Keqing Han (2020) - Social Welfare in Transitional China

SOCIOLOGY, MEDIA AND JOURNALISM
IN CHINA
Keqing Han
Social
Welfare
in
Transitional
China
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Keqing Han
Social Welfare
in Transitional China
Keqing Han
Renmin University of China
Beijing, China
Funded by 本书受到“中华社会科学基金 (Chinese Fund for the Humanities and

Social Sciences) 资助
Sociology, Media and Journalism in China

ISBN 978-981-32-9659-6 ISBN 978-981-32-9660-2 (eBook)
https://doi.org/10.1007/978-981-32-9660-2
Jointly published with China Renmin University Press, Beijing, China

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ISBN of the China Mainland edition: 978-730-01-3661-5
Translation from the Chinese language edition: 转型期中国社会福利研究 by Keqing Han,

© China Renmin University Press 2011. All Rights Reserved.
© China Renmin University Press 2020
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This book is dedicated to my mother
Contents
Part I Central Concepts
1 Introduction 3
1.1 Definitions of Social Welfare and Origins
of Welfare States 3
1.1.1 Definitions of Social Welfare 3
1.1.2 Origins of Welfare States 5
1.2 Basic Functions of Social Welfare 6
1.2.1 Economic Functions 7
1.2.2 Political Functions 8
1.2.3 Social Functions 9
1.3 Reforms and Reconstruction of China’s Social
Welfare System 10
1.3.1 Reforms of China’s Social Welfare System 10
1.3.2 Reconstruction of China’s Social Welfare
System 12
2 China’s Social Transition and Social Welfare Reform 17

2.1 Social Structural Differentiation and Transition
Since the 1978 Reform 17
2.1.1 Differentiation of Social System and Structure 17
2.1.2 Impact from Market Transition on Social
Structure 19
vii
viii CONTENTS
2.2 Commonly Benefited: Key Principle for China’s

Social Transition 20
2.2.1 Theoretical Bases 22
2.2.2 Effects of “Commonly Benefited”
on Chinese Social Transition 23
2.2.3 Issues Need to Be Noticed 27
2.3 Equality: Core Value of China’s Social Transition 29
2.3.1 Basic Connotations of Equality 29
2.3.2 Issue of Equality During the Transitional
Period 30
2.3.3 Discussing the Concept of Equality
in the Current Transitional Period 33
2.3.4 Realization of Equality 38
2.4 Changes and Reconstruction of Chinese Welfare System 38
2.4.1 Changes of Chinese Social Welfare System 38
2.4.2 Reconstruction of Chinese Social Welfare
System 41
3 Impact of Economic Globalization on China’s Social

Welfare Policy 49
3.1 Economic Globalization: An Increasingly Prominent
Reality 49
3.1.1 Globalization and Economic Globalization 50
3.1.2 Impact of Economic Globalization
on Wealth and Income Distribution 51
3.2 Impact of Economic Globalization on China’s
Income Distribution 56
3.2.1 China’s Foreign Trade and Absorption
of Foreign Investment 56
3.2.2 Economic Globalization Uplifting Economic
Status of Social Members on the Whole 57
3.3 Economic Globalization and China’s Inequality 63
3.3.1 Economic Globalization: Key Factor Leading
to Imbalanced Regional Economic Growth 64
3.3.2 Economic Globalization Expediting Industrial
Restructuring 68
CONTENTS ix
3.3.3 Economic Globalization Somewhat

Widening Urban–Rural Inequality 71
3.3.4 Economic Globalization Widening
the Gap Between Workers’ Income
and Occupational Prestige 72
3.4 Economic Globalization and Policy Selection
for China’s Social Welfare System 75
3.4.1 Giving Priority to Building a Social
Assistance System 77
3.4.2 Gradually Improving Modern Social
Insurance System 78
3.4.3 Improving Labor Protection Mechanism 78
3.4.4 Rapidly Building a Social Welfare System
in Rural Areas 79
4 Financial Crisis and Institutional Countermeasures

Amid China’s Social Welfare Reconstruction 83
4.1 Impact of Financial Crisis on China’s Economy
and Society 83
4.1.1 Impact of the Financial Crisis on China’s
Economy 84
4.1.2 Impact of the Financial Crisis on China’s
Employment 86
4.2 Impact of Financial Crisis on China’s Social Spending 90
4.2.1 Social Insurance Expenditure 90
4.2.2 Social Assistance Expenditure 90
4.3 China’s Policy Measures in Response to the Financial
Crisis 94
4.3.1 Ensuring the Basic Livelihood of Low-Income
Earners and Unemployed 94
4.3.2 Flexible Contribution Policies 98
4.3.3 Employment-Supporting Policies 98
4.3.4 Promoting Steady and Rapid Development
of Rural Areas and the Western Region 100
4.4 Development and Flexibility Principle of China’s Social
Welfare System in Post-crisis Period 101
x CONTENTS
5 Social Stratification Objectives of China’s Welfare

Construction 105
5.1 Basic Concepts of Social Stratification
and Their Relations 105
5.1.1 Social Stratification and Strata 106
5.1.2 Social Mobility and Social Stratification 108
5.1.3 Social Differentiation and Social
Stratification 110
5.2 Theoretical Tradition of Social Stratification
Study and Its Enlightenment 113
5.2.1 Social Stratification Study in Functional
Paradigm 114
5.2.2 Social Stratification Study in Conflict
Paradigm 121
5.2.3 Enlightenment of Sociological Theory
to Chinese Social Stratification 126
5.3 China’s Current Social Stratum Structure
and Future Variation Trend 128
5.3.1 Current Social Stratum Structure 128
5.3.2 Future Variation Trend 129
5.4 Social Stratification Targets of China’s Social
Welfare Construction 132
5.4.1 Impact of Social Welfare on Social
Stratification 132
5.4.2 Direction of China’s Social Welfare
Construction from the Perspective
of Social Stratification 134
6 Civil Society and China’s Social Welfare Reform 139

6.1 Evolution and Theoretical Definition of the Concept
of “Civil Society” 139
6.1.1 Evolution of the Concept of “Civil Society” 139
6.1.2 Theoretical Definition of Civil Society 140
6.2 Development of China’s Civil Society 143
6.2.1 Development of Civil Society After
the Founding of New China 144
6.2.2 Rise of Civil Society Since the Reform
and Opening Up 145
CONTENTS xi
6.2.3 Sequential Problems in Civil Society

Construction 147
6.3 Social Welfare Reform During Civil Society
Construction 148
6.3.1 Simultaneous Construction of Civil Society
and Social Welfare System 148
6.3.2 Feasible Welfare System: Let Government
Play a Leading Role and Socialized
Services Act as a Supplement 150
6.4 Growth of China’s Charitable Organizations 151
6.4.1 Cultivation and Development
of China’s Charitable Organizations 152
6.4.2 Role of Government in Nurturing
Charitable Organizations 154
6.4.3 Role of Charitable Organizations
in Social Welfare 155
7 Social Quality Theory and Its Enlightenment

to China’s Welfare Reform 159
7.1 Main Content of Social Quality Theory 159
7.1.1 Concept of Social Quality 159
7.1.2 Constituent Elements of Social Quality 160
7.1.3 Methodology for Social Quality Study 163
7.2 Social Quality Study in the Chinese Context 164
7.2.1 Birth of the Social Quality Concept
in China 164
7.2.2 Content of Social Quality Study 165
7.3 Enlightenment of Social Quality Theory
to China’s Welfare Reform 166
7.3.1 Economic Development Is the Main
Route to Improve Social Quality 168
7.3.2 Political Democracy Is an Important
Symbol of Social Quality 168
7.3.3 Cultivation of Civil Society Is an Important
Aspect for Improving Social Quality 168
7.3.4 Equal Opportunities Are Indispensable
for Social Quality 169
7.4 Conclusion 169
xii CONTENTS
8 “Third Way” Theory and Chinese Way of Welfare

Reform 173
8.1 “Third Way” Theory for Social Welfare 173
8.1.1 Political Ideal of the Third Way 174
8.1.2 State View of the Third Way 175
8.1.3 Society View of the Third Way 176
8.1.4 Welfare View of the Third Way 176
8.2 “Leftist” and “Rightist” Stages in China’s Social
Welfare Construction 179
8.2.1 “Leftist” Welfare in the Era of Planned
Economy 179
8.2.2 “Rightist” Welfare in the Early Years
of Market Economic Reform 180
8.3 Chinese Way of Welfare Reform 181
Part II China’s Welfare System
9 Development of China’s Elderly Welfare

in the Transitional Period 187
9.1 Main Content of China’s Elderly Welfare 187
9.1.1 Guarantee of Economic Income 189
9.1.2 Elderly Welfare Facilities 190
9.1.3 Medical Care Service 190
9.1.4 Spiritual Consolation and Other Services 191
9.2 Predicament in Front of China’s Elderly Welfare
at Present 192
9.2.1 Plight of the Elderly Welfare in Urban Areas 192
9.2.2 Changes in the Rural Elderly Welfare 201
9.3 Role of Land Security in Rural Elderly Welfare 204
9.3.1 Misunderstandings of Land Security 205
9.3.2 Realistic Dangers of Land Security 208
9.4 Discussion on Marketization of Elderly Care Services 209
9.4.1 Three Levels of Marketization of Elderly Care
Services 210
9.4.2 Management of Elderly Care Service Market 211
CONTENTS xiii
9.4.3 Problems Worth of Attention for Marketizing

Elderly-Care Services 213
9.5 Policy Proposals for Improvement of Elderly Welfare 215
10 Development of Welfare for the Chinese Disabled

in the Transitional Period 221
10.1 Current Situation of China’s Welfare of the Disabled 221
10.1.1 Disabled Persons and Disabled Groups 221
10.1.2 Main Content of the Welfare for the Disabled 223
10.1.3 Achievements in the Welfare for the Disabled 227
10.2 Problems in Welfare for the Disabled
and Countermeasures 228
10.2.1 Employment of the Disabled 230
10.2.2 Education of the Disabled 232
10.2.3 Construction of a Barrier-Free Environment 235
10.3 Development of Chinese Welfare Enterprises 239
10.3.1 Development Course 241
10.3.2 Major Problems 242
10.3.3 Vision of Future Development 249
10.3.4 Development Direction of Welfare
for the Disabled in China 250
11 Changes on Children’s Palace and Fulfillment

of Child Welfare in China 255
11.1 Issues Worth of Attention and Existing Studies 255
11.1.1 Connotations of Children’s Palace,
After-School Education and Child Welfare 256
11.1.2 Literature Research on After-School Education 260
11.1.3 Studies on the Children’s Palace in China 262
11.2 Development Course of China’s Children’s Palace:
Case Study of M City Children’s Palace 265
11.2.1 Development of M Children’s Palace
in the Era of Planned Economy 266
11.2.2 Development of M Children’s Palace Since
the Reform 269
11.2.3 Functional Changes of M Children’s Palace
Since the Reform 280
xiv CONTENTS
11.3 Changes on the Function of Children’s Palace

in Delivering Child Welfare 281
11.3.1 Child Welfare Function of Children’s Palace
in the Era of Planned Economy 282
11.3.2 Difficulties in Front of the Children’s Palace
Since the Market-Oriented Reform 282
11.3.3 Deviation from Child Welfare Since
the Market-Oriented Reform 285
11.3.4 Reasons for Deviation from the Function
of Child Welfare 286
11.4 Development Trend of Children’s Palace
and Realization of Child Welfare 288
11.4.1 Role of Children’s Palace in Child Welfare 289
11.4.2 Discussions on the Future Prospect
of Children’s Palace 290
11.4.3 Development Direction of China’s Child
Welfare 292
12 Welfare Reconstruction for the Urban Poor: Taking

the Minimum Livelihood Guarantee System
as an Example 297
12.1 System Background and Research Techniques 297
12.1.1 Introduction to System Background 297
12.1.2 Research Techniques 298
12.2 Main Focuses of Current Studies 299
12.2.1 Standard of Urban Subsistence Allowance 299
12.2.2 Implementation of the Minimum Livelihood
Guarantee System 301
12.2.3 Major Problems Existing in the System 302
12.2.4 Countermeasures for Improving the System 304
12.2.5 Future Development Trends of the System 305
12.3 Quantitative Descriptive Results 306
12.3.1 Basic Information of the Respondents 306
12.3.2 Housing Condition of the Respondents 309
12.3.3 Receipt of Subsistence Allowance 312
12.3.4 Recognition and Evaluation
of the Minimum Livelihood Guarantee System 317
12.3.5 Brief Conclusion 320
CONTENTS xv
12.4 Qualitative Analysis Results 321

12.4.1 The Chinese Have Not yet Taken
the “Subsistence Allowance” as Their
Legal Right 321
12.4.2 Verification Mechanism and Supporting
Systems Remain Defective 323
12.4.3 Unduly Low Standard of Subsistence
Allowance 327
12.4.4 Publicity of Subsistence Security Policy Needs
to Be Intensified 329
12.4.5 Psychology of Subsistence Allowance
Recipients Is Worth of Attention 330
12.4.6 Construction of a Contingent
for Grassroots Subsistence Security Work 332
12.5 Policy Suggestions for Improving the Urban
Minimum Livelihood Guarantee System 334
12.5.1 Standardize the Eligibility Review System
with Focus on Household Income Survey 334
12.5.2 Improve Dynamic Management to Promote
Employment 335
12.5.3 Build a Comprehensive Social Assistance
System 335
13 Social Mobility and Urban Inclusion of Migrant Workers 339

13.1 Major Problems to Be Examined 339
13.2 Social Mobility of Migrant Workers 344
13.2.1 Mobility Intention 344
13.2.2 Attainment of Social Status in Urban Areas 347
13.2.3 Ways for Migrant Workers to Achieve
Upward Mobility 352
13.2.4 Intergenerational Expectation and Future
Plans of Migrant Workers 358
13.3 Social Protection of Migrant Workers: A Case Study
of Suzhou 361
13.3.1 Research Background and Survey Approaches 361
13.3.2 Analysis Results of the Questionnaire Survey 364
13.3.3 Causes for the Damages to the Rights
and Interests of Migrant Workers 377
xvi CONTENTS
13.4 Social Inclusion of Migrant Workers in Cities 380

13.4.1 Inevitability for Migrant Workers
to Integrate into Cities 380
13.4.2 Ways for Migrant Workers to Integrate
into Cities 383
13.5 Conclusion 385
13.5.1 Institutionalization of Migrant Workers’
Social Mobility 386
13.5.2 Social Mobility of Migrant Workers
and Alternative Paths to China’s
Urbanization 386
Postscript 391
References 393
List of Figures
Fig. 3.1 China’s total foreign trade volume in 1978–2001

(Source National Bureau of Statistics [NBS], China
Statistical Yearbook 2002, Beijing: China Statistics Press) 56
Fig. 3.2 Ranking of China’s total foreign volume by municipality/
province/region (Source NBS, 2002, China Statistical
Yearbook 2002, Beijing: China Statistics Press) 65
Fig. 3.3 Comparison of FDI among China’s three major regions in
2001 (Source NBS, 2002, China Statistical Yearbook 2002,
Beijing: China Statistics Press) 66
Fig. 3.4 Distribution of foreign-funded enterprises in China in 2001
(Source NBS, 2002, China Statistical Yearbook 2002, Beijing:
China Statistics Press) 69
Fig. 3.5 Changes on China’s industrial structure (Source NBS, 2002,
China Statistical Yearbook 2002, Beijing: China Statistics
Press) 70
Fig. 3.6 Structure of China’s export commodities in 2001
(Source NBS, 2002, China Statistical Yearbook 2002,
Beijing: China Statistics Press) 72
Fig. 4.1 Changes on China’s GDP in 1998–2009 (Source NBS,
2010, China statistical yearbook 2010, Beijing: China
Statistics Press, p. 41) 85
Fig. 4.2 Number of China’s foreign-funded enterprises
(Source NBS, 2010, China statistical yearbook 2010,
Beijing: China Statistics Press, p. 41) 88
xvii
xviii LIST OF FIGURES
Fig. 4.3 Number of employees in China’s foreign-funded enterprises

(Source NBS, 2010, China statistical yearbook 2010, Beijing:
China Statistics Press, p. 41) 89
Fig. 4.4 Revenue, expenditure and balance of China’s social insurance
fund (Source NBS, 2010, China statistical yearbook 2010,
Beijing: China Statistics Press, p. 41) 91
Fig. 4.5 Revenue, expenditure and balance of China’s unemployment
insurance fund (Source NBS, 2010, China statistical yearbook
2010, Beijing: China Statistics Press, p. 41) 92
Fig. 5.1 Chinese social strata (Note The arrows denote that
the concerned social stratum can be classified into one
of the five social ranks. Source Lu Xueyi, 2002, Research
Report on Social Strata of Contemporary China, Beijing:
Social Sciences Academic Press, p. 9; Lu Xueyi, 2004,
Social Mobility in Contemporary China, Beijing: Social
Sciences Academic Press, p. 13) 129
Fig. 11.1 Number of enrolled students and class times in summer
in 1996–2001. Note (1) The number of trainees
throughout 1995 is also included in the figure
for comparison. (2) This figure is plotted in reference
to the historical data about M Children’s Palace 272
Fig. 12.1 Gender and age composition of the respondents 307
Fig. 12.2 Start time for the respondents receiving subsistence
allowance 312
Fig. 12.3 Amount of monthly subsistence allowance distributed
to the respondents 314
Fig. 13.1 Gender composition of the migrant workers in Suzhou 365
Fig. 13.2 Age composition of the migrant workers in Suzhou 365
Fig. 13.3 Registered permanent residence of the migrant workers
in Suzhou 366
Fig. 13.4 Educational level of the migrant workers in Suzhou 367
Fig. 13.5 Identity of the migrant workers before working in Suzhou 367
Fig. 13.6 Daily working hours of the migrant workers in Suzhou 369
Fig. 13.7 Housing conditions of the migrant workers in Suzhou 372
Fig. 13.8 Residence of children of the migrant workers in Suzhou 373
Fig. 13.9 Schooling of children of the migrant workers in Suzhou 373
Fig. 13.10 Foremost difficulty for the migrant workers in Suzhou 377
Fig. 13.11 Proportion of migrant workers joining in labor union 379
List of Tables
Table 3.1 China’s paid-in foreign investment (Unit: bln USD) 58

Table 3.2 Per capita total import-export volume, per capita FDI,
per capita GDP and workers’ average wage
in 31 provinces/municipalities in 1995 and 2001 60
Table 3.3 Regression analysis of the impact of per capita total
import-export volume and per capita FDI on per
capita GDP and workers’ average wage 62
Table 3.4 Basic information of China’s foreign-funded enterprises
in three major regions in 2001 67
Table 3.5 Layout of China’s industrial structure (Unit: %) 69
Table 3.6 Average wage of workers in enterprises of different
ownership (Unit: yuan) 73
Table 3.7 Comparing workers’ average wage in enterprises
of different ownership in east China in 2001 (Unit: yuan) 73
Table 4.1 Changes on China’s GDP in 1998–2009 84
Table 4.2 Changes on China’s foreign trade value in 1998–2009 85
Table 4.3 Number of urban registered unemployment and URUR
in China 86
Table 4.4 China’s foreign investment in 1998–2009 88
Table 4.5 Number of employees in China’s foreign-funded
enterprises 89
Table 4.6 Revenue, expenditure and balance of China’s social
insurance fund 91
Table 4.7 Revenue, expenditure and balance of China’s
unemployment insurance fund 92
Table 4.8 Social assistance expenditure for entire Chinese residents 93
xix
xx LIST OF TABLES
Table 4.9 China’s policies in response to the financial crisis 95

Table 10.1 Development of Chinese welfare enterprises 243
Table 10.2 Occupational distribution of the disabled 248
Table 11.1 Admissions directory of M children’s palace in spring
of 2010 273
Table 11.2 Major training bases built by M children’s palace
since 1997 278
Table 11.3 Institutional restructuring of M children’s palace 279
Table 12.1 Statistics on the family size of the respondents 306
Table 12.2 Statistics on the educational level of the respondents 307
Table 12.3 Statistics on marital status of the respondents 308
Table 12.4 Statistics on the health status of the respondents 308
Table 12.5 Statistics on the working ability of the respondents 309
Table 12.6 Statistics on the employment status of the respondents 310
Table 12.7 Statistics on the housing (construction) area
of the respondents 310
Table 12.8 Statistics on housing ownership of the respondents 311
Table 12.9 Statistics on housing types of the respondents 311
Table 12.10 Statistics on housing condition of the respondents 312
Table 12.11 Time for approving the subsistence allowance application 313
Table 12.12 Channels for the respondents to know the Minimum
Livelihood Guarantee System 313
Table 12.13 Ways for the respondents to draw the subsistence
allowance 315
Table 12.14 Intermission of subsistence allowance 315
Table 12.15 Adjustment to the amount of subsistence allowance 315
Table 12.16 Adjustment to the amount of subsistence allowance 316
Table 12.17 Reasons for adjusting up the amount of subsistence
allowance 316
Table 12.18 Reporting of the changes in family income
to the relevant department 317
Table 12.19 Receipt of the subsistence allowance in full and on time 317
Table 12.20 Effect of the subsistence allowance in improving
life quality 318
Table 12.21 Consistency of the allowance amount with
the actual economic state 318
Table 12.22 Satisfaction of the allowance approval process 318
Table 12.23 Whether there are ineligible recipients of subsistence
allowance 319
Table 12.24 Whether there are eligible applicants but unable
to get the subsistence allowance 320
LIST OF TABLES xxi
Table 12.25 Overall evaluation of the Minimum Livelihood Guarantee

System 320
Table 13.1 Distribution of migrant workers in Suzhou by sector 364
Table 13.2 Marital status of the migrant workers in Suzhou 365
Table 13.3 Social insurance coverage of the migrant workers
in Suzhou 376
PART I
Central Concepts
CHAPTER 1
Introduction
1.1 Definitions of Social Welfare

and Origins of Welfare States
1.1.1 Definitions of Social Welfare

“Social Welfare” generally refers to a kind of interest distribution
mechanism, and a gauge for measuring the level of happiness of all citizens.
However, the scholars from different states or regions have var-
ied definitions of social welfare. And the researchers, though coming
from the same social background, may interpret this issue from diverse
perspectives.
According to the US scholar Robert L. Barker, social welfare is “a
nation’s system of programs, benefits, and services that help people meet
those social, economic, educational, and health needs that are fundamen-
tal to the maintenance of society”.1
In the Encyclopedia of Social Work, which was published by the
US National Association of Social Workers in 1999, social welfare is
explained as “an extensive and inaccurate phase, mostly defined as an
‘organized activity’, ‘government intervention’, policy or project that
intends to respond to the social problems that are being aware of or
improve the conditions of the disadvantaged groups…However, social
welfare may be better understood as an idea about a fair society that cre-
ates job opportunities and helps people achieve their life value, provides
© China Renmin University Press 2020 3

K. Han, Social Welfare in Transitional China, Sociology,
Media and Journalism in China,
https://doi.org/10.1007/978-981-32-9660-2_1
4 K. HAN
social members with security to a reasonable degree, keeps them from

financial strain and violence, and facilitates the establishment of a fair and
personal value-based assessment system; so such society shall be econom-
ically productive and stable. Such idea is based on an assumption that
human society, through organized governance, is able to produce and
provide what social welfare requires and morally obliged to fulfill such
idea because it is feasible”.2
The Japanese Social Security Review Conference, which was held in
1950, came up with a report on Suggestions for Japan’s Social Security
System which states that “social welfare is an undertaking that is designed
to provide necessary guidance on livelihood and reintegration into soci-
ety, as well as life protection to the handicapped, children and others that
are entitled to governmental bailout, so as to enable them to lead a life
on their own”. Besides, according to Article 3 in the Law on the Social
Undertakings of Japan, “all social welfare activities shall abide by the prin-
ciples for helping and cultivating the people that have to regain means
of subsistence without hurting their will for a self-reliance life”. In other
word, social welfare, which involves “all kinds of activities that benefit
those in need of assistance and protection”,3 is the same with social wel-
fare undertaking.
In 1991, China published the Encyclopedia of China that covers 74
volumes dedicated to separate disciplines. The volume of Sociology
defines “social welfare” as “a system that is designed to improve the
quality of life of all citizens, particularly those in difficulty. This system
shall, by means of allocating funds and rendering services, ensure basic
living standard of all social members and upgrade their life as much as
possible. Social welfare, in a narrow sense, indicates the services and
measures for helping certain social members that lead a difficult life due
to old age, sickness or incapacity resulting from physical or psychological
defect; in a broad sense, it refers to all types of services and measures for
improving both material and spiritual life of all members of society”.4
Overall, social welfare could be defined in both broad sense and
narrow sense. From the perspective of objects or beneficiaries, the
broad-sense social welfare takes care of all social members, while the nar-
row-sense social welfare focuses on the impoverished or special groups.
With respect to welfare content, the generally defined social welfare
contains both financial security and social services, while the narrowly
defined social welfare is only about financial security or somewhat social
assistance. The social welfare in this book is generally defined, i.e., it is a
1 INTRODUCTION 5
system designed to satisfy people’s needs and improve their living stand-
ard by means of fiscal allocation, physical distribution and social services.
Strictly speaking, social insurance is not covered in social welfare, yet
a general social welfare is a comprehensive system that embraces social
assistance, social insurance and social services.
1.1.2 Origins of Welfare States

After the World War II, all industrialized countries, while improving
their society security system, began to pay more attention to building
a social welfare system. The UK and other western European countries
successively declared to develop themselves into a welfare state, and an
all-round welfare system that cares about their citizens “from cradle
to tomb”. Other countries, though not following the same path, kept
enacting legislation on social welfare. Japan, for example, stipulated the
famous “six laws on social welfare”,5 which have laid legal basis for build-
ing and developing a sound social welfare system in the country.
The knowledge of welfare state is usually deemed as stemming
from the UK. In 1941, Sir William Beveridge, head of the then Social
Insurance and Allied Services Committee, was entrusted by the UK
government to draw up a post-war social security plan. At the end of
1942, Sir Beveridge delivered the famous report titled Social Insurance
and Allied Services, usually known as the “Beveridge Report”, which sets
out to annihilate five evils, i.e., “Want, Disease, Ignorance, Squalor and
Idleness”. Sir Beveridge presented 23 reform proposals to fulfill these
targets, particularly standardizing social insurance premium and social
security administration, and ultimately build a caring-for-all social insur-
ance system.6 The Beveridge Report is of epoch-making significance
for creating the basic framework for a post-war welfare state. It reflects
on the UK’s previous welfare schemes, and stands firm to the prin-
ciple that welfare is for common good rather than the interest of cer-
tain groups, and the cause of social welfare calls for joint endeavor of
both government and individuals. In contrast to the previous efforts,
the Beveridge Report is rated as a prime example for the studies on
social welfare, since it envisions a complete welfare system, involving
both people’s needs in every aspect—its foremost concern—and corre-
sponding measures. Around the end of the World War II, the UK gov-
ernment, on the basis of the Beveridge Report, introduced a series of
social welfare laws: Family Allowance Law (1945), National Insurance
6 K. HAN
Law (1946), National Health Service Law (1946), Industrial Injury

Law (1946) and National Relief Law (1948). The above five laws are
so extensive that they take every aspect of social welfare into account;
they are considered as an epitome of the UK’s achievements in social
welfare in the past 300 years. These laws entered into effect as of July 5,
1948 when the precedents went invalid automatically, marking that the
UK officially turned into a welfare state and opened a new page in its
history.
Since the 1970s, the UK has been reforming its welfare system, thus
altering the continuous growth momentum of the welfare expenditure
that had lasted for almost half a century, and generating a “non-welfare”
development trend. The reform strictly controlled the UK’s welfare
expenditure, e.g., some expenses were frozen, some were deferred, and
some welfare products were “privatized” and subject to market oper-
ation. Such reform came under heavy criticism. It was even accused of
deteriorating social inequality, since the previous policies were caring
more about the poor, while the new ones catered to the rich.7
In the world at large, other developed western countries have joined
the UK in the rank of welfare states, particularly those in the north-
western Europe like Sweden which are long hailed as “window of the
welfare state” for their high-spend and extensive welfare policies. These
societies have seen the policies for higher-level and more reasonable
welfare treatment become irreversible, despite of some economic and
social problems therefrom, because it is human instinct to seek happi-
ness and benefit, and continuous economic growth makes their dream
attainable. Therefore, when taking measures to control expansion of wel-
fare expenditure, all governments shall seize the opportunity of devel-
opment, foster reasonable growth of welfare and mitigate the possible
adverse effect, in an aim to build a social welfare system that benefit
all citizens.
1.2 Basic Functions of Social Welfare

There is no doubt that the establishment and improvement of social wel-
fare system is the prominent feature of the modern market economy, and
also important means for a state to intervene with economy and correct
market malfunction. Nowadays, social welfare plays an essential role in
resolving social problems, safeguarding social stability and improving
1 INTRODUCTION 7
people’s living standard. To be specific, social welfare could be inter-

preted through its economic, political and social functions.
1.2.1 Economic Functions

First, social welfare is a form of income distribution. By taking part in
social income distribution, social welfare is able to ease the negative
impact from income disparity and ensure basic livelihood of all citizens.
Second, social welfare is of great significance in resource allocation.
Through exerting influence on prioritization and input scale of finan-
cial appropriation, social welfare will alter velocity of capital accumula-
tion. Last, social welfare has enormous impact upon macroeconomy,
which manifests in the following three aspects: (i) The impact on balance
between supply and demand. Social welfare is a key factor that affects
demand expansion—driving force for economic growth. In order to
boost consumption and increase domestic demand, the government shall
build a social welfare mechanism that effectively liberates people from
worrying about birth, death, illness and old age. On this basis, social
supply and demand could be balanced and do good to a virtuous eco-
nomic cycle. (ii) The impact on production and reproduction of labor
force. Social welfare is able to help the laid-off employees amid market
competition sustain a basic living standard, and create possible condi-
tions for labor reproduction. Moreover, a standardized social welfare
mechanism facilitates rational flow and allocation of labor force. (iii) The
impact on employment. Social welfare system is actually a nationwide
network, its operation calls for participation and contribution of massive
manpower; in other word, there are vast job opportunities in this sector.8
Since its execution of the policies for reform and opening up to the
outside world in 1978, the Chinese government has been actively press-
ing ahead industrialization, which has created enormous demand for
building a social welfare system. In the meantime, the economic boom in
the past two decades not only built up China’s comprehensive strength,
but accumulated substantial funds and materials for carrying out the wel-
fare programs. It is also an urgent task to do so, since multiple social
problems have exposed in recent years along with the economic growth,
and the solutions lie in welfare treatment. According to Karl Polanyi, an
Austro-Hungarian economic sociologist, several necessary conditions
for operating a free market cannot be created by the market itself, but
supported by other systems; otherwise, a laissez-faire market mechanism
8 K. HAN
may end up in self-destruction.9 In short, whether China could continue

rapid economic growth or maintain social stability, harmony and healthy
development, a national social welfare system has a lot of discretion.
1.2.2 Political Functions

First, social welfare is a tool used by the ruling class to maintain politi-
cal control and social governance. Social welfare is a political phenom-
enon that is closely bonded with class and the state; it begins to reflect
the interest of the ruling class and uphold their authority since the day it
was initiated. In class societies, the ruling class, in order to defend their
prestige, manages to build economic, political and cultural institutions to
manifest their will, and works out and exercises a series of social norms
to represent their interest. Social welfare is a key component of the social
norms, and plays a role in safeguarding the class rule through regulat-
ing social relationships. In addition to being a political instrument, social
welfare is also a basic means for governance of society, because any polit-
ical rule relies on performance of certain public functions. Second, social
welfare is the basic means for party activities. Generally, social welfare,
which is associated with certain values and ideology, marks the nature of
a political party. In modern societies, the construction of a social welfare
system not only serves as the foundation for political parties, but con-
cerns their prosperity and decay.10
Among the social welfare theories, the “state-centered perspective”
states that the state and bureaucracy are the leading “actors” in work-
ing out social welfare programs; the development of social welfare relies
on the organizational structure, operational objectives and other factors
within the state, which implies that the state can either be a propellant
or a stumbling block in developing social welfare. Being an “auton-
omous actor”, the state is sure to utilize all “financial and bureaucratic
resources” to accomplish its operational objectives. Herein, the devel-
opment of social welfare is considered as a result from the bureaucrats’
ambition to realize their operational objectives and the state’s endeavor
to respond to social pressure. Here is a typical example for the “state-cen-
tered perspective”, by the end of the 1800s, Otto von Bismarck, the then
Chancellor of Germany, vigorously carried out a social insurance plan in
order to enhance the survivability of his government and suppress the
socialist movement. Besides, in their researches, the American econo-
mist Richard Freeman and psychologist J. S. Adams pointed out that
1 INTRODUCTION 9
bureaucratic activities used to playing a decisive role in developing the US

social welfare system; and the bureaucrats usually influence the formula-
tion and implementation of social welfare policies from two aspects: First,
to help promote the “social insurance movement” and design an opera-
tional structure for the social welfare system. Second, to reform the con-
tent of this system to make it accord with the social and political climate
at that time.11 Currently, China has seen such problems as economic ine-
quality, employment and unemployment become increasingly prominent,
which could be effectively resolved by social welfare policies. Therefore, it
is incumbent upon the Chinese government to execute the social welfare
policies through legislative and administrative means; after all, govern-
ment action is always the most crucial and effective in China.
1.2.3 Social Functions

The experiences of different countries have proved that social welfare is
important to guarantee for social stability and development. Social wel-
fare mainly has three social functions: First, to assist the people who
encounter risks. In their lifetime, people may face various risks such as
disease, old age, injury, disability, unemployment, disaster, no family or
no friend, which may deprive them of income source and force them
into predicament. In that case, the social welfare system will help them
overcome difficulties. Second, social welfare helps create a fair society.
Being capable of redistributing national income, social welfare will some-
what divert the wealth toward the low-income earners so as to satisfy
their basic life demand, which will then narrow the wealth gap among
all social members. Third, social welfare is favorable for social stability
and development. By satisfying people’s basic living standard, social wel-
fare alleviates their anxiety over possible risks. Furthermore, a narrowed
wealth gap will pave way for creating a fair and reasonable social envi-
ronment where everyone enjoys benefit from social welfare, holds confi-
dence in their future, lives and works in peace and contentment. Overall,
the building of a social welfare mechanism with the government taking a
leading role is able to resist against all risks and uncertainties in front of
individuals; it is a common development trend for all countries, and an
opportunity for China to exhibit its responsibility for its people.
In today’s world, social welfare is extensively recognized by the
international community for being an institution that benefits citizens.
Although different political parties or theorists may have mixed views
10 K. HAN
toward the functions and effects of social welfare, it is a fact that social
welfare has become a key component of the modern societies, and the
foremost security defense system for social development and a benign
social order.
1.3 Reforms and Reconstruction of China’s Social

Welfare System
1.3.1 Reforms of China’s Social Welfare System
Since it was founded in 1949, the People’s Republic of China saw its
social welfare system undergo two reforms which involved three cru-
cial development stages. Through the first reform, China gradually built
the social insurance, workplace welfare and collective security systems
that accorded with the socialist planned economy. Through the second
reform that was kicked off after 1978 when China started exercising the
policies for reform and opening up to the outside world, the planned
economy-based social welfare system was transformed into the one based
on market economy. These two rounds of significant reforms could be
split into the following three stages:
During the first stage (1949–1978), the social welfare system of
China was established and tended to be stabilizing. China successively
built the Insurance System for Urban Enterprise Workers (1951),12 the
State-funded Public Medical System (1952),13 the Corporate Welfare
System (1953),14 the Retirement System for the Personnel in Government
Departments and Public Institutions (1955),15 and the Five Guarantees
Supporting System in Rural Areas (1956)16 and the Cooperative Medical
Care System (1962),17 marking that a national welfare system, which was
based on an urban–rural dual structure, finally took shape. While China
remained in the era of planned economy, its social welfare system fea-
tured urban–rural segmentation, i.e., the urban laborers were mainly
guaranteed by the national insurance system, with the workplace wel-
fare serving as a supplement, and a minority of impoverished people, like
those “sanwu” people,18 could receive social assistance; whereas in the
rural areas, there was a three-level collective welfare system, i.e., people’s
commune, production brigade and production team.
The second stage (1979–1997) witnessed China transit from planned
economy to market economy, and start building a new-type social
1 INTRODUCTION 11
welfare system since 1997. The dominant trend during this period was
to replace the initial rural land reform with the reform of state-owned
and collectively-owned enterprises in the urban areas, and replace
planned economy with market economy. As for the reform of social wel-
fare, the Chinese government was helping the economic organizations,
government departments and public institutions get rid of the burden
from the coverall welfare system—a sign of the planned economy era.
In 1993, in its Decisions on Several Matters about Building a Socialist
Market Economy, the Central Committee of the CPC explicitly proposed
to build a reasonable individual income distribution system and a social
security system, i.e., “build a multi-level social security system, pro-
vide both urban and rural residents with the social security services that
match with China’s situations, sustain economic growth and maintain
social stability”, “give priority to improving the corporate elder-care and
unemployment insurance system, ease the burdens upon the enterprises
by giving full play to social services, support the enterprises to adjust
organizational structure, increase economic benefit and enhance com-
petitive edge”.19 During this period that new things kept emerging out
of the old, several welfare systems that were left from the planned econ-
omy era were collapsing, e.g., their effectiveness was weakening, there
was vacuum in certain welfare policies, some welfare schemes were either
distorted or incomplete; moreover, welfare housing and state-funded
education began to be marketized, commercialized, privatized or indus-
trialized. Later, along with continuous implementation of the reform and
opening-up policies, new economic and social problems kept cropping
up, which made it an inevitable demand for building an up-to-date social
welfare system based on the market economy. In such context, lots of
provinces started pilot programs about new pension and medical insur-
ance systems, and created an insurance model that integrated social
financing with personal spending. Shanghai and other places, through
researches and explorations, put in place a minimum living insurance sys-
tem that focused on the urban laid-off workers and impoverished groups.
During the third stage (1998 to date), the new-type social wel-
fare system was officially established and then constantly improved.
This stage took on the following characteristics: (1) The competent
departments were reorganized. In 1998, the then Ministry of Labor
was renamed as the Ministry of Labor and Social Security, indicating
that it would strengthen the administration of social insurance affairs.
Later in 2008, the Ministry of Labor and Social Security and the then
12 K. HAN
Ministry of Human Resources were incorporated into the Ministry of

Human Resources and Social Security. (2) Welfare systems were set up
one after another, e.g., the Retirement Pension Insurance System for
Urban Employees (1997), the Basic Medical Insurance System for Urban
Employees (1998), the Unemployment Insurance System (1999), the
Work-Related Injury Insurance System (2004), the Medical Insurance
System for Urban Residents (2007), the New-type Rural Cooperative
Medical Insurance System (2002), and the New-type Rural Retirement
Pension Insurance System (2009). On October 28, 2010, the Social
Insurance Law of the People’s Republic of China was enacted, marking
that a social welfare system basically took shape in China. In the mean-
time, the relevant policies for social assistance and services and housing
benefit kept coming out, e.g., the Minimum Living Allowance for Urban
Residents (1999), the Regulations on Management of Housing Provident
Fund (1999), the Law of the People’s Republic of China on Donations for
Public Welfare (1999), the Measures for the Administration of Relief for
Vagrants and Beggars without Assured Living Sources in Cities (2003),
the Regulations on the Work of Providing Five Guarantees (2006), the
Rural Minimum Living Allowance System (2007), the Measures for
the Guarantee of Low-rent Homes (2007), and the Law of the People’s
Republic of China on the Protection of Disabled Persons (2008). (3) The
guidance value for China’s social welfare changed fundamentally, i.e., the
ideas for fairness and righteousness gradually replaced such old concepts
as “efficiency coming first” and “remedy-oriented guarantee”.
1.3.2 Reconstruction of China’s Social Welfare System

Since China started reform and opened up to the outside world in 1978,
its social welfare system was initially built around the socialist market
economy, which contained two connotations as follows: First, the mar-
ketization reform was the basis for China’s reconstruction of the social
welfare system. Second, the reconstruction of the social welfare system is
part of China’s marketization reform, making China’s social welfare sys-
tem intensely colored by liberalism for a long time.20 According to Gøsta
Esping-Andersen, the minimal laissez-faire social policies are innate of
liberalism. When the ideal of universalism within liberalism conflicts with
the “social dualism” and “social stigma” in reality, the liberalist countries
will build a kind of social assistance—a punitive and stigmatized poverty
relief—to deal with market failure, and then resort to the means-tested
1 INTRODUCTION 13
relief. In terms of welfare arrangement, the means-tested relief is only a

supplement to the liberal social policies, the crucial part shall be individ-
ual insurance and the contract that sounds like based on people’s own
accord and insurance actuarial.21 Since China embarked on the mar-
ketization reform, all of the intrinsic duality, widening wealth gap and
social exclusion resulting from the stigma22 conformed to the difficul-
ties in front of the liberal social policies that were described by Andersen.
In case the liberal social policies and institutional arrangement stated
by Andersen was a universal rule for welfare system, then the priority
of China’s social welfare system shall be the same, i.e., to establish and
improve the poverty relief and the means-tested social assistance system.
With respect to the social assistance policies, the Chinese government
successively built the systems for the urban minimum living allowance,
helping the vagrants and beggars in cities, providing low-rent homes,
medical and educational help to the urban impoverished families; and
made adjustments to the competent departments. On July 10, 2008, the
Notice of the General Office of the State Council on Issuing the Provisions
on the Main Functions, Internal Structure and Staffing of the Ministry
of Civil Affairs was issued, marking that China would restructure the
internal agencies of the Ministry of Civil Affairs (MOCA), adjust the
duties and functions of MOCA to give its full play in social assistance,
and rename the then Minimum Living Assurance Department as Social
Assistance Department.
As for the social insurance policies, the Social Insurance Law of the
People’s Republic of China promogulated on October 28, 2010 inte-
grated the insurances separately for the elderly, medical care, work-
related injury, unemployment and childbirth, explicitly stated that the
pension insurance shall be gradually unified across the nation, while the
other types of insurance shall be unified at the provincial level, the scope
of beneficiaries shall cover laborers and citizens, and the responsibilities
of government shall be further clarified, marking that the social welfare
system with the Chinese characteristics basically took shape since it was
initiated in 1978.
A basic framework for the rural welfare system was already created.
It involves the New-type Rural Pension Insurance System, the New-
type Rural Cooperative Medical Insurance System, the Rural Minimum
Living Allowance System and the Rural Five Guarantees System. The
policies for safeguarding the rights and interests of the rural migrant
workers have been improved, the reform of household registration
14 K. HAN
system has been expedited, making the social welfare system that features
urban–rural integration already exist in embryo.
It should be noted that the reconstruction of China’s social welfare
system since 1978 was a kind of welfare reform led by government or
driven by policies. From the perspective of structural functionalism, any
change on political system is under the impact from changing economic
system, the two systems will firstly differentiate from each other, and
then gradually become mutually accustomed. To some extent, the recon-
struction of China’s welfare system was initially induced by economic
reform or changing economic system, but currently it has become an
essential part of the national pollical reform or changing political system.
At present, the single target for economic growth is being replaced by
diversified targets that include political democracy and social construc-
tion; consequently, the reconstruction of the welfare system is no longer
a supplement to the market economic reform, but tend to have several
targets as resolving social problems, mitigating wealth gap and promot-
ing social justice. In short, the reconstruction of the welfare system is not
only a part and an extension of the Chinese market economic reform,
but a part and an extension of the Chinese social transformation and
development in the future.
Notes
1. Barker Robert L., 1991, The social work dictionary (2nd edition), Silver
Spring, MD, National Association of Social Workers, p. 221.
2. Shang Xiaoyuan, 2001, Re-recognition of social welfare and society secu-
rity, Social Sciences in China, Issue 3.
3. Yasuko Ichibangase, 1998, The fundamental theories of social welfare,
Wuhan: Huazhong Normal University Press, p. 26.
4. Editorial Board of Encyclopedia of China, 1991, Encyclopedia of China
sociology, Beijing: Encyclopedia of China Publishing House, p. 286.
5. Law on People’s life protection, Law on children’s welfare, Law on welfare
of physically handicapped people, Law on welfare of psychologically defective
people, Law on welfare of elders, Law on welfare of single-parent families.
6. Beveridge William, 2004, Report on Social insurance and allied services,
Beijing: China Labor and Social Security Publishing House, pp. 20–82.
7. Liu Weiwei, 01/08/2016, The social relief system in the UK, http://www.
chinasocialpolicy.org/.
8. Lin Jia, 2002, Ideas, practice and innovation of social security law, Beijing:
China Renmin University Press, pp. 146–48.
1 INTRODUCTION 15
9. Lv Jiande, 2002, Globalization and social inequality, in Labor and social secu-
rity in the context of globalization, in Zheng Gongcheng, Zheng Yushuo,
ed., Beijing: China Labor and Social Security Publishing House, p. 49.
10. Hua Juxiang, 2002, Social policies and legislations, Beijing: Social Science
Academic Press, pp. 41–43.
11. Cai Wenhui, 1999, Social welfare, Taipei: Wu-Nan Book Inc., pp. 131–32.
12. Labor Insurance Regulations of the P. R. C., promulgated by the then
Government Administration Council of China on February 26, 1951,
marking the establishment of the insurance system for urban enterprise
workers in China.
13. Instruction on the State-funded Medical Care and Prevention to the State
Functionaries of the People’s Governments at All Levels, Parties, Groups and
Their Subsidiary Public Institutions, promulgated by the then Government
Administration Council of China in 1952, marking the establishment of
a state-funded public medical system in China. Circular on the Medical
Treatment to the Children of the State Functionaries, jointly released by the
Ministry of Finance, Ministry of Health and Personnel Department of the
State Council in September 1955, stating that the immediate families of
the state functionaries may receive half free medical service.
14. Detailed rules for implementation of the labor insurance regulations of the P. R.
C. (draft for revision), made public by the then Ministry of Labor in 1953,
stipulating that any enterprise that take part in labor insurance shall open a
canteen and nursery, etc., and the relevant expenses on premises, facilities
and employees shall be borne by the enterprise itself or investor(s) if any. If
the parents were unable to pay for the board expenses of the nutritionists or
their child, they shall be subsidized with their labor insurance fund.
15. Interim Measures for Treatment of People’s Retirement in the Government
Departments and Public Institutions, Interim Measures for Treatment
of People’s Resignation in the Government Departments and Public
Institutions, and Interim Rules for Calculating Years of Working for the
Retired or Resigned Personnel in the Government Departments and Public
Institutions, unveiled by China’s State Council on December 29, 1955.
16. National agricultural development program 1956–1967, Demonstration
charters of advanced agricultural cooperatives, both adopted in 1956, stip-
ulating that all agricultural cooperatives shall take care of the members
that are incapacitated, having no family or friend to rely on, by provid-
ing them with food, clothes, fuel, child education, and burial after death,
which are jointly called the “Five Guarantees”.
17. “sanwu” people: people without identification papers, a normal residence
permit, and a source of income.
18. In early 1955, Mishan Township Agricultural Cooperative in Gaoping
County of Shanxi Province took the lead in devising a special medicare
16 K. HAN
system, i.e., it was based on the “health fee” collected from the mem-
bers of the agricultural cooperative and the “public welfare fund” borne
by the agricultural cooperative; such system was later named as “collec-
tive and cooperative medicare system” in the Report on On-site Rural
Medical Work delivered by the Ministry of Health and then forwarded
by the CPC Central Committee in 1960, since then such system began to
take root in China’s rural areas.
19. Ministry of Human Resources and Social Security and CCCPC Party
Literature Research Office, 2002, Selected Documents about China’s
Labor and Social Security in the New Era, Beijing: China Labor and Social
Security Publishing House, pp. 133, 138.
20. Han Keqing, 2010, The third way and China’s welfare reform, Tianjin
Social Sciences, Issue 2; Han Keqing, 2008, Civil society and construction
of China’s social welfare system, Tianjin Social Sciences, Issue 1.
21. Andersen Gøsta Esping, 1990, The three world of welfare capitalism,
Bristol: Policy Press, p. 62.
22. Goffman E., ed., 1963, Stigma: Notes on the management of spoiled identity,
Englewood Cliffs, NJ, Prentice-Hall, Inc., p. 34, in Li Xianhong, 2009,
Concepts of AIDS-induced humiliation and discrimination and research
instruments, Advances in Psychological Science, Issue 2. According to E.
Goffman, “stigma” is a kind of characteristic or property that makes people
feel deeply humiliated. It could be divided into three types: physical defect;
stain in one’s character; one’s race or religion is not recognized. The later
scholars extended Goffman’s idea, they believe “stigma” is a negative prop-
erty that could be felt by people; the individuals and groups that have such
negative property are rejected, isolated, biased or discriminated, or forced
to escape from normal social strata; such escape features self-depreciation.
CHAPTER 2
China’s Social Transition and Social

Welfare Reform
2.1 Social Structural Differentiation

and Transition Since the 1978 Reform
2.1.1 Differentiation of Social System and Structure

It is known that China was ushered into a period of transition since the
reform and opening up in 1978, making up of the transition of both
economic system and social structure. This transition is usually labeled
as the transformation of market system, i.e., transforming from planned
economy to market economy. But in fact, this transition has rich conno-
tations as follows:
First, gradual separation of economic system from political system.
The market-oriented reform of China is led by the state (government),
meaning that this reform is a reasonable choice made by the state, and
the government is the main driving force for this reform. In other words,
Han Keqing, 1999, Commonly benefited: An important principle for China’s

social development, Journal of Literature, History & Philosophy, Issue 6; Han
Keqing, 2005, State and market: Dual driving forces for social stratification
during economic globalization, Journal of Scientific Socialism, Issue 1; Han
Keqing, 2002, Sociological analysis of the idea of equality in present China,
Journal of Huaiyin Teachers College (Social Sciences Edition), Issue 1.

https://doi.org/10.1007/978-981-32-9660-2_2
18 K. HAN
it is the state that takes charge of nurturing the market. So the state and
market are closely linked with each other and inseparable, or it was at
least the case in the wake of the 1978 reform. However, after the market
becomes increasingly powerful, it no longer needs to be nurtured by the
state, but starts self-organization and even stands up to the state as an
equal.
Second, internal differentiation of economic system. When analyzing
an economic system, the AGIL Paradigm1 put forward by T. Parsons
et al. yields four interrelated subsystems: Capitalization (A), Production
(G), Organization (I) and Resource Input (L).2 Under the impact from
the increasingly powerful market force, the Chinese economic sys-
tem has been subject to sharply internal differentiation in four aspects:
investment subjects, production and distribution patterns, resource
input models, and category of economic organizations. Under such cir-
cumstance, China has seen its industrial structure, business forms and
functions initiated in the planned economy period become increasingly
heterogeneous.
Last, constant changes upon social system. In terms of social struc-
ture, Fei Xiaotong characterizes the traditional Chinese society as “earth-
bound”, holding that the basic structure of the earthbound Chinese
society is the so-called “diversity-orderly structure” (in contrast to the
“group structure” of the modern western society), and a “network inter-
woven with personal ties”. An earthbound society, with “extended fam-
ilies” as its core community, is a “rite-ruled society”.3 As a whole, China
has all along been highlighting the harmony and unity between the state
and society, sometimes the state is even melted into and intermingled
with society.4 In the traditional Chinese society under the rule of mon-
arch, there used to be a great unity of politics, economy, society, cul-
ture and ethics; it could be said that the state, economy and society were
never separated. Since the 1978 reform, the rapidly developing market
economy has brought changes on the Chinese property right system and
interest structure. Since any change on economy is sure to trigger the
changes on other domains, so the relationship among the state, economy
and society is in need of adjustment. The reform of the Chinese eco-
nomic system, with focus placed on diversification of property right and
marketization of economic operation, has resulted in social structural dif-
ferentiation, and directly led to the formation of a relatively autonomous
society.5
2 CHINA’S SOCIAL TRANSITION AND SOCIAL WELFARE REFORM 19
Since the reform and opening up, the Chinese totalitarian society has
experienced an all-round differentiation, i.e., differentiation of social
groups, classes, industries and regions simultaneously. In a very short
period, the Chinese totalitarian society was disintegrated and sliced into
countless sections or even atoms, which is described as “social fragmenta-
tion”.6 As a result of the differentiation, the Chinese society, which used
to be highly homogeneous, has become heterogeneous. Of course, dif-
ferentiation does not mean thorough social disorganization and disorder;
instead, it splits a single social status, which bears multiple functions, into
varied statues that perform a single function. Although differentiation
has hampered social integration and increased social risks, it paved way
for building a new social integration mechanism.
2.1.2 Impact from Market Transition on Social Structure

The prominent feature of Chinese social transition is no doubt the
robust development of market economy. According to the market
transition theory, the market-oriented reform denotes the change of
the integration principle and power structure of the entire economy,
i.e., the right to allocate products and labor is transferred from redis-
tribution system to market, which will weaken power monopoly of
redistributors, since the power is delegated to all economic and social
domains. Such tendency is sure to exert a significant impact on social
equality and stratification structure.7
The emergence of market power has gradually broken the landscape
where the state dominates the social structure. One of the key conse-
quences of the marketization reform is the appearance of “free flow of
resources” and “free space for activities”, and formation of the four car-
dinal “social-political” forces: the state, elite from monopoly groups,
elite from folk society and social masses.8
During the period of social transition, China has seen its class and
stratum structures undergo the following changes: (1) While the 100
million-plus rural laborers are joining the urban work force, the changes
on industrial structure have increased the number and influence of the
employees involved in modern economy, e.g., the professionals and tech-
nicians in emerging industries. In contrast, the size of the employees in
traditional industries has been shrinking. (2) As a result of the profound
vocational differentiation, the same social class is divided into several
strata with different economic status and interests. Besides, the originally
20 K. HAN
overlapped stratification criteria—income, status and prestige—become

notably separated during the transitional period, i.e., the high-income
earners may have inferior status and low prestige, while those with high
prestige may occupy inferior status and earn a low income. Such dislo-
cation is able to be corrected through a new round of social integration.
(3) Following the changes on the ownership structure since the 1978
reform, a stratum of private owners possessing certain production mate-
rials and an occupational stratum accessing to international capital have
come into being.9 In terms of the changes on benefit structure, Li Qiang
has examined people’s gains and losses since 1978, and then divided the
Chinese into four benefit groups: specially benefited group, commonly
benefited group, relatively deprived group and vulnerable group.10
According to Sun Liping, the Chinese economic reform in the 1980s
had resulted in wealth growth and resource diffusion. At the start, it was
the disadvantaged and marginal groups that firstly tasted the fruit of the
reform, and the most impoverished saw their income and living stand-
ard improved. However, things began to change in late 1980s and early
1990s, the social wealth tended to be amassed by a minority of people,
because of ill-regulated market operation, widening income gap, corrup-
tion and bribery, and widespread seizure of state-owned assets. Such sit-
uation gave rise to two opposite social strata: one is the higher stratum
constituted by a small number of rich people, the other is the lower stra-
tum made up of poor farmers, migrant rural workers and urban laid-off
workers.11 Given this, the Chinese society is seemingly fractured, what’s
worse, it is fractured into more than two parts.12 Apparently, as result of
deepening marketization reform and growing market forces, the social
differentiation is aggravated, and three social strata have initially taken
shape, i.e., the elite that occupy a greater share of social resources, a mid-
dle class that keeps expanding, and manual laborers in both urban and
rural areas.
2.2 Commonly Benefited: Key Principle for China’s

Social Transition
The so-called “commonly benefited” denotes that social members are
able to constantly receive the benefits from the development of society.
But its understanding shall go deeper into four aspects: (1) The pre-
requisite for “commonly benefited” is economic growth. Only with an
enormous “cake” of economic achievement, then everyone would have

a bigger bite, i.e., more social members could receive tangible benefit.
In fact, the impartiality resulting from wealth gap is, to a great extent,
attributed to scarcity of material wealth, just as J. Rawls puts it that
under moderately poor conditions, when people that are usually indiffer-
ent to each other demand for distribution of social benefit but in a con-
flicting manner, then the context for the issue of justice has emerged.13
(2) The “commonly benefited” principle aims to bring good to the
vast majority of people rather than certain interest groups or individu-
als. With a view to the current situation in China, lots of necessary reg-
ulations and rules are not yet put in place in the period of transition,
thus resulting in lots of loopholes, such as a small number of people have
made great fortune overnight through illegal means. The “commonly
benefited” principle is to reduce or even eradicate such distorted phe-
nomena, and enable the majority of citizens to benefit from common
prosperity. (3) Objectively, the “commonly benefited” principle calls for
building a relatively fair distribution mechanism. Fairness is an internal
order of economic activities and social development. The interest distri-
bution based on fairness is to use a kind of “game rule” to restrict and
balance redistribution of social wealth so as to safeguard the society from
being eroded by unfairness. As for the so-called “relative fairness”, it
means that “fairness” is a time-space concept, there is no fairness mech-
anism that applies to all stages of history or all mankind. With regard to
the current situation in China, the government shall utilize the political,
legislative, economic and moral means to reconstruct a fair distribution
mechanism and promote the idea of fairness. (4) “Commonly benefited”
is a process that benefits people progressively. This process manifests the
characteristics of the times, and constantly adjusts itself to meet the social
development demand and people’s demand in a given historical context.
In a word, it is a dynamic process that reflects the themes of the times,
and satisfies people’s escalating demand, i.e., from the most basic mate-
rial needs to high-level spiritual enjoyment.
In contrast to developed countries, China pays an even higher
attention to “commonly benefited” because of the following reasons:
(1) Such concept as “eliminating class difference and equalizing wealth
distribution” is deeply ingrained in the mind of the Chinese people.
(2) In more than 30 years since the New China was founded in 1949,
the Chinese people had been accustomed to equalitarian income distri-
bution. Although such approach was criticized and adjusted after 1978,
22 K. HAN
the shadow of its impact lingers on. Such mindset is unreasonable, yet
it is an objective existence in China that cannot be avoided. It is neither
correct to continue tolerating such mindset nor ignore it, otherwise, a
sound social order is sure to be disrupted.
A notion needs to be clarified, i.e., what is “benefited”? We believe
it should not be simply defined as satisfying people’s material needs,
although it is a key component of the “commonly benefited” principle,
and also the foundation for benefiting all social members. However,
while the social transition is going deeper, especially when there is sub-
stantial wealth and the material needs are not as desperate as before,
people will turn to pursuing other things. Therefore, being “benefited”,
despite of material gains, also means achievement of higher goals, which
calls for equally tapping the development potentials of individuals and
creating development opportunities for them.
2.2.1 Theoretical Bases

The “commonly benefited” principle is built on the following theoretical
bases:
First, social justice. From the perspective of social justice, everyone
deserves to receive what a society gives to its members, regardless of
their different contributions, at least human rights and other basic rights
for survival and development on an equal footing (on the other hand,
different persons make unequal contributions, it is justifiable for them
to ask for some non-basic and unequal rights14). Social justice calls for
fair distribution of social wealth, and basic rights and development rights
for each social member on an equal footing. The “commonly benefited”
principle, which embodies the reasonable demand of social justice, is an
inevitable choice to ensure everyone of basic rights and development
rights. In other word, social justice will be a “dead letter” unless “com-
monly benefited” is achieved.
Second, the people-oriented development concept. The evolvement
of the social development concepts shows that free and overall devel-
opment of human beings is the ultimate goal and destination of social
development. Any form of social development, if not putting people
at the first place, seems like a tree without roots. In 1995, the World
Summit for Social Development held in Copenhagen declared that
“social development is central to the needs and aspirations of people
throughout the world and to the responsibilities of Governments and all
sectors of civil society”, “ensuring that human persons are at the center
of social development”, and “the ultimate goal of social development is
to improve and enhance the quality of life of all people”. As such, the
“commonly benefited” principle is consistent with the people-oriented
development concept.
Third, unity between fairness and efficiency. Fairness and efficiency
shall not be simply examined together, but viewed separately: efficiency
is more like an economic term, while fairness concerns morality, ethnics
and law. With respect to social development, fairness is the goal instead
of the means, while efficiency is the means but the goal. Yet these two
factors may be unified under the “commonly benefited” principle at cer-
tain stage of social development or in the current transitional period of
China, because of the following reasons: (1) Improved efficiency reduces
unfairness. Samuel P. Huntington has argued that economic growth, in
the long run, is able to bring forth a fairer income distribution pattern
than conventional society.15 Efficiency lays a solid material foundation for
fairness, while improved efficiency is precondition for the ultimate reali-
zation of fairness. (2) Fairness improves the level of efficiency. Fairness is
primarily reflected in income distribution. A reasonable form of income
distribution, i.e., “more work, more pay”, effectively motivates the ini-
tiative of laborers and raises economic efficiency. The “commonly ben-
efited” principle unifies fairness and efficiency, it not only highlights
fair income distribution, but that everyone is entitled to basic rights for
their contribution on an equal footing, and some non-basic rights for
their additional contribution, so as to excavate individuals’ development
potentials and create a level playing field for them.
2.2.2 Effects of “Commonly Benefited” on Chinese Social Transition

The effects of the “commonly benefited” principle on Chinese social
transition are shown as follows:
First, the “commonly benefited” principle adds a sense of purpose
to social transition. Such principle conveys the people-oriented devel-
opment concept which defines the goal and end result of social transi-
tion. Such concept is both reasonable and inevitable: it sums up people’s
constant reflections on their own development and on social progress
amid the mounting conflicts between environmental pollution, resource
waste—resulting from people’s ambition for economic growth—and
demand of human beings. This development concept, by affirming that
24 K. HAN
the ultimate goal of social development is to improve the living standard

of all citizens, explains “why” and “how” puts people at the first place.
In short, the “commonly benefited” principle confirms that the ulti-
mate beneficiary of social transition is human beings; in other words, the
results of social development are commonly beneficial.
Second, the “commonly benefited” principle is a powerful driving
force for social transition. “Commonly benefited” is associated with spe-
cific time and space, it should be gradually set up and improved while
building the socialist market economic system. It is essentially differ-
ent from the idea of “eliminating class difference and equalizing wealth
distribution”, which was shouted by the peasant rebels in China’s feu-
dal past. Such traditional idea sounds like “utopian” to a great extent,
because at that time the wellbeing of people was not the goal of social
development, and there was nothing related to market economy.
Nowadays, the goal of social transition integrates with people’s internal
demand; and the “commonly benefited” principle, which meets with the
requirements of the market economy, has become the driving force for
social transition. By placing people’s demand at the dominant position,
this principle defines the ultimate goal of social transition and ensures
people to constantly benefit from social achievements; on this basis, it
will enhance people’s recognition of social transition, solidify the foun-
dation of the masses for social transition, and make it benefit the public.
Third, the “commonly benefited” principle is favorable for social inte-
gration and stability. Such principle plays a prominent role of integration
during the transitional period. While the social structure and interest pat-
tern are being adjusted owing to social transition, both “core groups”
and “marginal groups”,16 under the guidance of the “commonly ben-
efited” principle, will gradually join in the new system that obeys such
principle, especially after the fairness mechanism—basis for this princi-
ple—becomes the dominant value of the entire society. After the period
of transition comes to an end, a relatively stable “commonly benefited”
stratum structure will take shape. As long as a majority of social mem-
bers enter the middle class, the society will become truly stable and
maintain prolonged stability. The “commonly benefited” principle per-
forms a positive function for China’s progressive modernization. Such
modernization model stresses the basic conditions for modernization,
i.e., cultivating the soil for social development by building an efficient
social mobility mechanism and social security system, ensuring fair dis-
tribution of wealth and adopting a reform strategy of “easy first, hard
later”. Such model aims at cutting the social cost for China’s moderni-
zation as much as possible, removing the resistance during the process,
and pressing ahead with the modernization drive smoothly and suc-
cessfully.17 The “commonly benefited” principle and progressive mod-
ernization fit each other, because they have the same starting point,
i.e., insisting that social development shall benefit people. Also, they have
the same purpose while considering that modernization is the proper
meaning of social development. In addition, a restrictive mechanism,
which is “commonly benefited” and relatively equitable, is able to safe-
guard social harmony, since it ensures healthy and steady social devel-
opment, guards against social disintegration, tensions or formation of
privileged strata. Given this, “commonly benefited” shall be considered
as the source of social stability, harmony and civilization.
Fourth, the “commonly benefited” principle improves the level of
rationalization and legislation during social transition. Rationalization
means people’s action is based on calculation and measurement of advan-
tages and disadvantages, rather than on passion, impulse or prestige.
Essentially speaking, “commonly benefited” is the basic right of citizens,
not granted by any individual or organization. “Commonly benefited”
is achieved under the principle of rationalization and through open,
legitimate and proper means, rather than through blood ties, prestige or
covert transaction, so it is especially important in China where the social
network is built on interpersonal relations and ethics. As such, “com-
monly benefited”, which embodies universal rationality, is able to greatly
improve the level of social rationalization. In addition, “commonly
benefited” expedites differentiation and integration of interest groups,
and results in heterogenization of interest subjects. In order to pursue
their own interest, these mutually exclusive interest subjects are forced
to conclude contracts to form new interest groups or eligible organiza-
tions, by this means these heterogeneous interest subjects will form a
contract-based interpersonal relation that involves both rights and obli-
gations,18 and such relation will become basis for a society ruled by law.
Therefore, “commonly benefited” not only raises the level of rationaliza-
tion, but creates conditions for rule of law. The “commonly benefited”
principle is accompanied by awakening of individuals’ consciousness for
rationality and self-interest, and strong appeal for human rights, freedom
and equality.
Fifth, the “commonly benefited” principle helps improves social qual-
ity. In the same era, social quality reflects the goodness of fit between
26 K. HAN
the actual situation of social organism and its best demand and optimal
demand. In other words, it means whether the actual situation of social
organism is in its optimal state at that time. What it highlights is not only
the development level of a society, but its completeness or effectiveness,
because “effective social development is sure to give full play to people’s
initiative, creativity and activity, and call for transformation and reform of
the original institutions and social structure that are less effective” (Wang
and He 1997).19 Moreover, the development quality of a society shall
be examined quantitatively, i.e., how many social members access to the
substantial results of social development. A small number of beneficiaries
are unable to speak for the overall social quality, only when the demand
of massive ordinary people and the internal demand of social organ-
ism have reached their optimal state, then the society is proved to be a
high-quality one; and only when a majority of people receive increasing
benefits, then the social quality is proved to keep improving.
With a view to the current situation in China, if the “commonly ben-
efited” principle fails to be conscientiously preserved, then there may be
the following adverse consequences:
First, there may be seriously uneven wealth distribution, which will
then lead to “single-polarization” of social members. China’s polariza-
tion is not the usual type which revolves around the middle class (con-
stituted by a majority of social members and relatively stable), but a
“unipolar” type, i.e., a small number of interest groups seizing social
resources. Under such circumstance, the social interest pattern will
evolve into an unreasonable “inverted T shape”, which is sure to deform
the social structure, undermine social stability and slow down the process
of development.
Second, the principle of fairness and social integration may be under-
mined. The “commonly benefited” principle calls for building a relatively
fair social order for redistributing social resources. The disobedience to
this principle will break social justice, distort the dominant social order,
weaken government capacity, make social members confused about the
principal values and code of conduct, destabilize the society, and down-
grade social integration. Moreover, the absence of fairness will discour-
age massive social members to lose passion for work, responsibility and
confidence for society, which will then weaken the driving force for social
transition and increase possibilities for social upheavals.
Last, social members may find their development potentials held
back. To what extent the individuals play to their development potentials
is mainly decided by the satisfaction of their demands. According to

the “law of rising demand”, after the people see their basic material
demand satisfied, they will turn to pursue spiritual demand. On the
contrary, if their basic physiological and living needs are not met, they
will lose interest in other aspirations, thus restricting their development
potentials.
Overall, the “commonly benefited” principle embodies the peo-
ple-oriented development concept, guarantees steady and continuous
social transition, prevents from drastic social upheavals and motivates
people to join in social transition. The “commonly benefited” principle
is a powerful support to the social transition, since it will greatly build
up the internal growth force of China, link people’s direct interest with
the process of social transition, bond their own destiny with that of the
entire society, and make them believe their daily behavior tendency asso-
ciated with social transition, which will make China’s social develop-
ment an irreversible trend.20 It should be noted that the overly utilitarian
“commonly benefited”—only caring about material gains—will turn peo-
ple and society into an appendant to physical wealth, and then cause
alienation of both citizens and the entire society.
Then how to achieve “commonly benefited”? As previously men-
tioned, “commonly benefited” is a gradual process. It is split into two
stages in China while taking account of the country’s specific time-
space conditions: First, give priority to meet people’s basic material and
spiritual needs, e.g., raise their basic living standard, build and improve
the social welfare system, satisfy the subsistence demand of the poor
population, and help individuals accumulate personal wealth. To be spe-
cific, the Chinese government shall intensify effort in relieving poverty,
improving the urban housing system and the urban–rural medical secu-
rity system, reducing the rent-seeking conducts in economic field and
eliminating corruption. Second, in the long run, while safeguarding peo-
ple’s basic human right and survival right, provide them with develop-
ment right and opportunities, so as to realize social justice.
2.2.3 Issues Need to Be Noticed

In order to prevent any misunderstanding of the “commonly benefited”
principle, we should pay more attention to the following issues:
First, “commonly benefited” is not the same with equalitarianism.
“Commonly benefited” advocates reasonable distribution, not everyone
28 K. HAN
has the same share. It should not be simply regarded as reaping fruit or
eating cake. There is a sequence for being “commonly benefited”: firstly
“eat the cake” (to soothe beneficiaries), and then learn to “make the
cake” (a critical step). According to the “commonly benefited” princi-
ple, everyone is entitled to certain non-basic rights in proportion to their
contributions, reasonable returns are based on reasonable contribution,
i.e., “no pains, no gains”. As such, the “commonly benefited” principle
is an organic combination of fairness and efficiency, contribution and
demand. In contrast, equalitarianism means everyone has an equal share,
which violates the principle of fairness, encourages people’s laziness and
makes them least interested in working, and deprives the society of the
incentive from competition, and finally holds up the progress of social
development.
Second, efforts shall be made to maintain a reasonable gap in ben-
efits, which is required by the “commonly benefited” principle. While
preventing from over-polarization, efforts shall be made to guarantee
benign operation of the social system, which provides individuals with
basic conditions for survival and development. While considering the
current situation in China, “commonly benefited” does not mean to
eradicate wealth gap, but insists that wealth acquisition to be based on
fair competition. The key lies in equal development opportunities, and
wealth acquisition through legitimate and proper means. Therefore, it is
an urgent task for China to build a complete, balanced and fair income
distribution mechanism.
Third, guard against hyperstimulation and overheated consump-
tion. The “commonly benefited” principle aims to meet people’s basic
living demand, instead of taking care of everything. It is different from
the “care-for-all welfare policy” that features “high welfare, high tax and
high subsidy” in welfare states, and also different from China’s “iron-
rice-bowl type” subsidy to the urban residents that had been prevailing
in several years after 1949. Efforts shall be made to avert from excessive
stress of “commonly benefited” for fear of hyperstimulation. Moreover,
the government shall guide people’s consuming behavior, make their
consumption level and habits match with the level of social develop-
ment, and prevent people from expecting too much. Otherwise, they will
feel deprived whenever their demand is unsatisfied, which will inflict the
“commonly benefited” principle.
2.3 Equality: Core Value of China’s Social Transition

Social transition needs guidance of core values; otherwise, it may devi-
ate from the ultimate goal of social development, cause social disorder
and ideological and moral chaos. Since the modern times, China has
seen several core values come to the fore. For example, the May 4th
Movement in 1919 marked that the Chinese intellectuals expected to
promote China’s modernization by uprooting the people’s conventional
ideologies and cultural ideas. They cast away the traditional Chinese
culture, and vigorously publicized the western culture; they expected
to build a New China by relying on the core values as “science” and
“democracy”. According to King Yeo-Chi, the May 4th Movement
was more like the European Enlightenment in terms of its spirits and
impact on China’s modernization.21 The Renaissance and Enlightenment
movements in Europe advocated liberation of human beings and return
to rationality, which were closely linked with such concepts as science,
freedom, equality and justice. In our opinion, the mounting social prob-
lems such as widening wealth gap in the transitional period have laid
both social and ideological foundations for proposition of the value of
equality.
2.3.1 Basic Connotations of Equality

Equality is not only a principle for social resource distribution, but
an important norm for interpersonal contact and social develop-
ment. Equality has two aspects of connotations, i.e., uniformity and
impartiality, as noted by Giovanni Satori, when two or more peo-
ple/objects in the states that are wholly or partially identical or sim-
ilar, then they are regarded as equal, while impartiality also requires
equality.22 It could be said that equality on one hand upholds uni-
formity for human beings, and on the other hand endorses the uni-
versal value of social ethnics. Wang Haiming holds that equality is a
kind of uniformity that relates to interest acquisition among people.
He quoted the argument of Rousseau about dividing equality and ine-
quality respectively into natural and social categories: natural equal-
ity is only about interests rather than rights; social equality is not
only about interests but more about rights. Given this, equality—
a moral code about what ought to be—shall be social equality
which is in essence equality of rights, rather than natural equality.23
30 K. HAN
However, “social equality” does not equate “equality of rights”.

