional Title Evaluation and other policies. As for the construction of social security network, the number of social security cardholders nationwide was 1.305 billion at the end of 2019, covering 93.2% of the population, and the APP application service for electronic social security cards was also available; thus a one-card system providing both online and offline service formed.16 During building a well-off society in all respects, China’s old-age insurance system has developed rapidly. The old-age security system has comprehensively improved and modernized, leading to complete coverage of the old-age insurance and more diversified old-age security forms. The old-age commercial insurance and social capital have injected more vitality into the old-age security, making its multi-level development. The orientation of national policies has changed from establishing and improving old-age security to establishing a diversified security system to enhance people’s happiness. During this period, with the improvement of relevant legal systems and policies, government’s role has quietly changed to be the supervisor that supervises and promotes the oldage security system. However, people are no longer passive recipients of old-age security but take on active participation and supervision. The multi-level old-age security system gives people more choices, and the improved laws also ensure the fairness and transparency of the system.

16 Ministry of Human Resources and Social Security: Statistical Bulletin on the Development of Human Resources and Social Security in 2019, the website of the Ministry of Human Resources and Social Security of the People’s Republic of China, http://www. mohrss.gov.cn/syrlzhshbzb/zwgk/szrs/tjgb/202006/t20200608_375774.html, June 18, 2020.

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Present Problems The year 2020 is a year of a decisive victory for China to finish building a well-off society in all respects, which greatly improves people’s well-being. As an essential part of people’s livelihood security, old-age security has developed for 40 years, with various old-age indicators actively improved. However, “a large population with an aged structure” is a new essential national condition that China will face for a long time in its future development. It is estimated that China’s aging population will reach 483 million by 2050, accounting for 34.1% of the total population (General Report Drafting Group, 2015). Therefore, after building a welloff society in all respects, due to the large population of older adults, there will still be tremendous pressure and heavy burden of old-age security. They need to be actively dealt with ahead of time scientifically and comprehensively. Social development also puts forward more requirements for the development of old-age services. The traditional biases toward aged should be transformed collaboratively by the community and individuals. First, from the national level, the financing model, security level, and legal system for old-age insurance still need to be improved. China currently adopts the pay-as-you-go system to raise old-age insurance funds. In essence, the intergenerational transfer payment of the current generation of workers to the previous generation of workers (Wu, 2017: 795). Such a system is facing increasing pressure with the population’s aging and the working population’s shrinkage. Simultaneously, in the actual operation process, personal account funds in many areas are borrowed to relieve the pressure of insufficient social pooling funds, resulting in the operation of empty personal accounts (Dong et al., 2016). Therefore, China’s old-age insurance fundraising model needs to be further improved. At the same time, compared with other countries’ multiple elderly-care models such as: family-based, social care, and mutually supportive elderly care, China’s multi-level old-age insurance system has not yet been established, and the concept of diversified elderly-care models has not yet been established. Also, the legal system of old-age security still needs to be improved. For example, Germany promulgated the Law on Social Security for Old-Age, Disability and Death as early as 1889, and in 1957 and 1995, respectively, promulgated the Law on Assistance to Elderly Farmers and the Law on Agricultural Social Reform, establishing a sound legal system of old-age security (Su, 2010: 166).

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Although China promulgated the Social Insurance Law of the People’s Republic of China in 2010, its specific provisions are still not complete. For example, this law only stipulates the employers’ administrative liability for not paying social insurance premiums in full and in time, but not the employers’ civil compensation liability for the laborers (Yang, 2014).It is urgent to improve the fragmented old-age security system, resulting from the policies being formulated in different periods. Secondly, from the perspective of community level, the shortage of funds, fragmented systems, and lack of professionals have caused community-based old-age services’ poor operation. The first problem for the community is the shortage of funds. Bringing old-age services into the community cannot be realized without the support of funds. At present, the primary sources of funds for community-based old-age services in China are raised by the community and the sub-district. The lack of social participation leads to poor facilities for community-based old-age services. When the fragmented old-age security system runs in the community, the “grey zone” of the system tends to appear because of overlapping regulations between different systems and gaps or ambiguities in the formal system. For example, when implementing the pension policy concretely, the community level will operate different policy interpretation rights to reduce its workload and responsibilities within the pension framework, depending on its actual needs. Moreover, when old-care service policies are implemented at the community level, the service staff often lack professionalism. Most of the community old-age service personnel have not received professional training. Moreover, community-based old-age service management often sees inefficiency due to the lack of a sound supervision system. Finally, from a personal perspective, the conservative choice of oldage care mode also restricts the development of a diversified old-age care system. People’s choice of how and how much to participate in old-age care also profoundly influences the old-age security system’s development. According to the Report of China’s Rural Old-Age Care in 2014, in rural areas, more than 40% of the elderly still want to live with their children, and 68.4% rely on their children’s financial support. It shows that China’s old-age security still needs to be improved and that the traditional concept of “depending on children for old-age care” profoundly affects people’s choice of old-age care mode. Based on family-based old-age care, it is the international trend to actively participate in mutually supportive old-age care and institution-based old-age care. Simultaneously, the continuous

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development of commercial insurance for the elderly has brought more possibilities for the insured’s pension income. However, according to the data from the World Social Security Research Center of the Chinese Academy of Social Sciences, China’s commercial old-age insurance assets accounted for only 2.6% of GDP in 2014, compared to 42.5% for the United States; the density of commercial old-age insurance in China was 185 yuan/person, and that in America was 1,258 dollars/person (Kang, 2015). Compared with developed countries in Europe and America, the development of China’s old-age commercial insurance still has a long way to go. Only when individuals establish the healthy concept of old-age care and rationally plan old-age investment can a modern old-age security system be established.

Development of the Old-Age Security System in the New Era As a well-off society is built, the modernization of China’s old-age security system has made some achievements, but the aging population and the demand for old-age care will be a significant event that has a long-term impact on the national economy and people’s livelihood. China can also draw on experience from other developed or developing countries at the old age for its development of old-age security system in the post-well-off era. For example, in the reform of the old-age insurance system, Switzerland established a balanced pension compensation fund and put it into the market to make up for the pension gap with the returns. By increasing the total income of pension insurance premiums and extending the age range of collecting pension insurance premiums, Japan expands the scope of increasing the income of pension, and at the same time raises the age of receiving a pension from 60 to 65, thus ensuring the stability of pension system from two aspects: increasing income and reducing expenditure. By increasing the payment obligations of enterprises and individuals, standardizing the old-age insurance system, and increasing the investment in old-age insurance, Switzerland and Japan have stabilized the old-age care systems’ reform and ensured their smooth operation (Jiang, 2002).In terms of social old-age care, Japan emphasizes the training and education of old-age care professionals and forms a complicated professional qualification system. In 2000, the Nursing Insurance Law was implemented, which grades the disabled elderly according to the degree of disability by

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which different social nursing treatment is provided. The French government also attaches great importance to the professionalization of the aged care service personnel, investing heavily in the construction of aged care training institutions and encouraging private capital and talents to enter the aged care field (Wang et al., 2019: 130–134). In the choice of homebased care for the aged, community care in Britain embodies the concept of “people-orientation.” It provides material support and daily life care and cares about the elderly’s psychological emotions. They communicate regularly with the elderly to meet their material and spiritual needs. The United States has built a social safety net for the aged, relying on a sound legal system. Through an excellent legal system of providing for the aged, the services for the elderly have been guaranteed in the economy, medical care, housing, and social participation (Zhang, 2015: 172). Given the current problems in China’s old-age security, as well as the experience of foreign old-age insurance system reform and old-age service, China needs further to improve the old-age security system in the following aspects: First, it is necessary to improve the old-age security system’s sustainability according to the old-age security reform experience at home and abroad. It has been 40 years since the modernized system of old-age security was established. During this period, the national old-age security policy has also accumulated much experience and lessons. However, with the increase of national economy and people’s old-age care demand, pension policy formulation should no longer grope forward. The reform with the “trial-and-error method” no longer meets China’s current development needs (Zheng, 2009).In the new era, after building a well-off society in all respects, the old-age care policy must be formulated on a feasible basis. The relevant policies must meet the needs of national development and embrace pension reform’s technical route. Second, it is necessary to improve the legal system of old-age security and enhance the old-age security system’s fairness. By studying the old-age service in other countries, we can find that a sound old-age legal system and active supervision measures can effectively guarantee the oldage service’s implementation. A sound legal system can ensure that the government is in a leading position in the field of old-age care. When faced with poor implementation of old-age care policies and difficulties in developing old-age care services, the government can make manage and guide through the existing legal system. Moreover, a sound legal system ensures the good market order in old-age care service. Although the

