A busy barbershop in China. After the Communist Party came to power it attempted to narrow the gaps in income, education, and opportunity between rural and urban populations. PHOTO BY JOAN LEBOLD COHEN.

After the Communist Party came to power in 1949 it attempted to narrow the gaps in income and wealth between men and women and between urban and rural residents. As a result, the standard of living for most Chinese was raised. Some gains were only temporary, however, and the socialist system has introduced new inequalities.

In 1949, when the socialist government of Mao Zedong (1893–1976) came to power, one of its main goals was to reduce the glaring inequalities of income and wealth. To this end the government appropriated most private property, abolished labor markets, expanded public education, and instituted wage controls. By the early 1960s inequalities of income and wealth in rural and urban areas were sharply reduced, and living standards for most Chinese were vastly improved. Ironically, however, socialism introduced new inequalities—both among people who did and did not have network ties to government officials and Communist Party members and among people who did and did not work in state-owned firms.

Furthermore, one of the most serious inequalities in pre-1949 China—the disparity in income and living conditions between urban and rural areas—was never eradicated under Mao. Just two years after his death in 1976, many of the policies designed to abolish economic inequalities were incrementally removed in an effort to marketize the Chinese economy. Post-Mao market socialism would reverse many of the equalizing trends of the Maoist era.

Haves and Have-Nots

In the decades before 1949 China was continuously buffeted by war, acts of imperialism, and domestic turmoil. By the time Mao’s government came to power, China had become a society in which a small proportion of well-to-do people lived alongside countless impoverished people. In rural areas, where about 80 percent of the population lived, 70 percent of farmers were landless and worked for subsistence wages for a small number of landowners. In cities unemployment was high, and begging and prostitution were rampant. Thus the government faced the immediate problem of raising living standards for a mostly destitute population.

Urban Economic Inequalities

The government sought to reduce economic inequalities in urban areas by appropriating wealth and abolishing labor markets. Privately owned housing was seized and subdivided into much smaller living spaces. Families could rent these apartments but never purchase them, thus eliminating a key means through which inequalities of wealth can be perpetuated from generation to generation.

By 1958 virtually all privately owned urban businesses had been appropriated and socialized as well. Furthermore, in an effort to ensure full employment, market competition for jobs in these businesses was eliminated. People leaving school were assigned to jobs bureaucratically. The masses of urban unemployed were either assigned to jobs in factories or businesses or were sent to rural areas to work in agriculture. After they were matched to a job, employees could not quit voluntarily. But employees could not be fired either and thus essentially had a guarantee of lifelong employment.

Urban inequalities were reduced still more by salary compression in firms. Differences between the salaries paid for high-skill, high-prestige occupations such as doctors and other professionals and low-prestige jobs such as unskilled factory worker were much smaller than is typical in capitalist economies. Efforts were also made to increase the social prestige attached to manual labor and to downplay the social importance of white-collar work.

As a result of these economic policies, income inequalities during the Maoist era plummeted. For example, the richest 10 percent of the urban population took in only 21 percent of total urban income, a figure about ten percentage points lower than the average for other developing countries at that time. Living standards for the average urban resident improved substantially.

Furthermore, the determinants of socioeconomic status were different from those in capitalist economies. In capitalist economies socioeconomic position is largely dictated by income and therefore by one’s educational level. The highest-paying jobs require a long period of education, and a big difference in pay exists between jobs that do and do not require extensive education. Mao’s government expanded public education a great deal. But salary compression in urban firms meant that the payoff in income for a lengthy education was not great.

Instead, nonmonetary employment benefits became a much more important source of stratification in urban areas, and these benefits were determined not by what a person did on the job but rather by the type of work organization in which he or she did that job. Although nearly all urban work organizations were government owned, they were not all administered by the same government offices. About three-fourths of urban residents were employed in state-owned work organizations, which were controlled by the central government. The rest worked in collectively owned organizations that were controlled and operated at the municipal level. State-owned firms were allocated bigger budgets and more resources and thus could afford to provide their employees with generous fringe benefits such as housing, health insurance, pension plans, and consumer goods. In general, collectively owned firms could not provide such benefits and could pay employees a salary only about three-fourths of what they would have received in state-owned firms. Because housing, health insurance, and pension plans could not be acquired through markets or other government channels, job placement in a state-owned firm became the goal among urban Chinese.