In the eyes of the socialists, equality not only concerns rights,
but opportunities and status; equal opportunities are precondition, equal
rights are focal point, while equal status is representation.24 According
to F. A. V. Hayek, the adjective “social” only describes a kind of “sta-
tus”, it is “equality” in front of law (uniform and non-discriminatory
access rules) that is able to represent “impartiality”.25
The above understandings about equality mainly concern individuals,
i.e., whether individuals could enjoy the same rights or at least propor-
tional rights. From an overall perspective of social transition, equality
concerns the following issues: (1) The establishment and improvement
of an impartial mechanism: whether a society provides its members with
equal capabilities and opportunities to access to resources? (2) Whether
equality could effectively promote social transition? (3) To what extent
equality—being an instrument—could be fulfilled? What it stresses is not
ought or oughtn’t to achieve equality, but how to do so? In fact, equal-
ity is relative and every society is unequal, just like R. Dahl said inequal-
ity is everywhere, the natural state of mankind is unequal, rather than
the opposite.26 In a sense, we can only look for relative equality, since
absolute equality only reflects the social ideal and value pursuit of peo-
ple. Moreover, equality is not only a relative concept, but a time-space
concept, because it has different connotations and extensions in differ-
ent periods, different societies and different regions. With regard to the
current situation in China, equality is continuity of the Chinese people’s
values and ideas that are left from thousands of years of history, and also
their expectation for the current social transition.
2.3.2 Issue of Equality During the Transitional Period

The traditional Chinese society, on the whole, was a unified totalitarian
society where the dominant value and ethics stressed hierarchy and obe-
dience, but despised civil rights, although there used to be concurrent
peasant riots fighting for “equal status and even distribution of wealth”,
revealing the strong resentment of the lower class for hereditary rights and
unfair distribution of benefits. The Chinese ethical tradition highlights
individual ethics rather than social ethics. In contrast, the western ethics
not only cares about moral cultivation of individuals, but the impartiality
of the social institutional arrangement.27 To some extent, the equal right
simply for survival and even distribution of wealth in peasant economy

constitute the theme of the Chinese traditional concept of equality.
Being a latecomer in modernization and social development, China
was determined to get stronger through reform from the outset; the
modernization of materials and institutions has remained a dominant
theme of China’s social changes since the past century. The founding of
New China in 1949 established a modernization-oriented regime, mark-
ing a tremendous accomplishment in the country’s modernization drive.
However, for a long time since 1949, the “egalitarian” practice of distri-
bution had been dominating every domain of the Chinese society. Such
kind of distribution put egalitarianism at the first place, thus stifling indi-
vidual initiative and social vitality, and encouraging people’s laziness. The
1978 landmark reform broke up the egalitarian distribution and pro-
moted the practice of “decentralization of power and transfer of profits”,
which motivated a small number of Chinese people to get rich quickly.
Meanwhile, the introduction of market economy increased both social
and economic exchanges; in such context, the issue of equality—both a
theoretical and pragmatic issue calling for immediate solution—began to
draw increasing attention. This subsection will review the major changes
on the Chinese society, which provide arguments for discussing the issue
of equality.
(1) Social development showing pronounced orientation of utilitarianism
The economic reform since 1978 has brought unprecedented bene-
fits to the Chinese people. In social life, the interest orientation grad-
ually gained ground, while the traditional ethics and ideologies have
weakened, the dominant social values have been gradually yielding to
money and interests, quite a number of Chinese even took money wor-
ship and quick success as their tenets. The loss of traditional ethics, ide-
als and beliefs and the domination of money-based value have caused
lots of vacuum zones and distorted places in Chinese society. Although
there have been disputes on giving priority to “efficiency” or “fair-
ness”, the Chinese usually prefer “efficiency”. As for its target orienta-
tion, the Chinese social development has been gradually tainted with
utilitarianism.
(2) Social differentiation aggravating inequality and heterogeneity
China’s reform, to a certain extent, is realized through the processes
of “marketization of power” and “privatization of interests”, which are
32 K. HAN
interwoven with each other. The reform has led to differentiation of

interest subjects. Since the 1978 reform, the Chinese citizens have seen
their identity and social status gradually collapse, but gained enhanced
autonomy and mobility; they no longer perform single functions but
diversified functions, and the social structure has been heterogenized.
With altered identity and status, individuals will find their rights and
obligations change accordingly. Individuals will lose something old, but
regain something new. The reestablishment of identity and status calls
for a reasonable income distribution mechanism, so as to ensure a major-
ity of social members “commonly benefited”.
(3) Required by social mobility and integration
A sound mobility mechanism is an important guarantee for healthy
and sustainable social development. For individuals, an easy access to
resources (interests, power and status) concerns the vigor and vital-
ity of any society, as well as its long-term security. In ancient China, an
“imperial examination system” for selecting talented bureaucrats was
practiced, which increased personnel flow in a vertical direction, and
provided opportunities for the low-class civilians to gain social prestige
and political power. It reflected decentralization of power under the
rule of emperor and somewhat restricted hereditary power. Although
such mobility mechanism had historical limits and an overly sim-
ple flow channel, it was worth approving for solidifying the royal rule
and revitalizing the society during thousands of years of long Feudal
Times.
The Chinese society is now in a transitional period. Such period is
in need of a sound mobility mechanism that boosts social integration,
healthy and orderly social development, and strengthens social stability.
T. Parsons once used five pairs of “pattern variables”28 to explain the
value orientation of practitioners in a social system, and concluded that
such value norms as achievement orientation and universalism are essen-
tial characteristics of a modern society. The concept of equality plays a
role of value leverage for building a sound social mobility mechanism.
Economically, it is of vital importance to build a fair market competition
mechanism. Politically, the concept of equality is an indispensable guide-
line for selecting and appointing carders and for advancing with the dem-
ocratic process. In social and cultural fields, the concept of equality helps
implement radical reforms, reverse the unhealthy social trends and purify
the social organism.
2.3.3 Discussing the Concept of Equality in the Current

Transitional Period
As mentioned above, the current transitional period of China is a right
time for discussing the concept of equality. With a view to the develop-
ment of China in the future, it is necessary to elaborate on the following
issues about equality:
(1) Double choice: value equality and instrument equality
Equality is an eternal value of human society. Whenever and wherever, it
is impossible for human beings to avoid answering the questions about
equality. Max Weber proposed an interpretation of social action that
distinguished between four different idealized types of rationality. The
first, which he called purposive/instrumental rationality, is related to the
expectations about the behavior of other human beings or objects in the
environment. These expectations serve as means for a particular actor to
attain ends, ends which Weber noted were “rationally pursued and cal-
culated”. The second type, Weber called value/belief-oriented. Here
the action is undertaken for what one might call reasons intrinsic to the
actor: some ethical, aesthetic, religious or other motive, independent of
whether it will lead to success. The third type was affectual, determined
by an actor’s specific affect, feeling or emotion—to which Weber him-
self said that this was a kind of rationality that was on the borderline of
what he considered “meaningfully oriented”. The fourth was traditional
or conventional, determined by ingrained habituation.29 The above
four actions are the “ideal types” conceived by Weber; it is the first type
(purposive/instrumental rationality) that features the highest degree of
rationality. With Weber’s “rationality” theory, we divide equality into val-
ue-oriented type (value equality) and instrument-oriented type (instru-
ment equality): the former embodies a kind of social ideal, it is a topic in
ethical studies; the latter that reflects rationality principle and utility value
is vigorously advocated by lots of Chinese scholars. Given this, the theo-
retical preference for instrument equality is closely related to the utilitar-
ian orientation of Chinese social transition.
Since the modernization drive was launched, “modernity” has become
the core issue of China’s social development. Briefly speaking, “moder-
nity” expresses western “rationality” in a historical form; it enables
“rationality”, in different forms, to exist in varied facets of a society.30
Since the Enlightenment Movement, the outlook of Europe and the
entire world had altered after going through the Industrial Revolution
34 K. HAN
led by “science” and the French Revolution led by “democracy” (civil

rights).31 Modernity, with rationality as its kernel, has been challenged by
post-modernism emerging in the west since 1960s, is by far an internal
driving force for China’s social transition and development while consid-
ering its current space-time condition, but it is still in absence. From this
perspective and in an analytical framework constituted by value equality
and instrument equality, the purposes for discussing the issue of equal-
ity in current China are as follows: (i) Equality itself is an integral part
of social development, and social development shall all along follow the
guidance of equality. The discussion about equality will help us establish
a more reasonable philosophy of development. (ii) What China lacks is
instrument equality supported by rationality, the discussion about equal-
ity will enable us to address lots of social problems in reality. Therefore,
the equality in front of us is not just an ideal pursued by mankind, but
an indispensable instrument for Chinese development. Moreover, what
is worth noting is that instrument equality and value equality are not in
a mutually exclusive relationship; they have enriched the connotation
of equality. In other words, instrument equality is an extension of value
equality, whereas value equality—eternal ideal of human society—could
somewhat help achieve instrument equality.
(2) Equality of starting point: difference from and continuation of social
differentiation
Within the analytical framework of “value equality” and “instrument
equality”, we can regard equality of starting point as a pursuable value,
or a logical premise of a certain “game” rule or environmental factors.
Being a pursuable value, equality of starting point stresses the equal
rights of individuals to create society and such value ideal as “all men are
created equal”, it guarantees people to enjoy basic survival right equally,
manifesting the sameness of human beings and their inviolable dignity
in taking part in social life. Being a logical premise of a certain “game”
rule or environmental factors, equality of starting point stresses equal
opportunities to take part in a certain “game” while ignoring the une-
qual ascriptive rights of individuals. We shall logically affirm that there
is a principle above rules, and such principle is equality of starting point.
Without equality of starting point, there will be absence of equality of
rules, let alone social justice.32 It should be noted that a new starting
point is usually an end to the preceding result. While considering time
sequence and the differences in social relations and social structure,
equality of starting point usually comes out when there is inequality of

result, while equality of result usually comes into being when there is
inequality of starting point and rule.
At the start of the 1978 reform, under the impact from the egalitarian
income distribution since 1949, the disparity among the Chinese popu-
lation was not prominent, i.e., the social members had equality of start-
ing point on the whole. The reason why Chinese people are divided into
urban and rural residents is attributed to the long-standing urban–rural
dual structure.
According to Qin Hui, the “justice of freedom” in increment domains
and the “justice of starting point” in inventory domains (mainly denot-
ing rural areas) are of great significance for China to make reform
achievements; but in the future, the success of China’s reform is mainly
decided by promoting “justice of starting point” to other inventory
domains (e.g., housing and state-owned enterprises).33 It should be
noted that in the process of reform, the equality of starting point at the
beginning is gradually replaced by inequality of result caused by social
differentiation. Moreover, equality of starting point is segmented by the
diversified admission accesses in social environment, thus giving birth
to a number of new “starting points”. With respect to social environ-
ment, the pursuit of equality of starting point not only manifests in every
aspect of social structure, but concerns concrete reform measures, i.e.,
every step of the reform is associated with equality of starting point.
Since the society itself is a stratified system, an all-directional and cross-
wise “starting point” structure accordingly comes into being. In this way,
the equality of a specific starting point is extremely likely to damage the
equality of the entire society unless there is an ideal circumstance: every
subsystem of the society (politics, economy or culture) or sub-subsystem
could maintain orderly development in line with the overall design for
social transition. Theoretically, there may be a stepwise system for equal-
ity of starting point, i.e., the starting point equality of the sub-subsystem
is subject to that of the subsystem, while the starting point equality of
the subsystem is then subject to that of the entire society. But in fact,
such conception is unlikely to be realized, since the social transition
itself is too intricate to be properly balanced and coordinated. Of course,
coordinated social development is closely related to equality of starting
point. Therefore, the equality of starting point for value could exist, but
that for instrument will become increasingly complicated amid social dif-
ferentiation while the reform keeps pressing ahead.
36 K. HAN
(3) Equality of opportunity: principle for building social mobility

mechanism
Opportunity is a possibility space for social members to achieve devel-
opment. For different social members, the same opportunity means
different development space. J. Rawls stresses “fair equality of opportu-
nity”, implying that equality of opportunity may not be fair. M. J. Adler
notes that there may be inequality of condition if there is nothing else
but equality of opportunity,34 meaning that equality of opportunity for
individuals are confined by lots of innate and acquired conditions. Wu
Zhongmin proposes to understand equality of opportunity from two
aspects: (i) shared opportunity: every social member deserves similar
opportunities for basic development. (ii) differentiated opportunity: the
development opportunities for social members are different to varying
degrees, rather than identical.35 At the current stage of China, shared
opportunity and differentiated opportunity are somewhat separated, not
so many people accept differentiated opportunity, but a larger number of
people prefer shared opportunity.36
Then how could equality of opportunity be counted as fair? To
answer this question, we shall firstly define which kinds of opportunities
are vital for most people before attempting to achieve equality. People’s
aspiration for equality is closely related to their yearning for income,
fame and power, meaning it is of great importance to enable them to
access to income, fame and power. As for individuals, while admitting
their innate differences, equality of opportunity means whether they
have the same opportunities to ascend to higher social strata. In other
words, it means whether there is a proper pathway for building a social
mobility mechanism, which is the prerequisite for formation of social
strata. Undoubtedly, equality of opportunity helps shape a new hierar-
chical system. Nowadays, it is widely recognized that the foremost or the
only legitimate pathway for individuals to gain income, fame and power
is to abide by the principle of universality (e.g., education, intelligence
and capability). But it will give rise to another problem, i.e., in a society
where there is real equality of opportunity, there may be new-type ine-
quality in income and status due to different educational background,
intelligence and capability, which will cause the entire society to be sub-
ject to “meritocracy” or “almighty rule”, then is it still an eligible soci-
ety? According to D. Bell, in real society, almighty rule is to replace one
set of hierarchical principles with another set of hierarchical principles
and replace the principle of hereditary ownership with the principle of
accomplishment37; a strictly regularized almighty rule is able to create an

impartial society, even if it is unequal.38 Such society is similar to the one
described by J. Rawls, i.e., in a society with equality of opportunity, the
disadvantaged group may drop behind while pursuing power and social
status.39 And we believe such kind of society is a fair and reasonable
society.
Currently, China’s social mobility is at a stage of acceleration. A
proper social mobility mechanism concerns appropriateness of Chinese
social structure, social stratification and social order and effectiveness of
social control means. Overall, it is associated with healthy and orderly
development of the entire Chinese society. The establishment of the
principle of opportunity equality and permeation of this principle into
all aspects of society provides support for building a reasonable social
mobility mechanism, and sustains healthy and orderly development of
the Chinese society.
(4) Result equality: a realistic appeal for social welfare reconstruction
Although equality has diverse forms and operation rules, result equal-
ity has all along been the fundamental criterion for measuring degree
of equality. In case of an unequal result, people tend to claim there is
violation of the principle of fairness, despite of equal starting points,
opportunities and rules. Therefore, equality of result is the bottom line
of fairness.
But there are two issues in need of our attention: (i) We shall never
ignore real fairness while seeking for result equality. Owing to continu-
ation of hereditary power based on reproduction of human beings, and
different individual endowment and intelligence within the same genera-
tion, no matter how hard we stress the righteousness of equality, unequal
results seem unavoidable. (ii) If we overemphasize equality of opportu-
nities and rules, but ignore such realistic problems as polarization that
arises from unequal results, there may be unbalanced social structure
and chaos, which will ultimately induce partial or overall turmoil of the
entire human society or even warfare. To this end, J. Rawls has come up
with the “principle of compensation”, meaning that a society shall care
more about those less talented or born with an inferior social status, in
order to treat everyone equally and provide them with genuinely equal
opportunities.40 With regard to social order or social integration, each
state is making its utmost to erase polarization, so as to prevent from
social unrest and maintain social stability; the major policy measure to do
38 K. HAN
so is to establish a sophisticated social welfare system which secures the

basic livelihood of individuals—a kind of result equality or the minimum
requirement of equality.
Human society is full of diversity with the desire and demand of
human beings constantly increasing. Equality is a pluralistic system with
equality of result as its cornerstone; on this basis, it is possible to have
equality of opportunities and rules which are discriminating or propor-
tionate. In other words, we shall keep defending social order and stabil-
ity, only by this way can we achieve equality to the utmost extent.
2.3.4 Realization of Equality

While discussing the issue of equality, there is a question should not be
ignored: who would supervise the rule-makers of equality? Such question
diverts our attention to another relevant issue—political democracy.
Moreover, equality itself is a system rather than a pure idea. According
to Sartori, certain types of equality are incompatible or even repel-
lent; equality is in essence an issue about building an offset system for
one unequal result to offset another.41 In a word, the crucial means to
achieve equality is to coordinate the dynamic changes of equality issues
and rebalance their relationships.
It could be asserted that idealized equality is never attainable.
Inequality is precondition for realizing equality. Equality and inequal-
ity constitute a continuum, each of them holds one side of the contin-
uum and never converging. What we can do is to define a coordination
point between them so as to satisfy most people’s ideal pursuit for value
equality, activate social vitality and guarantee orderly social transition and
healthy social development.
2.4 Changes and Reconstruction of Chinese

Welfare System
2.4.1 Changes of Chinese Social Welfare System

Since 1949 the social welfare system of China has undergone two stages
of institutional change and three phases of notable development. At
the first stage, China gradually built a national insurance system, work
unit welfare system and collective security system which adapted to the
socialist planned economy. At the second stage (after the 1978 reform),
the welfare system gradually transformed from the one suited to planned
economy to the one catering to market economy. During these two
stages, the development of Chinese social welfare system could be split
into three phases:
First phase (1949–1978): It was a period when the welfare system
under the planned economy was initiated and gradually developed into
an urban–rural divided welfare system. China successively built the labor
insurance system for urban employees (1951),42 public medical care
system (1952),43 corporate welfare system (1953),44 retirement system
for functionaries with government departments and public institutions
(1955),45 rural five-guarantee system (1956)46 and cooperative medi-
cal care system (1962).47 The Chinese social welfare system under the
planned economy was an urban–rural divided welfare system: in urban
areas, the welfare system was mainly based on labor insurance and partially
on work unit welfare, and supplemented by social assistance for a small
number of poor population (e.g., the urban “sanwu” people); in rural
areas, there was a collective welfare system constituted by people’s com-
mune, production brigade and production team.
Second phase (1979–1997): It was a period when the Chinese
planned economy was transforming into market economy, and the new-
type social welfare system was initiated. This period witnessed rural land
reform, reform of urban state-owned and collectively owned enterprises,
and overall replacement of planned economy with market economy
and the latter even become a dominant trend of reform and develop-
ment. In the domain of social welfare, the foremost task was to get rid
of the all-inclusive welfare burden on economic entities and on govern-
ment departments and public institutions. In 1993, the Decision of the
Central Committee of the CPC on Several Issues Concerning Building the
Socialist Market Economy explicitly proposed to build a reasonable indi-
vidual income distribution system and a social security system: “build
a multi-level social security system, provide urban-rural residents with
social security services that accord with the national situations and favor
for economic growth and social stability”; “give priority to improving
the enterprise endowment insurance system and unemployment insur-
ance system, enhance social service functions so as to relieve enterprises
of financial burdens and motivate them to start organizational restruc-
turing, increase economic efficiency and build up competitiveness”.48
In this process of replacing the old with the new, several social welfare
40 K. HAN
systems established in the era of planned economy were exposed to such

challenges as gradual collapse of institutional basis, weakening effective-
ness, policy vacuum or even institutional distortion or defectiveness in
some domains. Welfare housing and public-funded education were on
the way to be marketized, commercialized, privatized and industrialized.
Afterwards, while the reform and opening up was deepening, new eco-
nomic problems and social contradictions came out one after another,
making it an inevitable choice to build a social welfare system suited to
the socialist market economy, which is also required for maintaining
economic growth. In this context, the state carried out pilot reforms of
endowment, medical care and other social insurance systems in many
places, and initially established a social insurance model by combining
social pooling and individual contribution. Shanghai and other cities
implemented the Minimum Livelihood Guarantee System for the urban
laid-off workers and impoverished residents.
Third phase (1998 to date): It was a period when the new-type social
welfare system was established and improved. This phase has three out-
standing features: (1) The management system has undergone rounds
of adjustment. In 1998, the former Ministry of Labor and Personnel
was renamed as the Ministry of Labor and Social Security, marking that
China began to reinforce the management functions of social insur-
ance affairs from structure setting. In 2008, the Ministry of Labor
and Social Security and the Ministry of Personnel were merged to
become the current Ministry of Human Resources and Social Security.
(2) Welfare policies were introduced one after another: (i) Various social
insurance systems were established and improved, e.g., endowment
insurance system for urban employees (1997), basic medical insurance
system for urban employees (1998), unemployment insurance system
(1999), work-related injury insurance system (2004), medical insurance
system for urban residents (2007), new-type rural cooperative med-
ical care system (2002) and new-type rural endowment insurance sys-
tem (2009). On October 28, 2010, the Social Insurance Law of the
People’s Republic of China was promulgated, marking that the Chinese
social insurance system was generally finalized. (ii) The policies for
social assistance, social services and housing welfare were also unveiled
in this period, e.g., the Regulations on the Subsistence Security for Urban
Residents (1999), the Regulations on Management of Housing Provident
Fund (1999), the Law on Donation for Public Welfare (1999), the
Measures for the Relief and Administration of Vagrants and Beggars
Who Have No Means of Livelihood in Cities (2003), the Regulations

for Rural Five-Guarantee Work (2006), rural Minimum Livelihood
Guarantee System (2007), the Measures for the Guarantee of Low-rent
Homes (2007), the Law on the Protection of the Disabled (2008) and the
Interim Measures for Social Assistance (2014). (3) The value orientation of
social welfare has changed fundamentally, such institutional ideas as “fair-
ness” and “justice” gradually replaced the concepts of “efficiency comes
first” and “remedial measures are more important than prevention”.
2.4.2 Reconstruction of Chinese Social Welfare System

Since the reform and opening up, Chinese social welfare system was ini-
tially built around the socialist market economy, which has two aspects
of meanings: (1) The market-oriented reform is the basic condition for
rebuilding Chinese social welfare system. (2) Reconstruction of Chinese
social welfare system is part of the marketization reform. Because of the
market-oriented reform, the construction of Chinese social welfare sys-
tem will be labeled as strongly liberalized for a long time.49
As described by Gøsta Esping-Andersen, the minimized laissez-faire
social policy is an inherent meaning of liberalism. When the ideal of uni-
versalism, which stems from liberalism, conflicts with the realistic “social
dualism” and “social stigma” that are brought about by liberalism, a
liberal state usually handles market failure with a kind of punitive and
stigmatized poverty relief, and then gradually resort to the modernized
household survey-based social assistance. In terms of welfare delivery,
household survey-based social assistance is only a “stopgap” of the liberal
social policy, the truly important things shall be the individual insurance
and the contract that is seemingly concluded on basis of voluntariness
and actuarial studies.50 Since the marketization reform, Chinese society
has encountered several predicaments like urban–rural division, widen-
ing wealth gap and social exclusion generated by “stigma”,51 all of which
conform to Andersen’s opinions. If the liberal social policy and its insti-
tutional arrangement are a common law for welfare system, according
to Andersen, then the foremost welfare arrangement in current China
is poverty relief, construction and improvement of the household sur-
vey-based social assistance.
With regard to social assistance, the Chinese government succes-
sively established the systems for allocating subsistence allowance for
poor urban residents, providing aid to urban vagrants and beggars,
42 K. HAN
giving urban poor families access to low-rent housing, and deliver-

ing medical and educational assistance. The management system was
adjusted accordingly. On July 10, 2008, the General Office of the State
Council issued the Notice on Issuing the Provisions for the Main Functions,
Internal Structure and Staffing of the Ministry of Civil Affairs, which
states to reform the internal structure and staffing of the Ministry of
Civil Affairs, adjust its responsibilities and obligations, strengthen its
function of social assistance and reset its internal offices (the Subsistence
Security Department was renamed to Social Assistance Department).
With regard to social insurance, China promulgated the Social
Insurance Law on October 28, 2010. Based on further integration of
endowment insurance, medical insurance, work-related injury insurance,
unemployment insurance and maternity insurance, this law explicitly
states to unify the endowment insurance at the national level, and unify
other items of insurance at the provincial level, gradually extend the
scope of beneficiaries to all laborers and all citizens, and further clarifies
the accountability of government, marking that a social insurance system
with the Chinese characteristics that was initiated in 1978 is generally
finalized.
With regard to construction of a rural welfare system, China has been
dedicated to building a fundamental framework that is constituted by
new-type endowment system, new-type cooperative medical insurance
system, Minimum Livelihood Guarantee System and five-guarantee sys-
tem. Moreover, the social policies for safeguarding interests and rights
of migrant rural workers are constantly improved, and the reform of the
household registration system has been rapidly pressed ahead. Overall, an
urban–rural social welfare system has initially taken shape.
It should be noted that the reconstruction of Chinese social welfare
system since 1978 is led by the government. From the perspective of
structural functionalism, the changes on the political system are always
affected by the economic system, and both of them usually go through
a process from differentiation to accommodation. In a sense, reconstruc-
tion of Chinese social welfare was initially induced by economic reform
or changes on the economic system, but at present Chinese social wel-
fare is a key component of the political reform or changes on the politi-
cal system. As for the current operational target of the Chinese political
system, the single target for economic growth is being replaced or has
been replaced by the pluralistic targets for political democracy and social
construction.52
Notes
1. Translator’s note: The heuristic scheme that T. Parsons used to analyze
systems and subsystems is called the “AGIL Paradigm”. The pure AGIL
model for all living systems: (A) Adaptation. (G) Goal Attainment. (I)
Integration. (L) Latency (pattern maintenance).
2. Parsons T., Smelser N., 1956, Economy and society, London: Routledge, p.
44.
3. Fei Xiaotong, 1998, Earthbound China, reproductive system, Peking
University Press, pp. 6, 31, 38, 49.
4. Liang Shuming, 1987, Essence of Chinese culture, Shanghai: Academia
Press, pp. 169–70.
5. Han Keqing, 2002, Civil society: Re-examination of China’s moderniza-
tion course, Tianjin Social Sciences, Issue 3.
6. Social Structural Transition Research Group of China Institute of Strategy
& Management, 1998, Short-to-medium-term trends and hidden dangers
in China’s social structural transition, Strategy and Management, Issue 5.
7. Nee V., 1989, A theory of market transition: from redistribution to mar-
kets in state socialism, American Sociological Review, Vol. 54, pp. 663–
81. The market transition theory consists of three interrelated theses: (1)
The market power thesis: If the surplus products are no longer monop-
olized by redistribution department, but subject to market for alloca-
tion and distribution, it will give rise to two consequences: (i) Resource
control will be mainly held by market transaction, not by redistribution
system. (ii) When the pricing for labor force and commodities is based
on the contract between buyers and sellers, instead of on administrative
decree, the direct producers will have more decisive power in exchanging
for commodities or services. In short, the transition from redistribution
system to market implies transfer of power, which benefits direct pro-
ducers but goes against redistributors. (2) The market incentive thesis:
Unlike the redistributive economy that constrains direct producers, the
market economy fully releases their initiative for production. In redistrib-
utive economy, the labor force pricing based on administrative decree sel-
dom considers the differences in laborers’ work performance, and such
pricing is usually lower than market pricing. In contrast, in market trans-
action, producers are entitled to disposing their products and laborers,
and providing workers with more surplus products. Since payment closely
concerns one’s work performance, a decent income is able to stimulate
their work activity. Such argument implies better economic returns for
those properly educated, which justifies the human capital theory that
education is the best criterion for measuring one’s productivity. (3) The
market opportunity thesis: In national socialism, in the process where
redistributive economy is transiting into market economy, there will be a
44 K. HAN
new opportunity structure to access to market. It is not only the mobil-

ity inside the redistribution departments or the opportunity to enter such
departments; more importantly, it means market will become another
channel for socio-economic mobility. As result of the changes on oppor-
tunity structure, entrepreneurs are seen as accomplished as government
officials. The above three theses constitute the cardinal content of the
social transition theory, according to Ni Zhiwei, and reveal the essential
process where market transaction is replacing administrative decree, and
then dramatically changing the power of resource control, incentive for
production and opportunity structure; such changes will ultimately alter
forms of distribution.
8. Social Structural Transition Research Group of China Institute of Strategy
& Management, 1998, Short-to-medium-term trends and hidden dan-
gers in China’s social structural transition, Strategy and Management,
Issue 5.
9. Li Peilin, “Another invisible hand”: Social structural transition, develop-
ment strategy and corporate organizational innovation, quoted by Yuan
Fang, et al., 1998, Vision of sociologists: China’s social structural transi-
tion, Beijing: China Society Press, p. 62.
10. Li Qiang, 2000, China’s four benefit groups at present, Academics in
China, Issue 3.
11. Sun Liping, 2002, Formation of lower social stratum in the context of
resource reaccumulation, Strategy and Management, Issue 1.
12. Sun Liping, 2002, Are we facing a fractured society?, Strategy and
Management, Issue 2.
13. Shi Yuankang, Civil society and modernity, quoted by Liu Junning, et al.,
1997, Economic democracy and economic freedom, Beijing: SDX Joint
Publishing Company, p. 71.
14. Wang Haiming, 1998, New theory of equality, Chinese Social Science,
Issue 5.
15. Huntingdon, 1989, Political order in changing societies, Shanghai:
Shanghai Translation Publishing House, p. 62.
16. Li Qiang, April 3, 1998, Two Stages of Chinese Social Structural
Transformation, Guangming Daily.
17. Wu Zhongmin, 1996, Discussion on China’s Progressive Modernization
Model, Journal of Literature, History & Philosophy, Issue 4.
18. Lin Liling, 1998, Discussion on the differentiation and integration of
Chinese interest groups during social transition, Modern Philosophy,
Issue 2.
19. Wang Yalin, He Mingsheng, 1997, Discussion on the development quality
of modernization, Sociological Studies, Issue 3.
20. Wu Zhongmin, 1995, China’s social development, Hunan Publishing

Group, p. 70.
21. King Yeo-Chi, 1993, Critique and inheritance of the May 4th new tradi-
tion, in King Yeo-Chi, ed., Chinese society and culture, London: Oxford
University Press, p. 188.
22. Satori Giovanni, 1998, The theory of democracy revisited, trans. Feng Keli
and Yan Kewen, Beijing: Oriental Press, p. 381.
23. Wang Haiming, 1998, New theory of equality, Chinese Social Science,
Issue 5.
24. Shi Yunxia, 1998, Analysis of the views of justice and equality of mod-
ern democratic socialism, Wuhan University Journal (Philosophy & Social
Science), Issue 2.
25. Feng Keli, 2000, Further discussion on social justice, Magazine of
Reading, Issue 2.
26. Dahl Robert, 1999, On Democracy, trans. Li Baiguang, Lin Meng,
Beijing: The Commercial Press, p. 71.
27. Cheng Lixian, 1999, Social justice, equality and efficiency, Journal of
Peking University (Humanities & Social Sciences), Issue 3.
28. Hou Junsheng, 2001, Theory of western sociology, Tianjin: Nankai
University Press, p. 174. According to T. Parsons, there are five pairs
of “pattern variables” for analyzing a social system: (1) Affectivity neu-
trality vs. affectivity. (2) Self-orientation vs. collectivity-orientation.
(3) Universalism vs. particularism. (4) Achievement vs. ascription. (5)
Specificity vs. diffuseness. Different combination of these “pattern varia-
bles” reflects varied social relations and social structure. In terms of the
modernization theory, one of its focuses is comparative analysis of mod-
ern society and traditional society. Parsons pointed out that because of
modern economy, highly-specialized profession and rationality principle,
the modern society tends to become simply functional, achievement-ori-
ented, universalism-oriented, self-oriented and affectivity-neutral, while a
highly homogeneous traditional society is just the opposite.
29. Weber M., 1997, Wirtschaft und gesellschaft, trans. Lin Rongyuan,
Beijing: The Commercial Press, p. 56.
30. Ye Zhengqi, 1996, Rediscussion on the fight between tradition and
modernity, Sociological Studies, Issue 6.
31. King Yeo-Chi, 1993, Critique and inheritance of the May 4th new tradi-
tion, in King Yeo-Chi, ed., Chinese Society and Culture, London: Oxford
University Press, pp. 192–93.
32. Bian Wu, 1995, Rediscussion on supremacy of justice—Possibility of
equality starting point, The Eastern Miscellany, Issue 2.
33. Qin Hui, 1999, Social justice and experiences & lessons from China’s
reform, Science & Technology Review, Issue 1.
46 K. HAN
34. Adler M. J., 1998, Six great ideas, trans. Xi Qinghua, Beijing: SDX Joint
Publishing Company, p. 190.
35. Wu Zhongmin, 2000, A new theory of justice, Social Sciences in China,
Issue 10.
36. Wu Zhongmin, 2000, Analysis of Equality of Opportunity in Current
China, Science & Technology Review, Issue 9.
37. Bell Daniel, 1997, The coming of post-industrial society, trans. Gao Gu,
et al., Beijing: Xinhua Publishing House, p. 466.
38. Bell Daniel, 1997, The coming of post-industrial society, trans. Gao Gu,
et al., Beijing: Xinhua Publishing House, pp. 466–500.
39. Rawls J. B., 1988, A theory of justice, trans. He Huaihong, et al., Beijing:
China Social Science Press, p. 101.
40. Rawls J. B., 1988, A theory of justice, trans. He Huaihong, et al., Beijing:
China Social Sciences Press, p. 96.
41. Sartori G., 1998, The theory of democracy revisited, trans. Feng Keli and
Yan Kewen, Beijing: Oriental Press, p. 401.
42. On February 26, 1951, the then Government Administration Council
(GAC) issued the Labor Insurance Regulations of the People’s Republic of
China, marking that the Chinese labor insurance system for urban work-
ers was officially established.
43. In 1952, the GAC issued the Instructions on Implementation of the Free
Medical Treatment and Prevention for the State Functionaries with the
People’s Governments at All Levels, Political Parties, Mass Organizations
and Affiliated Institutions Throughout the Country, the public med-
ical care system was implemented since then. In September 1955,
the Circular Concerning Medical Treatment of the Children of State
Functionaries, jointly released by the Ministry of Finance, Ministry of
Health, and Personal Bureau under the State Council, stipulated that the
family members of state functionaries are entitled to medical treatment at
half cost.
44. In 1953, the then Ministry of Labor promulgated the Draft Amendment
to the Implementation Rules of the Regulations of the People’s Republic
of China on Labor Insurance, stipulating that the enterprises or inves-
tors shall bear all expenses on canteen, nursery, corresponding premises,
equipment and personnel salary; in case the nutrition staff find it hard to
pay for their own diet, or the parents fail to afford the food expenses of
their kids in nursery, they can apply for the special subsidy covered by the
labor insurance fund.
45. On December 29, 1955, the State Council promulgated the Interim
Measures on Handling Retirement of State Functionaries, the Interim
Measures on Handling Resignation of State Functionaries, the Interim
Provisions on Calculation of Working Years Upon Resignation and
Retirement of State Functionaries.
46. In 1956, the National Outline for Agricultural Development (1956–

1967) and the Standard Charters for Advanced Agricultural Production
Cooperatives were adopted, requiring the agricultural cooperatives to
properly take care of their members that have lost working ability and
have no means of livelihood, so as to guarantee their food, clothing,
fuels, education and burial.
47. In early 1955, Mishan Township, Gaoping County of Shanxi Province
took the lead in establishing the local cooperative medical care system
in which commune members contributing part of “health fee” and pro-
duction cooperatives contributing part of “welfare fund”. In 1960, the
Central Committee of the CPC forwarded the Report of the Ministry of
Health on the On-site Meeting for Rural Health Work, defining this system
as the “collective medical care system”, which has since then become the
basic medical care system in Chinese rural areas.
48. Ministry of Labor and Social Security, Literature Research Office of the
CPC Central Committee, 2002, Selected important documents on labor
and social security in the new era, Beijing: China Labor & Social Security
Publishing House, Central Party Literature Press, pp. 133, 138.
49. Han Keqing, 2010, The third way and China’s welfare reform, Tianjin
Social Sciences, Issue 2; Han Keqing, 2008, Civil society and construction
of China’s social welfare system, Tianjin Social Sciences, Issue 1.
50. Andersen Gøsta Esping, 1990, The three world of welfare capitalism,
Bristol: Policy Press, p. 62.
51. Goffman E., ed., 1963, Stigma: Notes on the management of spoiled iden-
tity, Englewood Cliffs, NJ: Prentice-Hall, Inc., pp. 3–4, in Li Xianhong,
et al., 2009, Concepts of HIV/AIDS-related stigma and discrimination,
and developments of research tools, Advances in Psychological Science, Vol.,
17, Issue 2, pp. 414–20. According to Goffman E, “stigma” is a kind
of feature or trait that makes people deeply humiliated; such feature is
categorized into three groups: physical defects, a stain in one’s charac-
ter, and rejection for his/her clan or religion. The later-generation schol-
ars expounded the notion of “stigma”, i.e., it usually refers to a negative
trait that is perceivable, and it makes the individual/group that carries the
negative trait to be rejected. Isolation, prejudice, discrimination, depar-
ture or escape from the normal social strata, such kind of escape carries a
self-deprecation tone.
52. Han Keqing, 2011, Financial crisis and institutional response amid recon-
struction of China’s social welfare system, Dongyue Tribute, Issue 3.
CHAPTER 3
Impact of Economic Globalization

on China’s Social Welfare Policy
3.1 Economic Globalization: An Increasingly

Prominent Reality
Sociology neither ignores the realistic problems that keep emerging nor
forgets the underneath causality. In today’s China, the Chinese people
feel quite at ease at seeing foreigners of all skin colors walking among
them, English has become a communication tool for certain groups
of Chinese people, the cross-boundary personnel flow is increasingly
common, foreign commodities are ubiquitous, the foreign food led by
McDonald’s and KFC are hot sales, everywhere there are advertisements
publicizing Hollywood blockbusters and global brand products…These
signs manifest that the Chinese people have entered into a completely
new era where the national, cultural, racial and ethnical divisions are no
longer distinct.
Han Keqing, 2007, Economic globalization, inequality and China’s social

policy choices, Dongyue Tribute, Issue 3; Han Keqing, 2004, Impact of capital
globalization on China’s social class structure, Strategy and Management, Issue
4; Han Keqing, 2005, Economic globalization and construction of China’s social
security system, Social Sciences in Guangdong, Issue 2.

https://doi.org/10.1007/978-981-32-9660-2_3
50 K. HAN
3.1.1 Globalization and Economic Globalization

Globalization is currently a worldwide trend. According to the United
Nations Development Programme (UNDP)’s Human Development
Report 1999, “globalization, a dominant force in the 20th century’s
last decade, is shaping a new era of interaction among nations, econo-
mies and people”.1 Some scholars summarize globalization as “a process
(or set of processes) that embodies a transformation in the spatial organ-
ization of social relations and transactions, generating transcontinental
or interregional flows and networks of activity, interaction, and power”
(D. Held et al. 1999).2 As Anthony Giddens maintains, “globalization
can thus be defined as the intensification of worldwide social relations
which link distant localities in such a way that local happenings are
shaped by events occurring many miles away and vice versa” (Giddens
1990),3 it is an infinitely extended state deriving from the notion of
“separation of time and space”. Starting from the theory of moder-
nity, Giddens proposes that globalization is an implicit consequence
of modernity. And he adds that commercial corporations, particu-
larly those transnational ones, are not only economically powerful, but
capable of affecting the political decisions in their homeland or other
areas. Corporations are a driving force in world economy, their grow-
ing influence has triggered local commodity market (including currency
market) to join in the tide of global expansion. However, the capitalist
market economy is never a single commodity market or service market,
but encompasses commercialization of labor force, meaning that labor-
ers are no longer controlled as a part of production mode, but a sepa-
rate commodity. This process evidently conveys a sense of inequality of
globalization.4
To understand economic globalization, we shall firstly comprehend
the connotation of globalization. Some scholars believe economic glo-
balization is the same with globalization, but stressing intensified inter-
nationalization of economic activities, which imply increasing integration
and interdependence of different regions. Following this way of think-
ing, the European Commission has made a classic definition of economic
globalization: “it is the increasing economic interdependence of national
economies across the world through a rapid increase in cross-border
movement of goods, services, technology, and capital”.5 Other schol-
ars believe economic globalization is only a component and a form of
manifestation of globalization. For example, the Lisbon Group, which
3 IMPACT OF ECONOMIC GLOBALIZATION ON CHINA’S SOCIAL WELFARE … 51
consists of scholars from several countries, holds that globalization has

seven aspects of content: the globalization of the possession of finance
and capital; the globalization of market and market strategy; the globali-
zation of technology, related scientific research and development as well
as knowledge; the globalization of living style and the mode of consump-
tion as well as cultural life; the globalization of the adjustment capability
and political control; the globalization of the world political unity; and
the globalization of observation and consciousness.6
We hold that economic globalization and globalization is an organic
integrity, with the former functioning as the driving force and prominent
feature of the latter. In terms of the internal logic, economic globaliza-
tion is basis for the changes upon the entire society, it is sure to lead to
changes upon politics, economy and culture of a society. Therefore, eco-
nomic globalization is narrowly defined globalization, while the broadly
defined globalization is a research subject that is far more complicated
and extensive than economic globalization.
According to the studies of the World Bank, the development of glo-
balization has gone through three stages or three waves since 1870 in
light of constantly increasing trade, capital flow and immigration. During
the first wave (1870–1914), being driven by decreasing transportation
cost and vigorous free trade between Britain and France, the worldwide
flow of trade, capital and labor force had kept mounting. During the
second wave (1945–1980), the developed economies achieved unprec-
edented integration, marked by rapid growth in their multilateral trade.
As for the third wave (1980 to date), some characteristics make it dif-
ferent from its predecessors: (1) The most striking feature is that a large
number of developing countries get involved by the world market.
(2) Certain developing countries are becoming increasingly marginalized
in the world economy, and caught in shrinking income and worsening
poverty. (3) Such phenomena as international immigration and capital
flow, which were still negligible during the second wave, have begun
to stand out.7 In a nutshell, economic globalization is globalization in
terms of free trade, free capital flow and cross-boundary immigration.
3.1.2 Impact of Economic Globalization on Wealth

and Income Distribution
What impact of economic globalization will exert upon wealth and
income distribution? Is it widening the international or domestic
52 K. HAN
polarization between the rich and the poor? Each sticks to his/her
argument, there is no consensus.
There has been a widespread understanding of globalization, i.e., it
is globalization that widens the gap between rich and poor between dif-
ferent economies and within a given economy, thus the rich countries
become richer and poor countries become poorer; in other words, the
wealthy class receives more privileges from globalization, and the poor
are somewhat left behind, although they are inside the same society.
Heckscher-Ohlin model, the opening degree of trade will impact income
distribution among factors of production, but the degree of impact varies
among different economies. The impact on family income distribution
is decided by, which factors are adequate in a country, and the situation
for family holding of these factors. They believe there is no systematic
relation between changes on trade policies and family wealth gap. In
other words, the poor families, from open trade, may not be less than
other families. In order to testify such argument, Dollar and Kraay built
a database about income gap, which involves the Gini Coefficient of
several economies, and Lorenz Curve that was produced based on the
annual materials of these economies. It turned out that it was hard to
make comparison of the income distribution data of different countries,
because of the concept, measurement indicator (gross or net value), unit
of target object (individual or family), coverage of investigation (nation-
wide or regional). Therefore, they decided to focus on the income dis-
tribution data based on the above information, so as to underhand the
changes upon the 1/5 of the global population that earned the mini-
mum income. The result showed that the income growth rate of the
poor and the overall per capita income growth rate, is one-to-one rela-
tion. There is no inevitable relation between the changes on income
distribution and growth rate. In the meantime, the further investiga-
tions show that the proportion of trade in GDP, no relation to the Gini
Coefficient, while other indicators, such as openness indicator, average
duty rate, degree of capital manipulation, no relation to the changes on
wealth-poor. Therefore, although the free trade and investment will gen-
erate a divided consequence: both winner and lose will come out in a
short term, but the losers do not come from the poor. Trade increase
will go along with rapid economic growth, there is no change upon
income distribution pattern, indicating that trade increase will improve
the poor people’s living standard.8
The studies of the World Bank also show that, the wealth gap in cer-
tain economies did widen in the past 20 years, but it does not that all
the open economies will have widening wealth gap. Take Costa Rica
and Vietnam for instance, their income distribution has been stable;
in Malaysia and the Philippines, the income gap narrowed. In 1980s,
Mexico, the wealth gap expanded, but then narrowed in 1990s. In most
economies, the wealth gap between rich and poor has been changing
slightly, the income growth rate of the poor is closely related to the per
capita GDP growth rate. In addition, China, India and Uganda have
achieved remarkable results in joining in economic globalization. Since
1980s, the latest global wave, greatly cut the number of the poor across
the global. Since 1980s, the number of the global poor dropped about
200 million, over 1993–1998, along with progress of globalization, the
number of the absolute poor dropped to 120 million. In other econo-
mies, the number of the absolute poor increased by 20 million.9
Some scholars point out that, the class that defends globalization has
been gaining power across the globe, and has generated a serious social
crisis, and affected the workers, farmers, employees and self-employed
personnel that relies on the entire world. It is the promotion of glo-
balization policy and penetration that induces a small group of people
that advocates globalization and the majority of people that are being
exploited. The widening income inequality among diverse social class is
outcome of expanding globalization, there are other forms of inequality,
cross political and cultural boundaries. Taxation tends to be more regres-
sive: more and more government taxation comes from the workers’ sal-
ary, the percentage of the taxes from transnational companies has been
declining. It is partially attributed to a big legal loophole, and the block
that is created by tax lawyers that are employed by major corporations,
and transfer the location of profit to the countries with low tax rate, the
so-called transfer pricing. Along with regressive taxation mechanism is
the increasingly progress national subsidy or budget. On the one hand,
there is low-interest loan, export preference, subsidies to factory con-
struction, land property transfer, infrastructure development, research
and development—rights and interests owned by major corporation.
On the other hand, the sharp decrease in the social welfare granted to
workers. The state has been increasing subsidy to the capital of trans-
national corporations, but reducing the welfare granted to workers, the
personnel receiving pension, low-income families, sick and handicapped
people, single-parent families and children. Such social inequality is
54 K. HAN
attributed to two factors: continuous concentration and centralization as

a result of merger, purchase and joint venture, as well as close integra-
tion of national elite and globalized consortiums. The largest social crisis
exists in the countries that went the farthest during the process of glo-
balization. There are the largest group of the workers without medical
insurance, labor union, the part-time or half-day workers without or with
minimum social welfare, followed by the UK. In contrast to Europe, the
low unemployment rate which is boasted by the United States is offset
by its highest rate of low income and guarantee-free workers—such sit-
uation is unaccepted by the European workers’ community. The similar
situation also exists in the third-world countries. The unemployment
rate in Argentina and Brazil, 18% and 15%, with exponential growth in
unemployment rate along with the globalization process. The similar
process is also seen in east Europe. Since the 1980s, east Europe began
to transit to the capitalism, the living standard dropped 30–80%.10
Economic globalization usually enables all production factors to flow
and to be allocated more freely and more efficiently across the world,
which will lead to increase in economic wealth objectively. In the long
run, increasing world wealth is favorable for improving people’s welfare.
However, currently, what we are seeing is intensified unfairness of social
distribution. It is attributed to the following reasons: (1) Institutional
reason. Under the capitalist system, even a wealthy society is not wealthy
enough to reduce the massive sufferings. (2) The reason of development
of market force. Globalization is usually associated with the development
of market force, stimulating the development of inequality that threatens
social integration, because it enables semi-monopoly to return to market
force. (3) The reason of competition. The welfare state regime is a his-
torical product of labor force and capitalists, it is a strategy adjustment,
the capital to meet certain social requirements. However, globalization
has broken such social contract. (4) The reason of structural changes.
Another serious consequence of globalization is the changes on employ-
ees’ structure, which has led to income changes. The investigations have
shown that, the job opportunities for high-income technicians have been
on the rise, the job opportunities for middle-income employees have
been falling, while the job opportunities for low-income workers have
been rapidly increasing. The consequence of such development is that,
the unfair social income distribution is being exacerbated. In 1960, the
20% of the global population, their average per capita income was about
30 times more than the 20% of the poorest population, soared to 78
times in 1998. Along with the progress of globalization, since 1970s or

1980s, some old norms have been gradually cast aside, replaced by wel-
fare capitalism. Its ideological theory stresses individual freedom, indi-
vidualism and worship for individual achievement, stress individuals to
take over responsibility. Economically, standardized and large-scale pro-
duction of commodities, and the associated labor form, replaced by var-
ied forms of “flexibility”, correspondingly, an ever increasingly divided
society.11
Well, is economic globalization a benefit or a disaster? Especially for
such developing countries as China, while bringing economic growth,
will economic globalization become an origin for new phenomena
of inequality? While facing the realistic requirements for social devel-
opment, we shall pay attention to economic globalization, and make
appropriate explanations and predictions. Daniel Bell said, “as long as
there exist regular development and repeatedly occurring phenomena,
it is possible to make predictions; or there exists continuous devel-
opment trend, while the direction of such trend (not necessarily the
accurate track), can be predicted with statistical time, or it could be
arranged to historical development trend, then, predictions are possi-
ble”. “The changes upon values and concepts and appearance of new
society, there are important social reforms, its development trend could
be depicted by historical stages. Here, Bell pointed that predictions
are possible and feasible. He also pointed out that “social structure is
a main organizational structure that decides individual life in a soci-
ety…from rural society to urban society, from agricultural economy to
industrial economy, from federal state to a centralized state, all impor-
tant changes upon social structure. Because they are structural, and
gradually intensified, and hard to be reversed. Therefore, they are eas-
ily identified. However, such change upon structure is not large scale,
not allow us to describe accurate details about the future social pattern.
When such change takes place, we are not likely to predict its future,
but we can identify the ‘agenda of the question’ faced and resolved
by the society, which is predicted by the agenda itself”.12 “Agenda
of problem” refers to “post industrialized society” according to Bell,
he cares about a kind of social prediction of the western social struc-
tural changes. The “Agenda of problem”, is social fact, globalization,
the Chinese social structure, especially the impact on social inequality,
and the countermeasure about social welfare in China brought forth by
such impact.
56 K. HAN
3.2 Impact of Economic Globalization on China’s

Income Distribution
3.2.1 China’s Foreign Trade and Absorption of Foreign Investment
In a sense, the process in which China is increasingly involved in the
wave of economic globalization witnesses its foreign trade and utiliza-
tion of foreign funds keep mounting. It is self-evident that foreign trade
plays a vital role in promoting China’s economic development. Being a
bridge that links China’s economy with the world market, foreign trade
not only drives China’s economic growth, but increases its Foreign-trade
Dependence (FTD). From 1978 to 2001 when China entered into the
WTO, its total foreign trade volume had increased dramatically. Foreign
trade was playing an ever significant role in the entire national economic
development, with the FTD jumping from 9.8% in 1978 to 44.7% in
2001; during the same period, the export contribution rate to China’s
GDP rose from 4.6 to 23%, while such contribution rate of import
went up from 5.2 to 21%. Figure 3.1 demonstrates the developments of
China’s foreign trade from 1978 to 2001.13
%OQ86'

7RWDOIRUHLJQWUDGHYROXPH ([SRUW ,PSRUW
Fig. 3.1 China’s total foreign trade volume in 1978–2001 (Source National

Bureau of Statistics [NBS], China Statistical Yearbook 2002, Beijing: China
Statistics Press)
In the meantime, in a global view, the flow of capital and technologies

is far more active than that of commodities. Economic globalization has
turned in the entire world into a unified market system, especially con-
nect foreign trade with capital market. In the worldwide foreign invest-
ment wave, the globalization of productive capital has become the core
of capital globalization. The authentic capital utilization in China started
from 1978 after the opening up policy was put into place. In 1979,
China promulgated the Law of the People’s Republic of China on Chinese-
Foreign Equity Joint Ventures, and first three foreign-funded companies
were allowed to invest in China in 1980. In June 1995, China’s State
Council, Interim Provisions on Investment Made by Foreign-Invested
Enterprises in China, and Catalogue for the Guidance of Foreign
Investment Industries. In 1998, in light of the new situations, the opin-
ions for further widened the landscape of opening up and improve level
of utilization of foreign investment. Along with expanding of foreign
investment and fields, more and more source countries and regions
have entered into China, and more and more internationalized trans-
national companies entered into China. Since 1993, the inflow of for-
eign investment into China ranked the world second place, and the first
place among the developing countries, only behind the state with the
FDI less than the United States. According to China Statistical Yearbook
2002, from 1979 to 2001, China’s paid-in use foreign investment totaled
$568.4.1 billion (bln), including $147.16 foreign loan, $393.51 FDI
and other foreign investments at $27.74 (Table 3.1).
Accordingly, China’s inflow of foreign capital drew in multina-
tional companies. In light of the Almanac of China’s Foreign Economic
Relations and Trade 2002, more than 200 of the world top 500 multi-
nationals had investment in China, covering a wide range of businesses,
thus vigorously expanding China’s overall foreign investment scale and
building up domestic industries’ technical strength. Table 2.2 shows the
sales revenue of the top 20 foreign-funded enterprises in China based
on the statistics from the Ministry of Foreign Trade and Economic
Cooperation of China.
3.2.2 Economic Globalization Uplifting Economic Status

of Social Members on the Whole
As early as in the eighteenth century, Adam Smith pointed out that
foreign trade is an important condition for modern economic growth.
58 K. HAN
Table 3.1 China’s paid-in foreign investment (Unit: bln USD)
Year Total Amount of foreign Foreign direct Other foreign

loan investment investments
1979–1984 17.14 13.04 3.06 1.04

1985 4.46 2.51 1.66 0.30
1986 7.26 5.01 1.87 0.37
1987 8.45 5.81 2.31 0.33
1988 10.23 6.49 3.19 0.55
1989 10.06 6.29 3.39 0.38
1990 10.29 6.53 3.49 0.27
1991 11.55 6.89 4.37 0.30
1992 19.20 7.91 11.01 0.28
1993 38.96 11.19 27.52 0.26
1994 43.21 9.27 33.77 0.18
1995 48.13 10.33 37.52 0.29
1996 54.80 12.67 41.73 0.41
1997 64.41 12.02 45.26 7.13
1998 58.56 11.00 45.46 2.09
1999 52.66 10.21 40.32 2.13
2000 59.36 10.00 40.72 8.64
2001 49.67 0.00 46.88 2.79
1979–2001 568.41 147.16 393.51 27.74
Source NBS, China Statistical Yearbook 2002, China Statistics Press
In the 1930s, D. H. Robertson, a professor with University of

Cambridge, presented a more explicit proposition that “foreign trade is
the engine for economic growth”.14 The contemporary economic the-
ories hold that trade openness will increase income of abundant factors,
but reduce that of scarce factors. A country will see increasing income
brought forth by trade, but imbalanced income distribution. According
to the Factor-Price Equalization Theorem, under specific conditions,
the profit of different factors, i.e., land rent, wage rate and profit rate,
will show a tendency of convergence across the world. Intuitively, trade
drives up the profit of abundant factors of each country, but pulls down
the profit of scarce factors, because abundant factors are relatively cheap,
while scarce factors are fairly costly, meaning that the prices for usually
cheap factors will rise, while the prices for usually expensive factors will
drop, so as to reach a globally unified price. Theoretically, if labor force
or capital could freely flow from low-income and low-profit countries
to high-income and high-profit countries, the wage or profit of capital
will become universally unanimous. In other words, in the labor-inten-

sive countries, though the level of wage was low at the beginning, it
would go up later; in contrast, in the countries lack of labor force, they
tended to set high wage standards, which would then gradually shrink.15
According to the studies of the World Bank on the average per-hour
wage in the manufacturing sector, the developing countries differed
greatly from their developed counterparts. For example, the average per-
hour wage was about $30 in Germany, but merely 30 cents in China
and India, which was only 1% of that in Germany.16 Such gap indicated
enough room for developing countries to raise workers’ wage, particu-
larly for China which heavily relied on export of manufactured goods,
there was theoretically great potential to raise workers’ wage, in view to
the wage gap between developed countries, which came into being along
with development of foreign trade.
In fact, the Chinese urban-rural residents have seen their household
income increase notably since 1978. Although it is too simplistic to say
that the growth in the Chinese people’s household income and wage
is a direct consequence of China’s participation in the global trade and
market, it cannot be denied that the development of foreign trade and
accelerating process of marketization have stimulated growth in workers’
wage. Moreover, the high-wage standard in foreign companies has also
exerted an important demonstration effect.
In order to visualize the understanding of the implications of eco-
nomic globalization on China’s income distribution, we used “per capita
total import-export volume” and “per capita FDI” as independent vari-
ables, and “per capita GDP” and “workers average wage” as dependent
variables, and then analyzed the total import-export volume, total local
population, per capita GDP and workers’ average wage of each of the
31 provinces/municipalities in 1995 and 2001, in reference to the data
excerpted from the China Statistical Yearbook (1996, 2002). Two things
should be noted: (1) There were no separate data about Chongqing
Municipality in 1995, its data were included into those of Sichuan
Province, since Chongqing was still under Sichuan’s jurisdiction at that
time. (2) Tibet Autonomous Region was a special case with zero FDI in
1995 and 2001, such abnormal data were excluded from the final statis-
tics. See Table 3.2.
By using the statistical software SPSS10.0, a Regression Analysis
Ordinary Least Square (OLS), the result (Table 3.3), the F value of the
regression equation in 1995 and 2001 shows significance at the level of
Table 3.2 Per capita total import-export volume, per capita FDI, per capita GDP and workers’ average wage in 31
provinces/municipalities in 1995 and 2001
Province/ Per capita import-export Per capita FDI (USD) Per capita GDP (yuan) Workers’ average
60 K. HAN
municipality volume (USD) wage (yuan)
1995 2001 1995 2001 1995 2001 1995 2001
Beijing 2960.30 3726.80 86.33 127.85 11151.0 25,523 8144 19,155

Tianjin 853.88 1810.00 161.46 212.50 9766.5 20,154 6501 14,308
Hebei 60.87 85.64 8.49 10.00 4427.5 8362 4839 8730
Shanxi 45.57 59.32 2.07 7.15 3548.9 5460 4721 8122
Inner Mongolia 43.46 85.60 2.53 4.50 3642.7 6463 4134 8250
Liaoning 322.23 472.27 34.81 59.99 6825.5 12,041 4911 10,145
Jilin 100.58 119.17 15.74 12.55 4355.7 7640 4430 8771
Heilongjiang 64.48 88.80 13.97 8.95 5441.8 9349 4145 8910
Shanghai 1721.40 3772.80 204.42 265.90 17399.0 37,382 9279 21,781
Jiangsu 230.82 698.18 73.46 94.02 7295.5 12,922 5943 11,842
Zhejiang 266.50 711.00 29.13 47.94 8159.3 14,655 6619 16,385
Anhui 33.39 57.21 8.03 5.32 3331.1 5221 4609 7908
Fujian 446.27 657.83 124.93 113.90 6672.9 12,362 5857 12,013
Jiangxi 32.57 36.57 7.11 9.45 2965.8 5221 4211 8026
Shandong 160.18 320.25 30.89 38.94 5746.1 10,465 5145 10,008
Henan 24.50 29.11 5.26 4.79 3298.9 5924 4344 7916
Hubei 58.98 59.87 10.83 19.89 4142.4 7813 4685 8619
Hunan 31.90 41.81 7.94 12.28 3434.0 6054 4797 9623
Guangdong 1513.20 2267.70 149.39 153.31 7834.9 13,730 8250 15,682
Guangxi 68.03 37.53 14.81 8.02 3535.1 4668 5105 9075
(continued)
Table 3.2 (continued)
Province/ Per capita import-export Per capita FDI (USD) Per capita GDP (yuan) Workers’ average
municipality volume (USD) wage (yuan)
1995 2001 1995 2001 1995 2001 1995 2001

Hainan 325.38 219.48 146.69 58.66 5027.6 7135 5340 8321
Chongqing – 59.22 – 8.28 – 5654 – 9523
Sichuan 30.73 35.87 4.78 6.73 3120.5 5250 4645 9934
Guizhou 18.94 17.02 1.63 0.74 1795.9 2895 4475 8991
Yunnan 53.83 46.39 2.45 1.51 3022.6 4866 5149 10,537
Tibet 90.51 35.33 – – 2332.5 5307 7382 19,144
Shaanxi 47.93 56.35 9.22 9.61 2845.8 5024 4396 9120
Gansu 24.59 30.25 2.62 2.89 2268.3 4163 5493 9949
Qinghai 32.01 39.18 0.34 6.98 3451.1 5735 5753 12,906
Ningxia 42.81 94.63 0.76 2.98 3294.4 5340 5079 10,442
Xinjiang 70.53 94.43 3.31 1.08 5027.1 7913 5384 10,278
Source NBS, China Statistical Yearbook (1996, 2002), China Statistics Press
3 IMPACT OF ECONOMIC GLOBALIZATION ON CHINA’S SOCIAL WELFARE …
61
62 K. HAN
Table 3.3 Regression analysis of the impact of per capita total import-export

volume and per capita FDI on per capita GDP and workers’ average wage
Workers’ average wage Per capita GDP
1995 2001 1995 2001
Constant 4936.410*** 9625.349*** 3894.020*** 5983.769***

(29.625) (20.768) (9.234) (11.045)
Per capita 1.603*** 2.901*** 3.922*** 6.630***
import-export (6.884) (6.969) (6.655) (13.625)
volume
R2 0.629 0.626 0.613 0.865
Adjusted R2 0.615 0.613 0.599 0.860
F value 47.395 48.569 44.283 185.650
Constant 4716.398*** 9023.749*** 3478.836*** 5237.561***
(25.447) (20.426) (7.907) (7.694)
Per capita FDI 16.854*** 41.434*** 44.646*** 97.406***
(6.416) (7.460) (7.159) (11.382)
R2 0.604 0.665 0.655 0.822
Adjusted R2 0.589 0.653 0.642 0.816
F value 41.165 55.653 51.257 129.558
Note The figures in the round brackets denote ‘T Test’; ***denote Significance Level is 0.01
0.000, and passed the t-test at 0.01 level, indicating that the per capita
import and export volume and per capita FDI have significant impact on
average workers’ wage. Based on time series, the R2 of per capita import
and export volume on workers’ average wage is about 0.63, the R2 on
per capita GDP is 0.61 in 1995 and 0.87.
The regression equation shows that, the regression coefficient of per
capita import and export volume on workers’ average wage in 1995
is 1.6, which rises to 2.9 in 2001, indicating that an increase of $1 in
per capita import and export volume, workers’ average will increase 1.6
yuan. In 2001, an increase of $1 in per capita import and export vol-
ume, workers’ average will increase 2.9 yuan. A comparison shows that
the per capita import and export volume has a more prominent impact
on per capita GDP. By 2001, the per capita import and export volume
affect over 86% of per capita GDP. In 1995, an increase of $1 in per cap-
ita import and export volume, per capita GDP increases 3.9 yuan, which
rose to 6.6 yuan in 2001.
With regard to the regression effect of per capita GDI on workers’
average wage and per capita GDP, the R2 of per capita FDI on workers’
average wage was over 0.6, and the R2 on per capita GDP was 0.66 in
1995 and 0.82 in 2001. In comparison, the per capita GDI on per cap-
ita GDP and workers’ average wage in 2001 was more significant. The
observation of the regression equation shows that the regression coef-
ficient of per capita FDI on workers average wage was 16.85 in 1995,
which rose to 41.43 in 2001, indicating that an increase of $1 in per cap-
ita FDI in 1995, the workers’ average wage would increase 16.85 yuan;
by 2001, an increase of $1 in per capita FDI, the workers’ average wage
would increase 41.43 yuan. In comparison, the effect of per capita FDI
on per capita GDP was more significant. By 2001, the per capita FDI
affected over 82% of per capita GDP. In 1995, an increase of $1 in per
capita FDI, per capita GDP would increase 44.65 yuan, which reached
97.41 yuan in 2001.
Thus, while China keeps carrying out the reform and opening up pol-
icy, it is ever more deeply involved in economic globalization, and the
Chinese people have seen their material life gradually upgraded, although
the enhancement of people’s economic status is accompanied by throes
of uneven income distribution. Generally speaking, economic globali-
zation not only improved the Chinese people’s living standard and liv-
ing conditions, but also caused extreme imbalance among regions,
urban-rural areas and industries, owing to development of foreign
trade and imbalanced FDI in different regions, urban-rural areas and
industries.
3.3 Economic Globalization and China’s Inequality

Economic globalization will destruct China’s traditional social struc-
ture. While accelerating China’s economic growth, economic globali-
zation also shocked China’s income distribution pattern, and helped
generate new forms of structural inequality and wealth gap. The World
Bank Annual Report 2002 stated that China embarked on moderniza-
tion on basis of extremely even income distribution and dire poverty.
The intra-rural inequality has in fact alleviated, however, the inequality
between rural areas and rapidly developing urban areas has been aggra-
vating. Moreover, the inequality between the provinces with or without
urban agglomeration is also worsening.17 Doubtlessly, economic glo-
balization is an important factor that intensifies the inequality among
regions, urban-rural areas, industries and sectors.
64 K. HAN
3.3.1 Economic Globalization: Key Factor Leading to Imbalanced

Regional Economic Growth
Although China has entered into a new stage of economic globalization
since 1978, different provinces/municipalities vary greatly in their extent
of participation in economic globalization and economic benefit there-
from. In reference to the studies of Hu Angang, professor with Tsinghua
University, and other scholars, the sequence of the FTD by province/
municipality in 1999 was Guangdong (1.4026), Shanghai (0.7808),
Tianjin (0.7659), Beijing (0.6995), Fujian (0.4291), Jiangsu (0.3534),
Zhejiang (0.3127), Liaoning (0.2904), Shandong (0.2247), Hainan
(0.1827), Xinjiang (0.1412), Ningxia (0.1381), Jilin (0.1266), Shanxi
(0.1265), Tibet (0.1295), Shaanxi (0.1156), Heilongjiang (0.0864),
Inner Mongolia (0.0826), Hebei (0.0817), Anhui (0.0801), Guangxi
(0.0792), Yunnan (0.0768), Chongqing (0.0741), Hubei (0.0660),
Qinghai (0.0656), Jiangxi (0.0636), Sichuan (0.0610), Guizhou
(0.0600), Hunan (0.0556), Gansu (0.0500) and Henan (0.0435).18 The
sequence of total import-export volume by province/municipality in
2001 was Guangdong, Shanghai, Beijing, Jiangsu, Zhejiang, Shandong,
Fujian, Liaoning and Tianjin, mostly those lie in China’s eastern coastal
region (see Fig. 3.2). Obviously, there was a notable imbalance in for-
eign trade among different provinces/municipalities, because foreign
trade and foreign capital remained concentrated in east China, such land-
scape was identical with the imbalanced economic development among
different regions.
Similarly, the distribution of FDI and foreign-funded enterprises
between China’s central-western regions and eastern coastal region
is apparently unequal. With respect to China’s three major economic
zones,19 the FDI and other foreign investment are highly concen-
trated in the eastern region. In 1984, the eastern region held 96.73%
of China’s total foreign investment; to be more specific, Guangdong
Province accounted for 73.42%, while the central and western prov-
inces/municipalities respectively held 1.19% and 2.08%. Since the mid-
1980s, the share of the eastern region in China’s total foreign investment
has somewhat dropped, that of the central region has been rising slightly,
while that of the western region has remained at downside, i.e., falling
from 6.81% in 1987 to 2.75% in 1999, down more than 4 percentage
point.20
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Fig. 3.2 Ranking of China’s total foreign volume by municipality/province/

region (Source NBS, 2002, China Statistical Yearbook 2002, Beijing: China
Statistics Press)
66 K. HAN
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Fig. 3.3 Comparison of FDI among China’s three major regions in 2001

(Source NBS, 2002, China Statistical Yearbook 2002, Beijing: China Statistics
Press)
In 2001, the paid-in FDI of Guangdong was $11,932.03 million,

holding 25.73% of China’s total FDI, and the proportion would be even
larger if taking account of other foreign investment. Jiangsu Province
took the second place with paid-in FDI of $6914.82 million, account-
ing for 14.91%; followed by Shanghai, Fujian, Shandong, Liaoning,
Zhejiang, Tianjin, Beijing and Hubei; their paid-in FDI held a combined
share of 87.12% of the national total. Based on the division of three
major economic zones, the paid-in FDI of the 13 eastern provinces/
municipalities amounted to $41,022.41 million, taking up 88.47% of the
national total; the paid-in FDI of the 8 central provinces/municipalities
reached $3913.59 million, holding 8.44%; the paid-in FDI of 10 west-
ern provinces/municipalities added up to $1431 million, merely holding
3.09%. In short, the ratio of the paid-in FDI of the eastern, central and
western regions was 28.67: 2.74: 1 (see Fig. 3.3). Even the effect of local
population was considered, such gap was still great.
Then what about the foreign-funded enterprises in China? The figures
in Table 3.4 prove that the distribution of such enterprises in China was
extremely imbalanced. Based on the division of the three major regions, in
2001, the 13 eastern provinces/municipalities were home to 171,957 for-
eign-funded enterprises, accounting for 84.99% of China’s total; their com-
bined foreign investment reached $747,254.88 million, holding 85.4%; and
Table 3.4 Basic information of China’s foreign-funded enterprises in three major regions in 2001
Region Number of Percentage Total invest- Percentage Registered Percentage Population Percentage
foreign-funded (%) ment (mln (%) foreign capital (%) size (mln) (%)
enterprises USD) (mln USD)
National 202,306 100 875,010.79 100 35,9682.75 100 1242.61 100

Eastern 171,957 84.99 747,254.88 85.40 308,835.36 85.92 547.20 44.05
Central 17,304 8.58 64,767.10 7.39 24,087.56 6.69 413.07 33.24
Western 13,045 6.43 62,988.81 7.21 26,759.83 7.39 282.34 22.71
Source NBS, 2002, China Statistical Yearbook 2002, Beijing: China Statistics Press
3 IMPACT OF ECONOMIC GLOBALIZATION ON CHINA’S SOCIAL WELFARE …
67
68 K. HAN
their registered foreign capital amounted to $308,835.36 million, holding

85.92%. In contrast, the 8 central provinces/municipalities had 17,304
foreign-funded enterprises (8.58%), while the western 10 provinces/
municipalities ranked at the bottom with merely 13,045 foreign-funded
enterprises (6.43%). The ratio of the number of foreign-funded enterprises
in the eastern, central and western regions was 13.22: 1.33: 1.
The total foreign investment in the eastern, central and western regions
was respectively $747,254.88 million (85.40%), $64,767.10 million
(7.39%) and $62,988.81 (7.21%); thus forming a ratio as 11.86: 1.03: 1.
The registered foreign capital in the eastern, central and western
regions was respectively $308,835.36 (85.92%), $24,087.56 (6.69%)
and $26,759.83 (7.39%); thus forming a ratio as 11.54: 0.9: 1.
In sum, the foreign investment, in terms of scale and number of
enterprise, of both the central and western regions was lagging far
behind that of the eastern region.
3.3.2 Economic Globalization Expediting Industrial Restructuring

In a sense, economic globalization is essentially a process for labor divi-
sion to regroup, expand and elaborate at the worldwide level. Such pro-
cess, which is driven by global trade (a profit-seeking activity in nature),
also changes the internal industrial structure of a country. Moreover,
the FDI is unevenly distributed among different industrial sectors. The
NBS statistics show that China’s paid-in FDI totaled $6877.59 in 2001,
mostly flew to such sectors as manufacturing (65.9%), real estate (11%),
social services (5.54%), electricity, gas and water production and supply
(4.85%). Accordingly, the foreign-funded enterprises were concentrated
in these four sectors: there were 141,668 foreign-funded manufactur-
ing enterprises, holding 70.3% of the total, with combined investment of
$491,322 (56.15%) and registered foreign capital of $214,931 (59.8%);
there were 16,169 foreign-funded social service enterprises, accounting
for 7.99%, with combined investment of $56,274 (6.43%) and registered
foreign capital of $23,188 (6.45%); there were 12,249 foreign-funded
enterprises in the wholesale, retail trade and catering sectors, taking up
6.06%, with combined investment of $24,592 (2.81%) and registered
foreign capital of $11,311 (3.14%); there were 11,925 foreign-funded
real estate enterprises, holding 5.9%, with combined investment of
$149,094 (17.04%) and registered foreign capital of $55,536 (15.4%).21
See Fig. 3.4.
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Fig. 3.4 Distribution of foreign-funded enterprises in China in 2001 (Source
NBS, 2002, China Statistical Yearbook 2002, Beijing: China Statistics Press)
Table 3.5 Layout of China’s industrial structure (Unit: %)
Indicator 1980 1985 1990 1995 2001
Primary 30.1 28.4 27.1 20.5 15.2

Secondary 48.5 43.1 41.6 48.8 51.1
Tertiary 21.4 28.5 31.3 30.7 33.6
Source NBS, China Statistical Yearbook (1996, 2002), Beijing: China Statistics Press
Since 1978 the share of the primary industry in China’s GDP has
been shrinking year on year, that of the secondary industry dropped
somewhat but bounced back after the 1990s, while that of the tertiary
industry gradually increased (see Table 3.5), indicating that China is
being deeply involved in economic globalization, with the traditional
agricultural production withering, the manufacturing-based industrial
production remaining as a driving force in China’s national economy,
and the tertiary industry—mainly constituted by finance, telecommuni-
cations and tourism sectors—entering in boom times.
In terms of employment, despite of a large cardinal number, the
Chinese agricultural workers have been decreasing year on year. If con-
sidering transfer of the surplus rural workers, then the workers that
70 K. HAN

3ULPDU\ 6HFRQGDU\ 7HUWLDU\
Fig. 3.5 Changes on China’s industrial structure (Source NBS, 2002, China

Statistical Yearbook 2002, Beijing: China Statistics Press)
persist in agricultural production is even less. The statistics show that at

the early days of the New China, the number of workers in the tertiary
industry only held 9.1% of the Chinese total employees, such proportion
rose to 12.2% at the initial stages for reform and opening up, and then
leveled off the number of the workers in the secondary industry in the
early 1990s and later came from behind. By 2001, the share of the three
main industries respectively occupied a share of 50, 22.3 and 27.7% in
China’s GDP. See the changes on China’s industrial structure in Fig. 3.5.
In a nutshell, China’s industrial structure has undergone dramatic
changes since 1978. From 1952 when the People of Republic of China
was founded not long ago to 1978 when the reform and opening up
policy was put into effect, China was still an agricultural society with
80% of the Chinese laborers (a total of over 200 million) engaged in the
primary industry. During this period, the growth of China’s secondary
industry was no more than 10 percentage point, and that of the tertiary
industry was too small to be mentioned. In contrast, the 23 years since
1978 witnessed great changes on China’s industrial structure. In 2001,
there were 730 million laborers in China, and 50% of them were distrib-
uted in non-agricultural sectors; over 200 million Chinese—accounting
for 1/3 of the total employees—were working in the tertiary sector. It
is worth noting that in some developed countries, particularly Japan and
Germany, service sector occupied an astonishingly large share in their
total foreign investment. If such investment pattern remained as so, it

was foreseeable that the service sector would occupy an even larger share
in their total foreign investment, which will further differentiate China’s
industrial structure and catalyze rapid development of its social service
sector.
3.3.3 Economic Globalization Somewhat Widening

Urban–Rural Inequality
While China’s marketization is gradually improved, free flow of produc-
tion factors has become a precondition for efficient resource allocation.
The agricultural production has occupied a fairly small share in China’s
total FDI since 1979. According to the years’ contracts on utilizing the
foreign capital, the share occupied by agriculture hit high at 8.62% in
1979–1984, then dropped to 5.99% in 1985 and 5.01% in 1986; such
year-on-year decline continued since then; despite of a slight recovery
after 1994, it remained within the range of 2–5%. As for the contracts on
the FDI, the share occupied by agriculture topped at 3.94% in 1988, yet
dropped to a low point at 1.07% in 1993; despite of a moderate recov-
ery, it remained within the range of 1–4%.
In a chronological order, while China has been speeding up its
marketization reform since 1992, the share of agriculture in foreign
investment decreased,22 indicating that along with the progressing mar-
ketization process, particularly at the initial stage of the market econ-
omy, more foreign capital flew into urban areas, instead of rural areas;
and most of the FDI was concentrated in urban areas. Under such cir-
cumstance, the FDI was of no help in mitigating the urban–rural gap;
on the contrary, it would further aggravate the urban–rural inequality if
restricted by certain institutional barriers.
Since the 1990s, of China’s export commodities, primary goods
have occupied a shrinking share, while manufactured goods occupied
an expanding share. By 2001, primary goods and manufactured goods
respectively accounted for 9.9 and 90.1% of China’s export commodities
(see Fig. 3.6). For most of the Chinese farmers that have remained at a
disadvantaged position in foreign trade, it was highly likely for them to
be isolated from the market economic system amid the wave of economic
globalization. As such, such kind of inequality will intensify breakage of
urban-rural society. Agriculture will turn into an industry that fails to
generate profit, or it will descend to a natural economic activity, instead
72 K. HAN

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Fig. 3.6 Structure of China’s export commodities in 2001 (Source NBS, 2002,

China Statistical Yearbook 2002, Beijing: China Statistics Press)
of an industry, for farmers to satisfy their demand for self-consumption

and self-sufficiency. In the meantime, during the process for industrial-
ization and urbanization, massive laborers and population are flocking
into cities; besides, there is also transformation of agriculture and farm-
ers themselves. In other words, the small number of farmers left in rural
areas shall industrialize agricultural production through large-scale oper-
ation, and integrate industrialized agriculture with the entire landscape
of industrialization. However, in today’s China, there are still a great
number of laborers and population living in rural areas, which has caused
small-scale operation of agriculture—a stumbling block for achieving
industrialization of agriculture.23
3.3.4 Economic Globalization Widening the Gap Between Workers’

Income and Occupational Prestige
Since 1978, the workers’ average wage in the Hongkong, Macao and
Taiwan funded enterprises and foreign-funded enterprises has been
notably higher than that in the state-owned and collectively-owned
enterprises in mainland China, particularly in the developed areas (see
Tables 3.6 and 3.7). And the workers in the foreign-funded enterprises
usually have better bonus and welfare treatment. In the meantime, the
foreign-funded enterprises also introduced such unequal pay model into
China. In these enterprises, the management staff and technicians have
Table 3.6 Average wage of workers in enterprises of different ownership (Unit:

yuan)
Year State-owned Urban Joint own- Limited Hongkong, Foreign-

units collective ership units liability Macao and funded
owned units corporations Taiwan economic
funded units
units
1953 496 415 – – – –

1978 644 506 – – – –
1985 1213 967 1269 – – 1847
1991 2477 1866 1789 – 4879 3806
1993 3532 2592 3741 5171 5147 5315
1995 5625 3931 6056 7277 7484 8058
1997 6747 4512 7310 7693 9329 10,361
1999 8543 5774 9501 9720 10,991 12,951
2000 9552 6262 10,663 11,131 11,914 14,372
Source NBS, China Statistical Yearbook (1988, 1993, 2002), Beijing: China Statistics Press
Table 3.7 Comparing workers’ average wage in enterprises of different owner-

ship in east China in 2001 (Unit: yuan)
Province/ State-owned Urban collective Hongkong, Foreign-funded

municipality units owned units Macao and economic units
Taiwan funded
units
Beijing 19,776 11,063 21,210 34,481

Liaoning 10,609 6354 12,505 12,766
Shanghai 21,961 13,693 19,625 28,787
Jiangsu 12,917 7543 11,460 14,483
Zhejiang 19,514 12,208 14,099 14,105
Fujian 13,313 9098 10,334 11,015
Guangdong 16,779 9040 13,601 18,192
Hainan 8102 6207 10,088 11,296
Source NBS, 2002, China Statistical Yearbook 2002, Beijing: China Statistics Press
decent wage and welfare, the senior managers and technicians could earn
as much as their counterparts in developed countries; however, the wage
of a majority of common workers just reaches the local average. Such
unequal pay model inside the foreign-funded enterprises has worsened
74 K. HAN
the overall wage inequality in China, but it exerted a “demonstration

effect” for the state-owned enterprises (SOEs), and motivates them to
rapidly replace the originally equal income distribution with an unequal
model.
Economic globalization plays an important role in China’s industrial
restructuring. An undeniable fact surfaced during the industrial restruc-
turing process, i.e., a large number of workers in the state-owned and
collectively-owned enterprises were dismissed, indicating that economic
globalization deprived the SOE workers of their occupational prestige.
From the perspective of industrial structure, the foreign-funded enter-
prises were mostly distributed in the manufacturing sector. If considering
geographical distribution of the laid-off workers, they were concen-
trated in the old industrial bases in the northeastern, northwestern and
southwestern areas, according to a survey on China-wide laid-off work-
ers organized by Li Qiang and Yao Yuqun in 1998. With a view to the
category of industries, 45.8% of the total laid-off workers were used to
working in the manufacturing and mining sectors.24 Such workers were
forced to lose their social-economic prestige amid the large-scale struc-
tural unemployment in the state-owned and collectively-owned enter-
prises. From the mid-1950s to 1978, the Chinese SOE workers in urban
areas were accessed to more resources in terms of both wage and wel-
fare, and they enjoyed more status advantages than farmers. However,
the joint-ownership enterprises, foreign-funded enterprises, Hongkong,
Macao and Taiwan-funded enterprises and limited liability corporations
began to emerge since 1980s, these enterprises boasted higher effi-
ciency than the SOEs, and their workers earned more than their SOE
counterparts; particularly in the late 1990s, the status decline of the SOE
workers became even more prominent as a result of unemployment and
lay-off issues.25 It was obvious that such status decline not only referred
to declining economic status, but also fading social prestige. In light of
a survey on the workers’ occupational prestige in Beijing conducted by
Li Qiang over 1997–1998, as for the 100 occupations that were investi-
gated, in the foreign-funded enterprises, the prestige of senior employees
was scored 69.91 on average, ranking the 43rd place; that of ordinary
employees was scored 53.38, ranking the 62nd place; that of the work-
ers in steel mills, textile factories and construction sites was lagging far
behind.26 From March to October of 2002, a research group in the
Institute of Sociology at Chinese Academy of Social Sciences organized
a nationwide sampling questionnaire survey, the prestige of the senior
employees in foreign-funded enterprises was scored 83.1, ranking the

19th place among the total 51 investigated occupations; that of com-
mon employees was scored 75.7, ranking the 31st place. In contrast, the
medium management staff in the SOEs and the ordinary workers in the
medium-to-large-sized SOEs had a respective prestige scored 77.3 and
60.9, ranking the 31st and 46th place.
3.4 Economic Globalization and Policy Selection

for China’s Social Welfare System
Economic globalization not only provides China with an important

development opportunity, but brings more uncertainties to the Chinese
society. The UNDP’s Human Development Report 1999: Globalization
with a Human Face states that “Globalization has swung open the door
to opportunities in the world’s markets. But markets can go too far and
squeeze the non-market activities so critical for human development…
What’s worse, the success of the global markets has marginalized many
non-market activities for human development, making human wellbeing
even more vulnerable”.27 During the process of globalization, China is
increasingly integrated with a highly risky world system. Owing to dif-
ferent cultural deposits and national situations, as well as different insti-
tutional arrangements, economic globalization also requires China to
take a more open stance to absorb the foreign advanced management
expertise and institutional arrangements. A complete institutional sys-
tem guarantees China’s long-term development, so the formulation and
implementation of the social welfare policies is an indispensable institu-
tional ingredient to cope with the modern market economy and eco-
nomic globalization.
Long before China’s entry into the WTO, some Chinese scholars had
presented some insightful suggestions about China’s systems. Prof. Guan
Xinping, Dean of Department of Social Work and Social Policy at Nankai
University, stated that the WTO accession will inevitably place China’s
social policies under the following influences: First, in the traditional
labor-intensive industry, China will compete against the other develop-
ing counterparts for a share in international capital market and commod-
ity market—such kind of competition is labeled as “race to the bottom”,
since it tends to keep pressing down the wage and welfare of common
laborers in all countries to the lowest level. In contrast, in the capital and
technology-intensive industry, China will compete against the developed
76 K. HAN
countries to form a landscape of “race to the top”, with a direct conse-

quence that each country tries to lure top talents with a tempting salary.
The coexistence of the two forms of competition will aggravate the social
inequality within China. Second, labor cost has international linkages
in the context of globalization, meaning that the labor price in a coun-
try is to be affected by the other countries; as a result, the social policies
of a country is increasingly affected by other countries. In other words,
China’s WTO accession will extend the international economic com-
petition to the field of social policies. Third, China has a large economic
aggregate and a labor-intensive and highly competitive manufacturing
industry, its entry into the WTO will cause mounting pressure upon the
export and absorption of foreign capital of other developing countries,
which may be forced to adopt countermeasures. Under the framework of
increasingly free capital flow and trade on the international market, such
trade protection means (e.g., tariff and government subsidy) and other
competition tactics which were widely used have become invalid to differ-
ent extent, the developing countries will resort to such means as cutting
social expenditure to build up competitive edge of their local products.
In case of any serious situation, these countries may adopt the means of
“social dumping”, i.e., reduce product cost to enhance their competitive-
ness on the world market by lowering the wage and welfare of laborers. If
other developing countries really did so, it would exert a negative impact
upon China, and then form a vicious circle. Besides, in the context of eco-
nomic globalization, the impact on China’s social policies not only come
from the direct international economic competition, but from political,
social and cultural channels. Last, after entering into the WTO, China will
see its social policies exposed to more international intervention, just like
the other developing countries. On the whole, in absence of a fair and rea-
sonable international coordination mechanism, the WTO accession fore-
bodes that China’s social stratification and social policies will suffer from
a generally negative impact from economic globalization.28 Prof. Lin Yi,
Director of Aging and Social Security Research Center at Southwestern
University of Finance and Economics, introduced three decision-mak-
ing approaches about social security against the backdrop of globaliza-
tion: First, providing minimum guarantee and provisional relief to social
disadvantaged groups shall be the basic function of government. Second,
adjust the traditional western-style social policy system with social insur-
ance as a mainstay, and build a social risk management system that focuses
on integrity and integration so as to deal with the social risks brought by
globalization. Third, accurately estimate the severity of social risks in the

context of economic globalization, and evaluate the capacity of the cur-
rent social security system to bear social risks, and then reflect on the deci-
sion-making approaches about building China’s social security policies.29
When coming up with the social welfare policies under the impact
from economic globalization, China shall, by holding a global vision,
safeguard social stability and resolve the social problems that arise along
with the domestic institutional changes. The following four aspects shall
be specially thought about.
3.4.1 Giving Priority to Building a Social Assistance System

Economic globalization has increased conditions and opportunities for
unequal income distribution and wealth possession in China, and played
an important role in aggravating China’s social division. While taking
account of its reality, China shall firstly establish a proper social assistance
system for two reasons: First, as a result of trade development and indus-
trial restructuring, massive workers in the traditional state-owned and
collectively-owned enterprises were laid off, and a great majority of them
were no longer the middle class but reduced to the urban poor; they
not only suffered from a degrading material life, but a descending social
status, so their sense of “relative deprivation” was much more stronger.
Because of multiple restrictions, lots of them were unable to regain any
opportunity for upward mobility either through their own effort or fam-
ily assistance, but become member of the urban disadvantaged groups
in dire need of government and social assistance. Second, the developed
countries, with a higher budget for social assistance programs, have set
a model for China to follow. In such leading developed countries as US
and UK, the social assistance funds usually account for over 1/3 of their
total social expenditure, covering more than 1/10 of their total popu-
lation. Comparatively speaking, in 1992 when China put into the trial
run of the minimum subsistence guarantee system, only 190,000 urban
poor (0.06% of the total urban population) could receive quantitative
assistance regularly, the total social assistance funds (including tem-
porary relief) were no more than 120 million yuan, which was merely
0.05‰ of China’s GDP in the year and less than 0.03% of China’s fiscal
revenue.30 After the urban minimum subsistence guarantee system was
put into place, a large number of the urban poor received such benefit,
marking a sound policy effect.
78 K. HAN
3.4.2 Gradually Improving Modern Social Insurance System

Economic globalization is an accelerator for China’s industrialization
process. During this process, manufacturing has become China’s pillar
industry, and massive manufacturing workers ask for guarantee from a
modern social insurance system which is mainly constituted by old-age
insurance, unemployment insurance and work-related injury insurance.
The modern social insurance system built by Germany not only sets a
successful example for the other developed countries in making socioec-
onomic development plans, but forms a common wealth for the entire
human society. Economic globalization may increase China’s unem-
ployment rate and sharpen the conflicts that already existed in its social
insurance system. In terms of the institutional arrangement, the Chinese
social insurance system encountered dual problems, on one hand, it shall
try to link with the different social insurance system in the international
community; on the other, it shall establish a social insurance system that
integrates with its own situations and characteristics while achieving
industrialization. Specifically speaking, China shall make active explo-
rations in building an old-age security system with its own characteris-
tics, and deepen the reform of work-related injury insurance system and
medical insurance system. Besides, China shall build a coverall medical
insurance system which not only meets the demand for protecting lab-
orers’ physical health and sustaining laborers’ reproduction, but builds
up the Chinese people’s physical quality and avoids the vicious cycle
of poverty.
3.4.3 Improving Labor Protection Mechanism

Amid the wave of economic globalization, and in the pattern of
“stronger employers and weaker employees”, the government shall
build and improve a labor protection mechanism from the institutional
dimension: (i) Build an effective labor union and carry out the meas-
ures for labor protection, guide and teach the workers to build up their
self-protection ability. (ii) Improve legislation, join in international
organizations or conventions, and safeguard the basic rights and legiti-
mate interests of workers. (iii) Establish a sound mechanism of regular
pay raises for workers, and set a minimum wage standard to guarantee
their legitimate income. (iv) Strengthen supervision of workplace safety
and guard against serious accidents, particularly in the privately-owned
or foreign-funded enterprises. With a view to the currently serious excess

of labor resources, any failure in the workplace safety will cause a direct
threat to workers’ personnel safety.
3.4.4 Rapidly Building a Social Welfare System in Rural Areas

Under the impact from economic globalization, it is the massive Chinese
rural residents that were reduced to the most vulnerable groups, rather
than the urban laid-off workers. Unlike the rural areas, the urban areas
are more capable of absorbing labor forces, and the diversified urban life-
style has incubated more reemployment opportunities for those laid-off
workers. On the contrary, in the relatively closed rural areas where the
production and living patterns are simplified, the rural residents are less
capable of withstanding the production and living pressures while mon-
etary forces are becoming stronger, yet traditional family ties and farm-
land are no longer helpful. Therefore, China shall, from the perspective
of institutional arrangement, includes a rural social welfare system into
its overall welfare framework. China shall make effort in establishing a
classified and diversified social welfare system that takes cares of both the
urban and rural residents, instead of focusing on urban areas or giving
priority of urban areas over rural areas.
Notes
1. United Nations Development Programme, 2002, Human development
report 1999: Globalization with a human face, Beijing: China Financial &
Economic Publishing House, p. 25.
2. Held David, et al., 2001, Global transformations: Politics, economics and
culture, trans. Yang Xuedong, et al., Beijing: Social Sciences Academic
Press (China), p. 22.
3. Giddens A., 2000, The consequences of modernity, trans. Tian He, Nanjing:
Yilin Press, pp. 56–57.
4. Giddens A., 2000, The consequences of modernity, trans. Tian He, Nanjing:
Yilin Press, pp. 62–63.
5. Thompson G. W., 2000, Globalization in question, International Social
Science Journal (Chinese edition), Issue 2.
6. Lu Zhiqiang, 2000, Economic globalization and China, Management
World, Issue 6.
7. World Bank, 2002, Globalization, growth, and poverty: Building an inclu-
sive world economy, Washington, DC: The World Bank, pp. 24–31.
80 K. HAN
8. Dollar D., Kraay A., 2001, Growth is good for the poor, Policy research
working paper, No. 2587; Dollar D., Kraay A., 2001, Trade, growth,
and poverty, Policy research working paper, No. 2199 (both in Jin Liqun
and Stern Nicholas, 2002, Economic development: Theories and practices,
Beijing: Economic Science Press, pp. 89–90).
sive world economy, Washington, DC: The World Bank, pp. 5–7.
10. Petras James, 01/08/2003, Consequences of globalized wealth distribution,
http://www.cc.org.cn/ziliaoku/index.htm.
11. Qiu Yuanlun, 1999, Economic globalization and China’s national interest,
The Journal of World Economy, Issue 12.
12. Bell Daniel, 1997, The coming of post-industrial society, trans. Gao Xian,
et al., Beijing: Xinhua Publishing House, pp. 1–8.
13. National Bureau of Statistics, 2002, China Statistical Yearbook 2002
(Table 3.1, Table 17.3), Beijing: China Statistics Press.
14. Zhang Peigang, 1999, Economics of development (expanded edition),
Zhengzhou: Henan People’s Publishing House, p. 404.
15. Held David, et al., 2001, Global transformations: Politics, economics and
culture, trans. Yang Xuedong, et al., Beijing: Social Sciences Academic
Press (China), pp. 228, 257.
sive world economy, Washington, DC: The World Bank, p. 44.
sive world economy, Washington, DC: The World Bank, p. 48.
18. Hu Angang, ed., 2002, Globalization challenging China, Beijing: Peking
19. According to its seventh “five-year” plan (1986–1990), China is divided
into three major economic zones, i.e., the eastern, central and west-
ern regions. The eastern region is made up of Beijing, Tianjin, Hebei,
Liaoning, Jilin, Heilongjiang, Shanghai, Jiangsu, Fujian, Shandong,
Guangdong and Hainan. The central region covers Shanxi, Inner
Mongolia, Anhui, Jiangxi, Henan, Hubei, Hunan and Guangxi. The
western region consists of Chongqing, Sichuan, Guizhou, Yunan, Tibet,
Shaanxi, Gansu, Qinghai, Ningxia and Xinjiang.
20. Wei Houkai, 2001, The regional characteristic and development of for-
eign investment in China, Economic Review, Issue 6.
21. NBS, China Statistical Yearbook 2002, China Statistics Press, 2002.
22. The afore-said data are computed based on the data included in years’,
China Statistical Yearbook.
23. Sun Liping, 2002, We have begun to face a broken society?, Strategy and
24. Li Qiang, 2000, Social stratification and disparities between rich and poor,
Xiamen: Lujiang Publishing House, p. 113.
Xiamen: Lujiang Publishing House, pp. 83–85.
Xiamen: Lujiang Publishing House, p. 146.
27. United Nations Development Programme, 2002, Human development
report 1999: Globalization with a human face, Beijing: China Financial &
Economic Publishing House, p. 84.
28. Guan Xinping, 2002, Economic globalization, social inequality and policy
transition in Chinese society, Southeast Academic Research, Issue 6.
29. Lin Yi, 2002, Challenges on China’s social security and its countermeas-
ures in the context of economic globalization, in Zheng Gongcheng,
Zheng Yushuo, ed., Labors and social security amid globalization, Beijing:
China Human Resources & Social Security Publishing Group Co., Ltd.,
pp. 417–18.
30. National Bureau of Statistics, 1994, China statistical abstract 1994,
Beijing: China Statistics Press; Comprehensive Planning Department of
Ministry of Civil Affairs of the PRC, 1994, China civil affairs’ statisti-
cal yearbook 1993, Beijing: Yearbook Editorial Office of Ministry of Civil
Affairs of the PRC.
CHAPTER 4
Financial Crisis and Institutional