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implementation of the old-age care policy depends on non-governmental support to a great extent, the market competition without a sound legal system will only lead to the vicious competition of supremacy of power and money. Also, a sound legal old-age care system safeguards the dignity, rights, and interests of the elderly. Although respecting the old and cherishing the young is a traditional Chinese virtue, the informal moral tradition still needs a formal legal system. A sound legal system is a shelter for the legitimate rights and interests of the elderly. Third, the combination of government guidance and multiple participations can improve the old-age security system’s efficiency. In 2019, the State Council issued the Opinions of the General Office of the State Council on Promoting the Old-Age Care Services, which pointed out deepening the reform of government functions, supporting the scale and chain development of old-age care institutions, broadening the investment and financing channels of old-age care services, and expanding the consumption in old-age care service.17 Active participation of private capital is conducive to expanding domestic market demand and stimulating economic development. At a historical starting line of the post-well-off era, old-age security is not only a passive social need. It is an inevitable trend of economic development regarding the construction of old-age security as a new production factor. Actively seeking the development of old-age care can solve the existing old-age care problems and promote the development of old-age care industry and obtain economic benefits. Under the government’s guidance, establishing and actively participating in a healthy modern model of old-age care can also reduce the burden of old-age care and form a virtuous circle of old-age mutual assistance. The old-age industry guided by the government can solve the actual needs in this regard show the shortcomings of the old-age insurance system based on the reality of the old-age market, which is good for improving the old-age security system. Fourth, it is necessary to value the professional training of old-age service personnel and improve the old-age security system’s standardization. It is common to attach importance to the training of old-age service personnel across the related countries. The training of old-age 17 GBF [2019] No. 5: Opinions of the General Office of the State Council on Promoting the Development of the Elderly Care Services, the website of the central people’s government of the People’s Republic of China, http://www.gov.cn/zhengce/content/2019-04/16/ content_5383270.htm, April 16, 2019.

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service personnel is related to the current level of old-age service and the future development of the old-age service industry. Only by standardizing the training of old-age service personnel and improving their treatment can the old-age service industry’s virtuous circle be realized. The government should actively introduce relevant preferential policies, encourage the participation of private capital, improve the quality of old-age service employees, and strengthen the audit and supervision mechanisms, to ensure the standardization of professional training and healthy competition among old-age care institutions. Fifth, it is necessary to provide high-quality intelligent old-age services by using high technology to make the old-age security system more forward-looking. The Development Planning for a New Generation of Artificial Intelligence issued by the State Council’s in 2017 clearly states that China’s research on artificial intelligence technology application will be in the world’s forefront by 2030. In 2019, the Ministry of Civil Affairs issued the Opinions on Further Expanding the Supply of Old-Age Care Services to Promote the Consumption in Old-Age Care Services. The Opinions pointed out: “we need to build a new model of old-age care service by Internet Plus, and develop a variety of Internet Plus applications relying on the Internet, Internet of Things, cloud computing, big data and old-age care smart devices, to build a multi-level intelligent old-age care service system, and create new formats and modes in this regard.”18 In the context of everyday epidemic prevention and control, the shackles of time and space of traditional old-age care can be shaken off by using high-tech to empower intelligent old-age care so that the elderly can enjoy healthy old-age care at home. Through the new old-age care model of Internet Plus, an old-age service information platform can be established, convenient for the elderly to check the health information. Family members of the elderly can also supervise the process of aged care service through smart devices. In this way, a more effective operation mechanism of old-age care service can be established. Also, the establishment of smart old-age care services can also promote multi-sectoral cooperation, coordinate the work of various departments, make full use of

18 MF [2019] No. 88: Opinions on Further Expanding the Supply of Old-Age Care Services to Promote the Consumption in Old-Age Care Services, the website of the Ministry of Civil Affairs of the People’s Republic of China, http://www.mca.gov.cn/article/GK/ wj/201909/2019090019848.shtml, September 23, 2019.

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old-age care resources and existing technologies, and improve the quality and efficiency of old-age care services.

References Chang, Fang, et al. 2014. “Current Situation of New Rural Social Pension Insurance and Influencing Factors of Coverage—Analysis Based on Survey Data of 101 Villages in Five Provinces”, Management World, 3: 92–101. Chang, Liang. 2016. China’s Rural Old-Age Security: Institutional Evolution and Cultural Reflection, Doctoral Dissertation, Beijing: China Agricultural University. Deng, Dasong & Xue Huiyuan. 2010. “Analysis of Difficulties in the Implementation of the New Rural Social Aged- Care Insurance System—And Individual, Collective and Government’s Financing Ability”, Reform of Economic System, 1: 86–92 . Dong, Keyong et al. 2016. “Is ‘Nominal Account System’ the Direction of China’s Pension Reform?—Evaluation and Reference of Sweden’s ‘Nominal Account System’ Reform”, Social Security Studies, 4: 3–6. Gao, Ninghui. 2010. “On the Present Situation of Aged-Care Insurance System in Institutions and the Problems in the Institutional Reform”, Economic Research Guide, 1: 88–89. Jiang, Yuexiang. 2002. “Measures for the Aging of Population: An Analysis of the Old-Age Insurance System Reforms in Switzerland and Japan”, Chinese Journal of Sociology, 2: 44–46. Kang, Min. 2015. “Turn ‘Subsistence’ to ‘Moderate Prosperity’ in Old-Age Care”, China Insurance News, December 2. Lu, Jiehua & Zhang Li. 2018. “Research on Risks of Rural Elderly Care in Building a Moderately Prosperous Society in All Respects—From the Perspective of Transformation of China’s Principal Social Contradictions in the New Era”, Journal of Huazhong University of Science and Technology (Social science edition), 1: 8–14. Mo, Long. 2009. “Quantitative Research on the Coordination between Population Aging and Economic Development in China from 1980 to 2050”, Population Research, 3:10–19. Peng, Xizhe & Hu Zhan. 2011. “China’s Population Aging from the Perspective of Public Policy”, Chinese Social Sciences in China, 4: 106–124. Su, Baozhong. 2010. Research on Chinese Rural Old-Age Care, Beijing: Tsinghua University Press. Wang, Weijin et al. 2019. Practice Exploration and Approaches to Integrated Development of Community-Based Old-Age Care in China, Beijing: Social Sciences Academic Press. Wu, Jinglian. 2017. Trilogy of Chinese Reform, Beijing: CITIC Press Group

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Wu, Ying. 2018. “China’s Population Aging Process and Achievements in OldAge Security Construction”, China Population News, December 31. Xi, Jinping. 2017. “Secure a Decisive Victory in Building a Moderately Prosperous Society in All Respects and Strive for the Great Success of Socialism with Chinese Characteristics for a New Era”, People’s Daily, October 28. Yang, Sibin. 2014. “Theoretical Interpretation of the Implementation of Social Insurance Law and Supporting Laws and Regulations”, Journal of China University of Labour Relations, 2: 77–81. Zhang, Guoping. 2015. Research on the Home-Based Old-Age Care System for Rural Elderly, Beijing: China Social Sciences Press. Zheng, Bingwen. 2009. “60 Years of China’s Social Security System: Achievements and Lessons”, Chinese Journal of Population Science, 5: 2–18.

CHAPTER 13

Ageing, Demography, and Welfare States in China and India: Familial and Social Transitions Keerty Nakray

Introduction To understand the effectiveness and problems of old-age support programmes, we need to understand demographic trends. China and India are the two largest countries in the world that represent two different directions in their demographic patterns and responses. Not only do social dynamics affect the nature of welfare state developments but also these developments have ramifications for the rest of the world as the “lessons learned” will have implications to the global well-being among the elderly. In 2015, China had an estimated total population of 1.4 billion, of which 10.1% was older, India close behind with a total population of 1.3 billion, six per cent over 65. With an projected ageing population of 345 million by 2030 in China (Liu et al., 2022) and in

K. Nakray (B) O. P. Jindal Global University, Sonipat, India e-mail: [email protected]; [email protected]

© The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2022 K. Nakray et al. (eds.), Social and Economic Transitions in China and India, https://doi.org/10.1007/978-981-19-6124-3_13

