China

Banish the Impoverished Past: The Predicament of the Abandoned Urban Poor.

Written by Dorothy J. Solinger.

Aside from the tale of the miraculous “Rise of China” marveled over ceaselessly in popular media, the country’s pulling of millions up from poverty is yet another oft-mouthed piece of rhetoric rehearsed when that nation is the subject. But to be clear about it, these stories of success generally have one of two sorts of foci: if the tale is of “rise,” then the domestic locus of attention is the urban middle and rich classes; if the point is to look at poverty, it is just the peasants, the rural people. All we get, in the main, is about positive, upward trajectories.

Perhaps the regime has willed it so. For this has been a government – much like its predecessors going back some 200 years—that aims for progress, prosperity, and productivity. Indeed, much of the legitimacy of the current political order has been tethered to achievements in amassing wealth, stimulating national pride and fabricating a new, so-called “high-quality” citizenry, all aimed at permitting China to be conceived, finally, as fully “modern.” What does not – most likely cannot – be forced into that mold is best cast aside, pitched out of the range of watching gazes. China is proud but it is also self-conscious; its dreams must be glorious, its path seen as ever pushing onward, toward modernity.

In such a context, poverty in the cities is simply out of place. It is not to be available for viewing.  And yet, the poverty-stricken in the urban areas, much of their condition of penury manufactured by the leadership itself in and after the late 1990s, cannot be merely left to expire in situ immediately. So the Party has devised a mode of maintaining these indigents. But in doing so it employs a method that more or less clamps the cities’ poor into a space of exclusion from which they cannot escape.

Fashioned as the “other” side of the “modern,” these unfortunates thus must be shucked away. Compared with three other similar social groups–China’s city-based unemployed of the late 1990s and early 2000s; the destitute in the Chinese countryside in recent years; and the impoverished in other countries, these urban poor are managed much more meagerly, in relative terms. I make the case that China’s municipally-situated needy have been shunted away because of the state’s obsession with forging the stability and the appearances its political elite deems necessary for attaining their own vision of modernity. This form of modernity is a site of aspiration regarded by the powerful as suitable for realizing their own illusions and imaginaries of rejuvenation, regeneration, and renovation.

The crux of this claim of mine lies in a sorry appraisal of the state’s Minimum Livelihood Guarantee (zuidi shenghuo baozhang,最低生活保障, for short, dibao), a program initiated in 1999, at a time of crisis for the prior working class—many of whose members were turned into the recipients of this welfare. This guarantee is a social assistance scheme that has been steadily downgraded in the past several years.

As the country’s political economy shifted from state planning, the plants that made up the industrial portion of that economy were forced to cope with an unaccustomed market. And as the planned model of business arrangement began to falter and crumble under the onset of rivalry between state-owned (on the one hand) and private, collective and foreign (on the other) factories that had no welfare responsibilities, the state-funded-enterprise social security system cracked apart, completely unable to cope, such that tens of millions of workers were abruptly cast aside, making a new welfare model a necessity.

This program’s stated aims were to “maintain the basic living standard for urban residents,” defined as meeting the “necessary costs of food, clothes, and housing, giv[ing] reasonable consideration to water and power and fuel bills, and [providing for] the educational costs for children.” But right from the start, the authorities who created the program admitted that its goals were to “establish a wholesome modern social welfare system, and guarantee that the economic system reform, especially the state enterprise reform, could progress without incident [shunli jinbu 顺利].” These hopes revealed that—in addition to (or, better put, on the foundation of) sustaining the needy, the paired objectives of securing “stability” in the cities and facilitating the firms’ restructuring lay at the core of the program.

Thus, alarmed by ongoing demonstrations by the laid-off even after instituting this program, in 2001 then-Premier Zhu called for a massive increase in the funding for and the numbers served by the dibao program, with investment leaping from 1.5 billion yuan in 1999 up to 10.5 billion by 2002, as beneficiaries ballooned from 2.8 million in 1999 to 19.3 million in the latter year.

World Bank researchers about a decade ago found that only about half of those eligible to do so was receiving the dibao. Besides that malfunction, “leakage” had resulted in an absurd situation in which “about 40 percent of the [program’s actual] recipients [were people who were in fact] ineligible to get it.” By 2007 there was some improvement, when 39 percent of the dibao eligible poor were recipients, and when just 1.2 percent of the non-poor were.[1] Thereafter, the number of urban recipients climbed up to 23.5 million at the program’s peak in 2009; within six years, however, at year end 2015, the number had fallen to just 17.216 million in the cities. Adding up the beneficiaries in urban and rural areas together, the total amounted to a national sum of 66.55 million, a significant decline of from 2011’s peak of 75.86 million.