Countermeasures Amid China’s Social
Welfare Reconstruction
4.1 Impact of Financial Crisis on China’s Economy

and Society
During the period of social transition, China has seen its social welfare
system transforming into a mixed and diversified welfare model in the
context of market economy; moreover, the objectives and construction
process of China’s social welfare system are exposed to both internal and
external influencing factors. For instance, the 2008 financial crisis and
the resulting economic recession were a hard blow to the social welfare
system of some western developed countries: the Greek pension reform
program triggered widespread strikes1; some northern European coun-
tries were forced to adopt such elastic welfare measures as extending
the retirement age or cutting welfare benefits. How did this worldwide
economic downturn impact China’s social welfare system which is still
being constructed? How did China’s social welfare system respond to
this financial crisis and what about the effect? What is the development
trend of China’s social welfare system in the future? The content of this
chapter will unfold by revolving round these questions.
Han Keqing, 2011, Financial crisis and institutional countermeasures amid

China’s social welfare reconstruction, Dongyue Tribune, Issue 3.

https://doi.org/10.1007/978-981-32-9660-2_4
84 K. HAN
This global financial crisis, which actually started from 2007, was also
known as the “financial tsunami”, “credit crisis” or “the financial melt-
down in Wall Street”. It was attributed to a liquidity crisis in the financial
market that was triggered by the US subprime mortgage crisis. In 2008,
this crisis spiraled out of control, causing bankruptcy or government
take-over of several major financial institutions, and then quickly wors-
ened into a worldwide economic catastrophe. The world real economy
was shaken, numerous people lost their jobs, and countries were forced
to increase social expenditure, which somewhat inflicted the economic
growth and social development of China.
4.1.1 Impact of the Financial Crisis on China’s Economy

China’s GDP growth rate went downhill after this financial crisis, i.e.,
dropping from 14.4% in 2007 to 9.6% in 2008 and further to 9.3%
in 2009, according to the NBS data. In contrast, during the five years
before 2007, the Chinese economy had maintained a double-digit
growth (see Table 4.1 and Fig. 4.1).
As for the entire Chinese economy, it was the part of foreign trade
that suffered the most in this financial crisis. Its total foreign trade value,
particularly the export, dropped dramatically after 2008. According to
the NBS data, China had seen the total foreign trade value, export value
and import value keep increasing year on year by 2008, and respectively
Table 4.1 Changes
Year GDP (in billion yuan) YoY growth (%)
on China’s GDP in
1998–2009 1998 8440.23 7.3
1999 8967.71 7.9
2000 9921.46 8.6
2001 10,965.52 8.1
2002 12,033.27 9.5
2003 13,582.28 10.6
2004 15,987.83 10.4
2005 18,493.74 12.0
2006 21,631.44 12.8
2007 26,581.03 14.4
2008 31,404.54 9.6
2009 34,050.69 9.3
Source NBS, 2010, China statistical yearbook 2010, Beijing: China

Statistics Press, pp. 38, 41
4 FINANCIAL CRISIS AND INSTITUTIONAL COUNTERMEASURES AMID … 85
Fig. 4.1 Changes on China’s GDP in 1998–2009 (Source NBS, 2010, China

statistical yearbook 2010, Beijing: China Statistics Press, p. 41)
Table 4.2 Changes on China’s foreign trade value in 1998–2009
Year Total foreign trade value Export value Import value Surplus
(US$bln) (US$bln) (US$bln) (US$bln)
1998 323.95 183.71 140.24 43.47

1999 360.63 194.93 165.70 29.23
2000 474.29 249.20 225.09 24.11
2001 509.65 266.10 243.55 22.55
2002 620.77 325.60 295.17 30.43
2003 850.99 438.23 438.23 25.47
2004 1154.55 593.32 561.23 32.09
2005 1421.91 761.95 659.95 102.00
2006 1760.40 968.94 791.46 177.48
2007 2173.73 1217.78 955.95 261.83
2008 2563.26 1430.69 1132.56 298.13
2009 2207.54 1201.61 1005.92 195.69
Source NBS, 2010, China statistical yearbook 2010, Beijing: China Statistics Press, p. 230
reach US$2,563.26 billion, 1,430.69 billion and 1,132.56 billion in

2008, but respectively fall to US$2,207.54 billion, 1,201.61 billion
and 1,005.92 billion in 2009, registering a decrease by 16.1, 19.1, and
12.6% (see Table 4.2).
86 K. HAN
Other statistics show that in the eastern coastal region lots of the
Chinese enterprises that depended on foreign trade went bankruptcy.
In reference to the data released by China’s National Development and
Reform Commission (NDRC), about 67,000 small-to-medium sized
enterprises (SMEs) across the nation closed down in 1H2008, account-
ing for 8.5% of China’s total bankrupt enterprises.2 The situation became
even worse in 2H2008, since the existing SMEs resorted to pay cuts or
layoffs to survive.
4.1.2 Impact of the Financial Crisis on China’s Employment

This financial crisis also hit China’s employment situation. According
to the data released by the Ministry of Human Resources and Social
Security of China, the urban registered unemployment rate (URUR)3
rose slightly since 2007. In the urban areas 8.86 million and 9.21 million
people registered for unemployment in 2008 and 2009, respectively, pre-
senting a URUR at 4.2 and 4.3%4 (see Table 4.3).
Table 4.3 Number of urban registered unemployment and URUR in China
Year Number of registered unemployment (1000 YoY growth (%) URUR (%)
people)
1998 5710 −1.0 3.1

1999 5750 0.7 3.1
2000 5950 3.5 3.1
2001 6810 14.4 3.6
2002 7700 13.1 4.0
2003 8000 3.9 4.3
2004 8270 3.4 4.2
2005 8390 1.5 4.2
2006 8470 1.0 4.1
2007 8300 −2.0 4.0
2008 8860 6.7 4.2
2009 9210 4.0 4.3
Source Department of Population and Employment of the NBS, Department of Planning and Finance of
the former Ministry of Labor and Social Security, China labor statistical yearbook 2007, p. 140; the rele-
vant data in the years 2008 and 2009 were extracted from the website of MOHRSS: http://w1.mohrss.
gov.cn/gb/zwxx/2010-05/21/content_382330.htm
It is worth noting that China’s URUR does not include the great
majority of migrant workers (almost 200 million), which are the nucleus
of the manufacturing employees. As such, the actual number of unem-
ployed people and unemployment rate far exceeds the number of urban
registered unemployed people and URUR. According to the sur-
veys made by Sheng Laiyun et al. with the Rural Social and Economic
Investigation Department of the NBS, the fact that massive migrant
workers returned home in early 2009 long before the Chinese Spring
Festival was a direct outcome of the global financial crisis: about 12 mil-
lion migrant workers (8.5% of the total) left for their hometowns earlier
than before. They found that the male migrant workers poorly educated
and inexperienced were more vulnerable to the financial crisis; more
migrant workers in manufacturing and construction sectors returned
home earlier than those in other sectors.5 As disclosed by Yang Zhiming,
Chief of the Office of the Rural Workers United Conference under the
State Council and Deputy Minister of the MOHRSS, after the 2009
Spring Festival, 80% of the Chinese migrant workers came back to cit-
ies (including 56 million resumed their old jobs and 11 million started
searching new jobs), while the rest 20% remained in their hometowns
looking for jobs, doing farm work or starting their own business.6 It was
estimated that about 25 million Chinese migrant workers were hit by this
financial crisis.
Although the financial crisis slowed down the growth pace of
China’s economy and hit its foreign trade, the FDI flowing into China
increased dramatically. According to the NBS data, in 2007, 2008 and
2009, China received the paid-in foreign investment of US$78.34 bil-
lion, 95.25 billion and 91.80 billion, respectively; and the paid-in FDI
of US$74.77 billion, 92.40 billion and 90.03 billion, respectively.
There were 286,232 foreign-funded enterprises in 2007, then the
number rose to 434,937 in 2008 and further to 434,248 in 2009 (see
Table 4.4 and Fig. 4.2). Besides, the number of employees in the for-
eign-funded enterprises increased year on year amid the financial crisis
(see Table 4.5 and Fig. 4.3), showing that the international capital and
foreign enterprises kept flowing into China. With continuous reform
and opening-up efforts and economic growth, China seemed like a har-
bor for the international capital to shun away from the impact of the
financial crisis.
88 K. HAN
Table 4.4 China’s foreign investment in 1998–2009
Year Paid-in foreign invest- Paid-in FDI (US$bln) Number of foreign-funded

ment (US$bln) enterprises
1998 58.56 45.46 227,807

1999 52.66 40.32 212,436
2000 59.36 40.72 203,208
2001 49.67 46.88 202,306
2002 55.01 52.74 208,056
2003 56.14 53.51 226,373
2004 64.07 60.63 242,284
2005 63.81 60.33 260,000
2006 67.08 63.02 274,863
2007 78.34 74.77 286,232
2008 95.25 92.40 434,937
2009 91.80 90.03 434,248
Note The number of foreign-funded enterprises is excerpted from the annual statistical yearbook from
1998 to 2009
Fig. 4.2 Number of China’s foreign-funded enterprises (Source NBS, 2010,

China statistical yearbook 2010, Beijing: China Statistics Press, p. 41)
Table 4.5 Number of employees in China’s foreign-funded enterprises
Year Number of employees (1000 people)
Hongkong, Macao & Taiwan-funded Foreign-funded enterprises Total

enterprises
1998 2940 2930 5870

1999 3060 3060 6120
2000 3100 3320 6420
2001 3260 3450 6710
2002 3670 3910 7580
2003 4090 4540 8630
2004 4698 5630 10,328
2005 5570 6880 12,450
2006 6110 7960 14,070
2007 6800 9030 15,830
2008 6790 9430 16,220
2009 7210 9780 16,990
Fig. 4.3 Number of employees in China’s foreign-funded enterprises (Source

NBS, 2010, China statistical yearbook 2010, Beijing: China Statistics Press, p. 41)
90 K. HAN
4.2 Impact of Financial Crisis on China’s Social

Spending
The mounting unemployed population brought along by the finan-
cial crisis posed an objective requirement for increasing social spending.
But different countries responded to this predicament with different
approaches: some increased welfare benefits and social spending con-
currently, the others refused to increase social spending and cut welfare
benefits. For instance, the Obama administration, since it came to power
in 2009, had been conquering the economic recession generated by the
financial crisis, and in the meantime reforming the medical system so as
to increase the welfare benefits of the lower-middle class. In contrast,
there was a different landscape in several European states: the govern-
ments were either considering reducing welfare benefits or had already
done so. Well, how about the situation in China? Through a survey of
China’s social insurance and social assistance expenses, we can see the full
picture of China’s social spending.
4.2.1 Social Insurance Expenditure

China’s social insurance system is made up of five basic systems of
endowment insurance, medical insurance, work-related injury insurance,
unemployment insurance and maternity insurance. The revenue, expend-
iture and cumulative balance of China’s social insurance fund had kept
increasing since 1998; particularly in the period 2007–2009, the revenue
and balance of social insurance increased notably year on year, while the
expenditure only went up slightly (see Table 4.6 and Fig. 4.4).
With regard to China’s unemployment insurance fund, the revenue
dropped slightly in 2009, while the expenditure rose notably, and the
cumulative balance kept increasing (see Table 4.7 and Fig. 4.5), which
was somewhat attributed to the impact of the global financial crisis.
4.2.2 Social Assistance Expenditure

At present, the Minimum Livelihood Guarantee System is the corner-
stone of China’s social assistance system. According to the relevant sta-
tistics, the beneficiaries and expenditure of the Minimum Livelihood
Guarantee System in both urban and rural areas, at the outset of being
Table 4.6 Revenue, expenditure and balance of China’s social insurance fund
Year Revenue Expenditure Cumulative balance

(bln yuan) (bln yuan) (bln yuan)
1998 162.31 163.69 79.11

1999 221.18 210.81 100.98
2000 264.45 238.56 132.75
2001 310.19 274.80 162.28
2002 404.87 347.15 242.34
2003 488.29 401.64 331.38
2004 578.03 462.74 449.34
2005 697.52 540.08 607.37
2006 864.32 647.74 825.59
2007 1081.23 788.78 1126.66
2008 1369.61 992.51 1517.60
2009 1611.60 1230.30 1894.20
Source Institute of Population and Labor Economics of CASS, 2010, Almanac of China’s popula-
tion 2009 (1998–2008 data), Beijing: China Social Sciences Press, p. 412; MOHRSS, Oct 25, 2010,
Statistical communiqué on development of China’s human resources and social security undertakings 2009
(2009 data): http://w1.mohrss.gov.cn/gb/zwxx/2010-05/21/content_382330.htm
Fig. 4.4 Revenue, expenditure and balance of China’s social insurance fund

(Source NBS, 2010, China statistical yearbook 2010, Beijing: China Statistics
Press, p. 41)
92 K. HAN
Table 4.7 Revenue, expenditure and balance of China’s unemployment insur-

ance fund
Year Revenue Expenditure Cumulative balance

(bln yuan) (bln yuan) (bln yuan)
1998 7.26 5.61 13.34

1999 12.52 9.16 15.99
2000 16.04 12.34 19.59
2001 18.73 15.66 22.62
2002 21.56 18.66 25.38
2003 24.95 19.98 30.35
2004 29.10 21.10 38.60
2005 34.03 20.69 51.90
2006 40.25 19.80 72.48
2007 47.17 21.76 97.91
2008 58.51 25.35 131.01
2009 58.00 36.70 152.40
Source Institute of Population and Labor Economics of CASS, 2010, Almanac of China’s popula-
tion 2009 (1998–2008 data), Beijing: China Social Sciences Press, p. 412; MOHRSS, Oct 25, 2010,
Statistical communiqué on development of China’s human resources and social security undertakings 2009
(2009 data): http://w1.mohrss.gov.cn/gb/zwxx/2010-05/21/content_382330.htm
Fig. 4.5 Revenue, expenditure and balance of China’s unemployment insur-

ance fund (Source NBS, 2010, China statistical yearbook 2010, Beijing: China
Statistics Press, p. 41)
Table 4.8 Social assistance expenditure for entire Chinese residents
Year Urban subsistence security Rural social assistance and subsistence

security
Population Expenditure Population Expenditure

(1000 people) (1000 yuan) (1000 people) (1000 yuan)
1998 1841 – – –
1999 2569 154 2658 –
2000 4026 272 3002 –
2001 11,707 – 3046 –
2002 20,647 1087 4078 –
2003 22,468 1510 3671 –
2004 22,050 1727 4880 162
2005 22,342 1919 8250 253
2006 22,401 2242 15,931 435
2007 22,721 2774 35,663 1091
2008 23,348 3934 43,055 2287
2009 23,456 4821 47,600 3630
Source Institute of Population and Labor Economics of CASS, 2010, Almanac of China’s population
2009, Beijing: China Social Sciences Press, p. 408; Ministry of Civil Affairs, Oct 25, 2010, Statistical
report on the development of the civil affairs undertakings 1998–2009: http://cws.mca.gov.cn/article/
tjbg/
established, were expanding notably. In the period 2007–2009 (before

and after the financial crisis), the expenditure of this system grew even
more rapidly (see Table 4.8).
To sum up, the impact of the financial crisis on China’s social spend-
ing had two characteristics: on the one hand, China’s social spending
was not seriously hit by the financial crisis, while in the western devel-
oped states (especially the welfare states) where the retirement pension
payment was so intractable, they had to implement such institutional
reforms as welfare cuts; on the other hand, the rapid economic growth
and a social welfare system being reconstructed and expanded have, to
some extent, offset the negative impact of the financial crisis on China’s
social spending. Given this, we can say that although the financial crisis
had adverse influence on China’s economic development, the shock to its
under-construction social welfare system was limited on the whole.
94 K. HAN
4.3 China’s Policy Measures in Response to the

Financial Crisis
Although the financial crisis did not cause any structural shock to
China’s social welfare system which is under construction, the Chinese
government maintained an active attitude to cope with the challenges
posed by the financial crisis, and came up with a slew of economic and
social policies to mitigate the negative impact of the financial crisis, so
as to ensure the steady economic growth, and build up the anti-risk
ability and sustainability of the social welfare system. The relevant wel-
fare policies issued by the Chinese government since 2008 are listed in
Table 4.9.
4.3.1 Ensuring the Basic Livelihood of Low-Income Earners

and Unemployed
In order to guarantee the basic livelihood of low-income earners and
unemployed persons, the Circular on Further Improving the Level of the
Subsistence Allowances for Urban-rural Residents and Properly Arranging
the Basic Livelihood of the Poverty-stricken Population, which was jointly
released by the Ministry of Civil Affairs (MOCA) and Ministry of
Finance (MOF) and took effect as of January 1, 2008, states that the
monthly subsistence allowances allocated to the urban low-income resi-
dents will increase by 15 yuan per person, such allowances for the rural
recipients will increase by 10 yuan per person. The Central Government
may appropriate certain subsidy in addition to the subsistence allow-
ances and encourage the more capable areas to adjust up the basic
allowance amount. In the meantime, local governments shall properly
raise the level of “five guarantees” for rural residents in line with rising
prices and specific local conditions, and provide temporary assistance
to the urban poor families living on the fringe of subsistence allow-
ances. According to the Circular on Doing a Better Job in Alleviating
the Burdens on Enterprises and Stabilizing the Employment Situation,
jointly released by the MOHRSS, MOF and State Administration of
Taxation (SAT) in 2009, upon expiration of the 2010 social insur-
ance subsidy, the flexible employees that fail to have stable jobs may
apply for one-time extension of the subsidy, but no longer than
one year.
Table 4.9 China’s policies in response to the financial crisis
Date of issuance (mm/ Authority of issuance Document no. Policy title Date of implementation
dd/yy) (mm/dd/yy)
02/03/08 Ministry of Civil Affairs, MinDian [2008] No. 16 Circular on Further 02/03/08
Ministry of Finance Improving the Level of the
Subsistence Allowances for
Urban-rural Residents
and Properly Arranging
the Basic Livelihood
of the Poverty-stricken
Population
09/26/08 General Office of the GuoBanFa [2008] No. Guiding Opinions for 09/26/08
State Council 111 Promoting Employment
by Encouraging Business
Startups
12/20/08 Ministry of Human RenSheBuFa [2008] Circular on the Matters 12/20/08
Resources and Social No. 117 about Adopting Active
Security, Ministry Measures for Alleviating
of Finance, State the Burdens on Enterprises
Administration of and Stabilizing the
Taxation Employment Situation
01/07/09 Ministry of Human RenSheBuFa [2009] Circular on Carrying 01/07/09
Resources and Social No. 8 out the Plan for Special
Security, National Vocational Trainings
Development and
Reform Commission,
Ministry of Finance
4 FINANCIAL CRISIS AND INSTITUTIONAL COUNTERMEASURES AMID …
(continued)
95
dd/yy) (mm/dd/yy)
96 K. HAN
06/15/09 Ministry of Civil Affairs, MinFa [2009] No. 81 Opinions for Further 06/15/09
Ministry of Finance, Improving the Medical
Ministry of Health, Assistance System in
Ministry of Human Urban and Rural Areas
Resources and Social
Security
09/19/09 State Council GuoFa [2009] No. 36 Opinions for Further 09/19/09
Promoting the
Development of Small-
and Medium-sized
Enterprises
09/30/09 General Office of the GuoBanFa [2009] No. Opinions for Dealing 09/30/09
State Council 55 with the Global Financial
Crisis and Maintaining
Steady and Relatively
Rapid Development of the
Western Region
10/09/09 Ministry of Human RenSheBuFa [2009] Guiding Opinions for 10/09/09
Resources and No. 116 Further Strengthening the
Social Security, State Construction of the Public
Commission Office of Employment Service
Public Sectors Reform System
(continued)
dd/yy) (mm/dd/yy)
12/16/09 Ministry of Human RenSheBuFa [2009] Circular on Doing a 12/16/09
Resources and Social No. 175 Better Job in Alleviating
Security, Ministry the Burdens on Enterprises
of Finance, State and Stabilizing the
Administration of Employment Situation
Taxation
02/10/10 Ministry of Human RenSheBuFa [2010] Circular on Further 02/10/10
Resources and Social No. 13 Carrying out the Plan
Security, National for Special Vocational
Development and Trainings
Reform Commission,
Ministry of Finance
Source Portal of the Central People’s Government of the PRC: http://www.gov.cn/; portal of the MOHRSS: http://www.mohrss.gov.cn/; portal of the
MOCA: http://www.mca.gov.cn/, Oct 25, 2010
4 FINANCIAL CRISIS AND INSTITUTIONAL COUNTERMEASURES AMID …
97
98 K. HAN
4.3.2 Flexible Contribution Policies

The content of flexible contribution policies has two aspects: (1) The
troubled enterprises are allowed to delay the contribution of social
insurance premiums within a certain period of time. According to the
Circular on the Matters about Adopting Active Measures for Alleviating
the Burdens on Enterprises and Stabilizing the Employment Situation,
jointly released by the MOHRSS, MOF and SAT in 2008, the enter-
prises that were seriously hit by the financial crisis may postpone the
contribution of social insurance premiums within a certain time limit
to overcome their difficulties, as long as they are approved by the pro-
vincial people’s government and free from disturbing the full payout of
the social insurance benefits on time or leaving any gap in the overall
social insurance fund; the postponement shall be implemented within
2009 and no longer than 6 months. (2) The contribution rates of the
four insurances for urban workers may be cut progressively. The above-
mentioned Circular states that the areas above the prefecture-level city
may properly lower the rates of the basic medical insurance, unemploy-
ment insurance, work-related injury insurance and maternity insurance
for urban workers within 2009 and no longer than 12 months, as long as
the social insurance benefits are not lowered, the social insurance system
maintains smooth operation and the social insurance fund remains intact.
In December 2009, the MOHRSS, MOF and SAT released the
Circular on Doing a Better Job in Alleviating the Burdens on Enterprises
and Stabilizing the Employment Situation, stressing that the implemen-
tation of the following four regulations shall be extended till the end of
2010: “allowing troubled enterprises to delay the contribution of society
insurance premium within a certain period of time”, “progressively low-
ering rates of four social insurance programs”, “helping troubled enter-
prises keep employees in their jobs with unemployment insurance fund”,
and “encouraging troubled enterprises to stabilize their workforce by
organizing on-the-job trainings”.
4.3.3 Employment-Supporting Policies

The employment-supporting policies are interpreted from the following
four aspects: (1) Helping troubled enterprises keep employees in their
jobs with unemployment insurance fund. In light of the Circular on the
Matters about Adopting Active Measures for Alleviating the Burdens on
Enterprises and Stabilizing the Employment Situation (2008), under the

premise that the unemployment insurance benefits are paid in full and on
time at present and for some time in the future, the areas above the pre-
fecture-level city with rich surplus of unemployment insurance fund are
allowed to broaden the application scope of the unemployment insur-
ance fund for trial run; help enterprises stabilize their workforce through
on-the-job trainings, staff rotation and salary negotiation; authorize the
troubled enterprises—which pledge zero or minimum layoff—to use the
unemployment insurance fund for covering their workers’ social insur-
ance subsidy and job subsidy. The social insurance subsidy standard is
based on the local social insurance subsidy granted to the people with
difficulties in finding jobs, while the job subsidy standard is in refer-
ence to the local unemployment insurance benefits. These subsidies are
valid for no longer than 6 months within 2009. (2) Encouraging entre-
preneurship to increase employment opportunities. According to the
Guiding Opinions for Promoting Employment by Encouraging Business
Startups, released by the MOHRSS and forwarded by the General
Office of the State Council in 2008, all localities shall work on better
supporting policies, improve the entrepreneurial environment, and pres-
ent measures for relaxing control over market access, refining admin-
istrative management, strengthening policy support and widening
financing channels. (3) Promoting the development of SMEs. According
to the Opinions for Further Promoting the Development of Small-and
Medium-sized Enterprises (2009), more efforts shall be made in build-
ing an environment that benefit the development of SMEs, alleviating
their financing difficulties, increasing fiscal and taxation support to them,
expediting their technological breakthroughs and structural adjustment,
encouraging them to explore market, providing them with better ser-
vices, improving their operation and management, and strengthening the
leadership over the work related to SMEs. (4) Organize skill trainings for
on-the-job migrant workers and the employees in troubled enterprises.
The Circular on Carrying out the Plan for Special Vocational Trainings
(2009) stresses that the relevant departments shall, by focusing on the
employment demand of the laborers affected by the financial crisis and
cooperating with the technical colleges/schools and vocational train-
ing institutions, organize four types of vocational training from 2009 to
2010: (i) on-the-job and job-transfer trainings for the employees in the
troubled enterprises; (ii) practical skill trainings for the migrant workers
who lost their jobs and returned home; (iii) employment skill trainings
100 K. HAN
for the urban unemployed persons; and (iv) and skill inventory trainings
for the emerging labor force. Later, the Circular on Further Carrying
out the Plan for Special Vocational Trainings (2010) was issued to con-
tinue and increase the special vocational trainings in 2010, so as to cope
with the impact of the global financial crisis on China’s employment
situation. The Circular requires the relevant departments to start with
promoting employment and serving economic development; focus on
migrant workers’ trainings, labor preparation trainings and entrepreneur-
ship trainings; organize on-the-job trainings and skill-upgrading trainings
for the migrant workers in construction, manufacturing and service sec-
tors and for the urban employees in troubled enterprises; carry out short-
and-medium term practical skill trainings; and promote entrepreneurship
trainings in an all-round manner.
4.3.4 Promoting Steady and Rapid Development

of Rural Areas and the Western Region
The western region of China is characterized by small economic aggregate,
uneven development, vulnerability to economic fluctuations, weakness in
self-adjustment, extensive mode of production, and local products remain-
ing at the low end of industrial chain. In order to support the western
region to withstand the shock from the financial crisis, in 2009 the State
Council released the Opinions for Responding to the Global Financial Crisis
and Maintaining Steady and Rapid Economic Development of the Western
Region, which proposes to continue infrastructure construction in the
western region to lay a firm basis for long-term development; intensify
efforts in environmental protection and ecological construction to build a
resource-saving and environment-friendly society; adjust industrial struc-
ture and transform the economic growth pattern; support the construction
of livelihood projects to promote social harmony; accelerate development
of social undertakings and improve quality of basic public services.
The above-mentioned measures, by taking into account of both eco-
nomic and social interests, and the specific conditions of different groups
in different areas, were proved effective in tackling the financial crisis,
promoting economic development and improving the social welfare sys-
tem. In such context, China’s social welfare system bears more social
value than economic value, which highlights the functions of China’s
social welfare system to solve social problems and promote social justice,
not just to match up with economic policies.
4.4 Development and Flexibility Principle of China’s

Social Welfare System in Post-crisis Period
From a historical perspective, the relationship between economic crisis
and social welfare reflects in two aspects: (1) An economic crisis may
present new requirements to the existing social system, thus accelerat-
ing welfare development and increasing welfare benefits. In this case,
the economic crisis is a “booster” of welfare development. Take the US
for instance, in the wake of the 1930s depression, the US Federal Social
Security Act was unveiled in August 1935, since then the US govern-
ment began to establish a welfare system that started with endowment
insurance for laborers, and later gradually extended to disability ben-
efits and medical treatment, which effectively alleviated the economic
stagnation and social contradictions. (2) An economic crisis may under-
mine the economic foundation of the existing social welfare system, thus
degrading the welfare system and lowering the welfare benefits. In this
case, the economic crisis becomes a “trigger” of social crisis. As such,
the European welfare states started reforming their welfare systems since
the 1980s to explore new ways for implementing constructive welfare
policies that enhance economic competitiveness, and also new ways for
curbing costs (esp. annuity and health care expenses) that save welfare
spending.7
The financial crisis broke up at a time when China’s social welfare
system was yet developed. It could be said that the financial crisis may
somewhat improve China’s social welfare system based on the market
economy. As mentioned above, an economic crisis may be a “booster” of
welfare development in certain cases. Generally speaking, in the countries
where the social security is inadequate or the welfare system is defective,
their welfare system will advance with big stride in the post-crisis period.
In China—which is on the way to improve its social welfare system—
the financial crisis seems like a “reagent” that tests the effectiveness of
this new system and points out the direction for its improvement. The
reconstruction of the social welfare system is not only a component and
continuation of China’s marketization reform, but a component and
continuation of China’s modernization drive and future social devel-
opment. In response to the financial crisis, what China’s social welfare
system did has gone far beyond its function to develop the market econ-
omy. In other words, the measures that China has adopted for address-
ing the financial crisis are no more than “a little spray” in the course of
102 K. HAN
reconstructing its social welfare system. It is sure that China’s social wel-
fare system will enter a period of continuous expansion in the future.
Unlike China, many developed countries in Europe and America
suffered double strike from the financial crisis: on the other hand, lots
of financial institutions went into bankruptcy, which induced world-
wide economic crisis and recession; on the other hand, the financial cri-
sis tightened pension payment and deprived more people of their jobs,
which explained for the demonstrations and group conflicts in some
European states. For instance, under the impact of the financial crisis,
Iceland, Portugal, Italy, Ireland, Greece and Spain had to cut down the
national welfare benefits (e.g., raise the retirement age and cut salary of
civil servants) to avoid bigger economic and social crises like the sover-
eign debt crisis.
With a view to the long-term development after the financial crisis,
China has to reflect on two questions while reconstructing its social wel-
fare system: how to determine the goal orientation of the system recon-
struction? how to maintain moderate flexibility of the system design?
Since its marketization reform, the goal of China’s social welfare sys-
tem had been tilted toward economic achievement. It is the financial
crisis that enlightened us that each economic crisis could affect social
situation, and challenge the ultimate values of human society like hap-
piness, equality, justice and freedom. Therefore, when we design the
social welfare system, we shall consider the political goal and the ultimate
development goal of human society, in addition to the economic goal.
The long-term goal of China’s social welfare system is to constantly sat-
isfy the growing material and cultural needs of its citizens and improve
their well-being.
In order to fulfill the long-term goal of improving the national
well-being, the design philosophy of China’s social welfare system shall
transit from selectivity to universality. To be specific, the social insur-
ance system shall cover more groups of people in addition to laborers;
the social assistance system shall take care of all impoverished people and
their families; the public welfare shall pay more attention to the survival
and development needs of the entire population, and provide equal and
high-quality services in education, medical care, housing and environ-
ment, etc.
With regard to the welfare benefits, considering the fact that China’s
national strength and people’s living standards are continuously
improved, and the social assistance and insurance systems remain in
smooth operation, the social welfare system shall be upgraded to involve

all aspects concerning people’s livelihood, so as to realize the transition
from satisfying people’s material needs to satisfying their spiritual needs.
It should be noted that the design of China’s social welfare system
shall not only conform to the ultimate values of human society, but fol-
low the principle of flexibility. Such principle has four connotations:
(1) The social welfare system shall fit with the country’s economic
strength and affordability. (2) The social welfare system may not solidify
social hierarchy or impede social mobility. (3) The social welfare system
shall leave space for individuals’ free choice. (4) The social welfare system
shall balance the relationship between economic policies and social poli-
cies and ensure that “a good economic policy is a good social policy and
vice versa”.
Notes
1. The Greek government drew up a pension reform program to extend the
retirement age of all Greeks to 65, meaning that in order to gain a full-
amount pension, the Greeks have to work additional 3 years to 40 years,
and a retirement before the age of 65 will cut their pension by 6% annu-
ally; and no Greek is allowed to retire before the age of 60 unless for
health reasons.
2. Chen Lijin, 2009, Impact of the global financial crisis on China’s small-
to-medium sized enterprises and analysis of their countermeasures,
Reformation & Strategy, Issue 6.
3. The URUR is the ratio of the number of urban registered unemployed
in the aggregated number of urban employed and actually registered
unemployed at the end of a reporting period, i.e., the numerator is the
urban registered unemployed, while the denominator is the sum of urban
employed and registered unemployed. The urban employees herein do not
include the rural laborers (migrant workers), reemployed retirees and the
employees from Hongkong, Macao or foreign countries. The urban reg-
istered unemployed refers to those that possess non-agricultural “Hukou”
and working ability, and have their jobless state registered at the local
employment service agencies in hope of finding a job (the male regis-
trants shall be aged between 16 and 50 and the female registrants shall
be aged between 16 and 45). The Chinese government replaced the
indicator of “URUR” with the “surveyed urban unemployment rate”
(SUUR) from 2011.
104 K. HAN
4. MOHRSS, Oct 25, 2010, Statistical communiqué on development

of China’s human resources and social security undertakings 2009,
http://w1.mohrss.gov.cn/gb/zwxx/2010-05/21/content_382330.htm.
5. Sheng Laiyun, Wang Ran, and Yan Fang, 2009, Influence of the interna-
tional financial crisis on Chinese migrant workers’ mobility and employ-
ment, Chinese Rural Economy, Issue 9.
6. Yu Changmiao, Li Hong, and Sun Yu, 2009, The issue of migrant workers
and the countermeasures of China amid the international financial crisis—
an interview with Yang Zhiming, Chief of the Office of the Rural Workers
United Conference under the State Council and Deputy Minister of the
MOHRSS, Chinese Cadres Tribune, Issue 5.
7. Gooby P. T., et al., 2006, Welfare states under pressure, trans. Liu Yuting,
et al. Taipei: Song-Hui Publishing Co. Ltd., p. 39.
CHAPTER 5
Social Stratification Objectives of China’s

Welfare Construction
5.1 Basic Concepts of Social Stratification

and Their Relations
While China’s social structure is going through changes, social stratifica-

tion has remained a research hotspot in the Chinese academic circle. But
“the theoretical logic of so many social stratification studies is apparently
flawed. People pay more attention to the untapped phenomena (the sta-
tus quo of Chinese society and sociology provides abundant possibilities
for doing so), but less interested in making new theoretical explanations;
moreover, owing to vague theoretical perspectives, the same study or
similar studies are plagued by arbitrary use of concepts, inconsistent con-
ceptual systems or even logic disorder” (Li Lulu 1999).1 As such, there
have been theoretical misunderstandings and vague knowledge in social
stratification research. We shall streamline the social stratification con-
cepts to avoid confusion of theoretical logic and arbitrary construction of
propositions.
Han Keqing, 2008, Social security network: China’s social stratification and social
welfare construction, Social Science Research, Issue 5; Han Keqing, 2003, Basic
concepts of social stratification study and analysis of their relations, Tianjin Social
Sciences, Issue 4; Hou Junsheng, Han Keqing, 2005, Two theoretical paradigms
in western social stratification study, Jianghai Academic Journal, Issue 4.

https://doi.org/10.1007/978-981-32-9660-2_5
106 K. HAN
5.1.1 Social Stratification and Strata

Social stratification, which holds a central position in the social structure,
is the most basic concept in social stratification research. According to
the definition in the Encyclopedia of China (volume of sociology), social
stratification distinguishes people into a hierarchical social order accord-
ing to certain criteria. The term “stratification” was initially used by
geologists to analyze geological structure. When sociologists found the
inequality among people and among groups is as hierarchical as the geo-
logical structure, they decided to borrow this geological term to describe
the social structure, thus giving rise to a sociological category as “social
stratification”.
Stephen K. Sanderson holds that social stratification is the relative
social position of groups with unequal wealth and power within a soci-
ety.2 Some scholars suggest interpreting social stratification from two
aspects: (1) An objective definition whereby the social members, with
varied abilities and opportunities to acquire social resources in their
social life, naturally fall into separate hierarchies or levels. (2) A subjec-
tive definition whereby the social members are distinguished by different
hierarchies or levels according to certain criteria.3 Based on the above
definitions, we can conclude that social stratification means individuals
or groups in a country (or a society) are divided into different hierar-
chies based on their possession of social resources. In our opinion, social
stratification not only indicates unequal socioeconomic status of individ-
uals or groups, but the inequality at the national level and social struc-
ture level.
The Research Group on China’s Social Structure Changes since 1949,
which was initiated by the Institute of Sociology of Chinese Academy of
Social Sciences, believes that social strata are the groups of people that
share common socioeconomic status and interests. Social stratification
is to reflect that people have systematic differences in social power, eco-
nomic power, cultural values, norms, conducts and other aspects, yet it
does not mean the people of the same strata have to maintain consist-
ency in every respect. A social stratum derived of the stratification system
may develop collective consciousness or take collective action, but it is
not a must-be. A social stratum has its own static characteristics; it may
be hierarchical or not, i.e., not all social strata are bound to be ranked.
The stratification system may take into account of regional differences
and urban–rural differences. By following this train of thought and
5 SOCIAL STRATIFICATION OBJECTIVES OF CHINA’S WELFARE … 107
absorbing the research outcomes both home and abroad, the Research
Group defines the “social strata” as follows: the stratum position (state)
of an individual is determined by his/her market position and work
state. One’s market position, which reflects his/her life chances and
economic returns based on possession of capital, labor force and skills,
could be measured by his/her ownership of means of production (being
an employer or employee), type of occupation and grade of vocational
skills. One’s work state, which shows his/her authority and autonomy in
the workplace, could be measured by his/her administrative ranking and
managerial position, staff size and organizational type of work unit.4
In the study of social stratification, the notions of “class” and “stra-
tum” are often confused. According to the Modern Chinese Dictionary,
the “class” is a group of people within a certain social production system
divided by their different status and different relations with the means
of production, such as the working class and the bourgeoisie. The “stra-
tum” on the one hand refers to different ranks of people of the same
class based on their different socioeconomic status, e.g., the peasant class
includes poor peasants and middle peasants; and on the other hand refers
to the social groups that belong to different classes but share certain
common features, such as the intellectual stratum.
The word “class” in English stems from the Latin word “classicus”
(“part”). The ancient Romans were divided into six “classicus”. The
word “class” means “a collection of things sharing a common attrib-
ute”, “a league ranked by quality” or “a body of students who are
taught together”. The word “stratum” (pl. strata) derives from the
Latin word “strãtum” (“a covering”), it denotes “rock stratum”, “geo-
logical stratum” or “social stratum”. A concept closely related to “stra-
tum” is stratification, which refers to the formation or sedimentation
of rocks or sediment layers, or stratified state or stratified structure. In
the Chinese language, stratum and stratification are sometimes mixed.
For example, we use stratum as stratification or vice versa; what’s
more, class and stratum are often intermingled, and stratum may even
replace class.
As for the relationship between class and stratum, it is generally
believed that class is a broader concept than stratum. In other words,
class is a general concept, while stratum is subordinate, i.e., each class
is divided into several strata according to different criteria. According
to the Encyclopedia of China (volume of sociology), each class is divided
into several strata that have separate interests, values and political
108 K. HAN
orientation; in the process of social reform or revolution, different strata

may react differently to reform or revolution. Such explanation for strata
is identical to that in the Modern Chinese Dictionary.
5.1.2 Social Mobility and Social Stratification

In the study of social stratification, the two concepts of social strati-
fication and social mobility are closely interrelated yet differentiated.
According to the American Heritage Dictionary, the word “mobility” is
defined as “the quality or state of being mobile” or “the movement of
people, as from one social group, class, or level to another”. The second
definition essentially denotes the social mobility of sociological connota-
tion. In the field of sociology, it was the US sociologist P. A. Sorokin that
initiated the social mobility study. In his book Social Mobility (1927),
he stressed quantitative study on social mobility, and mainly discussed
such issues as quantity, direction and regional distribution of mobility.5
Afterwards, the social mobility study, especially the quantitative study on
this subject, has achieved remarkable progress. For instance, S. M. Lipset
and R. Bendix made a statistical analysis on the relation between people’s
occupational type and their background based on the 1949 Auckland
labor surveys.6 In the western academic community, particularly in the
United States, social mobility has become an important research branch
in the field of sociology. The scholars after Sorokin showed interest in
studying the tendency toward intergenerational occupational inheritance
between fathers and sons. In 1967, P. M. Blau and O. D. Duncan pub-
lished the book The American Occupational Structure, in which they
proposed the famous “Blau-Duncan Status Attainment Model”, which
has become a classic social mobility theory.7 Thereafter, the researches on
occupational mobility and labor market have been on the rise.
Social stratification is closely related to social mobility. Some scholars
believe that social stratification and social mobility are two sides of the
same coin: mobility itself means the existence of a ladder of inequality
which is the concrete embodiment of social stratification.8 But there are
significant differences between these two concepts:
First, their study objects are of varied attributes. Stratification exam-
ines the overall distribution of social resources among social groups,
with individuals embedded in specific social structures. To some extent,
stratification looks at the layers constituted by collection of individuals,
not any specific individual. In other words, it studies groups of people
rather than individuals. In contrast, mobility examines the changes of

individuals in the social stratification system, it is more concrete and
microscopic than stratification. “The status attainment research describes
the distributional aspects of stratification, rather than analyzing the rela-
tional aspects of stratification”.9 Although the contemporary western
mobility studies attempt to add some structural factors into the scope
of mobility analysis, their theoretical foothold remains at specific individ-
uals. “The biggest shortcoming of the status attainment research refers
to its orientation of extreme individualism. When analyzing the factors
that affect the status attainment of an individual, whether it is individual
traits (educational level, family background, IQ, achievement motivation,
etc.) or structural factors (market structure, government intervention,
etc.), the “basic unit of analysis” is still individuals, rather than structure.
That is, although the independent variable of status attainment research
extends to structural factors, the focus of the entire research is still lim-
ited to the individual level.10 M. Granovetter and Lin Nan et al. tried to
examine the structural factors in occupational status attainment from the
perspectives of “the strength of a tie” and “social capital”, in response
to the criticism against the Blau-Duncan Status Attainment Model for
lacking attention to structure and relationship. However, this response is
only a study of the process in which an individual acquires his prestigious
position and of the structural factors that help determine his attainment
of occupational status, the study object remains individuals.11 Generally
speaking, stratification falls into the scope of macrosociology, while
mobility is a subject of microsociology.
Second, they have different study contents. Although the changes
of social stratification state are manifested as social mobility, the social
stratification study is a static description that analyzes and outlines the
state, form and nature of social structure differentiation, as well as the
interaction between social strata and their orderliness. Social mobility
is a dynamic grasp of the spatio-temporal scope, direction, speed and
mechanism of social structural differentiation. Of course, such different
does not offset the complementarity of the two concepts, and this com-
plementarity shows their rudimentary internal connection: on the one
hand, the phenomenon of social stratification generates need and pos-
sibility of social mobility; on the other hand, once social mobility comes
into being on the basis of social stratification, it will exert a counteractive
effect on social stratification to trigger further structural differentiation
and reorganization.12
110 K. HAN
Third, they have different methodologies and research techniques

which are attributed to their varied theoretical concerns. From the
perspective of methodology, social stratification study is based on
collectivism or structuralism, while social mobility study is mostly based
on individualism. From the perspective of research techniques, social
stratification study usually utilizes the occupational prestige compari-
son approach, which is measured by such methods as adopted by ISP
(the Hollingshead Index of Social Position), SEI (the Duncan Socio-
Economic Index) and NORC (National Opinion Research Center);
among them it is SEI that is the most commonly used.13 In addition,
Gini Coefficient and regression analysis, which are applicable to econom-
ics, are also frequently used for social stratification study. Social mobil-
ity study pays more attention to the occupational promotion or mobility
of individuals through model construction and path analysis, which are
mathematical methods in essence. Therefore, among the sociological
study branches, social mobility study is the one that features the highest
degree of quantization. Thanks to popularization of computer technol-
ogy and improvement of statistical software packages, almost all of the
social mobility studies coming forth in recent decades are quantitative
studies based on sophisticated statistical methods.14
5.1.3 Social Differentiation and Social Stratification

The word “differentiation” in sociological sense is derived from bio-
logical differentiation or variation. The Modern Chinese Dictionary lists
out three definitions of “differentiation”: (1) Things of the same nature
become things of different nature; what is unified becomes what is
divided. (2) To make things differentiate. (3) During the ontogenetic
period, cells develop in different directions, and the structural adapta-
tion of some body part for a particular function, e.g., some embryonic
cells differentiate into muscle cells, and others differentiate into con-
nective tissues. According to the Modern Comprehensive English-Chinese
Dictionary, “differentiation” is defined as “a discrimination between
things as different and distinct”.
In the development course of the sociological theories, social differ-
entiation and social stratification are two parallel theories. According to
M. Waters, the boundary along which the differentiation arises is
basically a functional boundary. People often regard differentiation
as functional differentiation, horizontal differentiation or vertical
differentiation, because it does not give any social unit a privileged posi-
tion relative to another social unit. There is a common term as “struc-
tural differentiation”. The stratification theory is usually put forward by
the sociologists who pay attention to power and structure, they use such
theory to describe and explain such substantive phenomena like class,
interest groups, status, racial inequality, national inequality and gender
inequality. The theories of differentiation and stratification have different
theoretical characteristics.
The characteristics of social differentiation theory are summed up as
follows: (1) Social differentiation has been intensifying along with social
changes. (2) Differentiation means separation of social structural units.
Such units may include institutions, aggregations, occupations, crowds,
location, tasks, groups, categories or systems. Separation usually indi-
cates the units are positioned differently in time and space. (3) Division
of labor is a key area where increasing differentiation occurs, i.e., the
assignment of tasks becomes increasingly differentiated. This key area
involves two aspects: one is social division of labor, i.e., various social
roles are to be allocated to specific personnel; the other one is techni-
cal division of labor, i.e., to what extent the tasks are gradually special-
ized among various roles and implemented by clearly defined operations.
(4) Differentiation has brought forth the issue of integration. Through
theoretical construction, people tend to classify the cohesive factors that
play an integral role into a set of highly generalized concepts and values,
which can transcend the diversity of social experience brought by differ-
entiation. Some theories refer to it as an ideology, while others refer to it
as a shared culture or dominant value system. (5) Differentiation theory
also cares about the resource exchange between various social units that
are already differentiated, as well as the mediation and regulation modes
of these exchanges. (6) The process of social changes is split into a series
of stages or periods, and each stage is an advance in material conditions
compared with the previous stages. Therefore, the process is somewhat
an evolution.15
The characteristics of social stratification theory are summed up as fol-
lows: (1) All societies stand out as patterns of social inequality that follow
some rules. Such social inequality, at a minimum level, includes a range
of grades which are conceptually understood as spatial metaphors, seem-
ingly a hierarchy from the top to the bottom. At the maximum level,
social inequality is a zero-sum struggle between feuding groups that seek
for their own interests at the expense of others. (2) Stratification divides
112 K. HAN
society into many parts which separate from each other; as such, an indi-
vidual has more in common with the companions in the same hierarchy
than with those in other hierarchies. (3) Stratification always has some
material properties, i.e., it involves the differences in property ownership
and/or in the channels that access to material rewards. (4) Stratification
is also related to power, i.e., some social strata are more powerful than
others, thus they are able to exploit those less powerful. (5) Lots of the-
ories hold that stratification is connected to status, e.g., different social
strata give their members varied degree of identity in the form of norms
or ethics. (6) Generally, the patterns of stratification are stable enough
to be repeatedly produced or passed down from generation to genera-
tion. This means that the likelihood of material rewards, moral identity
and power for any individual can be predicted (to some extent) by their
parents’ hierarchical membership. (7) The members of a stratum tend to
exclude and exploit the lower strata, while lower-strata members are in
the meantime attempting to break the boundary of the upper strata, or
seek profound changes to the hierarchical order, so as to benefit their
own hierarchy. Therefore, competition or struggle is usually found in the
stratification system.16
Although Waters presented lots of differences between the theo-
ries of differentiation and stratification, they are indeed closely related.
First, stratification is the result of differentiation which pays attention to
the dynamic process of social structural changes, while stratification is
the static manifestation of differentiation. Second, differentiation is also
division and reorganization of social stratification structure. In a society
which is being constantly differentiated, its stratification structure is also
going through continuous differentiation. At present, the Chinese society
is at a transitional period with a prominent feature of intensified social
structure differentiation, this functional differentiation of social structure
is bound to break the original social stratification structure. Meanwhile, it
takes time for social stratification structure to take shape. Consequently, a
remarkable feature of the Chinese society is synchronous unfolding of dif-
ferentiation and stratification. While studying social stratification, we can-
not ignore the process and development trend of social differentiation,
otherwise, the theoretical value and practical significance of the study will
be lost. It is especially important for China where the social differentia-
tion is on the way to further develop, and the social stratification struc-
ture has not been finalized. The differentiation study shall be ahead of the
stratification study, but in practice it is prone to be overlooked.
Through analysis of the above concepts and their relations, we find

that social stratification, social mobility and social differentiation are
three indispensable aspects. There are social differentiation and stratifi-
cation studies at the macro level, and social mobility study at the micro
level. The three studies have different research orientation, but they are
intermingled. Therefore, when studying China’s social stratification, we
shall at the first place consider the structural transformation and social
differentiation at present, until then we are able to describe the status
quo and laws of social stratification, and finally grasp the laws and char-
acteristics of social mobility. Only in this way can we effectively explain
China’s social stratification structure, find the valuable influencing factors
among complexities and trivialities, so as to define the formation mecha-
nism and future trend of Chinese social stratification.
5.2 Theoretical Tradition of Social Stratification

Study and Its Enlightenment
In the development course of western sociological theories, due to the
differences in research objects, research methods and understanding of
society, there has been contestation between social realism and social
nominalism (i.e., collectivism and individualism), between empirical
approach and comprehension (i.e., naturalism and anti-naturalism). In
his book The Structure of Scientific Revolutions (1962), Thomas Kuhn
firstly put forward the concept of “paradigm”, since then on theoretical
paradigm has been widely used in sociological study.
Generally speaking, the paradigm of social stratification theory can be
divided into two categories: one is the stratification theory of functional
paradigm and the other is the stratification theory of conflict paradigm.
The stratification theory of functional paradigm holds that strata are an
inevitable existence to meet social needs, and each society gives rise to
social strata due to the need of integration, coordination and solidarity;
strata reflect the shared values of a society and improve the functions of
society and individuals; economic structure is not the main structure of
a society; power is legally distributed in a society; remuneration is rea-
sonably distributed based on one’s work; social strata structure change
along with social changes. In contrast, the stratification theory of conflict
paradigm holds that although strata are universal, they are not inevitable;
social strata are generated by competition, conflict or conquer, thereby
they hamper the functions of society and individuals; economic structure
114 K. HAN
is the main structure of a society; power is controlled by a small num-

ber of people in the society; remuneration is unreasonably distributed
based on one’s work; the change of social strata is accomplished through
revolution.
5.2.1 Social Stratification Study in Functional Paradigm

E. Durkheim was the first one that expounded social stratification in the
framework of functional paradigm. From the integral social organism,
Durkheim elaborated on the importance of social differentiation and
labor division for social solidarity. K. Davis and W. Moore, who inherited
Durkheim’s view of biological organism, believed that social stratification
is to meet the functional needs of complex social systems, and co-published
the famous article Some Principles of Stratification17 in 1945. According
to Parsons, norms and values are the main contents of maintaining social
order, and a common value system provides services to meet social needs.
Therefore, status or honor is the most important dimension of social strat-
ification. Those who have best reflected the social common values will gain
a high position in the social stratification system and, accordingly, obtain
some secondary rewards in addition to status, such as wealth.
(1) Functional theory of Durkheim
Durkheim believes that ethics are a main factor that affects social order
and integration within the social system. For Durkheim, ethics are his
central and ultimate work. Durkheim’s ethical theory is related to his
view of human nature and to his view of the needs of social system.
Like Weber, Durkheim is also pessimistic about human nature. Without
ethics, he argued that people would fall into constant conflict and self-
ish dictatorship, and even exploit others for their own narrow interests.
In order to save people from social chaos and even personal destruction
(suicide), a forceful ethical order must be built.
Unlike Weber, however, Durkheim argued that a new social system is
capable of continuously regulating the selfish conflicts for the common
good. Various social institutions—religion, family, vocational associa-
tions and education on top of them—are fairly important for maintaining
strong ethical integration. A continuous process of socialization is nec-
essary for individuals, because it facilitates people to internalize the ethi-
cal order, in order to reduce individual selfish conducts for safeguarding
collective interests.
Durkheim argued that in those small-sized pre-industrial societies,

the maintenance of social order (in other words, ethical integration)
was relatively simple. Durkheim, F. Tonnies and other early sociologists
had an ideal thought that most of the close interpersonal relationships
in the pre-industrial societies could help maintain ethical integration.
However, while these societies were turning into large-sized industrial
societies and labor division keeps expanding, more types of occupations
have come out, thus making ethical integration an increasingly important
issue of common concern. “The biggest role of labor division is not in
increased productivity by means of functional differentiation, but in that
these functions are closely connected”.18 Thus, the issue of social order
in industrial societies has become central work to the early sociologists
like Durkheim.
As for the above issue, Durkheim insisted that mechanical solidarity
(moral order of pre-industrial societies) shall turn into organic solidarity
of industrial societies. He was confident that such organic solidarity is
possible with available vocational organizations and guilds. There is every
reason to believe that any guild is able to establish some ethical principles
that guide workers and employers to know their rights and responsibil-
ities. Like pre-industrial societies, this new type of ethical order is able
to inhibit the selfish orientation of large-sized societies to seek profit.
Given this, more social differentiation in industrial societies is necessary,
but such differentiation does not inevitably lead to social disorganiza-
tion. “Social cohesion completely, or at least mainly, relies on labor divi-
sion, and the essential characteristics of social constitution is determined
by labor division…In general, the reason why labor division is ethical is
because it requires order, harmony and social solidarity”.19
The book The Division of Labor in Society more clearly showed
Durkheim’s opinions on social inequality and social stratification. In the
book, Durkheim concludes that all societies value some activities more than
the others. All the functions of a society—law, religion, family and work,
etc.—are arranged in a hierarchy based on their degree of importance.
Durkheim’s theory also admits the fact that people have different
talents—some are more talented than others. Through training, their
different endowments will be improved accordingly. Durkheim believed
that if a society was to thrive, then the most talented people had to per-
form the most valuable functions. In order to attract the best and the
brightest talents, a society shall improve the ways for them to access to
social rewards.20
116 K. HAN
Durkheim divided inequality into external inequality and internal

inequality. External inequality is the kind of inequality that is imposed
on individuals by the social environment where they were born, which
is what we call “ascribed status”. These external inequalities dominated
mechanical solidarity or pre-industrial societies. For industrial societies,
internal inequality is needed; all external inequalities endanger the secu-
rity of organic solidarity, or in other words threaten the social order of
industrial societies and the peculiar functioning of labor division. Internal
inequality is seen as something based on individual abilities, and we usu-
ally call it “achieved status”. For the peculiar functioning of industrial
systems, Durkheim alluded that people with particular talents shall be
placed in the positions that give full play to their talents.
What Durkheim envisioned is “meritocracy”, a system based on
equal opportunity. In this case, inequality remains in existence, but a
virtue-based inequality becomes necessary. The ideas of Durkheim are
somewhat similar to those of many modern functionalists, but his focus
is different while considering his foremost concern for social solidarity
and ethical integration. He believes that the domination of internal ine-
quality over external inequality is the most important for maintaining
social solidarity.
Durkheim has been tending to view “society” as an integrality, and
more precisely as a pluralistic or conflicted integrality with different social
groups and forces. Therefore, the word “class” rarely appears in his book
The Division of Labor in Society. However, as a result of well-meaning
criticism and the apparent existence of class divisions and class conflicts
in expanding industrial societies, Durkheim was forced to consider the
existence of class and class conflicts.
In essence, Durkheim dismissed the existence of class and class con-
flict as something morbid. According to Durkheim, the reason why such
morbid situation exists is because guilds fail to perform their unique
function of providing ethical order when the society is threatened by the
selfish interests of individuals or groups. But Durkheim never thought
that the whole system of labor division in an industrial society would
become a power structure where one class rules over another, just like
what conflict theorists had argued. For Durkheim, ethical integration
serves the interests of all people in a society.21
Within the framework of the functional paradigm, there are two
major modern social stratification theories. The first one was proposed
by Davis and Moore in 1945, aiming to explain why social stratification
and inequality have positive functions, and are therefore necessary for all
human societies except simple ones. In the years since the theory was
published, there has been an ongoing and sometimes heated discussion
in the field of social stratification.
(2) Davis and Moore’s stratification theory of functional paradigm
The functional theory of Davis and Moore briefly sums up social strat-
ification as for meeting the needs of complex social systems. In other
words, from the point of view that society is somewhat a biological
organism, this theory discusses the assumption that the social needs shall
be satisfied for maintaining healthy social organism. Among these needs,
the most important positions or jobs in a society need to be filled by
the most trained and competent persons. Social stratification is seen as a
mechanism to ensure that all needs are met.
Davis and Moore’s theory is not a comprehensive theory of social
stratification. Its aim is limited to explaining why inequality is necessary
to ensure the proper functioning of complex societies. The basic points
of this theory are as follows:
i. In each society, there are some positions with more important
functions than the others, and calling for special skills to meet
their requirements.
ii. Only a few talented people, who are going through training, are
able to fit in these positions.
iii. There is a training period for transforming one’s talent to skills.
During this period, people have to make some kind of sacrifice for
training.
iv. In order to motivate the talented people to make sacrifices and get
trained, their future position must convey an induced value in a
different form, i.e., they will have the privilege of additional access
to scarce resources provided by society, and get the rewards they
crave for.
v. These scarce and desirable items are made up of the various pow-
ers and prerequisites that constitute these positions, and these
items shall be able to sustain livelihood and a comfortable life,
bring humor and entertainment, boost self-respect and ego
expansion.
vi. Their discriminatory access to the basic social rewards is an out-
come of the differential prestige and respect enjoyed by different
118 K. HAN
social strata. These rewards, together with power and precondi-

tions, constitute institutionalized social inequality, which is social
stratification.
vii. Therefore, the social inequality, which results from the different
quantity of scarce and desirable items and different degree of
prestige and respect existing in different social strata, is not only
positive in a society, but also inevitable.22
Davis and Moore suggest that inequality is a way for a society to ensure
that the most important jobs are undertaken by the most qualified peo-
ple. In simple societies, warriors and pharmacists enjoy the highest status;
in more complex societies, it is engineers and doctors that are most valu-
able. The importance of work differs from one social system to another.
An important position in one society may be irrelevant to another. A fur
hunter might be valuable to an arctic society, but become useless in the
rainforest tribes inhabiting in tropical and humid areas. However, some
functions are universally important, e.g., religion, government rule and
technologies available in more complex societies.
Religion is a key activity that helps human society create shared beliefs
and values. Religious leaders not only care about the meaning of life and
death, but preach the ethnical rules that guide people to accomplish their
salvation. Since this function is so important, the people in charge of reli-
gious affairs could earn more than the ordinary people. The reward is
not necessarily monetary—lots of priests or religious staff do not earn
much—but in the form of social recognition and esteem.
Government rule is another key function. The ruler is more powerful
than the ruled. The strengthening of power is a reward for rulers, but
they often receive a higher share of wealth and prestige than the social
average.
Another key position that Davis and Moore have mentioned is tech-
nicians. They are responsible for solving the difficult problems in some
special fields like developing military weapons and improving agricultural
techniques. Since such work requires long-term and rigorous training,
the society must provide technicians with better pay to motivate people
to devote themselves into such career.23
(3) T. Parsons’ theory of functional stratification
The second social stratification theory within the framework of the
functional paradigm is represented by T. Parsons’ more abstract
and integrated functional theory. Although his theory is not con-

trary to that of Davis and Moore, it places focus on the more gen-
eral social order and the overall maintenance of social order by social
stratification.
The theory of functional evolution, which was proposed by Parsons,
argues that social evolution is usually the outcome of an internal ten-
dency to build up what he called the “adaptive capacity” of a society,
including the capacity of effectively responding to the outside world and
the capacity of dealing with the problems arising from the fact that “one
must live in a social group”. Parsons believed that the adaptive capac-
ity of societies has become increasingly sophisticated through thousands
of years’ evolution. Given this, contemporary societies are more effective
than earlier societies in dealing with the problems about social organi-
zations. The emergence of social stratification, according to Parsons, is
an important aspect that proves social adaptive capacity keeps increasing
through constant evolution. It was an “evolutionary breakthrough” in
his opinion, and an outstanding achievement of the various forms that
brought about social progress.24
Parsons’ theory is not at odds with that of Davis and Moore’s, their
difference actually lies in their separate focal point. Parsons inherited the
tradition of functional analysis, believing that the foremost question in
sociology to be answered is how social order might be achieved. By fol-
lowing the theoretical tradition of sociological analysis, he said achieve-
ment of social order relies on norms and values. Specifically, the norms
and values of a society are usually internalized by individuals through a
long-term and continuous process of socialization, and they will guide
individuals’ conducts and interpersonal communication. In other words,
the reason that we do our part and our institutions do theirs is primarily
because of a common value system. For instance, most people do not
steal, not because they fear of being caught in jail, but they believe steal-
ing is a misconduct. Like Davis and Moore, Parsons also assumed that
a society has its own needs, and the most important one is the need for
social integration; a common value system shall provide services to satisfy
the social needs.
Like the Warner School,25 Parsons contended that status or honor is
the most important dimension for social stratification, i.e., one’s social
hierarchy is evaluated and ranked by their performance in practicing the
social mainstream values, no matter what those values are.
120 K. HAN
Parsons was of course aware of the difference between wealth and

power, but both of them were secondary matters to him. When speak-
ing of wealth, Parsons claimed that it is never a major criterion regard-
less of those opposite views, its prominent significance is no more than
a symbol of success from the perspective of the common value system.
For Parsons, the common value system is capable of ensuring that the
most important roles to be undertaken by the most competent persons
through their status and efforts.
In order to elaborate on people’s position in the stratification system,
Parsons ranked their roles and tasks in society from the most respected to
the least respected, including subdivision of the mainstream value system.
Parsons firstly put forward four major functional subsystems of a social
system, these subsystems are associated with the four major functional
prerequisites which are imperative for survival of any society. Such pre-
requisites are summed up in the AGIL Paradigm: Adaptation (A); Goal
Attainment (G); Integration (I); Latency pattern maintenance (L). The
“concrete” system for meeting these prerequisites, in their fixed order,
is respectively economy, state, legal or sometimes religious system, and
family, school and cultural system. Each of them performs a certain func-
tion for sustaining social health, just like the organs of human body. For
instance, the economic system draws resources from the environment to
generate products and services to social members; the state or polity sets
collective goals and points out the way to achieve these goals; the legal
or religious system facilitates the integration of social systems through
rules and moral standards; lastly, families and educational institutions
will remain functional to social members by providing them with train-
ing and socialization opportunities, and services to meet their individual
needs, and by maintaining latent patterns.
Parsons claimed that the above analyses are of dual importance in
understanding social stratification: (i) The different tasks of these sys-
tems lead them to emphasize different values or pattern variables.
(ii) A society pays respect to the four systems at different levels. For
instance, in a society where “polity” (i.e., collective goal attainment)
occupies the dominant position, the common value system will, to the
maximum extent, tilt toward the aspects that are underscored by polity.
As a result, it is the individuals whose values are best shaped by one or
more major systems that are accessible to higher status, and then obtain
the secondary returns (e.g., wealth) that are associated with their social
status.
These abstract ideas can be concretized as follows:
i. The position of individuals in the social hierarchy (social stratifica-

tion) is determined by other people’s moral judgment.
ii. These moral judgments constitute a common value system.
iii. The common value system is shaped by the particular institutions
that are primarily emphasized in society (which institutions are to
be emphasized are constrained by the given historical conditions
or ambient environment).
iv. Those who have best practiced these values or ideas will receive
higher status and additional rewards (e.g., higher income and
wealth).
It should be noted that individuals could obtain authority (or power)

through their functional position in the occupational structure, and such
authority (or power) is ultimately attributed to their status attainment.
5.2.2 Social Stratification Study in Conflict Paradigm

The social stratification theory in conflict paradigm is represented by
Marx’s class theory and Weber’s stratum theory, yet their theories don’t
share the same concerns. Marx noted that the peculiar mode of produc-
tion in capitalist society has caused the contradiction between the bour-
geoisie and the proletariat, and argued that the economic structure of a
society plays a decisive role. Weber’s stratum theory relies on multivariate
analysis, based on which he highlighted the stratification standards of the
trinity of class (economy), status (honor) and party (power); class is a
part of his analytical framework, not all of it. It is Weber that has a much
more far-reaching impact on the development of the western sociological
theories in the wake of him.
(1) Marx’s class theory
According to Marx, human history can be divided into different stages
based on the mode of production. In feudal society, agriculture was the
dominant mode of production: the land was owned by aristocrats but
farmed by serfs. In capitalist society, the owners of goods paid salaries
and wages to their workers, and the latter would then use the money
to purchase necessities. The mode of production determines the form
of economic organization at each stage. Marx contended that economic
122 K. HAN
organization, which is the most fundamental aspect of society, consists of

technology, division of labor and most importantly the relations between
people in the production system; these relations of production have
become the cornerstone of Marx’s class theory.
Marx believed that in every economic organization there is a ruling
class that owns and controls the means of production—factories, raw
materials and so on; as a result of this economic power, the ruling class
controls the lives of the people that work for them. In feudal society, the
aristocrats were masters of the serfs; in capitalist society, the bourgeoisie
(owner of the means of production) decided the fate of the proletariat
(the worker).
In the Communist Manifesto, Marx and Engels declared that “The
history of all hitherto existing societies is the history of class struggles.
Freeman and slave, patrician and plebeian, lord and serf, guild-master
and journeyman, in a word, oppressor and oppressed, stood in constant
opposition to one another, carried on an uninterrupted, now hidden,
now open fight, a fight that each time ended, either in a revolutionary
reconstitution of society at large, or in the common ruin of the contend-
ing classes”.26
Obviously, Marx’s theory is run through by class and class conflict
which are basic concepts for understanding human society. Marx argued
that the key to understand human society was that “material conditions
determine their production”. In other words, this key indicates the mode
of production. Class and class conflict arise from the private ownership
of the mode of production. In feudal society based on land and agricul-
tural production, the two opposing classes were landlords and serfs, or
land-owning aristocrats and peasants; landlords or aristocrats were own-
ers of land (mode of production), while serfs and peasants almost had
nothing except their productivity.
In capitalist society, which was based on industrial production, the
two opposing classes were the bourgeoisie (owner of the mode of pro-
duction or owner of capital) and the proletariat (the working class).
Marx noted that the bourgeoisie was born in the late feudal society,
and the feudal aristocracy remained in existence in capitalist society.
However, when industry replaced land to become the dominant mode
of production, the bourgeoisie turned into the ruling class in capitalist
society, thus giving rise to class conflict. The root of class conflict was
the inconsistency of class interests. According to Marx, all of the exist-
ing societies, despite of the “primitive communist society” and “the
communist society to be mature in the future”, are a venue where one

class possesses or controls the mode of production, it is common for class
society. When one class governs and controls the surpluses which are
produced to meet the needs of society itself, there will be exploitation of
one part of society by the other.
The capitalist society was the top concern of Marx, and he devoted
most of his energy to studying the details of the exploitive class relations.
He put forward the Labor Theory of Value to explain the value of all
goods produced in the capitalist society. Marx found that the essence of
capitalist exploitation is the fact that the capitalists (owner of the mode
of production or owner of factory) pay the workers a salary just enough
to live on or too low to do so, and such salary was lower than the value
actually produced by the workers. The remainder is the “surplus value”
occupied by the capitalists for their own profit; surplus value is simply
the difference between the value created by workers and the cost for
supporting them. Marx believed class and class conflict are the driving
forces of history. The ruling class occupied the mode of production and
exploited other classes. However, in the face of such exploitation, these
classes found it beneficial to overthrow the ruling class and establish a
social order to their favor, when the historical course of the mode of pro-
duction is available for transformation. In terms of capitalism, the ruling
class will be overthrown by the proletariat.27
(2) Weber’s multivariate stratification theory
Like Marx, Weber also examined social stratification with the social con-
flict model or assumption, but he disagreed with Marx that the conflict
between the owners of modes of production (the bourgeoisie in capitalist
society) and the workers (the working class) is the only and sometimes
the paramount conflict relation in society. According to Weber, all of the
various groups or individual interests are able to form the conflict rela-
tions in human society.
Weber’s conflict theory may be understood more easily through com-
parison with Durkheim’s functional (order) theory. For instance, Weber
regarded individuals as the people who act on their own will and self-per-
ceived material benefits. More than that, Weber also paid attention to
the division of labor and some individual factors in human society, while
placing emphasis on the overall function and integration of society.
Unlike Marx, Weber did not see conflict as the only outcome of eco-
nomic relations in society. According to Weber, the conflict relation may
124 K. HAN
derive from various types of interests (social, material, political, etc.).

Among these interests, political (or organizational) conflict and rule is
a more important interpretation of society. However, there is no end to
political conflict and rule, only changes to its bases or forms.
Weber’s disagreement with Marx also lies in the following two
aspects. First, he argued that the stratified class or economic dimension
itself is overly simplistic. In addition to the owners of the mode of pro-
duction and the proletarians, the social scientists shall take account of
a person’s more general relations in the marketplace. Second, he con-
tended that there are other important divisions in society—sometimes
separating from class division. As such, Weber placed emphasis on the
multidimensional aspects of social stratification, particularly the dimen-
sions of class, status and party (or power).
In addition to the dichotomy of the owners of mode of produc-
tion and the proletarians, Weber put forward another dimension of
class stratification that is based on a more continuous level of skills; in
other words, it involves several grades or levels beyond the dichotomy.
The division based on status or honor derives from individuals’ ability,
i.e., the ability to practice a set of ideals or principles that exist within a
society or social organization and support their operation. Thus, when
making judgment of others by a set of ideals or values, we often have
them graded based on the evaluation results. So status is not only a fairly
subjective dimension of social stratification, but a dimension most fre-
quently highlighted by functional theorists. Status dimension usually
imposes restrictions on social interaction. For this, Weber noted that
status groups tend to draw a circle around themselves to limit intimate
social interactions, marriages and other relationships among the group
members. Consequently, the status groups usually develop into a closed
“social hierarchy”.
Lastly, there is the dimension of party or power. The bureaucratic
form of a political party or organization is the most typical representative
of this dimension. The position of a person in this dimension is deter-
mined by the organizational forms, which are associated with political
rule or power, to which he or she belongs.
Weber regarded the three dimensions as important criteria for ranking
individuals and groups in a society. But they are not equally important
in the history of human society. In the early stage of capitalism, the class
dimension was attached with great importance; in caste society, the sta-
tus dimension became paramount; in modern society, the importance of
the party or power dimension has greatly increased. One thing shall be
stressed is that Weber held that all social divisions are based on the three
dimensions of class, status and party. It is equally important that Weber
has found a large degree of overlap between the three dimensions, i.e., a
high position in one dimension usually implies a high position in others.
For the people standing high in a dimension, such overlap increases their
strength in the entire stratification system.
In the late nineteenth century and early twentieth century, Weber
was as sober as to foresee the rational-legal forms of social organizations
(i.e., bureaucracy) will further develop and become increasingly influen-
tial in the future. Weber laid out three basic and ideal types of authority:
(i) “Rational-legal authority” is constructed on the belief in “legiti-
macy” of standardized rules, and those powers elevated to authority
are subject to the rules for issuing orders. (ii) “Traditional authority” is
rooted in the beliefs and practices of society, and the status legitimacy of
those trained authority figures are inferior to such beliefs and practices.
(iii) “Charismatic authority” depends on the love of certain special and
unusual sacredness, and admiration for heroic or exemplary character of
a given person, and this standardized pattern or order is prescribed or
manifested by this person.
Traditional authority mainly existed in the early stage, and started
declining along with the collapse of the feudal society in the wave of
industrialization. Once a new structure of authority is established after
successful resistance, charismatic authority will give way to a more stable
authority. Of the three types of authority, Weber regarded rational-legal
authority as the most effective one in modern society.
Weber held that rational-legal authority is far superior to anything
else (in light of the rationality of the goal), and therefore excluded
everything else. “Precision, speed, clarity, familiarity with documents,
continuity, judgment, uniformity, strict subordination, friction, reduc-
tion of human and material costs, and deliberate rules” are part of the
reasons that Weber cited to prove superiority of the bureaucratic form
of the organization. Moreover, once bureaucracy is fully established,
it will be among the strongest and indestructible social structure. In
fact, in the areas where bureaucratization of management is executed
through definite power relations, bureaucracy is unlikely to be broken.
However, though it is established, bureaucracy is not used to serve the
same goal or the same interests permanently. Bureaucracy is in essence
a means of rule, it is created simply to work for those who know how
126 K. HAN
to get control of it. Bureaucracy implies the existence of conflict since

it is a form of control or a means of control.28
(3) Dahrendorf’s theory on class conflict
Ralf Dahrendorf inherited Marx’s two-class system, but he disagreed
with some of Marx’s conclusions. For instance, he did not believe rev-
olution will eliminate class conflict, and he rejected Marx’s view that
the class conflict in advanced industrial societies is based solely on eco-
nomic interests. He added that the constantly growing neo-middle class
in industrial society has changed the nature of the class division described
by Marx.
According to Dahrendorf, the root cause of social conflict is a spe-
cific social structure, rather than anything else. This specific social struc-
ture is a class structure which is not decided by possession of the means
of production, but by the authority relations between domination and
obedience. Two classes centering on “power” and “authority”29 have
come into being in modern society: one is the class that possesses mas-
sive power and authority, and the other is the class that is forced to
obey power and authority. These two classes exist in any organization
in a society. Hence, social organization is not a system generated from
the public anticipation, but “an Imperatively Coordinated Association”
(ICA) and a group with a somewhat authoritarian structure. Distribution
of power and authority—both are resources—is unlikely to be equal in
ICA. In order to maintain or change one’s status and payment distribu-
tion, two roles as domination and obedience are formed, so the social
members respectively fall into the “command class” and the “obey class”:
the command class exercises authority, while the obey class is subservient
to that of others. In a given ICA, the roles of domination and obedience
have clearly defined boundaries and differentiation levels, thus forming
the upper class and lower class, but there are multiple forms of domina-
tion-obedience combinations in the society as a whole.30
5.2.3 Enlightenment of Sociological Theory to Chinese

Social Stratification
Through analysis of the two paradigms of the western social stratifica-
tion theory, we see more clearly that social stratification is an objective
existence and social order exists in social stratification; there will be no
social order in case of no social stratification. We cannot say whether
social stratification exists or not, but reasonable or not. Reasonable

social stratification stimulates social vitality, motivates social members to
acquire new knowledge and helps maintain social order. As Kant put it
in his Idea for a Universal History from a Cosmopolitan Point of View
(1784): “Man has an inclination to associate with others, because in soci-
ety he feels himself to be more than man, i.e., as more than the devel-
oped form of his natural capacities. But he also has a strong propensity to
isolate himself from others, because he finds in himself at the same time
the unsocial characteristic of wishing to have everything go according to
his own wish. Thus he expects opposition on all sides…This opposition
it is which awakens all his powers, brings him to conquer his inclination
to laziness and, propelled by vainglory, lust for power, and avarice, to
achieve a rank among his fellows…Thus are taken the first true steps
from barbarism to culture…”31 At the same time, it should be noted
that social stratification may not be excessive, since overly strict stratifi-
cation will stifle social vitality and induce social revolution under serious
circumstances. What we pursue is reasonable and equitable stratification,
rather than keep away from it, and work to build an appropriate social
mobility mechanism. As a result, it is an essential part to pay attention to
social order while studying social stratification.
The problems existing in China’s social stratification at present shall
be examined by both conflict and function theories. At present, China
is undergoing dual changes: the changes on interest relations and eco-
nomic mechanism brought by market transition, and the changes on the
overall social structure during the transition from traditional society to
modern society. Such a distinctive institutional background has com-
plicated China’s social stratification study. We contend that the current
stratification study shall be placed in a dynamic process. In fact, China’s
social stratification has entered a bottleneck period, during which the
establishment of social stratification and mobility mechanisms is critical
for shaping China’s social structure in the future. Therefore, the aim of
China’s stratification study is, based on description and interpretation of
the current stratification situation, to borrow the western available the-
oretical models to enlighten its stratification practice. In the process of
Chinese social differentiation and integration, functional stratification is
the paramount problem, and there are additional problems like inter-
est conflict, power distribution and possession of opportunity. In order
to advance China’s present stratification study, we shall take account of
the class conflict factors and fully explore the significance of Marx’s class
128 K. HAN
conflict theory on the analysis of the stratification status quo. Besides,

the interest differentiation and group conflicts hiding behind the
bureaucracy of the giant social organism may not be ignored (where-
upon the study on “unit system”), and the studies on status groups
and occupational prestige that are forming gradually during the tran-
sitional period may not be slackened. The status differentiation, which
is highlighted by functionalism paradigm, is of irreplaceable signifi-
cance in payment distribution and in forming a rational social mobility
mechanism.
5.3 China’s Current Social Stratum Structure

and Future Variation Trend
5.3.1 Current Social Stratum Structure

According to the national sampling survey conducted in 2001 by the
Research Group on the Changes to Contemporary China’s Social
Structure, which was built by the Institute of Sociology of Chinese
Academy of Social Sciences, China’s social stratum structure is roughly
divided into five socioeconomic ranks and ten social strata:
The five ranks consist of upper rank (including senior leaders, man-
agers of large-sized enterprises, senior professionals and owners of
large-sized private business), upper-middle rank (including mid-low
level leaders, mid-level managers of large-sized enterprises, managers
of SMEs, mid-level professional and technical personnel and owners of
medium-sized business), middle rank (including junior professional and
technical personnel, small business owners, office clerks, self-employed
people, mid-high level machinists, large-scale agricultural operation
households), lower-middle rank (individual laborers, general commerce
and service employees, workers, farmers) and bottom rank (workers,
farmers, those jobless, laid-off and semi-employed people living in pov-
erty and lack of job security).
The ten social strata are made up of administrators of state and society
(2.1%), management staff (1.6%), private business owners (1.0%), profes-
sional and technical personnel (4.6%), office clerks (7.2%), self-employed
people (7.1%), commerce and service employees (11.2%), industrial
workers (17.5%), agricultural laborers (42.9%), urban-rural jobless, laid
off and semi-employed (4.8%). See Fig. 5.1.
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Fig. 5.1 Chinese social strata (Note The arrows denote that the concerned
social stratum can be classified into one of the five social ranks. Source Lu Xueyi,
2002, Research Report on Social Strata of Contemporary China, Beijing: Social
Sciences Academic Press, p. 9; Lu Xueyi, 2004, Social Mobility in Contemporary
China, Beijing: Social Sciences Academic Press, p. 13)
5.3.2 Future Variation Trend

At present, China’s social stratum structure is being gradually finalized,
several variation trends that are standing out in this process are worth of
our attention:
First, interest alliance of elite groups. While China’s social stratum
structure is being shaped, a notable trend in this process is the alli-
ance of political, economic and intellectual elite. According to C. W.
Mills, the elite are those who possess superior status and abilities.32
130 K. HAN
A. Giddens argued that the elite are the persons who hold the top
positions in a social organization (e.g., political and economic organi-
zation) with its own authoritative departments.33 In the opinion of V.
Pareto, in transformative and dynamic modern society, the solid class
barriers are shaken on the one hand, and there is strong contingency
and variability of individuals’ ability and talent on the other hand, thus
breaking the pattern that people are fixed to a given social status for gen-
erations. That is to say, in modern society, class stability is shattered by
a mobility mechanism called “circulation of elite”, and permanent ine-
quality is replaced by temporary inequality. Those highly talented indi-
viduals get a chance to rise to the top of the social hierarchy through
their own efforts.34 Since the reform and opening up, China has seen
the people who occupy the top positions in economic, political and
social organizations enter upper class and acquire superior abilities, such
as entrepreneurs, government officials and university professors. These
well-educated economic, political and intellectual elite, after climbing
up to the top of social organizations, are likely to form special inter-
est groups through interest relations and then influence the national
decision-making, in order to ensure that their vested interests are
institutionalized.
Second, weakening position of industrial workers. At present, China
has a vast number of disadvantaged groups in a general sense, but even
more serious is that lots of members in such main social groups as work-
ers and farmers tend to be more disadvantaged. The so-called “weaken-
ing tendency” indicates that the living conditions of many members fail
to maintain a synchronous relationship with continuous economic devel-
opment, but become somewhat marginalized; specifically, there are signs
showing their competitiveness is weakening and degrading, their basic
rights sometimes lack of due protection, and their influence on society
started diminishing, etc.35 Since the reform and opening up, especially
from the mid-1990s onwards, a large number of workers in state-owned
and collective enterprises were laid off to be reduced to a vulnerable
group, they not only lost the economic resources based on the pub-
lic ownership in the era of planned economy, but were deprived of the
strong protection from social organizations, since the functions of labor
union have altered in market economy. The deeper reason is that under
the condition of market economy, the administrative power has with-
drawn from social protection, but the social policies have been absent for
a long time after the reform and opening up.
Third, the middle class has not formed yet. The middle class or
neo-middle class emerging in the western society refers to such kind of
people engaged in white-collar work but not in possession of any means
of production, and earning an income no more than the rich but no
less than the poor, thus constituting a middle stratum of a society. In
the United States and several European states, the middle class usually
consists of the middle-rank administration staff in governmental agen-
cies, middle-rank managers and employees in state-owned and privately
monopolized enterprises, and the professional and technical personnel
in other sectors. The concept of middle class has two implications: from
the perspective of individuals, being middle class means accession to mid-
dle-level personal wealth and social status; from the perspective of soci-
ety, a large-scale middle class symbolizes optimization of social structure,
since the middle class is generally regarded as the foundation of social
stability. So, is there a middle class in China? The answer is no. China has
not formed a stable middle class to date.36 It is still on the way to tran-
sit from agricultural society to industrial society, it is too early for such
a developing country to have a middle class. China is a big agricultural
country, meaning that the peasant class is the cornerstone of the social
strata, and the urban-rural dual structure will remain in existence dur-
ing the modernization drive for a long time to come. We assume that
the formation of a Chinese middle class shall meet the following condi-
tions: (i) the level of industrialization and urbanization shall be further
improved, which is the basis for forming a middle class; (ii) there shall
be a certain number of middle-income earners; (iii) the middle-income
earners shall have a relatively definite lifestyle and class consciousness,
which is an important sign marking maturity of the middle class.
Fourth, the changes on the rural social stratum structure. After
the founding of the People’s Republic of China, the Decision of the
Government Administration Council on the Division of Rural Social
Class Status released in 1950 divided the rural residents during the land
reform period (1950–1952) into the following strata: landlords; capi-
talists; enlightened gentry; rich peasants; middle peasants; intellectuals;
freelancers; religious practitioners; small handicraftsmen; peddlers; poor
peasants and farm laborers; workers and artisans; paupers and vagrants.
Among them, landlords, rich and middle peasants, poor peasants and
farm laborers constituted the basic rural social strata. Since the reform
and opening up, the rural social strata are further divided into agricul-
tural laborers, migrant workers, hired laborers, peasant intellectuals,
132 K. HAN
individual laborers and self-employed people, private enterprise owners,

managers of township enterprises, and administration staff of rural
affairs. Among them, agricultural laborers form the main body, migrant
workers and hired laborers have become new forms of strata.
In terms of power source, China’s social stratification is mainly
affected by two kinds of factors: one is external factors like economic
globalization; the other is internal factors including cultural tradition,
historical accumulation and policy orientation. Since China has been
increasingly active in joining the tide of economic globalization, the
influence of external factors on its social stratification will gradually come
from behind the scenes to the foreground, and the traditional political
power is subject to challenges from the worldwide market power. In the
era of the planned economy, the state was dominating the social strat-
ification, and the role of the state is not weakened after the emergence
of market force, because the state and market are exerting impact on
social stratification concurrently. In modern society, a fair and reasonable
social welfare system is an indispensable instrument for the government
to obtain governance legitimacy. Under the condition of market econ-
omy, the state exerts both an indirect and direct impact on social stratifi-
cation: the indirect impact is through active intervention of the market,
e.g., redistributing national income by means of tax adjustment; the
direct impact is through construction of a social welfare system, e.g.,
increasing the protection of the disadvantaged groups through welfare
programs.
5.4 Social Stratification Targets of China’s Social

Welfare Construction
5.4.1 Impact of Social Welfare on Social Stratification
In today’s world, social welfare has become an institutional arrangement
that is widely recognized by the international community to improve
national treatment. Although different political parties and theorists
either praise or criticize the functions and effects of social welfare, there
is no doubt that the social welfare system has become an integral part of
the modern social system, the foundation of governance legitimacy, and
the most important security system for safeguarding social development
and social order.
The establishment of social welfare system in any country cannot be

separated from the specific space-time environment. In terms of China,
the changes on its social stratum structure have put forward new require-
ments for the construction of social welfare system, i.e., it shall be dif-
ferent from the one in the era of planned economy and the one in other
market economies. When considering the construction of social welfare
system from the perspective of social stratification, we shall have a clear
understanding of the relationship between the two items. In a sense, the
wealth gap and differentiation of social strata have accelerated the con-
struction of social welfare system, and the type of social welfare system
will affect the basic form of China’s social structure in the future.
(1) Social welfare construction is the realistic demand of social
stratification
As mentioned above, since the reform and opening up, the differenti-
ation between China’s different social strata has become increasingly
apparent. The wealth gap and absence of a welfare system has seriously
affected social stability and restricted economic development. It is urgent
for the state to solve social problems and safeguard the CPC’s govern-
ance through a social welfare system. At present, different social strata
vary greatly in their welfare needs: poor people expect the welfare poli-
cies to firstly meet their basic living conditions, while rich people expect
the welfare policies to further improve their living quality and facilitate
them to purchase luxury commodities. In addition, different social strata
see their welfare needs satisfied to different degrees. According to some
relevant studies, the self-satisfaction degree of the mid-lower strata hits
the top. As for the arrangement of the existing social welfare system,
different social strata are accessible to different amount of social welfare
resources, some studies have found that most of the welfare resources are
occupied by the upper-middle stratum.
(2) Social welfare is institutional guarantee for social mobility
A striking feature of the social structure in the transitional period is that
the social groups remain at a volatile state. In such context, the establish-
ment and improvement of a social welfare system can remove the wor-
ries of individuals for mobility and provide a good institutional guarantee
for the reasonable mobility of each social stratum. On the one hand, the
establishment and improvement of a social welfare system prevents indi-
viduals from the risks of old-age care, disease, unemployment and occu-
pational injury in the process of independent job-choosing and voluntary
134 K. HAN
mobility. On the other hand, social welfare is an adjustment mechanism

and direction guide of social mobility, and able to reduce the cost for
social mobility.
(3) Institutional arrangement of social welfare decides social stratum
structure
Which kind of social stratum structure is more reasonable? An olive-
shaped or a pyramid-shaped? It is an interesting topic in the current
social stratification study. Lots of scholars suggest that China has an
onion-shaped social stratum structure at present, yet the olive-shaped
structure is the most stable, which is therefore recommended as the
development direction of China’s social stratification. But we prefer
the pyramid-shaped structure, because it is more stable according to
the basic principles of geometry. Here, let’s put aside the dispute about
the reasonable social stratum structure, and shift our attention to the
relationship between social welfare and social stratification, then we
can draw a conclusion that, under certain conditions (e.g., a finalized
basic economic system), different welfare system arrangement decides
China’s social stratum structure in the future. If the ideal stratum
structure in the future is olive-shaped, then China’s social welfare sys-
tem design at present shall benefit the growth of the middle stratum,
i.e., the social insurance system shall be improved, housing subsidy and
educational welfare shall be more inclusive, and non-farmerization of
farmers shall be achieved step by step. After this olive-shaped struc-
ture is finalized, there will be a smaller bottom stratum—indicating the
social assistance system shall be downsized, and a larger middle stra-
tum—indicating the public welfare and social insurance system shall be
designed comprehensively. If the ideal stratum structure in the future is
pyramid-shaped, then the bottom stratum shall be expanded to consoli-
date the foundation of the pyramid. After this pyramid-shaped structure
is finalized, there will be a larger bottom stratum, then the social assis-
tance expenditure shall be increased accordingly.
5.4.2 Direction of China’s Social Welfare Construction

from the Perspective of Social Stratification
First, the chief target of China’s social welfare construction is to elim-
inate social inequality—rather than natural inequality—at present and
in the future. To this end, when designing the social welfare system, we
shall avoid creating new social inequality. For instance, with respect to
the reform of the social welfare treatment of the national public servants,
the focus is to abolish their privileged benefits, not strengthen them.
Second, the objects covered by the social welfare system are not just
aggregates of class groups, the characteristics of their social strata shall
be taken into account. From the perspective of social stratification, the
welfare needs of different strata shall be considered, and the needs of dis-
advantaged groups and major social groups shall be satisfied, so that the
institutional arrangement can involve all social strata and form a welfare
network. For instance, the elderly welfare system is not simply for the
old people on the whole, the practical needs of the elderly from all strata
shall be given full consideration, i.e., commonality and individuality shall
be distinguished, the needs of the elderly from different strata shall be
met through social assistance, social services and other forms of welfare,
and the welfare resources shall be protected from tilting toward the priv-
ileged senior citizens.
Third, the system design of social welfare shall be so flexible as not
to block the social mobility among different strata. The social assistance
system, in particular, shall be able to motivate the upward mobility of the
beneficiaries, and prevent the formation of welfare dependence and pov-
erty trap.
Fourth, the system design of social welfare shall combine economic
policies with social policies. According to the classical social stratification
theories, social stratification is mainly determined by political, economic
and social standards. The institutional arrangement of social welfare shall
ensure that the social members can access to economic, political, social
and cultural resources. When making institutional arrangement, eco-
nomic policies and market mechanism shall be fully utilized, in addition
to social policies, so as to maximize the welfare of individuals.
Notes
1. Li Lulu, 1999, The study of social stratification, Sociological Study, Issue
1.
2. Sanderson Stephen K., 1991, Macrosociology: An introduction to human
society (2nd edition), New York: HarperCollins Publishers Inc., p. 48.
3. Liu Zuyun, 1999, Social transition and social stratification: China’s class
differentiation in late 1990s, Journal of Huazhong Normal University
(Humanities and Social Sciences), Issue 4
136 K. HAN
4. Lu Xueyi, et al., 2002, Deng Xiaoping theory and changes on contempo-
rary China’s social stratum structure, Beijing: Economy & Management
Publishing House, p. 13.
5. Sorokin P. A., 1927, Social mobility, New York: Harper & Brothers.
6. Lipset S. M., Bendix R., 1959, Social mobility in industrial society,
Berkeley: University of California Press.
7. Blau P. M., Duncan O. D., 1967, The American occupational structure,
New York: Wiley
8. Xu Xinxin, 2000, Social structure changes and social mobility in contempo-
rary China, Beijing: Social Sciences Academic Press, p. 11.
9. Xu Jiayou, 1986, Social stratification and social mobility, Taipei: San Min
Book Co., Ltd., p. 219.
10. Xu Jiayou, 1986, Social stratification and social mobility, Taipei: San Min
Book Co., Ltd., pp. 225–26.
11. Granovetter M., 1973, The strength of weak ties, American Journal of
Sociology, Vol. 78, pp. 1360–80; Lin Nan, Ensel W. M., Vaughn J. C.,
1981, Social resource and strength of ties: Structural factors in occu-
pational status attainment, American Sociological Review, Vol. 46, pp.
393–405.
12. Lu Xueyi, et al., 2002, Deng Xiaoping theory and changes on contemporary
China’s social stratum structure, Economy & Management Publishing
House, pp. 5–6.
13. Cai Wenhui, 1993, Sociology (expanded edition), Taipei: San Min Book
Co., Ltd., p. 284.
14. Xu Xinxin, 2000, Social structure changes and social mobility in contempo-
rary China, Beijing: Social Sciences Academic Press, p. 7.
15. Waters Malcolm, 2000, Modern sociological theory, trans. Yang Shanhua,
et al., Beijing: Huaxia Publishing House, pp. 312–13.
16. Waters Malcolm, 2000, Modern sociological theory, trans. Yang Shanhua,
et al., Beijing: Huaxia Publishing House, pp. 312–13.
17. Davis K., Moore W., 1945, Some principles of stratification, American
Sociological Review, Vol. 10, pp. 242–49.
18. Durkheim Émile, 2000, The division of labor in society, trans. Qu Dong,
Beijing: SDX Joint Publishing Company, p. 24.
19. Durkheim Émile, 2000, The division of labor in society, trans. Qu Dong,
Beijing: SDX Joint Publishing Company, pp. 26–27.
20. Smelser N. J., 1984, Sociology (alternate edition), Englewood Cliffs, NJ:
Prentice-Hall, Inc., pp. 157–58.
21. Kerbo H. R., 1991, Social stratification and inequality: Class conflict in
historical and comparative perspective (2nd edition), New York: McGraw-
Hill, Inc., pp. 118–20.