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India, 93 million males and 101 million females in 2031 increase from up from 67 million males and 71 million females in 2021 will be a social policy challenge (National Statistical Office, GOI, 2021). Generally, an ageing population is associated with adverse outcomes such as a decline in labour supply, declining consumption patterns, lower investment, less cross-border capital flows, lower fiscal balances, and reduced private savings. An increase in a dependency ratio in the population implies a decline in economic resources to support the elderly population, which leaves them vulnerable to poverty and social exclusion (Singh, 2013). Traditional presumptions are that Confucian ideals of 孝, xiào (filial piety) as moral principles govern parent–child relationships in East Asian countries. The Hindu welfare traditions encapsulated in the Sanskritic traditions of mathru devo bhava pithru devo bhava (revere mother as God, revere father as God), embedded in the undivided patriarchal joint families (Canda, 2013). The social and demographic changes such as increased mobility of the population, urbanization, emergence of nuclear households, an increased number of ailing communities, and decline in young people who can provide familial care or tax base to support national programmes are impacting familial structures (Chen, 2008; Population Reference Bureau, 2012). Since the 1970s, China has experienced a precipitous fertility decline, resulting in the Chinese government withdrawing the one-child policy (Zhao, 2015). The World Economic Forum (2017) estimates that China could see a decline of 170 million working-age people, would eventually increase healthcare and pension expenditure, and experience lower productivity and growth. Tung and Lai (2011), who study Chinese older persons living with grandchildren without adult children or multigenerational households, observed that the former experienced higher levels of individual poverty than the ones living alone. On the surface, India is in an advantageous position owing to the demographic dividend as its young population is growing. On the surface, owing to the demographic dividend, India is in an advantageous position as its young population is growing. Due to the The demographic dividend hypothesis, which rests on the shifts in favour of age-structure, with increased number of working age (15–64 years/15–54 in India)and decline in dependent population of children or aged. With India, expected to have working population rise till 2035 to 2040 (Singh, 2016). It is even expected that atleast 65 percent of the population will be

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working till 2050 (Dommaraju, 2015). However, the demographic dividend advantage of India is unlikely to result in improvements in economic growth or human resource formation without social policies along with improved governance, high saving rates; investments in infrastructure, schooling, and public health, policies promoting gender equity, and openness to trade and foreign investments (PEW Research Center Global Attitudes and Trends, 2014). By 2050, 32.4 million Indians (20 percent) will be over the age of 60 years will need pensions. Currently, pension covers only 35 percent of the senior citizens, which implies that only 20 million (61.7 percent) will have no pension or income protection by 2050.(The Financial Express, 2017). Studies note intra-familial disparity, with higher familial support, to those below age 20, with little if any is going to family members ages 60 and older, challenging the widespread assumption that in the absence of a viable public social security safety net, kin provide for Indian elders (Ladusingh and Narayana, 2011). Elderly parents may own the homes where their children’s families live and the farms, they work in. Under such circumstances, the costs of population ageing do not fall on the working-age population as they would if the elderly did not continue to work and to support their adult children (Ladusingh and Narayan, 2011). These studies challenge the dominant rhetoric in India seems to suggest that the breakdown of the caste-based Hindu joint family has led to precariousness among Indian elderly (Cohen, 1998). However, the joint family is not necessarily a universal norm; joint families are increasing in number (Van Willigen, 2000). Elders abused at homes are afraid to report as they attribute such to karma (past sins) and fear of losing social and financial support (Soneja, 2011; Chokkanathan et al., 2014). Traditional social practices such as Thalikoothal (oil bath) are condoned in the Southern Indian state of Tamil Nadu. It entails elderly been given a long oil bath early in the morning and then drinking glasses of tender coconut water that results in renal failure, high fever, fits, and death within a couple of days due to heart failure, plugging the nose, and breathing difficulties. Some of the more recent practices include lethal injections bought from quacks and nurses from INR 2000 to 7000 per person or the use of pesticides (Subramanian, 2015; Kaushik, 2016). Widespread gender discrimination, sexual abuse, and maltreatment of widows are common practices in Indian society (Chen-Alter, M., 2000). There is also a correlation between elderly abuse and total financial dependence, lack of social support, and depression among elderly patients (Nisha et al.,

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2016). China and India face challenges in addressing population ageing. To gain some perspective about the rest of the world and its history, France took 115 years for the proportion of older people in France to double from 7 to 14%. China took 27 years to achieve the same increase at a lower level of affluence (Kalache and Keller, 2000). In developing countries, rapid changes in familial structures, migration, and structures of changing labour market and increasing environmental threats pose a threat to traditional care models (World Health Organisation, 2002). Paradigms of Elderly Care in Times of Social Investment and Production Generally, social investment encompasses three core ideas: (1) reintegration of social and economic policies, (2) a shift from a redistributive state to a facilitative state, and (3) commercial activation through human resource investment (Peng, 2011). The social investment state has its share of critics who say that social expenditure should not be seen as a substitute for social protection, especially risks that individual face well beyond their control in industrialized societies (Esping-Andersen, 2003). The origins of the social investment state are traced back to the 1990s when European countries had to introduce reforms within their welfare states (Esping-Andersen et al., 2002). Anthony Giddens (1998), in his The Third Way: The Renewal of Social Democracy, gave impetus to the social investment state, which formed the basis for Tony Blair’s New Labour agenda to recalibrate the welfare state in Britain in the direction of a knowledge-based service economy with emphasis on human resource formation. Within the European Union, under the leadership of the Belgian Presidency of the European Union in 2001, the bulwark of the social investment state was laid, with liberal countries such as UK and Canada at the forefront of adopting this welfare model (Lister, 2003). This approach has resonated globally, including Asian economies, the East-Asian model of developmental or productivist welfare regime, is associated with the of developmental or productivist welfare regime, limited social provisions for social welfare, childcare, and eldercare (Holliday, 2000). In developing countries, the social investment state appears in an array of education and skills formation programmes (Pellisery and Anand, 2017) with their embeddedness in the “productivist model”, driven by ambitious goals of industrialism, maximization of profit, and debasing to the piece-rate wages of the workers. The paradigm shift in favour of the

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social investment state also may be explained in terms of economic factors such as inflation in advanced economies, and social policy is viewed as a deterrent to economic growth (Hall and Soskice, 2001). Here, the varieties of capitalism approach elaborate on the significance of social policies to firms and the role of business groups in the welfare state contract. The pro-social investment shifts have implied a greater focus on capability generation and skills development that will activate a knowledge-based economy (Bonoli, 2013). The shifts towards social investment have been in line with changing familial structures and non-standard labour markets (Bonoli, 2007). The emergence of the social investment state entailed policy shifts from “old” to “new” social risks, from “cash benefits” to “social services”, from “ex-post” remedies towards “ex-ante” prevention (De Deken, 2012). The focus of the social investment state was on children, women, and the elderly. On a positive note, the social investment state dispels perceptions of social services as unproductive and an impediment to growth with adverse effects on investment incentives and labour market flexibility (Sipila, 2008). It also augments the consumption side of the argument in favour of a more market-orientated approach to welfare provision. Within the social investment approach, the pension system has income security for older people who are no longer a part of active labour markets. It enables the elderly to meet their daily consumption needs especially if they have no access to waged employment, provide insurance against increased life expectancy, disability and death of carers, reduce poverty and marginalisation and facilitate inter-generational redistribution (Barr and Diamond, 2009). (Barr and Diamond, 2009). Pension systems prevent marginalization of the elderly and restore dignity to the aged who live on their own or in multi-generational households, wherein they provide vital counsel and unpaid care to the children to ensure social reproduction (Lloyd-Sherlock, 2004). In Brazil and South Africa, social transfers such as pensions have directly benefited grandchildren (Lloyd-Sherlock, 2004). Welfare policies for the elderly who are no longer a part of active labour markets form a subset of employment policies. The “Golden Age” of the welfare state in Europe laid the foundation for the generous payas-you-go (PAYGO), earnings-related public pension systems. However, the social investment state brings in a new social contract for older adults (Esping-Andersen et al., 2002). The social investment state must address new demographic and economic challenges. Traditionally, “old social risks” included health care; old-age pensions and cash benefits for the

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working population. The “new social risks” include parental leave, elderly care, childcare and pre-primary education, active labour market policies, and primary and secondary school education (Vandenbroucke and Vleminckx, 2011). Pensions remain a challenge even in advanced economies, as they imply attuning to the population’s needs in terms of adequate pensions to ensure that they do not dissuade people from employment. There is a delicate balance between active workers’ contributions and benefits for the retired. Regarding values, pensions have maintained intergenerational fairness, intergenerational solidarity, and gender equality (Myles, 2002). Pension systems are born out of complex intersections between historical, political, demographic, social, and economic factors. In addition, the cultural, psychological, environmental, and geopolitical factors such as globalization are restructuring welfare systems due to migration. Demographic transition and economic growth have been identified within the mainstream political economy as determinants of welfare state development. Industrialization necessitates the welfare state to address new social risks associated with changes in the familial structures (Wilensky, 1974). Developing countries must leapfrog the stages of welfare state development, introducing provisions at lower growth levels than their counterparts in developed economies (Gerschenkron, 1962; Kwon et al., 2009). Historically, pension systems are entrenched in pathdependency and policy feedbacks. The institutional design has an impact on designing pension reforms. In terms of path-dependency, no country is a tabula rasa; they must draw from the existing resources, including both public and private sector (Myles, 2002). For example, changing pension systems from PAYGO to private funded designed might entail high costs, so policymakers might continue with what they have (Myles and Pierson, 2001). Some other determinants of welfare states include employment patterns, state capacity to administer a pension system, and corporatist social pacts between workers, employers, women, private insurers, and public officials (Myles, 2002). Specific pension provisions, such as ways of financing and distributing benefits (e.g., PAYGO), define benefit plans financed from payroll taxes. “Policy feedback” is another policy dynamic that shapes pension reforms (Skocpol, 1992; Pierson, 1994). In the context of advanced economies, latecomers such as Britain, preferred privatization of pensions due to system immaturity to avoid double payments, whereas, in Continental Europe and the Nordic countries with the largest PAYGO systems, there was the entrenchment of collective