Important inequalities also developed among people who did and did not have personal ties to government officials and Communist Party members. In the absence of markets government officials and party members had monopoly control over the allocation of economic rewards. Persons with ties to government officials or party members could use those ties to maximize career opportunities or nonwage work benefits.

Rural Economic Inequalities

The socialists also attempted to reduce rural economic inequalities by confiscating resources from the wealthy. In rural China these resources consisted primarily of agricultural land. Many well-to-do landlords were killed in retribution for their exploitation of tenant farmers. Starting in 1951 confiscated land was redistributed equally to all rural households for members to farm privately. But in 1953 the government began taking back this land, designating it as community property. Families were required to work larger plots of land collectively, in groups of twenty to forty households, and the harvest was split between government and the collective. People were paid for their work in points, which were periodically traded in for money and grain. Although average household incomes in rural areas remained low, this collective system of farming did raise living standards for poor families and produced communities with much less economic stratification than before.

Gender Inequalities

One subjugated social group especially targeted by rural and urban economic policies was women. Prior to 1949 Chinese women had little social status or p
olitical and economic power. Their low social position was underpinned by a family structure that was patriarchal and patrilineal. Male heads of household had near-absolute power in the household and held legal right to all family property. Women—especially new brides joining the family—were powerless, marginal family members who were often treated as servants. Fathers and brothers could provide no protection from abusive treatment by in-laws because a woman lost most ties to her natal family after marriage.

One key way by which Mao’s government tried to counter this family structure was by pulling women into the paid labor force. In urban areas women were incorporated into a growing industrial sector, and in rural areas women were put to work in agriculture. The idea was that women would be able to wield more power within their families if they had an independent income.

Such efforts to reduce gender inequalities were somewhat successful. It became routine in both rural and urban areas for women to work, and as a result of their being employed their status in the family improved. But a great deal of gender segregation in the workforce existed and continues to exist, with women usually assigned to lower-paying jobs and given lowest priority for nonmonetary benefits such as housing. Especially in rural areas Chinese families remained strongly patriarchal because the government never challenged the tradition of patrilineal marriage.

Urban-Rural Gap Remains

Although Maoist economic policies reduced inequalities within urban and rural communities, a substantial gap remained in income and living standards between urban and rural areas. As in all developing countries, urban residents in China before 1949 enjoyed much higher living standards than rural residents because of better access to education and well-paying jobs. After both rural and urban economies were socialized, this gap began to shrink. In 1957, for example, urban residents took in three times the income of rural residents. By 1978 urban incomes were 2.36 times greater than rural incomes. Thus the rural-urban gap was smaller, but still substantial, under Mao. Urban residents continued to have much better access to schools, medical care, and pensions. Generous government investment in urban industries and low state-set prices for agricultural goods kept the rural–urban gap from completely closing. Migration laws that prevented rural residents from moving to urban areas also kept urban incomes high by limiting the supply of labor for urban industries.

Post-Mao Policies

Just two years after Mao’s death in 1976, the new Communist Party leader, Deng Xiaoping (1904–1997), began to implement economic policies designed to marketize China’s economy. In urban areas private businesses were legalized, and foreign investment was encouraged. A private sector grew quickly, so that by 1999, according to government estimates, nearly 35 million urban residents were employed in privately owned firms. In July 2001 it became legal for private business owners to join the Chinese Communist Party (CCP), a further indication of the growing acceptance of private enterprise. Likewise, reforms were instituted in publicly owned firms, requiring them to operate more like private firms. Managers were given greater autonomy in setting wages for workers and also came under greater pressure to show a profit. Post-Mao economic policies also sought incrementally to institute labor markets in urban areas in both public and private firms. By the late 1990s residents of large cities were no longer assigned to jobs by the government and, after they were employed, could quit or be laid off from their jobs.

However, post-Mao economic reforms have reintroduced substantial economic inequalities in urban communities, in part because some residents now earn high salaries in foreign-invested firms. An equally important contributing factor is the growing unemployment problem. Pressure on public firms to be more profitable after Mao’s death gave managers incentives to cut labor costs. Layoffs are becoming more and more common as a result, especially among middle-aged women. Some employers lay off employees to solve overstaffing. Others wish to replace their urban employees with cheaper recruits from rural areas who have been allowed to migrate to urban areas and work in urban firms since 1983. By 1988 about 2 percent of the urban population was unemployed, a figure that is large compared with the Maoist era and increasing every year. Urban unemployment is publicly acknowledged as a serious and growing social problem.