Hill, Inc., pp. 126–30.
23. Smelser N. J., 1984, Sociology (alternate edition), Englewood Cliffs, NJ:
Prentice-Hall, Inc., p. 158.
24. Sanderson S. K., 1991, Macrosociology: An introduction to human society
(2nd edition), New York: HarperCollins Publishers Inc., pp. 126–27.
25. Translator’s note: W. Lloyd Warner (1898–1970), a pioneering anthro-
pologist in the US, and some other representative sociologists in support
of the traditional subjective stratification models are collectively called the
“Warner School”.
26. Marx K., Engel F., 1964, The Communist Manifesto, Beijing: People’s
Publishing House, pp. 23–24.
Hill, Inc., pp. 104–6.
Hill, Inc., pp. 109–14.
29. Dahrendorf inherited Weber’s definitions of “power” and “authority”,
i.e., “power” is the ability to impose one’s will on another, even when the
other objects; and “authority” is the recognition by others of a person’s
legitimate right to exercise power.
30. Hou Junsheng, ed., 2001, Western sociological theory, Tianjin: Nankai
31. In Hou Junsheng, 1988, Progress of western sociology, Shenyang: Liaoning
People’s Publishing House, p. 456.
32. Grusky David, 2005, Social stratification, Beijing: Huaxia Publishing
House, p. 183.
33. Grusky David, 2005, Social stratification, Beijing: Huaxia Publishing
House, p. 188.
34. Zheng Hangsheng, ed., 2003, Newly revised introduction to sociology, p.
227.
35. Wu Zhongmin, 2006, Study on the weakening tendency of Chinese major
disadvantaged groups, Dongyue Tribune, Issue 3.
36. Han Keqing, 2004, Middle-level asset is far from enough to form a mid-
dle class, Collected Papers of Leadership, Issue 8.
CHAPTER 6
Civil Society and China’s Social Welfare

Reform
6.1 Evolution and Theoretical Definition

of the Concept of “Civil Society”
6.1.1 Evolution of the Concept of “Civil Society”

The concept of “civil society”, which was brought forth as early as in
the first century AD, not only refers to a single country, but the living
conditions of a civilized political community that is developed enough to
dwell in cities. In the fourteenth century, the Europeans translated the
Latin “societas civilis” into the English “civil society” that prevails today.
In the seventeenth century, the civil society denoted a state opposite of
the natural state, i.e., a state in which people were living under admin-
istration of government. By the eighteenth century, it had acquired
Han Keqing, 2008, Civil society and construction of Chinese social welfare
system, Tianjin Social Sciences, Issue 1; Han Keqing, 2007, Connotation of civil
society and its modern significance, Journal of the Party School of CPC Zhuhai
Municipal Committee, Issue 6; Han Keqing, 2001, Civil society and China’s
modernization, Jiangsu Social Sciences, Issue 6; Han Keqing, 2002, Civil society:
Reexamination of China’s modernization process, Tianjin Social Sciences, Issue
3; Han Keqing, 2007, Civil society and development of Chinese charitable
organizations, Academia Bimestris, Issue 3.

https://doi.org/10.1007/978-981-32-9660-2_6
140 K. HAN
a connotation similar to its present version, i.e., a society with vibrant

urban life and busy commercial activities. In the nineteenth century, in
his detailed accounts, Hegel defined the civil society—or more precisely
the civil part of a society—was neither the same with family nor country,
but identical to market or the commercial part of a society, including the
systems and institutions indispensable for market functioning and secu-
rity of social members. Though inheriting Hegel’s interpretation of the
civil society, Marx was more interested in its commercial or economic
aspect, and he employed this concept to describe the entire society, not
just a part of it.1 In addition, Locke, Gramsci and other scholars have left
writings about civil society.
It can be seen that the development of civil society in the west has
undergone a long process since it emerged. To date, it has been rein-
vented and injected with new content. Owing to a complicated evo-
lutionary process, the civil society inevitably has some conceptual
ambiguities and diversified analytical visions. After it was introduced into
China, this concept has been exposed to a distinctive context of social
transition, people tend to intercept a particular implication of civil soci-
ety, by taking a teleological or utilitarian stance, as a conceptual tool to
analyze China’s problems. Besides, the Chinese and western societies,
due to spatiotemporal dislocation in development and differences in
social structure and culture, have lots of intersections and even contra-
dictions in both the concept and material form of civil society.
6.1.2 Theoretical Definition of Civil Society

The dual structure of state and society shall be established, since it is
the premise and core of civil society. The theories about the relationship
between state and society are roughly divided into two factions: “State
over Society” and “Society over State”; the former stresses the role of
state in shaping society but denies the function of society in shaping
state, and debases society as an appendage to state; in contrast, the latter
holds that society comes into being ahead of state, while state is a polit-
ical organization created by people to maintain their own security and
interests, it is only a tool to realize social welfare; but from the point of
view of society, state is a “necessary evil”; hence, the less state interven-
tion, the better; the smaller government size, the better.
In terms of the understanding of civil society, no matter it is the west-
ern definition or the Chinese scholars’ interpretation, there are doubts in
6 CIVIL SOCIETY AND CHINA’S SOCIAL WELFARE REFORM 141
need of further clarification, otherwise, people are prone to be confused:

Is civil society a physical society in real existence or merely an abstract
conceptual tool for theoretical analysis? Is civil society an integral society
or a part of it? How to define the boundary between state and civil soci-
ety? Or is the state-society dichotomy appropriate? What is the relation-
ship between civil society and political/economic society? For China, is
civil society a theoretical research approach or a concrete social construc-
tion movement? We suggest understanding civil society from the follow-
ing aspects:
(1) Civil society is a factual existence and a high-level theoretical
generalization above it. The disputes between social nominalism and
social realism seem like an old story. The civil society in the west was
initially recognized as a factual existence, later it was Locke that, for the
first time, used the concept of civil society for logical deduction, while
Hegel was a pioneer in the west that clearly distinguished political state
from civil society. Marx argued that civil society is a private sphere rel-
ative to political state, and also a historical concept that describes a
particular period in the course of human society, while the substantive
characteristic of this period is the existence of class interests. The Italian
Marxist Gramsci pointed out that civil society represents various private
or non-governmental institutions that forge and disseminate ideologies,
particularly those of the ruling class. It should be noted that the ties
between practice and theory of civil society are consistent in the west,
but broken in China. In this regard, according to Deng Zhenglai, the
western sinologists do not focus on the non-empirical ideological aspect
of the concept of civil society, but on its empirical aspect; but for the
Chinese mainland and Taiwan theorists, what is the most important is
the non-empirical ideological aspect; therefore, when they quote the
concept of civil society, their primary intention is to criticize reality and
achieve psychological integration.2 In view of this, the Chinese concept
of civil society tends to emphasize “introduction” of ideologies, but lacks
theoretical improvement and practical test based on China’s social reality.
(2) Civil society represents a functional sphere of an integral soci-
ety, and an abstract social form with certain characteristics. In the typ-
ical sociological sense, a physical society shall contain the following
elements: a certain quantity and quality of population; a natural envi-
ronment suitable for people’s survival; cultural and organizational sys-
tems; and people’s material production and communication activities.
Since the nineteenth century, the term “civil society” has been used to
142 K. HAN
refer to “part of a society” or a “society with such part”, it is yet appli-

cable for describing any physical integral society.3 Just like political
society and economic society, civil society is also one of the functional
spheres of modern integral society, and such functional sphere high-
lights the equilibrium of social integration. According to J. Habermas,
civil society is a private sphere (a sphere of economy with market as
the core) and public sphere (a sphere of social and cultural life) inde-
pendent of state. The US scholars J. L. Cohen and A. Arato define
civil society as a social sphere between economy and state, thus remov-
ing economic sphere from the scope of civil society.4 In his Institutions
and Social Evolution (1977), Parsons summarizes several paths for
large-scale social integration: (i) Institutionalization of freedom on a
larger scale; (ii) Progressive development of equality and social equity;
(iii) Strengthened decentralization and integration of power and
authority; (iv) Persistence in the modern basic value models.5 What
we believe is that freedom, equality and decentralization advocated by
civil society is an inevitable trend when the functions of modern soci-
ety become prominent after the social development comes to a certain
stage.
(3) Based on the perception that civil society is a functional sphere
of an integral society, we can draw such conclusion as both the state
and civil society are functional systems in an integral society. The state
embodies the supreme authority in the political sphere, and it is the
power center of the entire society where political determinism prevails.
Civil society stresses transfer of state power to prevent it from excessive
expansion. By remodeling and defending civil society, the goal of recon-
structing the required benign relationship between state and society
can be achieved. However, in modern society, the political, economic,
cultural and other functional systems are increasingly interwoven and
integrated, it is theoretically untenable to view state and civil society as
binary opposition.
In summary, we tend to think that the premise for defining civil
society is to incorporate state and civil society into an integral society,
any logic crossover or separation between state and civil society shall
be unfolded under this premise. M. Duverge reminds us of avoid-
ing the tendency to confuse the integral society with the basic politi-
cal society, i.e., a society where the regime possesses the most powerful
physical means.6 According to E. Shils, civil society has the following
basic characteristics: (i) it is a part of a society, different from and
independent of state; (ii) it constitutes the basis of individual rights,

particularly property right; (iii) it is an aggregate of self-own economic
units or commercial firms which act on their own accord and compete
with each other.7 Harvard professor R. D. Putnam holds that the fea-
tures of civil society mainly manifest in four aspects: (i) citizens partici-
pating in political life; (ii) political equality; (iii) solidarity, mutual trust
and tolerance among citizens; (iv) existence of cooperative social struc-
tures, e.g., various associations and organizations.8 It can be seen that
though civil society separates from, opposes against and intersects with
state, it is bound to be associated with other functional systems in a
society.
Based on the above analysis, we can define civil society as a private
sphere and a non-governmental public sphere, which are derived from
a fully developed market economy and becoming independent; it is
closely associated with the politics, economy and culture and exerting
a synergistic effect with them; it is also an important functional system
indispensable for benign operation and coordinated development of
modern society, with the characteristics of autonomy, self-reliance, free-
dom, equality, self-discipline and self-organization; it is different from
political society and economic society, but not fully detached from pol-
itics, economy and other social spheres. In China, the civil society (at
least the discussions about it) was born while the country is fostering
the market economy, thus making it an inevitable outcome of market
economy.
6.2 Development of China’s Civil Society

Since the 1990s, the issue of China’s civil society has drawn interest of
both the domestic and foreign scholars.9 Did China have a civil society?
There is no consensus among the scholars. Some argued that China’s
civil society firstly appeared in late Qing Dynasty,10 but “a majority
of people said no (China did not have a civil society). The following
question is whether civil society is possible to come true in contempo-
rary China. Quite a number of people feel optimistic about that” (Zhu
Shiqun 1995).11 The author of this book attributes the above differences
to misunderstanding of the concept of civil society. When examining this
issue, we shall grasp the essence of civil society, and strip out the ele-
ments also belonging to the western civil society, only in this way can we
understand and deconstruct China’s civil society.
144 K. HAN
6.2.1 Development of Civil Society After the Founding of New China

The founding of new China in 1949 basically modernized the country’s
state power, marking a tremendous achievement in its modernization
drive, and enabling the Central Government to effectively control every
region and even every inch of its territory. In terms of social structure, a
round of unprecedented social mobilization and highly insensitive social
integration was launched concurrently, the whole society became highly
homogeneous, while social differentiation was relatively inadequate.
The state monopolized all social resources, the state power directly
controlled the society and even penetrated into villages which are basic
units of social life. Hence, a totalitarian society—a society with a fairly
low degree of structural differentiation—came into being. Such society
usually has the following characteristics: (i) An extremely strong social
mobilization ability. By taking advantage of a nationwide tight organ-
ization system, this society is able to mobilize all human and material
resources to achieve some common goals, particularly those for eco-
nomic construction, glory projects and resolving crises. (ii) Absence of
a middle class. The state power extends to the remote and backward
areas, and reaches out to the populace directly without any interme-
diate buffer. (iii) Social order completely relies on individual authority
that derives from particularism, implying that the society is prone to
fall into a spontaneous, anarchical and disorderly situation. (iv) Owing
to poor capability of autonomy and self-organization, the entire social
life is increasingly subject to politicization and administerization, var-
ious social subsystems lack conditions for independent operation, and
different functional systems are manipulated by the same operational
principle. (v) The resonance effect may escalate a local conflict or ten-
sion into an overall crisis. (vi) A prevailing identity system seriously
confines social mobility, so the society is highly homogeneous, without
adequate differentiation and a flexible structure. (vii) A totalitarian ide-
ology simultaneously assumes a dual function of social integration and
instrumental rationality, so the contradictory functional requirements
may exert a mutually debilitating effect. (viii) Bottom-up communica-
tion is out of place. There are few eligible organizations for soliciting
public opinions, thus forming a wide gap between popular will and gov-
ernment policy, and few public opinions are seriously treated. In other
words, “the totalitarian society is a highly integrated society, in which
the social life is almost completely driven by the state apparatus”.12
In the early days of new China, its economy, social life and culture were
all compressed into the political system, the development of civil society
was actually at a standstill.
6.2.2 Rise of Civil Society Since the Reform and Opening Up

The reform and opening up ushered China into a new stage of devel-
opment. From a historical perspective, China’s modernization initially
seemed like a “stimulation-reaction” process; after the national inde-
pendence was established, the government began to play a leading role
in pressing ahead with the modernization; what’s more, once the func-
tional systems of the society get activated, China’s modernization drive
becomes increasingly “endogenous”. The power system for China’s
modernization consists of three parts: government promotes economic
operation at the first place; economic growth then nurtures the market;
government and market constitute the dual driving force in the end.
Since the reform and opening up, China’s social structure has been
going through significant changes: (i) From self-sufficient and semi
self-sufficient product economy to socialist market economy. (ii) From
agricultural society to industrial society. (iii) From rural society to
urban society. (iv) From closed and semi-closed society to open society.
(v) From homogenously oneness society to heterogeneously diverse soci-
ety. (vi) From ethical society to legal society.13 Among these changes,
the most prominent one is undoubtedly the rapid development of mar-
ket economy, which then induced the reform of property right sys-
tem and the adjustment of interest structure. Of course, the changes
in the economic domain are sure to bring about other social changes,
e.g., adjustment of the relationship between state and society. Although
it is uncertain that the adjustment of the state-society relationship was
defined as one of the reform targets at the very beginning, lots of the
concrete reform measures have resulted in structural differentiation
between state and society, whereby a free space came into being and
keeps expanding; moreover, the economic system reform—with diversi-
fication of property right and economic marketization as its basic con-
tent—directly contributed to the formation of a relatively independent
society. So to speak, the important outcomes of the reform include the
emergence of “freely flowing resources” and “free activity space”, and
the formation of four cardinal social-political powers: state, elite with
monopoly groups, folk elite and the social mass.14
146 K. HAN
Yu Keping said a civil society is now rising in China, and he cited sev-
eral facts to support his argument: (i) Development of unplanned econ-
omy. (ii) Decentralization of government power and transformation of
government functions. (iii) Private interests are recognized and encour-
aged, and the concept of property right becomes clearer. (iv) Personal
lifestyle starts to keep away from politics. “All of these changes show that
the free activity space of individuals has notably expanded, the bound-
ary between political state and civil society is becoming more visible, and
a relatively independent civil society is gradually taking shape in China”
(Yu Keping 1993).15 In short, owing to the development of market
economy and the changes upon the social structure since the reform and
opening up, China now sees the development of civil society turn into a
self-conscious process.
However, the development of China’s civil society is far from mature,
which is shown in the following aspects: First, the civil society was not
born until the market economy was initiated, it is naturally more adhe-
sive to the economic domain. Market economy is both the incubator and
carrier of China’s civil society. Second, China’s civil society still maintains
spontaneous growth. The Chinese market economy is planned, initiated
and implemented by the government, but the government is unable to
foresee what kind of changes will happen to the social structure as result
of the developing market economy, particularly the cultivation of civil
society. In this case, if the government holds a laissez-faire attitude and
let the civil society develop on its own, then it may cause two adverse
effects on the entire society: (i) The civil society may turn into a politi-
cal force confronting the government (ruling party), and a fuse that trig-
gers social changes (the civil society construction in Poland is a lesson of
failure).16 (ii) The civil society may breed anti-society forces. Owing to
the Chinese thousands of years’ feudal tradition and family-oriented
ideas, the social members, with their interest infringed or reduced to a
disadvantageous position during the reform, may form gangs, criminal
bands or heretical organizations to threaten social stability. Third, there
are no available civil society principles for promoting social integration.
The moral codes and value principles, which should be contained in civil
society, remain chaotic, disorderly or even contradictory, which is attrib-
uted to the aftermaths of institutional reform (e.g., conflict between
public ownership and private ownership, contradictions between mar-
ket system and planning system/government intervention), and to the
social problems cropping up during social development (e.g., social
polarization and demand for social justice). Under such circumstance, it

is hard for the emerging China’s civil society to accomplish value inte-
gration; in other words, the applicable civil society principles for social
integration are still in absence.
6.2.3 Sequential Problems in Civil Society Construction

Deng Zhenglai put forward a “two-stage theory” to illustrate the
sequential arrangement of China’s civil society construction. According
to Deng, the main target in the first stage is to construct a civil soci-
ety framework and form a state-civil society dual structure. The target is
achieved through economic means and settlement of such problems as
a free space for civil society relative to the state control and independ-
ent status of civil society, which is premise for its development. On the
other hand, the main target in the second stage is to further advance civil
society construction based on the achievements in the first stage, let civil
society exert a positive impact on national decision-making through var-
ious channels, e.g., active public participation. The main problems to be
solved in this stage include extension of civil society from private domain
to public domain, independence of civil society and a benign interaction
between civil society and the state.17 Given this, Deng divided the con-
struction sequence of China’s civil society from a dualistic perspective
(state and society); such division shows a reasonable forward look into
the relation between the state and society in China.
We suggest that China shall carry on civil society construction and
social transition simultaneously. China shall, by regarding civil society
as a functional area of the whole society, proceed with civil society con-
struction in the following sequence. First, gradually build civil society
organizations of certain scale—main force that represents civil society.
Second, carve out a space for civil society in the overall social structure,
and work for harmonious operation of civil society, political and eco-
nomic domains.
Now we shall concentrate our efforts on the first step of the work.
No matter it is the western or Chinese civil society, there is a question
hardly avoidable: what is the mark of the formation of civil society? The
most essential characteristic of civil society refers to the main force repre-
senting civil society. In order to evaluate such main force, we shall con-
firm the weight of its members in the total society, whether they have
a clear class consciousness? and how about its internal homogeneity?
148 K. HAN
Currently, China sees its civil society construction remain at the stage of
social mobilization and enlightenment, and its ultimate formation still
takes time because the Chinese middle class is yet fully developed during
the transitional period; what’s more, the middle class is not necessarily
the main force. At present, in order to fulfill China’s civil society con-
struction, the first step is to foster civil society organizations, which calls
for continuous development of market economy, improvement of urban-
ization level, smooth operation of social mobility mechanism (through
reform of household registration system) and government backing.
6.3 Social Welfare Reform During Civil Society

Construction
6.3.1 Simultaneous Construction of Civil Society
and Social Welfare System
As stated earlier, China saw its social welfare construction roughly
undergo two stages since 1949. The first stage (1950s–late 1980s) was
predominated by the traditional welfare model: China inherited the
social welfare system from the past, but made some modifications to it
by combining civil welfare (defined and executed by government) with
employee welfare (provided by work units). During the second stage
(late 1980s to date), the traditional welfare system has been transformed
into a new model (socialized welfare), it is a system reform in response
to the emergence of market economy. In the era of planned economy,
the Chinese social welfare system was made up of civil welfare (mainly
benefiting the “sanwu people” or “three withouts people”,18 handi-
capped people, psychiatric patients and other disadvantaged groups) and
employee welfare. The traditional welfare system at this time had the
following characteristics: the social welfare was a small-scale welfare; the
welfare system was led by government; its primary function was social
assistance. Since the reform and opening up, China kicked off the reform
of social welfare system, i.e., from government-financing to market-ori-
ented. The initial intention of the reform was to make social welfare a
supporting mechanism for the reform of market economy, and relieve
enterprises of financial burdens. However, guided by such thought, the
social welfare programs through the reform were once reduced to gov-
ernment relief. Since the 1980s, the Ministry of Civil Affairs introduced
new thoughts for reforming the welfare system (e.g., socialization of

social welfare), then the existing welfare system started transforming
into the one that features various investment sources, broadened scope
of beneficiaries, diversified welfare programs and professionalized ser-
vice team; moreover, private nursing home, community services and
non-governmental organizations are also mushrooming, marking the
Chinese social welfare cause has entered a new period where reform is
the top priority.
In China, the development of civil society is almost synchronous with
the reform of social welfare system. Since the reform and opening up,
China started the social welfare reform to match with the socioeconomic
restructuring, and civil society construction is able to broaden the space for
social welfare reform. However, China is still stuck with several problems
that hold back civil society construction. First, underdeveloped market
economy. As mentioned earlier, China did not launch civil society construc-
tion until the emergence of market economy. Chinese civil society seems
relatively separated from the state, which is manifested in the relative alien-
ation between political and economic system, and also in the alienation
among social space (non-economic), political system and economic system.
Although the civil society started unfolding in China after the reform and
opening up, its growth space remains limited due to underdeveloped mar-
ket economy. Second, inadequate separation of civil society from the state.
For a mature civil society, its main body refers to all kinds of social organ-
izations. But most of the Chinese social organizations are only nominal
non-government or non-profit organizations, they are in essence “second
government”, “quasi-government” or at least “semi-official and semi-
folk” entities. In a word, genuine social organizations have yet come out in
China. Third, incompetence of social organizations. While remaining at the
growth stage, the Chinese social organizations themselves are troubled by
lack of funds, human resources, operational expertise and experience, etc.
On the other hand, the government is unable to execute effective admin-
istration of these organizations. Take their registration for instance, some
are registered in civil affairs department, some are in industrial and com-
mercial administration department, and some are exempted from registra-
tion as affiliated to enterprises. There are even underground organizations
in existence. The Chinese social organizations on the whole are criticized
for ill-standard management, ineffective supervision, absence of rele-
vant policies and regulations, non-transparent operation, chaotic internal
management and loss of credibility.
150 K. HAN
Well, in China where civil society is burgeoning, are there any avail-
able paths for reforming its social welfare system? One possible path is
nationalization of social welfare. China can learn the relevant experiences
from the European welfare states. The other possible path is socializa-
tion or marketization of social welfare. When planning for social welfare
socialization in China, where civil society development remains at the ini-
tial stage, a question needs to be answered in the first place: is there any
space for survival of de-nationalized social welfare reform? Such ques-
tion is a test of our understanding of social welfare socialization. In our
opinion, social welfare socialization actually means socialization of wel-
fare services, rather than that of state responsibility. The word “social”
in social welfare socialization denotes marketization at the early stage of
civil society, and also socialization of citizens after civil society becomes
mature. As such, social welfare socialization is now linked to the concept
of social welfare marketization. Social welfare socialization firstly man-
ifests itself in marketization of social welfare, and then in socialization
of social welfare (citizens). It should be noted that while civil society is
underdeveloped, social welfare socialization is likely to become a pretext
for government to pass the buck.
6.3.2 Feasible Welfare System: Let Government Play a Leading

Role and Socialized Services Act as a Supplement
Since the 1980s, social welfare socialization has been the direction of
social welfare reform as espoused by the Chinese government. Such
selection indeed has some positive significance, but it also brings about
several problems. The most prominent problem, as mentioned above,
is that where social welfare socialization is going without the backup of
civil society. Through examination of the current situation of China’s
welfare system, two wrong tendencies are worthy of our attention: from
the perspective of responsibility main body, social welfare socialization
is excessive while nationalization is insufficient; from the perspective of
welfare provision, social welfare socialization (marketization) is inade-
quate while nationalization is excessive.
From the perspective of responsibility main body, we believe the
inevitable trend of Chinese social welfare reform is to transit from state
responsibility to “state-market” responsibility and “state-market-society”
responsibility. Of course, such reform cannot proceed without developed
market and mature civil society. The reform of welfare system in the
western developed countries, from government taking care of everything

to active participation of social organizations and welfare pluralism,
is going along the same path. These countries are now going through
transition from welfare state to welfare society. As for China, the driving
force of government, which is justifiable if considering the Chinese tradi-
tion of centralization, is the key achieve successful social welfare reform.
In other words, the leading role of government remains at the center for
reforming the Chinese social welfare system. Therefore, the Chinese gov-
ernment shall increase financial support to social welfare undertaking, so
as to gradually replace the concept of “small welfare” with that of “big
welfare”.
6.4 Growth of China’s Charitable Organizations

Through an overview of the development of Chinese civil society, we
found that the rapid growth of charitable organizations is fairly prom-
inent. In recent years, quite a number of scholars have devoted them-
selves into the literature research on charity, demonstrating their keen
interest in this regard. Charitable organizations are carrier of charity, said
Deng Guosheng, in order to develop the charity cause, the first step is
to put reliable charitable organizations in place.19 It can be said that the
operation and development of modern charity is closely related to char-
itable organizations. Therefore, we shall pay attention to the cultivation
of charitable organizations, which is an important subject for studying
the Chinese charity cause.
We take it that China shall combine the cultivation of charitable
organizations with its social structural transformation since the reform
and opening up, also with its reform of social welfare system. Under the
analytical framework of civil society, the development of Chinese chari-
table organizations is closely related to the social structural transforma-
tion since the reform and opening up. The foreign experiences show that
the charitable organizations are usually cultivated and developed in two
models: one is the classified goal-business model, and the other is the
unified cultivation model. At present, more and more countries have
preferred the unified one. Take several foreign countries for instance.
In South Korea, it is the Committee on Development of Civil Society,
which is directly under the Office of the Prime Minister, that draws up
the strategic planning for both charity and civil society organizations,
then reports it to the civil affairs assistant to the prime minister for
152 K. HAN
high-level communication and coordination, and in the end the Citizens

Cooperation Division of the Ministry of Government Administration
and Home Affairs will take charge of fiscal appropriation. The UK estab-
lished a special charity commission for cultivation and supervision of
charitable organizations. India has included the cultivation and develop-
ment of charitable organizations into its five-year plan, which prescribes
that every year the government shall allocate a US$5 billion subsidy to
charitable organizations in the form of project procurement; it is the
Indian Planning Commission that is in charge of the cooperation plans
between government and charitable organizations.20 It can be said that
the development of charitable organizations is inevitably tied up with the
growth of civil society.
6.4.1 Cultivation and Development of China’s Charitable

Organizations
The Chinese folk charity cause boasts a long tradition that can be traced
back to ancient times, and the folk charitable organizations were in dif-
ferent variety. By referring to over 2000 local annals, Liang Qizi made
statistics of the Chinese charitable organizations throughout the Qing
Dynasty: there had been at least 973 nurseries, 399 elderly care homes,
216 widow-care centers (limited to poor and young widows), 589 special
benevolent societies (providing poor families with free coffins to bury
the dead), 338 general benevolent societies and 743 unclassified ones.
These charitable organizations had been distributed across the country.21
Of course, these traditional charitable organizations were mostly owned
by privileged families or religious institutions and subject to strict gov-
ernment control, their organizational forms and functions were com-
pletely different from their modern counterparts.
After the founding of new China, both charity itself and charitable
organizations were resolutely banned by the government. As a result,
there were only 44 national charity societies in the 1950s and less than
100 in the 1960s, and the local charity societies totaled about 6000
nationwide.22 During this period, the state power controlled social
resources, and the social structure seemed like a unipolar dominated by
politics, leaving no room for growth of civil society, the charitable organ-
izations were discredited as “hypocritical”, “fraudulent” and “dens of
wicked deeds”. According to statistics, the Chinese government took
over about 500 charitable organizations after 1949 and transformed
them into government subsidiaries. In the 45 years from 1949 to 1994,

“charity” was criticized for their wrong ideology, i.e., a “hypocritical”
and “fraudulent” tool for defending imperialism and the Kuomintang
rule. To erase such shame on socialism. The term “charity” was even
excluded from the Chinese official discourse.23
In 1994, China Charity Federation (CCF) was established, becoming
a landmark in the history of China’s charity cause. The CCF not only
ends the criticism poured onto charity since the founding of new China,
but marks that the national social welfare system is about to be reformed,
i.e., the state or collective-dominated welfare is to be replaced by plural-
istic welfare. The bright spot of this reform is that the social forces will
become co-subject of social welfare with the government. In 2004, more
than 160 social organizations were registered as the CCF members.24
Moreover, various charitable non-government societies and foundations
have sprung up. Since the 1990s, in particular, the number of all kinds
of societies, private non-corporate units and foundations have increased
substantially. So to speak, development of charitable organizations is an
important sign of the growth of civil society. By the end of 2016, there
were altogether 702,000 social organizations across China, including
336,000 societies, 361,000 private non-corporate units and 5559 foun-
dations.25 Among the overall social organizations, it is the charitable
organizations governed by the Ministry of Civil Affairs (MCA) that on a
fast growth track. Besides, lots of other types of social organizations also
have some charitable purposes and functions. In short, a golden age has
arrived to witness the rapid development of Chinese charitable organiza-
tions and charity cause.
The development of Chinese charitable organizations to date has
shown the following characteristics: First, the overall strength of chari-
table organizations remains weak, and the charitable organizations reg-
istered under MCA account for a small proportion in the total social
organizations. Second, the charitable organizations have been growing
at a fast pace, especially in recent years, an increasing number of charita-
ble organizations at all levels have come into being. Third, the charita-
ble organizations, e.g., CCF and China Youth Development Foundation
(CYDF), are more like administrative departments, since their organi-
zational structure and operating model resemble those of government.
Fourth, the charitable organizations have somewhat replaced the gov-
ernment in undertaking social assistance. But lots of problems still
exist and may obstruct the ongoing development of Chinese charitable
154 K. HAN
organizations. Therefore, China shall intensify efforts in guiding the

development of charitable organizations to prevent them from going
astray.
6.4.2 Role of Government in Nurturing Charitable Organizations

At present, there are mainly three paths for China to develop charitable
organizations: (i) A top-down state-driven path. (ii) A bottom-up social-
driven path, i.e., to boost development of various grassroots organiza-
tions. (iii) An outside-in externally driven path, i.e., to bring in foreign
charitable organizations and foundations.
Market economy is an endogenous driving force of civil society, and
the full development of market economy not only fosters independent
market players, a contractual relationship based on equality and mutual
benefit, liberal and unrestrained individualistic consciousness, but rede-
fines the property right relations, principles for possession and distri-
bution of social capital and personal property; all of them are necessary
conditions for forming charitable organizations.
However, in case of China, it is the role of government that takes
precedence. The Chinese tradition of centralization and the currently
highly intensive government control are particularly important for the
growth of charitable organizations. Through nationwide publicity cam-
paign, the government is able to reduce the time for the formation of
charitable organizations and accelerate their development. Moreover,
government intervention may prevent the emergence and growth of any
morbid social organization, which is critical for safeguarding the healthy
development of the entire society. Therefore, the Chinese government
shall create appropriate social space for the growth of charitable organ-
izations. And the roles of government in this regard are summed up as
follows.
First, improve legislation on charity. In light of the Charity Law of
the People’s Republic of China enacted in 2016, “charitable organiza-
tions refer to legally established non-profit organizations that meet
the requirements specified in this Law and aim to carry out charitable
activities in society. A charitable organization can adopt the forms of a
foundation, social group or social service organization.” The Charity
Law, which points out the direction for the development of char-
ity cause, defines three types of behavior subjects as charitable organi-
zations, donors and beneficiaries, and sets out the measures for
charitable donation and tax preference, is foundation and guide for the
development of Chinese charity cause.
Second, carry forward the charitable culture, foster a social and cul-
tural foundation for the growth of charitable organizations. The goal of
charity is to cultivate a charitable culture that conveys truth, benevolence
and virtue, and strengthens social inclusion. The development of chari-
table organizations shall be based on both cultural and behavioral con-
sciousness. The government can publicize the virtue of charity through
the media, set excellent charitable organizations as examples to motivate
the others, and mobilize the entire society to join in the charity cause, so
as to guide the healthy growth of charitable organizations.
Third, strengthen the management of charitable organizations.
On the one hand, the charitable organizations themselves are far from
developed, they still have to resolve lots of problems to forge ahead. On
the other hand, there is widespread public distrust of charitable organ-
izations, many people prefer direct donation to the recipients. In view
of this, the government shall strengthen the management of charitable
organizations, put in place concrete regulatory measures and punishment
mechanism, so as to build up their credibility. Besides, the government
shall, through a bottom-up approach, create a charitable culture that
meets people’s expectation, promotes social virtue and transmit positive
energy.
Fourth, increase financial support to charitable organizations. Charity
is not only dedicated to public good, but resolving the wicked social
problems for the government. The significance of charity is not limited
to the third distribution, it is also a useful tool for the government to
implement the primary and secondary distribution. The government
and charitable organizations shall maintain benign interaction: the for-
mer supports the growth of the latter through fiscal appropriation and
tax incentives, and in turn, the latter helps the former achieve the goal of
social justice.
6.4.3 Role of Charitable Organizations in Social Welfare

Charitable organizations are an important driving force of civil soci-
ety, while civil society is the social foundation for the development and
growth of charity. The developed charitable organizations, in a sense,
symbolize the growth of civil society and manifest its maturity, this is
because a society with developed charitable organizations is sure to be
156 K. HAN
the one filled with love and kindness, and also the one where the dif-
ferent functional areas (state, market and civil society) have benign
interaction.
It is worth noting that charitable organizations play an important role
in improving social equality and justice. Charitable organizations shall
become a social force that eradicates poverty and inequality, rather than
widens or institutionalizes it. In fact, the growth of charitable organizations
is not in conflict with the government’s leading role in the social welfare
system. In our opinion, the government-led income distribution and insti-
tutional arrangement of social welfare is “great good”, while the charitable
organizations and civil society are an effective supplement or “small good”.
All the “good”, no matter it is great or small, reflects virtue of human soci-
ety. The developed charitable organizations and civil society are a bridge
for the communication between the government and the public, and also
an indispensably important force in building a social welfare system.
Notes
1. Edward Shils, The virtue of civil society; Deng Zhenglai, Civil society and
state-division and two frameworks in academic interpretation; both in
Deng Zhenglai and Alexander J. C., 1999, State and civil society, Beijing:
Central Compilation & Translation Press.
2. Deng Zhenglai, Alexander J. C., 1999, State and civil society, Beijing:
Central Compilation & Translation Press, p. 12.
3. Yu Keping, 1993, Marx’s civil society theory and its historical position,
Social Sciences in China, Issue 4. Marx once used “civil society” to denote
the “bourgeois society” where he was living, the main difference between
them is that “civil society” is a general concept relative to “political
state”, while “bourgeois society” is a specific concept. He argued that
civil society is a certain period in the development course of human soci-
ety, and it also refers to the private sphere, which is relative to “political
society”, mainly involving people’s material relations.
4. Yu Keping, 1993, Marx’s civil society theory and its historical position,
Social Sciences in China, Issue 4.
5. Song Linfei, 1997, Western sociological theory, Nanjing: Nanjing
6. Duverge Maurice, 1987, Sociologie de la politique: eléments de science poli-
tique, trans. Yang Zugong, et al., Huaxia Publishing House, p. 75.
7. Shils Edward, 1999, The virtue of civil society, in Deng Zhenglai, J. C.
Alexander, ed., State and civil society, Beijing: Central Compilation &
Translation Press.
8. Zhao Liqing, Putnam R. D., 1999, Civil society and non-governmental

organizations, Social Sciences Abroad, Issue 1.
9. Wei Feide, 1999, Debate on civil society and public sphere: Westerners’
thinking on contemporary China’s political culture (trans. Zhang Xiaojin,
et al.), in Deng Zhenglai, J. C. Alexander, State and civil society, Beijing:
Central Compilation & Translation Press; Jing Yuejin, 1993, Symposium
on civil society and China’s modernization, Chinese Social Sciences
Quarterly (Hong Kong), Issue 4. In April 1991, during the annual meet-
ing of the Association for Asian Studies held in New Orleans, the western
scholars attended a symposium on “Civil Society in the People’s Republic
of China”; later in November, a small meeting was held at Wilson Center
in Washington to discuss the topic “Did China have a civil society?”.
Over May–June 1992, such top was again heatedly discussed in a sym-
posium on China’s modernization co-hosted by University of California,
Berkeley and Fudan University of China. In August 1993, the Chinese
scholars took part in an academic conference on “Civil Society and
China’s Modernization” jointly sponsored by Shanghai Historical Society
and the periodical office of the Chinese Social Sciences Quarterly (Hong
Kong) in Shanghai.
10. Such Chinese scholars as Xiao Gongqin, Zhu Baoxin and Xu Yong hold
such point of view.
11. Zhu Shiqun, 1995, Review of Chinese civil society studies, Social Science
Research, Issue 6.
12. Research Group of China Institute of Strategy and Management on Social
Structural Transition, 1998, Short- and medium-term trends and hidden
dangers in China’s social structural transition, Strategy and Management,
Issue 5.
13. Li Peilin, 1993, China in transition, International Social Science Journal
(Chinese edition), Issue 3.
14. Research Group of China Institute of Strategy and Management on Social
Structural Transition, 1998, Short- and medium-term trends and hidden
dangers in China’s social structural transition, Strategy and Management,
Issue 5.
15. Yu Keping, 1993, Socialist civil society: A new research subject, Tianjin
Social Sciences, Issue 4.
16. Jing Yuejin, 1993, Symposium on civil society and China’s modernization,
Chinese Social Sciences Quarterly (Hong Kong), Issue 4. The Polish civil
society construction was initiated by some intellectuals when the foun-
dation for market economy remained fragile in the country. But the civil
society, from the outset, was labelled as “anti-political politics”, because
these intellectuals actually used it as a bomb shelter to evade from and
resist against political authoritarianism. The Solidarność (Solidarity Trade
158 K. HAN
Union) was later founded, mainly constituted by intellectuals and posi-

tioned as a civil society organization striving for specific political and eco-
nomic interests. However, the nature of the Solidarność gradually altered
during the complex interactions with the political authorities, and became
increasingly like a party organization. Despite of the drastic changes to its
political landscape in the late 1980s, Poland saw its civil society construc-
tion neither achieve any substantive progress, nor form a normal relation
with the state.
17. Deng Zhenglai, Jing Yuejin, 1997, Construction of China’s civil society,
in Deng Zhenglai, ed., State and civil society: The Chinese perspective,
Chengdu: Sichuan People’s Publishing House, pp. 14–16.
18. Translator’s note: “sanwu” people: people without identification papers, a
normal residence permit, and a source of income.
19. Deng Guosheng, 2006, Policy thinking on cultivation and development
of charitable organizations, Social Science Research, Issue 5.
20. Deng Guosheng, 2006, Policy thinking on cultivation and development
of charitable organizations, Social Science Research, Issue 5.
21. Liang Qizi, 2001, Charity and civilizing: Charitable organizations in
Ming and Qing Dynasties, Shijiazhuang: Hebei Education Press, pp. 2–3.
22. Wang Jianjun, 2005, Development and functions of Chinese non-govern-
mental organizations, China Civil Affairs, Issue 5.
23. Tian Kai, 2004, Noncoordinate constraint and organizational operation:
A framework to study the relationship between China’s charitable organiza-
tions and the government, Beijing: The Commercial Press, p. 94.
24. Fan Baojun, 2005, Address to the international symposium on comparison
of charity laws, in China Charity Federation, China charity yearbook 2004,
Beijing: China Society Press, p. 3.
25. Ministry of Civil Affairs of the PRC, 2017, China civil affairs’ statistical
yearbook 2017, Beijing: China Statistics Press, p. 11.
CHAPTER 7
Social Quality Theory

and Its Enlightenment to China’s
Welfare Reform
7.1 Main Content of Social Quality Theory
7.1.1 Concept of Social Quality

Social quality theory is a new social theory popular in Europe in recent
years. Wolfgang Beck, the founder of the social quality theory, and some
other scholars, defined social quality as “the extent to which people are
able to participate in the social and economic life and development of
their communities under conditions which enhance their well-being and
individual potential”.1
According to Alan Walker, the concept of social quality dates back to
the early 1990s. At that time, the European Commission held a num-
ber of meetings to discuss the work of the commission’s two watch-
dogs (respectively on social exclusion and the elderly). A key conclusion
reached at the end was that there is an unequal relationship between eco-
nomic policy and social policy, and the former tends to further narrow
down the latter’s content and scope, which is the primary cause for the
crisis in the European social policy.2
Han Keqing, 2011, Social quality theory: A new perspective to examine China’s
welfare reform, Teaching and Research, Issue 1; Han Keqing, 2010, Social quality
theory: A research overview, Soochou Academic, Issue 1.

https://doi.org/10.1007/978-981-32-9660-2_7
160 K. HAN
The concept of social quality has provided a new vision for the possi-
ble connotation of the European social model. Such concept endeavors
to change the unequal relationship between social and economic policies,
so as to subordinate them to the goal of social quality.3 The emergence
of social quality theory marks a new turn in the European welfare reform
and social model. At present, the European social model is being threat-
ened, which is the primary challenge to the European social policy. It is
by no means a technical problem about the design of social protection
system, but about welfare, or in the final analysis, it is about the social
life of millions of people: Which kind of socioeconomic security will they
have and how about its development level? Which form of civic rights
will they have? Will there be social inclusion or exclusion? The European
social model is no doubt in need of an all-round reform, but it is the cur-
rent reform orientation that brings about this question: to maintain the
minimum standard or pursue social quality?4
The European welfare state model is an important reference for
China’s current welfare reform. The emergence of the social quality the-
ory and the corresponding shift of European social model are sure to
affect the ongoing construction of the Chinese social welfare system.
7.1.2 Constituent Elements of Social Quality

Social quality, in essence, is influenced by three types of factors,
i.e., constitutional factors, conditional factors and normative factors.
Social system is constructed by people’s actions, while social quality is
the consequence of these actions. Therefore, when analyzing social qual-
ity, we shall firstly analyze the constitutional factors (e.g., personal abil-
ity, social cognition and social response). Meanwhile, as people’s social
constitutional activities are bound to be guided by certain social norms,
and individual activities are based on the recognition of their collec-
tive identity, thus making normative factors (including social solidarity,
social trust, etc.) also need to be examined. These normative factors are
of strong ideological significance, meaning that we cannot ignore their
influence on social quality at both the individual level and social level (as
an ideology).5
Conditional factors, the third type of influencing factors, are actu-
ally the core of social quality. They include four constituent elements:
“socioeconomic security”, “social cohesion”, “social inclusion” and
“empowerment”.
7 SOCIAL QUALITY THEORY AND ITS ENLIGHTENMENT TO CHINA’S … 161
The first constituent element is “socioeconomic security”, its thematic

event involves the following two aspects: one indicates citizens’ basic
survival safety (income, social protection and health), basic everyday life
safety (food, environment and workplace), and their welfare supply (free-
dom, security and justice within the territory of their homeland), the
focal point is to deal with people’s social crisis. The other one, which
concerns people’s daily opportunities, aims to expand the domains where
different theoretical schemes may be applicable.6 Specifically, some basic
conditions and relevant systems are required to ensure “socio-economic
security”, e.g., guaranteed income, job opportunities, living conditions,
housing, education, health care, social network and available time. When
examining these factors, we usually use GDP, per capita income and UN
human development index to reveal the level of socioeconomic develop-
ment. When studying social quality, we usually use the indicators about
various social security projects to reveal the situation of social security.
The second constituent element is “social cohesion”. The concept of
social cohesion has a long history both in science and in politics, and
now it has, together with the other concepts and their connotations
(e.g., inclusion, exclusion, integration, disintegration and social disor-
ganization), extended into a broad conceptual scope. Friends, families,
neighbors and local communities are the most important forms of social
relationships. But social cohesion is not limited to local autonomy and
micro level.7 The degree of social cohesion reflects the normative foun-
dation of a society. Given this, social trust becomes the core issue when
examining this constituent element, and that’s why people have to exam-
ine all types and levels of social trust, as well as the relationship between
interpersonal trust and institutional trust in different societies, in case of
any social quality study by country.8
The third constituent element is “inclusion”, which is closely asso-
ciated with exclusion. The thematic event included in social qual-
ity is citizenship, which refers to the possibility of citizens in taking
part in economic, political, social and cultural systems and institutions.
Participation in public affairs has three dimensions: possibility of con-
necting and defending identified interests (material); assurance that
public autonomy and citizens’ private autonomy are guaranteed (proce-
dural); and voluntary participation (individual).9 Specifically, social inclu-
sion examines social quality from the aspects of social structure and social
integration. Social inclusion has multiple dimensions, including inter-
personal relationships, community and neighborhood relationships, as
162 K. HAN
well as social organizations and the state. Improving social inclusion is

able to reinforce existing social structure, accelerate individuals’ social-
ization process and promote social empowerment.10 Social inclusion
integrates people into social system, and enables them to be involved
in various social relationships related to daily life. Thus, it is possible for
us to figure out the exclusion of societies by examining their inclusion
(or integration).11
The fourth constituent element is “empowerment”. Social quality
is essentially an action-oriented concept, thus endowing some special
significance to such constituent element as empowerment. Its attrac-
tion is manifested by such popular slogan as “invest in the people”.
Empowerment seems easy to be instrumentalized and also applicable to
many policy areas. The thematic event of empowerment may be defined
as broadening the range of choice for people and upgrading their basic
needs at early stage through top-down approaches. Since this con-
cept focuses on people’s ability, and people’s social relationships are the
most valuable resource,12 empowerment is hence a question of how to
enhance and develop personal ability in social relationships,13 while social
empowerment is a question of building up people’s social action ability
through improvement of social relationships.14 For this reason, the social
quality index system covers the indexes of how easy it is for people to
obtain political information, their access to information, and their rights
to participate in and discuss political affairs. On one hand, social partic-
ipation enhances people’s social right and cognitive right; and on the
other hand, social quality is reflected by people’s participation in social
affairs (including their ability, willingness and passion in doing so), the
social quality theory highlights the importance of building civil society
and developing non-governmental organizations, and regards them as a
basic approach to attain social empowerment.15
Thus, the social quality theory has drawn a four-dimensional table
involving individuals and society. In Fig. 7.1, individual development and
social development constitute the two poles of one axis, while the action
subject (community, family/group), together with the environmental
and conditional factors (system, institution and organization)—where
the action subject organizes activities—constitute the two poles of the
other axis. These two axes form a coordinate system. In the four quad-
rants of the coordinates, if we look at social and environmental factors
(system, institution and organization), then social quality is reflected by
the level and degree of socioeconomic security that the society provides
for people to live. But if we look at individuals, then their opportunity to

enter social system and possibility to be integrated into the mainstream
society—both are provided by the society, as well as openness of the soci-
ety itself, are able to reflect social quality of the society. The “horizontal”
and “vertical” connections between these factors thereby become the
four constituent elements for examining social quality.16
7.1.3 Methodology for Social Quality Study

The social quality study does not focus on such indicators as economic
growth and GDP, but on the comprehensive analysis of the above four
constituent elements. However, these constituent elements are not sub-
ject to special study respectively, because social quality theory aims to
reveal their interrelations, and then interpret the situation of the entire
society through analysis of these relations. On this basis, social quality
study is expected to discuss a great number of issues and topics about
social policy:
A reasonable research technique for social quality theory is to exam-
ine a series of material indicators related to socioeconomic conditions,
including the coverage rate of the social security system, the category of
social security programs, people’s income and employment status, hous-
ing subsidy, and provision of public medical services. Besides, there are
also the indicators associated with environment (i.e., people’s living con-
ditions) and education, which are able to reflect the quantity and quality
of public subsidies and services, based on the social security system, that
are granted to people. The employment indicator is about employment
rate, work-related injury rate and employment situation (fixed or partial
employment). These indicators, if being used and compared, will reflect
the general situation of socioeconomic security and material life in the
framework of social security system. Of course, a simple listing of indi-
cators cannot effectively describe the social quality of a society, which
means that we shall dig into the social background of these indicators
after data analysis, and finally build an internally logical and explicable
connection between the social quality framework and these indicators.
In addition, social quality can also be measured from the perspective
of social norms. Social quality theory, with social cohesion as its central
issue, studies social quality at the level of social value. The surveys of
interpersonal and interinstitutional trust thus become a core to the analy-
sis of social quality. In other words, when examining the social quality of
164 K. HAN
a society, we shall look into the degree and type of social trust owned by
people, and the trust relationships formed between people, between peo-
ple and institutions, and between institutions.17
The measurement of social quality can be achieved not only by the
measurement of material indicators, but also by that of subjective indi-
cators. Just like life quality study uses subjective satisfaction to reflect
life quality, social quality study can also use some subjective indicators
to demonstrate social environment state and people’s welfare state. In
fact, in comparative analysis, people’s assessment of the social quality of
each society is highly subjective, and they are also influenced by the cul-
tural values and mainstream ideologies of their societies. Some poorer
developing countries, take India and Thailand for instance, do not agree
that their social quality ought to be inferior to that of developed econ-
omies like the United States. Even though when we assess the develop-
ment course of the same country, such as the Soviet Union and eastern
European states, it is difficult to assert that their social quality after the
market-oriented reform is higher than before. Therefore, we’d better
examine the social material life indicators in an all-round manner, so as
to comprehensively reveal the basic material conditions and people’s
wellbeing of the concerned society.
7.2 Social Quality Study in the Chinese Context

Like other east Asian countries, China also experienced the baptism of
European civilization either positively or passively in modern times. No
matter it was the new cultural movement after the 1911 revolution or
the transition to market economy since the 1978 reform and opening
up, all of them are imprinted by the join forces of western values and
indigenous traditions.
7.2.1 Birth of the Social Quality Concept in China

Interestingly, some Chinese scholars also put forward the social qual-
ity concept and conducted systematic researches in the 1990s, but it
was a pity that the academic circle failed to carry on these discussions.
Wang Huning argued that social quality represents the degree of non-
political orderliness of a society, i.e., to what extent a society can achieve
self-organization without political control and coordination.18 According
to Wu Zhongmin, a society has to constantly meet its internal specific
requirements and demands while it is functioning and developing, some

peculiarities of this society will show up during this process, and social
quality is just a sum of these peculiarities.19 Through comparison, the
notions of these two scholars indeed have something to do with the con-
temporary European theories in this regard, but not identical to them.
Moreover, the social quality studies of these Chinese scholars are not in
the same context.
The above two scholars seem to have different disciplinary back-
ground and different definitions of the social quality concept, but in
the final analysis, they do have a great deal in common, e.g., they have a
strong national sentiment, discuss the social quality issues from the per-
spective of the social transformation and political order reconstruction
during China’s modernization process, and put forward the principled
indicators for measuring social quality. In his subsequent studies, Wu
Zhongmin concluded that social quality has six basic features, i.e., onto-
logical, efficient, adaptable, unobstructed, coordinative and reliable. In
addition, based on their performance in meeting their internal require-
ments and demands while they are functioning and developing, societies
are generally divided into high-quality, general-quality and low-quality
ones.20 Wang Huning, based on the two types of modern societies
(politically ordered and non-politically ordered), further divided societies
into four basic categories: (i) low degree of political orderliness; (ii) high
degree of political orderliness; (iii) low degree of non-political orderli-
ness; and (iv) high degree of non-political orderliness. The Chinese soci-
ety falls into the second category, said Wang, and he also added that
whether a society is able to reconstruct its political order is decided by
the possibility of changes to its social quality.21
7.2.2 Content of Social Quality Study

According to Wu Zhongmin, there are two types of social quality study
based on their varied contents: (1) The theoretical study on social qual-
ity, mainly about the essential characteristics and basic qualities of social
quality; classification of social quality; various factors and variables that
affect social quality. (2) The applied study on social quality, which mainly
involves the measurement methods and indicator system for social qual-
ity (including both objective and subjective indicators); designing of
an ideal social quality model and its specific technical solutions; social
quality study by nation; concrete measures for optimizing social quality.
166 K. HAN
Besides, social quality variation is also triggered by such factors as irregu-

lar economic fluctuation, variation of social structure, unrestrained pop-
ulation expansion, faults in operation and control, negative changes in
environment, and any other abnormal changes.22
The social quality indicator system is divided into two categories by
Wang Huning: material indicator system and value indicator system. The
former consists of historical development path; economic development
level; population; communication (transportation and communications);
education; culture. The latter is made up of integration; independence;
self-discipline; stability; adaptation; openness. Material and value indica-
tors move synthetically to act on social quality.23
In recent years, some Chinese scholars are keenly interested in social
quality theory and actively introducing it into domestic academic soci-
ety. Lin Ka insists that the study of social quality theory is conducive to
the comparative study of social policies, and to exploration of the char-
acteristics of the “Chinese social model”. Social quality theory advocates
social solidarity and harmony, opposes the American-style privatization
orientation, takes the “European social model” as its objective, and
hence sets up a specific analytical framework: centering on the concept of
“social solidarity”, inheriting the “society”-oriented sociological thought
(upheld by Comte and Durkheim), and highlighting people’s interde-
pendence in groups, communities and society. Social quality theory,
which is characterized by its logical starting point of “sociality”, follows
the principle of social integration (including “integration” of social sys-
tems, social interests, classes and strata), and seeks to improve the overall
social welfare condition by expanding public participation. Based on the
above values, social quality study has such ideas as social solidarity, social
inclusion and social empowerment linked with each other organically,
and lays a social philosophical foundation for studying the issues about
social harmony.24
7.3 Enlightenment of Social Quality Theory

to China’s Welfare Reform
Since 1949, China once saw its traditional social welfare system, which
had been prevailing in the era of planned economy, deeply imprinted
by the welfare models in the Soviet Union, eastern European and
other socialist countries. However, after the reform and opening up,
the thought of neoliberalism began to penetrate into the Chinese ideas

about social welfare system, and succeeded in influencing the system
design in the end. Such situation has altered in recent years. While the
market economic reform keeps deepening, the social contradictions and
risks are intensified, which has increased the weight of welfare system
design and development in the government’s work agenda. To reflect the
practical needs, the Chinese welfare ideas are shifting from liberalism to
social equity and justice, and the welfare system construction not only
supports market economic reform, but promotes political stability and
social construction. Meanwhile, the role of social policy as a “maidser-
vant” in economic life has been increasingly questioned and challenged.
By placing the social quality theory in the context of modern China,
we will be clearly aware of the urgency of China’s social construction and
comprehend its direction. The aim of social quality theory is to make
social and economic policies subordinate to social quality, and ultimately
achieve the goal of social harmony. It means that social policymakers
shall think about and choose a European social model to imitate, a kind
of security system and its scope of coverage, forms of civic rights, social
inclusion or exclusion, minimum standards or social quality.25
The European welfare state model is an important reference for
China’s current welfare reform. It is no doubt that the social quality the-
ory and European social model are an important inspiration and refer-
ence for us to think over China’s social welfare system which is being
built. For example, there are two options for us to choose: one is the
European welfare state model (minimum standards), the other is to
enter the stage of social quality directly without exercising the mini-
mum standards. The development of Chinese market economy will not
be stalled by welfare reform, there are great potentials for the develop-
mentalism centered on economic growth. However, while promot-
ing economic growth and market economic reform, we shall consider
simultaneous advancement of social policies and economic develop-
ment, and the significance of economic development for upgrading social
quality.
In the eyes of the European social quality theorists, citizens may work
hard in four aspects to improve social quality: degree of economic secu-
rity; level of social inclusion; scope of social cohesion and solidarity;
autonomy and empowerment. Given this, when discussing social quality
issues in the context of China’s situations, we shall pay special attention
to these aspects.
168 K. HAN
7.3.1 Economic Development Is the Main Route

to Improve Social Quality
Economic development is the main route to relieve poverty and ensure
people to access to high-quality employment and income security. No
matter it is the EU or China, they regard economic security as the most
essential basis for improving social quality. The EU sets the goal of soci-
oeconomic security to create better employment environment and social
protection, maintain people’s living standard, and safeguard their rights
to access to such resources as income, education, health care, social ser-
vices, sound environment, public hygiene and personal safety, etc.26 In
China, eradicating poverty and maintaining a good momentum of eco-
nomic growth are the most effective ways to ensure people’s job oppor-
tunities and income and improve national welfare treatment, and also the
most essential ways to improve social quality as proved by the social prac-
tice since the reform and opening up.
7.3.2 Political Democracy Is an Important Symbol of Social Quality

No matter it is the European researchers that founded the social quality
theory or the Chinese scholars that are keen on studying this subject, they
seem to avoid the relationship between social quality and politics (or the
political factors in social quality), either knowingly or unknowingly. In an
integral society, political system is the most essential social system, especially
for China—a country with a tradition of centralization of state power—
political power is the core of all powers. Moreover, political democracy is an
important symbol of a high-quality society, and also an effective means to
curb such wrongdoings as power-for-money deal and corruption, ensure an
open and transparent process of public administration, and safeguard legit-
imate acquisition of civil rights. In addition, China’s welfare system has an
authoritarian tradition, implying that China’s social quality is bound to be
intervened and promoted by state power. Therefore, political democracy is
an unavoidable issue when talking about social quality in China.
7.3.3 Cultivation of Civil Society Is an Important Aspect

for Improving Social Quality
If regarding the entitative civil society as a continuum, then such con-
tinuum in China seems unworthy of the name. Since the reform and
opening up, the rapidly developing market economy and the resulting
changes in social structure have made the development of civil society

in China as a conscious activity. The development of market economy
has not only cultivated independent market players, equal and mutually
beneficial contractual relationship, free and unrestrained personality con-
sciousness, but redefined property relations, the principles for posses-
sion and distribution of social capital and personal property, which are
all necessary conditions for forming a civil society. Since the reform and
opening up, China has seen the development of civil society and con-
struction of welfare system almost maintain the same pace. In terms of
providing social welfare services, we shall give full play to the tradition of
mutual assistance among individuals, family members and neighbors, and
encourage community-based welfare services, which not only reduce the
cost in enjoying welfare services, but increase the effectiveness of social
welfare, so as to realize benign interaction between government and civil
society in the field of social welfare, promote social integration, harmo-
nize the interpersonal and family relationships that tend to be increas-
ingly utilitarian and money-oriented.
7.3.4 Equal Opportunities Are Indispensable for Social Quality

Opportunity refers to the possibility space and leeway for survival and
development of social members. At the beginning of the reform and
opening up, due to the influence of the egalitarian distribution since the
founding of new China, the income gap between the Chinese people
was not evident, i.e., the social members actually had an equal starting
point on the whole. The relatively separated urban–rural identities were
attributed to the long-standing urban–rural dual structure. During the
progressing reform and opening up process, social members have more
opportunities to share the economic benefits, the initially equal starting
point is gradually replaced by inequality as result of social differentiation.
Currently, China’s urban–rural dual structure, household registration
system, work unit system and bureaucracy nature are a formidable obsta-
cle to both equal opportunity and social quality.
7.4 Conclusion
Social quality theory has some positive significance for us to form value
orientation in pressing ahead with social construction and to reflect on
development of social policies. What’s more, this theory also brings
170 K. HAN
along some ideas with policy implications for the practical approaches to
promote welfare reform.
In a nutshell, social quality theory provides us with a new perspective
for social science research, and inspires the theoretical circle to reexamine
the future prospect of human society. For the ongoing welfare reform
in China, social quality theory and the social development model that it
advocates provide us another universal value about welfare, and enable us
to think about China’s social welfare system and the direction of social
development from a strategic height. While examining China’s national
conditions with social quality theory, we will obtain more choices and
references for China’s existing welfare reform.
Notes
1. Beck W., Maesen L., Walker A., ed., 1997, The social quality of Europe,
The Hague, Netherlands: Kluwer Law International, pp. 267–68.
2. Walker A., Social Policy in the 21st century: Minimum standards or social
quality? In the 1st international symposium and lectures on social policy,
Tianjin: Nankai University, 2005, p. 11.
quality? In the 1st international symposium and lectures on social policy,
quality? in the 1st international symposium and lectures on social policy,
5. Lin La, 2010, Social quality theory: A new perspective to study the con-
struction of a harmonious society, Journal of Renmin University of China,
Issue 2.
6. Beck W., Maesen L., Thomése F., Walker A., ed., 2001, Social quality: A
vision for europe, The Hague, Netherlands: Kluwer Law International, p. 334.
vision for Europe, The Hague, Netherlands: Kluwer Law International,
pp. 336–38.
8. Lin Ka, 2010, Social quality theory: A new perspective to study the con-
Issue 2.
vision for Europe, The Hague, Netherlands: Kluwer Law International,
pp. 338–39.
10. Herrmann P., 2005, Social quality-opening individual well-being for a
social perspective, Alternative, Vol. 4, p. 21.
11. Walker A., Wigfield A., 2003, The social inclusion component of social qual-
ity, Amsterdam: EFSQ, pp. 1–31.
12. Beck W., Maesen L., Thomése F., Walker A., ed., 2001, Social quality:
A vision for Europe, The Hague, Netherlands: Kluwer Law International,
p. 340.
13. Ward P., et al., 2006, Operationalzing the theory of social quality:
Theoretical and experiential reflections from the development and imple-
mentation of a pubic health programme in the UK, The European Journal
of Social Quality, Vol. 6, Issue 2, pp. 9–18.
14. Steffens P., de Neubourg C. R. J., 2005, European network on indica-
tors of social quality: Summary of the Dutch national report, European
Journal of Social Quality, Vol. 5, Issues 1&2, pp. 194–96
Issue 2.
Issue 2.
17. Lin Ka, Gao Hong, 2010, Social quality theory and construction of har-
monious society, Journal of Social Sciences, Issue 3.
18. Wang Huning, 1989, China: Social quality and new political order, Social
Sciences, Issue 6.
19. Wu Zhongmin, 1990, Discussion on social quality, Sociological Study,
Issue 4.
Issue 4.
Sciences, Issue 6.
Issue 4.
Sciences, Issue 6.
Issue 2.
25. Walker A., 2005, Social policy in the 21st century: Minimum standards or
social quality? In the 1st International Symposium and Lectures on Social
Policy, Tianjin: Nankai University, p. 15.
26. Walker A., 2005, Social policy in the 21st century: Minimum standards or
social quality? In the 1st International Symposium and Lectures on Social
Policy, Tianjin: Nankai University, p. 12.
CHAPTER 8
“Third Way” Theory and Chinese

Way of Welfare Reform
8.1 “Third Way” Theory for Social Welfare

The main purpose of social welfare is to improve the living conditions
and quality of life of social members. The state plays an essential role in
this institutional arrangement, because in most cases it is both developer
and supervisor of welfare policies. Therefore, the institutional arrange-
ment of social welfare is closely related to party politics. On the one
hand, social welfare system is a crucial means for political parties to sus-
tain their legitimacy. On the other hand, social welfare system exerts an
important impact on party politics and even the entire political system.
In a specific sense, welfare politics is not only a powerful means for the
ruling party to maintain legitimate domination, but also as lofty as a
political ideology and even a value for the entire society.
A classic case to reflect the impact of social welfare theory on party
politics is Anthony Giddens’ “Third Way” theory. In his The Third Way:
The Renewal of Social Democracy (1998) and Beyond Left and Right:
The Future of Radical Politics (1994), Giddens elaborated on the cen-
tral points of the Third Way. Like some other scholars, Tony Blair, the
then British Prime Minister and the leader of the Labour Party, was
greatly inspired by Giddens. There was a pamphlet titled The Third Way:
Han Keqing, 2010, “Third way theory” and Chinese way of welfare reform,
Tianjin Social Sciences, Issue 2.

https://doi.org/10.1007/978-981-32-9660-2_8
174 K. HAN
New Politics for the New Century that even bore the signature of Blair.1
And Giddens himself is since then frequently referred to as the guru
of Blair.2
In the vision of welfare politics, the First Way refers to the tradi-
tional social democratic path that had dominated the western society
for 30 years from the late 1940s to the early 1970s. The Second Way is
the neoliberal path that was prevailing in the West for nearly two dec-
ades from the late 1970s to the mid-1990s.3 Giddens argued that social
democracy and neoliberalism are two separate disciplines in political phi-
losophy, while the Third Way is a synthesis of social democracy and neo-
liberal thought.
8.1.1 Political Ideal of the Third Way

Giddens for the first time defined the political objective of the Third
Way as to deal with the relationship between individuals and the times
where they are in. According to Giddens, the general political objective
of the Third Way shall be the one that helps citizens identify their own
direction amid the tremendous changes in this era. And these changes
involve globalization, transformation of the lives of individuals, and our
relationship with nature.4 The Third Way advocates such values as equal-
ity; protection of vulnerable groups; autonomy and liberalism; rights
based on responsibility; authority based on democracy; cosmopolitan
pluralism; and philosophical conservatism. And the Third Way is fulfilled
through the radical center; new democracy (free from enemies); aspiring
civil society; democratic families; new-type mixed economy; equality and
inclusion; positive welfare; social investment state; cosmopolitan state;
and cosmopolitan democracy.5
The Third Way political ideal, which was put forth by Giddens, is
in essence an ideal social form that includes the all-round development
of politics, economy and culture, following the step of the predecessor
political philosophers, like Plato with his Politeia and Moore with his
Utopia. But Giddens’ theory indeed has some uniqueness, it is not only
a general description of social ideal, but also contains the developmental
characteristics of modern (European) society, i.e., the multiple elements
of welfare politics; among them, the most core content is still the role
positioning of the state and government.
8 “THIRD WAY” THEORY AND CHINESE WAY OF WELFARE REFORM 175
8.1.2 State View of the Third Way

Giddens held that a government exists for the following purposes:
(1) provide channels for the expression of various interests; (2) provide
a venue for harmonizing the competing demands for these interests;
(3) create and protect an open public domain where the debates on pol-
icies may continue unrestrictedly; (4) provide a wide variety of public
goods, including all forms of collective security and welfare; (5) regulate
the market for the public interest, and foster market competition in the
presence of monopoly threats; (6) foster social stability through violent
means and law enforcement of police institutions; (7) actively develop
human resources through its central role in education system; (8) safe-
guard an effective legal system; (9) play a direct economic role as a major
employer in intervening macro-and micro-economies and in providing
infrastructure facilities; (10) the government also has a purpose of indoc-
trination (though it is still controversial): while reflecting the norms and
values that are generally upheld, the government also helps shape these
norms and values through the education system and other instruments;
and (11) foster regional and international alliances to achieve global
goals.6
Authority and legitimacy of the state, both shall be reconstructed on
a positive basis, is summarized by Giddens as follow: (1) the state shall
make structural adjustment in response to globalization; (2) the state
shall expand the function of the public domain, meaning that the state
shall launch more transparent and more open constitutional reforms,
and adopt new anti-corruption measures; (3) where there are no exter-
nal enemies, the state shall raise its administrative efficiency to retain or
regain its legitimacy; (4) under the downward pressure from globaliza-
tion, it is both possible and quite necessary to replace traditional voting
model with new forms of democracy; (5) for any state free from external
enemies, its legitimacy increasingly depends on its ability to manage risk;
and (6) democracy is not a regional or national phenomenon, in other
words, upward democratization may not be limited by region, the state
shall have a global vision.7
A new-type democratic state (without external enemies) shall have
the following characteristics: (1) delegation of power; (2) bidirec-
tional democratization; (3) updated public domain: more transparent;
(4) improved administrative efficiency; (5) direct democratic mecha-
nisms; and (6) government playing a role as “risk manager”.8 In order
176 K. HAN
to achieve delegation of power and democratic governance of the state,

according to Giddens, there shall be an inclusive civil society beyond the
state.
8.1.3 Society View of the Third Way

Giddens advocated to foster a civil society beyond the government and
build a partnership between government and civil society. “Cultivating
an active civil society is an essential component of the Third Way pol-
itics”.9 The revival of civil society is based on the following factors:
(1) government and civil society as partners; (2) revitalization of com-
munities by stimulating local initiatives; (3) involvement of the third
sector; (4) protection of local public domains; (5) community-based
crime prevention; and (6) democratic families.10
Giddens highlighted to build an inclusive society. “The new politics
defines equality as ‘inclusion’ and inequality as ‘exclusion’… ‘Inclusion’,
in its broadest sense, means citizenship, and the civil rights, political
rights and corresponding obligations of all social members not only in
form, but also in the reality of their lives. It also means opportunity and
participation in public space. In a society where work is crucial for main-
taining one’s self-esteem and living standard, the possibility of getting
employed is an important implication of ‘opportunity’. Whereas educa-
tion is another vital opportunity, though it may not be imperative for
acquiring a job”.11 “The concept of ‘exclusion’ is not a mechanism that
divides social hierarchy, but excludes the people of certain groups from
the mainstream of society”.12
An inclusive society takes on the following characteristics: (1) equality
that symbolizes inclusion; (2) limited meritocracy; (3) revival of public
space (civil liberty); (4) society “beyond labor”; (5) positive welfare pol-
icy; and (6) social investment state.13
8.1.4 Welfare View of the Third Way

Giddens split the European welfare states into four types: (1) The British
welfare system attaches great importance to social services and health
care, but the level of welfare treatment is determined by the level of
income. (2) In the Scandinavian or Nordic countries, the welfare sys-
tems are based on high taxes, following the basic principle of making
benefits available to every citizen, providing generous welfare payments
and well-funded state services (including health care). (3) The central
European countries fail to input much into social services, but they allo-
cate a large amount of funds into other forms of welfare. Employment
is the main route to obtain welfare, and social insurance is the dominant
source for welfare fund. (4) The welfare systems of southern European
countries are similar to those of central European countries, but have a
smaller coverage and less welfare programs.14
Giddens argued that the state shall provide positive welfare. The wel-
fare state is facing a dilemma nowadays, said Giddens, “where it pro-
vides more welfare benefits, there may be more risks of moral hazard
and fraud”.15 As a result, “whenever it is possible, pour investment into
human capital, rather than direct financial assistance. In order to replace
the concept of ‘welfare state’, we shall put forward the concept of ‘social
investment state’, which applies to a society carrying out positive welfare
policies…In a more general sense, we shall realize that reorganization of
welfare supply is ought to be combined with vigorous development of
civil society”.16 “It is the welfare system that benefits the majority of the
population that can produce a common civic virtue. If ‘welfare’ only has
a negative connotation and tilts towards the poor, then it is sure to cause
social differentiation”.17
In short, what should an actively reformed welfare state - a social invest-

ment state among positive welfare states - look like? Welfare spending,
which is understood as ‘positive welfare’, will no longer be defined and
allocated solely by government, but provided by government and other
institutions (including enterprises) through cooperation. The welfare soci-
ety herein not only refers to the state, but extends above and below the
state…Every negative concept put forward by Sir Beveridge is replaced
by a positive welfare idea: deficiency by autonomy, disease by positive
health, ignorance by lifelong learning, misery by happiness and laziness by
creativity.18
In general, the Third Way social welfare theory upheld by Giddens at

least contains the following three basic viewpoints:
First, build a positive welfare system which has four prominent fea-
tures: (1) Effectively deal with crisis and seek for development. Dealing
with crisis is not to simply guarantee individuals and ethnic groups
to overcome crisis, but provide resources to take advantage of the
favorable factors in the crisis and seek development opportunities.
178 K. HAN
For example, motivate welfare recipients to give up aid and return to

workplace or support workers to throw themselves into certain indus-
tries. These proactive responses to crises (giving up aid and devoting into
certain industries) often yield to positive consequences for both indi-
viduals and society (e.g., regaining self-reliance and self-esteem, cutting
unemployment rate and stimulating economic growth). (2) Welfare
includes satisfaction of both economic and spiritual needs. The former
is over-emphasized by traditional welfare system, while the latter is
reflected by provision of individual counseling. (3) Develop social wel-
fare from the perspective of human capital, i.e., stick to the principle of
social investment in addition to meeting economic demand. (4) Invite
more third-party institutions to take part in offering welfare benefits,
e.g., voluntary organizations external to government, charitable groups,
automatic organizations, non-profit organizations and social entrepre-
neurship. Increasing participation of these institutions will, on the one
hand, improve the top-down distribution of benefits to satisfy the needs
of diverse communities; and on the other hand, promote the develop-
ment of civil society and boost its vitality.
Second, build a social investment state. Giddens believes that social
investment will help government intervention rewarded, and generate
social benefits such as reducing unemployment rate. At the micro level,
the strategy of social investment motivates people to positively face cri-
sis and stand on their own through various public offerings (includ-
ing welfare). At the macro level, it requires the government to actively
participate in socioeconomic activities, cooperate with and encour-
age non-governmental institutions to contribute to the overall social
development.
Third, develop a new type of mixed economy. Giddens acknowledges
the role of private enterprise and believes that the government is respon-
sible for investing in people and constructing infrastructure to give full
play of corporate culture. Government and enterprises shall, for the sake
of public interests, fully cooperate with each other to make use of market
forces. No matter at the transnational, national or even regional levels,
government management and intervention and laissez-faire shall remain
balanced. Obviously, Giddens attaches great importance to the posi-
tion of private enterprises in society. The focus of the new-type mixed
economy is how to utilize the strength and favorable position of private
enterprises, which is a deviation from the previous strategies of state-
owned enterprises and social market.
8.2 “Leftist” and “Rightist” Stages in China’s

Social Welfare Construction
As mentioned above, China’s social welfare system has roughly gone
through two stages of development since 1949. Based on contrary ide-
ological characteristics, there are “leftist” welfare stage in the era of
planned economy, and “rightist” welfare stage at the initial phase of the
market economy.
8.2.1 “Leftist” Welfare in the Era of Planned Economy