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bargaining organizations (Myles, 2002). Most importantly, social investment and pension regimes do not follow one way but are shaped by the countries’ starting points. The government exercises regulatory control on private pension benefits in terms of level, coverage, and duration under which these specific benefits are provided (Myles, 2002). Along with financial capacity, the future of welfare states depends upon the political process (Barr, 2016). Demographic changes towards ageing might push political opinions in favour of pensions as opposed to familial interests (Bloom and McKinnon, 2010). The demographic dividend in terms of a favourable working population will facilitate pensions financing, whereas, in ageing societies, the revenues to support pensions might be depleted. Disproportionate burdens on the young community for taxes will give rise to intergenerational conflicts. Pension systems must balance the needs of the young, along with reducing the vulnerability of the elderly to poverty. Traditionally, taxation was the source of funding pensions, as it was politically feasible, and technology did not permit individualization. Increased life expectancy has reduced resources available for intergenerational transfers. Some ageing societies are looking at immigration and encouraging fertility rates as potential sources of improving their replacement rates (Gora, 2014). Traditionally, there were two pension models: Bismarck versus Beveridge. Bismarckian schemes included contributory schemes financed by earnings (PAYGO) systems. National Provident Funds (NPFs), which were earnings and contributions financed both fully and partially. The Beveridge model included tax-financed flat-rate schemes targeted to the elderly poor (means-tested) (see also The World Bank, 2009). Table 13.1 illustrates the features of the pension systems according to the levels of economic affluence (Barr and Diamond, 2009). Current pension systems designed initially in Europe and North America in 1950 were based on the presumptions of full- and long-term employment, limited international mobility or inflow of migrants, and a male breadwinner’s model. These assumptions have lost their significance, as today’s work patterns are diverse, significantly growing digitalization-facilitated cyberjobs wherein contributory benefits are no longer linked to firm-based employment. Women are no longer dependent on male-led families to gain access to welfare provisions. Information asymmetry is a significant problem, even in the United States, where 50% of adults did not know the difference between a stock and a bond or the need to move equities to bonds as they age, especially if they hold individual accounts (Barr,

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2013). Government intervention in pensions is necessitated by imperfect information, missing markets, risk and uncertainty, and distortions such as progressive taxation, poverty relief, and redistribution (Barr and Diamond, 2006). Uncertainty with the global economy and society is driving change in the pension systems (Holzmann, 2012). Generally, social perceptions of such pension measures are detrimental, as they are viewed as a burden on the taxpayers and incentivize an informal labour economy. Such activities Table 13.1 Illustrative pension systems for low and middle income countries Low Income Country: First Tier: Constrained choices for pension provision and might not have a national system of poverty relief, relying instead on family, charitable organizations, and local government Second tier: The lack of state capacity to implement a mandatory earnings-related system, wherein contributions of the workers has to be recorded for a period of 40 years or more Third tier: The fiscal resources are constrained and tax incentives might be regressive. The option of voluntary savings could be provided Middle Income Country: First tier: Countries could opt for a non-contributory, tax-financed pension (as in Australia, the Netherlands, New Zealand, South Africa and, from 2008, Chile); or a simple contributory PAYG pension, for example a flat-rate pension based on years of contributions (such as the Basic State Pension in the United Kingdom or Old Age Security in Canada) Second tier: Countries can opt for a publicly organized, earnings-related, defined-benefit pension, or possibly an NDC pension; or a defined-contribution pension as part of a national provident fund (as in Malaysia and Singapore) or with sharply limited individual choice Third tier: Voluntary, defined-contribution pensions at the level of the firm or the individual are possible; regulation is important, and any tax favouring should be designed to avoid excessive regressivity High Income Country: First tier. A non-contributory, tax-financed pension, as above; or a contributory pension aimed at poverty relief (used in many countries, including the United Kingdom and United States), with any of an array of different designs Second tier: A publicly organized, defined-benefit pension, as above; an NDC system (as in Sweden); including an antipoverty element (as in Mexico) Third tier. Voluntary, defined-contribution pensions can be organized at the level of the firm, the industry or the individual; regulation (particularly of the funding of defined-benefit plans) is important (and difficult), and any tax favouring should seek to avoid excessive regressivity. Clearly, choices widen as fiscal and administrative capacities grow Source Barr and Diamond, 2009)

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sound the death knell for sophisticated Bismarckian systems in developing countries. It seems to suggest pathways to pensions: (a) unstructured retirement savings through voluntary efforts, (b) innovative new schemes in which necessary provisions are based on individual accounts funded across the life cycle by the government and augmented by single savings supplements of unknown design, and (c) keeping the elderly in the labour market (Holzmann, 2012). The PAYGO pension systems pushed tens of millions of working-age people to apply for early retirement to get better treatment, due to the ongoing worsening of the pension formulas in frequent pension reforms and the continuous deterioration in economic and demographic variables, now integrated into the pension formulae, as they have a further reducing effect on pension payments (Walker, 2015). Social investment perspectives resonate with “active ageing” adopted by the UN’s Madrid International Action Plan on Ageing (UN, 2002), which prioritized action on ageing in less developed countries, also a critical factor in its global prominence. The changing demographic realities have necessitated responses that can address the challenges of industrializing societies—integrating the aged into the active labour markets by appropriate legal and social policy measures. Greater flexibility in labour markets allows for shorter duration or worktime or adopting new measures to incentivize the participation of older adults in the workforce. The Bismarckian PAYGO pension system, or NDC (notional/nonfinancial defined contribution) pension systems, must consider individual incentives, flexible lifetime participation of individuals in the formal economy, be it through employment, entrepreneurship, or investment, including different kinds of own provident fund accounts, personal savings, home purchase, investment in stocks, business, etc. (Aspalter, 2015).

Comparative Analysis of Chinese and Indian Approaches to Ageing and Welfare Regimes This section discusses some main developments in pensions and welfare regimes in China and India along with some national and sub-national approaches to ageing and welfare states. There is an evaluation of welfare provisions, such as government-provided public pensions, provident funds private institutions (corporate or insurance plans), NGOs, trade unions, religious and familial support. The World Bank’s Old-Age Income Support in the 21st Century: An International Perspective on

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Pension Systems and Reform (Holzmann and Hinz, 2005) reports on the core universal principle that would manage risks of old age. The suggested multi-pillar pension system is composed of five essential elements: (a) a non-contributory or “zero” pillar, which includes demogrant or social pension, a form of minimal social protection. Social pension schemes that are subject to strict means-testing are targeted towards the poor. (b) a “first-pillar” contributory system that is linked to varying degrees to earnings and seeks to replace some portion of income; (c) a mandatory “second pillar” is essentially an individual savings account but can be constructed in various ways. (d) voluntary “third pillar” arrangements that can take many forms (individual, employment-sponsored, defined benefit, defined contribution) but are substantially flexible and discretionary in nature; and (e) informal intra-family or intergenerational sources of both financial and non-financial support to the elderly, including access to health care and housing. From a social investment perspective, pension systems that rely on the first, second, and third pillar would indicate a movement towards a sophisticated economic policy geared towards consumption, poverty alleviation, and gender equality as social goals of pensions. Table 13.2 provides an overview of the pensions systems in China and India. Table 13.2 outlines the critical pillars of pension systems as identified by the World Bank, which are: • Adequacy – the benefit levels it provides should be sufficient to perform the most basic function of promoting security in old age, and the system should provide necessary protection to the vast majority of workers. • Affordability – the system should be affordable by the government, individuals, and employers, both in a strictly financial sense and, more broadly, at a level that does not inhibit labour market efficiency and the economic competitiveness of enterprises;

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Table 13.2 Overview of Pension Systems in China and India (Helpage International, 2019)

