Rural-Urban Inequalities In China

Rural-Urban Inequalities In China

Introduction

China's traditional economy was dominated by agriculture. Before 1949 more than 90% of the population lived in the countryside and drew a living from farming. The dominance of agriculture is easily explained: from earliest times until as recently as the 1980s the central economic problem for China was how to maintain a favourable balance between food production and population. The scale of this challenge is captured in the finding that during almost 2,000 years of imperial history, a seven-fold increase in population was accompanied by a mere doubling in the area of arable land. Throughout this period there is abundant evidence of frequent local famines caused by natural disasters. At times, neglect of the agricultural infrastructure associated with political upheavals and dynastic decline resulted in even more severe food shortages affecting wider areas. Overall, however, the most remarkable historical achievement of China's farmers was their ability to maintain sufficient output growth to meet the needs of a rising population, and to produce a surplus sufficient to support one of the greatest urban civilizations in the world. This paper discusses the rural-urban inequalities in China.

Discussion

During the Maoist period (1949-78), welfare provision was founded on the principle of full employment. Urban workers were allocated jobs for life in the “iron rice bowl,” a system that provided a high level of economic security in comparison with most developing countries. On this basis, most welfare was provided to urban dwellers via their work units ( danwei ), including state enterprises, large collective enterprises, and other state institutions such as hospitals, schools and government offices. These work places provided a range of welfare for their employees, from cheap housing, health clinics, and nurseries to cash and material subsidies. The Labor Insurance Regulations issued in 1951 stipulated that state and collective enterprises should provide for employees in case of sickness, pregnancy, work injury, disability, death, and also in old-age. Other state institutions provided similar coverage, and the system was more or less comprehensive by the 1960s (by then, almost all private business had been eliminated). However, the range and quality of provision was uneven and dependent on the size and resources of the work place. Large state industrial enterprises, for example, typically offered better provisions to their work forces than did small collectives. Quality of coverage often was dependent on locality, type of work, sex, and whether employees were white collar, blue collar, skilled or unskilled (women, blue collar, and unskilled workers received lower-quality provisions).[1]

Rural dwellers did not receive such generous provisions. Although rural communes (the basic form of organization in the countryside from the late 1950s until the early 1980s) provided some security, commune members did not enjoy the same range of welfare and social security benefits as most urban residents. Some provisions were financed through commune funds, but these were confined primarily to health and collective welfare projects. The most impoverished households and individuals limited financial relief. Otherwise, rural dwellers relied on their families (and primarily their sons) ...