In the era of planned economy, the state power had been widely and
deeply penetrated into Chinese citizens’ social and economic life, col-
lectivist and egalitarian values were dominating every aspect of social
life, and the labour market was dictated to realize full employment to
the greatest extent. The social welfare system, which was imprinted by
such communist ideologies prevailing in the Soviet Union and eastern
European socialist countries, was typically a “leftist” welfare system. The
author hereby summarizes the characteristics of such welfare system as
follows: (1) Welfare arrangement was subject to ideological needs. The
welfare system at the time imitated the Soviet Union practice to mani-
fest the status of Chinese people as masters of the country and socialism
is superior to capitalism. (2) The value orientation of egalitarianism. In
the era of planned economy, the economic and social structure of China
was typically an urban–-rural binary partition; however, the binary wel-
fare system was sticking to extremely equalitarian benefit distribution.
Despite of certain influences from the “cadre-citizens-farmers” hier-
archy, China’s welfare distribution was relatively equal on the whole.
(3) Welfare system on the whole played a small role in the CPC’s rul-
ing. After the founding of new China, such feudal concepts of “seizing
political power by force, enjoying power at ease” and ruling concepts as
“without the Communist Party there would be no new China” remained
foundation for governance, making the welfare system like an appendage
to politics. (4) Low-level welfare system design. In the era of planned
economy when the material foundation was relatively weak, various bills
and receipts, grain and oil supply rationing system, and all-inclusive unit
welfare and collective welfare jointly sustained a relatively egalitarian but
low-level national welfare system.
180 K. HAN
8.2.2 “Rightist” Welfare in the Early Years

of Market Economic Reform
Since the reform and opening up, China’s social welfare undertaking has
gone through a process from work unit welfare and collective welfare
to “de-welfare” reform. Under the powerful impact of market forces,
this process follows the path of marketization reform guided by neolib-
eralism: remove the unit welfare and labor protection welfare borne by
enterprises and institutions in the context of planned economy, restruc-
ture state-owned and collective enterprises to help them “cast off bur-
dens”, build a new welfare system that adapts to market economy and
eventually facilitates the market economic reform. Guided by such
thought of reform, this new social welfare system seems to have com-
pletely discarded the state welfare model in the era of planned economy,
and entered a new epoch of “rightist” welfare reform led by liberalism.
According to the Suggestions Concerning Formulating the Tenth Five-
Year Plan for National Economic and Social Development by the CPC
Central Committee (2000), “a sound social security system is an impor-
tant pillar of the socialist market economic system, and concerning the
overall situation of reform, development and stability. We shall expedite
the formation of a social security system that is external to enterprises
and institutions, supported by diversified fund sources, rules and regula-
tions, and socialized management services”.19
Since the reform, China has been intensifying effort in building a
social insurance system combining enterprise contribution (for social
pooling) with employee contribution (for individual account). The emer-
gence of such reform ideas as “social welfare socialization” marks China’s
social welfare system has entered a new stage of reform on the whole.
Some people argue that the social security system being built in China
is actually a state monopolized commercial insurance system, “the basic
thought is to, based on the hierarchy and ‘egalitarian practice’ left from
the planned economy, draw a roadmap for a private capitalist social secu-
rity system, thus erasing the Chinese characteristics at the most essential
part. Such social security system, which marketizes public goods, sacri-
fices Chinese characteristics and deviates from socialism”.20
Since the marketization reform, China’s social welfare transformation
seems to be excessively marketized, thus making neoliberalism a domi-
nant idea for welfare system construction, and even affecting the system
design in the end. In recent years, while the market economic reform
is going deeper, the social contradictions and risks have been on the
rise, causing the government to pay increasing attention to welfare sys-
tem. Moreover, the welfare ideas have been transforming from liberal-
ism to those advocating social equity and justice, and the welfare system
construction is no longer a supporting measure for the market eco-
nomic reform, but an instrument promoting political stability and social
harmony.
8.3 Chinese Way of Welfare Reform

To date, Giddens’ Third Way theory has become an ideological trend
popular across the world. The basic target of such theory is to combine
the welfare state with the free market system. However, Giddens has seen
his Third Way theory criticized by other scholars since it was initiated.
Such criticisms are summed up by Giddens as follows: (1) Third Way is
an empty political scheme, hard to be controlled and lack of direction.
(2) Failing to carry on some proper leftist views, thus retrogressing to
conservatism knowingly or unknowingly. (3) Falling into the neoliberal
framework, particularly its interest in global market. (4) It is essentially
an Anglo-Saxon scheme with the characteristics of the society where
it originates. (5) Lack of a clear-cut economic policy despite of letting
market dominate everything. (6) Like its two main rivals, there is no
effective way to deal with ecological problems except providing token
recognition.21
In any case, Giddens’ Third Way is neither “semi-socialism” between
capitalism and socialism, nor “third socialism” between socialists and
communists, not even a choice between social democracy and classical
liberalism (the so-called conservatism held by Americans). To be precise,
it is actually a “third choice” between social democracy and European
conservatism, and a “third way” after liberalization of both socialism and
European conservatism. Therefore, Giddens’ proposition is not “revival of
social democracy”, but more like “liberalization of social democracy”.22
In terms of welfare state, Giddens’ Third Way theory opposes to imple-
ment welfare policies in a centralized organizational manner, and pro-
vide universal welfare for citizens. At present, the inevitable trend of the
European welfare system reform is to shift from welfare state to such inte-
grated responsibility model as “state + market” and “state + market + society”.
Of course, the prerequisite for such reform is political democracy, complete
market and mature civil society.
182 K. HAN
The welfare system reform advocated by western developed countries,

from the one wholly undertaken by government to a pluralist one with
active participation of civil society, has a completely different discourse
context from China. Since China’s reform and opening up, the liberal
appeal for restricting state power and the social democratic appeal for
expanding state welfare responsibility are not in complete opposition.
In China with a tradition of centralization, government promotion is
the key to successful social welfare reform, and highlighting the leading
responsibility of government remains the core of social welfare system
reform. We believe that to achieve the goal of welfare reform, at least in
the short term, China shall emphasize the leading responsibility of the
state in the welfare system, especially fiscal responsibility. Governments
at all levels shall increase financial support for social welfare and gradually
increase financial input into social welfare. Meanwhile, the welfare system
itself cannot be separated from the development of the market economy.
In terms of constructing welfare facilities and providing welfare services,
free market still has vast development potentials.
In case of China’s social welfare reform, the state shall remain as the
leading subject of responsibility, especially financial responsibility, but the
welfare service delivery shall mainly rely on free choice and market com-
petition. It is foreseeable that Chinese market economy will keep devel-
oping free from obstruction by welfare reform, and the construction of
social welfare system will not completely follow the market-oriented way.
We shall adhere to liberal economic development and social democratic
welfare reform, which may constitute the Chinese path of social welfare
reform and development.
Notes
1. Giddens A., 2000, The third way and its critics, Cambridge: Polity Press,
p. 3.
2. Gooby P. T., 2001, Risk, contingency and the third way: Evidence from
the BHPS and qualitative studies, Social Policy & Administration, Vol.
35, Issue 2, p. 198.
3. Feng Chongyi, 2009, The third way, in Yue Jinglun, Chen Zequn, Han
Keqing, Social policy in China, Truth & Wisdom Press, ed., Shanghai
4. Giddens A., 2000, The third way: The renewal of social democracy, trans.
Zheng Ge, Beijing: Peking University Press, SDX Joint Publishing
Company, p. 67.
5. Giddens A., 1999, The third way: The renewal of social democracy,
Cambridge: Polity Press, p. 70.
Company, pp. 50–51.
Cambridge: Polity Press, pp. 72–77.
Company, p. 81.
Company, p. 82.
Cambridge: Polity Press, p. 79.
Company, p. 107.
Company, p. 108.
Company, p. 109.
14. Scharpf Fritz W., 1998, Flexible integration, in Ian Christie, Euro visions,
London: Demos, in Giddens A., 2000, The third way: The renewal of
social democracy, trans. Zheng Ge, Beijing: Peking University Press, SDX
Joint Publishing Company, p. 7.
15. Lindbeck Assar, 1995, The end of the middle way? American Economic
Review, Vol. 85, in Giddens A., 1999, The third way: The renewal of social
democracy, Cambridge: Polity Press, p. 115.
Company, p. 122.
Company, pp. 111–12.
Company, p. 132.
19. Actively increase employment, refine the social security system, and improve
the lives of both urban and rural residents, Sections 13 and 14 of the
184 K. HAN
Suggestions concerning formulating the tenth five-year plan for national

economic and social development by the CPC Central Committee, in
Selected Important Works on Labour and Social Security in the New Era,
2002, Beijing: China Labor & Social Security Publishing House, Central
Party Literature Press, pp. 475–76.
20. Liu Fuyuan, 2006, Declaration on social security, Beijing: Social Sciences
Academic Press, p. 104.
21. Giddens A., 2000, The third way and its critics, Cambridge: Polity Press,
pp. 22–25.
22. Qin Hui, 2002, Third way or common bottom line—Contemplation on
Giddens’ third way, Tribune of Social Sciences, Issue 6.
PART II
China’s Welfare System

CHAPTER 9
Development of China’s Elderly Welfare

in the Transitional Period
9.1 Main Content of China’s Elderly Welfare

As a result of an aging population, old-age care has become one of the
prominent social problems in China during its social transitional period.
According to relevant statistics, the number of Chinese aged 65 and
above in 2016 reached 15.03 million, accounting for 10.8% of the total
population.1 And the people over 80 years old have been increasing by
5.4% year on year. What’s worse, owing to the different life expectancy
between men and women, the proportion of widowed elderly has been
on the rise, and the widowed elderly and “empty-nest” families have kept
expanding. In 1994, a survey about Beijing’s population showed that
350,000 local elderly needed long-term care. Shanghai, with 266,000
Han Keqing, Wang Honghai, Fan Caijuan, 2009, Problems and countermeasures
of urban old-age welfare policy, in Wu Zhongmin, Han Keqing, Evolution and
problems of China’s social policy, Shandong People’s Publishing House,
pp. 184–95; Guan Hui, Han Keqing, Rural old-age care policy, in Wu
Zhongmin, Han Keqing, 2009, Evolution and problems of China’s social policy,
Shandong People’s Publishing House, pp. 405–8; Han Keqing, 2004, Is land
a carrier of farmers’ social security? Academia Bimestris, Issue 5; Han Keqing,
01/24/2008, Build a welfare system that takes care of the elderly, People’s daily
(theory edition).

https://doi.org/10.1007/978-981-32-9660-2_9
188 K. HAN
residents aged over 80 in 1998, has taken the lead in becoming an aging
society. In 1999, Shanghai made public a questionnaire titled Family
and Social Support for the Elderly Unable to Take Care of Themselves,
showing the residents aged above 80 held 54% of Shanghai’s overall
elderly who are unable to take care of themselves.2 In addition, accord-
ing to the estimation made by the experts with the Chinese Journal of
Population Science, the Chinese aged 60 and above accounted for over
10% of the total population by February 20, 1999, marking China has
entered into the rank of aging population countries. In reference to the
results of the fifth national population census in 2000, the number of
the elderly above the age of 60 has reached 129 million, accounting
for 10.1% of the total population. Among them, 88 million are above
65 years old, 11 million are aged over 80, and the old-age dependency
ratio (OADR) has reached 10.0%. In 2005, Du Peng and his fellow
researchers made a prediction that the number and proportion of the
Chinese elderly will increase rapidly in the coming 50 years; by around
2055, the number of the elderly will reach the peak, those above the age
of 60, 65 and 80 will respectively reach 431 million, 342 million and
100 million, and the OADR will be as high as 60.8%.3
Dealing with the old-age care pressure brought by the demographic
changes not only a difficulty that afflicts individuals and their family,
but a serious social problem in front of the Chinese government. The
Chinese leadership has pledged that “more importance must therefore
be attached to social development on the basis of economic growth to
ensure and improve people’s livelihood, carry out social restructuring,
expand public services, improve social management and promote social
equity and justice. We must do our best to ensure that all our people
enjoy their rights to education, employment, medical and old-age care,
and housing, so as to build a harmonious society”.4 In short, in order to
fulfill the target of old-age care, we shall keep carrying forward the tra-
dition of family supporting, and make more efforts in building a welfare
system that meets the needs of the elderly.
China is a latecomer in introducing government-led elderly welfare
programs, because it has been a long tradition for the Chinese elderly
to rely on their children to support them. Since the founding of the
People’s Republic of China, the Chinese government has successively
promulgated the laws, regulations and policies on the income security,
welfare services, health care, culture, education, sports, rights and inter-
ests protection of the elderly, and also on the concerned old-age care
9 DEVELOPMENT OF CHINA’S ELDERLY WELFARE … 189
industry. A welfare policy system for the elderly, with the Constitution
of the People’s Republic of China as the cornerstone and the Law of the
People’s Republic of China on the Protection of the Rights and Interests
of the Elderly as the main body, has initially taken shape to encompass
applicable laws, administrative regulations, local regulations, rules of the
departments under the State Council and rules of local governments, as
well as the relevant policies.
9.1.1 Guarantee of Economic Income

Since 1949, China has promulgated the Labour Insurance Regulations of
the People’s Republic of China (1951), the Interim Measures for Handling
the Retirement of State Functionaries (1955), and the Interim Provisions
on Handling the Retirement of Workers and Staff (1958), and basically
established the elderly insurance system for the employees in urban
enterprises and the retirement system for the employees in government
organs and public institutions. Such systems, which are operated by a
“cash-in-and-cash-out” model, require enterprises and public institutions
to pay the pension insurance for their employees.
The Chinese economic reform since the 1980s has shaken the foun-
dation of the traditionally unit-based old-age insurance system, making
it urgent to establish a new system that adapts to the development of the
market economy. The State Council released the Decision on the Reform
of the Pension System for Staff and Workers of Enterprises in 1991, and
then supplemented it with the Circular on Deepening the Reform of the
Pension System for Staff and Workers of Enterprises in 1995, which clearly
pointed out the direction to transform the old-age insurance system from
a unit-based one into a socialized one, and established the pension fund-
ing model that combines social pooling with individual account. Later,
the Decision of the State Council on Establishing a Unified Basic Old-
age Insurance System for Staff and Workers of Enterprises was unveiled
in July 1997, providing that enterprise payment may not exceed 20%,
while individual contribution shall reach 8%, transfer a proportion of
enterprise payment into individual account, and finally create an individ-
ual account of basic pension funds with 11% of one’s capture expends
wage. In light of the Decision of the State Council on Improving the Basic
Old-age Insurance System for Staff and Workers of Enterprises, which was
released in December 2005, the individual account will be funded by 8%
of one’s capture expends wage, rather than 11%, as of January 1, 2006,
190 K. HAN
and completely from individual contributions, enterprise payment will be

no longer transferred into individual account.
In recent years, China has been gradually establishing and improving
an old-age insurance system that combines the responsibilities of govern-
ment, enterprises and individuals, and working hard to relieve the elderly
from worries about their financial resources after retirement and ensure
their basic livelihood. The NBS data show that by the end of 2016, the
number of people participating in basic old-age insurance nationwide
had reached 887.768 million, including 379.297 million urban employ-
ees and 508.471 million urban–rural residents.5 At the same time, the
poor elderly living in cities are accessible to social assistance through the
minimum living security system for urban residents.
9.1.2 Elderly Welfare Facilities

Construction of elderly care facilities is an important content of China’s
elderly welfare program. Though the situation varies from place to place
across the country, welfare houses, nursing homes and apartments for
the elderly remain the general means for adoption and placement of the
elderly without living security, and for taking care of their daily lives, pro-
viding them with medical care and spiritual consolation; their services
have been extending to the elderly with economic sources.
According to the Statistical Bulletin of Social Service Development
2016, which was released by the Ministry of Civil Affairs, the elderly care
institutions and facilities across the nation have reached 140,000, includ-
ing 29,000 registered elderly care institutions, 35,000 community-based
elderly care agencies and facilities, and 76,000 community-based mutu-
al-aid elderly care facilities; the various types of nursing beds have
amounted to 7.302 million, i.e., an average of 31.6 beds for per thou-
sand of the elderly.6 These elderly care facilities have, to some extent,
met the demands of the old people.
9.1.3 Medical Care Service

With declining physiological function, the elderly have become more
vulnerable to health risks, thus making their medical care an impor-
tant part of the elderly welfare program. In 1993, Zhenjiang City of
Jiangsu Province and Jiujiang City of Jiangxi Province were defined as
the pilot areas to implement the basic medical insurance system for urban
employees that combines social pooling with individual accounts, which

was then labeled as “Two Jiangs Model”, marking that China decided to
reconstruct the labor medicare and free medical service systems prevail-
ing in the era of the planned economy. In May 1996, the State Council
issued the Circular on the Suggestions for Expanding the Scope of the Pilot
Reform of the Employee Medical Insurance System, stating to extend the
model of combining social pooling with individual accounts to more
than 50 prefecture-level cities nationwide. In the meantime, the institu-
tional reform shall move toward the establishment of a multilevel med-
ical security system, which is constituted by the basic medical insurance
system, supplementary medical insurance system, commercial medi-
cal insurance system and social medical assistance system. In 1998, the
Decision of the State Council on Establishing the Basic Medical Insurance
System for Urban Employees was promulgated, stipulating that medical
insurance premiums shall be paid jointly by employers and employees;
the contribution of employers shall be around 6% of the total payroll,
while that of employees shall be 2% of their wage; 30% of employers’
contribution will be transferred into the individual accounts and the rest
will be transferred into the social pooling accounts. The basic medical
insurance for urban–rural residents, which is synthesis of the new rural
cooperative medical system (piloted since 2003) and the basic medical
insurance for urban residents (piloted since 2007), covers all the other
urban–rural residents in addition to those participating in the employee
medical insurance system, relies on a financing model that combines
individual contribution with government subsidy, and welcomes the sup-
port or financial assistance from collectives, units and other socioeco-
nomic organizations. As shown in the NBS data, by the end of 2016, the
basic medical insurance for urban residents had already covered 743.916
million people.7 In reference to the data from other sources, there had
been 670 million Chinese participating in the new rural cooperative
medical system in 2015, marking a participation rate of 98.80%. If the
above data are superimposed, then the Chinese medical insurance has
covered all social members.8
9.1.4 Spiritual Consolation and Other Services

In addition to material guarantee and medical care, the spiritual needs
of the elderly cannot be ignored either. In view of this, the government
supports the communities in urban areas to create leisure and recreation
192 K. HAN
venues specially for the elderly (e.g., activity stations and recreation
centers), and build culture, education, entertainment and fitness facil-
ities, so as to enable them to access to preferential services and satisfy
their spiritual and cultural demands. Some communities even set up the
dating agencies, reemployment service centers and housekeeping stations
for the elderly. For the purpose of catering to their interest in culture and
education, the state has been building the comprehensive elderly activ-
ity centers with full set of facilities and functions in medium and large-
sized cities, the elderly cultural activity centers in counties (cities, districts
and banners9), the elderly activity stations (points) in townships (towns)
and streets, and the elderly activity rooms in villages (communities).
The public cultural service facilities and venues, e.g., libraries, cultural
centers, art galleries, museums, science and technology centers, parks,
gardens and scenic spots, which are financed by the state, are open to the
elderly for free or on a discount.
9.2 Predicament in Front of China’s Elderly

Welfare at Present
9.2.1 Plight of the Elderly Welfare in Urban Areas

The aging population has presented new requirements for China’s
elderly care services and construction of an elderly welfare system.
At present, the elderly welfare in China’s urban areas is beset by such dif-
ficulties as weakened family supporting function, inadequate elderly care
institutions, and underdeveloped nursing services.
(1) Weakening family supporting
Filial to parents and veneration for the elderly has been a traditional
virtue of the Chinese since ancient times. There are applicable laws
on home-based care for the aged. For instance, the Law of the People’s
Republic of China on Protection of the Rights and Interests of the Elderly
stipulates that “the elderly care mainly depends on families, the fam-
ily members shall care for and look after the elderly. Supporters of the
elderly shall perform the duties of providing for the elderly, taking care
of them and comforting them, and cater to their special needs”. Article
21 of the Marriage Law of the People’s Republic of China provides that
“…children shall have the duty to support and assist their parents. If
children fail to perform their duty, parents who are unable to work
or have difficulties in providing for themselves shall have the right to

demand support payments from their children”.
At present, most old people in China live with their families, with
economic sources and life care mainly relying on their supporters and
dependents. A part of the elderly in urban areas are used to be the lab-
orers with formal occupation, so they are entitled to the old-age pen-
sion distributed by the state after emeritus or retirement according to
national regulations. However, China has a vast territory, underdevel-
oped productivity and weak national economic foundation, the Chinese
people have been earning a low wage and controlling consumption for
a long time. In addition, China is a latecomer in establishing the old-
age insurance system and developing the elderly welfare program, the
old-age pension remains low, not only varied greatly between regions,
but severely imbalanced between social groups. What’s worse, while the
health condition of the elderly is getting worse, their medical costs are
on the rise. The low-income elderly finds it hard to pay off the medi-
cal expenses by themselves, but depend on their children to take care of
their daily life and bear their medical expenses.
The unique and irreplaceable role of family in elderly care is reflected
by three aspects: (1) Guarantee the material life of the elderly. When the
old people reach the age of retirement, their labor capacity is weakened
or even lost, a majority of them no longer create wealth, those without
old-age pension have to count on their children for means of livelihood,
such as food, clothing, housing and daily use articles. (2) Take care of
the daily life of the elderly. With aging physiological function, poor phys-
ical quality and increasing illness risks, some old people are unable to get
around freely, and some become incapable of leading an independent
life, they have to stay at home for their children to look after them more
conveniently. (3) Bring spiritual comfort to the elderly. Old people are
strongly affectionate to their children after living together with them for
years. They feel blissfully happy at seeing their children and grandchil-
dren around them, the loneliness and solitude in old age seem to fade
away. For the former two aspects, the state or society may provide the
elderly with certain financial assistance, but neither of them can replace
the family in comforting the elderly. In the period of agricultural society,
household production and self-sufficient farming are pillar of economy,
family is the basic unit for both production and everyday life. In other
words, individuals go through thick and thin together with their family,
with life and career mainly driven by their family. Old people are highly
194 K. HAN
esteemed by the other family members, they are happy to live within the
big family after retirement and somewhat retreat from social activities,
since they believe the psychological and spiritual satisfaction therefrom is
far more precious than a rich material life.
At present, under the impact from strict family planning policy and
intensified social mobility, the spatial distance between generations is
constantly expanding. The miniaturization of family structure leads to
centralization of family power to transit into decentralization. The tra-
ditional concept of old-age care is facing challenges from various social
factors and value orientations. Family care services are under increasing
pressure, the multiple functions of traditional families have altered, and
the function of family supporting tends to be weakened. In such con-
text, the state shall adopt various means to encourage and support family
supporting.
First, educate the citizens to respect, care and support the elderly,
wake up the social awareness of venerating the elderly, carry forward
the Chinese traditional virtue of respecting the elderly by reporting the
typical cases in this regard, in an aim to foster an atmosphere that cares
about the old people. Second, provide the elderly and their families with
old-age care services and community support, e.g., community-based
elderly care, community-based medical treatment, home sick-bed, home
nursing and door-to-door guidance. Third, gradually establish and
improve the legal system for the elderly to guarantee their basic liveli-
hood, medical care, employment and participation in social activities, and
privileges in education, transportation, entertainment and other public
facilities, so that the old people can spend their remaining years in com-
fort under a caring social atmosphere. Last, work out some preferential
policies that tilt toward family supporting. For example, the government
may provide certain allowances to the families that look after the elderly
(aged 80 and over) at home, which is much economical and thought-
ful than government-funded old-age welfare institutions, and easily pre-
ferred by the elderly. In order to motivate family members to take better
care of the elderly that live with them, and ensure the old people to
enjoy a happy life in their later years, the government shall, in addition to
honor or commendation, think about rewarding such families some sub-
sidies, flexible working hours or even special housing benefits.
Of course, highlighting the importance of family supporting is not to
transfer all old-age care responsibilities to family, the state shall assume its
due responsibility. At present, the top priority for the state is to support
the senior citizens not covered by the social insurance system, provide
them with basic life relief and daily care services. Along with strengthen-
ing economic power, the state shall bear greater responsibility to provide
more and better welfare treatment to the elderly, and ultimately assume
more elderly care responsibilities. The state shall satisfy the elderly care
demand, let the senior citizens free from worrying about their subsist-
ence, and help build family into a paradise for the elderly to live a peace-
ful life, so that longevity will not be something woeful or painful, and the
elderly can live more harmoniously with their families. Besides, all the
old people, including those widowed and “empty nesters”, deserve to be
cared about by the society.
(2) Inadequate elderly care institutions
Elderly care institutions are an important part of the elderly welfare sys-
tem. Under the planned economy system, Chinese elderly care institu-
tions in urban areas were mainly open to the dispossessed old people
without family. In recent years, aging population has become a severe
social issue, and the shortage of elderly care institutions is becom-
ing increasingly prominent. The difficulty reflects in three aspects:
(1) Service facilities and quality of elderly care services are uneven. At
present, there are several types of elderly care institutions, e.g., state-
owned, state-owned-private-ran or private-owned, but their facilities and
service levels vary greatly. For example, there are high-end institutions
equipped with complete medical facilities, professional medical staff;
some of them even have affiliated hospitals to handle emergencies. The
ordinary institutions mainly refer to those run by communities and sub-
districts, they have basic medical facilities and a small number of medical
staff, and provide medium-level services. Most of the low-level institu-
tions are run by individuals, they are small-sized with a few rooms, there
are only nursing assistants rather than professionals, which make the old
people too worried to choose these institutions.10 (2) Controlled by gov-
ernment, low-level participation of social forces. Most of Chinese elderly
welfare institutions are “directly funded, built and managed” by civil
affairs departments. Those institutions run by social forces are small sized
and just at outset. Such situation is mainly attributed to two reasons: on
the one hand, the elderly welfare undertaking is inadequately funded
and developing at a slow pace; on the other hand, due to lack of com-
petition, the operation and management regime of welfare institutions is
unable to satisfy the requirements of market economic system and social
196 K. HAN
development.11 (3) The management of elderly care institutions remains

defective. For example, China is a late starter in standardizing elderly
care services, the category of elderly care institutions is not complete,
their charging standards are yet to be unified (some of them set fairly
high charges), and not all the service personnel therein are professional.
The above pressing problems, which have seriously restricted the
healthy development of China’s elderly welfare cause, shall be addressed
in response to the aging population crisis. Elderly care institutions are an
important carrier of old-age welfare. Amid the great changes on social
and family structure brought by aging population, industrialization and
urbanization, China has seen the demand for socialized elderly care ser-
vices grow at a fast pace. According to a survey conducted by relevant
authorities, among the 230 million Chinese people aged 60 and above,
5% of them desire to move into an elderly care institution. In order to
cope with the escalating aging population crisis, we shall extensively
mobilize and rely on social forces, vigorously promote the socialization
of social welfare, and speed up the development of social welfare cause.
As early as 2000, the General Office of the State Council forwarded the
Opinions on Accelerating the Realization of Social Welfare Socialization
(Guobanfa [2000] No. 19), which were issued by the Ministry of Civil
Affairs and the other ten ministries and commissions, explicitly laying out
the guiding ideology for promoting social welfare socialization: by keep-
ing a foothold in the fundamental realities of China at the primary stage
of socialism, taking Deng Xiaoping Theory and the spirit of the CPC’s
15th National Congress as guidance, and following the direction as
maintaining the dominant role of family supporting, and supplemented
by community-based and institutional welfare services, we shall explore a
new road for social welfare cause that is led and funded by the state and
actively collaborated by social forces, establish a management system and
operational mechanism for social welfare cause that adapt to the social-
ist market economy and social development, and benefit the healthy and
orderly development of social welfare cause. In 2001, the General Office
of the Ministry of Civil Affairs forwarded the Circular of the Ministry
of Finance and the State Administration of Taxation on Tax Policy Issues
Concerning Elderly Service Institutions (Caishui [2000] No. 97), which
specifies the tax preference conditions for non-profit elderly service insti-
tutions, i.e., for the welfare-oriented and non-profit elderly service insti-
tutions, which are funded and established by government departments,
enterprises and public institutions, social organizations, individuals and
other social forces, will be temporarily exempted from paying enterprise

income tax, and the property tax for self-use real estate, land, vehicle and
vessel, as well as urban land use tax and vehicle-vessel use tax; for the
donations offered by enterprises and public institutions, social organi-
zations, individuals and other social forces to the welfare-oriented and
non-profit elderly service institutions, but transferred by non-profit
social organizations or government departments, the resulting enterprise
income tax and individual income tax shall be fully deducted in advance.
Thanks to those incentive policies, the welfare institutions launched
by social forces have begun to emerge and become an important part
of China’s social welfare cause. But the development of such institutions
is not a plain sailing. For failing to accurately reflecting the elderly care
demand, the private elderly care institutions in various regions have fallen
into an embarrassing situation: some are in short supply and some have
vacant beds. Most of these institutions have to operate at a low cost due
to insufficient capital and limited financing channels, they are unable to
guarantee complete infrastructure facilities, human capital input and bet-
ter-quality service, thus resulting in a low occupancy rate despite of rich
demand, and forming a vicious operational circle. In addition, China has
indeed promulgated preferential policies for non-profit elderly care insti-
tutions, some policies are difficult to be effectively implemented since
they call for collaboration of multiple departments such as construction,
land, taxation, banking and finance.
In order to further promote social welfare socialization, the Ministry
of Civil Affairs issued the Opinions on Supporting Social Forces to Set
up Social Welfare Institutions (Minfa [2005] No. 170) in 2005, urg-
ing all localities to fully recognize the significance of and basic princi-
ples for supporting non-governmental welfare institutions, and work
out preferential policies in this regard; supporting the development
of such institutions by raising funds through multiple channels and in
various forms; and pledging that the policy support of the state is an
important guarantee for the development of social welfare cause. In
February 2006, the General Office of the State Council forwarded the
Circular on the Opinions for Accelerating the Development of Elderly Care
Service Industry (Guobanfa [2000] No. 19), which was issued by China
National Committee on Aging, National Development and Reform
Commission and other competent departments, proposing to vigorously
establish elderly care institutions through various options, e.g., public
funded and private run, private funded and public assisted, government
198 K. HAN
subsidizing and service procurement; motivate social funds to flow into

elderly care services in the form of sole proprietorship, joint venture,
cooperation, joint venture and equity participation; build apartments,
nursing homes and old-age care institutions for centralized residing, liv-
ing, learning, entertainment and bodybuilding of the elderly; encourage
private capital to invest in daily care, housekeeping, psychological coun-
seling, rehabilitation, emergency relief and other businesses targeting at
the elderly, including those staying at home. It can be seen that the state
has kept introducing policies to encourage the establishment of social
welfare institutions and the development of elderly care industry, which
has undoubtedly removed lots of policy barriers for the socialized elderly
care institutions and benefited their long-term and healthy development.
(3) Underdeveloped nursing services
The development of social services for the elderly in China still lags
behind. The old people, especially those who are sick, cannot access to
proper care and attention, even if they live with the other family mem-
bers. What the elderly really need is professional and meticulous nursing
services. While the aged population keeps expanding year by year, elderly
care has become an important social issue that needs to be seriously
addressed. Therefore, the establishment of an intact and sophisticated
elderly care service system is a top priority for China at present.
The main content of elderly care services is to look after the daily life
of old people. Under the impact from the family supporting tradition,
economic constraints, and sentimental attachment to their birthplace or
relatives, quite a number of the Chinese old people are unable or unwill-
ing to enter the elderly care institutions. At present, family supporting
for the elderly mainly relies on their spouse, children, nursing worker or
hourly worker. No matter it is for the elderly themselves or for the car-
egivers, they are in urgent need of support and assistance from medical
establishments, communities and other professional service institutions.
Generally speaking, China is still lack of the hospitals for chronic dis-
eases, nursing homes, rehabilitation centers and hospice care institutions
that are targeting at the elderly. Few cities have established an elderly
care service network, the government-led elderly welfare programs do
not have a wide coverage, the community-based elderly service facilities
and domestic service organizations are far from enough.
Owing to pathological aging brought by physiological senility and dis-
eases, old people begin to suffer from low physiological function or even
lose ability to take care of themselves. As a result of rapid population

aging, the number of the elderly unable to provide for themselves or suffer
from dementia is on the rise. In the process of population aging and socio-
economic development, family members are bearing an increasingly heavy
burden owing to diverse factors like miniaturized family structure, accel-
erating pace of modern life, increasingly fierce social competition, inten-
sified labor intensity and greater labor mobility. Moreover, because of its
special population policy as “one child per couple” for decades, China has
seen its fertility rate keep declining, and the human resources dedicated to
home nursing are rapidly shrinking, which is a severe challenge to long-
term elderly care in the future. What’s worse, elderly care is different from
general social services for the old people, it is professional and involving
multidisciplines like medical treatment, rehabilitation, nursing, psychol-
ogy and management, implying that family supporting cannot meet the
need for nursing and caring so many old people. Besides, long-term care
of the elderly has put their children and relatives into a dilemma—show
filial piety to the elderly at home as required by code of ethics, and in the
meantime work hard outside to alleviate financial strain—which may trig-
ger family problems to escalate into all-round social problems.
In the 1980s, the shortcomings of traditional family supporting began
to emerge, forcing the Chinese to shift attention to institutional old-
age care. In response to population aging, the Chinese government has
intensified efforts in improving health care for the elderly. Since 1984,
the Central Government and the health administrative departments at
all levels of provinces, autonomous regions and municipalities directly
under the Central Government have built the elderly health care institu-
tions. Some large cities with available conditions, e.g., Beijing, Hunan,
Shanghai and Guangzhou, have successively established geriatric hospi-
tals, elderly nursing homes or medical rehabilitation centers. Some streets
in coastal cities have set up elderly nursing centers to provide door-to-
door medical service to the aged, sick, disabled and those without fam-
ily within their scope of jurisdiction, install sick beds at home, create
archives for the elderly with serious diseases, provide mobile medical
counseling on a regular basis, the elderly are given priority in admission
to hospital for medical treatment, receiving one-stop nursing and hospice
care. The hospitals in prefectures, cities and counties have set up geriatric
outpatient services, some streets and towns/townships have set up ger-
iatric outpatient services or medical stations, and extensively install sick
beds at home. Other institutions for elderly care, such as sanatoriums,
200 K. HAN
nursing homes for the elderly without family and the recently popular
elderly apartments, pay great attention to nursing service. In the twenty-
first century, the long-term care of the elderly has been gradually
recognized by society. Such major cities as Shanghai and Beijing took the
lead in establishing the elderly nursing homes, while other cities are mak-
ing effort in catching up in this regard.
However, so many problems also exist in institutional care for the
elderly, though it was once highly expected. (1) Inadequate hardware
facilities. At present, the elderly care and nursing facilities still lag behind,
causing acute contradiction between supply and demand. (2) The elderly
care services are disappointing. Many aspects of the nursing institutions
fail to meet the needs of consumers, e.g., distribution, accessibility, sup-
porting equipment, living environment, service content and quality, as
well as their management. It seems that China does not have a long-term
development plan for the elderly care cause. (3) Huge financial pressure.
The long-term care for the elderly in China is still at the outset, the lim-
ited government input has restricted infrastructure construction, nursing
insurance and personnel training. (4) The management system is defec-
tive. The long-term socialized elderly care needs collaboration of three
departments: the health department is responsible for nursing the elderly
through medical institutions (e.g., nursing homes and geriatric hospi-
tals), and for community-based health work; the civil affairs department
arranges daily life care of some special groups of old people (mostly the
“sanwu” elderly) by establishing elderly care institutions; the labor and
social security department takes charge of the medical insurance of enter-
prise employees. Such status quo—without specialized institutions for
long-term care of the old people—shows that it is difficult to solve the
structural and operational problems in the development of elderly care
cause. (5) Shortage of professional nurses. Most of the nurses in nursing
institutions and community-based service agencies are not professionals,
but retirees and temporary workers that are neither well educated nor
specially trained. Without basic knowledge about elderly nursing, such
employees are unable to do sophisticated work but housekeeping or sim-
ple rehabilitation care. In addition, long-term nursing for the elderly is
a high-intensity and poorly paid job, which discourages professionals to
devote themselves into this cause.
The elderly nursing services shall be socialized, specialized and institu-
tionalized. However, most of the Chinese elderly are low-income earn-
ers, they cannot afford a long-term nursing expense. The old people
living in urban areas earn a living with their pension, yet it is too low to
cover other expenses beyond basic subsistence cost. The medical insti-
tutions cost thousands or even tens of thousands of yuan per month
for elderly care, which is unaffordable for many old people. The cur-
rent medical insurance only pays for the basic medical services for the
elderly, while the nursing institutions fail to meet the expectations of
most elderly and their families. Being deeply influenced by the Chinese
traditional culture, the elderly prefers living in their own house, staying
close with their spouse and children to enjoy the “happiness of family”.
They will not move into nursing institutions unless their families meet
some insurmountable difficulties. From the perspective of adults, most
of them believe that their parents enjoy staying with their children and
grandchildren, such happiness is incomparable, no matter how advanced
the nursing homes are. Some of them feel ashamed to send their parents
to elderly care institutions, for fear of being criticized as unfilial, so they
insist on looking after their parents on their own even if it is sometimes
hard for them to do so.
While the formal institutional nursing is yet satisfactory and family
care is unprofessional, quite a number of experts and scholars suggest
vigorously developing community health nursing in which the elderly
will keep dwelling in their own houses, but receive nursing services from
community in addition to family care. Such practice not only ensures old
people to stay in a familiar environment and maintain close contact with
their relatives, but boast another four advantages: (1) The elderly living
in their own house have more freedom, which is the dominant reason for
them and their family to prefer staying at home. (2) Community nursing
saves medical expenses for those aged patients. (3) Community nursing
has a wide coverage, i.e., taking care of most of the needy old people in
the community. (4) The state makes full use of limited social resources to
maximize social benefits.
9.2.2 Changes in the Rural Elderly Welfare

Respecting the old and caring for the young has all along been a
Chinese tradition. As early as the Han Dynasty (202 B.C.–220), the
Chinese government introduced a preferential policy for the people aged
above 70, i.e., a special envoy would send them condolences on behalf
of the emperor and grant them with some cloth, wine and meat. Zhu
Yuanzhang, first Emperor of Ming Dynasty (1368–1398), issued an edict
202 K. HAN
in 1386 to stipulate that “the poor people aged above 80 will be granted
with 30 kg of rice, 2.5 kg of meat and 18 kg of wine each month; those
aged above 90 will receive additional 33 m of silk and 0.6 kg of cot-
ton wool”.12 In both ancient and modern China where farmers were
acting as the main body of society and small-scale peasant economy as
the basic means of production, the family seemed like the cells of soci-
ety and undertook such social functions as material production, popula-
tion reproduction and provision, the elderly care relied on such informal
system as family security. Since 1949, China’s elderly welfare system is
not only limited to the urban area, but somewhat extends to the rural
population.
(1) Land security and family supporting on the basis of individual
economy
After the founding of new China, the key tasks of the state in rural areas
were to carry out land reform and restore production, i.e., to confiscate
the land of landlords and divide it equally among the poor and middle
peasants, develop agricultural production and increase farmers’ income.
Meanwhile, the state was attempting to establish a new social welfare
system for rural areas. According to the Common Program of the Chinese
People’s Political Consultative Conference (1949) and the Constitution of
the People’s Republic of China (1954), all workers, when they enter their
old age, suffer from diseases or lose labor ability, are entitled to obtaining
material help; the state will launch social insurance, social assistance and
public health undertakings, and gradually expand their coverage, so that
the workers will access to such welfare treatment. In 1949, the Ministry
of Internal Affairs (predecessor of the Ministry of Civil Affairs) was estab-
lished to be one of the main management authorities of China’s social
welfare cause. It was responsible for rural disaster relief, social assistance,
preferential treatment and resettlement. By this time, China had seen its
welfare system for rural people guaranteed by the constitution, imple-
mented by a unified management bureau, and actively supported by gov-
ernment, which were new features of the institutional architecture and
arrangement of the social welfare system. During this period, the govern-
ment organized large-scale relief activities in rural areas, such as distribut-
ing relief food and funds, launching an austerity campaign and arranging
disaster relief through industrial production, which played a positive role
in stabilizing people’s lives and social order. In addition, the completion of
land reform and gradual recovery of rural economy, as well as formation
of agricultural production mutual-aid teams and primary agricultural

cooperatives, greatly enhanced farmers’ ability to resist risks and maintain
a basic living standard, and gradually reduced the number of impover-
ished people.
In this period, the economic basis was the individual economy based
on private ownership of land and with family as the production-opera-
tion unit, the elderly welfare in rural areas was mainly relying on informal
institutional arrangement, i.e., land security. In addition, due to low-level
productivity in rural areas and limited financial resources of the state at
that time, it was hard for the state to afford a labor insurance system in
rural areas as the one in urban areas; consequently, such personal risks as
survival, aging, illness and death of farmers were mostly undertaken by
their families.
(2) Collective welfare and family supporting based on publicly
owned economy
Upon completion of the task of economic rehabilitation, China
embarked on the second land system reform to resolve the contradiction
between the small-scale peasant economy and agricultural modernization
and industrialization. From 1956 to 1978, the rural collective economy
went through drastic changes, i.e., from the people’s commune (firstly
high-level commune and then communal canteen) to the people’s com-
mune system that featured “three-level ownership and production bri-
gade-based”, marking that the socialist transformation of agriculture was
completed, and the private ownership of agricultural land was replaced
by collective public ownership. The socioeconomic background of this
stage was China’s highly centralized planned economic system and
industrial priority strategy, the state concentrated financial and material
resources on the construction of industrialization, and rural social wel-
fare emphasized collective responsibility. During this period, the elderly
welfare in rural areas evolved from land security to collective welfare,
which was marked by the “five guarantees” system (guaranteeing food,
clothing, medical care, dwelling and burial of a small number of people,
i.e., the elderly losing ability to work and dispossessed, the handicapped
and orphans). With regard to medical care, a rural cooperative medical
care system was gradually taking shape. The rural social welfare mainly
took care of the disaster-stricken victims, impoverished people and enti-
tled groups, and most of the rural old people were supported by their
families. At the same time, the rural collective economy was accompanied
204 K. HAN
by an almost egalitarian distribution model, which suited to the indus-

trialization based on the planned economy, but always overemphasized
realization and acquisition of collective welfare, and neglected individ-
ual freedom and efficiency, thus making the elderly welfare in this period
embedded in the collective welfare, and the responsibility of caring the
aged mainly borne by their family members.
(3) Land security and family supporting based on the household
contract responsibility system
After the reform and opening up, the state reformed the rural land
operational form again. On the basis of collective public ownership of
land and other means of production, the state implemented the house-
hold contract responsibility system, which featured proper separation
of land ownership and operation. During this period, family became
the basic unit of production, operation and life security in rural areas.
With the rapid development of rural economy, farmers’ income notably
increased and collective economic organizations began to disintegrate.
As result of the reform of rural economic system, the strength of col-
lective economy was greatly weakened, the rural collective welfare ini-
tiated in the era of planned economy lost the original economic basis,
farmers saw the burden of elderly care return to their family, some old
contradictions (covered up by the cooperative economy) and transforma-
tion of economic system triggered new contradictions. For example, the
old people with no family, who had been qualified to receive the “five
guarantees”, lost the minimum means of subsistence due to weakening
collective economy. Owing to the changes on the rural elderly welfare
system, land security once again became the foremost means for deliv-
ering welfare. With the deepening of market-oriented reform, growth
of population and decline of land comparative benefits, the function of
land security has kept weakening, and this informal welfare system is
increasingly becoming a stumbling block to continuous urbanization and
modernization.
9.3 Role of Land Security in Rural Elderly Welfare

The status and role of land security seems like an unavoidable question
when discussing the rural elderly welfare. There is a viewpoint that land
is able to undertake the social welfare of farmers given China’s current
situation. For example, some scholars pointed out that “the household
contract responsibility system, which remains unchanged for 30 years, is

the land system and social security system at the same time. The reason
why the contract system has been extended again and again is for its irre-
placeable social security functions to date”.13 However, while China is
pressing ahead with the reform and opening up and social transforma-
tion, land security has become far from enough to shoulder the heavy
responsibility of rural social welfare.
9.3.1 Misunderstandings of Land Security

Institutional social welfare is different from self-security, with this basic
knowledge we find that the viewpoint that land is able to undertake the
rural elderly welfare is questionable for the following reasons:
(1) Solidifying the dual welfare system based on urban–rural
segmentation
This view objectively acquiesces to legitimacy of the urban–rural dual
social welfare system, which implied such a wrong assumption: social
welfare is public benefit of urban areas (urban residents), while the rural
social welfare is borne by the rural areas (farmers) themselves.
As is well known, Chinese society has a typical urban–rural dual struc-
ture. Accordingly, the construction of social welfare system also shows
evident dual structural characteristics. After implementation of the rural
household contract responsibility system, the overall institutional arrange-
ment of rural society has undergone structural changes, the rural social
assistance and welfare systems, which took shape after the founding of new
China, tended to collapse, making the social welfare in rural society grad-
ually become dysfunctional. At the early stage of the reform, the improved
land system helped the vast rural population solve the long-running prob-
lem of lacking food and clothing, and stimulated farmers’ production
enthusiasm to a new height. During this period, land did play a role in
ensuring farmers’ basic livelihood, arousing their productive enthusiasm
and stimulating social vitality. However, along with deepening reform and
developing market economy, the potentials in reform of the rural land sys-
tem were mined out. At the same time, the dual division between urban
and rural areas began to shake. Given the fundamental realities of China,
i.e., a large population with relatively little (arable) land, the number of
rural surplus labor force was increasing rapidly. With further differentiation
of rural society, the initial excitement from decentralization of power and
206 K. HAN
transfer of profits gradually gave way to new social problems, e.g., elderly
care, medical treatment, caring for the people without family and una-
ble to support themselves, and schooling of children, which successively
stood out for lack of social welfare. In such context, reconstruction of the
welfare system had become an urgent need. We believe that the emphasis
on the social security function of land is actually a trick to shift the blame
for vacancy of social welfare in rural areas. We shall pay equal attention to
construction of social welfare in urban and rural areas, and endeavor to
integrate them effectively so as to improve China’s overall social welfare
system. If we keep preserving the dual social welfare system, it is sure to
increase social exclusion, i.e., excluding rural areas from an integral society,
which runs counter to China’s social development process.
(2) Contrary to the basic ideas for social welfare construction
As mentioned above, this viewpoint objectively acquiesces to legitimacy
of the urban–rural dual social welfare system. In the conceptual frame-
work of social welfare, the principles of fairness and justice are of great
significance. In rural areas, it is not only against fairness but also against
justice to replace social welfare with land security, or regard land security
as the main approach for delivering welfare. From the perspective of fair-
ness, since the founding of new China, the Chinese government estab-
lished a social welfare system in rural areas with collective as the subject of
responsibility and social assistance as the main content, which has greatly
improved the backward situation of rural areas and raised the living
standard and quality of rural residents. Since the reform and opening up,
with disintegration of the rural collective economy, the rural social assis-
tance system was tending to collapse. It is not accurate to conclude that
land security failed under the collective economy, but played an essential
role in rural social welfare after disintegration of the collective economy.
Social welfare system covers social assistance, social insurance and social
services. At present, in the absence of social welfare in rural areas, it is an
unfair institutional arrangement for land security to act as social insurance
or social assistance. From the perspective of justice, both urban and rural
residents are entitled to enjoying the national treatment. The so-called
national treatment herein means that all citizens of the People’s Republic
of China deserve to be treated equally, there is no disparate treatment
between urban and rural residents, or between lowliness and nobleness of
their status. It is a fundamental right of all citizens to share the achieve-
ments of social development.
(3) Economic (productive) function of land is unable to replace function

of social welfare
We believe that land security is an indirect guarantee. The function of
social welfare cannot be replaced by the economic (production) function
of land. Moreover, economic conduct is sometimes full of risks. If land
has the function of social welfare, then can we deduce that the machine
and factories—also means of production like land—of state-owned
enterprises have the same welfare function for urban laid-off workers?
If drought, waterlogging, hail, frost or any other natural disaster breaks
out and results in reduction or even total loss of crop yields, does land
still have the function of social welfare? Furthermore, if the material con-
dition for survival becomes a functional element of social welfare, then
where will China’s social welfare construction go? It is true that land is
the basis for farmers to obtain crops through hard work, but with con-
tinuous socioeconomic development and improvement of farmers’ living
standard, their psychological need is expanding. Compared with insti-
tutional social welfare, land security is hand for rural residents to seek
educational opportunity and medical treatment. Strictly speaking, land
security is an abstract notion, its social welfare function is indirectly real-
ized through implementation of land policies; in other words, it does not
have any direct welfare function.
(4) The new demands of farmers for social welfare due to differentiation
of peasant groups may not be ignored
Presently, Chinese society is undergoing an unprecedented overall
change, showing a development trend from a relatively backward agri-
cultural society to an industrialized society. In this process, the contin-
uously rising urbanization level is an important sign. Accordingly, rural
areas have been subject to a sharp transition, i.e., accelerated rural urban-
ization and farmers’ non-agricultural transformation. At the beginning of
the reform and opening up, being guided by such policy claim as vig-
orously developing small towns, township enterprises were in a boom,
massive rural labor force left their (farming) land to work in township
enterprises, such phenomenon was described as “departing land with-
out leaving hometown”. With continuous progress of the reform, espe-
cially loosening urban–rural dual structure, a large number of surplus
rural labor force flocked into cities looking for a job, forming a spec-
tacular “overflow of rural workers”. The traditionally defined farmers
not only break away from land, but leave their hometown to become
208 K. HAN
“migratory birds” in cities. These rural residents who “leave both land
and hometown” are usually defined as “migrant workers”. These young
and strongly built labor force, when they are in rural areas, are not only
main force of agricultural production, but pillar of family livelihood.
Now their life has in essence separated from land, so land security can no
longer satisfy their living needs.
Moreover, even in areas with relatively stable personal flows, the
differentiation of farmers has weakened the function of land secu-
rity. Currently, the polarization between rich and poor in rural areas is
becoming increasingly prominent. Since the reform and opening up,
some rural residents successfully acquired wealth by developing livestock
breeding and handicraft workshop, but a large number of farmers live
in extreme poverty due to natural environment, personal ability or some
other reasons. Many people have become impoverished due to illness or
disability. For the farmers living in areas with inferior natural conditions
or infertile land, and for the old, the young, the sick, the disabled, the
widowed and the lonely, land security is no more than a mirror image.
The government has the responsibility to provide these “vulnerable
groups” with basic living security instead of pushing them to land secu-
rity. In the meantime, the process of marketization may induce social
risks. Under the condition of market economy, farmers’ means of live-
lihood are gradually transformed, and such factors as weakening land
production function, strong monetary force and impact of economic glo-
balization on China’s agriculture undoubtedly make farmers exposed to
more and greater risks than before.
9.3.2 Realistic Dangers of Land Security

In real life, if this viewpoint is supported or agreed by policy makers, it
will mislead our practice and induce some problems: (1) It is likely to
exclude rural social welfare from the entire social welfare system, form-
ing a systemic inertia in the process of policy making and execution,
and then resulting in institutionalization of social exclusion, while social
exclusion is often caused by defective game rules. (2) It may hold back
the overall advancement of social transformation. Throughout the
development course of western society, we can find that the establish-
ment and improvement of social welfare are closely related to develop-
ment of social economy. “Complementary” social welfare theory holds
that the social welfare system is an effective supplement to economic
development or industrialization, it is able to raise economic efficiency,

solve social problems and achieve social justice. The Poor Law (1601)
enacted in Britain, the first law of this kind in Europe, was to a large
extent stipulated for the poor who migrated to cities after the “enclo-
sure movement”. In case of China which is still a developing country,
any failure to handle the issues about rural social welfare will confine the
overall development of Chinese society. (3) It goes against social order
and stability. Social welfare is an important means to guarantee equality
of results which is bottom line of equality. Without equality of results,
there will be no social stability. For the rich rural labor force who move
to cities, land security has become a mere name for them. On the one
hand, they lack the recognition of urban society; on the other hand, the
absence of social welfare aggravates their sense of relative deprivation.
Being an alternative group inhabiting in urban areas, they are likely to
become saboteurs of the urban social order and lay hidden dangers for
social stability.
To sum up, we believe that land security has been unable to deliver
social welfare to farmers, either from the nature of social welfare or from
realistic institutional arrangement. Moreover, the reform of rural land
system itself is facing lots of uncertainties. As such, land security shall be
separated from the rural social welfare system. Farmers’ social welfare
shall be undertaken by the state (government) not by themselves, and in
the name of national treatment but not land security.
9.4 Discussion on Marketization of Elderly

Care Services
While considering the status quo of shortage of state-funded elderly wel-
fare facilities, we may attempt to resolve the contradiction between insuf-
ficient welfare supply and robust elderly care demand through rational
allocation of market resources, i.e., through development of marketized
elderly care services. With regard to the service content, elderly care
includes daily life care, housekeeping, improving living environment
and raising life quality; and there are general care service and sophisti-
cated nursing service, which run through the whole process of one’s later
years. In other words, old people are in need of elderly care in all stages
of their later years, i.e., whey they are independent, semi-independent,
incapable of self-care and lying at the deathbed. Actually, there is a large
room for satisfying these needs of the elderly by working out specific
210 K. HAN
measures. Most of the old people need daily life care and medical service,
but those living in affluent areas also ask for certain psychological aid to
help them overcome some psychological problems like loneliness in old
age, estrangement from the fast-changing society and communication
gap with the youth. In short, for the old people earning different levels
of income and belonging to different social classes, it is better to provide
them with separately designed elderly care services.
9.4.1 Three Levels of Marketization of Elderly Care Services

Under the condition of market economy, the introduction of market
mechanism means that all services shall be provided by the market as
long as it is feasible, because the service system for the elderly is gen-
erally a pluralistic system combining multiple entities such as welfare
institutions of different types and functions, facilities, various service
organizations and family self-service. The establishment of the elderly
service market shall follow the principle of stratification and classification.
According to the income level of the elderly group and different con-
cepts of old-age care, stratification and classification of services shall be
provided to the elderly in need of old-age care. At the same time, specific
elderly service projects will be set up in accordance with China’s social
and economic development level.
(1) “Recreational” old-age care services for the high-income elderly
High-income elderly groups generally have annuity, pensions or other
incomes, they have higher requirements on the quality of life and can
afford higher service fees. For such kind of old people, their charging
shall accord with the market price and provide them with high-level pro-
fessional services. For example, in cities where residents earn an average
relatively high income, they can establish the service institutions such as
apartments for the aged, activity centers for the aged, medical rehabili-
tation centers and volunteer service stations. The elderly are encouraged
to receive centralized support in the apartments specially built for them,
and enjoy high-level marketized services. They can also provide services
such as day care, medical care, physical fitness, entertainment and leisure
for the elderly who live at home in the community, so as to meet differ-
ent needs of the elderly. This level of old-age care is called “recreational”
elderly services.
(2) “Mixed” old-age care services for the middle-and-low-income elderly

For the old people who are earning a middle-and-low income, we shall
provide them with low compensation or free welfare services, and pro-
vide marketized services for the old people who have the ability to pay.
For the old people earning a middle-and-low income, we shall consider
their economic bearing capacity, persuade them to choose the elderly
care services based on their ability, instead of comparing with others
blindly. Therefore, the second level of old-age care service is defined as
“mixed” old-age care service, which needs to be marketized in line with
the economic level, and the most important is the welfare old-age care
service. Along with developing economy and increasing income, the
high-quality and high-level marketized services will be the direction of
future development.
(3) “Basic” old-age welfare service for the poor elderly
For the poor elderly and the traditional “sanwu” people, the state shall
provide them with purely aid services. According to the data of the
“National Survey on the Poor Elderly in Urban and Rural Areas”, con-
ducted by the Research Group on the Poor Elderly in Urban and Rural
Areas which was set up by the National Working Commission on Aging
in 2002, there were 10.1 million poor elderly in urban and rural areas in
China in 2002, including 1.5 million in urban areas and 8.6 million in
rural areas.14
In recent years, although the economic poverty of the elderly has been
alleviated through the subsistence allowance system and the five guaran-
tees system, for the poor elderly without family supporting or economic
basis for self-care, the state shall provide them with centralized support
through social welfare institutions. This level of old-age care is called
“basic” elderly welfare services.
9.4.2 Management of Elderly Care Service Market

From the perspective of the whole society, we shall follow the principle
of market economy and establish a perfect and effective management
system for the old-age care service market. This management system
includes at least three levels, i.e., the government-led social welfare
management institutions, cultivation of intermediary organizations and
marketized operation of old-age care service providers.
212 K. HAN
(1) Macro management: government-led social welfare management

institutions
The role of the social welfare management institutions led by the gov-
ernment is only to be the “chief director” of the public elderly welfare
institutions, they even attend to every detail of welfare service delivery.
The responsibilities of government regulatory bodies mainly include:
policy research, formulation and implementation; formulation and imple-
mentation of plans; formulation and implementation of service stand-
ards; examination and approval of service institutions, administrative
legislation and supervision of service agencies; administrative review and
delivery of relief.
At present, the responsibilities of government-led social welfare man-
agement institutions include: investigate and evaluate the old-age care
needs of the whole society and formulate development plans; implement
preferential policies for welfare service providers, and formulate stand-
ards for classifying and grading of service institutions by their facilities,
equipment and services; establish the professional ranks of social workers;
examine and approve the establishment and opening of service institu-
tions, etc.
(2) Industry supervision: cultivate intermediary organizations for old-age
care service
Industry supervision is the key to improve the whole market-oriented
elderly service. Through the cultivation of intermediary organizations,
realize the separation between the government and the market, and
through the intermediary organizations, the industry supervision of the
elderly service market can be carried out to formulate industry rules, reg-
ulate industry order and ensure the healthy development of the entire
elderly service industry. It can be said that intermediary organizations
are the bridge between government-led welfare management institutions
and elderly service providers.
At present, the intermediary organizations shall give priority to the
financial support and welfare projects from the government welfare man-
agement institutions. To conduct financial audit of service institutions
and make them public; evaluate the quality and efficiency of service insti-
tutions. For example, organize experts from all aspects to form an evalu-
ation team to evaluate the performance of service institutions (according
to the satisfaction of service recipients, including the elderly and their
relatives) and make the evaluation report available to the public; set up
a special education training institution to train specialized personnel

engaged in the operation and management of welfare institutions and
social work, and ensure that all practitioners to hold a qualification cer-
tificate; conduct regular business training for service personnel; set up a
reserve fund in case the service organization fall into bankruptcy due to
poor management, etc.
(3) Service provision: marketized operation of elderly service providers
As elderly service providers in the entire elderly service market, the state
shall ensure that all elderly service providers have equal competition,
standardized management, fair policies, and improve service level and
quality. Elderly service institutions can allocate resources in a completely
marketized manner, including forming a corporate governance structure,
independently allocating human resources, and independently determin-
ing profits and salary distribution.
9.4.3 Problems Worth of Attention for Marketizing

Elderly-Care Services
1. The role of the government in developing the elderly-care service
market
(1) The government is an indirect provider of old-age care services
The role of government shall shift from directly providing welfare ser-
vices to indirect providers. Experience has proved that the government’s
direct role as welfare service provider is inefficient. To change this role
of the government does not mean that the government’s responsibil-
ity is weakened. On the contrary, the government’s responsibility is
strengthened rather than weakened. The role of the government shall be
positioned as an indirect supplier, providing subsidies for social elderly
service institutions or subsidies for elderly service recipients, and then let
the market-oriented elderly service institutions provide services.
(2) The government is macro manager of elderly service
As mentioned above, the role of government, in addition to being an
indirect supplier, shall also strengthen its responsibility as macro man-
ager. (i) The government shall strengthen the functions of develop-
ment planning, timely release planning objectives and provide macro
guidance to all sectors of society. (ii) The government shall improve the
welfare service index system and establish effective statistical channels
214 K. HAN
so as to timely reflect the development of the elderly service industry.

(iii) The government shall establish the standards of welfare service
industry, such as for facilities, personnel, service quality control, etc.,
so as to provide standards for service institutions. (iv) The govern-
ment shall supervise welfare service institutions on behalf of the recipi-
ents and the public to protect the legitimate rights and interests of the
recipients.15
(3) The government is the main investor of elderly service
The government must play the role of investment subject in social wel-
fare service, which can be realized through many ways. For example,
special financial funds can be used to provide subsidies to social service
providers in the form of special funds. These service providers can be
market economy organizations or non-profit organizations. The purpose
of subsidies is to make service providers lower their service fees so that
the elderly can afford these services. Another effective way is to formu-
late and implement positive tax incentive policies to encourage enter-
prises and private funds to enter the social welfare service market. In
western developed countries, tax incentives are the main way for govern-
ments to raise funds for public and social services. Some social services
that seem to be provided by the market or non-profit organizations are
actually the result of these organizations working for the government,
which pays for them by purchasing services.16
2. The security of “basic” old-age welfare service
At present, the elderly with economic difficulties are mainly concentrated
in government-run old-age care institutions, and they do not have the
right to choose old-age care institutions freely. This is related to the way
the state finances subsidize government-run old-age care institutions. In
addition to the widowed, childless and impoverished old people practice
the full responsibility of the government social assistance, one possible
way is that the government may give the subsidies directly to “sanwu”
people, instead of allocating the money to the public elderly care insti-
tutions, then the “sanwu” people can choose the elderly care institutions
to their liking. Of course, the development of marketized care services is
based on the premise of fully guaranteeing the original basic security, and
the government shall still provide basic security services for the “sanwu”
people that the government must guarantee and the elderly with limited
income.
3. Development of industry standards and cultivation of intermediary

organizations
Current elderly service industry lacks of independent industry stand-
ards and industry management specification, thus leading to many pri-
vate pension services directly to use the service mode for service of other
industries, such as the “concierge”, “hospital”, these services with elderly
pension does not conform to the demand, not conducive to the overall
development of elderly service market. Due to the vacancy of industrial
organizations, cases of service disputes between service recipients and
elderly service institutions occur from time to time, which are often set-
tled by private settlement or media exposure, etc., which have a negative
impact on the overall image of pension service institutions.
Therefore, in order to establish a system of industry management and
supervision, the government shall cultivate non-government industry
associations.17 Industry associations represent the common interests of
elderly care institutions and the common requirements and aspirations of
pension institutions. It can strengthen intra-industry collaboration and
strengthen institutional links with elderly groups, families and socially
relevant organizations and enterprises. While serving elderly care insti-
tutions in various forms, industry associations can timely find problems,
study the development trend of the industry, reflect the requirements of
members and the legitimate rights and interests of members to the com-
petent government business departments, and provide a basis for the sci-
entific formulation of government planning policies.
9.5 Policy Proposals for Improvement

of Elderly Welfare
There is no doubt that the establishment and gradual improvement of

the basic old-age social insurance system have played a fundamental role
in solving the old-age care problem. At the same time, the system design
of the elderly welfare shall be combined with the historical and cultural
traditions of the country, and any system design that deviates from the
historical and cultural traditions is rootless. Therefore, on the basis of
continuing to improve the basic old-age insurance system, we shall form
a welfare system that takes home-based old-age care as the main body,
institutional old-age care as the supplement and community old-age care
service as the support.
216 K. HAN
Firstly, highlight the principal role of home-based care in elderly

welfare. In short, home-based elderly care means that the old people
remain staying home to spent spend their remaining days. Such practice
in China has a profound ideological foundation, “expand the respect
of the aged in one’s family to that of other families; expand the love of
the young ones in one’s family to that of other families”. Respecting the
old and loving the young is a traditional virtue of the Chinese nation,
and traditional concepts such as “raising children for their old age” are
deeply rooted in people’s mind. The difference between home-based
elderly care and family supporting lies in that the former transfers the
responsibility from individuals and their family to family, enterprise, the
state and society. In modern society, home-based elderly care is not only
in line with the requirements of traditional Chinese culture, but also
respects the living habits of the elderly formed in the family for a long
time to avoid the resocialization of institutional elderly care and envi-
ronmental alienation and other problems. Through the development of
socialized pension service system, the elderly can spend their remaining
years in peace and security.
Second, develop and standardize institutional old-age care. Among all
kinds of old-age welfare institutions, the government-run old-age wel-
fare institutions are mainly targeted at the traditional “sanwu” people
and entitled groups. The state assumes more managerial and financial
responsibilities. However, private elderly care institutions mainly face the
self-funded recipients, which shall have more space for development. We
believe that we shall vigorously develop private elderly care institutions
and realize the marketized operation of their services.
Third, actively develop community-based old-age care services.
At present, China’s community old-age care service is faced with the
dilemma of not only the lack of community old-age care institutions, but
also lack of professional nursing staff, professional social workers, and
lack of medical and health care facilities. In order the play the principal
role of home-based elderly care, the state shall firstly improve the social-
ized and marketized old-age care service organizations, cultivate quali-
fied nursing team, establish a community-based of elderly health care
networks and family doctor system, meet the demand of the elderly for
dinner, daily life and medical care within the community.
Fourth, the state shall promote public health and welfare in rural
areas. Since the founding of new China, China has been actively pro-
moting the rural cooperative medical care system, it has built “health
care stations” and trained a large number of “barefoot doctors”, greatly

improved the medical and health conditions of rural society and the
health level of rural residents. According to statistics, in 1980, about 90%
of rural administrative villages (production teams) in China implemented
cooperative medical care, making it one of the three pillars of China’s
medical security system.18 Since the economic reform, the cooperative
medical system has been on the verge of disintegration. According to a
survey conducted in 1985, the number of administrative villages imple-
menting cooperative medical care nationwide plummeted from 90% to
5%. Statistics in 1989 showed that only 4.8% of the administrative vil-
lages in China continued adhering to the cooperative medical care.19
Under such circumstance, it is difficult to see a doctor has become
a common problem for the majority of rural residents, the health indi-
cators of farmers have deteriorated, poverty due to disease has become
a common phenomenon in rural society. In 2003, the Circular of the
General Office of the State Council on Forwarding the Opinions of the
Ministry of Health and Other Departments on Establishment of A New
Rural Cooperative Medical Care System (Guobanfa [2003] No. 3) was
released, calling for establishment of a new rural cooperative medical care
system. The new rural cooperative medical care system is a mutual med-
ical assistance system for farmers organized, guided and supported by
the government, with voluntary participation of farmers, multi-financing
by individuals, collectives and the government, and overall planning for
major diseases. At present, the rural public health and welfare construc-
tion based on the new rural cooperative medical care system has achieved
initial results, and has played a positive role in safeguarding the health
and nursing needs of the elderly.
Fifth, the elderly welfare allowance system shall be put int place in
due time. Many countries and regions in the world have implemented
the old-age welfare allowance system. China is a civilized country with
a tradition of respecting the elderly. With the improvement of economic
development level and the acceleration of industrialization process, the
old-age welfare allowance system for the elderly shall be launched with
the rural elderly group as the breakthrough point, because the existing
rural elderly care insurance system is far from playing the role of elderly
security, rural elderly pension is generally lower and some elderly peo-
ple do not have pension; in the case of the aging population and low
birth rate, the elderly in rural areas will immediately fall into the material
plight after losing working ability. In addition, the cost of living in rural
218 K. HAN
areas is generally low, which is convenient for the government to start

from a low level of elderly welfare subsidies and arrange the subsequent
design.
We believe that elderly care is not only a matter of money, but also to
meet the emotional and belonging needs of the elderly; elderly welfare
is not only the design of a modern industrial retirement insurance sys-
tem, but also the integration with the historical and cultural traditions
of a country. In terms of institutional arrangements for the welfare of
the elderly, it is necessary to give full play to the functions of the family,
create a good public opinion environment and cultural atmosphere that
respects, care for the elderly, and gradually establish an old-age welfare
service system centering on home-based old-age care. In addition, the
government and society shall do their part, supplemented by necessary
economic assistance, medical care and investment in public welfare facili-
ties, so as to truly achieve the social goal of “providing for the aged”.
Notes
1. NBS, 2017, China statistical yearbook 2017, Beijing: China Statistics Press,
p. 33.
2. Xia Ming, Wei Yi, 2003, Thoughts and countermeasures to solve the
problem of old-age care, Northwest Population Journal, Issue 1.
3. Du Peng, et al., 2005, A Centenary trend of aging population in China
(2001–2100), Population Research, Issue 6.
4. Translator’s note: quoted from the Speech by Hu Jintao to the 17th
National Congress, October 15, 2007.
p. 791.
p. 5.
p. 791.
8. National Health and Family Planning Commission, 2016, China health
and family planning statistical yearbook 2016, Beijing: Peking Union
Medical College Press, p. 329.
9. Translator’s note: “banner” is a county-level division peculiar to Inner
Mongolia Autonomous Region.
10. Xiao Xianghua, 2004, Diversity: Development pattern of communi-
ty-based elderly care, The Elderly, Issue 9.
11. Dou Yupei, 2000, Meeting the challenges from aging population, rapidly
developing the elderly-care social welfare programs, Theory Front, Issue
24.
12. Wang Junnan, 2003, A social security system based on aid—Research out-
line of the social security system in ancient China, Journal of Shandong
University (Philosophy & Social Sciences), Issue 7.
13. Cai Yongfei, 2002, is it possible to turn the land contractual management
right into pension card—Suggestion for building a social security system
for farmers, The World of Survey and Research, Issue 4.
14. Qiao Xiaochun, Zhang Kaiti, Sun Lujun, Zhang Ling, 2005, An estimate
of the poor elderly population in China, Population Research, Issue 3.
15. Sun Bingyao, Chang Zonghu, 2000, Hong Kong’s social welfare and its
enlightenment, Civil Affairs Forum, Issue 5.
16. Zhang Xiulan, Xu Yuebin, 2006, Discussion on the goal and approach of
the social welfare socialization in China, Jiangsu Social Sciences, Issue 2.
17. Bi Suhua, Chen Ruyong, 2005, Some thoughts on the development of
private elderly care institutions, Academic Journal of Suzhou University
(Philosophy & Social Sciences), Issue 5.
18. Wang Yanzhong, 2004, China labor and social security, Beijing: Economy
& Management Publishing House, p. 314.
19. Gu Tao, et al., 1998, Analysis of the problems about the rural medical
insurance system and policy suggestions, Chinese Health Economics, Issue 4.
CHAPTER 10
Development of Welfare for the Chinese

Disabled in the Transitional Period
10.1 Current Situation of China’s Welfare

of the Disabled
10.1.1 Disabled Persons and Disabled Groups

The definition of disabled persons is yet uniform at the international
level. For instance, as defined in the ILO Vocational Rehabilitation and
Employment (Disabled Persons) Convention (No. 159), “the term ‘dis-
abled person’ means an individual whose prospects of securing, retain-
ing and advancing in suitable employment are substantially reduced as
a result of a duly recognized physical or mental impairment”. While the
Declaration on the Rights of Disabled Persons defines the “disabled per-
son” as “any person unable to ensure by himself or herself, wholly or
partly, the necessities of a normal individual and/or social life, as a result
of deficiency, either congenital or not, in his or her physical or mental
capabilities”. But in the World Programme of Action Concerning Disabled
Persons, the disabled persons are not a homogeneous group, instead,
Han Keqing, Li Jin, 2008, Education for special children: Comparison between
Chinese and the US practice and inspirations, Academia Bimestris, Issue 6; Han
Keqing, Huang Shumin, 2008, Function of disabled persons’ security of welfare
enterprises, Shandong Economy, Issue 2.

https://doi.org/10.1007/978-981-32-9660-2_10
222 K. HAN
they “include those who have long-term physical, mental, intellectual

or sensory impairments which in interaction with various barriers many
hinder their full and effective participation in society on an equal basis
with others”. In 1980, the World Health Organization published the
International Classification of Impairments, Disability and Handicaps,
known as the WHO ICIDH model, which proposes that there are three
consequences of disease: impairment, disability and handicap and that
they sequentially related. (1) Impairment (I) refers to loss or abnormal-
ity of structure or function and can be seen as operating at a level below
that of the whole individual, often at the level of the organ. (2) Disability
(D) refers to restriction or lack of ability to perform activities and oper-
ates at the level of the individual. (3) Handicap refers to disadvantage
and role limitation and operates at the level of the individual in a social
context.1
In short, we hereby conclude that “disabled persons” mainly refer to
those who suffer from physical defects or physical dysfunction caused by
diseases or injuries, and have difficulties in both mental adaptation and
social adaptation, thus affecting their own daily life.
The disabled persons have some common characteristics, such as phys-
ical barriers, low income, living in poverty, low political influence and
psychological hypersensitivity.2
First, physical defects or barriers are the primary characteristics of the
disabled group. Such characteristic is attributed to the particularity of the
disabled. Unlike other groups (the elderly, children, the poor) that live in
hardship due to social or natural environmental constraints, disabled per-
sons are held back by their defective or injured biological organs (tissues)
from leading a life like normal persons, let alone participating in social
competition on an equal footing.
Second, low income is a universal feature of the disabled group.
People with disabilities are usually low-income earners, their average
income is below the social per capita income or even hovering on the
edge of poverty line. Among the disabled persons, some have whole or
partial working capacity, while others do not possess or have lost working
capacity. Low income has made the disabled persons more vulnerable in
front of risks; once they encounter any disease or disaster, it will be hard
for them to get over with it.
Third, living in poverty. Low income has resulted in a poor life of
disabled persons, they cannot afford a large quantity of necessities or
lead a quality life. The statistics about Chinese people’s consumption
10 DEVELOPMENT OF WELFARE FOR THE CHINESE DISABLED … 223
structure show the disabled persons spend most or all of their income on
food (registering an Engel’s Coefficient as high as 80–100%) and fail to
make ends meet; they buy cheap commodities in daily life and wear old
clothes, save money from culture and entertainment, and some of them
have dropped out of school.
Fourth, low political influence. Disabled people are a vulnerable
group that have less opportunities to participate in politics and low influ-
ence on political life. Since they are “far away from the center of social
power”, and less involved in social and political activities, it is difficult for
them to exert any impact on formulation of public policies. Besides, it
is not easy for them to quickly get rid of their difficulties and solve their
problems by themselves.
Fifth, psychological hypersensitivity. Owing to physical defects, low
income and poverty, disabled people bear a higher mental pressure than
the other social groups. Either without competitive vocational skills or
age advantage, the disabled are unable to have a secure job, stable and
high income, thus making them pessimistic about their future and bear
a great psychological pressure. Moreover, with limited political influence,
the disabled are hard to change their current situations on their own. All
of these factors have resulted in their psychological hypersensitivity, senses
of serious deprivation and frustration, and lack of support in social life.
People with a low sense of social support not only debase others, but view
themselves as interpersonally incompetent, anxious and socially excluded.
They tend to have such emotions as dissatisfaction, depression, anxiety,
impatience, inability of self-adjustment and finally lose confidence in life.
10.1.2 Main Content of the Welfare for the Disabled

Welfare for the disabled is a basic material help provided by the state for
the disabled citizens when they are old, sick, unable to work, retired,
unemployed or deprived of education, and an institutional arrange-
ment—based on the level of economic and cultural development—that
safeguards the rights and interests of the disabled in rehabilitation, med-
ical care, education, employment, cultural life and social environment.
Such welfare consists of an aid system that provides enough governmen-
tal and social material help for the disabled when they are old, sick, una-
ble to work, retired, unemployed or deprived of education, and all kinds
of social welfare projects, facilities and services funded and operated by
both government and civil organizations.
224 K. HAN
(1) Living security for the disabled

Life security for disabled people is a kind of social assistance provided by
the state and society to the impoverished disabled who cannot support
their basic life by on their own. Providing basic living security for the
severely disabled, who are living in hardships and unable to work, is the
fundamental content of the welfare for disabled persons. For the disabled
who have lost the ability to work, lack of income and stable economic
sources, they rely on the state and society to help them solve the subsist-
ence problem.
China provides basic living security to the disabled who live in dif-
ficulties through such systems and channels as temporary relief, regu-
lar subsidies, “five guarantees”, poverty relief and development. The
severely disabled and the extremely poor disabled are entitled to special
support and better-quality welfare security.3 However, there are still 10
million disabled people living in poverty in rural areas who do not have
enough food and clothing. Some disabled persons who have already
solved the subsistence problem return to poverty. In China, the number
of houseless and dilapidated poverty-stricken disabled remains at about
one million, and their basic production and living conditions have yet
undergone qualitative changes.4
(2) Prevention and rehabilitation of disabilities
Based on the premise of understanding the causes for disabilities, disabil-
ity prevention is exercised to prevent, control or delay the occurrence of
disabilities by utilizing the available clinical technologies and diagnostic
equipment, as well as all necessary measures and approaches. Disability
rehabilitation is to treat and intervene the physical, psychological and
behavioral disabilities through special programs and techniques, in an
aim to help the disabled achieve and maintain optimized physical, sen-
sory, intellectual, spiritual and/or social functions, enhance their ability
to adapt to society, and finally enjoy a normal social life.
China had embarked on the rehabilitation work for the disabled in the
1950s. At that time, in order to improve the health conditions of the sol-
diers that were wounded and disabled in revolutions and wars, the state
specially built sanatoriums, rehabilitation hospitals and veterans’ houses
for them. Later, the large-sized factories and enterprises in coal mining
and metallurgical industries found some sanatoriums and rehabilitation
hospitals for their injured, sick and disabled workers; the local health
and civil affairs departments even established mental hospitals.5 To date,
China has achieved remarkable progress in the rehabilitation work for

the disabled: spread modern rehabilitation ideas and knowledge, initially
developed a rehabilitation model in line with the national conditions,
enabled 13 million disabled citizens to access to rehabilitation at varied
levels, and laid a foundation for continuous improvement of the work in
the future.6
(3) Special education for the disabled
Special education is an institutional arrangement provided by the state to
children, the youth and adults with disabilities to enjoy equal education
opportunities. With government financial support, it is an organic part of
the modern national education system. It includes preschool education,
primary education, advanced education, vocational and technical educa-
tion, and adult education. Special education satisfies the needs of the dis-
abled for knowledge, especially the disabled children. In the process of
education, special teaching aids, learning aids and instructional methods
are utilized.
(4) Employment of the disabled
Like special education, employment is also an essential part of the welfare
for the disabled. One of the important purposes of the welfare for the
disabled is to promote their own development and encourage them to
learn self-reliance. Such purpose is achieved by adopting various meas-
ures to guarantee their employment. These measures generally consist
of two aspects: (1) Use legal or policy means to guarantee the employ-
ment opportunities of the disabled. For example, in all countries, cer-
tain enterprises are legally bound to preserve a proportion of positions
for the disabled, or the government is obliged to fund and establish wel-
fare enterprises to recruit disabled employees. (2) Arrange vocational
rehabilitation for disabled workers and provide the disabled with voca-
tional consultation, assessment and training, as well as associated welfare
services.
In China, employment of the disabled is mainly realized by the fol-
lowing pathways: (1) Centralized employment. At present, the state and
society establish welfare enterprises, occupational therapy institutions
and blind massage institutions, as well as welfare enterprises, public insti-
tutions and organizations, in an aim to create job opportunities for the
disabled. (2) Decentralizes employment. The relevant laws of China pro-
vide that all regions, departments and units shall arrange the disabled to
occupy a certain proportion of positions in government departments and
226 K. HAN
public institutions, enterprises and other economic organizations, and

designate appropriate jobs and positions for them. In addition, relevant
government departments shall encourage and help the disabled to seek
employment on their own by means of employment assistance.
(5) Culture, sports and entertainment for the disabled
The welfare for the disabled at the initial stage paid more attention to
satisfying their material needs. With the continuous development of the
welfare cause for the disabled, there have been rich and colorful cultural
and sports activities for them, thus enriching the content of the welfare
for the disabled. Sports for the disabled is of far-reaching significance.
Lots of countries now attach great importance to the development of
sports for the disabled, and regard it as a sign that manifests the develop-
ment level of their sports, economy and civilization.
China adopts the following measures for developing the sports, rec-
reation and entertainment activities for the disabled: (1) Relevant gov-
ernment departments, associations of the disabled and communities shall
strengthen organization and management of the leisure activities for the
disabled, and guide them to participate in the activities that are condu-
cive to their physical and mental wellbeing, and cultivating a noble taste;
(2) Further increase the support for the disabled and help them address
the prominent difficulties and problems in education, employment and
marriage. (3) Accelerate construction and improvement of barrier-free
facilities, enable the disabled to go out and move around more easily,
and enjoy themselves in leisure activities. (4) Incorporate leisure educa-
tion into the educational system of the special schools for the disabled
to improve their leisure skills, so that they can get rid of self-enclosure to
expand social space.7
(6) Construction of a barrier-free environment
A barrier-free environment is made up of an accessible physical environ-
ment, and unobstructed information exchange and communication. An
accessible physical environment requires that the planning, design and
construction of urban roads, public buildings and residential areas shall
be easy for the disabled to go through and utilize, e.g., urban roads shall
be convenient for those in wheelchair, on crutches or visually impaired
to pass on; public buildings shall be installed with special facilities for the
disabled at gateways, ground, elevators, armrests, bathrooms, rooms and
counters. Unobstructed information exchange and communication indi-
cate that the public media shall adopt measures, e.g., subtitle and caption
in films and TV plays, sign language in TV programs and audiobooks for

the blind, to enable people with hearing, verbal or visual impairment to
obtain information and communicate with others without barriers.
All countries have enacted laws and regulations for construction of a
barrier-free physical environment, i.e., the architectural design shall pay
attention to create an open, convenient and safe space for the disabled to
go around. In addition, the development of network information tech-
nology also puts forward new requirements for unobstructed informa-
tion exchange and communication of the disabled: on one hand, ensure
their rights and opportunities to access to information on the Internet;
on the other hand, facilitate them to use the Internet easily and freely,
which calls for specially designed computer hardware and software.
10.1.3 Achievements in the Welfare for the Disabled

Welfare for the disabled is of crucial strategic and practical significance
for coordinated social and economic development, since it fully shows
the level of welfare and civilization of a country and society, and helps
eliminate social exclusion, narrow wealth gap and promote social justice.
According to the second national sample survey of the disabled in
2006, China had altogether 82.96 million people with disabilities,
accounting for 6.34% of the total population. Among them, 12.33
million were visually impaired (14.86%), 20.04 million with hear-
ing impairment (24.16%), 1.27 million had speech disability (1.53%),
24.12 million were physically handicapped (29.07%), 5.54 million
had intellectual disability (6.68%), 6.14 million were mentally disa-
bled (7.40%), and 13.52 million suffering from multiple disabilities
(16.30%).8
After the founding of new China in 1949, great progress has been
achieved in China’s welfare programs for the disabled. Since the prom-
ulgation of the Labour Insurance Regulations in 1951, the Chinese
government has set up schools for deaf-mutes, welfare institutions and
enterprises. To date, several laws and regulations concerning the welfare
for the disabled have taken effect, such as the Regulations on Education
for Individuals with Disabilities and Law on the Protection of the Disabled.
Besides, in China’s Education Law, Compulsory Education Law, Higher
Education Law and Vocational Education Law, the education for the
disabled is also mentioned. In 1994, the Regulations on Education for
Individuals with Disabilities (Decree No. 161 of the State Council)
228 K. HAN
came out, which are specifically stipulated for the disabled persons.
By the end of 2003, China had a total of 1655 special schools and
3154 special educational classes run by ordinary schools, accommo-
dating 577,000 students with visual, hearing and verbal, or intellectual
impairments. As of 1993-end, there were 1532 community-based reha-
bilitation stations/points in urban and rural areas across the nation.9
According to the Statistical Bulletin of Social Service Development 2016,
by the end of 2016, there had been 244 service institutions for intel-
lectually and mentally disabled under administration of the Ministry
of Civil Affairs, in possession of 84,000 beds. Among them, there
were 150 social welfare hospitals (psychiatric hospitals) with 53,000
beds, taking in 44,000 patients of all kinds; and 94 psychiatric hos-
pitals for veterans with 31,000 beds, taking in 25,000 patients of all
kinds.10 In addition to the above achievements, China has also made
progress in developing culture, sports and barrier-free facilities for the
disabled.
10.2 Problems in Welfare for the Disabled

and Countermeasures
With respect to the difficulties and problems existing in China’s wel-

fare cause for the disabled, several Chinese scholars have contributed
insightful views and countermeasures for getting out of the predica-
ment. According to Cai He and Zhou Lingang, the persons with dis-
abilities are beset by conceptual exclusion, employment exclusion,
education exclusion, physical environment exclusion. Given this, elim-
inating the social exclusion borne by the disabled and ensuring their
equal participation in social life are the keys to improving their living
environment.11 Zhou Pei deconstructed the social welfare system for
the disabled, suggesting it is constituted by basic projects (e.g., social
insurance and social assistance), professional projects (e.g. social work
and rehabilitation education) and advanced projects (e.g., social ser-
vices and social support); we cannot guarantee smooth construction
and implementation of the social welfare system for the disabled unless
we have improved the laws for them, standardized the social insur-
ance system, and formed a service and relief network for them.12 Wang
Zhenyao et al. enumerated the major problems in China’s welfare for
the disabled: imperfect legal system, unequal educational opportunities,
underdeveloped medical rehabilitation, insufficient jobs and lagged con-

struction of barrier-free facilities. At present, China mainly relies on the
following measures to reform and develop the welfare for the disabled:
(1) Establishing and improving relevant systems, mainly the systems of
subsistence allowance, flat rate subsidy for the disabled, special assistance
and support. (2) Expanding the scope of rehabilitation services for the
disabled by means of establishing a social rehabilitation service system
involving rehabilitation institutions, communities and families; improv-
ing the system for prevention and treatment of mental illness; R&D,
production and supply of all kinds of assistive devices urgently needed
by the disabled; and using the mass media to carry out welfare public-
ity for rehabilitation of the disabled. (3) Vigorously promoting educa-
tion and training for the disabled by further improving the educational
policies and systems for children with disabilities, working on overall
plans for the special education for high school students with disabilities,
developing vocational education for the disabled, and building a con-
tingency of teachers dedicated to special education. (4) Doing a better
job in ensuring employment of the disabled through implementation of
the policy for allocating a certain proportion of jobs to the disabled, set-
ting up welfare enterprises, giving full play to the role of disabled per-
sons’ federations at all levels, and organizing vocational training for the
disabled.13
At present, China’s welfare for the disabled is troubled by the follow-
ing evident problems: (1) A large scale of the disabled persons, but lack
of effective institutional guarantee. (2) The sources of welfare funds for
the disabled are too limited, i.e., mainly from financial allocation, the
poverty of these persons remains a thorny issue. (3) The disabled, espe-
cially the children and teenagers with disabilities and deprived of educa-
tional opportunities, are prone to commit crimes or become puppets at
the mercy of criminal gangs. (4) The welfare for the disabled is increas-
ingly like administrative affairs, since the disabled persons’ organizations
and welfare function of government departments are yet to be clearly
positioned. (5) The disabled persons in rural areas are a particularly vul-
nerable group, they are not fully taken care of by preferential policies,
but remain supported by their family members.
In view of the above problems, we will hereby dissect the problems
and countermeasures in the employment, education and construction of
barrier-free environment for the disabled.
230 K. HAN
10.2.1 Employment of the Disabled