Population 60 and over (2018) Per cent of total Population 60 and over (2050) Per cent of total Type of contributory pension Does the country have a social pension? Per Capital Income Employment in Agriculture Employment in Industry Employment in Service Formal Sector Informal Sector Name of pension or programme Year first social pension introduced Legislative Underpinning Eligibility Criteria Age of eligibility Targeting approach Detailed eligibility criteria

Adequacy Monthly benefit (local currency) US$ Per cent of GDP per capita $ PPP

China

India

Upper Middle Income Country 235,410,953

Lower Middle Income Country 130,139,228

16.6% 478,860,994

9.6% 316,758,719

33.8%

Yes

23.4% Provident fund, social insurance, employer-liability Yes

Basic Pension Insurance for Rural and Urban Residents 2009

Indira Gandhi National Old Age Pension Scheme 1995 Article 41 of the Indian Constitution, 1995

60

60 Means-tested A basic pension is payable Living in a household that to older people aged 60 and is below the poverty line over whose children contribute to the scheme 70

200 Rupees

10 1.7% 19.8%

$3 2.2% 11.4

(continued)

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Table 13.2 (continued)

Per cent of $1.90 poverty line (PPP) Local amount detailed/other benefits

Coverage Number of recipients Coverage of population over the age of eligibility Coverage of population 60 + Cost Total cost (local currency) Cost as per cent of GDP

China

India

34%

20%

The basic 70 Yuan pension can be supplemented by local government revenue

Central government provides funding for 200 Rs a month to each recipient aged between 60 and 79 within the central assistance fund it distributes to state governments. State government is then required to distribute these funds and is requested to contribute an equal or larger amount, bringing the transfer level to 400 Rs or more a month. However, this is not adhered to across all states. Central Government funds 500 Rs a month to those over 80 years of age which is made available to state governments through the central assistance fund. Again, states are able to top up this amount

148,003,000 70.7%

20,595,274 17.7%

70.7%

17.7%

211,670,000,000 0.3%

49,428,657,600 Rupees 0.0%

• Sustainability – the system needs to be designed to make it sustainable in the longer term, even in the face of crisis and demographic transition;

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• Robustness – the system needs to have the capacity to withstand significant shocks, including those coming from economic, demographic, and political volatility. China China has made impressive strides towards universalizing pension schemes by integrating contributory and non-contributory social pensions to cover urban workers; civil servant pensions and resident’s pensions which include both in rural and urban areas (International Labour Office, 2015). However, the benefit levels are low along with regional variations and the phenomenon of “policy bundle” (zheng ce kun bang ) leaves universal coverage rather inadequate to support the ageing population (Liu and Sun, 2016). Elderly care varies in urban areas, pensions accounting for 67%, familial support 24%, and labour income 4%. In rural regions, familial support is 59%, labour income 28%, and pensions only 5%, with older women more dependent on familial support (Zhou and Wang, 2011). Suicides have been noted among the Chinese elderly, especially in rural areas, and such occurrences are condoned (Jiang et al., 2016). China is geared towards a high-income status in a short time with high saving rates, albeit its private consumption is constrained. Due to the uncertain future of social security benefits, people restrict their use and save for the future (Hujo, 2014). China follows the “dual-track” system, which combines state planning along with private-sector arrangements to address the needs of the formal and informal, rural, and urban sectors. China’s foray into the development of the modern pension system has its roots in capitalist reforms in the 1980s. Before the liberalization process, the state-owned firms and enterprises had the primary responsibility to provide pensions. The “Basic Old-Age Insurance System” was created in the early 1990s to meet the needs of urban workers of the state-owned enterprises. China slowly started moving towards the threepillar pension system (by learning from the experiences of countries such as Chile and Singapore), a partially funded system that, combined PAYG-DB with individual-funded accounts. In terms of universalization, within a short span between 2009 and 2013, China tripled the number of people covered by the old-age pension system, making impressive progress in achieving its goal of universal coverage by 2020. China has

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achieved universalization by combining contributory schemes and noncontributory social pensions (International Labour Office, 2012). The ratio of the old-age population (ages 65 or above) to the workingage population (ages 15–64) has been increasing, while the share of the working-age people (ages 15–64) in the total population has been decreasing rapidly (See Fig. 13.1). The dependency ratio is currently 14% (as of 2016), but it is expected to increase to 38% by 2050 (Holzmann et al., 2012). The Chinese social insurance law of 2011 has simplified the overly fragmented pension schemes. First, separate pension schemes for migrant workers issued by each local government have been halted. The existing employment-based pension programme has become the only legitimate and functioning pension programme for all Chinese employees. Second, the rural and urban residency-based pension schemes have been reorganized and integrated. With these changes, the social insurance law of 2011 has consolidated the dual pension system in which two distinctive

Constitution of the PRC (current version adopted in 1982) Social Insurance Law (2010) and Labour Law (1995)

National Administrative Regulations

Ministerial Rules

Local Administrative Rules

Other Legal Provisions

Fig. 13.1 Chinese pension system reforms

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layers of pension programmes—the employment-based pension scheme and the residency-based pension scheme—coexist in every locality in China (see Fig. 13.2). It has not fixed the locally fragmented social pooling system or low transferability of pension funds. The genesis of the ageing policy in China reveals the establishment as early in 1982 of the Chinese National Committee on Ageing Problems, renamed in 1996 as the “China National Committee on Ageing, reflecting the more positive connotation of ageing. In 1999, the China National Working Commission on Ageing (CNWCA)” was established (composed of twenty-six members from key commissions and departments in China), and it prioritized the ageing policy. In 1996, the People’s Republic of China Law on the Protection of the Rights and Interests of Older People was enacted. It addressed the rights of older people, including dependency, social security, social participation, and legal obligation. It mandates children’s responsibility to take care of older parents (Figs. 13.3 and 13.4). As early in 1978, the State Council in its Decree No. 108 announced the pension regulation of government officials and public employees in State-Owned Enterprise (SOE), government bureaus, and public schools, and specified their pension coverage standards. In the mid-1980s, China started to implement a new national Old-Age Social Security (OASS) scheme with a combination of government pooling and personal contribution accounts. Some local and provincial level pension pooling was developed, and individual workers were required to make monthly contributions to their individual pension accounts. In the 1990s, several major legislative acts gradually developed China’s OASS system in its current form. In 1991, the State Council, in Decree No. 33, announced its decision to reform the pension system for non-governmental employees. The

2009

2010 Approval of he Social Insurance Law

2011 Launch of the Urban Resident's Pension

2013 The overall pension system's reform started

Launch of the rural resident's pension

Fig. 13.2 Milestones in China’s universal pension

2014 Rural and urban residents pensions merged

2020 Objectuve to achieve universal coverage

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Urban Employment pension plan (1991)

Urban SOE pension plan (~1989)

Migrant worker pension plan (the 2000s) Urban Employment-based Pension Plan Pilot Urban Residency based Pension Plans (1997)

Urban Residency-based Pension Plan (2011)

(Old) Rural Residency-based Pension Plan (1992)

(New) Rural Residency-based

Urban and Rural Residency-

Pension Plan (2009)

based Pension Plan

Fig. 13.3 Chinese pension system

decision made it law that three parties, the government, the employer, and the employee, are to share the financial responsibility of employee pensions (Ye, 2011). The foundations of China’s pension system were set up in 1997 with the decision of the State Council Decision on the Establishment of a Unified Basic Pension System for Enterprise Workers (国务院 关于建立统一的企业职工基本养老保险制度的决定). The new system of the Chinese pension system appeared in a fragmented fashion in a diverse set of regulations and provisions in the 1994 Labour Law (法) and 2008 Labour Contract Law (劳动合同法), etc. In 2011, these parts were codified into a comprehensive national framework in the Social Insurance Law (社会保险法) (China Labour Bulletin, 2012). China has a stratified welfare system based on urban and rural welfare systems (Kwon, 2009). China’s public pension system consists of the following four plans: An urban workers’ pension is mandatory and divided into two tiers. (a) The PAYG-DB plan financed entirely by employers,

National Initiative on Care for Elderly (NICE)

Increase of central government contribution. State contribution are requested to match (2006)

BPL card as eligibility criterion

IHDS II 2011-12

Fig. 13.4 Major milestones in Indian pension system (Source The Figures 13.1, 13.2 and 13.3 are complied by the author from China Labour Bulletin, 2012 and Figure 13.4 from various sources discussed in the text)

Integrated Programme for Older Persons (IPOP) (1992)

The National Old Age Pension Scheme (NOAPS) (1995) National Social Assistance Program

National Programme for the Health Care for the Elderly (NPHCE)

No cap on number of beneficiaries

Maintenance and Welfare of Parents and Senior Citizen's Act (2010)