Post-Mao market reforms in rural areas have also been extensive. Beginning in the late 1970s collective farming groups were disbanded, and rural families were again assigned land for use at their discretion. Rural families also became free to allocate household labor to nonagricultural work. Rural families now routinely have one or more members working in industrial jobs, which bring much better pay than does agriculture. Encouragement of private enterprise in rural areas has resulted in a mushrooming of industrial work opportunities in rural villages and towns.

Because of these burgeoning industrial job opportunities for rural residents and because household agricultural production gives rural families greater profit incentives than does collective agriculture, rural residents have become much more affluent, on average, than they were during the Maoist era. At the same time economic inequalities within communities have increased as some rural residents benefit more than others from these new opportunities.

That post-Mao economic reforms have increased inequalities in both rural and urban communities is not controversial. But scholars do disagree about whether upward economic mobility is still most advantageously pursued through personal ties to political actors. Some sociologists have argued that as a socialist economy marketizes, political actors such as Communist Party members or government officials lose their monopoly control over economic resources. Opportunities for upward economic mobility open up among people who are not political actors or who lack ties to political actors, and the relative economic advantage of people with political capital declines. People with education or work experience start to see greater returns for those attributes. Thus, for example, in a private, profit-driven business, someone with a college education but no political ties will be a more attractive job candidate than will someone who has political ties but no college education.

Others sociologists have argued that political actors still maintain privileged access to economic resources or are able to convert their political power into market resources easily. For example, a Communist Party member who wishes to become an entrepreneur can cut through the red tape required to establish a private business much faster than can someone who is not a party member.

Losses and Gains

Contemporary China is a fascinating case study for social stratification. Since a socialist government was established in 1949, China has undergone an enormous amount of purposive social change in a short time. Maoist efforts to change the stratification system demonstrate that economic policies can be an effective tool in reducing economic inequalities. In two decades or so China went from a country with a large impoverished population in both rural and urban areas to a country in which most citizens enjoyed a decent standard of living and in which the distribution of economic rewards was much more equal. After the post-Mao government began to dismantle these economic policies, however, many of the equalizing trends of the Maoist era began to reverse.

Mao’s China also demonstrated that although reductions in inequalities can be made, it is difficult to er
adicate those inequalities altogether. The concerted efforts to eliminate gender inequalities were only somewhat successful, and the rural-urban income gap never completely closed. Socialism also introduced new sources of stratification: among people who did and did not have personal ties to political actors and among people assigned to different types of work units.

Further Reading

China Statistics Press. (2000). China statistical yearbook. Beijing: China Statistics Press.

Griffin, K., & Renwei Zhao, (Eds.). (1993). The distribution of income in China. New York: St. Martin’s Press.

Johnson, K. A. (1983). Women, the family, and peasant revolution in China. Chicago: University of Chicago Press.

Meisner, M. (1986). Mao’s China and after. New York: Free Press.

Nee, V. (1999). The emergence of a market society: Changing mechanisms of stratification in China. American Journal of Sociology, 101, 908–949.

Parish, W. L., & Whyte, M. K. (1978). Village and family in contemporary China. Chicago: University of Chicago Press.

Walder, A. G. (1986). Communist neo-traditionalism: Work and authority in Chinese industry. Berkeley and Los Angeles: University of California Press.

Whyte, M. K., & Parish, W. L. (1984). Urban life in contemporary China. Chicago: University of Chicago Press.

Zhou Xueguang. (2000). Economic transformation and income inequality in urban China: Evidence from panel data. American Journal of Sociology, 105, 1135–1174.

Source: Matthews, Rebecca. (2009). Social Stratification. In Linsun Cheng, et al. (Eds.), Berkshire Encyclopedia of China, pp. 2016–2020. Great Barrington, MA: Berkshire Publishing.

Social Stratification (Shèhuì ji?céng f?nhuà ??????)|Shèhuì ji?céng f?nhuà ?????? (Social Stratification)

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