Employment of the disabled has become a social problem that cannot
be ignored in the period of social transformation. Employment concerns
people’s livelihood and determines survival of the disabled. In order to
properly resolve the issues about the disabled, the first and foremost is to
provide equal job opportunities to the disabled persons capable of work-
ing. But the statistics show that the employment rate of the Chinese dis-
abled is only half that of healthy people, and their average salary is no
more than 50% of their healthy counterparts.14 In this context, it seems
pressing to formulate a more sophisticated employment policy for the
disabled.
(1) Major problems for the disabled to seek employment
At present, there are mainly three problems that hold back the Chinese
disabled from acquiring jobs:
First, employment discrimination and lack of job opportunities.
Currently, the discrimination against the disabled in labor market
remains serious and prevalent. Most employers are unwilling to recruit
the disabled since they do not trust them can work as efficiently as
their healthy colleagues. The more worrisome is that the disabled may
be imposed a new round of exclusion in labor market along with con-
tinuously developing market economy. In addition, while considering
China’s severe employment situation in recent years, disabled persons
may encounter new challenges and pressures in the fiercely competitive
labor market.
Second, employment quality for the disabled is not high on the
whole, and employment patterns cannot meet the needs of employment
situation. Currently, a large number of the disabled are either unable to
find jobs or laid off, and almost 10 million disabled persons in rural areas
still lead a poor life. Urban and rural areas are implementing inconsist-
ent employment systems for the disabled, making their living quality vary
greatly. The employment of persons with different types of disabilities is
imbalanced, it is particularly difficult for those visually impaired or with
intellectual and mental disabilities to find jobs. In terms of employment
patterns, China has been insisting that centralized employment shall play
a key role, other employment patterns serve as a complementary, such
practice has indeed helped lots of disabled persons get employed in a
certain historical period; however, there has been intensifying competi-
tion among enterprises along with the development of market economy,
the welfare enterprises—specially established to provide jobs for the dis-

abled—are reduced into a disadvantaged situation for lacking technical
talents, advanced management, production scale and quality products,
and hard to survive amid such cruel market competition. Furthermore,
decentralized employment at certain proportion is hard to be effectively
implemented for obscurely defined subject of administrative execution.
Third, lack of both working skills and high-level education. People
with disabilities often lack of vocational training and sufficient educa-
tion. With an overall low-level cultural quality, the disabled job seekers
are neither competitive nor unattractive in job market, but biased and
discriminated by employers. Moreover, the existing schooling and train-
ing systems for the disabled divorce from market demand, meaning that
the students cannot find jobs after graduation, which in turn dampens
the enthusiasm of the disabled to go to school and then forms a vicious
circle.
(2) Countermeasures for resolving employment difficulties for the
disabled
In order to improve the employment environment and effectively resolve
employment difficulties for the disabled, we shall take the following
measures:
First, intensify policy protection for employment of people with
disabilities. In 2007, the State Council issued the Regulations on the
Employment for Disabled Persons, which explicitly stipulates that all kinds
of enterprises shall preserve a certain proportion of jobs for the disabled.
But the difficulties and obstacles in their employment remain in exist-
ence. The government shall introduce forceful policies to support wel-
fare enterprises and encourage self-employment of the disabled, and in
the meantime develop detailed measures to carry out these policies. For
example, the government shall coordinate with judicial departments to
eradicate such phenomena as “non-compliance with laws and slack law
enforcement”; further strengthen law enforcement inspection; popu-
larize legal knowledge, crackdown on and severely punish the conducts
that infringe on the employment right of the disabled, so as to effectively
safeguard their rights and interests.
Second, improve comprehensive quality of the disabled. We shall
improve comprehensive quality of the disabled, such as literacy rate and
vocational skills, and constantly strengthen their schooling and training,
it is the fundamental way to resolve the difficulties in their employment.
232 K. HAN
At present, the generally poor comprehensive quality of the disabled is a

major obstacle to their employment. In other words, they cannot gain
an advantage in labor market and have the initiative amid market com-
petition unless they are knowledgeable and skilled. Therefore, ensuring
education and vocational training for the disabled is of great importance
in increasing their employment rate.
Third, develop employment opportunities for the disabled. Decentralized
employment and self-employment are two major options for the Chinese
disabled at present. In the era of market economy, the key to create jobs
for the disabled in China is to maintain and improve operation of wel-
fare enterprises, since they boast such advantage as centralized employ-
ment for these persons. In the meantime, the state and society shall
actively create self-employment opportunities for the disabled, and build
a favorable social atmosphere and market environment for them to start
businesses and achieve success.
10.2.2 Education of the Disabled

China has introduced a series of policies and measures to guarantee the
equal right of disabled persons to receive education since 1949. The
Decision on the Reform of School System, released by the then Council
of Political Affairs (predecessor of the State Council) in October 1951,
requires establishment of special schools for the deaf-mute and blind.
Since the reform and opening up, the state promulgated the Opinions
on Development of Special Education (1989) and the Regulations on
Education for Individuals with Disabilities (1994) to keep developing
special schools for the deaf-mute and blind, open special classes for the
disabled in ordinary schools, allow disabled children to study in regu-
lar classes, set up all kinds of short-to-medium term vocational training
classes, common technical secondary schools and technician training
schools to enroll students with disabilities.
In reference to the second national sample survey of the disabled,
as of April 1, 2006, China had a total of 3.87 million people with disa-
bilities, including 2.46 million school-aged children from 6 to 14 years
old, accounting for 2.96% of the total disabled population. Among the
disabled children, 20.93% with visual impairment, 15.95% with hearing
impairment, 23.08% with speech impairment, 19.64% with physical dis-
ability, 35.14% with intellectual disability, 30.58% with mental disabil-
ity, and 59.01% with multiple disabilities; all of them were deprived of
compulsory education.15 Even if some disabled children had the oppor-

tunity to go to school, quite a number of them could not go through the
9-year compulsory education. Although the special education for the dis-
abled in China has made great progress since the 1980s, it is still devel-
oping at a slow pace and lagged behind in contrast to the development
of general education.
(1) Major problems for the disabled to receive education
First, system construction is congenitally deficient and lacking legis-
lative guidance. Chinese legislations for protection of the rights of the
disabled and their education are mostly principles and general laws, e.g.,
the Law on the Protection of the Disabled and the Compulsory Education
Law. But such laws and regulations do not contain detailed explanations
or operation rules, even the Regulations on Education for Individuals
with Disabilities, which are specially provided for the disabled persons,
have not risen to the level of law. This situation has resulted in differ-
entiated policy implementation and weakened effectiveness of poli-
cies. Other countries and regions have taken the lead in laying legal a
basis for safeguarding the right to education of the disabled. Belgium
put into effect of the Special Education Act in 1970 and the Special
Education and Integrated Education Act in 1986. The Danish Ministry
of Education made public the first Special Education Act in 1972, and
then successively enforced another six acts for the disabled. In 1975, the
United States enacted the Individuals with Disabilities Education Act. In
1976, the British Parliament adopted the Warnock Report, which con-
stituted the foundation of the Education Act 1981 and the Education
Act 1993. South Korea enacted the Special Education Promotion Law in
1977, while Israel did so in 1998. Taiwan Area promulgated the Special
Education Law in 1984, which is a separate legislation to guarantee the
right to education of the disabled. The above examples prove that a
sophisticated education law is an institutional basis for the disabled per-
sons to receive education.
Second, underdeveloped educational institutions and lack of specially
trained teachers. At present, the educational institutions for the Chinese
disabled are far from sufficient to meet their demand, and the conditions
of school-running shall be further improved. In most Chinese special
schools, buildings and classrooms are at a low standard, both teaching
and living facilities are incomplete. In ordinary schools where disabled
students are studying in regular classes do not have a special learning
234 K. HAN
environment and supporting facilities. In the vocational schools and

training institutions engaged in special education, the instruction of
vocational skills is usually confined to textbooks, and disabled students
do not have much practice opportunities, which is attributed to the
absence of necessary and professional teaching equipment. In addition,
although lots of teachers have devoted themselves into special education,
most of them are neither graduates majored in nor trained for special
education, such situation is unable to ensure better-quality education of
the disabled.
Third, decentralized responsibilities of departments and insufficient
social participation. Education for the disabled involves multiple institu-
tions such as disabled persons’ federation, ministries of civil affairs, edu-
cation and social security, as well as schools. However, such governance
by multiple parties features poor coordination, absence of an integration
mechanism and accountability mechanism. Different parties have their
own policy objectives which are neither unified nor centralized, thus
making it hard to implement the policies or ascertain where the manage-
ment responsibility lies. As such, it is urgent to define the responsibilities
of each party, raise their work efficiency and protect the right to educa-
tion of the disabled. In addition, the existing educational institutions for
the Chinese disabled are mostly run by government, which are unable to
effectively cooperate with society and enterprises or make better use of
social resources. The school-run enterprises, which are set up by special
education schools, are not good at operation and management but exist
in name only, because of no professional management or products that
meet market demand.
(2) Countermeasures for resolving the difficulties in education for the
disabled
In general, the education for the disabled encounters the problems inside
and outside of the educational system, and there are also historical rea-
sons, as well as constraints of the level of current socioeconomic devel-
opment. The practitioners in special education and relevant departments
shall actively explore strategies and measures, e.g., enacting a special edu-
cation law, establishing a financial investment system for education of the
disabled, and optimizing structure of education, so as to promote the
development of fair and high-quality education for disabled persons.
First, pay attention to developing welfare education for disabled
persons. The state shall incorporate education of the disabled into
the overall education welfare system, clarify the relationship between

education of the disabled and other welfare programs, abolish the pro-
jects that are overlapped or unable to reflect the needs of the times, and
steer education of the disabled onto the road of welfare, systematization
and institutionalization. In addition, since China remains at the primary
stage of socialism, it is impossible for government to take full charge
of the education for disabled persons. So we shall, on one hand, con-
tinue letting government play a leading role in running special education
schools, and on the other hand, expand social participation and increase
sources of educational funds by supporting and encouraging individuals,
non-governmental sectors and social donations to do their part.
Second, increase investment into special education and strength
construction of a contingency of specialized teachers. Inadequate edu-
cational fund for the disabled not only demonstrates absence of govern-
ment responsibility, but also seriously restricts cultivation of teaching
staff in special education schools, and results in shortage and outflow
of talents. The state shall increase financial input into education for the
disabled, adjust up amount of fiscal subsidy, and allocate special funds
to build a number of high-quality special education schools with good
social benefits. The special funds shall be spent on all kinds of special
facilities and equipment for disabled students, and on training teachers
and subsidizing the full-time teachers dedicated to special education.
Third, give full play to the role of social forces. We shall advocate such
concepts of universal welfare and diversified participation to boost devel-
opment of the welfare for disabled persons, stimulate the entire society
to care about their education, and motivate social forces to participate
in their education. Among all social forces, NGOs are no doubt of great
significance in developing education of disabled persons. The operational
practice shows two advantages of the NGOs: on the one hand, it is easier
for NGOs to obtain governmental resources that are required for their
operation; on the other hand, NGOs seem closer to welfare recipients,
meaning that they can respond to their needs more flexibly and then
provide targeted services for the recipients in a better way.
10.2.3 Construction of a Barrier-Free Environment

Construction of a barrier-free environment is for the purpose of ensur-
ing that the vulnerable group, including the people with disabilities and
the elderly, is able to move around easily and freely. Barrier-free buildings
236 K. HAN
and other facilities will expand the scope of action of the disabled, so that
they can participate in social life and integrate into all aspects of soci-
ety like healthy people, and share the physical and spiritual achievements
brought by socioeconomic development.
Since the 1980s China has made unremitting efforts to construct a
barrier-free environment for the disabled:
• In March 1984, China Foundation for Disabled Persons (CFDP)

was founded to improve the work for creating an “equal and partic-
ipatory” social environment for the disabled.
• In 1985, Beijing took the lead in researching barrier-free tech-
nologies, and held a seminar on “Disabled Persons and Social
Environment” where the attendees advocated to “create a conven-
ient living environment for the disabled”.
• In July 1986, the Ministry of Construction (MOC), the Ministry
of Civil Affairs (MOCA) and CFDP jointly formulated the Codes
for Design on Urban Roads and Buildings Conveniently Used by the
Disabled (JGJ50-88) (for trial), the first one of this type in China,
which was promulgated and implemented as of April 1, 1989,
marking an official start of China’s barrier-free environmental
construction.
• In December 1990, China promulgated the Law on the Protection of
the Disabled which provides that the state and society shall gradually
implement barrier-free architectural design norms and adopt sup-
porting measures, marking that China’s barrier-free environmental
construction for the disabled is guaranteed by mandatory rules of
law.
• In 1995, Beijing Municipal Government, in reference to the
requirements of the United Nations Economic and Social
Commission for Asia and the Pacific (UNESCAP), selected
Fangzhuang residential community in Fengtai District to imple-
ment the pilot project of barrier-free environmental construction.
Before that, Beijing had put into effect of several policies and regu-
lations in this regard, and rebuilt Wangfujing and other streets into
a barrier-free zone as early as in 1985.
• In 1996, China developed the Outline of the Ninth Five-Year Plan
for the Cause of the Chinese Disabled (1996–2000), which includes
implementation norms into the examination and approval of capital
construction so as to gradually popularize barrier-free facilities.
• In 1998, the MOC, MOCA and China Disabled Persons’

Federation (CDPF) jointly released the Circular on Supplementary
Provisions for the Codes for Design on Urban Roads and Buildings
Conveniently Used by the Disabled, asking to strengthen the exami-
nation and approval and acceptance inspection of barrier-free pro-
jects, and apply barrier-free design to the entrance to high-rise flats
and roads in residential areas.
• In 2000, the MOC and CDPF successfully held an international
seminar on the “Construction of Barrier-free Public Facilities in the
Asia-Pacific Region” in Shenzhen. Since then, barrier-free design
has become prevalent in planning, construction and municipal facil-
ities in China’s major cities.
• On August 1, 2001, the MOC, MOCA and CDPF jointly prom-
ulgated the Codes for Design on Accessibility of Urban Roads and
Buildings (JGJ50-2016).
• On July 18, 2003, the MOC approved the National Standard
Architectural Design Atlas—Design on Accessibility of Buildings,
which has pushed China’s barrier-free architectural design and con-
struction to a new height.
Thanks to continuous socioeconomic development in recent years, China

has made further progress in construction of a barrier-free environ-
ment for the disabled. Several large and medium-sized cities like Beijing,
Shanghai, Tianjin, Guangzhou, Shenzhen, Shenyang and Qingdao have
built sidewalks for the blind, and curb ramps for wheelchair users; in
large public buildings there are rampways for wheelchair users and the
elderly to enter from the outside into the inside, as well as stairs, eleva-
tors, telephones, toilets, handrails, wheelchair seats and other barrier-free
facilities that are convenient to use.
(1) Major problems in construction of a barrier-free environment
At present, China has encountered some problems in construction of a
barrier-free environment:
First, insufficient understanding of construction of a barrier-free envi-
ronment for the disabled. China is a latecomer in barrier-free environ-
mental construction for the disabled, the entire society and individuals
are not yet fully aware of the significance of this issue: the public lacks
basic knowledge about the barrier-free environment for the disabled,
a large number of construction and supervision personnel in charge
238 K. HAN
of barrier-free facilities are not better. Due to lack of knowledge and

understanding of this issue, some people tend to think that barrier-free
facilities are not indispensable since they are only used by a small number
of disabled persons, as a result, such facilities are not properly protected
and even damaged from time to time.
Second, the barrier-free facilities for disabled persons remain incom-
plete and defective. China indeed has greatly improved the barrier-free
environment for the disabled since the 1980s, but it still has a long way
to go in this regard. According to the Main Data Report on Monitoring
of Nationwide Disabled Persons in 2007, published by CDPF in 2008, in
the urban areas across the country, the communities with ramps, blind
lanes and notice boards respectively accounted for 45.1, 43.2 and 30.4%,
the facilities with handrails were 26. 9%, and those with automatic doors,
barrier-free elevators and prompt braille signs were 9. 2, 3.1 and 2.2%,
and the roads with a voice direction finder at the intersection were
merely 1.2%.16 It can be seen that China still lags behind in construc-
tion of barrier-free facilities at present, the auxiliary facilities are espe-
cially backward. In quite a number of cities, the barrier-free design of
streets and communities, such as laying of blind lanes and ramps, is a
mere formality since it is inconsistent with design norms and inconven-
ient for the disabled and the elderly to use. Some barrier-free facilities
seem like “vanity” or “mandatory” projects, i.e., some blind lanes are
only built on sidewalks, but not connected to the entrance to stations,
shops, banks and other public facilities; the public transportation system
almost has no barrier-free facilities, the wheelchair-bound people cannot
take buses or enter subway stations, and there are no braille bus-stop
boards.
Third, maintenance and management of barrier-free facilities for the
disabled shall be strengthened. Although China has built a large quan-
tity of barrier-free facilities for the disabled from scratch, and some of
them are particularly advanced, their utilization rate is extremely low,
because they have been seriously damaged and occupied. For example,
in urban areas, blind lanes and ramps on roads are frequently vandalized
and arbitrarily occupied, handrails for the disabled in public toilets are
destroyed, and low-level telephones cannot work. As a result, few blind
people “dare” to walk on blind lanes, and few disabled persons have a
chance to use all kinds of barrier-free facilities. Such reality requires us
to pay more attention to maintenance and management of barrier-free
facilities.
(2) Countermeasures for resolving the difficulties in construction of a

barrier-free environment for the disabled
First, strengthen publicity on building a barrier-free environment for the
disabled. For its weak foundation of a barrier-free environment, China
shall intensify efforts in education and publicity to enable barrier-free
environment construction is be recognized and supported by the whole
society, so that barrier-free facilities will be one day as commonplace as
traffic lights. The state shall, through conscious advocacy and publicity,
create a positive atmosphere where the free movement of disabled per-
sons is respected and their barrier-free facilities are protected.
Second, enable the disabled to use barrier-free facilities more effi-
ciently. On the one hand, we shall maintain and protect the existing bar-
rier-free facilities and further strengthen their management; on the other
hand, we shall assist the disabled to be familiar with such facilities, so that
they can use them more efficiently. The barrier-free facilities shall be a
convenient tool for the disabled to move freely, and then actively partici-
pate in social life.
Third, continue increasing and improving barrier-free facilities for
the disabled. Currently, the legal norms, systematic planning, equip-
ment R&D, and construction standards for barrier-free facilities for the
Chinese disabled remain backward, which has somewhat resulted in
isolation and separation of disabled persons from the mainstream soci-
ety. China shall, based on its existing socioeconomic achievements and
mature foreign experiences in this regard, further improve barrier-free
environmental construction for the disabled. To be more specific, China
shall strengthen law enforcement, develop systematic planning, support
R&D of assistive devices and raise construction standards, increase vari-
ety of barrier-free facilities and constantly improve their construction, so
as to create basic conditions for the disabled to participate in social life
on an equal footing.
10.3 Development of Chinese Welfare Enterprises

Welfare enterprises—main channel for absorbing disabled employees—
play an important role in delivering welfare to the disabled. But their
survival and development has been challenged by continuously develop-
ing market economy.
In recent years, lots of scholars have noticed the problems and diffi-
culties in front of the Chinese welfare enterprises under the condition
240 K. HAN
of market economy. For example, Wang Xuemei argues that the fierce
market competition has forced a large number of disabled workers in
welfare enterprises to be laid off, the governmental support and pro-
tection policies for welfare enterprises have become outdated. She is
worried about the employment prospect of the disabled that are still
working in existing welfare enterprises.17 According to Zhou Yunteng,
Chinese welfare enterprises are hard to keep abreast with the develop-
ment of socialist market economy, which is attributed to their backward
operation and management model. Most of them either go bankrupt
or keep struggling for survival, it is unlikely for them to employ more
disabled persons. The number of disabled employees in welfare enter-
prises has been decreasing year by year.18 The Research Group on
Employment of the Chinese Disabled draws a conclusion that Chinese
welfare enterprises are seriously differentiated in their operating condi-
tions: some fairly profitable township enterprises are transformed into
welfare enterprises under the stimulus of tax reduction and exemption,
and the tax rebate policy has further built up their competitiveness.
However, upon the end of the shortage economy, more enterprises,
for such reasons as shortage of funds, outdated equipment and tech-
nology, and unskilled employees, have found it too difficult to sustain
operation, but chosen to shut down to transit to a different industry,
thus dismissing a large number of disabled workers.19 Yan Chun agreed
that the development of Chinese welfare enterprises is lagging behind.
Welfare enterprises have always been the foremost choice to arrange
jobs for the disabled. However, under the great impact from the mar-
ket economy in recent years, lots of these enterprises were knocked out
of market, some are reduced to an awkward situation of barely surviv-
ing, while those relatively profitable are overcrowded with disabled
employees.20
According to the second national sample survey of the disabled,
among the total of 20.71 million disabled in cities and towns across
the country, 2.97 million were on-the-job, while 4.7 million were
jobless.21
While considering the abovementioned problems, we can see that the
research on development of welfare enterprises not only concerns the
improvement of employment and living standards of the disabled, but
strongly benefits the improvement of China’s welfare system for the
disabled.
10.3.1 Development Course

Chinese welfare enterprises emerged in the 1950s with their predeces-
sor as the production units mainly constituted by the families of military
personnel and martyrs and the impoverished people. Since 1952, some
municipal governments began to organize these two groups of people
to work in handicraft industry and small industrial production; later, the
production units gradually formed production groups constituted by the
ordinarily disabled people that were capable of working. The Ministry
of Civil Affairs exercised comprehensive planning and unified arrange-
ment of these production groups, and rebuilt quite a number of them
into the enterprises that provide jobs for the disabled, so these enter-
prises are known as “social welfare enterprises”.22 Under the impact from
the Great Leap Forward campaign launched in 1958, all parts of the
country gathered together the aged, the weak, the sick and the disabled
(including the blind, deaf, mute, widowers, widows, orphans and child-
less), who had completely or partially lost their ability to work, to take
part in simple production. The welfare enterprises initially did not have
a clear positioning, i.e., they were public institutions in form but welfare
houses in nature, so some were called blind-mute factories, while oth-
ers were welfare factories. With low working capacity, the disabled could
only do simple jobs and earn a limited income, which was not enough to
maintain their basic livelihood, so they needed monthly life relief from
civil affairs department. Since the 1950s, China began to implement the
state welfare system, i.e., the state guarantees employment of individu-
als, and their basic necessities of life are provided by their work units;
with respect to the disabled, their jobs are arranged by welfare enter-
prises and their basic livelihood is supported by the state. A social welfare
policy that “provides citizens with livelihood security, medical treatment,
educational opportunities and a burial place after death” thus coming
into being.
The Cultural Revolution (1966–1976) inflicted heavy losses on the
Chinese economy, forcing the development of welfare enterprises come
to a halt. Since the reform and opening up, the state began to place a
new emphasis on survival and development of welfare enterprises, and
introduced a series of preferential policies and regulations—on produc-
tion and operation, raw material supply, tax reduction and exemption—
to support these enterprises. Thanks to these incentive policies, Chinese
welfare enterprises had seen their production scale, business profit and
242 K. HAN
number of disabled employees keep expanding at a fast pace until the

mid-1990s (see Table 10.1).
However, under the impact of market economy, welfare enter-
prises, which have all along been protected and supported by the pref-
erential policies of the state, become especially vulnerable. Despite of a
small number of welfare enterprises remain active market players with
advanced technologies, sophisticated products and abundant capital as
their backup force, a majority of them keep producing and processing
simple products with low technical content, such as cartons, quilt wad-
ding, palm rope and gloves, because the disabled workers are poorly
educated (either illiterate or semiliterate) and physically weak, and the
enterprises themselves seem powerless for inadequate funds, aging equip-
ment and incomplete infrastructure. Along with rapid development of
modern science and technology and increasingly fierce market competi-
tion, lots of the welfare enterprises confined to extensive production and
processing have been winnowed out, and the remaining enterprises find
it hard to survive out of the fierce competition due to the abovemen-
tioned adverse factors, some of them were forced to halt production or
even close down.
In reference to the data in Table 10.1, after the mid-1990s, the
growth of the number of welfare enterprises slowed down significantly,
and their profits even showed negative growth. Although corporate
profits have been increasing year by year since 1999, the number of wel-
fare enterprises and the total number of disabled employees have been
decreasing annually. Generally speaking, the development of welfare
enterprises at this stage is in a state of atrophy. As the number of welfare
enterprises drops, they can no longer absorb as many disabled employees
as before, thus weakening their importance in delivering welfare to the
disabled.
10.3.2 Major Problems

(1) Existing enterprise scale and efficiency are hard to guarantee employ-
ment of the disabled
Under the condition of market economy, massive welfare enter-
prises, with simple and crude equipment, outdated technology, inade-
quate funds, backward products, unskilled management and production
personnel, are unable to adapt to the rapidly changing market and
reduced to a disadvantageous situation amid competition. Deteriorating
Table 10.1 Development of Chinese welfare enterprises
Year Number of YoY growth Total YoY growth Profit (bln YoY growth Total number Number of Proportion
enterprises (%) output (%) yuan) (%) of employees the disabled of the
value (bln disabled
yuan) in total
employees
(%)
1986 19,900 33.6 6.87 44.4 0.63 19.6 886,000 370,000 41.8
1987 27,800 39.9 11.47 67 0.92 46 1,139,000 433,000 38
1988 40,500 45.7 20.63 79.9 1.66 80.4 1,476,000 664,000 45
1989 41,600 2.7 26.15 26.8 0.66 −60.2 1,634,000 – –
1990 41,800 0.5 30.13 15.2 0.59 −10.6 1,583,000 – –
1991 43,800 4.8 41.26 36.9 – – 1,702,000 – –
1992 49,700 13.8 66.18 60.4 – – 1,901,000 700,000 36.8
1993 56,800 14.2 89 34.5 – – 2,059,000 842,000 40.9
1994 60,000 5.3 – – – – 2,183,000 909,000 41.6
1995 60,000 0 – – – – 2,221,000 939,000 42.2
1996 59,000 −1.7 43.35 – – 2,168,000 936,000 43.2
1997 55,000 −6.8 35.6 −17.9 – – 2,088,000 910,000 43.6
1998 51,000 −7.3 35.52 −0.2 – – 1,953,000 856,000 43.8
1999 45,000 −11.8 – – 7.67 20 1,800,000 790,000 43.9
2000 40,000 −11.1 – – 9.9 29 1,670,000 729,000 43.7
2001 38,000 −5 – – 12 21.2 – 700,000 –
2002 36,000 −5.3 – – 14.83 23.9 – 683,000 –
(continued)
10 DEVELOPMENT OF WELFARE FOR THE CHINESE DISABLED …
243
Year Number of YoY growth Total YoY growth Profit (bln YoY growth Total number Number of Proportion
enterprises (%) output (%) yuan) (%) of employees the disabled of the
value (bln disabled
244 K. HAN
yuan) in total
employees
(%)
2003 34,000 −5.6 – – 19 28.1 – 679,000 –
2004 32,000 −5.9 – – 21.9 15.3 – 662,000 –
2005 31,200 −3.1 – – 22.52 2.8 – 637,000 –
2006 30,200 −3.3 – – 23.78 5.6 – 559,000 –
2007 25,000 −17.3 – – 16.93 −28.8 – 561,000 –
2008 23,800 −4.8 – – 11.84 −30.1 – 619,000 –
2009 22,800 −4.2 – – 12.54 5.9 – 627,000 –
2010 22,300 −1.9 – – – – – 616,000 –
2011 21,500 −3.2 – – 14.01 −7.1 – 628,000 –
2012 20,200 −5.9 – – 11.84 −15.5 – 597,000 –
2013 18,200 −9.9 – – 10.69 – – 539,000 –
2014 16,400 −10.1 – – 9.52 – – 479,000 –
2015 15,000 −8.5 – – 8.14 – – 429,000 –
2016 – – – – – – – – –
Source All the above data are drawn from years’ statistical bulletins published on the website of the Ministry of Civil Affairs, 12/28/2017, http://www.
mca.gov.cn/article/sj/tjgb/
operation and management have forced lots of these enterprises to halt

production or close down, and then dismiss numerous disabled work-
ers. Take Beijing for instance, local welfare enterprises once reached their
peak in the early 1990s; in 1997, there were altogether 2322 welfare
enterprises and 28,278 disabled employees. Since then, both the num-
ber of welfare enterprises and their disabled workers began to decline. By
2006, the number of Beijing-based welfare enterprises had been reduced
to 1439, with only 15,720 disabled workers.23 Moreover, most welfare
enterprises, though create lots of jobs to the disabled, are actually small-
sized and less competitive manufacturing factories. Once they go bank-
rupt or fall into predicament, their disabled workers may lose their jobs.
Even if the disabled continue working in these factories, it is hard for
them to achieve self-promotion in such a small business.
(2) Preferential tax policies are not the only way to promote develop-
ment of welfare enterprises
Tax preference for welfare enterprises is the most important eco-
nomic policy for the government to encourage the development of
welfare enterprises. On February 28, 1980, the Ministry of Finance
and the Ministry of Civil Affairs issued the Circular on the Issues about
Payment of Income Tax by Welfare Production Units Run by Civil Affairs
Departments. Article 1 of the Circular states that “if the blind, deaf,
mute and physically disabled employees in a welfare production unit
account for more than 35% of the total number of its production person-
nel, this production unit shall be exempted from paying income tax; but
if the proportion is higher than 10% but lower than 35%, then its income
tax is collected by half”. Article 2 of the Circular states that “for a welfare
production unit newly established by civil affairs department, it may be
exempted from paying income tax for one year as of the month when it
is put into operation. Upon expiration of the tax-free period, it shall pay
income tax in reference to the provisions of Article 1”. Later, the Interim
Measures for Administration of Social Welfare Enterprises came out, stip-
ulating that if an enterprise employs disabled persons that exceed 35% of
the total number of its production personnel, and its nature as a social
welfare enterprise is then affirmed by the civil affairs department at and
above the county (district) level (including the county level, the same
below) after examination and verification, it will receive the Credential of
Social Welfare Enterprise, and enjoy tax reduction and exemption, loans
for technical reform, material distribution, and preferential treatment
246 K. HAN
for product innovation and optimization, and for enterprise upgrading

after reviewed and verified by the relevant departments at the same level.
For an enterprise where the proportion of disabled persons in the total
number of its production personnel exceeds 10% but not reaches 35%,
if the situation is verified by the civil affairs department at and above the
county (district) level, the enterprise will receive relevant certificates,
and then enjoy the treatment of tax reduction after reviewed by the tax
authority. Article 17 of the Regulations on the Employment for Disabled
Persons, which came into force as of May 1, 2007, provides that “the
state shall grant tax preference according to law to the units that have
centralized employment of disabled persons, and provides this unit with
support in production, management, technology, capital, materials and
site use”.
The above tax preferences have to a large extent provided economic
security for the development of welfare enterprises, but they are not
free from breeding problems. (i) It is hard to eliminate fraud of tax
preferences. Since it is difficult to identify the qualifications of welfare
enterprises to receive tax preferences, and also difficult for tax author-
ities to review the case, some enterprises that are driven by economic
interests may defraud of tax preferences and even attempt tax evasion.
For instance, some enterprises usually buy out disability certificates—
by providing a small amount of subsidy to the concerned disabled,
but do not actually employ them, so as to pretend that the propor-
tion of their disabled employees is enough to apply for tax preference.
Some enterprises may take advantage of correlated transactions with
welfare enterprises to transfer VAT payable to the latter to obtain tax
rebate. Some welfare enterprises may falsify the proportion of disabled
employees, e.g., an enterprise has altogether about 300 employees, but
the proportion of the disabled is less than 2%, then the enterprise may
“clone” a roster of disabled employees to pretend that they are enti-
tled to tax preferences.24 (ii) Preferential tax policies cost too much,
but generate less benefit to the disabled. Presently, the welfare enter-
prises have taken on a new look, some are becoming privately owned,
Sino-foreign joint venture, wholly foreign-owned, correlated or affili-
ated enterprises, indicating that most of the tax rebate is occupied by
operators, rather than benefitting disabled employees. For instance, in
2004, the 568 welfare enterprises in a city received a total of around
1,156.24 million yuan of VAT and income tax rebate, but only 16.05%
(185.62 million yuan) of which was paid to disabled employees as their
salary, the remaining tax rebate was completely occupied by private

business owners.25 (iii) Collusion between government and enterprises
is commonplace. According to relevant regulations, after receiving
a full amount of tax rebate, welfare enterprises shall firstly guarantee
the minimum wage and old-age insurance of disabled employees, but
in fact, lots of enterprises only give their disabled employees a small
amount of subsistence allowance, let alone insurance and welfare.
What’s worse, “welfare enterprises” could receive a large amount of tax
rebate from the state every year, but they will transfer a part of the
money to civil affairs department, local government, or sometimes to
tax authorities as a form of handling fee, so they only keep half of the
tax rebate in the end. Such collusion between government and enter-
prises benefits enterprises, civil affairs departments and local govern-
ments, but inflicts the greatest loss on the disabled. Besides, some
seemingly welfare enterprises have reduced their costs because of tax
rebate and then launch unfair competition with their counterparts,
which not only damages the interests of the other welfare enterprises,
but also disrupts normal market order.
(3) Low-level position and income of the disabled in welfare enterprises
Owing to low education level, lack of necessary vocational training,
imperfect national employment security policies and prevalent discrimi-
nation in labor market, disabled persons have been confined to second-
ary labor market, and mostly distributed in those simply operated and
poorly paid industries.26 The results of the national sample surveys of
disabled persons in 1987, 1990 and 1993 showed that 36% of the dis-
abled working in urban areas were engaged in simple but heavy manual
labor.
The 1987 national sample survey of the disabled revealed that the dis-
abled in agriculture, forestry, animal husbandry, sideline occupations and
fishery accounted for 81.06% of the total disabled working population,
while the overall employees in these sectors held 70.22% of the entire
working population in all sectors. As for the professions as professional
and technical personnel, functionaries of state organs, and the employ-
ees in public transportation, post and telecommunications, commerce
and service, the disabled accounted for a smaller proportion. Most of the
disabled were manual workers, only 3.35% of the disabled were doing
brainwork like professional and technical personnel and functionaries of
state organs (see Table 10.2). In reference to the second national sample
248 K. HAN
Table 10.2 Occupational distribution of the disabled
Occupational category Proportion of disabled Proportion of total working

employees (%) population (%)
Professional and technical 2.11 4.48

personnel
Functionaries of state organs 1.24 3.11
Public transportation, post 9.81 16.76
and telecommunications
Commerce and service 5.55 5.20
Agriculture, forestry, animal 81.06 70.22
husbandry, sideline occupa-
tions and fishery
Others 0.23 0.32
Total 100 100
Source China Disabled Persons’ Federation, 1996, China statistical yearbook on the work for persons with
disabilities 1949–1993, Beijing: Huaxia Publishing House, p. 567
survey of the disabled in 2006, among the employed persons with disa-
bilities, 56.19% were working in agriculture, forestry, animal husbandry,
sideline occupations, fishery and water conservation, 19.78% in produc-
tion, transportation and associated sectors, 12.52% in commerce and ser-
vice industries, 5.47% were professional and technical personnel, 4.36%
were office clerks and concerned staff, 1.58% took charge of state organs,
party and mass organizations, enterprises and institutions, while those in
other industries were 0.10%.27 Welfare enterprises are mostly distributed
in manufacturing industry, the disabled workers therein are assigned sim-
ple production and processing tasks, indicating that they are doing infe-
rior jobs and earning a humble income. There was an estimation that
disabled workers in welfare enterprises, on the whole, earned 300–400
yuan per month, despite of a small number of them earned a decent
salary.28 According to the sample surveys of Shanghai and Wuxi cities
conducted by the then Ministry of Labor and China Disabled Persons’
Federation in 1993, the average annual income of disabled workers was
respectively 81.8 and 55.4% of the overall urban employees. In Jinan
City, the disabled workers in welfare enterprises earned about 4500 yuan
annually on average, about half of that of healthy workers and just up to
the minimum wage standard of the city.29
10.3.3 Vision of Future Development

We shall give full play to the role of welfare enterprises in delivering wel-
fare to the disabled. On the one hand, we shall strengthen management
of welfare enterprises, and guard against the genuine enterprises mixed
with the false ones. On the other hand, we shall strengthen the princi-
pal responsibility of the government, provide financial support or techni-
cal consulting services to welfare enterprises, so as to help them develop
smoothly.
(1) Strengthen principal responsibility of the government in supporting
development of welfare enterprises
Under the condition of market economy, positioning of welfare enter-
prises remains an important issue, since it concerns employment secu-
rity and other welfare demands of the disabled. In recent years, there
are divided opinions on the development trend of welfare enterprises,
e.g., whether they shall be socialized or marketized. We disagree that
welfare enterprises are regarded as subjects of socialization or marketi-
zation. In other words, it is inappropriate for the government to leave
welfare enterprises to society and market. We shall make it clear that the
basic positioning of welfare enterprises is nationalization, and that con-
struction of welfare enterprises is a social policy rather than an economic
policy, and attach equal attention to construction of welfare enterprises
as to construction of welfare facilities like welfare homes for the elderly
and children. The government shall bear the principal responsibility in
purchase of factory buildings and equipment, provision of funds, tax
preference, subsidies to deficit and bankruptcy of welfare enterprises,
and in guaranteeing social insurance and vocational training for disabled
employees.
(2) Provide financial and technical support to welfare enterprises
Most of Chinese welfare enterprises are small-sized, lack of capital and
poorly competitive, some are on verge of bankruptcy, while others rely
on tax preference to sustain even if they not yet bankrupt. In the era of
planned economy, all kinds of production materials and products were
uniformly distributed by the state. In order to support development of
welfare enterprises, the state gave priority to ordering their products. It
would be impossible for them to flourish without this preferential policy.
However, after China ushered in the era of market economy, such pref-
erential treatment no longer exists, so it has become difficult for welfare
250 K. HAN
enterprises to develop and expand. In this context, preferential tax pol-

icies alone cannot solve the survival problems of welfare enterprises,
we shall facilitate their development by providing them with financial
and technical support. Financial support may be in form of fiscal sub-
sidy, government investment, tax rebate, low-interest or interest-free
loans, while technical support may be in form of corporate management
training for enterprise managers and incentives for them to introduce
advanced technologies.
(3) Organize the disabled to receive vocational education and training
In Chinese welfare enterprises, most of the disabled are assigned to do
jobs with low technical content and earn a low salary. And there is still a
gap between the number of disabled workers in welfare enterprises and
the entire disabled population. To improve the employment situation of
the disabled, the most important task is to build up their comprehensive
quality, which requires the government to provide them with appropriate
vocational education and training by taking account of the needs of dif-
ferent types of disabled persons.
Vocational education has all along been ignored in China, let alone
the vocational education specially designed for the disabled based on
their physical qualifications. Vocational education is an effective means
to improve one’s professional quality and cultivate specialized technical
personnel. Therefore, the vocational education for disabled people shall
be vigorously developed, and different training plans shall be devel-
oped to meet the needs of different types of the disabled. In addition,
the government shall encourage welfare enterprises to organize internal
vocational training for their disabled employees by making certain com-
pensation for the expenses incurred therefrom.
10.3.4 Development Direction of Welfare for the Disabled in China

Looking into the future, the development direction and approaches of
China’s welfare for the disabled mainly include:
First, implement the living security system for the disabled. On the
one hand, the minimum living security system provides basic institutional
guarantee for the disabled to meet their basic living needs. On the other
hand, special assistance for the disabled shall be incorporated into the
legal norms, China shall integrate the living security system for disabled
people with other systems to guarantee their basic livelihood.
Second, the employment welfare for disabled persons shall be

improved: (1) The state shall promote employment of the disabled and
their participation in social insurance and other legal benefits. (2) The
state shall consciously support and develop welfare enterprises, high-
light the public welfare nature of welfare enterprises for the disabled and
improve the social welfare functions of welfare enterprises for the disa-
bled through tax incentives, capital, technology and equipment support
and product acquisition. (3) Give full play to the vocational training and
support functions of organizations for the disabled.
Third, strengthen rehabilitation services for the disabled. On the one
hand, the state vigorously develops the cause of rehabilitation for the
disabled and integrate them into social life on an equal footing through
various forms such as disability prevention, medical rehabilitation and
community rehabilitation. On the other hand, the state promotes the
organic combination of rehabilitation services for the disabled and the
industrial injury insurance system.
Fourth, priority shall be given to education welfare for disabled chil-
dren. On the one hand, for children with non-intellectual disabilities,
it is necessary to ensure their fairness and even give priority to educa-
tion opportunities. On the other hand, children with mental retardation
should improve their self-care ability through special education. Giving
priority to education welfare for disabled children: (1) We shall make
clear the responsibility of the government, increase financial input and
expand financing channels. (2) Relevant legislation shall be promoted
to provide education welfare legal support for disabled children and
improve the level of legalization. At the same time, education institutions
for disabled children should be improved, the level of teachers should
be improved, and the social environment should be optimized to realize
the organic correlation between education and employment for disabled
children.
Notes
1. World Health Organization, 2004, International classification of impair-
ments, disability and handicaps (1980), in Li Yingsheng, ed., Introduction
to social work, Beijing: China Renmin University Press, p. 315.
2. Li Yingsheng, 2004, Introduction to social work, Beijing: China Renmin
252 K. HAN
3. Xu Lin, Zhang Yanni, 2007, Research on the current situation and
problems of China’s social security for the disabled, Journal of Northwest
University, Issue 6.
4. Sun Xiande (Vice Chairman of China Disabled Persons’ Federation),
04/05/2007, Speech at the national working conference on education,
Employment and poverty relief for the disabled.
5. Wang Zhenyao, ed., 2009, Social welfare and charity, Beijing: China
Society Press, p. 85.
6. Cheng Kai, 2008, Review and prospect of China’s rehabilitation work for
the disabled, Chinese Journal of Rehabilitation Theory & Practice, Issue 3.
7. Li Qunli, 2009, Survey and research on leisure activity satisfaction of the
urban disabled: Case study of Changsha, Wuhan and Nanchang Cities,
Chinese Journal of Special Education, Issue 5.
8. Office for Second National Sample Survey of the Disabled, 2007,
Databook on the second national sample survey of the disabled, Beijing:
Huaxia Publishing House, p. 2.
9. China Disabled Persons’ Federation, China statistical yearbook on the work
for persons with disabilities 1949–1993, Statistical communique on the
development of the work for persons with disabilities 2003.
10. Ministry of Civil Affairs of the PRC, China Civil Affairs’ Statistical
Yearbook 2017, Beijing: China Statistics Press, p. 5.
11. Cai He, Zhou Lingang, 2004, Eliminating social exclusion and achieve
social justice, Guangzhou: Guangdong People’s Publishing House.
12. Zhou Pei, 2010, Research on the social welfare system for the disabled,
Jiangsu Social Sciences, Issue 5.
13. Wang Zhenyao, 2009, Social welfare and charity, Beijing: China Society
Press, pp. 91–94.
14. Lai Desheng, Liao Juan, Liu Wei, 2008, Analysis on employment of
Chinese disabled and its influencing factors, Journal of Renmin University
of China, Issue 1.
15. Xinhuanet, 05/28/2007, Main data bulletin of the second national sample
survey of the disabled, http://www.gov.cn/jrzg/2007-05/28/content_
628517.htm.
16. China Disabled Persons’ Federation, 2008, Main data report on monitor-
ing of nationwide disabled persons in 2007.
17. Wang Xuemei, 2006, Issues about employment of the disabled and think-
ing on employment policy, Journal of Beijing Administration Institute,
Issue 2.
18. Zhou Yunteng, 2005, Issues about employment of the disabled & social
security and relevant thinking, Disability in China, Issue 9.
19. Research Group on Employment of the Chinese Disabled, 2003, Current

employment situation of the disabled and countermeasures, Review of
Economic Research, Issue 51.
20. Yan Chun, 2007, How can the disabled access to equal employment?
Disability in China, Issue 2.
21. Xinhuanet, 05/28/2007, Main data bulletin of the second national sample
survey of the disabled, http://www.gov.cn/jrzg/2007-05/28/content_
628517.htm.
22. Shi Guoshan, 1999, Welfare production and welfare undertakings in past
50 years, China Civil Affairs, Issue 8.
23. Ministry of Civil Affairs, 2007, China civil affairs’ statistical yearbook
2017, Beijing: China Statistics Press, p. 206.
24. Wang Haibin, 2006, Economic thinking on development prospect of wel-
fare enterprises, Inquiry into Economic Issues, Issue 8.
25. Xu Maozhong, 2006, Rethinking on the preferential tax policies for wel-
fare enterprises, China Social Welfare, Issue 3.
26. Huang Shumin, 2006, Problems in employment of the disabled and sug-
gestions, Development, Issue 12.
27. Cheng Kai, 2007, Main results of the second national sample survey of disa-
bled persons and countermeasures, Collected papers from the 1st forum on
cause of the disabled people in China, Beijing.
28. Hu Xishu, 2006, Faltering development of Chinese welfare enterprises,
China Social Welfare, Issue 9.
29. Research Group on Employment of the Chinese Disabled, 2003, Current
CHAPTER 11
Changes on Children’s Palace

and Fulfillment of Child Welfare
in China
11.1 Issues Worth of Attention and Existing Studies

As for the subject of China’s child welfare, most studies in this regard
focus on the assistance to the orphaned, disabled and impoverished chil-
dren, but care less about the public welfare to the children as a whole.
Children’s palace—an after-school educational venue for the children in
an urban area—is a microcosm of the child welfare in China; the study of
its functional changes is of great theoretical significance to the improve-
ment of China’s child welfare. The children’s palace is established mainly
for developing the innovative and practical abilities of children, and cul-
tivating their learning interest through rich extracurricular activities.
However, since the market-oriented reform, the children’s palaces across
the country have been gradually deviating from their due functions and
not as commonweal as before, thus failing to perform well enough in
delivering child welfare. This chapter will explore the ways for this
institution to play a better role in China’s child welfare cause.
Since 1949 when the first children’s palace was founded in Dalian
City, Liaoning Province, this institution has been developing for over
Han Keqing, Wu Wenqing, 2012, Changes on children’s palace and fulfillment

of child welfare in China: Case study of the children’s palace in M city, Dongyue
Tribune, Issue 7.

https://doi.org/10.1007/978-981-32-9660-2_11
256 K. HAN
60 years in China. At present, there are more than 7000 off-campus

juvenile activity venues across the country, most of them are the chil-
dren’s palace.1 The role of children’s palace in after-school education can
neither be replaced by school nor family. However, it has gone through
changes along with economic growth and social restructuring, as well
as continuously improved school education. What are the reasons for
these changes and how about their impact? To what extent does the chil-
dren’s palace affect China’s child welfare? These issues are worth our
contemplation.
The studies on China’s child welfare have been going through a tran-
sition in recent years, i.e., transiting from the narrowly defined “welfare”
(caring the children with special needs) to the broadly-defined “wel-
fare” (delivering welfare to all children), more and more researchers
have shifted their focus to such welfare issues as medical care, education,
nutrition and health, culture and entertainment for the vast majority of
children. Being an indispensable part of the educational welfare for chil-
dren, after-school education shall be analyzed and evaluated in a com-
prehensive manner. As such, we decide to review the changes on the
functions and effects of the children’s palace, which will help us under-
stand better the after-school educational system and its important role
in child welfare, and then look to the future of the children’s palace and
child welfare in China.
11.1.1 Connotations of Children’s Palace, After-School

Education and Child Welfare
(1) Definition of children’s palace
Children’s palace is a comprehensive after-school educational insti-
tution for Chinese juvenile since the founding of new China. In
1957, the Ministry of Education and the Communist Youth League
Central Committee (CYLCC) made public the Rules on the Work about
Children’s Palace/Center, which lay out the major tasks of the children’s
palace: “collaborate with school on education in communism, and cul-
tivate the children to have a good moral character; help them consol-
idate and extend the classroom knowledge, and enrich their cultural
life; instruct them to develop diverse interests and talents; and keep
improving their skills and specialties”.2 In 1987, the State Education
Commission and the CYLCC promulgated the Regulations on the Work
about Children’s Palace/Center, in which the children’s palace is defined
11 CHANGES ON CHILDREN’S PALACE AND FULFILLMENT … 257
as a comprehensive after-school educational institution, a venue for

holding extracurricular activities, and an important front in construction
of the socialist spiritual civilization.3 According to the Great Dictionary
of Chinese Reform, the children’s palace undertakes such tasks as organiz-
ing a variety of instructional, interesting and practical activities, providing
ideological and moral education to children, developing their interests
and specialties in science and technology, culture, art, sports and other
fields, and helping them form the good habits of thinking and taking
actions.4
To sum up, we hold that Chinese children’s palace—established by
the state by taking account of its national conditions and drawing the
experiences of the Soviet Union and other countries—is a distinctive
educational institution to meet children’s demand for off-campus learn-
ing. The Children’s palace shall be understood from the following five
aspects: (1) It is open to a majority of primary and middle school stu-
dents and the children outside of school. (2) The content of its educa-
tion is mainly about ideology and morality, science, culture, art and
sports. (3) It carries out education via diverse practical activities, e.g., art
training, group activities, art troupes, fans association, sports and enter-
tainment activities, sci-tech groups. (4) Its teaching style is characterized
as instructional, practicable, autonomous and interesting. (5) It aims to
help children develop the habit of active thinking and excellent hands-on
skills, and achieve physical and mental development while having fun.
(2) Definition of after-school education
After-school education is at the same time broadly and narrowly defined.
In a broad sense, after-school education concerns almost all aspects of
social life, “it is a sum of means and approaches of the off-campus edu-
cation, as well as its influences on the juvenile, both physical and psy-
chological”.5 But the “after-school education” that we often talk about
is the narrowly-defined one, i.e., the massive juvenile may, in their spare
time (including weekends, holidays, summer and winter vacations),
attend various extracurricular educational activities with rich contents
that benefit their physical and psychological health; these activities are
purposefully and systematically organized by certain out-of-school edu-
cational institutions or cultural organizations under guidance of the
national educational policy.
There are diverse forms of after-school education: mass activities,
interest group activities, young pioneers’ activities, exchange activities,
258 K. HAN
practical activities, operational guidance, and tutorial activities.6 In 1957,

the Ministry of Education and the CYLCC released the Rules on the
Work about Children’s Palace/Center, and in 1987 released the Opinions
on Strengthening the Work Related to Children’s Palace and its appendix
Regulations on the Work about Children’s Palace/Center, all of which
have defined the basic content of after-school education, i.e., ideology
and morality, science and technology, literature and art, sports, education
through labor, games and entertainment.
Being a supplement to school education, the current after-school
education is divided into for-profit and non-profit types. The non-profit
after-school education, which is a kind of child welfare, is funded by the
government to provide education or instructional activities that promote
the healthy development of children both physically and mentally, not
aimed at making a profit. The after-school education described in this
chapter refers to the non-profit one, unless noted otherwise.
(3) Definition of child welfare
In China, “child welfare”, which is also noted as “minor welfare”, refers
to all kinds of benefits provided to all of the Chinese citizens below the
age of eighteen. In reference to the United Nations Declaration of the
Rights of the Child (1959), “child welfare” involves all kinds of efforts,
undertakings and systems for promoting the healthy development
of children both physically and mentally, and for safeguarding their
normal life.
Both the content and scope of child welfare are yet strictly unified in
the academic circle, and the Chinese understanding and classification of
“child welfare” somewhat differs from their foreign counterparts.
The child welfare in the United States is delivered via three general
service models: supportive services, ancillary services and alternative ser-
vices. The forms of child welfare are classified, i.e., there are social secu-
rity act, subsidy for abandoned children, maternal and child health care,
services for disabled children and general child welfare services.7 This
classification represents the two orientations of child welfare in western
countries: (1) institutional or development orientation: to meet the nor-
mal life needs of all children and promote their development; (2) residual
or minimalist orientation: to meet the development needs of the children
whose demands are not satisfied in normal society.8
Lu Shizhen has divided child welfare into two types: the narrowly
defined child welfare indicates “the specific services provided by certain
institutions to special groups of children”, while the broadly defined one

involves “the policies and services for all families and children”.9 Just like
the orientations of social welfare, the narrowly defined child welfare rep-
resents a “residual or minimalist orientation”, while the broadly defined
one features an “institutional or development orientation”. Similar to
Lu’s classification, child welfare in the Social Security Dictionary also has
broad and narrow definitions. Child welfare in a broad sense represents
“all undertakings and facilities that benefit children’s physical and mental
health, including parks, reading rooms, theaters, entertainment centers
and health agencies”.10
Based on the above views, we can divide child welfare into two cat-
egories: general child welfare for all children and special child welfare
for orphaned and disabled children. When concerning the general child
welfare, the government and social organizations shall provide a healthy
living environment and educational opportunities to all children, safe-
guard their legitimate rights and interests, and deliver all welfare benefits
and social services necessary for their growth. The content of the general
child welfare lies in five aspects: (1) Protect the rights of children accord-
ing to laws and regulations, which is the core of child welfare. (2) Create
a safe environment for children’s growth, i.e., the parents or other
guardians shall take good care of their children, and the government and
society shall improve their living environment. (3) Provide health care
service to guarantee the healthy growth of children. (4) Enable chil-
dren to receive education, which is the basis for satisfying their thirst for
knowledge. (5) Create conditions for children to relax, entertain and do
physical exercise, which will promote their physical and mental growth.
In contrast, the special child welfare refers to all kinds of assistance,
welfare benefits and social services to the orphaned, abandoned and
disabled children and their families, in addition to the general welfare
delivered to normal children. This chapter only focuses on general child
welfare.
After-school education is a concrete form of child welfare, while
children’s palace is an important after-school educational institution.
The evolution and functional changes of children’s palace are, to a
great extent, in line with the development course of the Chinese after-
school education, and therefore demonstrating the characteristics of the
country’s child welfare system.
260 K. HAN
11.1.2 Literature Research on After-School Education

Some developed countries began to pay great attention to after-school
education since World War II. Along with the post-war economic recov-
ery and population growth, all countries have become more demanding
for talents. The third revolution of science and technology makes them
realize the importance of all-round talents, and learning should not be
confined to the classroom and textbook, but extended to various out-of-
school activities. Individuals shall keep enriching themselves by absorbing
the knowledge inside and outside of school, gaining enough creativity
and comprehensive ability to keep abreast with the time. Through read-
ing the literature about the after-school education in major European
and American countries, we have discovered their common charac-
teristics in four aspects: the ways of providing education, content of
education, sources of funding and management approach.
(1) Ways of providing after-school education
Lots of developed countries have not founded any specialized after-school
educational institutions, but hand over children’s activities to families,
schools and the entire society, which is a kind of off-campus education
in a broad sense. For example, in the United States, almost all museums,
memorials, libraries, theme parks, universities and other places for children
to draw inspiration are open for free, and some venues are staffed with
full-time commentators that guide the tour of juvenile visitors. Similarly,
in Australia, all public service facilities bear the function of after-school
education to different degrees. The after-school education in these coun-
tries is a “big society” education, i.e., there are no special institutions or
regulations in this regard; instead, the entire society is a carrier for after-
school education, and the instructional methods are flexible and diverse.
But other countries like Japan and Russia (the former Soviet Union)
do have specialized after-school educational institutions. A study in 1997
revealed that Japan has 732 after-school educational institutions (includ-
ing children’s centers open to elementary school students and 25 youth
centers), off-campus juvenile activity venues distributed in cities, dis-
tricts and sub-districts, as well as libraries, museums, houses of youth and
sports facilities, which add up to a total of 53,000.11 In Russia, there
are about 18,000 large-sized off-campus activity bases, most of them
were built in the era of the Soviet Union. These bases are open for
free from morning till night, accommodating about 50% of teenagers’
extracurricular activities.12
(2) Content of after-school education

As for the content of after-school education, each country has its own
focal points, but generally speaking, all of them pay attention to sci-
ence education, creativity cultivation and personality shaping through
all kinds of practical activities. For example, in the United States, there
are Character Counts! Coalition (CC!) and the Character Education
Partnership (CEP) that help teenagers shape a good character and cul-
tivate their civic consciousness; the schools not only require students to
attend after-class club activities for no less than 50 hours every year,13
but hold popular science activities to draw participation of children. In
Japan, Switzerland and other countries, after-school education also pro-
motes environmental protection, thus various activities are held to build
children’s green awareness. The children’s palace in Russia attaches par-
ticular importance to science popularization and technical training.
(3) Financial support and funding sources
Adequate funding is an important guarantee for after-school education.
In the United States, the funds poured into after-school education are
mostly spent on moral and character education, and the funds come
from multiple sources: the federal government is one of the sponsors;
each state, with great autonomy, also provides financial appropriation to
education; the donations from some third parties like charitable organi-
zations and consortiums are a rich reward to the morally superior juve-
nile. In Japan, most of the funds for after-school education come from
local governments, with the educated paying little or exempted from
the charge. In Australia, the educational funds accounted for 5.46% of
its GDP as early as in 1998, while 84.1% of the educational funds came
from government grants.14
(4) Management of after-school education
In the major developed countries, after-school education is subject to the
administration of special authorities and a clearly defined management sys-
tem. In the United States, education is under the jurisdiction of the state
government, while management of after-school education is the duty of
the state education committee. In Japan, the Ministry of Education,
Culture, Sports, Science and Technology (MEXT) is the top authority
in charge of all kinds of education, including social education; under the
MEXT, there is a lifelong learning bureau that directly manages social edu-
cation; there are also education committees at all levels that preside over
local social education affairs.15 In Russia, after-school education is also
262 K. HAN
known as assisted or supplementary education. The federal government

pays equal attention to in-school and after-school education. The Ministry
of Education and Science has set up a moral education and supplementary
education bureau to deal with the work related to teenagers’ after-school
education.16
11.1.3 Studies on the Children’s Palace in China

We have studied the literature materials about the children’s palace
in China, and hereby briefly introduce them from the following three
aspects:
(1) Development course and origin
According to Xu Dexin, the development of children’s palace in China
has roughly gone through four periods: the initial period (October
1949–August 1956); the period of popularization and development
(September 1956–April 1966); the period of setbacks (May 1966–
September 1976); and the period of comprehensive reform and open-
ing-up (October 1976 to date). But the fourth period is further divided
into three stages: the stage of overall recovery and rectification (October
1976–September 1982); the stage of comprehensive reform (October
1982–September 1992) and the stage of vigorous development
(October 1992 to date).17 The children’s palace seems to have different
focuses and characteristics in each period. Zhang Hua, based on Chinese
per capita hold of the children’s palace, has split its development into
three periods: (i) “Infancy Period” (1949–1966): an average of 1.83
million teenagers were accessible to a children’s palace. (ii) “Recovery
and Development Period” (1979–2000): an average of 510,000 teen-
agers were accessible to a children’s palace, marking a coverage rate
of 79.8%. (iii) “Popularization Period” (2001 to date): the Central
Government dictates 90% of the counties across the country to build an
after-school juvenile activity base, there shall be at least 2178 children’s
palace in prefecture-level cities and counties, then an average of 200,000
teenagers will have a fairly standardized activity venue.18
From a historical perspective, the children’s palace in China was ini-
tially a copycat of the Soviet model. “Since its founding, new China put
forward a slogan to learn from the Soviet Union and put it into action”,
said Cai Qiuyun. While concerning the children’s palace, its guiding ide-
ology, site selection, management model and department setting were all
imitated from the Soviet Union. But the Soviet experiences seem like a
double-edged sword. On the one hand, Cai confirms the positive role of
the Soviet model in developing Chinese children’s interests, but on the
other hand denies such mechanical and blind imitation, since it has con-
fined the independent development of Chinese children’s palace.19
(2) Functions, purposes and positioning of children’s palace
The functions and purposes of the children’s palace were expressly
stated shortly after the founding of new China. As mentioned above,
in 1957, the Ministry of Education and the Communist Youth League
Central Committee (CYLCC) promulgated the Rules on the Work
about Children’s Palace/Center, and later in 1987, the State Education
Commission and the CYLCC made public the Regulations on the Work
about Children’s Palace/Center, which defined the basic tasks and posi-
tioning of the children’s palace at the legal level.
The Research Group of CWI Children’s Palace has pointed out that
the purpose of children’s palace education is to “improve the quality of
elementary and middle school students”, and it shall “consciously adhere
to the principle of lowly-constraint education”, i.e., children’s palace
education shall be the most independent, open and creative after-school
education, it is a counterweight and supplement to highly-constraint
school education and is of great significance to the overall growth of
adolescent students.20 Lin Xiuying has noted that “children’s palace is
an important social educational venue for teenagers, and an after-school
educational base initiated by government. The education provided by
children’s palace and normal schools is mutually complementary for their
own characteristics and advantages”, and added that children’s palace
shall “integrate into society and communities”.21
In January 2006, the General Office of the CPC Central Committee
and the General Office of the State Council jointly released the Opinions
on Further Strengthening and Improving Construction and Management
of Juvenile After-school Activity Venues, which prohibit the off-cam-
pus juvenile activity venues to engage in profit-making business.22
However, the commonweal nature of children’s palace differs among
regions because of unbalanced economic development. Shi Baoquan has
observed that the children’s palace in China is currently in four states:
(1) “Purely public”: the children’s palace is a public welfare provider
wholly funded by the government. But such a situation only exists in
a small number of developed areas, e.g., the juvenile activity center in
264 K. HAN
Luwan District of Shanghai. (2) “Basically public”: the children’s pal-

ace may charge fees from its students and seek other fund sources to
make up for the financing gap. (3) “Non-public”: all of the funds are
generated from market operation. (4) “Quasi-public”: the central and
western regions have been using lottery public welfare funds to build
county-level juvenile activity centers in recent years.23 The Compulsory
Education Law explicitly stipulates that “the educational activities shall
accord with the national and social public interests”, “no organiza-
tion or individual may set up schools or other educational institutions
for profit”,24 however, due to the uneven government grants in differ-
ent areas, it is impossible for all children’s palaces across the nation to
be purely welfare providers. Given this, most scholars believe that the
combination of “blood transfusion” and “hematopoiesis” is an effective
option under the current circumstance.
(3) Current situation, predicament and its causes
According to Zhang Hua, presently in China, the construction of chil-
dren’s palaces in large and medium-sized cities has begun to take shape,
those in county-level cities are at a full start-up stage, but those in rural
areas are almost a blank. Such situation is attributed to the following
problems: “short of resources and inadequate total quantity”, “unbal-
anced development and irrational distribution”, “conflicting policies
from different departments and poor management”, “pressure on sus-
taining operation”, “aging facilities and unreasonable staffing”. Zhang
has explained that why Chinese juvenile activity venues remain backward
is because “social consensus has not been formed”, “functional position-
ing is not unified”, “management system is not straightened out” and
“policies and measures are ill-matched”.25
In its another study, the Research Group of CWI Children’s Palace
has evaluated the performance of children’s palace since the founding of
new China, analyzed its current situation, pointed out the problems that
restrict its further development, and presented specific countermeasures
and suggestions. On the one hand, the Research Group confirms that
children’s palace has established its place in Chinese society through half
a century of development, and to some extent integrated society educa-
tion with family and school education, as well as accumulated rich expe-
riences in after-school education. But on the other hand, the Research
Group warns that some prevalent problems shall be seriously treated
and solved, e.g., “unbalanced development, and unreasonable layout,
total quantity and scale”, “lack of policy support and social recognition”,
“insufficient capital input, aging facilities and equipment”, and “defective
faculty structure”.26
11.2 Development Course of China’s Children’s

Palace: Case Study of M City Children’s Palace
By selecting the children’s palace in M City (hereinafter briefed as “M
children’s palace”) for our case study, we have reviewed its development
course and changes, analyzed the reasons for the changes, discussed how
children’s palace may deliver child welfare, and finally presented an out-
look of Chinese children’s palace in the future. Two relationships shall be
firstly straightened out: (1) The relationship between M children’s palace
and the Chinese children’s palace. M children’s palace is a role model for
the other children’s palaces in Shandong Province, a study on its devel-
opment is of referential value for studying the overall national children’s
palace. (2) The relationship between children’s palace and child welfare.
Children’s palace embodies some characteristics of child welfare and
somewhat acts as a welfare provider, while child welfare presents require-
ments for further improvement of children’s palace.
After the victory in 1949, new China was subject to a severe test
that full-scale construction was underway, and children’s education was
one of the important tasks. However, the limited educational resources
forced many primary schools to implement a “half-day system”, so quite
a number of children had more spare time idling around, some of them
even started “stealing, fighting or joining in other activities that dis-
rupted social order”27; such situation posed an urgent demand for devel-
oping off-campus activity venues for students. In the meantime, Soong
Ching-ling, Tao Xingzhi and other famous child educationists in mod-
ern China pointed out the direction for developing after-school educa-
tion for children. Being a founder of CWI Children’s Cultural Center—a
prototype of Chinese children’s palace, Ms. Soong commented that “this
cause will pave way for children’s cultural work, it should be extended
nationwide until one day China has thousands of children’s cultural
palaces…”.28 In short, the objective demand from national conditions,
the concern of entire society for children’s extracurricular life and the
instruction of educationists have constituted the internal basis for China
to develop children’s palace.
266 K. HAN
With a view to the external influences, in the first few years after 1949,
the basic national policy of “learning from Soviet Russia” was one of the
motivations for new China to develop children’s palace. The after-school
educational institutions and theories in Soviet Union greatly influenced
new China. In the 1940s and 1950s, the post-war Soviet Union was
making explorations into educational reform and harvested good results
from strengthening extracurricular and off-campus activities. According
to the statistics in the mid-1950s, there were almost 8000 off-campus
activity venues across the Soviet Union at that time, increasing more
than four times from the 1930s.29 The achievements of the Soviet Union
in after-school science and art education were highly praised by the
Chinese. Moreover, the theories of Krupskaya and Kairov—famous edu-
cationalist of the Soviet Union—became guidance for China to popular-
ize children’s palace, and an important reference for Chinese children’s
palaces and youth centers to organize various activities. In addition, the
Soviet Union maintained frequent cultural exchanges with new China
and dispatched a large number of experts to support China’s national
construction, which has directly promoted the development of Chinese
children’s palace.30
11.2.1 Development of M Children’s Palace

in the Era of Planned Economy
Founded in 1965, M children’s palace was originally called M City Youth
Activity Station under the administration of the city’s commission of the
Communist Youth League. This activity station was established at the
time when the children’s palace established its place in China’s after-
school education and began to spring up.
Having gone through the disaster relief through vigorous industrial
production in the early 1960s, M City was short of funds when started
establishing a children’s palace. The 150,000 yuan construction fund
for the activity station came from the residual donations for the “red
scarf31 tractor station” in 1958; the money was put into use upon the
approval of Shandong Provincial Commission of the Communist Youth
League. The activity station at first covered an area of more than 40 mu
(26,667 m2), and a construction area of 3200 m2. It was initially staffed
with 30 personnel who were assigned to the administration office, mass
culture group and art teaching group. At the end of 1965, M City Youth
Activity Station was officially put into use. In the following year, colorful
activities were held one after another: the first children’s art exhibition,
and then a concert attended by 5000 juvenile across the city (they were
singing praises to the CPC and having a get-together with soldiers).
In the same year, the station published the “Instruction Materials for
Children’s Activities in Summer Holiday”—the first tabloid printed by
the station, organized contests on story-telling, table tennis, swim-
ming and recitation, and held an exhibition promoting the children’s
heroic deeds during the years of war. But the outbreak of the Cultural
Revolution in 1966 forced the station to halt all kinds of activities which
were initiated a year ago.
In early 1972 when the Cultural Revolution was in full swing, most
children’s palaces across the country were paralyzed. But M City Youth
Activity Station was not killed in the cradle; instead, it was attempting
to get everything back on track. In those days, some members in the
Red Guards32—original employees of the station—jointly submitted
a letter to the Revolutionary Committee33 demanding to reopen the
activity station. In May 1972, with the presence of 17 supervisors who
were selected from senior high school graduates, M City Youth Activity
Station was reopened and renamed as “M City Children’s Palace”; mass
culture group and art teaching group were incorporated into culture-art
group, while publicity group was newly set up. Since then M children’s
palace has entered the second stage of development. After resuming its
activities in 1972, M children’s palace expanded its original area, built a
new gate and opened a special road for juvenile in the city.
After returning to normal operation, M children’s palace organized a
series of activities: holding a total of 12 Spring Festival fine arts exhibi-
tions consecutively from 1972 to 1982; setting up a Chinese orchestra
and a drum corps; defining a month to hold scientific and technological
activities; producing a new version of “extracurricular activity materials”;
in 1979, in the context of resuming the college entrance examination and
the passion for learning mathematics, physics and chemistry was running
high among the Chinese, M children’s palace blazed a new trail to hold
a “Little Red Flowers” essay soliciting activity, in an aim to improve liter-
ary attainments and writing ability of primary and secondary school stu-
dents. In 1980, the children’s palace opened calligraphy training classes
and invited participation of calligraphy masters to draw their sugges-
tions. Besides, other activities like vocal music, instrumental music and
fine arts were held one after another. Several outstanding talents in table
tennis, writing and fine arts have emerged. For example, a student of the
268 K. HAN
children’s palace, surnamed Shan, won the best work award at Greece
International Children’s Painting Exhibition in 1979. At this stage, the
major tasks of M children’s palace were to resume the work that was
interrupted by the Cultural Revolution, and enrich the content of edu-
cational activities, and thereby developed its distinctive style in talent
cultivation.
Through a review of the activities held by M children’s palace and
in reference to relevant materials, in this period, the children’s palaces
across China were under joint administration of the educational depart-
ments and the Communist Youth League at all levels, and a relatively
complete after-school educational network was formed with the exten-
sive support from the entire society. Since local governments and all
sectors of society were caring about the growth of juvenile and paying
great attention to after-school education, the children’s palace in the era
of planned economy presented “high welfare” characteristics, which are
reflected in the following aspects:
First, the state was attaching great importance to protection of chil-
dren. In the early days after the founding of new China, the “half-day
system” in schools had given students a large amount of spare time,
but they did not know how to effectively spend the time; the majority
of women devoted themselves to industrial and agricultural production
under the call of government, thus weakening the function of family in
children’s education and protection. At that time, the children’s palace
was subject to joint administration of the educational department and
the Communist Youth League, i.e., its daily operation was at the com-
mand of the Communist Youth League, while its staffing and funding
were under the control of the educational department. In short, the
flourishing development of the children’s palace was attributed to the
vigorous government support at both the national and local levels.
Second, vigorous social support. The society-wide cooperation was
an important characteristic of the children’s palace in its early days. In
this period, all walks of life were providing assistance to the children’s
palace: when the children’s palace was initiated across the country,
quite a number of its articles and equipment were donated by social
forces; and the children’s palace was intensively reported by all forms
of media, thus forming an atmosphere that the entire society was sup-
porting the juvenile after-school education. In this context, a nation-
wide after-school educational network started taking shape, consisting
of home-based study group, young pioneers’ center, juvenile activity
station, sub-district cultural room, club, city/district children’s pal-

ace (center), sometimes the adults’ cultural center was occupied for
holding activities for children.
Third, the government took charge of staffing and funding. In this
period, both the human and financial resources for the children’s palace
were controlled by education departments at all levels: its regular funds
were included into the local fiscal budget on education, while its staff-
ing was uniformly arranged by local governments. Although the human,
financial and material resources were in tight supply in this period, the
local governments were doing their best to guarantee the personnel
and funds for the children’s palace, which was supplemented by social
donations, so as to ensure the nature of the children’s palace as a non-
profit welfare provider. In terms of fairness of student enrollment, the
children’s palace in this period was targeting schools, the vast majority
of children and the Young Pioneers. The children’s palace held vari-
ous activities in an aim to absorb students as many as possible, demon-
strating its commonweal property from initial design to the process of
implementation. Of course, the excessive political movements—themes
of the times—had somewhat damaged the fairness of children’s palace,
e.g., owing to the guideline of “taking class struggle as the key link”,
some children from “non-worker or non-farmer” families were rejected
by children’s palace, which was a kind of welfare deviation under the
political background at that time.
11.2.2 Development of M Children’s Palace Since the Reform

In the 1980s and 1990s, the children’s palaces across China were subject
to comprehensive reform, so did M children’s palace, it had witnessed
great changes on its club activities, training, venues and revenue genera-
tion. The development of M children’s palace in this period had the fol-
lowing characteristics:
(1) Massive children’s societies coming into being
In March 1985, a children’s song and dance troupe was founded in
M City, it was a separate establishment staffed with 9 personnel and sup-
ported by municipal financial appropriation. It was merged with M chil-
dren’s palace in 1991, and upgraded to a county-level public institution.
It is the first well-organized children’s society in M City, and then affil-
iated to M children’s palace art troupe in 1995. In more than 20 years
270 K. HAN
since it was founded, the song and dance troupe has been attending
the major performances in provinces and cities almost every year and
has made contributions to Chinese-foreign exchanges. The outstanding
students from the singing and dancing troupe were either admitted to
Shanghai Ballet School or won first place in major competitions, e.g., the
one surnamed Li in the Taoli Cup Dance Competition—the top-level
dance contest for Chinese juvenile, the one surnamed Wang in an inter-
national violin competition in France, and the one surnamed Zhuang
was a winner of three championships in a national viola competition.
The folk music band of M children’s palace was formed in the 1970s
and has become increasingly active since the 1980s. For years it has
been invited to perform in the large-scale activities at home and abroad,
e.g., the biennial east China children’s folk music festival, the Zhongzhou
Cup children’s folk music band invitational (Beijing), the ART Cup
Chinese musical instruments international competition, and the annual east
Asian cultural and art festival held in Japan. This band has cultivated lots of
famous Erhu performers with surnames as Yu, Song, Ma, Zhang and Li.
In 1988, the Little Star Drama Troupe was formed by M children’s
palace. In addition to performing in the activities organized by the pal-
ace, the little performers in the troupe also starred in several child plays
shot by the municipal TV station.
In 1986, M children’s palace built a martial arts team, and on this
basis founded a youth amateur martial arts school, its students have
attended so many performance tours and cultural exchanges. In 1991,
the National Children’s Palace Martial Arts Association was established
in M City. Remarkable results have been achieved by this school: as of
1999, more than 100 martial arts classes had been opened, training
over 16,000 teenagers, 17 of them were sent to the professional mar-
tial arts teams and schools at or above the provincial level, and they have
won dozens of team and individual championships and runners-up in
national, provincial and municipal martial arts competitions.
M children’s palace also formed other societies and activity bases at
this stage: Lotus Flower Radio and Television Art Troupe (1989), Young
Pioneers Good Team Leader School, Red Scarf Press Corps, Little Red
Flower Literary School (1990), National Defense Palace (1991), Junior
Military Academy (1994), and Shandong Children’s Chess Training
Base (1996). In addition, a student surnamed Lan won the honor as
the National Top Ten Youth, and a student surnamed Zhao became the
world chess champion.
Since the mid-to-late 1980s, the society activities of M children’s pal-

ace have been increasing rapidly, and tending to be specialized, stabilized
and branded. Lots of new children’s societies have come into being,
which not only enrich the extracurricular activities, but generate more
frequent foreign exchanges.
(2) Training program in its full swing
In 1986, an art school was founded by M children’s palace and ready to
enroll students for the first time; there were art, calligraphy, dance, violin
and other professional training classes, marking a full start of the training
program of the palace. In 1988, the night school of the palace prolonged
training hours and enrolled more than 1000 students. In the same year,
a seminar on management of the children’s palaces in 16 provinces/
cities was held in Shanghai, their responsible persons reached the follow-
ing consensus after discussions about the current situation: “the after-
school educational institutions shall broaden the channels for utilizing
social resources, increase revenue and cut expenditure so as to make up
for the lack of facilities and funds”.34 In July 1996, M children’s palace
started enrolling students for its summer classes, the number of classes
and students enrolled has been increasing year by year (see Fig. 11.1).
As shown in Fig. 11.1, M children’s palace started summer enrollment
in 1996, the students only enrolled in summer had reached 5560 man-
times in the year, 40% more than such figure throughout the year 1995.
Despite a slight drop in 1997, the number of students has maintained
growth year by year since then. By 2001, the students only attending
the summer classes had reached 8018 man-times, increasing 44.2% from
1996; and the number of classes had reached 371, increasing 91.2%
from 1996. In general, from 1996 to the early twenty-first century, the
training scale of M children’s palace has kept expanding, proving that its
training function caters to the demand of the children and their parents
in M City.
Now M children’s palace has opened more than 50 professional train-
ing classes, mostly on calligraphy, dance, fine arts, vocal music, English,
instrumental music, literature and sports.
In reference to the enrollment rate of M children’s palace in the
first half of 2010 (Table 11.1), we have found that the cultural classes
(excluding sports, mental and intelligence classes) account for the high-
est proportion (61%) of the total enrollment, while fine arts and callig-
raphy classes rank the second (21%); these two types of classes occupy
272 K. HAN
Fig. 11.1 Number of enrolled students and class times in summer in

1996–2001. Note (1) The number of trainees throughout 1995 is also included
in the figure for comparison. (2) This figure is plotted in reference to the histori-
cal data about M Children’s Palace
a combined share of 82%. The classes of instrumental music, vocal

music, dance and sports account for a small proportion, from 3 to 5%.
The mental and intelligence classes (for psychological cultivation) only
have 32 students, holding 1% of the total enrollment. Among the cul-
tural classes—with intakes of 1868 students, 85% of its enrollment rate is
contributed by the literature, writing and literacy classes (39%), interest-
ing mathematics classes (25%) and English classes (21%), the reason for
their predominance in enrollment is because they are closely following
the school education; in contrast, the sci-tech and chess classes only have
an enrollment rate 6 and 9%, respectively.
It can be seen that although the variety of classes in the children’s
palace is greatly diversified, the student enrollment only concentrates in
certain subjects, i.e., those closely follow the formal school education
are able to absorb a majority of students, while the art and sports classes
seem less attractive.
(3) Changes in revenue generation structure
The increasing revenue from operation is another prominent fea-
ture of the children’s palace since the reform. In 1995, the Ministry of
Table 11.1 Admissions directory of M children’s palace in spring of 2010
Major Class Number of students
Fine arts and calligraphy 780

Pre-school painting Kid and mum fine arts 15
Children’s comprehensive fine arts 30
Children’s painting Kids’ comprehensive fine arts 60
Kids’ calligraphy and painting 50
Teenagers’ calligraphy and painting 25
Teenagers’ specialized fine arts Sketch and color painting 100
Pre-exam tutoring 25
Teenagers’ Chinese painting 25
Firefly animation studio Kids’ hand-drawn cartoon 80
Kids’ cartoon 40
Kids’ computer animation 40
Teenagers’ computer animation 20
Adults’ utility software operation 20
Handcraft studio Paper cutting and paper art 50
Dough modelling 100
Calligraphy Kid and mum hard-tipped pen calligraphy 15
Kids and mum brush calligraphy 15
Children’s brush calligraphy 20
Kids’ brush calligraphy 20
Kids’ hard-tipped pen calligraphy 30
Kids’ calligraphy and painting
Dance 160
Dance Kids’ dance (grading test) 60
Street dance 25
Kid and mum class 15
Kids model (elementary) 60
11 CHANGES ON CHILDREN’S PALACE AND FULFILLMENT …
(continued)
273
Language and vocal music 115

Language Kid and mum class 15
274 K. HAN
Language performance 25
Chairing and reciting 25
Vocal music Kids’ vocal music 15
Vocal music (elementary) 15
Opera Beijing Opera 20
Instrumental music 123
Instrumental music Digital piano 15
Electronic keyboard 15
Violin 10
Saxophone 8
Guzheng (Chinese zither) 10
Erhu (Chinese two-stringed fiddle) 12
Drum 8
Flute 4
Hulusi (cucurbit flute) 5
Bamboo flute 5
Pipa (Chinese lute) 6
Sign-singing, ear-training and music theory 20
Classical guitar 5
Instrumental music
Literature, sports 2335
Little Red Flower Literary School Same level with school education 504
Interest mathematics Same level with school education 432
Kumon Math 60
Finger and mental arithmetic 60
Read and writing Same level with school education 252
(continued)
Cambridge English – 140

Chess Chess 60
Chinese chess 60
Go 80
Computer controlled robot Science and technology 30
Robotics challenge 20
Amusement park 10
Energy world 10
Sunshine tour 10
Power machinery 10
Structure and force 10
Aero model 20
Sports Table tennis 30
Roller skating 15
Wing Chun 20
Martial arts 20
Latin dance 30
Mind and intelligence Pupils 16
Kids 16
Macheng English New English curriculum 60
International Phonetic Alphabet 20
English for all grades 120
Baby literacy Idiom reading 20
Pinyin and literacy 20
Reading 60
Universal IELTS – 120
Adult training 123
11 CHANGES ON CHILDREN’S PALACE AND FULFILLMENT …
(continued)
275
Adult class Yoga 10