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with a maximum contribution of 20% of the payroll (in most areas). Old-Age Insurance for Employees of Urban Enterprises Reforms in pension arrangements for employees of urban enterprises came along with the economic reforms in 1978, aiming to establish a market-oriented economy. (b) A Funded Defined Contribution (FDC) plan based on mandatory individual accounts. These accounts are entirely financed by employees, who must contribute 8% of their earnings. (c) The new rural pension system was introduced in 2009 in an overhaul of the old schemes, which had operated for many years with little progress. It is a voluntary system with two components: a basic pension financed by the local and central government and a personal account for saving contributions from enrolled individuals. A flat-rate basic pension of 55 Yuan per month (about US$8) is the minimum benefit, representing roughly half of the poverty line in rural areas. (d) Social protection for rural residents was not paid much attention until the 10th National Five-Year Plan for the years 2005 to 2010. Before 2005, the only nationwide protection for older people in poverty in rural areas was the Five Guaranteed Household scheme, which was initiated in the 1950s and adopted as a national policy in 1994. The urban resident pension pilot programme was launched in July 2011, also voluntarily. It has a structure that is like the model of the new rural pension scheme. The basic monthly pension is also 55 Yuan (minimum), and the insured can choose from ten categories (100–1,000 Yuan) for personal contributions paid annually. After reaching the age of 60, they will receive a basic pension from the government as well as the benefits from their account. All urban residents aged 16 and above (excluding school students) who are not engaged in employment, and hence do not qualify for enrolment under the pension scheme for urban employees, can join the urban resident programme voluntarily. The Civil Servant Pension Plan has been modified from a single state pension into a social insurance pension based on the pensioner’s previous salary with four components: duty wage, rank wage, basic wage, and seniority wage in the 1993 reform (Allianz Global Investors, 2019; OECD, 2016). The Chinese pension system is stratified based on occupational status. Also, combining the social security systems for urban and rural areas has been deemed unfeasible (Wu, 2013). The migrant workers usually have irregular employment and are less likely to participate in the pension system. There are also sub-national variations, the average income in Guangdong province being 3,420 CNY per month and 3,942 CNY for the residents in its capital city, Guangzhou. The urban pensioners who

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retired in 2010 should receive a basic pension with a minimum of 736.2 CNY per month, more than 13 times the amount received by their rural counterparts (Wu, 2013). In the Chinese context, those who are born in a geopolitical community and have hukou have been considered as political insiders of the geopolitical community (Yang, 2018). The Chinese pension system faces the challenges of “insiders-outsiders”, that is political insiders who manage stable employment positions (labour market insiders) and the migrants lacking local citizenship (hukou) considered as “outsiders” (Fan, 2002). India India’s pension system is ranked 28 out of the 30 countries, highlighting the inadequacy of the nation’s retirement programme in the world’s second-most populous nation. India’s overall index value rose to 44.9 in 2017 from 43.4 a year ago, according to the Melbourne Mercer Global Pension Index for 2017. India’s pension system was also found to be more sustainable than that of Poland, Germany, France, Japan, Austria, Brazil, China, and Argentina, though it ranked low on the “adequacy” sub-index. Only 7.4% of the working-age population in India is covered under a pension programme. That compares with 65% for Germany and 31% for Brazil, another major emerging market economy, according to the World Economic Forum’s report on Global Human Capital (Mercer, 2017). The large informal economy is the reason for the low usage of pension funds and a lack of a variety of retirement programmes in India (see Chapter 10 by Nakray). Partly, the onus is on the employers to communicate the pension plans in both organized and unorganized sector in improving coverage (Mercer, 2017). Estimates suggest that 85% of current workers are not members of any pension scheme and in their old age are likely to remain uncovered or draw only a social pension. Of all the elderly, 57% receive no income support from public expenditure, and 26% collect a social retirement as part of poverty alleviation. One and four-tenths per cent of the elderly draw defined benefit as government exworkers (or their survivors), cornering 62% of system expense. The system for old-age income support entailed 11.5% of public expenditure, and sub-national governments bear more than 60%. Contributory programme funds invested in government paper soak up 40% of all interest payment of sub-national governments (Anand, M. and Chakraborty, R., 2019).

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On the surface, India appears to have a demographic dividend who can potentially contribute to economic growth and be part of the formal sector with access to work, social security, and capital accumulation (Asher and Bali 2010; Chopra and Puddussery, 2014). The political motivation for the pension might be at the backseat. Universal coverage does not necessarily provide pre-retirement income or lifestyle. Formal sector workers have better social security as compared to the informal sector; women especially are over-represented in the informal economy. Table 13.3 illustrates that India faces enormous challenges to universalization, primarily due to the employment structure in both the urban and rural economy, which is concentrated in the informal economy. Some of the other constraints to universalization include migration of workers from one state to another, thus restricting the possibility of a centralized scheme (Anand and Chakraborty, R., 2019). The elderly largely depends on their mandatory and voluntary savings, post-retirement income (Asher and Bali, 2010). The other concerns in the Indian pension systems include inefficient targeting of social pensions. India also has a dual-tiered pension system stratified based on employment status in the formal or informal economy. The organized sector pension needs are met by the Employees’ Pension Scheme (EPS) run by the Employees’ Provident Fund Organization (EPFO) and the National Pension System run by the Pension Fund Regulatory and Development Authority of India. The formal sector employees can contribute to either one or both the schemes. The EPFO is a mix of a non-contributory (taxfinanced) defined benefits plan (for employees appointed before January 2004) and a defined contribution plan (National Pension Scheme—NPS) and Insurance Regulatory and Development Authority (IRDA) set up after the entry of private providers in the insurance business (including life and health insurance) after 1999, and its establishment is another example of government efforts to promote voluntary health and life insurance (including annuities) coverage (Bloom et al., 2010). In India, the private sector is playing a pivotal role in the expansion of pensions, even though funding is from the public sector. The informal sector employees might not understand the intricacies of pensions. The civil services pensions is another vital source for old age income security among the organized workers. Since India’s independence in 1947, pension arrangements for civil servants (at all levels of government) have followed the Defined Benefit (DB) method, with no contributions required from civil servants and benefits paid from government revenues reviewed every ten years

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Table 13.3 Major pension schemes in India National Policy for Older Persons (NPOP) 1999

Maintenance and Welfare of Parents and Senior Citizen’s Act

Integrated Programme for Older Persons (IPOP)

National Initiative on Care for Elderly (NICE)

NPOP 1999, the first major initiative taken by the Government of India for the welfare of the elderly, provides a broad framework for inter-sectoral collaboration within the government and between government and non-government agencies The Act was passed in 2007, it was by 2010 that the act was notified by 22 states and in all Union Territories. It enables senior citizens, if they so desire, to claim maintenance allowance of up to Rs. 10,000 per month from their children and specifies the claim procedure. The Act also envisages (i) establishment and management of Old Age Homes for the needy elderly, (ii) provision of geriatric beds and wards in Government hospitals, partially or fully funded by the government, (iii) facilities like separate queues for senior citizens, (iv) action plan for protection of the life and property of senior citizens. It also prescribes penal provision for the abandonment of senior citizens (3 months imprisonment or fine up to Rs. 5000/-) The Programme has been operational since 1992. Under IPOP, 90 per cent of the project cost is provided to NGOs for building and maintaining old age homes, day care centres and mobile Medicare units. IPOP underwent a revision in 2008 after which several innovative projects for the elderly have been added NICE was launched in 2000 by the National Institute of Social Defence (under MOSJE), which conducts various courses to prepare skilled and committed professionals to provide services to the elderly

(continued)

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Table 13.3 (continued) National Programme for the Health Care for the Elderly (NPHCE)

Facilities, Services, Concessions, Schemes Provided by Various Ministries

Central schemes (not specifically targeted at the elderly)

Indira GandhiNational Disability Pension Scheme (funding shared by the central government and state government)

Indira Awas Yojana (IYA) of the Ministry of Rural Development

Central Facilities/Services designed specifically for the Elderly

Concessions given by the Finance Ministry, Government of India:

NPHCE was launched by the Ministry of health and family welfare, during the 11th plan period to: (i) provide preventive, curative and rehabilitative services to the elderly at various levels of the health delivery system, (ii) strengthen the referral system, and (iii) develop specialized manpower and promote research on geriatric diseases These initiatives include (a) initiatives for the general population, which are relevant for the needy elderly, and which the eligible elderly can benefit from and (b) initiatives that are specifically targeted at the elderly The elderly, if eligible, can avail of: Mahatma Gandhi National Rural Employment Guarantee scheme (MGNREGA) guarantees 100 days of employment. All the districts in India are in its ambit since 2008 Provides for pension of Rs. 300 per month to destitute with severe or multiple disabilities and who do not receive other pension. The eligible age group is 18–79 years Gives grants for the construction of dwelling units for BPL households. Central: state ratio for funding is 75:25. Elderly persons belonging to the below poverty line households, if in need of a dwelling unit can avail of this scheme In 2005, an advisory was issued by the Ministry of Home Affairs to the State governments directing police departments to pay special attention to the protection of life and property of the senior citizens, to keep a friendly vigil, to sensitise the police force about the security concerns of the elderly and to formulate action plans for setting up helplines, home visits, mandatory review of old persons’ cases by senior police officials, etc. (i) Income tax exemption up to Rs. 3 lakhs per annum for Senior Citizens (It is Rs. 5 lakhs for senior citizens over 80) (ii) Deduction of Rs. 20,000/- under Section 80D for individuals paying insurance premium for senior citizen parents