Comparisons with Social Assistance Elsewhere

That the dibao program is ungenerous in comparative terms becomes evident when considering the percentage of GDP devoted to the scheme. In China that percentage for the urban dibao has wavered around 0.12 percent (reaching a high of .14 percent in 2009, during the financial crisis) after rising from under 0.1 percent, where it stood before 2003. Alfred M. Wu and M. Ramesh state that the average spending on the urban allowance from 2000 to 2009 amounted to .12 percent of GDP, “considerably below other countries in East Asia.” Even with the funds for the rural dibao added in, the two allowances together amounted to just .25 percent of GDP in 2014. In 2015, the percentage dropped to .20 percent of GDP.

By contrast, the percent for targeted poverty programs elsewhere spanned from 0.5 to 1 percent in Latin America in the early 2000s to an average 2.5 percent of GDP spent on cash transfer programs. Expenditures on anti-poverty programs typically range between one and two percent of GDP. Mexico fell below this proportion, but still was investing 0.3 percent of GDP in its poverty reduction programs as of 2008, and Indonesia’s similar program cost 0.5 percent of its GDP in 2005.

Besides this, in China in 2015, the average dibao handout was a mere 439 yuan per person per month in the cities, or 5,268 yuan per year.  Urban average disposable income that year was 31,195 yuan per year, so that dibao represented just 16.88 percent of China’s average urban disposable income last year, a drop from the previous year’s 17.1 percent, not to mention a long-term drop from the 28 percent among the major cities of 2002.

Another critical way in which at least the urban portion of China’s program suffers by comparison with social assistance around the world is in its failure to essay to raise its recipients out of poverty. As a general rule, anti-poverty transfer programs aim at facilitating [their targets’] permanent exit from poverty. But in China, neither is there an effort to encourage indigent parents to improve the endowments–whether physical or cultural–of their offspring, nor is there a work requirement for the adults.  Rather, there is a push to remove the labor-capable from the rolls.  These are telling contrasts, suggesting that the Chinese leadership may have no real intention of bettering the long-run lot of its urban poor.

I propose that this long-term Chinese bent toward contriving contemporaneity through elevating its slice of humanity has been responsible for neglecting the urban poor in the present, and not essaying to include them. Such a method today appears to obviate endeavoring to include or advance such persons, or, indeed, to seriously bestow financial and administrative resources on bringing them and their offspring within the general fold. Their presence, it would appear, could threaten to derail the track to modernity along which the nation is racing, especially now, when the goal would seem so near.

The crux of the issue is that the indigent in China today cannot have a place, cannot conceptually be present in the grand “dream” that President Xi has proposed.  For whatever else that dream might embody, it must surely embrace modernity and not the searing destitution of the days long gone, whether under Chairman Mao or before him.  If anything, these people, the impoverished of the present, stand as a kind of metaphor for Maoist society, which, along with themselves, is viewed now as best obliterated, both mentally as well as physically. The imaginaries in these visions were surely of wealth and power, always, and, now, more specifically of the marketplace (at which, in the leadership’s litany—true or not–anyone of fit body can find a posting), of a thriving middle class, whose members alone stroll along trim and tidy, clean avenues, and of stability and order. China’s reverie is instead to shine with bright dreams, the glorious ones.

Indeed, the poor are the very antithesis of all the Chinese dream consists of domestically—the inversion, one might say, of the market (for they were fostered under the state plan, and it is plans that cast them away), the opposite of the modern, of economic growth and prosperity, of productivity, of progress;  as such, neither poverty nor the poor can be “modern.” So, first, today’s dibaohu are, or, in the main were, yesteryears’ xiagang, or laid-off staff and workers, in one account as of the early 2000s amounting to some 70 to 90 percent of the total urban poor. The training they received and the old daily practices they lived, along with the machinery and technology they managed to master, marked them as obsolete in today’s terms. As such, they emblematize a past best put to rest and banished.

Not as a surprise, multitudes of those thrown from their positions raged in the roads, severely jarring the political elite of the turn of the century.  But once the dibao was devised and distributed, trifling as its sums amounted to, it seemed to calm them down.  A policy designed for stability has appeared to wane as its beneficiaries wandered back to their homes, more or less placated.  My supposition is that a project meant for forging peacefulness lost its prominence once it had achieved its purpose.  This, to me, is why the funds allocated to the program are in steady decline.

In short, the impoverished poor of Chinese cities have been abandoned, and when their generation finally passes, the Chinese nation, its leaders believe, will finally more fully have “stood up.”

Dorothy J. Solinger is Professor of Political Science at the University of California, Irvine. Her current work is on urban poverty and the welfare program that addresses this in China. Her most recent book is States’ Gains, Labor’s Losses (Cornell University Press, 2009), selected as an Outstanding Academic Title by Choice magazine. Image credit: CC by Jakob Montrasio/Flickr.

[1] Martin Ravallion,“A Guaranteed Minimum Income: China’s Di Bao Program.”  Ppt., n.d. Draws on research with Shaohua Chen and collaborators in China’s National Bureau of Statistics (obtained from the author).