Latin dance 10
276 K. HAN
Street dance (crash course) 10

Vocal music 6
Calligraphy and painting 6
Guzheng 6
Digital piano 6
Piano 6
Erhu 6
Guitar 6
Hulusi and bamboo flute 6
Female self-defense 15
Nutrition and fine food 15
Fashion 15
Adult art
Art examination training
Youth psychological counseling
Note Each class accommodates 15–30 students, the number of students studying the same course in separate classes denotes the sum of these students
Source The student enrollment statistics of M children’s palace in spring of 2010
Education, the Central Committee of the Communist Youth League,

the All-China Women’s Federation and the other four ministries and
commissions jointly issued the Rules of Work for Juvenile After-school
Educational Institutions, which state that “the after-school educational
institutions, under the premise of not disturbing the normal school edu-
cation, weakening the backbone teaching force or occupying the main
activity venues, are allowed to carry out proper social services upon
approval by the local competent authorities, and all the income there-
from shall be used to supplement their activity funds”.35 Great changes
have occurred to the revenue generation structure of M children’s pal-
ace since 1996. Previously, the revenue of the children’s palace mainly
came from the tertiary industry (e.g., rental of venues), instead of train-
ing program. Since the summer enrollment in 1996, the training classes
have become an increasingly important source of income. In 1996, M
children’s palace saw its annual gross revenue reach 1.75 million yuan,
including 1 million yuan (accounting for 57%) from training. In 1997,
the gross revenue rose to 1.71 million yuan, of which 1.4 million yuan
was from training, accounting for 81.9%, up 25% from a year ago, mark-
ing that the revenue-generating structure of M children’s palace began
to change substantially.
(4) Considerable expansion of the area
During this period, thanks to the municipal government support and its
own investment, M children’s palace succeeded in expanding its venues
and repairing the old hardware facilities. On the one hand, a number of
projects were kicked off, such as the expansion of the auditorium, the
construction of an ice-skating rink and an amusement park, and settle-
ment of the land disputes left from the past, which increased the area of
the children’s palace by more than 4000 m2. At the same time, the chil-
dren’s palace built a computer room with social financing, and received
some painting and calligraphy works and activity equipment donated by
Qilu Painting and Calligraphy Institute, Shandong Provincial Physical
Culture and Sports Commission and other units. On the other hand, the
children’s palace maintained the old facilities with part of its operational
revenue, e.g., it invested 0.30 million yuan into hardware renovation in
1997, and 1 million yuan to beautify the environment and repair the
teaching buildings in 1998. Consequently, the area of M children’s pal-
ace was significantly expanded and improved, providing a larger space for
more children to take part in the activities held in the palace.
278 K. HAN
Table 11.2 Major training bases built by M children’s palace since 1997
Year of Name of base Partner

establish-
ment
1997 No. 2 cotton factory affiliated training M City No. 2 cotton factory
branch affiliated kindergarten
1999 No. 2 machine tool group affiliated M City No. 2 machine tool group
training base affiliated technical school
No. 26 middle school training base M City No. 26 middle school
2000 Bus factory affiliated training base M City bus factory affiliated
school
Intel Wave Computer Little Doctor Intel (China)
Studio
2001 H training base M City H primary school
Z training base M City Z District Government
Railway technical college training base M City Railway technical college
2002 T training base T primary school
B training base B primary school
D training base D primary school
2003 “Xueyijia” training base Outstanding English “Xueyijia”
School
Oriental educa- Q kindergarten branch Q company affiliated kindergarten
tional center S century fine arts S century fine arts school
school branch
Y educational activity Y sub-district office
center
2004 Finance and economics M City finance and economics
school training branch school
2005 X educational station X district government
Source Internal materials about M children’s palace
In 1999, M children’s palace specially set up a development office for

building external bases in order to expand the scale of training and activi-
ties. In 2008, the Training and Exchange Center, covering a construction
area of 130,000 m2, was completed and put into use. To date, the head-
quarters of the palace cover an area of 29,000 m2, with a construction area
of 21,000 m2, increasing 5.6 times from 1965 when it was established,
also increasing by 31.2% compared with the late 1990s. The activity ven-
ues continue expanding. Up to now, a total of 15 external training bases are
formed. Table 11.2 lists the major training bases built by M children’s palace
over the years, most of them were initiated by its development office.
Table 11.3 Institutional restructuring of M children’s palace
Year Department setup Category Quantity
1965 Administration Functional 1

Mass culture Publicity 1
Art teaching Business 1
Publicity Publicity 1
Art Business 1
Art teaching 1
Mass sports, sci-tech, children’s singing and dancing Business 1 3
troupe Business 2
1991 Administration, teaching affairs, general affairs, busi- Functional 4
ness development
Cultural education, art teaching, sports Business 1 3
Sci-tech, activity instruction Business 2 2
1994 Administration, teaching affairs, financial, business Functional 4
development
Training (1), training (2), early childhood teaching Business 3
1996 Administration, teaching affairs, financial, business Functional 4
development
Training center, kindergarten Business 1 2
Art troupe Business 2 1
1999 Administration, financial, general affairs, research, base Functional 6
expansion, development
Training center Business 1 1
Art troupe, activity Business 2 2
Source The materials recording the reforms of M children’s palace
(5) Institutional reform was carried out in an all-round way

In this period, M children’s palace was subject to significant changes
after five rounds of institutional restructuring. The institutional setup
through reforms is shown in Table 11.3.
From 1987 to 1999, M children’s palace increased the number of
its departments from 3 to 9 (made up of 6 functional departments and
3 business departments); the original one functional department was
replaced by 6 functional departments as a result of refined labor division;
the business department was split into the one taking charge of training
and the other two taking charge of activities (see Table 11.3). In 2008,
M children’s palace carried out a new round of departmental reform,
canceling the original development department and setting up the new
280 K. HAN
departments for administration, property management, social activities

and cultural publicity, youth career development, training, kindergarten,
and infrastructure construction. In 2009, a venue management depart-
ment was set up to take charge of rental and use of the children’s pal-
ace theatre. Compared with the departmental setup in the late 1990s,
M children’s palace has shifted attention to infrastructure, property and
venues, cultural publicity and youth development, in an aim to intensify
publicity work and increase revenue by making good use of its venues.
Besides, M children’s palace has introduced the competition mecha-
nism to strengthen internal management. The palace put into effect of
the Reward and Punishment Regulations in 1990, and since then the
heads of all departments began to sign the “letter of objective responsibil-
ity” every year and agree to implement the classified responsibility system.
Such practice was widely adopted by the children’s palaces across China at
that time. According to the Educational History of the Children’s Palace,
by the early 1990s, most of the children’s palaces had implemented the
objective responsibility system for all kinds of work, and established the
competition mechanism of “appointing the ones truly capable, employ-
ing the ones doing solid work and assessing their performance based on
results”.36 The reform of the management system is an important part of
the changes on Chinese children’s palaces. Based on the “palace direc-
tor” responsibility system, such supervisory organs as labor union and
the Youth League branch came into being. In 1992, the labor union of
M children’s palace was founded; in 1993, the Youth League branch
completed its self-remolding. Both the labor union and Youth League
branch, which supervise the children’s palace in exercising power and
straighten out the relationships among the departments, are an important
achievement left from the reform of the management system.
11.2.3 Functional Changes of M Children’s Palace Since the Reform

Based on the above analysis, we can conclude that since the reform
M children’s palace has undergone changes in welfare delivery, funding,
staffing and non-profit nature.
First, transiting from state welfare in the era of planned economy to
marketized welfare. Along with the economic transformation, the welfare
function of the children’s palace has become somewhat marketized. On
the one hand, the rise of after-school education and convergent train-
ing content demonstrate that the children’s palace tries to cater to the
market demand. On the other hand, the marketized operation is essential

for the children’s palaces to sustain survival, especially for those lacking
financial support. Among the children’s palaces funded by government,
some have attempted small-scale marketized operations but not for mak-
ing profits, the income generated therefrom is mainly for replenishing
the palace to keep delivering educational welfare.
Second, the sources of human and fund, which had been provided
by the government in the era of planned economy, are being diversified.
Based on their funding sources, the children’s palaces in this period are
divided into such types as full allocation, balance allocation, self-financing
and enterprise-run. Among them, the palaces with full allocation and bal-
ance allocation are similar to those in the era of planned economy, since
their daily expenses are covered by local educational budget and supple-
mented by social contribution and training fees, just like M children’ pal-
ace. As for the self-financing and enterprise-run children’s palaces, their
sources of fund seem diversified, i.e., mostly self-earning revenue and
partially social contribution. Moreover, the children’s palaces have been
open for recruitment of teachers to cover the shortage of full-time teach-
ers, showing that their staff composition is also changed.
Third, the nature of the children’s palace is transforming from deliver-
ing welfare to partially making profit. During this period, in addition to
government and social support, the children’s palace has been generating
revenue on their own, becoming a kind of “quasi-public interest” welfare
provider that is profitable but not seeking profit. Although the children’s
palace is a relatively equitable educational institution since it charges a
lower fee in contrast to the private training institutions, it is not as fair as
the one (“targeting at schools, the vast majority of children and the Young
Pioneers”) in the planned economy period, some children from impover-
ished family cannot afford the fees to register for the activities in the palace.
11.3 Changes on the Function of Children’s

Palace in Delivering Child Welfare
On a macro level, the development and functional changes of the chil-
dren’s palace are under the impact from the Chinese economic trans-
formation and social restructuring. On a meso level, they are influenced
by the reforms of the educational system and the child welfare system.
On a micro level, they are affected by the attitude and behavior choice of
children, especially of their parents.
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11.3.1 Child Welfare Function of Children’s Palace

in the Era of Planned Economy
In the planned economy period, the children’s palace gradually estab-
lished itself as an indispensable after-school educational institution, hav-
ing enriched the spare life of teenagers, brought up a large number of
outstanding artistic talents, and significantly improved the children’s
quality education and ideological and moral cultivation.
First, the children’s palace is an important place for the juvenile
to acquire knowledge. Through training classes, various societies and
interest groups, the children’s palace provides children with knowledge
and skills in culture, art and sports. Since the founding of new China,
countless famous artists had spent their childhood in the children’s pal-
ace. For example, M children’s palace has cultivated the world chess
champion Zhao and other famous artists and athletes; the “Little Red
Flower” essay competition and sci-tech competition have built up the
thinking and hands-on abilities of children, enabling them to grasp more
cultural and scientific knowledge. All children’s palaces across China
are worthy to be confirmed for their important role in cultivating art-
ists, disseminating culture, and popularizing scientific and technological
knowledge.
Second, the children’s palace is an important place for the charac-
ter education and personalized development of the juvenile. One of
the functions of the children’s palace is to help the students form the
habit of “studying hard and practicing more” and constantly improving
themselves. Enabling children to fully realize their personality character-
istics and giving full play to their strengths and creativity are not only a
demand of the society, but a respect for their own interests. With various
artistic, physical and cultural activities, science and technology societies
and interest groups, the children’s palace has become a platform for chil-
dren to achieve personalized development.
11.3.2 Difficulties in Front of the Children’s Palace Since

the Market-Oriented Reform
Since it was founded in China half a century ago, the children’s pal-
ace has been actively providing after-school education to the Chinese
juvenile, entertaining their mind and body, increasing their social con-
tacts and promoting their comprehensive development. But for various
reasons, while the children’s palace keeps developing, some of its func-
tions have deviated from the nature of delivering child welfare.
First, insufficient financial input. The lack of financial support has all
along been a restrictive factor for the children’s palace. According to the
statistics released by the Central Committee of the Communist Youth
League, from 1949 to 2002, China had invested a total of 8 billion yuan
in the construction of children’s palaces. Based on the Chinese youth
population as of 2002, the average financial input per youth was 15.07
yuan; in terms of the urban youth population, the average financial input
per youth was 41.9 yuan; the fixed assets of the juvenile activity venues
averaged 28.25 yuan per youth nationwide.37 With a view to Shandong
Province, there were 14.79 million students in all kinds of ordinary pri-
mary and secondary schools and kindergartens in 200838; the fixed assets
of the off-campus educational venues affiliated to the Communist Youth
League totaled 323 million yuan (excluding land assets) in the same
year39; on this basis, the average financial input per youth was 21.8 yuan,
but the population parameter for this figure was the in-school students,
implying that the figure would be even lower if counting in the teenagers
outside of school. In a word, if comparing with the size of youth popu-
lation, the investment into juvenile after-school education remains fairly
low. From both the local and national perspective, inadequate financial
appropriation has been a historical problem that restricts the develop-
ment of the children’s palace.
Second, short of places for activities. The municipal children’s pal-
ace in M City is the largest juvenile after-school educational institu-
tion, with annual trainees of 15,000 man-times according to the 2009
statistics.40 Assuming that the other three palaces in M City could enroll
the same number of students every year, then the total number of train-
ees in the four palaces would be 60,000 man-times, but still behind the
682,000 on-campus teenagers in the city, indicating that less than 10%
of them were accessible to the children’s palace. In terms of per capita
occupancy, 170,000 children accessed to one children’s palace, marking
that the intake capacity of the palaces is far from enough. With a view
to the entire Shandong Province, the after-school educational institution
affiliated to the Communist Youth League had altogether 530,000 man-
times of trainees,41 far less from the 14.79 million on-campus teenagers.
The case of Shandong (lack of places for activities) is an epitome of the
common situation of the after-school education in east China which is
fairly developed, such situation is even worse in the less developed central
284 K. HAN
and western regions. According to a survey of the parents of teenag-

ers, 82% of them said the after-school activity venues are too limited,
77.8% of them expect their children to attend summer camps or juvenile
military activities organized by the children’s palace,42 highlighting the
contradiction between shortage of activity venues and robust demand of
children, that’s why the summer classes in the M children’s palace have
been increasingly popular in recent years.
Third, shortage of professional teaching staff. At present, the pro-
portion of part-time teachers in M children’s palace is more than tripled
from the 1990s, but the full-time teachers only increased one person.
With a view to the entire Shandong Province, in 2002 there were 15.36
million in-school teenagers,43 and 1643 teaching staff (including part-
time teachers) in juvenile after-school educational institutions,44 register-
ing a ratio of 9351:1, while such ratio would be higher after excluding
those doing part-time jobs. On a national scale, in 2002 the ratio of
teenagers to after-school teachers was 10,620:1, and that of urban teen-
agers to full-time after-school teachers was 3810:1.45 Although the chil-
dren’s palace has been making efforts in attracting outstanding teachers,
they still have to rely on those doing part-time jobs, the full-time teach-
ers on the whole remain short of demand.
Fourth, uneven development of children’s palaces in different regions,
which is a nationwide problem. The “unbalance” of the children’s pal-
ace indicates unbalanced geographical distribution and unbalanced
funding. With regard to Shandong Province, the teenagers in Binzhou,
Dongying, Rizhao, Laiwu, Heze and other prefecture-level cities account
for 17% of the provincial total, but so far they don’t have any children’s
palace; in 2003 the province allocated a total of 11.57 million yuan for
the construction of children’s palaces, but the funds distributed to each
palace differed from 40,000 yuan to 3.35 million yuan.46 Consequently,
the children’s palaces are usually concentrated in large and medium-sized
cities; for so many counties, county-level cities and districts, the chil-
dren’s palaces are in small numbers and without strong financial backup.
Such a problem of unbalanced distribution and financial input has
remained in existence for a long time, thus restricting children’s palaces
to properly perform their welfare function.
Fifth, restricted opening hours and activity space. As mentioned
above, some foreign developed countries don’t have any specialized
institutions in after-school education, their children’s off-campus educa-
tion is socialized, i.e., integrated with various social activities. But Russia
and Japan do have such institutions which are fairly open and flexible,
e.g., some large children’s palaces in Russia are open from morning till
night every day, allowing teenagers to attend 1–2 activities in any time
when they are free; the Japanese after-school educational institutions
are distributed in cities, districts and sub-districts. In contrast, Chinese
children’s palace constrains both activity space and opening hours, mak-
ing the trainees therein have limited social interactions and self-initiated
activities. Moreover, the after-school education in China is mainly under-
taken by children’s palace, instead of by the entire society, so that the
teenagers don’t have much opportunities to access to truly comprehen-
sive after-school education.
11.3.3 Deviation from Child Welfare Since

the Market-Oriented Reform
First, deviation from its functional positioning. Take M children’s pal-
ace for example, it was designed to be a host venue for juvenile activ-
ities, but gradually turning to be an organizer of training classes and
club activities. Presently, its training classes on literature, writing, math-
ematics, English and other cultural subjects have become increasingly
popular, with an enrollment rate far ahead, which is followed by the
art training on fine arts, calligraphy, music and dance; the sci-tech and
sports classes seem less attractive, though they were enjoying popular-
ity for a time after the palace was just founded. The impact of deviated
functions on the overall development of children’s palace is a question
worth discussing. The club activities of M children’s palace have grad-
ually formed a fixed scale and brand advantage. The excellent trainees
are performing in shows and activities all year round, exhibiting their
talent and skills almost like professionals. It has become a general trend
of so many Chinese children’s palaces. On the one hand, more brand
clubs are able to increase publicity of the children’s palace and enable
their members to attend large-scale performances and art exchanges. On
the other hand, branding and professionalization of clubs is able to single
out those talented children, i.e., those with some artistic skills are likely
to be chosen, while those without or with little artistic skills are excluded
from the clubs, but assigned to learn from scratch and unable to join
in clubs until they become truly capable. However, such operation also
deviates from the initial positioning of the children’s palace to “com-
bine teaching with pleasure” and “stimulate interest through activities”.
286 K. HAN
In addition, some children’s palaces are renting out venues for irrelevant
events such as wedding parties, which is another evidence of the func-
tional deviation of the children’s palace.
Second, deviation from its commonweal property. This kind of devi-
ation not only exists in certain children’s palaces, but a general problem
at a national scale. Delivering child welfare was defined as the purpose
of the children’s palace on the day it was founded. The Compulsory
Education Law of the People’s Republic of China explicitly stipulates that
“the educational activities shall conform to the national and social public
interests”, “no organization or individual is allowed to run schools or
other educational institutions for profit”.47 In 2006, the General Office
of the CPC Central Committee and the General Office of the State
Council released the Opinions on Further Strengthening and Improving
Construction and Management of Minors’ After-school Activity Venues,
which prohibit these venues to carry out revenue-generating operations
for profit-making purpose,48 which is an endorsement of the nature of
the children’s palace as a welfare provider.
However, since the market-oriented reform, most of the children’s
palaces in China have started revenue generation to different degrees.
Their revenue mainly comes from training classes and rental of venues.
According to the previous analysis, M children’s palace has been gen-
erating an annual revenue of above 1 million yuan for several consecu-
tive years since 1996, a considerable proportion of the revenue comes
from training. Moreover, M children’s palace has set up a special depart-
ment to take charge of venue management and rental (even rented out
for some irrelevant events), it can be seen that revenue generation is not
only a matter of necessity, but an important business of the palace. Being
a public institution fully funded by the government, M children’s palace
has been generating revenue on its own, let alone the palaces rely on bal-
ance allocation and self-financing. As a result, the current children’s pal-
aces in China have some “quasi-commonweal” characteristics, deviating
from their original purpose of delivering welfare.
11.3.4 Reasons for Deviation from the Function of Child Welfare

First, management by multiple parties. Since it was founded in China,
the children’s palace has been subject to joint management of sev-
eral authorities. The Rules on the Work about Children’s Palace/Center
(1957) for the first time prescribed that the children’s palace is affiliated
to the education administrative organ and the Communist Youth League

concurrently. However, new children’s palaces came into being succes-
sively afterwards, which has complicated their management system,
caused uneven management levels and unsynchronized policy implemen-
tation, and hampered the concerted efforts in management. In order to
reverse such awkward situation, the first national after-school education
work conference was held in 1996 to put forward the principle of “coop-
eration, coordination and concerted management”, the State Education
Commission, the Central Committee of the Communist Youth League
and the All-China Women’s Federation have since then strengthened
cooperative management of the children’s palace and other after-school
educational institutions; but a stable and feasible operational mecha-
nism has yet developed to date. Failure of the relative authorities to pay
enough attention in this regard is one of the major reasons for inade-
quate financing and uneven development of children’s palaces.
Second, the policies and regulations for after-school educational
institutions do not have a strong binding force. There are the Rules
on the Work about Children’s Palace/Center (1957), the Opinions on
Strengthening the Work Related to Children’s Palace and the Regulations
on the Work about Children’s Palace/Center (1980s), the Opinions on
Strengthening the Work Related to Juvenile After-school Education, the
Rules of Work for Juvenile After-school Educational Institutions, and the
Assessment Criteria (1990s). These rules or regulations only highlight
the importance of after-school education for children but fail to lay
out norms or constraints for actual operation. There is even no docu-
ment that clearly defines the business scope, financing channels, charg-
ing standards, qualification of practitioners, professional title and other
key issues about the children’s palace. The authorities at all levels do not
have a clear-cut policy basis for the management of children’s palace.
Most of the regulations are developed by local children’s palace associ-
ations, which are neither restrictive nor able to provide institutional and
environmental guarantee.
Third, the lack of widespread social recognition. After-school edu-
cation has always been regarded as a supplement to formal school
education. By playing a “supporting role”, the children’s palace can
only receive more financial appropriation when local finance is abun-
dant, but the budget for after-school education may be omitted in
“lean years”. For the competent authorities at all levels and even the
whole society, they don’t think the support to after-school education
288 K. HAN
(e.g., the children’s palace) is mandatory, since the compulsory educa-

tion in normal schools is more important. Inadequate social recognition
of after-school education is one of the reasons that the children’s palace
is often underfunded, mismanaged and deviated from its commonweal
nature.
Fourth, attitude and standpoint of parents. A recent survey shows
that a majority of parents regard the children’s palace as a “second class”,
“art school” or a kind of “training institution”, only 5% of them take
it for a place for recreation.49 Most parents appreciate the educational
function of the children’s palace, believing that it is able to improve the
cultural and artistic qualities of their children. They pay training fees for
their children to learn skills, rather than letting them have fun or receive
psychological training. Since the reform and opening-up, the trainees in
the children’s palace are usually the only child in their family. It is under-
standable that the parents expect their children to be versatile, skilled and
knowledgeable. Not only that, amid the increasingly fierce social compe-
tition, the parents are afraid that their beloved son or daughter may “fall
behind at the starting line”, so they force their children to learn English,
writing or “Mathematical Olympiad” to build up their capability to lead
a better life in the future. In order to cater to the demand of parents,
the children’s palace has gradually diverted their focus to the training
classes of culture and art subjects, and no longer pay great attention to
the sports, sci-tech and psychological training and activities as before.
11.4 Development Trend of Children’s Palace

and Realization of Child Welfare
The role of children’s palace in delivering child welfare cannot be

ignored, but some defects and problems are weakening its welfare func-
tion: (1) Due to a shortage of funds, venues, teaching staff and other
resources, only a few children have the opportunity to attend the activ-
ities in children’s palace. The number and scale of children’s palace lag
far behind the large size of the juvenile, so the children in rural area
and remote parts of urban area are inaccessible to children’s palace.
(2) The functions of the existing children’s palaces have deviated, they
are paying great attention to the training of culture and art subjects,
but seem less interested in the classes of science and technology, sports
and psychology, such deviation is no good for children’s comprehensive
development.
11.4.1 Role of Children’s Palace in Child Welfare

The role of children’s palace in China’s child welfare mainly reflects in
three aspects:
First, connect child welfare with education welfare. Education is one
of the core contents of child welfare and an important means to promote
children’s growth and development. In the process of their growth, chil-
dren need to acquire knowledge and skills, improve cognitive ability and
ways of thinking, develop sound personality and healthy mentality, learn
to survive and get along well with others. For these purposes, multifac-
eted efforts shall be made in addition to formal school education. The
children’s palace is evidently an important tool in this regard: in addition
to directly enrolling students to its self-initiated activities, it also holds
various activities, contests and trainings that link up with school educa-
tion, which have greatly enriched the content of education welfare.
Second, integrate child welfare resources. The theory of “welfare
pluralism”, which was put forward when the welfare state met with the
economic plight, holds that the government is not the only provider
of welfare, the responsibility of delivering welfare shall be borne by the
public sector, for-profit sector, non-profit sector, family and society;
i.e., all social resources shall be mobilized for delivering welfare. Since
the 1970s, this theory has won extensive recognition from the western
academic circle and played an important role in defending against the
crisis of the welfare state. In terms of China’s child welfare model, it is an
integration model in which the state plays a dominant role and all sectors
of society are mobilized to make contributions. The children’s palace, in
its decades of development in China, has been upholding government
leadership and combining with social support. On the one hand, in
terms of its funding, the children’s palace in the planned economy period
was relying on local educational budget and social contribution. Since
the market-oriented reform, along with gradual marketization of the
traditional state-dominated welfare system, the children’s palace finally
has diversified sources of funds. On the other hand, in terms of person-
nel and venue resources, the staffing of children’s palace in the past was
decided by the educational departments at all levels, while the venues,
facilities and instructional supplies were based on financial appropriation
and social contribution. Since the reform, the children’s palace has seen
290 K. HAN
its personnel composition notably diversified, and venue construction

and expansion has drawn increasing social investment.
Third, increase the forms of delivering child welfare. The children’s
palace provides child welfare through flexible, practical and entertaining
forms of education, including mass cultural activities, interest groups,
science-themed visits, scientific experiments, amateur associations,
exchange visits and other distinctive practices. Organizing entertaining
and practical activities is the initial purpose of children’s palace, its ulti-
mate purpose is to meet the needs of children to acquire knowledge and
grow up. The children’s palace education is both practical and entertain-
ing—different from formal school education—is able to stimulate the
students to feel the wonder of knowledge in a relaxed atmosphere and
diversify the forms of delivering child welfare.
11.4.2 Discussions on the Future Prospect of Children’s Palace

(1) From the perspective of marketability and public benefit
Through a case study of M children’s palace and review of the devel-
opment of the Chinese children’s palaces on the whole, a significant
feature of them since the economic reform is deviation of commonweal
property. Due to inadequate financial input, the children’s palaces in dif-
ferent regions have been using means of marketization to increase reve-
nue so as to maintain normal operation and expand the scale of activities,
i.e., they are delivering after-school education in a “quasi-commonweal”
form to satisfy the demand for child welfare.
Child welfare shall be fair and universal in essence, and an irreplace-
able state responsibility. Marketized operation cannot enable the chil-
dren’s palace to fully play its role in delivering child welfare for the
following reasons: (i) An entry fee may be in the way of some children
from poor families to receive the welfare provided by the children’s pal-
ace. Although most of the children’s palaces with government grants
charge a low entry fee, it is still hard for some families to afford 400–500
yuan per semester. (ii) Marketization may help the children’s palace per-
form its welfare function, but it cannot replace its welfare property. In
the context of a market economy, the self-financed and enterprise-run
educational institutions are indispensable, but it does not mean that
those funded by the government shall be reduced, these two types of
educational institutions shall be mutually complementary to satisfy the
diverse needs of children, rather than a wane-and-wax relationship.
Presently, owing to insufficient financial support, some children’s pal-

aces of commonweal nature have been attempting marketized operation,
which may further tap their potentials to perform their welfare function.
Through the analyses above, the after-school education itself shall
become diversified and multilevel in the future: being geared by market
demands, all kinds of private institutions shall keep developing to meet
the high-level demand for after-school education; the children’s palace
shall gradually transit from the current “quasi-commonweal” to “wholly
commonweal” to play a better role in delivering fair and universal wel-
fare. In the process of transition, more efforts shall be made to lower the
entry fee, e.g., discriminative charging or fee waiver for some programs,
so as to meet the welfare needs of the children from different back-
grounds, especially the underprivileged children.
(2) From the perspective of the macro environment
Since it was founded in China, the children’s palace has been under a
significant impact from the macro-environment of the country, whether
it is able to properly perform the welfare function is directly decided
by the government support. In the era of planned economy, owing to
both internal and external influences, the government and public insti-
tutions were paying great attention to after-school education, that’s why
the children’s palace could be flourishing as never before, which has
provided massive benefits to children. At present, the government and
the entire society fail to pay enough attention to after-school education,
which has restricted the children’s palace to fully perform its welfare
function.
Owing to the sophistication of the modern socioeconomic life, the
government cannot fully participate in all aspects of social management,
and the increasingly diversified welfare sources have, to different extent,
made for the deficiency of the government-led welfare; however, the
commonweal nature of the socialist China and its extremely unbalanced
regional resources have determined that the Chinese government shall
keep playing a dominant role in delivering child welfare, and foster the
growth of various welfare sources at the same time. In the long run, the
government shall support the children’s palace to return to its common-
weal nature and motivate all sectors of society to invest in after-school
education. In the short term, the government shall introduce preferen-
tial policies towards the underprivileged children, lower the entry fee
for these children so that they may access to education welfare; and the
292 K. HAN
government shall provide financial support to the children’s palaces that

have deviated from welfare function, and mobilize the entire society to
provide them with human, financial and material sources, so as to build
up their ability to deliver welfare in the future.
(3) From the perspective of resource integration and community-based
education
The children’s palace is able to integrate child welfare resources,
i.e., it not only receives financial appropriation, but draws support from
all sectors of society. In recent years, community-based education—
to improve the cultural quality and life quality of community residents
through various educational activities within a prescribed area—has
become a development trend that wins extensive recognition from the
academic circle. The premise for community-based education is integra-
tion and sharing of educational resources within the community. These
resources include libraries, museums, cultural centers, off-campus activ-
ity bases, schools, sci-tech resources and venues of scientific research
institutes. The children’s palace, which connects society education with
school education, is an integral part of community-based education;
while the community provides talents, sites and necessary hardware sup-
port for the children’s palace.
In a nutshell, a feasible development trend of children’s palace in
the future is summarized as follows: under the macro-environment
where the government keep playing a leading role, the children’s pal-
ace shall maintain its commonweal nature, openness, integration with
social welfare resources and connection with school education; both the
government and the entire society shall increase investment into com-
munity-based child welfare facilities and after-school education, promote
integration and sharing of educational resources, in an aim to guarantee
the children’s palace to perform its child welfare function.
11.4.3 Development Direction of China’s Child Welfare

Since the market-oriented reform, Chinese child welfare has demon-
strated such development trends as excessive family protection, overly
marketized preschool education, after-school education and welfare facil-
ities. Given this, China shall make it clear that it is the state that bears
the main responsibility for child welfare. Moreover, the goal orientation
of child welfare shall transit from over-emphasis of moral education and
ideologization to humanization and socialization. The development

concepts for child welfare shall transit from the assistance type (mainly
for orphaned and disabled children) to the universal type (for all chil-
dren). Moreover, the service principals for delivering child welfare shall
be diversified, i.e., let market and social organizations play a positive role
in this regard.
Notes
1. Juvenile Out-of-School Education Branch of the Chinese Society of
Education, 2007, China out-of-school education yearbook, Tianjin: Tianjin
2. Ministry of Education, Communist Youth League Central Committee,
05/25/2010, The rules on the work about children’s palace/center,
CYLCC Portal (historical documents 1950–1959): http://www.gqt.org.
cn/695/gqt_tuanshi/gqt_ghlc/his_wx/.
3. State Education Commission, Communist Youth League Central
Committee, 05/25/2010, The regulations on the work about children’s
palace/center, People’s Daily (Library of Laws and Regulations 1987):
http://www.people.com.cn/item/flfgk/gwyfg/1987/gwyfg1987.html.
4. Yuan Baohua, et al., ed., 1992, The great dictionary of Chinese reform,
Hainan: Hainan Publishing House, pp. 3, 102.
5. Xu Dexin, 2000, Educational history of the children’s palace, Hainan:
Hainan Publishing House, p. 2.
6. China National Children’s Center, 2002, After-school education in China,
Beijing: Xueyuan Publishing House, p. 15.
7. Lin Shengyi, 2009, Child welfare, Taipei: Wu-Nan Culture Enterprise,
pp. 35–45.
8. Zhou Zhenou, 2007, Child welfare, Taipei: Chu Liu Book Company,
p. 85.
9. Lu Shizhen, 2003, Social work about children, Beijing: Social Sciences
10. Zhang Haiying, 1993, Social security dictionary, Beijing: Economy and
Management Publishing House, p. 9.
11. Wang Dinghua, 1997, After-school education in today’s Asian countries,
Education for Chinese After-School, Issue 3.
12. Xu Xu, Sha Jiang, 2008, Theory and practice of modern after-school educa-
tion in China, Hangzhou: Zhejiang People’s Publishing House, p. 43.
13. Li Chunsheng, Kang Yu, 2002, Reconstruction of school-community
relations in the context of lifelong learning, Comparative Education
Review, Issue 4.
294 K. HAN
14. Kang Liying, 2001, Basic characteristics of modern after-school education,

Educational Review, Issue 1.
15. Shi Kecan, 2002, Brief analysis of Japanese “school-society integration”
theory, Studies in Foreign Education, Issue 9.
16. Li Yan, 2008, Comparative study on after-school education of teenagers
in China and foreign countries, in Theory and practice of modern after-
school education in China, p. 42.
Hainan Publishing House, pp. 13–56.
18. Zhang Hua, 2004, Analysis on the development course of Chinese juve-
nile activity bases and reasons for their relative backwardness, China
Youth Study, Issue 1.
19. Cai Qiuyun, Review of CWI children’s palace in learning from the Soviet
Union experiences, in China out-of-school education yearbook 2001,
pp. 213–17.
20. Sun Ningsheng, Li Runde, 1999, Challenges in front of children’s palace
in the 21st century and relevant thinking, Economic Inquiry, Issue 3.
21. Lin Xiuying, 2001, Explorations into development of educational function
of children’s palace, Journal of the Chinese Society of Education, Issue 2.
22. General Office of the CPC Central Committee, General Office of the
State Council, 2006, Circular on issuing the opinions on further strength-
ening and improving construction and management of minors’ after-school
activity venues, Gazette of the State Council.
23. Shi Baoquan, Realization of commonweal of children’s palace education,
in China out-of-school education yearbook 2006, pp. 185–89.
24. Education Office of Committee of Education, Science, Culture, Health
and Sports, 2006, Learning and promoting the compulsory education
law of the People’s Republic of China, Beijing: Beijing Normal University
Publishing House.
26. Sun Ningsheng, Li Runde, 1999, Challenges in front of children’s palace
in the 21st century and relevant thinking, Economic Inquiry, Issue 3.
28. China Welfare Institute, 1992, Thoughts of Soong Ching-ling on chil-
dren’s education and the work concerning children, Shanghai: Shanghai
Educational Publishing House, p. 41.
29. China National Children’s Center, 2002, After-school education in China,
Beijing: Xueyuan Publishing House, p. 29.

Hainan Publishing House, pp. 17–18.
31. Translator’s note: The “red scarf” is a symbol of the Young Pioneers of
China—a national children’s organization under the leadership of the
Communist Youth League. A “red scarf” denotes a young pioneer.
32. Translator’s note: the “Red Guards” was a spontaneous mass organiza-
tion within each work unit during the Cultural Revolution. It was used
as propaganda machine to destroy the symbols of China’s pre-communist
past, including ancient artifacts and gravesites of notable figures.
33. Translator’s note: the “Revolutionary Committee” was a political organi-
zation at all levels during the Cultural Revolution.
35. Ministry of Education, et al., 03/25/2010, The rules of work for juvenile
after-school educational institutions, The Ministry of Education portal,
http://www.moe.edu.cn/edoas/website18/50/info5950.htm.
38. Shandong Provincial Bureau of Statistics, 03/25/2010, Shandong statisti-
cal yearbook 2009, http://www.stats-sd.gov.cn.
39. Youth League Committee of Shandong Province, Special investigation
report on the minors’ activity venues affiliated to Shandong Communist
Youth League (not for publication).
40. Report on the work of the children’s palace in M city 2009 (not for
publication).
41. Youth League Committee of Shandong Province, Special investigation
report on the minors’ activity venues affiliated to Shandong Communist
Youth League (not for publication).
42. Juvenile Out-of-School Education Branch of the Chinese Society of
Education, 2004, China out-of-school education yearbook, Tianjin: Tianjin
43. Shandong Provincial Bureau of Statistics, 03/25/2010, Shandong statisti-
cal yearbook 2003, http://www.stats-sd.gov.cn.
44. Youth League Committee of Shandong Province, 2002, Investigation
report on construction and management of the minors’ activity venues affil-
iated to Shandong Youth League Committee (not for publication).
296 K. HAN

47. Education Office of Committee of Education, Science, Culture, Health
and Sports, 2006, Learning and promoting the compulsory education
law of the People’s Republic of China, Beijing: Beijing Normal University
48. General Office of the CPC Central Committee, General Office of the
State Council, 2006, Circular on issuing the opinions on further strength-
ening and improving construction and management of minors’ after-school
activity venues, Gazette of the State Council.
49. Zhang Liangxun, 2010, Analysis of parental psychology in children’s palace
education, China Youth Studies, Issue 1.
CHAPTER 12
Welfare Reconstruction for the Urban Poor:

Taking the Minimum Livelihood Guarantee
System as an Example
12.1 System Background and Research Techniques
12.1.1 Introduction to System Background

Since its implementation of the reform and opening-up policy, China has
witnessed robust economic growth and notable improvement of peo-
ple’s living standard. However, while the urban landscape keeps opti-
mizing, urban poverty has become an evident issue that obsesses the
Chinese government. Such an issue is attributed to both individual rea-
sons (disabled, growing old and weak or incapable of working) and social
reasons (inadequate job opportunities, social exclusion or structural
unemployment).
The Chinese government attaches great importance to the issue
of urban poverty. Since the 1990s, it has been striving to establish and
improve the social welfare system, in an attempt to fulfill its responsibility
in guaranteeing the basic livelihood of the urban poor by institutional-
izing policy arrangements. The Minimum Livelihood Guarantee System
for urban residents, especially targeting at the issue of urban poverty, is
one of the essential parts of the Chinese social welfare framework. In
Han Keqing, Liu Xitang, 2008, Status quo and problems of Chinese urban
Minimum Livelihood Guarantee System and countermeasures, Journal of Social
Sciences, Issue 11.

https://doi.org/10.1007/978-981-32-9660-2_12
298 K. HAN
order to expedite implementation of this system, the Chinese government

promulgated the Regulations on the Subsistence Security for Urban
Residents in 1999. To date, the Minimum Livelihood Guarantee System
is established in all cities across China. As long as the residents hold an
urban “hukou” (urban household registration), and the average income
of their family is below the urban minimum living standard, then they
are entitled to apply to the local government for subsidy. The civil affairs
department, on behalf of the local government, shall firstly verify the fam-
ily economic status of the applicants, if it proves eligible, then they will
receive a balance subsidy in cash based on the minimum living standard.
According to the statistics, the Minimum Livelihood Guarantee
System for urban residents only covered about 4.03 million people
in 2000, then this figure sharply rose to 20.65 million in 2002. Those
receiving the subsistence allowance reached 22.40 million in 2006, and
hit the peak at 23.46 million in 2009, but declined year by year since
then to drop at 14.80 million in 2016.1
12.1.2 Research Techniques

Both questionnaire survey and case interview are used for this study. We
selected some subsistence allowance recipients in the typical Chinese
cities by applying the purposive sampling method. Through an overall
consideration of economic level, city scale, location in the national top
three economic belts, and coverage rate of the Minimum Livelihood
Guarantee System, we defined six cities—Beijing and Chongqing
municipalities, Changsha City of Hunan Province, Zhongshan City of
Guangdong Province, Tianshui City of Gansu Province and Chaoyang
City of Liaoning Province—as our sampling points, and then selected a
district in each of the six cities by applying the cluster sampling method.
There are 1200 samples for the questionnaire survey. But in actual oper-
ation, we referred to the information about the subsistence allowance
recipients—recorded in the Civil Affairs Statistical Ledger, and used the
sampling survey software and the multistage random sampling method,
and finally selected 1462 respondents: 237 in Xuanwu District of
Beijing, 235 in Yuzhong District of Chongqing, 249 in Tianxin District
of Changsha, 259 in Zhongshan, 243 in Qinzhou District of Tianshui,
and 239 in Shuangta District of Chaoyang. Overall, these figures are
highly representative since they are based on objective records and
screened with scientific method. In addition to the questionnaire survey,
12 WELFARE RECONSTRUCTION FOR THE URBAN POOR … 299
we also directly interviewed 108 respondents in the above-mentioned

cities, and held 12 forums, respectively attended by subsistence
allowance recipients and concerned civil administration cadres.
The questionnaires in the form of Q&A were filled out by 20 inter-
viewers. All of them were graduate students majored in social security
at Renmin University of China, they shall meet the conditions of being
honest, competent, responsible, serious and hardworking, and attend-
ing special training. Since they were unfamiliar with the environment
and dialects of the sampling points, we also selected 60 local students,
which were, respectively, from Chongqing City Management College,
Changsha Social Work College, UESTC-Zhongshan Institute, and
Tianshui Normal University, to help us carry out the questionnaire sur-
veys in different areas.
12.2 Main Focuses of Current Studies

The current studies on Chinese urban Minimum Livelihood Guarantee
System generally have the following characteristics: (1) Focusing on hot
issues, especially the existing problems in the process of system imple-
mentation. (2) Most researchers are doing their work under the guid-
ance of government policies. (3) Involving multiple disciplines like
management, law, economics, statistics, finance, psychology, accounting
and archival science, particularly sociology. (4) A large number of the
researchers are civil administration cadres that take charge of subsistence
security work, meaning that they are adept in identifying the problems
in system implementation and interpreting policies. The main focuses of
current studies are specifically introduced as follows.
12.2.1 Standard of Urban Subsistence Allowance

The standard of subsistence allowance, also known as the “security
line”, is the core of the Minimum Livelihood Guarantee System. Since
the implementation of this system, the standard of subsistence allow-
ance has been a focus of both government and academic community. In
the International Symposium on Chinese Urban Subsistence Allowance
Standard held in 2006, the participating experts and scholars agreed
that it is necessary to provide for the procedures and methodologies
for developing the standard of urban subsistence allowance—it shall be
formed with the Market Basket Method and Engle’s Ratio Method; the
300 K. HAN
development of urban Minimum Livelihood Guarantee System shall be

oriented towards multiform social assistance; and all social policy issues in
this regard shall be deliberated from both theoretical and practical aspects.2
Hong Dayong has pointed out the main defects in the current stand-
ard of urban subsistence allowance: (1) The standard is somewhat arbi-
trarily developed, the allowance amount is fairly low, and there is no
unified norm for regular adjustment to the standard. (2) The standard
is not flexible for failing to take account of family size and structure. (3)
In terms of the balance allowance, there is neither a unified norm for cal-
culating family income in different regions. (4) It is hard to implement
the net income standard. (5) Some areas fail to distribute the subsist-
ence allowance in full and on time once in a while. (6) The actual wel-
fare standards vary greatly among regions for their different preferential
policies.3
In his other studies, Hong proposes to firstly build a four-level indi-
cator system (basic food demand, non-food demand, family status and
economic development), and then calculate the subsistence allowance
standard for each city by following eight basic steps: (1) Define a low or
medium standard for the average daily calorie intake (1800 or 2400 kcal
recommended by the Chinese Nutrition Society). (2) Carry out a scien-
tific sampling survey in target cities, record the food-consuming struc-
ture and quantity of the low and middle-income earners, and develop a
list of average food that satisfies the low or medium calorie intake stand-
ard. (3) Calculate the cost of the listed food, based on the average food
prices learned from the survey, such cost will be the food poverty line.
(4) Calculate the reasonable non-food cost with the Martin Method,
based on the data collected from the survey, such cost will be the non-
food poverty line. (5) Count up the food and non-food poverty lines to
obtain the amount of subsistence allowance, which is actually the min-
imum living standard for a standard person. (6) When distributing the
subsistence allowance, adjust the standard in light of the specific family
size of the recipients. (7) Slightly readjust the allowance standard accord-
ing to the family type of the recipients to ensure its appropriateness. (8)
Regularly adjust the allowance standard in line with changes on com-
modity price and people’s living standard.4
Lots of scholars have joined in the discussion on how to adjust the
subsistence allowance standard. Lin Zhiwei suggests taking account
of such factors as per capita consumption, average wage and minimum
wage standard. Through a regression analysis of the cross-sectional data
about 35 Chinese cities in 2004, Lin has found that when the per capita
consumption (average wage, the minimum wage standard) increases 100
yuan, the subsistence allowance standard shall be adjusted up by 7.61
yuan (4.68 yuan, 13.50 yuan); in other words, each city shall refer to per
capita consumption, average wage and minimum wage standard when
adjusting the subsistence allowance standard. The author of this book
adds that the current subsistence allowance standard only guarantees
the survival of low-income earners, but fails to meet their other urgent
needs (the scope of security is too limited); the allowance amount lags far
behind the average wage—highlighting the wealth gap between laborers,
but closes to the minimum wage standard—adverse for motivating the
allowance recipients to return to job market.5
Wang Hong et al. calculated the minimum cost on food of Shanghai
residents with the Linear Programming Model, and then calculated
their non-food cost with the Artificial Neural Network (ANN) Model.
The results calculated with the two models are added together to obtain
the amount of subsistence allowance, which is fairly intuitive. The for-
ward-looking ANN Model, which is able to assemble, interpret and pre-
dict the factors for non-linear variation, is a useful tool for defining the
security line for Shanghai residents.6
12.2.2 Implementation of the Minimum Livelihood

Guarantee System
Since the implementation of the urban Minimum Livelihood Guarantee
System, its effect has been a general concern of the Chinese. Cheng
Shengli once surveyed 804 families that receive the subsistence allowance
in Jinan City of Shandong Province, and drew up the following conclu-
sions: the Minimum Livelihood Guarantee System—the final safety net
for the underprivileged—has played an essential role in guaranteeing the
basic livelihood of the urban poor; the subsistence allowance accounts
for 33.5% of the average income of the recipient families, and increases
their income by 50.3% on average, which has only notably improved
their living standard, but maintained a stable environment for continu-
ous development of socio-economy.7
In reference to the NBS big sample survey (2004), which is about the
implementation of the Minimum Livelihood Guarantee System in 35
Chinese cities, Wang Youjuan has evaluated the implementation effect of
the system from two aspects: (1) Eligible rate and poverty intensity which
302 K. HAN
are estimated on basis of the security line. Compare the per capita income of
each surveyed family with the local security line, screen out those earning an
income below the line, then this part of population is entitled to the subsist-
ence allowance and identified as “eligible recipients”, while the “eligible rate”
denotes the percentage of the eligible recipients in the total surveyed popula-
tion. Through calculation, the eligible rate in the 35 large and medium-sized
cities was 8.13%: such rate was higher in northeast and southwest China,
but lower in north, east, northwest and south China. (2) Accuracy rate of
identifying the eligible recipients and of distributing subsistence allowance.
Measured with the index of income, 8.13% of the surveyed population in the
35 cities earned an income below the security line in 2003, among which
2.65% had received the subsistence allowance, but 5.48% had not, showing
that the Minimum Livelihood Guarantee System only covered about 1/3 of
the eligible recipients, while the remaining 2/3 were left out. But this con-
clusion was made without considering the impact of the income gap among
cities and an unduly low security line. In fact, 3.91% of the surveyed pop-
ulation received their subsistence allowance, among which 2.65% earned an
income below the security line, meaning that they were eligible recipients,
while the remaining 1.26% were illegible with an income above the security
line, presenting an accuracy rate of identifying the eligible recipients at 67.6%.
In the 35 cities, 76.22% of the subsistence allowance was distributed to the
people earning an income lower than the security line, while the remaining
23.78% was given to those with an income above the security line, registering
an accuracy rate of distributing subsistence allowance at 76.22%, which was
higher than such rate of identifying the eligible recipients.8
12.2.3 Major Problems Existing in the System

Since the implementation of the Minimum Livelihood Guarantee
System, Chinese scholars have examined the problems existing in the sys-
tem itself and its operation process from separate perspectives. Although
different problems have surfaced at each stage of the implementation,
they do have something in common on the whole.
According to Tang Jun et al., the major problems in the urban
Minimum Livelihood Guarantee System reflect in four aspects: the scope
of coverage is too limited, the impact from the traditional relief thoughts
remain strong, the financial departments at all levels fail to agree on a
reasonable a cost-sharing basis and part of the subsistence allowance
recipients still live under financial strain.9
Hong Dayong and Liu Zhongxiang also found some prominent prob-
lems in the process of implementing the Minimum Livelihood Guarantee
System: (1) Some areas fail to understand the essence of the system, but
believe it is no more than a continuation of the traditional social assistance,
they are unaware of the innovative significance of the system in the new era
or its important role in the reform of the national social security system. (2)
Some local civil affairs departments are narrow-minded, they only see the
difficulties in their own work, but make no effort in seriously implement-
ing the system. (3) Some areas lack capital sources for subsistence allow-
ance, which restrains them from expanding the coverage of the system.
(4) Medical treatment is a foremost concern of the subsistence allowance
recipients at present. (5) The publicity for the system is far from enough,
especially the publicity for the civil rights—proper meaning of the system.10
According to Liu Wenji, the main problems existing in the subsist-
ence security work reflect in five aspects: (1) Defects in the competent
departments, e.g., authorized strength, staffing, funds, office premises
and equipment. (2) Lack of a scientific basis for accessing the overall situ-
ation of the applicants, e.g., their jobs, income level and family economic
status. (3) Inefficient distribution of subsistence allowance. (4) A lengthy
process for exit from the system. (5) Poor supervision of the financial sta-
tus of the allowance recipients.11 But in the view of Wang Chengwu, it
is difficult to verify the eligibility of applicants and define the amount of
subsistence allowance; difficult to maintain regular revisits to the allow-
ance recipients and reverify their eligibility; difficult to coordinate the
relationship between subsistence security and reemployment incentive;
difficult to draw input of human resources and raise work efficiency.12
Li Cheng has specially analyzed the information asymmetry in the
subsistence security work—directly associated with the civil administra-
tion, and believes such information asymmetry lies in the following two
relationships: (1) Between the central and local governments. The cen-
tral government needs to confirm the number of applicants reported by
local governments to prevent deliberate overreporting. (2) Between local
governments and agents. The work of agents directly determines the
authenticity and reliability of data, that’s why only the agents that “give
priority to efficiency” will be hired. The local governments shall properly
deal with their relationships with the agents by conforming to the princi-
pal–agent norms, i.e., the principal shall provide funds and other neces-
sary conditions to the agent, ensure that the commission relationship is
accepted by the agent voluntarily, the two parties shall clearly define their
304 K. HAN
respective rights and duties, work out scientific rules and a reasonable
accountability mechanism, and perform their work conscientiously.13
12.2.4 Countermeasures for Improving the System

With regard to the problems existing in the urban Minimum Livelihood
Guarantee System, experts and scholars have put forward lots of
countermeasures.
According to Hong Dazong and Liu Zhongxiang, the urban Minimum
Livelihood Guarantee System shall develop along with the direction of
China’s social reform and follow the principle of “separating government
from public institutions”, i.e., China shall establish one or more independ-
ent subsistence security institutions, hire the social workers with profes-
sional background and let the government play the role as a policymaker,
investor, supervisor and administrator. Such development model not only
avoids expansion of governmental institutions and cuts fiscal expense, but
promotes competition and raises the efficiency of the subsistence security
work. Furthermore, once the Minimum Livelihood Guarantee System
completes the transition and then takes hold, it will generate demand for
professional social workers, which will benefit the development of Chinese
social work education by combining with practice.14
Tang Jun has presented seven suggestions for resolving the problems
existing in the urban Minimum Livelihood Guarantee System: (1) The
government, respectively, at the central, provincial, municipal and district
level shall share the fiscal appropriation for the subsistence allowance. The
central, provincial and municipal governments may each bear 30% of the
total expense, which will be a benchmark, but certain poverty-stricken
provinces/cities are allowed to make appropriate adjustments. The provin-
cial/municipal government shall define their sharing proportion and then
report to the central government for approval. (2) After the central and
provincial financial authorities pledge to share the expenditure on the sub-
sistence allowance, they shall urge the competent authorities to come up
with the opinions for the upper and lower limits of the allowance standard;
such standard shall be adjusted in line with year-on-year improvement of
people’s living standard and constant rise in commodity price. (3) Improve
management of the Minimum Livelihood Guarantee System. Inside the
civil affairs system, an urban subsistence security management bureau shall
be set up, by imitating the setting of the Ministry of Labor and Social
Security. Meanwhile, the “focus of management shall be shifted down”
to sub-districts which are directly associated with the masses. Sub-district

subsistence security office is a cornerstone of the social assistance network,
and each office is staffed with 2–3 personnel. The neighborhood commit-
tee is also staffed with social workers who take orders from the sub-district
office. Both the subsistence security management bureaus at the municipal
and district levels take charge of personnel file management and investiga-
tion of certain difficult cases. (4) Adjust the framework of the Minimum
Livelihood Guarantee System by the following means: refer to the practice
in some foreign countries to divide the subsistence allowance into three
parts, respectively, for “basic livelihood”, “special needs” and “discretion-
ary assistance”; adjust the amount of allowance based on the family size
of the recipients, e.g., from one person to four persons and above; in case
the recipients have working ability, then their allowance may be somewhat
lowered in line with the international practice. (5) Strengthen the com-
munity-based subsistence security work. (6) Conduct a poverty-alleviation
campaign in urban areas. (7) Organize charitable activities.15
12.2.5 Future Development Trends of the System

According to Hong Dayong, the current urban Minimum Livelihood
Guarantee System has demonstrated the following development trends:
(1) The principle that let local governments play a leading role may be
altered. (2) The pure financial subsidy is to be replaced by comprehen-
sive social assistance. (3) The unfair practice in implementing the sys-
tem will be gradually removed, and “classified assistance” is expected to
be popularized. (4) The single function of livelihood assistance is being
weakened, while the combined functions of livelihood guarantee and
employment motivation are to be strengthened. (5) The subsistence
allowance may be no longer in the single form of cash, but include live-
lihood services. Efforts shall be made to enhance social participation and
social integration of the allowance recipients, so as to prevent them from
being alienated from the mainstream society. (6) The current Minimum
Livelihood Guarantee System, with the collaboration from other systems,
will provide the necessary support to the low-income earners with per
capita family income slightly above the security line, so as to mitigate
their sense of relative deprivation. The coverage of some special assis-
tance systems shall be broader than the Minimum Livelihood Guarantee
System, and on-demand assistance shall be implemented. (7) The cur-
rent system will become increasingly sophisticated along with continuous
306 K. HAN
institutional practice and evolution of the system itself. (8) The imple-
mentation of the system is likely to give birth to specialized social assis-
tance institutions and social workers.16
To sum up, the current studies have garnered fruitful results, i.e., accu-
rately revealing the existing problems in the Minimum Livelihood Guarantee
System and its development trends, and putting forward constructive policy
suggestions for improvement and development of this system.
12.3 Quantitative Descriptive Results
12.3.1 Basic Information of the Respondents

(1) Family size (Table 12.1)
According to the figures shown in the above table, a majority of the
respondents have a family with no more than 4 persons (including 4),
especially those made up of 3 persons, which account for 42.7% of the
total, followed by the families with two and one person, accounting
for 21 and 15.5%, respectively. The families with 4 persons account for
15.3%. Less than 20% of the families consist of 5–8 persons. In short, the
number of families is inversely proportional to their size.
(2) Gender and age composition of the respondents (Fig. 12.1)
The respondents of the survey are made up of 50.5% of men and 49.5%
women, their proportions are fairly close.
The respondents are from 2 to 95 years old. A great majority of them
(57.9%) are aged from 40 to 60. Those aged 44 account for the larg-
est proportion of 5.4%, followed by those aged 43 and 45, respectively,
Table 12.1 Statistics on the family size of the respondents
Number of family member Number of households Valid percent (%)
1 187 15.5
2 254 21.0
3 516 42.7
4 185 15.3
5 49 4.1
6 9 0.7
7 7 0.6
8 2 0.2
Total 1209 100.0
Fig. 12.1 Gender and age composition of the respondents
Table 12.2 Statistics on the educational level of the respondents
Educational level Number Valid percent (%)
Primary school and below 374 30.9

Junior middle school 524 43.3
Senior high school and vocational high school 246 20.3
Secondary vocational/technical school 35 2.9
Junior college 23 1.9
Undergraduate 7 0.6
Total 1209 100.0
accounting for 5.2 and 5.1%. Those aged 42 and 50, respectively,
account for 4.1 and 4.6%. The number of people in other age groups is
relatively small, and the people under 30 and above 67 are no more than
1%. The people aged from 2 to 18 account for 1.2%. Those falling in the
age groups of 18–29, 30–39, 60–70 and 70–95 account for 2.7, 18.7,
9.9 and 10.3%, respectively. It can be seen that most of the subsistence
allowance recipients are aged from 40 to 50.
(3) Educational level (Table 12.2)
The statistics in the above table show that most of the respondents are
not well educated, i.e., failing to complete the senior high school edu-
cation. A majority of them (43.3%) attended junior high school, fol-
lowed by 30.9% that attended primary school and even below. Among
the total respondents, 20.3% attended senior high school or vocational
308 K. HAN
Table 12.3 Statistics
Marital status Number Valid percent (%)
on marital status of the
respondents Single 120 9.9
Married 714 59.2
Divorced 176 14.6
Separated 2 0.2
Widowed 195 16.2
Total 1207 100.0
Health status Number Valid percent (%)
on the health status of
the respondents Good 233 19.3
General 284 23.6
Weak 209 17.3
Chronic disease 216 17.9
Severe disease 146 12.2
Others 117 9.7
Total 1205 100.0
high school, 2.9% attended secondary vocational/technical school, 1.9%

were admitted into junior college, and merely 0.6% are undergraduates.
In general, the number of respondents who could access to higher edu-
cation is extremely limited.
(4) Marital status (Table 12.3)
The relevant statistics show that a majority of the respondents are mar-
ried or have been married. Among them, 59.2% are married, 14.6% are
divorced, 16.2% are widowed, 9.9% remain single, while 0.2% are mar-
ried but currently separated.
(5) Health status (Table 12.4)
Among the total respondents, those in good shape are less than 1/5,
most of them are generally healthy or suffering from illnesses to different
degrees. Only 19.3% of them remain in good shape, 23.6% are in a gen-
eral state, 17.3% are in poor health, 17.9% have chronic diseases, 12.2%
are seriously ill, while 9.7% are in other conditions.
(6) Working ability (Table 12.5)
A majority of the respondents are fully capable or partially capable of
working, those who are incapacitated at all are no more than 1/5. To be
Working ability Number Valid percent (%)
on the working ability of
the respondents Sound 492 40.8
Partially lost 480 39.8
Completely lost 234 19.4
Total 1206 100.0
specific, those with complete or partial working ability account for 40.8
and 39.8%, respectively; while those have completely lost their working
ability are merely 19.4%.
(7) Employment status (Table 12.6)
The employment status of the respondents is fairly complex on the
whole, most of them are in the state of unemployment (registered and
non-registered), and there are also a large number of old people. Among
the total respondents, the registered and non-registered unemployed
account for 27.3 and 9.7%; those flexibly employed account for 17.6%;
the old people in retirement and other conditions account for 5.9 and
12.3%; the “sanwu” people account for 4.2%; the formally employed,
on-campus students, self-employed and preschool people, respectively,
account for 2.7, 1.7, 0.8 and 0.2%. There are also 17.5% of the respond-
ents in other circumstances (they could not be precisely categorized, e.g.,
the children who have dropped out of school, due to limitations of the
questionnaire design).
Overall, the above statistics have revealed the basic characteristics of
the respondents: most of them have a nuclear family; the gender ratio
is balanced on the whole; those aged 40–50 are the main force; a large
number of them are not well educated (e.g., only attended junior middle
school); a majority of them are married, generally healthy or suffering
from illnesses to different degrees; those uncapable of working or in a
state registered unemployment account for a large proportion.
12.3.2 Housing Condition of the Respondents

(1) Housing area (Table 12.7)
In reference to the above statistics on housing area, regardless of family size,
most of the respondents dwell in small houses (some of them don’t have a
house), only a few of them reside in houses larger than 100 m2. Specifically,
6.1% of the respondents live in the houses covering an area of 0–10 m2
310 K. HAN
Table 12.6 Statistics on the employment status of the respondents
Employment status Number Valid percent (%)
Formally employed 32 2.7

Flexibly employed 213 17.6
Registered unemployed 329 27.3
Non-registered unemployed 117 9.7
Self-employed 10 0.8
Retired 71 5.9
“Sanwu” people 49 4.2
Other old people 148 12.3
On-campus students 21 1.7
Preschool 2 0.2
Other circumstances 211 17.5
Total 1203 100.0
Table 12.7 Statistics on the housing (construction) area of the respondents
Housing area (m2) Number (of household) Valid percent (%)
0–10 164 6.1

11–30 392 32.5
31–50 288 23.8
51–70 307 25.5
71–100 119 9.9
>101 27 2.2
Total 1206 100.0
(four respondents reported a housing area of 0 m2); 32.5% of them have a

housing area of 11–30 m2. Those living in houses of 31–50 m2, 51–70 m2
and 71–100 m2 account for 23.8, 25.5 and 9.9%, respectively. And those
residing in houses larger than 101 m2 only account for 2.2%.
(2) Housing ownership (Table 12.8)
The above statistics show that the housing of the respondents is of var-
ious ownerships, a higher proportion of them (30.1%) have to rent or
borrow houses; those have a patrimonial house account for 18.6%;
those live in housing-reform houses account for 12.1%; those reside in
self-built houses account for 6.6%; those purchase house on their own
or dwell in low-rent houses separately accounts for 5.4%. And 21.6% of
the respondents dwell in basement, workshop, elevator room, work shed,
wing room or illegal building.
(3) Housing types (Table 12.9)

The above statistics show that the majority of the respondents reside
in bungalows and old-style block buildings. Specifically, 42.3% of them
live in old-style block buildings, 37.1% in bungalows, 9.7% in new-style
tower/slab-type buildings, 5.1% in tube-shaped buildings, while 5.8% in
other types of houses.
(4) Housing condition (Table 12.10)
More than half of the respondents live in old and dangerous houses.
Specifically, 59.2% of them live in old houses, 26.1% in average houses,
9.6% in new houses, while 5% even reside in dangerous houses. It can be
Table 12.8 Statistics on housing ownership of the respondents
Housing ownership Number (of household) Valid percent (%)
Patrimonial and 222 18.6

privately-owned
Self-purchased commercial 65 5.4
housing
Self-purchased housing-reform 144 12.1
housea
Self-built 79 6.6
Rent/borrowed 360 30.1
Other circumstances 258 21.6
Low-rent housing 67 5.6
Total 1208 100.0
a“Housing-reform house”, also known as “self-purchased public house”, is a kind of welfare delivered by
the work units to their employees. Based on a certain price standard (e.g., normal price or cost price),
the employees are entitled to buy houses from their work units, and then completely or partially own the
property right of the house
Table 12.9 Statistics on housing types of the respondents
Housing type Number (of household) Valid percent (%)
Bungalow 443 37.1

Tube-shaped building 61 5.1
Old-style block building 505 42.3
New-style tower/slab-type building 116 9.7
Others 69 5.8
Total 1194 100.0
312 K. HAN
Table 12.10 Statistics on housing condition of the respondents
Housing condition Number (of household) Valid percent (%)
New 115 9.6

Average 312 26.1
Old 708 59.2
Dangerous 60 5.0
Total 1203 100.0
Fig. 12.2 Start time for the respondents receiving subsistence allowance
seen that the housing condition of the respondents, on the whole, is not
optimistic.
In a nutshell, a great majority of the respondents live in houses smaller
than 70 m2; quite a number of them have to rent or borrow houses, or
reside in old-style block buildings or bungalows and almost 60% of them
live in old houses.
12.3.3 Receipt of Subsistence Allowance

(1) Start time for receiving subsistence allowance (Fig. 12.2)
Most of the respondents started receiving the subsistence allowance since
1999. The statistics show that the year 2000 saw the largest number of
respondents become the subsistence allowance recipients, accounting for
Table 12.11 Time
Time for approval Number Valid percent (%)
for approving the
subsistence allowance Less than a month 154 12.8
application About a month 424 35.2
About 40 days 69 5.7
About 50 days 85 7.0
Longer than 2 months 271 22.5
Forgot 203 16.8
Total 1206 100.0
Table 12.12 Channels
Channels Number Valid percent (%)
for the respondents to
know the Minimum Neighborhood com- 610 50.7
Livelihood Guarantee mittee door-to-door
System propaganda
Sub-district office 106 8.8
Media (TV, newspaper) 129 10.7
Relatives, friends 130 10.8
Other recipients 71 5.9
Others 158 13.1
Total 1208 100.0
47.9%; those started receiving the allowance before July 1999—the first
batch of recipients—account for 0.7%; those began to receive the allow-
ance over 2001–2007 account for 25.6%. But 25.8% of the respondents
can’t tell when did they access to the Minimum Livelihood Guarantee
System (Table 12.11).
The above statistics show that the respondents usually wait for a long
time to see their subsistence allowance application approved. Only 12.8%
of them have got approval within one month, and 35.2% of them have
been waiting for about a month. Those once waited for about 40 days,
50 days and even more than two months account for 5.7, 7 and 22.5%,
respectively. Moreover, 16.8% of them have forgotten how long they
have been waiting.
(2) Channels for the respondents to learn about the Minimum
Livelihood Guarantee System (Table 12.12)
Among the respondents, more than half of them (50.7%) said they
learned about the Minimum Livelihood Guarantee System from the
neighborhood committee staff during their door-to-door propa-
ganda, 8.8% of them heard of it from the sub-district office and other
314 K. HAN
government departments, and 10.7% of them saw the relevant news on

TV, newspaper and other media. Those who came to know it from their
relatives or friends account for 10.8%, while those who were informed by
other subsistence allowance recipients account for 5.9%. The remaining
13.1% said they took notice of the system through other channels.
(3) Allowance amount and distribution forms (Fig. 12.3)
According to the survey of the respondents, every month they can
receive a subsistence allowance of more than 0 yuan but less than 1240
yuan. The amount of the allowance is fairly low on the whole, e.g., the
cumulative percentage statistics show that 77.2% of the respondents
receive less than 400 yuan per month. Specifically, 3.2% of them get no
more than 100 yuan, 23% of them get 100–200 yuan, 26.7% of them
get 200–300 yuan, 19.4% of them get 300–400 yuan, 8.2% of them get
400–500 yuan, and 3.9% of them get 500–600 yuan; those get 600–
700 yuan and above 700 yuan account for the same proportion of 6.4%
(Table 12.13).
According to the statistics, most of the respondents draw their subsist-
ence allowance directly from the bank counter or ATM, accounting for
Fig. 12.3 Amount of monthly subsistence allowance distributed to the

respondents
Table 12.13 Ways
Ways to draw the money Number Valid percent (%)
for the respondents to
draw the subsistence Bank counter/ATM 988 81.9
allowance Sub-district office 44 3.6
Neighborhood 40 3.3
committee
Other ways 135 11.2
Total 1207 100.0
Table 12.14 Inter
Intermission Number Valid percent (%)
mission of subsistence
allowance Intermitted 114 9.5
Never intermitted 1072 89.8
Uncertain 8 0.7
Total 1194 100.0
Table 12.15 Adjust
Adjustment Number Valid percent (%)
ment to the amount
of subsistence allowance Adjusted 943 78.3
Never adjusted 215 17.9
Uncertain 46 3.8
Total 1204 100.0
81.9%; those go to the sub-district office and the neighborhood commit-

tee to get the money account for 3.6 and 3.3%, respectively; while 11.2%
of them get their allowance in other ways.
(4) Intermission of subsistence allowance (Table 12.14)
The statistics show that a majority (89.8%) of the respondents said their
subsistence allowance has never been intermitted, only 9.5% of them
said there was intermission, while 0.7% of them were not sure of it
(Table 12.15).
The statistics show that 78.3% of the respondents said their subsist-
ence allowance was adjusted, 17.9% of them denied any adjustment,
while 3.8% of them had no idea about it (Table 12.16).
316 K. HAN
Table 12.16 Adjustment to the amount of subsistence allowance
Adjustment Number Valid percent (%)
Adjusted down 123 13.9

Adjusted up 759 86.1
Total 882 100.0
Table 12.17 Reasons for adjusting up the amount of subsistence allowance
Reason for adjusting up Number Valid percent (%)
Policy requirement 604 78.6

Family member(s) incapable of working for illness/ 34 4.4
disability
Family member(s) going to senior high school/college 16 2.1
Family income shrinking for special reasons 29 3.8
Other reasons 85 11.1
Total 768 100.0
The statistics show that more than 80% of the respondents have
found their subsistence allowance adjusted. Specifically, 13.9% of them
said their allowance was lowered, while 86.1% of them saw an increase in
their allowance (Table 12.17).
In reference to the above statistics, the increase in the subsistence
allowance is mostly attributed to policy adjustments, such case accounts
for 78.6% of the respondents; 4.4% of them saw their allowance adjusted
up since their family member(s) have lost working ability for illness or
disability; 2.1% of them said it was because of their family member(s)
going to high school or college; 3.8% of them said it was for their shrink-
ing family income; while 11.1% of them said their allowance was raised
for other reasons.
(5) Household income survey (Table 12.18)
According to the statistics, 40.1% of the respondents have reported their
income changes to the relevant department, 34.7% of them had not
done so, 14.7% of them was unaware of the reporting, while 10.5% of
them said that their family income has not changed.
Table 12.18 Reporting of the changes in family income to the relevant

department
Reporting Number Valid percent (%)
Reported 475 40.1

Not reported 412 34.7
Unaware of it 174 14.7
No change to family income 125 10.5
Total 1204 100.0
Table 12.19 Receipt
Receipt Number Valid percent (%)
of the subsistence
allowance in full and on In full and on time 1186 98.2
time In full, but not on time 21 1.7
Not in full, but on time 1 0.1
Total 1208 100.0
(6) Receipt of the subsistence allowance in full and on time (Table 12.19)

According to the statistics, a majority of the respondents get their sub-
sistence allowance in full and on time, this part of people accounts for
98.2% of the respondents; 1.7% of them receive the allowance in full but
not on time, while only 0.1% of them get the allowance on time but not
in full.
12.3.4 Recognition and Evaluation of the Minimum Livelihood

Guarantee System
(1) Effect evaluation of the subsistence allowance in improving life qual-
ity (Table 12.20)
The above statistics prove that the subsistence allowance is able to
improve the life quality of the recipients, but we have to remain cau-
tiously optimistic about its effect. Among the respondents, only 5.5%
said they are leading a much better life thanks to the allowance, 32.7% of
them said their living standard is only slightly improved, 28.1% of them
said their life is similar to the past, 22.6% of them found their livelihood
worsened after receipt of the allowance, 9.8% of them complained that
their life quality is much worse than before, while 1.2% of them had no
idea about it.
318 K. HAN
Table 12.20 Effect
Effect Number Valid percent (%)
of the subsistence
allowance in improving Greatly improved 67 5.5
life quality Slightly improved 395 32.7
Neither better nor worse 339 28.1
Declined 273 22.6
Greatly declined 119 9.8
Uncertain 15 1.2
Total 1208 100.0
Table 12.21 Consistency of the allowance amount with the actual economic

state
Consistency Number Valid percent (%)
Consistent 443 37.4

Inconsistent, desiring more allowance 699 58.9
Inconsistent, deserving less allowance 13 1.1
Uncertain 31 2.6
Total 1186 100.0
Table 12.22 Satisfaction of the allowance approval process
Satisfaction Number Valid percent (%)
Very satisfied 114 9.6

Satisfied 795 66.9
Neutral 198 16.7
Dissatisfied 58 4.9
Very dissatisfied 23 1.9
Total 1188 100.0
(2) Equity evaluation of the amount of the allowance (Table 12.21)

The statistics show that nearly 60% of the respondents said the verified
amount of the subsistence allowance does not conform to their actual
situation. Among the respondents, 37.4% of them believe the allowance
amount accords with their situation, 58.9% of them said they deserve a
higher allowance, 1.1% of them said that they are ought to get a lower
allowance, while 2.6% of them had no idea about it.
Table 12.23 Whether
Ineligible recipients Number Valid percent (%)
there are ineligible
recipients of subsistence Widespread 25 2.1
allowance Several 83 6.9
Only a few 60 5.0
Basically not 268 22.2
Completely not 86 7.1
Uncertain 684 56.7
Total 1206 100.0
(3) Satisfaction evaluation of the allowance approval process (Table 12.22)

The statistics show that more than 70% of the respondents are satisfied
with the approval process of the subsistence allowance. Those who feel
satisfied and very satisfied account for 66.9% and 9.6%, respectively;
those who feel neutral about it account for 16.7%; while those who are
dissatisfied and very dissatisfied account for 4.9 and 1.9%, respectively.
(4) Fairness evaluation of reviewing eligibility of recipients (Table 12.23)
When asked whether there are ineligible recipients of subsistence allow-
ance, a majority of the respondents denied it or said they have no idea
about it. Only 2.1% of them believe such phenomenon is commonplace,
6.9% of them said it may happen sometimes, 5.0% of them believe such
a phenomenon is rare. Those basically and completely denied it account
for 22.2 and 7.1%, respectively. The remaining 56.7% of them said they
are not sure of this phenomenon (Table 12.24).
When asked if there are applicants eligible but unable to get the sub-
sistence allowance, a majority of the respondents denied it or said they
have no idea about it. Only 0.8% of them believe such phenomenon is
commonplace, 8.6% of them believe it may happen sometimes, and 4.3%
of them said there may be a few cases like that. Those basically and com-
pletely denied it account for 24.9 and 6.8%, respectively. The remaining
54.5% of them said they are not sure of this phenomenon.
(5) Overall evaluation of the Minimum Livelihood Guarantee System
(Table 12.25)
The statistics show that a majority of the respondents hold a positive
view of the Minimum Livelihood Guarantee System, only a small num-
ber of them feel dissatisfied with it. Among the respondents, 32.5% of
them are very satisfied with the system, 47.7% of them feel satisfied but
expect it to be further improved, 14.7% of them feel neutral about this
system, 4.3% of them are dissatisfied with the system and believe there is
much to be improved, only 0.6% of them feel very dissatisfied.
320 K. HAN
Table 12.24 Whether there are eligible applicants but unable to get the sub-
sistence allowance
Eligible but unable to get the allowance Number Valid percent (%)
Widespread 10 0.8
Several 104 8.6
Only a few 52 4.3
Basically not 301 24.9
Completely not 82 6.8
Uncertain 658 54.5
Total 1207 100.0
Table 12.25 Overall evaluation of the Minimum Livelihood Guarantee System
Overall evaluation Number Valid percent (%)
Very satisfied 391 32.5

Satisfied, needs to be slightly improved 576 47.9
Neutral 177 14.7
Dissatisfied, needs to be notably improved 52 4.3
Very dissatisfied 7 0.6
Total 1203 100.0
12.3.5 Brief Conclusion

According to our survey, a majority of the respondents became the recip-
ients of subsistence allowance in 2000, as a result of the implementation
of the Minimum Livelihood Guarantee System; the amount of allow-
ance for each household is below 400 yuan per month; almost all of the
respondents are able to receive the allowance in full and on time; and a
great majority of them now withdraw their allowance directly from bank.
The subsistence allowance has somewhat alleviated the financial strain of
poor families and basically satisfied their minimum living demand; more
than one third of the respondents believe the allowance has improved
their life quality; nearly 50% of them got the allowance within one
month after application (which is prescribed in the government regula-
tion); and most of them are satisfied with the approval process. More
than 80% of the respondents are generally satisfied with this system. But
several problems have come to the surface while implementing the sys-
tem: almost 50% of the respondents are unaware of the local security
line; 60% of them consider the allowance amount is unfair; some of them
said the allowance fails to improve their livelihood, and some of them
even said their life quality is getting worse (mainly due to rapidly increas-
ing living expense); the ways for promoting the Minimum Livelihood
Guarantee System are too simplified, i.e., mainly via door-to-door propa-
ganda by neighborhood committee; and the eligibility review is criticized
for generating such consequence as “ineligible ones receiving the subsist-
ence allowance while the eligible ones are kicked aside”.
12.4 Qualitative Analysis Results
12.4.1 The Chinese Have Not yet Taken the “Subsistence

Allowance” as Their Legal Right
During the interviews, we heard that almost all the respondents speak
highly of the Minimum Livelihood Guarantee System, saying that it
has effectively solved some difficulties for the impoverished group, and
believe it is a policy of the state to benefit the people. So to speak, this
system has guaranteed the basic livelihood of the urban poor families, and
plays an important role in “underpinning the bottom line”. Lots of peo-
ple, to some extent, regard this system as a placebo, a stabilizer, a ray of
hope, a sense of security, and an indispensable institutional arrangement.
[Respondent 12-1] male, resident at Xincun Community, Lianglu

Sub-district, Yuzhong District, Chongqing Municipality
Q: How did you firstly learn about the Minimum Livelihood Guarantee System?
A: I’ve known about it for a long time. At the beginning, someone would
suggest “Xu, why not apply for the subsistence allowance? So your life
won’t be so hard”. I learned about it from the neighborhood committee.
Some of my friends are recipients of the subsistence allowance. At that
time, it was less than 200 yuan, but more than 100 yuan. I was not inter-
ested in it, I wanted to work to earn money on my own. The allowance
was far from enough. But later, I was driven into a corner, I’m getting
old and hard to find jobs. I had to ask the neighborhood committee to
help me apply for the subsistence allowance, it seemed the only way out
for me. That’s my story. But deep in my heart I don’t want to do that.
In the eyes of the cadres engaged in the subsistence security work,

the system has maintained social stability and harmony. Since a large
322 K. HAN
proportion of the allowance recipients are laid-off workers, the system

guarantees their basic livelihood, and more importantly, it alleviates their
“sense of relative deprivation” and makes them believe that both the
CPC and the government are paying great attention to their needs, thus
preventing from occurrence of chaotic events.
[Respondent 12-2] female, Director of Tianxin District Civil Affairs

Bureau, Changsha City
Q: How do you think of the Minimum Livelihood Guarantee System on the

whole?
A: The Minimum Livelihood Guarantee System is no doubt an important
system. It plays a significant role in China, especially for the impover-
ished and disadvantaged groups, it is a basic guarantee for them, there
are numerous people in such groups across the country, their life is
guaranteed by the Minimum Livelihood Guarantee System, it is basis
for social stability.
[Respondent 12-3] female, cadre at the subsistence security office,

Chongqing Municipal Civil Affairs Bureau
Q: How do you evaluate the subsistence system?

A: Before the system was implemented, there used to be some people bomb-
ing bridge or blocking road, but such events were never seen after imple-
mentation of the system. It has effectively safeguarded social stability.
Those subsistence allowance recipients on the whole feel grateful to the
government, but some narrow-minded people think they deserve to ask
money from the government, and quite a number of people hold this
view. Someone blames the bankruptcy of their work units on the CPC,
so they feel it is justifiable to get the compensation…Now the thought of
people has become complicated, not as pure as in the past. Most people
feel grateful to the CPC, but some are complaining, especially for the col-
lapse of their enterprises, the former workers are reduced into a disadvan-
taged group, it is sure for them to have an unbalanced mentality.
It is worth noting that most of the respondents take the subsistence

allowance as a gift granted by the CPC and the government, rather than
their deserved civil right. They could thank a million to the government
for giving them “alms”. Given this, the government departments, espe-
cially those grassroots government agencies, have increasingly become
indifferent to civil rights. It may be attributed to the government atti-

tude toward this system and the approach of implementation, especially
the grass-roots agencies at the sub-district and community levels, they
seem to control the “life and death” of the subsistence allowance recip-
ients within their jurisdiction, and sometimes forget their appropriate
work style and obligations as civil servants. During years’ contact with
the low-income earners, they have cultivated a bad mentality of being “a
charity giver”, which tends to cause both sides—allowance provider and
recipient—to ignore civil rights.
12.4.2 Verification Mechanism and Supporting Systems

Remain Defective
In reference to the feedback of the respondents, we can tell that the
Chinese urban Minimum Livelihood Guarantee System is going through
a transition to be sophisticated, e.g., transiting from simplified livelihood
assistance to comprehensive assistance, and from survival assistance to
development assistance; the government takes the lead in creating job
opportunities, providing free vocational training and job introduction.
With a view to application for the subsistence allowance and the process
of implementation, most of the respondents said that they could receive
the allowance in full and on time. Now most areas are remitting the
allowance to the designated bank account of the recipients, marking that
the Minimum Livelihood Guarantee System has become more standard-
ized and efficient.
[Respondent 12-4] male, resident at Renminzhilu Community,

Yuzhong District, Chongqing Municipality
Q: Can you get the subsistence allowance on time and in full every month?
A: Yet, we can get it in full and on time. Now we have a bank account,
every month we will go to the bank to withdraw the money. We also
received the money on time in the past, but at that time we had to go to
the neighborhood committee. We had to wait at the office until the civil
affairs staff got all allowances from the sub-district government, then we
could get our own. But now we can directly withdraw it at the bank.
However, we have detected several problems in the process of imple-

menting the system: (1) The eligibility review of the applicants is not
standardized. It is common to see illegible access to the Minimum
324 K. HAN
Livelihood Guarantee System, speculation, fraud or winning approval by

means of “relationships”. The review work is especially difficult in the
following cases: some applicants conceal deposits or negotiable securi-
ties; some applicants don’t have formal occupation but rely on a high
family income; some applicants have left their residence for a long time
but keep receiving the subsistence allowance; some applicants that are
already identified as eligible recipients. (2) The defective system design
holds back in-depth check of the savings or property of the applicants,
but limited to their apparent income, which often gives rise to ineligi-
ble recipients. (3) Different neighborhood committees and sub-district
civil affairs offices sometimes refer to different criteria, which results in
unbalanced allowance distribution. (4) Many applicants are complaining
about the long period of eligibility review, some application lasts four
or five months, far exceeding the 30-day period prescribed in the State
Council’s regulation. Of course, it takes time to verify the authenticity of
application materials, but we cannot rule out the backlog of materials in
neighborhood committees, sub-districts and district civil affairs bureaus
or municipal government departments.
[Respondent 12-5] male, resident at Xincun Community, Lianglu

Sub-district, Yuzhong District, Chongqing Municipality
Q: You have just talked about the shortcomings of the Minimum Livelihood
Guarantee System. Is there anything else that needs to be improved?
A: Strict review and revise some rules. As in my case, I don’t have my own
house, how can the neighborhood committee review my condition?
According to the government document, the applicants must have a
house, supply of water, electricity and gas. But I have none of them,
that makes me unqualified. It’s no use to argue with them (staff with
the neighborhood committee), my condition is inconsistence with the
regulation, and they are doing their work by the rules and unable to
tell me how to do. I think these rules may not be fixed, but adjusted
in light of specific situations. I have no more suggestions, but I always
stick to one thing: the implementation of subsistence security policies
may not follow dogma, but accord with the actual situations. For exam-
ple, if they want to be sure of our difficulties, they cannot completely
rely on the door-to-door survey, we can bluff it out.
Q: In addition to the subsistence allowance, do you expect the government
to introduce other policies to solve your difficulties?
A: I can’t say for certain. But I do hope there would be some policies
that help us live on our own, like small-amount loans and some job
opportunities. If I’ve got small-amount loans, I will be able to resume

my business, and stand on my own feet again. It doesn’t mean I only
care about myself, I will run my own company as in the past, and hire
other unemployed persons. But if we remain bogged down, how can
we help others? We should firstly feed ourselves. In the past, I was
running a chemical plant and a company selling auto spare parts. One
more thing, I hope the government could help us aged 50–60, but still
healthy and strong, find jobs within our reach.
There are additional prominent problems, e.g., some work units are
found to produce a false income certificate for their employees that
intend to apply for the subsistence allowance, yet there is an absence
of supervision and restriction of their acts. Some civil affairs cadres said
when they were visiting some work units to verify the economic status
of their employees, their responsible persons would either reject them or
tell lies to mislead them. For the applicants in a state of flexible employ-
ment, it is even more difficult to verify their family income, they may say
they have made some money this month, but earn nothing next month
or even for months. Under such circumstance, it is really hard for the
civil affairs cadres to carry on their work.
Due to the absence of an effective review mechanism, it is difficult to
accurately verify the economic status of the applicants, which will exert
adverse impacts: on the one hand, it will be impossible to rationally and
optimally allocate the existing resources to help those in need; on the
other hand, distributing the subsistence allowance to those illegible recip-
ients weakens the function of this system and undermines its fairness.
In addition, during the surveys we have found that the supporting
measures related to the Minimum Livelihood Guarantee System—medi-
cal subsidy, educational subsidy, reemployment program and endowment
insurance—are far from complete. The medical and educational subsidies
for the poor are insufficient, which increases pressure on the Minimum
Livelihood Guarantee System and weakens its effect in helping the poor
solve their livelihood difficulties. Almost all of our respondents said that
their biggest expense is not on food, but on education and medical treat-
ment. Moreover, most of the allowance recipients that are capable of
working desire a stable job, instead of relying on the state allowance. A
job not only brings about money, but more importantly, it establishes
one’s status in both society and family and builds up their self-esteem. The
government shall intensify effort in creating job opportunities. In recent
326 K. HAN
years, the government has been providing public service jobs17 every year,
but their supply falls short of demand and lots of the jobs require certain
vocational skills, which has rejected the persons that need this job but not
competent enough. And the recruitment process has been criticized for
relaxed review and bribery. For the people who are doing odd jobs, their
rights are not guaranteed either. They may find a job one day but become
unemployed the other day, they may get paid if they are lucky enough to
meet a kind employer, or else, their hard work will be in vain. Unstable
sources of income are also the major cause of their poverty.
[Respondent 12-6] female, resident at Guihuayuan Community,

Shangqing Sub-district, Chongqing Municipality
Q: In addition to the Minimum Livelihood Guarantee System, what other

policies do you expect the government to adopt to solve your family’s
difficulties?
A: I hope the government could introduce some provisional policies that
help people overcome temporary difficulties, adopt various measures
to shake off poverty, and help those capable of working do something
within their reach to get rid of poverty. They cannot only rely on the
subsistence allowance, but need another form of assistance, like subsidy,
grant or other options, that help them earn their own living. The sub-
sistence allowance alone cannot help them out of poverty, but let them
become poorer and poorer. The 200 yuan is far from enough, it costs
0.5 or 1 yuan to buy 500 g of cabbage, even the cheapest stuff costs 1
yuan/500 g. The subsistence allowance is hardly enough for survival,
let alone sending their children to school. If not going to school, their
children will continue leading a poor life, it will obstruct the national
development. Education of children concerns development of our
country. With good education, young people will have the chance to
come to the fore. If everyone relies on the subsistence allowance, they
will remain poor and never have the chance to change their life. When
the children grow up, they can look for jobs outside, but for those
uneducated, they are unable to find jobs but caught in poverty from
generation to generation. Poverty and illiteracy in one generation may
infect their next generation. If nothing else, they can only marry some-
one like them, because no rich people will fancy them, then they will
fall into a vicious circle. But some children are able to go to school,
thanks to the assistance from those kind-hearted persons. After receiv-
ing education, they will learn knowledge, then it is possible for them
to alter their destiny and also the lives of their offspring, they will have
the chance to get rid of poverty. Those aged 40–50 have little passion
for education. But the young people can attend vocational trainings
to earn a life by themselves. Now some people receive the subsistence
allowance, but at the same time do other things to make money. But
some people still count on their parents, it is seen everywhere, and we
could do nothing about it. I think for the young people between 20
and 40 years old, they should not apply for the subsistence allowance,
because they are physically strong, they are able to stand on their own
feet, they are mature enough. For those above 40, their physical func-
tions are decaying, it is appropriate for them to apply for the subsistence
allowance, but they can still do something capable, and the state shall
come up with some policies to assist them.
12.4.3 Unduly Low Standard of Subsistence Allowance

The principles of survival guarantee and adaptation to the local living
standard are the two cardinal principles of the Minimum Livelihood
Guarantee System. The proper meaning of survival guarantee is that the
subsistence allowance shall protect the poor from starving or enduring
coldness and provide them with basic living conditions. When commod-
ity price goes up, the purchasing power of the same amount of money
will decline, then the guarantee force of the subsistence allowance will
weaken, so the principle of survival guarantee is hard to be implemented.
Therefore, we shall follow the principle of survival guarantee dynam-
ically, i.e., at any point of time, the Minimum Livelihood Guarantee
System shall be able to guarantee the survival of the recipients, and its
guarantee force may not be weakened as a result of changing prices.
Since most of the subsistence allowance is spent on food, the con-
stant rise in food price directly devalues the money of the recipients, and
weakens the guarantee force of the subsistence allowance. When we were
doing door-to-door surveys in Chongqing, we observed the meals of
the recipients, and noticed that almost none of them eat pork, most of
them only eat steamed cabbage, and the dishes of each meal are very lim-
ited. It can be seen that when the subsistence allowance is not adjusted
up, the rise in commodity price will deteriorate the life quality of the
recipients.
328 K. HAN
[Respondent 12-7] female, resident at Shahe Community, Shuyuan

Sub-district, Tianxin District, Changsha City, Hunan Province
Q: So your life is still tough?