(continued)

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Table 13.3 (continued) Major Central Schemes Specifically for the Elderly

IGNOAPS National Old Age Pension Scheme (renamed as Indira Gandhi National Old Age Pension Scheme (IGNOAPS) in 2007), targeted at the destitute elderly, was launched by the Central Government on 15th August 1995. This was seen as a big step towards fulfilment of Article 41 and 42 of the constitution. From April 2011, the eligibility age for this scheme was reduced from 65 to 60 and the pension amount was raised from Rs.75 to Rs. 200 per month for elderly persons in the age group 60–79 years and Rs. 500 for those above 80. The entire funding for this is disbursed by the central government to the states and cover is limited to 50% of the BPL population above age 65 (now 60)

Source Ministry of Rural Development, Government of India (2022) and Kulkarni et al. (2016)

by the civil servants. A significant reform of the civil service pension system was pursued with the introduction of the New (subsequently changed to National) Pension Scheme (NPS), a defined contribution scheme as compared with the previously described benefit scheme (Asher and Singh-Bali, 2014). In terms of coverage of the informal economy, the Indian Government introduced the National Old Age Pension Scheme in 1995 as a meanstested scheme available to individuals above 60 years of age (Government of India, 1995). Social pension schemes come under the purview of the Ministry of Rural Development administrates social pension scheme, but the actual implementation is through panchayats (i.e., village councils) in rural areas and municipalities in urban areas, as stated in the guidelines from 1995 (reference). Other welfare measures include the ones stipulated by the National Policy on Older Persons, wherein older persons over the age 65 years are eligible to a pension of $4 (INR200), are strictly means-tested, and are too low to meet daily expenses of the older persons. Also, legal measures such as India’s 2007 Maintenance and Welfare of Parents and Senior Citizen’s Act stipulates imprisonment of 3 months or fine of INR 5000 ($10) or both of adult children who fail to care for

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their parents. Tribunals have been set up to address grievances of old parents, allowing them to demand maintenance of up to INR 10,000 (about $220) a month (Shetty, 2012). The linking between the Aadhaar card (Universal Identification Number) of various schemes, Direct Benefit Transfer (DBT), disability pension schemes, and old-age pension schemes hold massive potential for Indian’s welfare state. The United Progressive Alliance (UPA) (I) (2004–2009) and UPA II (2009–2014) extended the Indira Gandhi National Old Age Pension Scheme (NOAPS) in 2007 and is a social assistance programme with rigorous means-testing to qualify for the eligibility to cash transfers. Besides, widow and disability pensions exist. Concerning the former, eligibility extends to abandoned widows or women who are landless or awaiting pending divorce decisions in court but also women suffering from domestic violence. As to the latter, beneficiaries should have no source of income, have a disability, and be aged 45 or above (Times of India, 2018). The scheme has come under the criticism of the Supreme Court, which questioned the Central Government’s rationale of giving Indian Rupees (INR) 200 per month (approximately US$ 4) to the elderly persons. Former Law Minister Ashwini Kumar argued in the court that only seven states and Union Territories were giving about INR 2000 monthly pension to senior citizens, whose population would increase by over 300% by 2050. Even this meagre pension was delayed by six months, and he argued that the amount of pension to older persons should be at least INR 3,000 per month (Press Trust of India, 2018). Ideally, policy coordination between pension and healthcare policies provides a crucial avenue through which social security reform impacts economic growth and development (Bali and Asher, 2012). The Atal Pension Yojana (APY), introduced by Prime Minister Modi to address the needs of 410 million unorganized workers, was announced in Budget 2015–2016. It is an upgraded version of the UPA I/II Swavalamban scheme. The APY beneficiaries will be entitled to the fixed pension of INR 1000–5000 per month from the age of 60 years until they die if they regularly contributed for 20 years at least and only people below the age of 40 being eligible to apply. Various individual factors could lead to scheme failures, as in procrastination and laziness, low desires to sieve through investment choices, and risk averseness to the volatility of returns in stocks and funds. Previous governments UPAI/II failed badly, as did the Rajiv Gandhi Equity Savings Scheme (RGESS). Instead of learning from the failure of Swavalamban and RGESS, the

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babus (colloquial word of bureaucratic ineptness) have come out with another flawed idea in the APY (Basu, 2015). At sub-national levels, there are variations in the social pensions across Indian states. Social pensions are means-tested and targeted to specific social groups—the elderly, widows, and disabled. The amounts disbursed in the form of pensions are an essential source of income and sustenance. The Indian government has been scaling up the pensions and owing to the inefficiency of social programmes, direct cash transfers to the poor have been seen as a viable solution (Dutta et al., 2010). Recently Kapur et al. (2008) in their article made “The Case for Direct Cash Transfers to the Poor” analysed the implementation of social pensions descriptively for a few selected states. In addition to the eligibility age of 65 years as stipulated by the national government, the original guidelines stated that the “applicant must be destitute in the sense of having little or no regular means of subsistence from his/her sources of income or through financial support from family members or other sources” (Government of India, 1998, p. 7). Several states (Punjab, Manipur, Mizoram, Meghalaya, Assam, Maharashtra, and Karnataka) used their resources to extend social pension coverage to poor women aged 60 years and older. Rajasthan even provided social pensions to poor women aged 55 years and older and to men 58 years and older (see Appendix 2). The social pensions suffer from poor targeting the inadequately low amounts in several states (Asri, 2019). At the sub-national levels, states have been implementing various schemes for the elderly. For example, in Kerala, contributory pension and welfare funds managed by 16 Labour Welfare Boards have been catering to different occupational groups, such as artisans, beedi workers, coir workers, toddy workers, etc. Also, there are schemes like Snehapoorvam (for grandparents taking care of grandchildren) and Vayomitram (free mobile clinics for the elderly) (Kulkarni, et.al., 2016). Tamil Nadu has been implementing pension schemes for various vulnerable groups (destitute, widows, deserted wives, etc.) since the early seventies and the elderly have been benefited by them. Also, the elderly can avail themselves of the government schemes for the supply of free nutritious meal, free rice, and free supply of dhotis/sarees. A closer look at the Indian pension plans, they look as incomplete and insufficient as those in China.

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Policy Implications It is clear from the above analysis that pension systems in these countries are more closely intertwined with historical antecedents of path-dependency, policy feedbacks, demographic, political, social, and economic realities. The Chinese social policy appears more mature and well-developed, though, in both countries community and familial support intervenes to save lives. The Chinese pension regime is born out of its division of pensions between labour market insiders employed in urban-based state-owned enterprises, whereas labour market outsiders such as rural and migrant workers (Online, Pension Funds, 2019). The Chinese pension system has universalized progressive reforms with greater centralization along with changes at the local government levels. A closer look at the Chinese social protection system shows the integration of employment policy and pension policy, with employment status being of paramount concern (Friedman, 2009). The fragmentation of the pension system has necessitated the interventions from local self-governments who have created new pension planes for residents or specific social groups such as migrant workers, farmers who have undergone land loss and senior citizens of advanced age (over 70 or 80). This makes pension systems still more disjointed (Fang, 2014). China has introduced a more centralized collection system and implemented an ambitious much-hyped tax reform plan in July 2018 to ensure higher corporate contributions are vital to closing the widening pension shortfall. In effect from January 1, 2019, all local governments have transferred responsibility for collecting social insurance fees to tax authorities, seeking to streamline the system and to make it more difficult for companies to evade contributions. Still, reports indicate that at least ten provincial-level regions that released implementation notices have not yet begun collecting fees from companies, presumably to avoid putting additional financial stress on businesses (Rothschild, 2019). Already, nearly half of China’s provinces are slated to report operating shortfalls in their essential pension funds by 2022, compared to six in 2015, according to a report by the China Academy of Social Sciences. In July 2018, Heilongjiang, a province in north-eastern China’s rust belt, was forced to delay pension payments because even with state subsidies, they could not meet last year’s pension liabilities. Labour market informalization or dualization (or labour informalization) contributes to the expansion of universal social insurance programmes that incorporate both labour market insiders and labour market outsiders

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into the social welfare system (Barrientos and Lloyd-Sherlock, 2002; Carnes and Mares, 2013). Generally, societies with more bargaining capacity can shift the burden to firms. Alternatively, firms might opt for the citizenship-based social insurance programme if they can bargain with the government (Mares, 2005). Historically, the Chinese welfare system favoured urban State-Owned Enterprise (SOE) workers and was the key for Chinese leaders to constrain the explosive urbanization and prevent regime instability while saving costs (Dillon, 2015; Wallace, 2013). The Indian pension reforms are evolving slowly with limited state capacity entrenched in an informal-insecurity regime with a moribund low productive agricultural economy and limited labour force in the formal economy. The universalizing is a problematic reality with an overarching occupational structure still entrenched in the informal economy. The state-led social protection might not necessarily spur consumption smoothening. India ranks lower on adequacy, but higher on affordability, sustainability, and robustness. However, the higher ranking on the last three factors might differ due to inadequate coverage and adequacy. Also, the current pension systems are less likely to influence behavioural dimensions and people’s preference for immediate consumption. Large-scale focus on social protection might not necessarily improve the state of pensions in India owing to weak structural reforms and reduced employer stakes.

Conclusions Both the Chinese and Indian social support and pension systems present lessons that can be applied worldwide. As a bedrock, a coordinated, universal, and affordable pension/welfare system consolidated under a national omnibus programme dispensing benefits uniformly and based on community and integration with society is the best society has to offer. Such an approach would reflect the ethics of care that people are as valuable as the economy. Especially, globally, there are challenges of demography and reduction of the welfare state. Two solutions present themselves. At the centre of any social programme, including old-age support, is social ethos or core values. The discourses around “social investment” often undermine the ethics of care for older people. It also throws open ethical questions about the burden on young people who are primarily in precarious labour with themselves with limited social security. Alternative support schemes have been in existence, such as contributions

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by more inexperienced persons being invested (pension funds) in speculative ventures, like stocks, bonds, “money markets”, and so forth. With economies entering recession, the expansion of old-age security remains a challenge.

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CHAPTER 14

Conclusion Keerty Nakray

At this juncture, China and India are at the critical phase of their social and economic development. Both countries are facing enormous challenges due to the COVID-19 pandemic. China has been successful in initiating significant welfare reforms in the last two decades which has been backed by robust economic growth. The Indian welfare reforms have fallen short to propel India into middle-income countries (MICs). It can be attributed to lop-sided regional development in the large states of India. Unless there are substantial reforms in social policies, in the future the youth precariousness is likely to be aggravated in India. In India, lopsided sub-national development is an area of concern as they are marked by poor state capacity and rampant corruption. COVID-19 pandemic has exposed the fault-lines of society. With the most vulnerable sections of the society have been the hardest hit. Also advances made in early child education, higher levels of education and public health have been overturned. As the two large countries, China and India march towards achieving the Sustainable Development Goals (SDGs), both the countries have to

K. Nakray (B) O. P. Jindal Global University, Sonipat, India e-mail: [email protected]; [email protected]

© The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2022 K. Nakray et al. (eds.), Social and Economic Transitions in China and India, https://doi.org/10.1007/978-981-19-6124-3_14

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recalibrate their strategies and adopt innovations to achieve social inclusion. The COVID-19 pandemic has unleashed an enormous economic and social changes onto the society. It has brought forward the need to work collaboratively to address global challenges of climate change, social exclusion and inequality, gender justice and economic equality.

Index

A absolute poverty, 2, 24 annual fee reduction, 12 artificial intelligence, 2, 153, 262 automation, 2

C China, 1 Civil Servant Pension Plan, 282 compulsory education, 98, 151, 164, 178, 226, 227 consumer price index increase, 24 coverage, 2, 10, 15, 18, 21, 22, 24, 28, 102, 178, 242, 245, 248, 249, 251, 253, 254, 271, 277, 279, 283, 284, 287, 289, 291 COVID-19, 2, 9–12, 16, 17, 19, 22, 23, 25, 27, 32, 37, 44, 50 CPC Central Committee, 9, 10, 17, 23, 109, 113–115, 140, 146, 176, 250, 252 Cultural Revolution, 137, 139, 140, 194

D daily wage workers (shramiks), 34 declining family fertility, 2 demographic transitions, 2 demography, 2 Deng Xiaoping, 108, 110, 114, 177, 241, 246 “double reduction” policy, 11

E economic, 1, 9–11, 13, 19, 25, 31, 32, 34–36, 39, 47, 54, 86, 88, 92, 95, 101, 102, 105, 107, 111, 113, 118, 119, 121, 125, 126, 134, 137, 139, 141, 150, 151, 154, 159–162, 164, 165, 169, 171, 173, 175, 177, 182, 189, 194, 198, 200–203, 223, 230, 241–248, 250, 251, 261, 266–271, 273, 274, 277, 282, 284, 288, 290 economies of scale, 33 efficiency, 86, 88, 261, 263, 274

© The Editor(s) (if applicable) and The Author(s), under exclusive license to Springer Nature Springer Nature Singapore Pte Ltd. 2022 K. Nakray et al. (eds.), Social and Economic Transitions in China and India, https://doi.org/10.1007/978-981-19-6124-3

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Employee’s State Insurance Act, 1948, 36 externalities, 18

F fairness, 260 “five-postponement and four-reduction”, 10, 11 food security, 53, 154 formal enterprises, 33 Fourth Industrial Revolution, 2

G generosity, 2 global financial crisis, 96 Global Wage Report, 38 Guiding Opinions on Phased Reduction of Basic Medical Insurance Fees for Employees , 13

H historical trajectory, 1 home care, 19 hukou, 91, 94, 97, 101, 102, 283

I illiteracy, 178, 180 India, 1 informal, 33–39, 52, 53, 261, 272, 274, 277, 283, 284, 287, 291 informality, 36, 53 informal sector, 33, 35, 36, 38, 284 international financial crisis, 10, 11, 14 International Labour Organization (ILO), 32, 37, 52 interprovincial settlement of medical bills, 18

J jobless benefits, 21, 27

K Kenya, 38

L labour-intensive service industries, 19 life-course milestones, 2 lockdown measures, 38 low capital occupation ratio, 105 low-quality employment, 2

M Mahatma Gandhi National Rural Employment Programme (MNREGA), 3 Mahatma Gandhi National Rural Employment Rural Guarantee Act (MGNERGA), 33 mazdoor mandis , 35, 39, 41, 48 medical insurance, 10, 13–18, 23, 26, 28, 102, 127, 173, 249 middle class, 3, 4 middle income, 3 migrant workers, 21, 22, 34, 35, 54, 87, 89, 92, 98, 99, 102–104, 107–111, 113–127, 151, 189, 278, 282, 290 Millennium Development goals, 2 minimum living guarantee, 24 Ministry of Human Resources and Social Security, 12, 17, 20, 21, 96, 249, 254, 256 Myanmar, 38

N National Healthcare Security Administration, 15–17, 23

INDEX

National Medical Insurance Bureau, 13 national public budget, 10 new rural pension system, 282 O old-age insurance, 10, 11, 14, 24, 26–28, 244, 245, 247–257, 259–261 one-child policy, 3 “organized”, 33 P pension contribution, 11 Peru, 38 policy reassurance, 27 political, 1, 31, 270, 290 poverty eradication, 24 poverty reduction, 1, 24, 27, 195 public emergencies, 23 public health, 9, 16, 25, 173, 267 S Second Finance, 10 SMEs, 15, 19 social disequilibrium, 3 social distancing, 12, 32, 38 socialism, 108, 110, 117, 123, 153, 248 social mobility, 3 social security, 10–12, 14, 15, 19, 20, 23, 25–28, 33, 36, 39, 54, 102, 103, 122, 126, 127, 242, 244, 245, 247, 248, 250–252, 254,

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256, 267, 277, 279, 282, 284, 288, 291 social transition, 1 state-owned enterprises, 21, 89, 113, 114, 245, 247, 277, 290 subsistence allowances, 22, 24 T temporary living allowance, 22 the State Council, 10, 12, 17, 23, 113–117, 126, 140, 154, 171, 247, 252–256, 261, 262, 279 U unemployed, 10, 19, 21, 23, 27, 93 unemployment insurance, 10, 11, 14, 20, 21, 23, 26–28, 248 Unemployment Insurance Regulations, 22 unemployment subsidy, 21 upper-middle-income country, 2 urbanization, 19, 87, 89, 96, 100, 114–117, 120, 122–126, 149, 163, 164, 171, 291 W wearing masks, 12 welfare state transitions, 2 work injury insurance, 10, 12, 14, 16, 17, 26, 28 Y youth precariousness, vii, 2