A: Yes. We usually eat fried rice with egg and vegetable, but no meat. The
money (subsistence allowance) is too little, we still have to buy rice
and oil. Last year, I got my hand injured, but I didn’t go to hospital,
because it would cost me several hundred yuan. My shoulder was also
injured once, but I stayed at home to recover by myself. Now my shoul-
der still hurts. I would have gone to hospital if I had enough money.
Now the price for everything goes up, we have to save as much as we
can. We don’t want to increase burdens on the state, so we seldom go
to the neighborhood committee to ask for help. I’d rather rest at home
for my hand to recover, and not bother the society. I haven’t reim-
bursed any medical expense. The community is nice to our disabled per-
sons, the director pays door-to-door visit to our families every year.
Q: Last month, did you spend your family income on anything else despite
of food?
A: Only on food, the money was not enough for other things. The two of
us have to maintain the style of plain living. But we feel lucky if com-
paring with the vagrants. At least we have a house.
Q: But the two of you are getting old, you may fall ill, did you spend
money on seeing a doctor or buying medicine?
A: Yes, last month we bought some hypertensive drugs, like apocynum
venetum. In winter when we have trachitis, we have to get infusion, it
costs several hundred yuan.
Q: Did you spend money on seeing a doctor last month? How much was it?
A: Well, it’s about 100 yuan.
The definition of the security line is the basis and key of the Minimum
Livelihood Guarantee System. An unduly low security line is unable to
guarantee the basic livelihood of the poor, and prone to weaken the
due function of the system. But the subsistence allowance may not be
simply increased without overall consideration, i.e., it shall maintain
a gap between the minimum wage standard, or else the recipients may
lose interest in looking for jobs to earn their own living. Given this, the
adjustment of the subsistence allowance shall be linked with both com-
modity price and the minimum wage standard. In addition, the accuracy
rate of identifying eligible recipients shall be raised, only in this way can a
higher security line benefit those really in need.
12.4.4 Publicity of Subsistence Security Policy Needs to Be Intensified

During the surveys, we learned that most of the common residents and the
subsistence allowance recipients have heard about the subsistence security
policy, but few of them understand the essence of the policy. Lots of the
respondents have no idea about the local security line. On the one hand,
this shows that most of the subsistence allowance recipients are poorly
educated and not interested in policies; on the other hand, the publicity
work while implementing the Minimum Livelihood Guarantee System is
not done well. Some respondents told us that certain civil affairs staff (both
grassroots and upper-level) seek benefits for their relatives and friends, or
even accept bribes from the illegible applicants, which has resulted in an
unfair situation where the people in real need are rejected. Although the
community makes public the names of the recipients by bulletin, it seems
unable to prevent from practicing fraud and “black case work”.
[Respondent 12-8] male, resident at Tiexi Community, Linghe Sub-

district, Shuangta District, Chaoyang City, Liaoning Province
Q: Do you know about the application procedure for the subsistence

allowance? I mean how to apply and get the allowance?
A: I forgot the details in the application form. And I have no idea how the
amount of the allowance is defined, most of us don’t know about it.
He (civil affairs staff) told me that the standard is now 180 yuan (per
month) in Chaoyang, but I don’t know how this standard is defined.
Whether it is approved by month or once a year, I am not sure.
Q: Your subsistence allowance has been adjusted, right? The amount of the
allowance shall be defined after verification of your family income.
A: But it’s difficult to verify our family income. We may do part-time jobs,
earn much this month, but less next month, we are not sure of it, we
don’t have stable income.
[Respondent 12-9] male, resident at Nanweilu Community,

Tianqiao Sub-district, Xuanwu District, Beijing Municipality
Q: Did the civil affairs staff visit your family, ask you important questions,
or inform you of some news? Do you often see them?
A: We don’t often see them. If there are relevant policies, they can tell
us when we get our allowance and sign for confirmation every month.
There are specialized personnel taking charge of this matter, they
should explain the national policies to us.
330 K. HAN
When the publicity of the Minimum Livelihood Guarantee System

is not done well, it is likely to sharpen contradictions. The subsistence
allowance recipients, on the whole, are neither properly educated nor
well-mannered; they don’t know much about the policy, but ask for
the allowance when seeing others being benefited. If they are rejected,
they will blame the civil affairs staff for putting obstacles in their way,
and hold a grudge against them. Some paranoid people said the reason
why the civil affairs staff reject their application or adjust down their
allowance amount (based on verification of their family income) is to
embezzle part of their allowance as kickbacks or earn their salary from
the allowance. The grassroots civil affairs staff in Changsha City told us
that they often have frictions with the allowance recipients, some of them
were wounded by the recipients with knife, let alone the routine verbal
abuse, their family members were even hurt.
12.4.5 Psychology of Subsistence Allowance Recipients

Is Worth of Attention
The formulation of a social policy shall proceed from the needs of the
beneficiaries and follow the “people-oriented” principle. But the process
of blunt implementation may deviate the policy effect from the original
intention of its formulation. In light of the subsistence security policy,
the applicants’ family income shall be verified regularly and made pub-
lic in the community. It is an expedient to intensify surveillance by the
masses so as to prevent the applicants from concealing their income or
falsely claiming the allowance as their own. However, the arrogant atti-
tude and improper work style of the civil affairs staff have induced a neg-
ative effect. The household income survey hurts the self-esteem of the
subsistence allowance recipients, they tend to think they are suspected
by the civil affairs department. When we were doing the surveys, some
respondents mistook us as investigators sent by the government; even if
we made clear what we had come for, they said our survey won’t make
any difference. As for the subsistence allowance recipients, they could
not hold back their names being posted up. They are helpless, though
they are dissatisfied with such “humiliation”. We learned that some peo-
ple have given up applying for the allowance for fear of being taunted
by others, and they especially don’t want their children to be despised
in community and school, which may leave a shadow in their hearts.
If their names are disclosed, these persons will be labeled as an alien
group taking “alms” from the government, and excluded by the main-
stream society. That’s why most of the respondents that we surveyed feel
depressed and unwilling to contact with the outside world.
[Respondent 12-10] female, resident at Yanbei Community, Yanbei

Sub-district, Shuangta District, Chaoyang City, Liaoning Province
Q: Does your community make public the names of the subsistence allow-
ance recipients?
A: Yes, but I don’t like it. Every time I go to get my allowance, I will keep
a low profile, I will never show up until all the others have got their
money and left, then I will get my money and go away instantly. At the
start, I refused to apply for the allowance, I felt humiliated. But now
I have to take this humiliation as my honor, and I must do so. Why?
Because it is a form of social assistance, and I deserve it. I’m identified
as the one living in difficulties, so I have the right to the allowance. It
doesn’t mean I’m a burden on society. For example, some people are
on the hand driving taxis, and on the other hand receiving the subsist-
ence allowance? Then, why shouldn’t I?
[Respondent 12-11] female, resident at Chaochai Community,

Linghe Sub-district, Shuangta District, Chaoyang City, Liaoning Province
Q: Do you have any expenses on social activities?

A: What kind of social activities?
Q: I mean when your friends, relatives or neighbors invite you to some
special occasions (e.g., a wedding party), you have to give them gift
money.
A: How would someone make friends with us poor people? Even if my neigh-
bors invite us to some occasions, we will make excuses to avoid participa-
tion, but we still have to give them gift money to show our good will.
In addition, in the process of implementing the Minimum Livelihood

Guarantee System, some recipients complain about the practices that
infringe their dignity, e.g., the neighborhood committee posts up their
names on the bulletin board and compels them to do the labor work in
the community.
332 K. HAN
12.4.6 Construction of a Contingent for Grassroots

Subsistence Security Work
The subdistrict office and neighborhood committee are the grassroots
agencies for approval of the subsistence allowance application and regular
management. Their staff members often complain of poor working con-
ditions and a heavy workload—verify family income, identify eligibility
of the applicants, pay regular door-to-door visit and even distribute the
allowance. We have noticed that these grassroots personnel are working
hard and usually understaffed, lots of them have to play multiple roles.
Since most of them are recruited from the society, their overall profes-
sional quality is fairly low—neither experienced nor skilled, it is difficult
for them to accurately convey the themes of policies or efficiently resolve
conflicts; even worse, there is a high rate of staff turnover.
We interviewed some civil affairs staff in Changsha City, they said they
were recruited in 2003 after passing a unified examination. They are
nominally the staff of the government government-affiliated institutions,
but their wages and benefits are never promoted. Now they are earning
a basic wage of 800 yuan per month, but actually they only have 700
yuan left after deduction of insurance premium. At In the beginning,
they were only dealing with the matters about subsistence allowance.
But as the social assistance programs keep increasing, their workload
is mounting at the same time, yet they fail to receive better economic
returns, which has dampened their working enthusiasm. Of course, some
staff are still devoted themselves to this job. In their own words, “it is
our responsibility, lots of residents in the community need our help”.
They think they are doing “good deeds”, they are contented at hearing a
warm greeting from those who are grateful to them.
The situation in Zhongshan City is more or less the same. The grass-
roots civil affairs workforce is understaffed, forcing one person to deal
with multiple higher-level administrative departments. While discussing
with them about classified assistance approach, no one seemed inter-
ested, since it means multiplied workload. We could tell their fatigue and
pressure from their words, it is a sense of responsibility that motivates
them to keep serving the low-income residents. When we visited the
local subsistence allowance recipients, a considerable part of them had
no idea about such policy before the civil affairs staff paid a door-to-door
visit to help them apply for the allowance. The tedious subsistence secu-
rity work, especially investigation and verification of family income, calls
for carefulness and patience, as well as enough input of manpower and

funds.
In addition, power tends to breed corruption without supervision.
During the surveys, we learned that most of the respondents recognize
the work of the civil affairs staff, but there are also some complaints, show-
ing that a supervisory mechanism is needed for effectively implement-
ing the Minimum Livelihood Guarantee System. At the macro level, a
supervisory mechanism is able to check and balance the departments of
civil affairs, finance and auditing, so as to ensure the safety of allowance
funds. At the micro level, a supervisory mechanism is able to standard-
ize the conducts of the community-based civil affairs staff, since they play
an essential role in reporting and approving the allowance application.
Currently, the civil affairs staff on the whole still earn a low salary, but they
do have a great power, which may induce them to commit corruption.
They may obtain illegal benefits by understating, concealing or misreport-
ing the true family income of the applicants. Given this, we shall estab-
lish a supervisory mechanism: both the neighborhood committee and the
masses are mobilized to supervise the civil affairs staff and report their
wrongdoings; when reviewing the eligibility of the applicants, some ven-
erable residents in the community may be invited to voice their opinions;
and the civil affairs staff shall be rotated at regular intervals. Only in this
way can we ensure that the allowance is provided to those in real need.
[Respondent 12-12] female, resident at Chaochai Community,

Linghe Sub-district, Shuangta District, Chaoyang City, Liaoning Province
Q: You just said they (civil affairs staff) are not strictly following the poli-
cies? Can you give us some examples?
A: The director of our community doesn’t pay attention to the polices, she
does what she likes. If you are in good relationship with her, she may
give you some benefits; if not, she would completely ignore you.
Q: Why does she get on well with others, instead of you?
A: I’m not her relative, and I have never sent her any present (bribery).
Q: Present? How does it have anything to do with the subsistence
allowance?
A: That matters a lot. If you want to apply for the allowance, you’d better
give her some presents, or she will reject your application, or deduct the
allowance amount, or deliberately create obstacles in your way. When
there is something beneficial, she will firstly inform her acquaintances.
Do not expect any favor if you are not one of those.
334 K. HAN
Q: Did you give her presents when you applied for the allowance?
A: No, I didn’t. That’s why she made difficulties for us, our application
was not approved until several months later. If we gave her presents,
then we would soon get our allowance. We don’t have much money, a
present worth of 100 yuan or so seems too humble, but we can’t afford
an expensive one. So we just let it go. Someone asked my suggestions
on how much the present shall be. Our director is so greedy, if you
don’t play up to her, there is no way for you to get any benefit.
Q: I can see you how you are angry with your community director. But
what do other people think of her? Is it the same as you?
A: I’m not sure, but all my neighbors don’t like her. She is not qualified to
be a community director.
12.5 Policy Suggestions for Improving the Urban

Minimum Livelihood Guarantee System
12.5.1 Standardize the Eligibility Review System with Focus
on Household Income Survey
Standardizing the eligibility review system with a focus on household
income survey—the core issue for improving the Minimum Livelihood
Guarantee System—is an important guarantee to achieve social equity and
promote system justice, and the first barrier to prevent welfare dependency.
China started implementing the Minimum Livelihood Guarantee System
at the time when there were no detailed rules for eligibility review of the
allowance applicants. In this context, all cities have been making explora-
tions into verification of the income and family property of the allowance
applicants in light of local conditions, including control over their consump-
tion patterns, e.g., the allowance recipients are not allowed to use air condi-
tioners or keep pets in some areas, such kind of restriction seems rigid and
may offend the dignity of the recipients, but it can help identify the eligible
recipients and supervise their economic state. But in the final analysis, China
shall establish a sophisticated household income survey system, only in this
way the welfare dependence and resource abuse can be rooted out.
At present, it is difficult to effectively implement the household
income survey system in China, because of the defective design of the
survey system itself and incomplete financial credit system. While refer-
ring to the asset declaration made by the allowance applicants, we suggest
utilizing the existing information network platform—the information

management system of banks, securities, taxation, industry and com-
merce, labor, social security and other institutions—to legitimately ver-
ify their personal income and family property, and define the rights and
duties of each institution and the applicants in their eligibility review. If
necessary, the afore-said institutions shall collaborate with the civil affairs
department to take the evidence about the deposit, securities trading,
employment state and insurance contribution of the allowance applicants.
12.5.2 Improve Dynamic Management to Promote Employment

Dynamic management is an important principle for the current
Minimum Livelihood Guarantee System, i.e., when the family income
of the subsistence allowance applicants is below the local security line,
they will be identified as the eligible recipients to receive the prescribed
amount of allowance; when their family income increases or further
decreases, the amount of allowance shall be adjusted accordingly; when
their family income is above the local security line, their subsistence
allowance shall be terminated.
No matter it is quantitative description or qualitative analysis, they have
proven that the current Minimum Livelihood Guarantee System has some
design flaws, which tend to cause certain subsistence allowance recipients
with working ability to prefer “voluntary unemployment”. We suggest the
government to provide more vocational training and employment infor-
mation to the working-age population, especially those young and mid-
dle-aged; increase public service jobs and mobilize enterprises to recruit
the people relying on subsistence allowance but capable of working.
Moreover, “incentive measures” shall be developed to promote employ-
ment: when the average family income of the recipients exceeds the secu-
rity line, they are allowed to keep receiving the allowance for a while until
they have stable earnings; those with family income slightly above the
security line may continue enjoying the welfare treatment associated with
the subsistence security, so as to relieve them of worries for the future.
12.5.3 Build a Comprehensive Social Assistance System

The Minimum Livelihood Guarantee System is originally designed to
relieve the financial strain of impoverished families, but the current sys-
tem seems like a comprehensive assistance system for bearing too many
336 K. HAN
assistance responsibilities. We should bear in mind that the Minimum

Livelihood Guarantee System is not a “panacea” for curing all problems.
The solution is to establish separate systems to meet different demands
from different groups of people, i.e., there shall be systems for subsi-
dizing people’s housing, education, medical care and unemployment.
In addition, the Minimum Livelihood Guarantee System shall be linked
with the social insurance, welfare and other related systems. In a word,
an all-inclusive Minimum Livelihood Guarantee System will hamper the
construction and development of other assistance and welfare systems,
respectively, for the elderly, children and the disabled.
Notes
1. Ministry of Civil Affairs of the PRC, 2009, China civil affairs’ statisti-
cal yearbook 2009, Beijing: China Statistics Press, p. 64; Ministry of Civil
Affairs of the PRC, 2017, China civil affairs’ statistical yearbook 2017,
Beijing: China Statistics Press, p. 52.
2. Liu Xitang, et al., 2006, Several questions about the standard of urban sub-
sistence allowance—A review of the international symposium on Chinese
urban subsistence allowance standard, China Civil Affairs, Issue 9.
3. Hong Dayong, 2003, Analysis of the subsistence allowance standard for
Chinese urban residents, Journal of Beijing Administration Institute, Issue 3.
4. Hong Dayong, 2003, How to standardize the calculation of the subsist-
ence allowance standard for urban residents? Academia Bimestris, Issue 2.
5. Lin Zhiwei, 2006, Empirical study on the standard of subsistence allow-
ance for Chinese urban residents, Population & Economics, Issue 6.
6. Wang Hong, Zhang Bosheng, 2001, Study on the standard of subsistence
allowance for Shanghai residents, Journal of Donghua University (Social
Sciences), Issue 6.
7. Cheng Shengli, 2005, Financial status of chinese low-income families
and implications of subsistence allowance policies, Journal of Shandong
University (Philosophy & Social Sciences), Issue 1.
8. Wang Youjuan, 2006, Implementation evaluation of the subsistence
allowance policies for urban residents, Statistical Research, Issue 10.
9. Tang Jun, 2000, Problems in the urban Minimum Livelihood Guarantee
System and countermeasures, China Civil Affairs, Issue 4.
10. Hong Dayong, Liu Zhongxiang, 2002, Practice of and reflection on the
Chinese urban Minimum Livelihood Guarantee System, Social Science
Research, Issue 2.
11. Liu Wenji, 2003, Several problems ought to be noted in the urban sub-
sistence security work, China Social Welfare, Issue 7.
12. Wang Chengwu, 2006, Problems in the current urban subsistence security

work and countermeasures, China Civil Affairs, Issue 11.
13. Li Cheng, 2002, The problem of information asymmetry in the subsist-
ence security work, China Civil Affairs, Issue 3.
14. Hong Dayong, Liu Zhongxiang, 2002, Practice of and reflection on the
Chinese Minimum Livelihood Guarantee System for urban residents,
Social Science Research, Issue 2.
15. Tang Jun, 2002, Policy suggestions for improving the Minimum
Livelihood Guarantee System, China Economic & Trade Herald, Issue
11.
16. Hong Dayong, 2005, Discussion on the extension effect and evolution
direction of Chinese urban Minimum Livelihood Guarantee System,
Society, Issue 3.
17. Translator’s note: The public service jobs—delivering services to commu-
nities and their residents—are specially provided by government to the
persons living in difficulties. They will receive social insurance subsidy and
post allowance from the government special employment funds.
CHAPTER 13
Social Mobility and Urban Inclusion

of Migrant Workers
13.1 Major Problems to Be Examined

With the deepening of the market economy since the reform and
opening-up, a so-called “market society” has been on the rise in China.1
The terms of industrialization, urbanization and marketization have
become synonyms of modernization. At the same time, social groups are
enjoying an increasingly higher degree of freedom, and mobility of social
groups is accompanied by differentiation of social structure.
In terms of social structure, Chinese society had been dominated
by the working class and the peasant class before the reform and open-
ing-up. From then on, significant changes have occurred to Chinese
social structure, the relationships between classes and between strata are
going through a notable adjustment. The dual social structure based
on the two basic classes and the accordingly urban–rural dual plates are
Han Keqing, 2006, The migrant workers’ social mobility: A study of case
interviews, Journal of Renmin University of China, Issue 6; Han Keqing, 2009,
Protection of migrant workers’ rights and interests from the perspective of social
mobility, Journal of Henan University (Social Science), Issue 1; Han Keqing,
2007, Study on social protection of migrant workers: A case study of Suzhou,
Shandong Social Sciences, Issue 11; Han Keqing, 2008, Problems arising from
migrant workers’ urban inclusion and countermeasures, Journal of the Party
School of CPC Zhuhai Municipal Committee, Issue 5.

https://doi.org/10.1007/978-981-32-9660-2_13
340 K. HAN
gradually breaking up. Besides, China has been pacing up the reform of
rural land system and the process of industrialization, which has moti-
vated surplus rural laborers to migrate into cities to earn a living, this
group of people is usually called “migrant workers”.
According to the data released by the National Bureau of Statistics
(NBS) and the Ministry of Labor and Social Security (MLSS), the
number of rural laborers working in cities across the country had
reached about 11.43 million by the end of 2003, accounting for 10.4%
of the urban employed population.2 If counting in their spouses and
children, the figure is at least doubled. In 2004, the NBS conducted a
sample survey of 68,000 rural households in more than 7100 admin-
istrative villages of 31 provinces (autonomous regions and municipal-
ities), and then estimated that about 118 million rural laborers had
left for cities that year, accounting for 23.8% of the rural labor force.
In its follow-up survey of 10,000 rural households, the Ministry of
Agriculture asserted that in 2004 there were about 100 million migrant
workers, holding 21% of the rural labor force. The MLSS announced
that there were approximately 90 million migrant workers in the coun-
try, an estimation based on the number of rural laborers flowing into
the cities at prefecture level and above (excluding counties and coun-
ty-level cities), while the Research Office of the State Council held
that China had about 120 million migrant workers, and the total num-
ber might be 200 million if covering those employed by the township
enterprises in their hometowns.3 By the end of 2016, there had been
245 million migrant workers across the country, as shown in the lat-
est data in China Population & Employment Statistics Yearbook 2017.4
In fact, it is unquestionable that migrant workers have become a large-
scale social group in China.
The above paragraphs only describe the quantitative characteris-
tics of migrant workers, but they also have social characteristics: mobile
employment in addition to an embarrassing status as farmers. They have
to divide each year into several blocks of time: leaving for cities to earn
money in slack farming season, but returning home to help their families
with farm work in busy farming season. And whenever there is a rela-
tively long holiday, particularly the Spring Festival (Chinese New Year),
countless migrant workers across the country will return home for a fam-
ily reunion. Even for those that have thrown off the shackles of farmland
and settled down in cities, they still believe they are rooted in the coun-
tryside, rather than the cities that bring them a better material life.
13 SOCIAL MOBILITY AND URBAN INCLUSION OF MIGRANT WORKERS 341
The movement of social mobility can be divided into an upward one

and a downward one in terms of direction, and also an intragenerational
one (within the same generation) and an intergenerational one (between
one or more generations) in terms of attainment of social status. In a
given society, there are two conditions—developed industries and univer-
sal school education—that will promote upward mobility.5
The social mobility in Chinese society differs from its western coun-
terparts. In the industrialized western countries, social mobility takes
place under the background of generally stabilized political and eco-
nomic systems and social policies, which is different from the Chinese
social mobility in opportunities, rules, directions, speed and scale.
Moreover, the industrialized western society is an open society where
self-achieved factors dominate social mobility, but in China, no matter it
is self-achieved or ascriptive factors, they shall exert their effect by virtue
of institutional and structural factors.6
In recent years, Chinese scholars have been paying more atten-
tion to the mobility of migrant workers. According to the observation
of Li Peilin, the outflow of migrant workers in China has three char-
acteristics: (1) From rural to urban areas and from underdeveloped to
developed areas. (2) From agriculture to industrial and service sectors.
(3) From low-income farm work to other occupations with higher social
status.7 Wang Xiyu et al. split the development of trans-regional popu-
lation mobility—an important means to transfer surplus rural laborers
in China—into four stages: (1) 1978–1984: land contracting and agri-
cultural production remained a dominant theme in rural areas, only a
small number of farmers left their hometowns to work outside, but it
foreboded that the stagnated population migration in the past 30 years
(the era of planned economy) would come to an end. (2) 1985–1988:
regional disparities were widening, domestic market kept expanding,
and mobility of labor force was on the rise, e.g., the number of migrant
workers in the cities above county level had reached about 9 million.
(3) 1989–1994: this period witnessed rapidly intensified population
mobility. (4) 1995 to date: while the labor markets in both urban and
rural areas are becoming increasingly competitive, the large-scale out-
flow of workforce has never stopped. According to Wang and his fel-
low researchers, the trans-regional mobility of migrant workers under
market mechanism has three remarkable features: marketized employ-
ment-based on traditional social resources, labor market competi-
tion driven by economic interest, and market regulation based on land
342 K. HAN
security mechanism.8 From the perspective of occupational mobility and

re-mobility, Li Qiang has found that migrant workers change jobs and
professions from time to time. The first mobility usually enables most
migrant workers to attain a higher occupational status, but the second
mobility seems impossible for them to greatly upgrade their occupational
status.9 Zhai Xuewei, from the perspective of social network, examines
the significance of relationship trust in migrant workers’ job-hunting.
The so-called “relationship trust” generally means certain attitudes or
behavior tendency that enables someone to obtain information, affec-
tion or assistance from others within an available social network, so as to
meet their expectation or receive a satisfying result. “Weak relationship”
will cause the free and independent individuals to achieve vertical or
horizontal mobility between different groups, according to Zhai, while
“strong trust” will cause a large number of homogeneous individuals to
move to the same place or even the same enterprise.10 Wang Chunguang
believes that the mobility of migrant workers is facilitated by their social
relationship network: a “strong relationship” helps migrant workers
acquire information, economic support and spiritual inspiration, but it
is unlikely for them to “leap forward” to a superior social status, which
explains the fact that migrant workers are usually confined to horizontal
mobility.11
Some Chinese scholars living abroad also devote themselves to social
mobility study. When concerning the issues about Chinese social mobil-
ity, Bian Yanjie, after reviewing the changes on Chinese social stratifica-
tion and mobility since 1980, contends that the market-oriented reform
and emergence of labor market have broken up the institutionalized divi-
sion between urban and rural areas, between state/collectively-owned and
private enterprises, and between cadres and workers, driven almost every
Chinese to experience social mobility, and motivated millions of farmers to
work (though distributed in informal sectors) and dwell in cities.12 Zhao
Yaohui, by taking the outflow of Chinese rural laborers as an example, has
examined the role of “migrant networks” in the process of labor mobil-
ity. Through regression analysis, he has found that the early migrants are
excluded by urban society, experienced migrants have positively influenced
latecomers, while those returnees have exited from the migrant networks.13
We believe that the current mobility of Chinese migrant workers is
mainly intragenerational mobility in terms of attainment of social status,
and simultaneously upward mobility in terms of flow direction (from
rural areas to urban society). To sum up, the mobility of Chinese migrant
workers has the following characteristics: (1) Transition from spontane-

ous flow to institutionalized flow. The mobility of migrant workers was
purely spontaneous at the beginning, but in recent years, the govern-
ments of both exporting and importing areas have been directing the
flow of migrant workers so as to form institutionalized social mobility.
(2) Unstable employment. Migrant workers are usually employed by the
urban service sector and in a state of mobile employment. (3) Free from
constrained by geography and the “hukou” system. Unlike the urban
workers that are attached to their work units, the rural laborers leaving
from their farmland can freely move from place to place without any
restraints imposed by the household register system and the personnel
dossier management system.
This chapter examines the mobility of Chinese migrant workers based
on the following basic assumptions:
First, upward mobility is the goal of the outflow of migrant workers.
From the perspective of social stratification theory, farmers are at the
bottom of Chinese society; given this, it is apparently an upward move-
ment for the rural laborers liberated from the farmland to migrate to cit-
ies. Such upward mobility not only enables migrant workers to access to
a new geographical environment but improves their financial situation.
Second, the migrant workers in cities are actually in a state of being
excluded. Social exclusion is the process in which individuals or groups
are blocked from (or denied full access to) various rights, opportuni-
ties and resources that are normally available to the majority of social
members. The outcome of social exclusion is that affected individuals
or groups are prevented from participating fully in the economic, social,
and political life of the society in which they live.14 Although migrant
workers can move freely and search for jobs in cities, it is undeniable that
they occupy a low social status in urban society. Given this, when exam-
ining the mobility of migrant workers, the focus shall be placed on their
social status in urban society. In addition, we need to confirm whether
the exclusion of migrant workers is a long-standing issue. Is it economic
(labor market) exclusion or social (status) exclusion?
Third, education is a crucial means for migrant workers to achieve
upward mobility in cities. The standpoint of social mobility theory
is that mobility of individuals is part of the whole process of social
changes. In this process, educational attainment is the most essential
factor that affects the mobility of individuals. The human capital theory
also holds that education is of great significance in increasing the value
344 K. HAN
of human capital and garnering economic returns. This chapter exam-

ines the role of education and other factors in affecting the migrant
workers to attain their social status in cities.
Based on the descriptive study and case analysis of migrant workers’
mobility intention, upward mobility opportunities, status attainment in
urban society, future plans and expectation for intergenerational mobil-
ity, this chapter attempts to reveal the characteristics of migrant workers’
mobility and the influencing factors on their social inclusion in cities. All
the research materials are from the surveys completed by the Research
Group on “Social Protection of Chinese Migrant Workers”, which was
co-sponsored by Renmin University of China and City University of
Hong Kong. From July to November 2005, the research group carried
out a questionnaire survey of more than 2600 migrant workers in four
Chinese cities (Shenzhen, Suzhou, Chengdu and Beijing), and inter-
viewed 109 of them face-to-face.
13.2 Social Mobility of Migrant Workers
13.2.1 Mobility Intention

With respect to the social background for mobility of migrant workers,
the powerful motive for them to work in cities is to make money, but we
cannot rule out such factors as for personal development since rural areas
lack of development opportunities. Wang Chunguang argues that the rea-
son why migrant workers prefer non-agricultural activities, especially those
in urban areas, is not only because of the “push-and-pull” effect, but
yearning for an urban lifestyle and escaping from poverty in their home-
towns.15 Sun Liping, from the perspective of microprocess, contends that
the current flow of migrant workers to industry and cities in China is not a
direct response to the situation of “serious surplus of rural laborers”, but a
response to the “widespread poverty resulting from surplus workforce”.16
We believe that the serious surplus of laborers and prevalent poverty in rural
areas are two variables that affect each other. Since the reform and open-
ing-up, the farmers once tied to the land have been gradually liberated,
which lays the foundation for their migration, but it is the impoverished
life in rural society and temptation of high income from mobile employ-
ment in cities that vigorously drive rural laborers to move from one place to
another.
[Respondent 003, Beijing] male, 30, married, native of Anyang

County, Anyang City, Henan Province, received junior middle school
education. Left for cities for the first time in February 1993, now earn-
ing a living by collecting scrap in Beijing.
Q: Could you talk about your family? The situation before you left (for
cities) or at present.
A: Before I left, we were leading a dog’s life, it was hard for us to make
money. After I left home to find a job, I had a rough time at the begin-
ning. My first job was a mineworker, going deep down into the mine to
dig coal. I really needed money to support my family.
Q: How many people are there in your family?
A: I have a big family, a total of eight people, my parents, my five brothers
and sisters, and I. They are married and have moved out to live on their
own.
Q: Are you the oldest son in your family?
A: No, I’m the youngest.
Q: How about your own family?
A: I have two children, both of them are in school. The older one is in
junior middle school, and the younger one is in primary school.
Q: Does it cost much for them to go to school in your hometown? I mean
the tuition.
A: Though they are in my hometown, the tuition is not low. Going to
junior middle school costs me a great deal. And my elder child wants to
buy things he likes, so I have to send him pocket money.
Q: How much do you pay for your children’s tuition?
A: Several thousand yuan, (after thinking it over) at least three thousand
yuan a year.
Q: Can you afford it?
A: Yes. Now I can earn more in Beijing. If I stayed in the countryside, it
would be more difficult to support my parents and children.
Q: Your fellow villagers, do they work outside like you?
A: Yes. Every household has someone working outside. But they will
return home after summer to help families with autumn harvest, and
after that they will leave for cities again.
Q: Where do they usually work?
A: Beijing, Taiyuan, Datong…Lots of places. Some are moving back and
forth between cities and hometowns. Most of my fellow villagers are
construction workers, so do the people from neighboring counties.
Q: What did you intend to do when you first came out?
A: I just wanted to make money. Someone offered me a job with a
monthly pay, I agreed and left with him.
346 K. HAN
Q: You mean you were hired by someone?

A: That’s right. He would pay me several hundred yuan each month, my
food and lodging were all free. That’s the common practice.
Q: What crops did you grow in your hometown?
A: Corn, peanut and soybean, things like that.
Q: Did you grow any cash crop?
A: No, we didn’t. We had no farm, no factory and no asset at that time. It
(my hometown) is located at a plain, bordering on Henan and Hebei
(provinces). It was extremely poor and disordered—stealing, robbing
and fighting were commonly seen.
Q: How about your livelihood?
A: Alas! Totally a mess!
Q: Now that it was poor and chaotic, how did you lead your everyday life?
A: Life was difficult, very difficult. Lots of people were caught at steal-
ing or robbing, and then imprisoned. I am one of the lucky guys, some
of them were begging in streets, some of them were moving back and
forth between cities and hometowns, some continued working outside,
now they could lead a normal life.
Q: Was the chaos one of the reasons that you came out?
A: No. I wasn’t worried about it. I was born and growing up there, I was
not afraid of any chaos, I could fight if I had to. What I was fearing was
no money. My parents and children were counting on me, bullying oth-
ers wouldn’t help me feed my family. You can’t survive without money.
Q: What was your impression of Beijing at that time?
A: I liked it very much. I couldn’t be happier. When I returned home and
showed my photos in Beijing to my family, they would make a boast of
them for several days (laughing). But it doesn’t work any more, things
have changed.
Q: Did your fellow villagers feel envy of you at that time?
A: Of course. At that time, lots of people would come by to see my pho-
tos, they felt so excited as if they were seeing magic. In the past, our
farmers were naive and inexperienced. When I returned home playing a
camera in front of them, they couldn’t help exclaiming “Incredible!” or
“Amazing!” (laughing).
[Respondent 003, Beijing] had been leading a difficult life in a poor

and unsafe environment before leaving his hometown. Now he is work-
ing hard outside to support his parents and pay for his children’s tuition.
Like what he said, “I just wanted to make money”, “You can’t survive
without money”. In the tide of vigorously developing market economy,
improving their economic status is the dominant motivation for most
rural laborers to work in cities. Among the migrant workers that we have
surveyed, most of them said they were forced to leave home by “bad
living conditions”, and they wanted to “find jobs to make money”. No
matter where will they go and which profession they will choose, their
purpose is to “make money”.
For a long time, due to the urban–rural division and the correspond-
ing institutional arrangements, the “farmers” in rural society and the
“citizens” in urban society varied greatly in social status. In addition
to making money, lots of migrant workers show off their experiences
in cities, especially if they are in big cities, where they can widen their
horizon, learn knowledge and skills, and access to various new things.
[Respondent 003, Beijing] never intended to hide his complacence for
working in Beijing after returned home, “they would make a boast of
them (his photos taken in Beijing) for several days”. As can be imagined,
his fellow villagers felt amazed at seeing him in the capital city from the
photos, and they were longing for the same urban lifestyle like his. Later
when he showed a camera to his fellow villagers, they kept exclaim-
ing“Incredible!” or “Amazing!” This camera not only ignited their aspi-
ration for living in big cities, but proved it is feasible for them to improve
their financial conditions by working outside; it is a strong stimulus for
both re-mobility of migrants and mobility of left-behind population.
13.2.2 Attainment of Social Status in Urban Areas

The classical social stratification theory holds that the social stratum of
individuals is determined by multiple dimensions. M. Weber has defined
three dimensions as classes, status groups and parties (or power). The
status dimension is of significance in restricting social interaction.
Although rural laborers will see their economic status greatly improved
after moving to cities, they have to deal with the problems about social
inclusion in a new environment. According to Zhu Li, migrant work-
ers are on the whole at the bottom of the urban society. Economically,
migrant workers are the “servant” class in cities, they are laborers in the
pure sense, rather than citizens in the sociological sense. In urban soci-
ety, migrant workers are obliged to provide economic services, but inac-
cessible to political activities and social security benefits. The relationship
between migrant workers and cities is simply an employment-based eco-
nomic relationship without any political and social connections.17 We
hold that when migrant workers seek for their status in the stratified
348 K. HAN
urban society, they are blocked by several institutional barriers, which

could be seen as identity discrimination and regional exclusion.
The household registration system is a unique creation in China. For a
long time, Chinese society has been divided into two separate parts by the
dual urban–rural household registration system. Urban and rural residents
seem to lead two different lifestyles in two worlds. In the era of planned
economy, it was almost unlikely for farmers to enter the urban world to
experience a new life. Although the market economy has broken up the
regional restrictions from the household registration system, other insti-
tutional arrangements (e.g., welfare system) attached to the system have
retained to a large extent. “Citizens” and “farmers” are still important labels
to mark different social classes. The social exclusion of migrant workers is
primarily caused by restrictions from the household registration system.
[Respondent 025, Chengdu] male, 30, single, native of Baisha

County, Sichuan Province, received primary school education. Left for
working in cities for the first time in June 1995.
Q: In fact, you are still despised by them (urban residents), right?

A: Others are kind to us. But the urban people don’t think migrant work-
ers or farmers as the same kind of people like them, they treat us differ-
ently, as if migrant workers or farmers are a lesser being, or even worse.
Q: So you mean the responsible persons and other employees in your work
unit look down on you?
A: Alas! That’s right.
[Respondent 002, Suzhou] male, 42, married, native of Daxing

County, Qidong City, Jiangsu Province, received junior middle school
education. He has been working outside for 22 years since April 1983.
Q: Have you ever been discriminated by local people while working outside?
A: We usually stay in our workplace and seldom contact with the people
beyond our work unit. We are migrant workers, they are urban residents.
Q: How do the urban citizens treat you in everyday life?
A: Just so so.
Q: What do you mean?
A: We have our own life, and they have theirs, we have no contact.
Anyway, we don’t know each other.
Q: When you contact with them, do you feel any estrangement and a sense
distance?
A: Yes, I do feel distanced from them. They are urban employees, different
from us migrant workers. We seem like underdogs.
Q: You have been out for more than ten years. Have you ever felt that
migrant workers are treated unfairly and unequally?
A: Of course, it’s commonly seen.
Q: Tell us more about it.
A: When we fall ill, we can’t reimburse our medical expenses. Local people
look down upon our migrant workers. I don’t know where to start?
Q: Don’t be nervous. Say what you want to say.
A: Also, it’s not easy to make money by working outside. Our wage is
often deducted. The boss promised a certain amount of wage, but he
would not pay us in full amount at the end of the year.
Q: Then you can’t get back the rest of your money, can you?
A: No. It is a bad debt.
[Respondent 016, Beijing] female, 34, married, native of Jingchuan

County, Gansu Province, received junior middle school education.
Left for cities for the first time in February 1992, now working at the
hairdressers.
Q: Do you think rural people are equally treated like urban people?
A: Certainly not. They only regard us as farmers, different from them
urban people, that’s a kind of discrimination. In 1999, a neighbor of
my husband was working in Daqing (a city in Heilongjiang Province),
but he was repatriated to his hometown, because he was found not
holding a temporary residence permit in a police raid. We have never
heard from him since then, maybe he is dead.
Q: Did you call the police after he was missing?
A: No, how could we do so on behalf of his family? But his father passed
away, his mother has got dementia, and his elder sister was married.
Such a bad family condition! His sister asked his boss about her broth-
er’s whereabouts, the man said that he was brought onto a train and
left since then, the train was not heading for the south (the direction
of their hometown), but for the northwest. But he didn’t send back a
word or make any phone calls to his family in five or six years. I think
she should ask the police; how could a man disappear without a trace?
The above three cases show that migrant workers are on the whole suf-
fering from unequal treatment in cities. [Respondent 025, Chengdu]
said “the urban people don’t think migrant workers or farmers as the
same kind of people like them, they treat us differently, as if migrant
350 K. HAN
workers or farmers are a lesser being”. [Respondent 002, Suzhou] felt

that migrant workers seem like “underdogs”, they seldom contact with
local people; despite discrimination by locals, they cannot reimburse
their medical expenses, or even fail to get their full wages sometimes.
[Respondent 016, Beijing] has the same feeling of being unfairly treated,
she said a neighbor of her husband was repatriated to his hometown for
not holding a temporary residence permit and went missing since then,
no one knows if he is still alive.
For the composition of social groups, geographical relationship
(an important condition for human contact) and regional identity (an
ingrained cultural tradition in Chinese society) are of great significance.
While moving from rural areas to urban areas and from small counties to
big cities, migrant workers will inevitably encounter regional exclusion,
in addition to the exclusion from the urban household registration.
[Respondent 015, Suzhou] male, 42, married, native of Xuelu

Township, Qianxian County, Xianyang City, Shaanxi Province, received
senior high school education. Left for cities since July 1997, now work-
ing as a property management personnel.
Q: You had been working in Guangdong, now you have moved to

Suzhou. Do you often deal with local people?
A: Alas! What impressed me most is the exclusive Guangdong people. Why
do I say so? Because when lots of local companies hire employees, they
usually set an additional condition—those who can speak Cantonese are
preferred, and some enterprises only recruit Cantonese speakers. Such
condition has rejected many non-local job seekers. I think Guangdong
people discriminate against non-locals. Mandarin has been popularized,
Guangdong people themselves do not actively learn Mandarin, but
force our migrants to speak their dialect. It doesn’t make sense.
[Respondent 020, Suzhou] male, 30, married, native of Yancheng

City, Jiangsu Province, received junior middle school education. A vet-
eran. Working in cities for 7 years since 1998.
Q: Have you ever been to Shanghai?

A: Yes, just once. (The local people) Exclusive. One day I was about to
make a (long-distance) phone call at the phonebooth, the booth keeper
yelled at me it was only used for local phone calls. I wasn’t aware of
that, why he was so rude at me! They are exclusive, very exclusive.
[Respondent 004, Chengdu] male, 38, native of Deyang City,

Sichuan Province. Left for cities since 1998, now earning as a rickshaw
puller.
Q: How do local people treat you?

A: They are not friendly to our non-locals. Some would bully me while I
was sending them to their destinations with my rickshaw. Though most
of them would pay me in full, some hooligans would refuse to pay. The
local security is not good, I’m not doing business at night, I’m afraid of
being robbed again.
Q: Have you ever been discriminated while working outside?
A: In Shanxi Province, those from the mobdom often bully our non-locals
for extortion. One of my fellow rickshaw pullers was beaten. I narrowly
escaped at that time. Local government turns a deaf ear to such mat-
ters, they don’t care about our non-locals. The man (the same person
who got beaten) was once cheated of more than 2000 yuan.
In a nutshell, [Respondent 015, Suzhou] believes “Guangdong people

discriminate against non-locals” by citing an example that local employ-
ers prefer those speaking Cantonese. [Respondent 020, Suzhou] has a
similar impression of Shanghai people from his unhappy experience in
making a phone call. [Respondent 004, Chengdu] said the local people
are “not friendly to our non-locals”, some hooligans refuse to pay the
fare, and he is “not doing business at night” for fear of being robbed
again; he heard that the gangsters in Shanxi often bully the non-locals
for extortion, while local government is indifferent to such matters.
The social exclusion imposed on migrant workers is a consequence
of the long-standing urban–rural household registration system and
regional exclusion. Through surveys and interviews of the migrant work-
ers in different cities, we notice that they usually feel disheartened at
being excluded from social life and cultural identity, but seldom com-
plain about economic exclusion (in labor market). Of course, it does
not mean that there is no economic exclusion, the fact is that migrant
workers themselves are a disadvantaged group in labor market, they are
seen by their urban counterparts as rivals for job opportunities, and most
of them have to do the work despised by urban people. As a result, it
is likely to see such circumstance that migrant workers are thrown into
demeaning occupations, while certain urban residents would rather apply
for government assistance (e.g., “subsistence allowance”) than doing
menial jobs.
352 K. HAN
13.2.3 Ways for Migrant Workers to Achieve Upward Mobility

According to the social mobility theory, the changes on one’s social sta-
tus are induced by both ascriptive and self-achieved factors. The social
mobility of individuals after their birth is affected by congenital and
acquired factors. However, “genetic heritage” is no more important than
“social heritage” in real world. In case one’s innate intelligence is of sig-
nificance to their social status, there will be high-level social mobility. In
case one’s attainment is related to, or even decided by, the power and
privilege of their parents, there will be low-level social mobility.18 As for
migrant workers, their upward mobility is less influenced by ascriptive
factors, i.e., while they are on the move, it is the educational attainment
and professional skills—self-achieved factors—that help them realize
upward mobility.
[Respondent 011, Shenzhen] male, 29, native of Lichuan County,

Jiangxi Province, received senior high school education. Left for
Shenzhen in 1997, after working in a local Japanese-funded enterprise
for 8 years, he is no longer a front-line worker but gradually promoted as
HR director.
Q: Could you tell us how you are promoted?

A: In the first three months after I entered this company, I was only a
cleaner, washing containers with organic solvents. The job was hard,
and harmful for my health. My hands looked white as if painted all day
long, and I couldn’t help coughing when I was about to sleep at night.
I was planning to quit.
Q: Then why not? What made you stick with it?
A: Because I don’t have a diploma (symbol of higher education), I didn’t
know what to do when I just arrived in Shenzhen, and I gradually real-
ized that Shenzhen was not the same as I had imagined, so I dared not
quit. I made my mind that even if I might quit some day, I must learn
something useful before leaving.
Q: When did you find the first turning point in your career?
A: It came three months later, I was transferred to the mold manufactur-
ing workshop, repairing six mechanical tools. At that time, we had to
pass an internal examination to take such technical job. And we also
needed recommendation from our supervisor. I didn’t register for the
exam because I had not heard about it. But on the day of the exam,
I saw several young workers walking toward the exam room with pens
in their hands. I was working at that moment, but I thought it might
be a good try, so I put down my work and joined them. I came second
in the exam, but it should be the best one to be enrolled. Luckily, my
supervisor had a good impression of me, and spoke highly of me. My
good relations with others helped me win this job.
Q: How do you think of this new job?
A: It was neither an easy job. Before I came, this job was done by two
young workers, they had been there for two years, but still technicians
without any promotion, and the work was so wearing, so they quit it.
After I arrived, I had to do the work of two. The temperature inside the
workshop was above 40°C, I was soaked with sweat after a day’s work,
like taking a bath, I really felt exhausted.
Q: Have you ever regretted?
A: No. I was eager to learn some techniques. Working as cleaner didn’t
require any technique, but it was different in the mold manufactur-
ing workshop. While I was repairing the equipment, I learned how to
load and unload materials, how to drive a forklift. I also got my driver’s
license. My hard work was appreciated by my superior, and he com-
mended my performance in front of the Japanese boss. A few months
later, I was promoted to workshop monitor, so I worked here for one
more year.
Q: What are your biggest gains from this promotion?
A: One of the biggest gains was a higher pay, but I had to take more
responsibilities. And I had opportunities to contact with more col-
leagues and superiors, they would know about me, both my strengths
and weaknesses.
Q: Did you change jobs again after that?
A: Yes. From 1999 to 2001, I was transferred to place orders for foreign
products, urge delivery from suppliers, take charge of liaisons, coordi-
nation inside the workshop and quality inspection.
Q: At that time, you had taken part in management, not just a manual
worker, how did you feel about it?
A: I felt satisfied. But I wanted to climb higher up (smiling cheerfully).
Q: So you did succeed, did you?
A: Yes. Since November 1, 2001, I started working in the company’s main
office building, taking charge of six departments.
Q: By what means did you make it?
A: It was my artistic talent. I’m not a bad artist, every year I can win a
prize at the company’s evening party. My interest and hobby helped me
draw the attention of our manager. He had me transferred here (main
office building). At the beginning, he asked me to organize cultural and
artistic activities. After a month or two, he started assigning more jobs
to me: take charge of social insurance of employees, annual verification
354 K. HAN
of foreign credentials, review of employees’ certificates, coordination

with tax authority during its inspection, as well as canteen management.
I felt stressed out at the start, but I gradually got used to it. I was pro-
moted to HR director in 2004.
Q: Have you felt any difference in your work and life after you became a
director?
A: No, no much difference, I’m still working steadily and seriously just like
before, but I can earn more.
Q: Well, that’s your success story. Can you summarize the factors that lead
to your success?
A: The most important thing is learning; you shall keep learning and make
progress. Don’t worry about pressure, it is a kind of motivation. I think
society is an important college. Both social and working experiences
may be more important than what we’ve learned in school.
Q: As you just said, you haven’t received higher education, then what
makes you succeed?
A: I come from the countryside, I don’t have any advantage. When I
came to the city, I found that my decoration skills were neither my spe-
cialty nor my ambition, so I made my mind to learn new things, enrich
myself, and keep climbing higher up.
Q: What do you do to enrich yourself? Why do you insist on learning?
A: Now I am studying the safety management engineering courses, I will
get my associate degree in two years. I can’t climb higher without a
college degree. After all, the waves behind drive on those before, more
and more graduates have entered the labor market, the competition
is increasingly intensive. Nowadays, the employees care more about
the insurance for work-related injuries, all companies need specialized
personnel in human resources control and management. If I get this
diploma, I can find a better job. I’ve already got my driver’s license, and
made other preparations for my future. I attend the classes on week-
ends, and work from Monday to Friday, I feel a little tired sometimes.
But I always say to myself that persistence makes success, two years will
pass quickly.
Q: Well, may your dream (higher education) come true in your next gen-
eration. Our interview is coming to an end, what else would you like to
say?
A: What I want to say is that we must keep learning, be confident, believe
in our ability. Learning and reading is an investment for our future. The
inferior position of our migrant workers is caused by our poor family
condition, we can make it up with our own efforts. Migrant workers
are the same with urban people, we are all human, but from different
growth backgrounds. When in cities, we’d better not blame others
for their discrimination, but for our failure to grasp opportunities. I

entered this company together with a young man at my age, he had
been working here for five years, but remained at the bottom, he even-
tually quit the job. The reason (for his outcome) is that he neither had
a strong sense of responsibility nor worked hard. I think our migrant
workers in cities shall believe in themselves, work harder than others,
we are sure to succeed one day.
[Respondent 011, Shenzhen] is aggressive, hardworking, diligent,

responsible and easygoing. He had suffered a lot while working in an
aim to “learn some techniques”, and the purpose thereof is to achieve
upward mobility. After becoming a management personnel, what he
thought was to “climb higher up”. Thanks to his artistic talent and
non-stop learning (to get a driver’s license and associate degree), he was
finally promoted as HR director. Although not every migrant worker
could be as successful as this young man, his story is universally inspira-
tional, just like what he said, “The inferior position of our migrant work-
ers is caused by our poor family condition, we can make it up with our
own efforts. Migrant workers are the same with urban people…When in
cities, we’d better not blame others for their discrimination, but for our
failure to grasp opportunities”. He believes that as long as migrant work-
ers are confident of themselves and insist on learning, they are sure to
achieve success one day.
[Respondent 029, Beijing] male, 23, single, native of Longjiang

County, Heilongjiang Province, received senior high school education.
Left his hometown for the first time in August 1999 to work in Beijing
for 6 years since then. Initially doing odd jobs, and then trying several
positions in hotel, he is now captain of a five-star business hotel.
Q: How about your educational level?

A: Senior high school.
Q: Did you attend advanced studies?
A: I went to a junior college.
Q: When did you decide to do that?
A: From the day I became captain.
Q: Did you feel stressed out at that time?
A: No, because I receive lots of foreign guests every day. I can use what I
have just learned.
356 K. HAN
Q: What are you learning in junior college s?

A: English.
Q: Were you speaking some English when you were a waiter?
A: Yes, of course.
Q: When did you graduate from college?
A: I haven’t graduated yet.
Q: Why?
A: Although I’m close to finish my study in junior college, I don’t want to
end up here. I think I’m capable enough now, I want to go on to be an
undergraduate.
Q: How much do you make?
A: 1400 yuan (per month). I’ll save 400 yuan as my pocket money, and
spend part of the remaining 1000 yuan on my further study and re-ed-
ucation, buy my favorite books, travel with friends on weekends, attend
daily greetings, buy sneakers or other stuff I’m interested in; every
month I will keep about 500 yuan for investment.
Q: What do you invest?
A: In learning. I’m not the person content with the status quo. I’m curi-
ous about new things, I’d ready to give it a try. For example, I speculate
on stocks, none of my classmates tries this. Some of them graduated
from Tsinghua or Peking University, so I learned the stock knowledge
from them, and after that I started investing some money into stocks.
More than that, I also opened a bank account to buy and sell foreign
currency, also for speculation. I also buy something I want, as long as it
is to my liking, I will buy it.
Q: But making investment, in stock or foreign currency, you will need
instruction from professionals. How do you know these people?
A: When I was in a driver training school, I was ready to get my driver’s
license.
Q: Go on telling us how did you know these people?
A: Well, there was a young man named Ge Xing, he had been studying in
Tsinghua since 2000. We were assigned to the same coach car and
instructed by the same coach. We were getting along well with each other,
we had similar ideas and thoughts. He was a student in one of China’s top
universities, so I thought he could access to formal education, including
the western advanced knowledge. I only associate with the people that I
choose and I appreciate. I won’t accept anything that I don’t want.
[Respondent 029, Beijing] is a smart young man, doing things with

both purposes and plans. He is self-motivated, interested in new things
and persistent in learning. He is studying in a junior college and plan-
ning for getting an undergraduate degree at one fling. He invests part
of his salary in human capital, applies what he has learned, and always
gets rewarded from his learning. Besides, he holds onto opportunities to
get acquainted with the persons to his benefit. “I only associate with the
people that I choose and I appreciate”. Such kind of interpersonal rela-
tionship seems utilitarian, but considering the fierce market competition
and severe survival pressure, it is not fair to criticize his utilitarianism, but
cheer for his success.
In his researches, Li Peilin has noticed that Chinese migrant workers
are now divided into three social strata after going through occupational
differentiation: (1) owners that possess considerable productive capital
and hire others to engage in production; (2) self-employed business-
men in possession of a small amount of capital; (3) salary earners that
work for others to make a living. Part of the differentiation already exists
before migrant workers move to cities, while part of the differentiation
does not take shape until their arrival in cities.19
According to the theory of modernization, traditional society is a
rigidly structured society that strictly confines the mobility of individu-
als, while modern society is an open society with unobstructed mobil-
ity among different classes. In traditional society, people usually rely on
the ascriptive factors to attain social status; but in modern society, the
attainment of social status is more associated with the self-achieved
factors—education is of great significance in the attainment of social
status and diploma has somewhat become a gate pass for individuals to
achieve upward mobility. Through the surveys of migrant workers, we
have found that those who have received better education and voca-
tional training can receive more job opportunities, which will help them
achieve upward mobility to a greater extent. We have summarized some
common ways for migrant workers to move upward: (1) Spend one’s
spare time in learning professional knowledge (e.g., law or foreign lan-
guages), and make effort to obtain an associate or higher diploma. (2)
Cultivate good personality traits (e.g., a hardworking and down-to-earth
spirit), special talents or skills. (3) Be good at seizing opportunities, such
as getting to know upper-class people and developing good interper-
sonal relations. (4) Through marriage or other means: when we were in
Suzhou, we heard a migrant worker married a local girl (i.e., a registered
urban resident), while some female migrant workers are kept as mistress
by their bosses. In general, among the overall migrant workers in cities,
those who have achieved upward mobility and won recognition from
their urban counterparts account for a small proportion.
358 K. HAN
13.2.4 Intergenerational Expectation and Future Plans

of Migrant Workers
The “intergenerational expectation”, also known as the “intergener-
ational mobility expectation”, hereby refers to the expectation that
migrant workers place on the occupational inheritance or future devel-
opment of their children. Following in the footsteps of P. A. Sorokin—
founder of social mobility study, the later sociologists have kept on
studying the occupational inheritance between fathers and sons. In
their monograph, The American Occupational Structure (1967), P. M.
Blau and O. D. Duncan introduced the famous “Blau-Duncan’s Status
Attainment Model”, which has since then become a classical social
mobility theory.20 The studies on intergenerational mobility have been
on the rise thereafter. In recent years, some foreign sociologists have
drawn to a conclusion that “educational attainment” is under the impact
of some social factors outside of school, especially the impact of social
origin.21 For the children of migrant workers, their educational attain-
ment is primarily affected by social factors. To date, most of the Chinese
migrant workers still hold the traditional idea that they are obliged to
work hard and earn as much money as possible, so that their next gen-
eration may lead a better life. Owing to limited data, we cannot make a
quantitative evaluation of the intergenerational mobility of the Chinese
migrant workers, but our interview transcriptions will show their expec-
tation for the future social status of their children.
[Respondent 011, Beijing] male, 39, married, native of Chengguan

Township, Dengfeng City, Henan Province, received senior high school
education. Left for working in cities since October 1997.
Q: You want to send your children to study abroad, can you afford it?
A: In about three years, I plan to send my youngest daughter to study
abroad. At the moment, I can’t afford the overseas studying of the two
older children. But after two or three years, I may be able to send my
little girl abroad. The world is so big, but we are confined to such a
small environment, especially the Chinese political system and human
rights are not developed, I mean it.
Q: So you want to change your living environment?
A: My generation can’t change it, but I think my children can, they shall
not live in vain.
[Respondent 011, Beijing] intends to send his youngest daughter to

study abroad, so as to change her destiny. For many rural laborers work-
ing in cities, their biggest wish is that their children could receive higher
education and lead an affluent life.
In terms of the life choices of migrant workers in the future—either
settle down in cities or return to their hometowns, Wang Chunguang
argues that, considering both realistic possibility and future possibility,
it will be a long term and several stages for migrant workers to inte-
grate into urban society. Generally speaking, they have to experience
changes on occupation and settlement and receive certain education
before completing the transition from occupational mobility to social
mobility.22 During our interviews, lots of migrant workers frankly said
that they do not want to set up a home and establish a business in cit-
ies, but spend some years in cities to earn money and learn some skills
and then return to their hometowns to continue farming or start busi-
nesses on their own. Bai Nansheng and He Yupeng have noticed that
the forced backflow of migrant workers presents an uptrend because
of difficulties in finding jobs in cities, while the backflow for personal
or family reasons presents a downtrend, those return home for invest-
ment only accounts for 2.5% of the backflowing labor force.23 The
Research Group on “Mobility of Farmers and Rural Development”
visited ten villages in Huantai County of Shandong Province to inter-
view 737 returned migrant workers. They have come to the conclusion
that “there will be a wave of entrepreneurship following the overflow
of migrant workers”, but it seems a long term for migrant workers to
turn to entrepreneurs. What is important is that farmers can constantly
improve themselves while flowing, after they return home to start their
own business, they will become a new driving force for rural develop-
ment.24 The above conclusions are consistent with the main idea of our
interviews.
[Respondent 005, Shenzhen] surnamed Zhou, male, 20, native of
Maoan Township, Zizhong County, Neijiang City, Sichuan Province,
received junior middle school education. Left for working in cities since
February 2001.
Q: Do you have any plans for the future?

A: Yes, I do. I plan to work here for another five to ten years, I will have
some savings at that time, then I will return home to start a small busi-
ness. If I stay here, I will keep meeting with disdain of local people.
360 K. HAN
I want to go to school, but I’m no longer a child, going back to school

will increase burdens on my family, so I’d rather give it up.
Q: Now, if possible, would you like to stay in the city permanently?
A: No, I won’t.
Q: Why?
A: Because the life here is not secure. If you lose your job, you have no
other way out, you cannot grow vegetables, but look for jobs to sur-
vive. But if you live in the countryside, you may at least grow some
crops, you have a plot of land, you can have a self-sufficient life.
[Respondent 029, Beijing] male, 23, single, native of Longjiang

County, Heilongjiang Province, received senior high school education.
Left for working in cities since August 1999, now is captain in Chateau
Star River Hotel (Beijing).
Q: What about your career plans in the future?

A: I intend to start from catering, then open a franchised outlet of Golden
Key Hotel. I must accumulate some capital, then I will be able to invest
in a catering group, already well-known or potential to appreciate in
the future, to become its partner, or work with some like-minded col-
leagues and friends to start our own company.
Q: Will you give up your rural “hukou” to get a Beijing “hukou”?
A: No.
Q: Why not?
A: I think it’s a good to have a rural “hukou”. I have land in the country-
side, and a job in Beijing, I can get the best of both worlds. If I rent
out my land, and work to earn a salary in Beijing, then I will have two
sources of income.
[Respondent 006, Suzhou] male, 38, native of north China. Left for
cities since 1988, now is selling fruit in Changqiao Town, Zhangjiagang
City, Hebei Province. He was picking up someone at the waiting hall of
Suzhou Railway Station when receiving the interview.
Q: Are you going to settle down in the urban area?

A: No. There is a saying in my hometown: no matter how tall a tree is, its
leaves will eventually fall to its root. I will be here for another ten years
or more, then I will go back, after all, this place is not my hometown.
A: Have you ever thought about transferring you rural “hukou” to the
city?
Q: No. Though I could do so, I don’t think an urban “hukou” is use-

ful. In that case, my land in the countryside will be taken back, it’s not
worth it. And my children no longer go to school, it makes no sense to
have an urban “hukou”.
[Respondent 005, Shenzhen] is an inexperienced young worker,

[Respondent 006, Suzhou] has gone through years’ ups and downs in
cities, and [Respondent 029, Beijing] has acquired certain social status in
the city. Despite individual differences, the three of them coincidentally
plan to return to their hometowns in the future. We cannot help won-
dering that migrant workers have achieved upward mobility by flowing
to cities, then why do most of them prefer returning to the countryside?
Our interviews reflect that it is because they have no better choice. It is
indeed a kind of upward mobility from rural areas to urban areas and
from agriculture to industry, but there are so many institutional obstacles
in cities that prevent migrant workers from acquiring an urban social sta-
tus. Labor market is the only channel that facilitates their mobility, which
is hard for them to actually integrate into urban society. As such, return-
ing home has become the best choice for migrant workers to regain
social status, realize status transfer and win social prestige. In a word,
owing to various external constraints in urban society, migrant workers
have to come back to the countryside rather than seeking permanent res-
idence in cities.
13.3 Social Protection of Migrant Workers:

A Case Study of Suzhou
13.3.1 Research Background and Survey Approaches

While the group of migrant workers keeps expanding, the impairment of
their rights and interests has become an evident issue, which has drawn
attention of quite a number of scholars. For instance, Pang Wen has
noticed that migrant workers frequently come across unequal job oppor-
tunities, different payment for the same work, absence of social security
benefit, exclusion and discrimination in daily life and social interaction;
he suggests that the authorities of household registration and social secu-
rity, together with labor market, shall make joint efforts to safeguard the
rights and interests of migrant workers.25 According to Qian Yanxian,
the impairment of the rights and interests of migrant workers reflects
362 K. HAN
in the following aspects: unequal right to employment, low signing rate

of labor contract and poor contract performance, delayed or deducted
wage payment, unsafe working conditions, ineffective labor protection
measures, inaccessible to basic social security and unable to guarantee their
children to receive compulsory education.26 Zhang Lihong argues that
the ascriptive identity of migrant workers is the reason for their unguar-
anteed political rights, i.e., their basic civil rights (employment, children’s
education, access to social organizations, expression of opinions and social
interaction) are not guaranteed. Further, migrant workers are deprived
of the rights to participate in political activities and election due to their
occupational mobility.27 The Opinions of the State Council on Resolving
the Problems about Migrant Workers (Guofa [2006] No. 5) explicitly
points out that “safeguarding the rights and interests of migrant work-
ers is a prominent issue that needs to be addressed…Migrant workers are
still beset by the following major problems: low wage and serious arrears;
long working hours and unsafe working conditions; excluded from social
security and exposed to work-related diseases, injuries and accidents; inac-
cessible to vocational trainings and job opportunities, obstructed to send
their children to school, difficult to survive and dwell in cities; economic,
political and cultural rights and interests fail to be guaranteed. These prob-
lems have given rise to lots of social conflicts and disputes. Whether these
problems could be properly solved is directly related to safeguarding social
equity and justice, and maintaining social harmony and stability”.28
To date, has China effectively protected the rights and interests of
migrant workers? If not, what are the reasons? To answer these ques-
tions, we have developed a questionnaire to survey the migrant workers
in Suzhou—a key industrial city in the Yangtze River Delta with a con-
centration of migrant workers—to gather first-hand information about
social protection of migrant workers.
Since the mid-1990s, with the economic boom of the Yangtze River
Delta, scholars began to pay attention to the migrant workers in other
large and medium-sized cities,29 in addition to those in the Pearl River
Delta, which reflects the demand for labor force from regional eco-
nomic development. After entering the new century, the social mobil-
ity of migrant workers has shown some new features, e.g., more and
more rural laborers have been flocking into the Yangtze River Delta—
an important consideration for us to choose Suzhou as the survey site.
Moreover, at the early stage of the economic reform, the township enter-
prises in southern Jiangsu Province were flourishing, so the local rural
laborers didn’t have to go far away to earn a living, but “departed from
farming without leaving native land”, such pattern was described by
Fei Xiaotong as the “Sunan model”30 (or “Southern Jiangsu Model”).
Intuitively, the migrant workers in the Yangtze River Delta are mainly
constituted by the locally transferred rural laborers.
Suzhou is not only a famous historical and cultural city in China, but
a developed local economy in the Yangtze River Delta. By the time of
doing the survey, Suzhou had a registered population of 5,988,500 peo-
ple (of which 2,207,500 were residing in the downtown), who were dis-
tributed in the cities of Zhangjiagang, Changshu, Taicang, Kunshan and
Wujiang, the districts of Wuzhong, Xiangcheng, Pingjiang, Canglang
and Jinchang, as well as Suzhou Industrial Park and Suzhou High-
tech Zone (in Huqiu District)—all of them are under the jurisdiction
of Suzhou. Since the reform and opening-up, Suzhou has been forging
itself into a modern manufacturing base powered by new and high-tech
industries. At present, there are over 10,000 foreign-funded enterprises
in Suzhou, including more than 90 of the world’s top 500 enterprises.31
As shown in the data released by Suzhou Municipal Labor and Social
Security Bureau, by the end of 2005, Suzhou had a total of 2,865,000
migrant workers; they were distributed in manufacturing (1,575,000),
construction (217,000), accommodation and catering (86,000), whole-
sale and retail trade (143,000), neighborhood service and other service
sectors (27,000), coal/non-coal mines and other sectors (817,000).
See the figures in Table 13.1.
Considering the characteristic distribution of Suzhou’s migrant work-
ers by sector and area, we developed a detailed sampling scheme by
combining stratified sampling and random sampling. For the survey of
towns, we distributed 200 questionnaires in Miaogang Town of Wujiang
City and Luzhi Town of Wuzhong District. For the survey of sub-dis-
tricts, we distributed 200 questionnaires in Shilu Sub-district of Jinchang
District and Chengbei Sub-district of Pingjiang District. For the survey
of enterprises, we distributed 100 questionnaires to 4 foreign-funded
companies in the industrial park, 3 foreign-funded companies and 2
domestic silk companies in the high-tech zone, 1 construction com-
pany, 3 catering service companies and 1 shopping mall. Besides, 150
questionnaires were randomly distributed in labor markets and stations
which are crowded with migrant workers, as well as certain streets where
mobile vendors are found everywhere.
364 K. HAN
Table 13.1 Distribution of migrant workers in Suzhou by sector
Sector Number of migrant workers Proportion (%)
Manufacturing 1,575,000 55.0

Construction 217,000 7.6
Accommodation and catering 86,000 3.0
Wholesale and retail 143,000 5.0
Neighborhood service and other services 27,000 0.9
Coal/non-coal mines and others 817,000 28.5
Total 2,865,000 100.0
Source Restricted data of Suzhou Municipal Labor and Social Security Bureau
In July 2005, the Research Group on “Social Protection of Chinese

Migrant Workers”, which was initiated by Renmin University of China,
started this questionnaire survey of the migrant workers in Suzhou and
collected rich first-hand data (a total of 650 questionnaires were distrib-
uted, and 623 valid ones were recovered, marking an effective recov-
ery rate of 95.8%). In addition, the research group also visited Suzhou
Municipal Labor and Social Security Bureau and some companies to
learn the opinions from their responsible persons, and directly inter-
viewed certain migrant workers with typical experiences.
13.3.2 Analysis Results of the Questionnaire Survey

(1) Basic information of the respondents
a. Gender composition
Among the 623 migrant workers that we surveyed, 239 are female,
accounting for 38.4% of the total; while 384 are male, accounting for
61.6% (see Fig. 13.1), which demonstrates that male migrant workers
usually outnumber those female migrant workers.
b. Age composition
Among the 623 respondents, the youngest was 17 years old, while the
oldest was already 65. The age group of 18–30 includes 403 people,
occupying the largest share of 64.8%. There are 186 respondents aged
between 31 and 45, accounting for 29.9% (see Fig. 13.2). These figures
tell that the majority of migrant workers are young and middle-aged,
i.e., they are physically strong. Only in terms of age and physical quality,
these persons are an “advantaged group” in rural society.
Fig. 13.1 Gender composition of the migrant workers in Suzhou
Table 13.2 Marital status of the migrant workers in Suzhou
Marital status Number of migrant workers Proportion (%)
Single 270 43.3

Married 350 56.2
Divorced 1 0.2
Missing data 2 0.3
Total 623 100.0
Fig. 13.2 Age com-

position of the migrant
workers in Suzhou
c. Marital status
Among the migrant workers surveyed, 270 are still single, accounting for
43.3% of the total; 350 are married, accounting for 56.2%; and one got
divorced. The single migrant workers are made up of 131 women and
139 men, those married ones include 107 women and 243 men. The
only divorced migrant worker is male (Table 13.2).
d. “Hukou” or registered permanent residence

Statistics show that the migrant workers in Suzhou are mainly from the
provinces of Jiangsu, Anhui, Henan, Sichuan, Shandong, Jiangxi, Zhejiang,
Hubei and Hunan. Among the 623 respondents, 231 have a “hukou” or
registered permanent residence in Jiangsu, accounting for 37.1% of the total;
152 hold an Anhui “hukou”, accounting for 24.4%. The natives of Henan
and Sichuan are, respectively, 62 (10%) and 33 (5.3%). See Fig. 13.3. As for
the migrant workers in the entire Jiangsu Province, despite the 25 Suzhou
natives, part of them come from the underdeveloped cities in northern
Jiangsu: Yancheng (45), Suqian (33), Lianyungang (23), Huaian (20) and
Xuzhou (19).
366 K. HAN
Fig. 13.3 Registered permanent residence of the migrant workers in Suzhou
e. Level of education
Among the migrant workers surveyed, the majority (280, 44.9%) of
them attended junior middle school, followed by those who received
senior high school education. Those attended secondary technical/
vocational school come next (see Fig. 13.4). During the surveys, we
have found that the enterprises are increasingly interested in the profes-
sional quality of migrant workers, for the sake of manufacturing high val-
ue-added products. Some enterprises are cooperating with the vocational
schools in the areas that export migrant workers, so as to reserve the tal-
ents that satisfy their needs.
f. Former identity
Among the respondents, we have found that 275 of them, or 44.4% of
the total, were students before arriving in Suzhou; while 186 of them, or
30% of the total, had been farmers in their hometowns (see Fig. 13.5).
In short, migrant workers are actually a product of rural overpopulation
and transfer of surplus labor force along with continuous industrializa-
tion and urbanization.
(2) Employment protection for migrant workers

a. Employment opportunities
According to the materials provided by Suzhou Municipal Labor and
Social Security Bureau, Suzhou has introduced the unified urban–rural
employment policy for locals and non-locals, the mobility of migrant
workers is no longer restricted by the household registration system, and
Fig. 13.4 Educational level of the migrant workers in Suzhou
Fig. 13.5 Identity of the migrant workers before working in Suzhou
the enterprises are asked to remove such discriminatory rules in recruit-

ment as preferring those in towns/cities to those in the countryside and
preferring locals to non-locals. The migrant workers—as long as they
reach the legal working age, have working ability, received at least junior
middle school education or hold relevant qualification certificates—can
seek jobs in the labor market of Suzhou. And they are accessible to the
same employment opportunities as local laid-off and unemployed per-
sons. Meanwhile, Suzhou provides migrant workers with the same wage
368 K. HAN
and benefit as local employees, i.e., equal pay for equal work, so as to
safeguard their equal right to employment. Suzhou Municipal Labor and
Social Security Bureau randomly inspected 260 enterprises engaged in
different businesses to see how they treat migrant workers. The result
turned out that their migrant workers earned 1213 yuan/month on
average (the enterprises in Suzhou Industrial Park and Kunshan City paid
an average wage of 1732 yuan/month and 1659 yuan/month, respec-
tively), while the local employees in Suzhou earned an average wage
of 1581 yuan/month.32 Comparatively speaking, the average wage of
migrant workers is not greatly different from that of local employees.
b. Labor remuneration
Nationally, the problem of the wage arrears of migrant workers has
drawn extensive attention from the media and all walks of life, the
then Chinese Prime Minister Wen Jiabao even condemned the employ-
ers for holding back the wage to migrant workers. It is unjustifiable
that migrant workers work hard but fail to get their legitimate income
on time or in full. Through the surveys of 570 migrant workers in
Suzhou, we learned that the majority of them (84.9%) could get their
wage on time, but 86 (15.1%) said their wage was delayed in the past
six months. “Can you get a higher pay according to law when working
overtime or on holidays?”—one of the questions in the questionnaire,
209 respondents answered “no”, accounting for 36.2%; while 368
said “yes”, accounting for 63.8%, as shown in the recovered 577 valid
questionnaires.
c. Labor contract
Labor contract is a legal text that standardizes the labor relations
between employers and employees. Among the 577 migrant workers in
Suzhou that we surveyed, we found that 361 of them have signed labor
contracts with their employers, accounting for 57.9% of the total; the
remaining 216 did not do so, accounting for 34.7%. Given that some of
the respondents are self-employed or in a state of informal employment
(e.g., street vendors and rickshaw pullers), the labor contract signing
rate, on the whole, may be higher than our survey result.
d. Working hours
Through the surveys, we found that it is common for migrant workers to
work overtime. Among the 595 respondents, 246 of them work less than
8 hours per day, accounting for 41.3% of the total; 349 work for more
than 8 hours, accounting for 51.5%; while 43 or 7.2% said they were not
sure. When asked “how many days off did you get in the last month?”,
447 migrant workers said less than 8 days, accounting for 79.7% of the
561 valid respondents; 103 or 16.5% said they kept working every day;
only 88 or 14.1% said they had rested for 8 days (statutory rest days per
month). It is also common for migrant workers to work on holidays.
Among the 582 valid respondents, 102 or 17.5% haven’t got one day off
even on the Spring Festival Holiday and May Day Holiday—both impor-
tant holidays for migrant workers; 102 or 17.5% have rested for less than
5 days during the two holidays; 163 or 28% have been off for 6–10 days;
while 215 or 36.9% got more than 10 rest days (Fig. 13.6).
e. Work safety
In reference to the materials provided by Suzhou Municipal Labor and
Social Security Bureau, in order to effectively protect the health and
safety of migrant workers, Suzhou has set up an “occupational hazard
warning” mechanism, i.e., the labor and social security bureau shall,
through routine inquiry and special inspection, supervise the perfor-
mance of enterprises in executing the working time system, labor protec-
tion and protection of women and minors; in case any hidden danger for
safety production or for occupational hazard (disease) is detected, it shall
immediately report and hand over the matter to the public health and
work safety departments.33
Among the 602 respondents, 168 of them are engaged in danger-
ous, toxic or harmful jobs or positions, accounting for 27.9% of the
total. Among the 596 respondents, 291 or 48.8% said their work units
have never arranged them for a periodic health check. Among the 597
Fig. 13.6 Daily working hours of the migrant workers in Suzhou

370 K. HAN
respondents, 208 or 34.8% have never received any education or training

about labor safety and occupational health. Among the 594 respondents,
188 or 31.6% said their work units have never given them the necessary
labor protection supplies. Among the 616 respondents, 159 or 25.8%
had got injured while working or suffered from occupational diseases.
Among the 599 respondents, 181 or 30.2% said “yes” when answering
the question “do your employers compensate for your work-related inju-
ries and occupational diseases?”, while 418 or 69.8% said “no” or “not
sure”.
f. Vocational training
According to the materials provided by Suzhou Municipal Labor and
Social Security Bureau, in order to improve the professional quality of
migrant workers, Suzhou started to implement a unified vocational
training system for migrant workers since May 2002. The vocational
training of migrant workers was even defined as one of Suzhou’s gov-
ernment projects in 2003 and 2004. The main content of vocational
training includes analysis of forms of employment, career guidance,
instruction of laws and regulations (e.g., the Labor Law), safety knowl-
edge and civic virtues. Moreover, Suzhou also implements the national
vocational qualification system to motivate non-local workers and oper-
ating personnel to register for vocational training, as long as they can
pass the tests, they will be granted a “vocational qualification certifi-
cate” which is uniformly issued by Suzhou Municipal Labor and Social
Security Bureau. According to the statistics made by the bureau, in 2003
and 2004 Suzhou respectively trained 98,400 and 87,000 migrant work-
ers. Furthermore, the city has been cooperating with the labor force
exporting areas to provide vocational training to surplus rural labor-
ers and newly added laborers, and implementing such pilot programs
as “school-enterprise cooperation and school-school cooperation” (to
absorb the workforce from the exporting areas and provide “order-ori-
ented” training), so as to improve the cultural attainment, professional
quality and working ability of migrant workers. All kinds of technical
schools in Suzhou have been cooperating with more than 20 vocational
schools in other areas to cultivate the workforce to the needs of the city’s
enterprises, they enrolled a total of 3000 students in 2005, all of them
will be labor force reserves for Suzhou.34
Through the questionnaire surveys, we found that most migrant
workers have received some pre-job training. Among the 579 valid
respondents, 355 have received such training, accounting for 61.3% of

the total; 224 or 38.7% have not; the majority of them (90.4%) said their
pre-job training lasted no more than three months. In addition, among
the 616 migrant workers that we surveyed, 156 or 25.3% attend various
classes in their spare time; 57.3% attend technical training classes or sec-
ondary technical schools and 14.7% have obtained an associate degree.
(3) Protection of the personal rights and interests of migrant workers
a. Identity and personal protection
For migrant workers, identity and personal protection may be roughly
regarded as an integral part of their personal rights and interests. Among
the 621 respondents, 186 or 30% of them said they were discriminated
while working in cities; 368 or 59.3% of them have no such experience;
while 67 or 10.8% are not sure. When asked “do you mind being called a
migrant worker?”, 205 respondents answered “yes”, accounting for 33%
of the 621 valid respondents; while a majority of them (67%) said “no”.
Among the 556 respondents, the majority of them (66.9%) believe
that the managers of their work units do not treat them equally like local
employees; 26.1% took the opposite view; while 7% have no idea about it.
When asked “did your employers ever beat or abuse migrant work-
ers?”, 74 respondents said “yes”, accounting for 12.8% of the 580 valid
respondents; 32 or 5.5% of them were “not sure”; while 474 or 81.7% of
them said “no”.
b. Housing and living conditions
In terms of housing and living conditions of migrant workers, Suzhou
has included the “dormitories” of migrant workers into both the urban
construction plans and enterprise development plans. The government
not only provides funds, but mobilizes enterprises and social forces to
take part in the construction of “dormitories” for migrant workers,
and provide accommodation services in the areas inhabited by migrant
workers, so as to relieve their worries about residence in the city.
Suzhou High-tech Zone has done a good job in this regard, it poured
110 million yuan on building a residential area, which covers an area of
80,000 m2, to accommodate more than 11,200 migrant workers work-
ing in the foreign-funded enterprises based in the zone.35
Among the 612 respondents, we have found that 165 or 27% of them
live in the dormitories provided by their work units; 380 or 62.1% of
them rent houses by their own; 29 or 4.7% of them dwell in work sheds;
21 or 3.4% of them stay in the temporary shelters built by themselves;
372 K. HAN
while 14 or 2.3% of them live with their relatives or friends. Among the
618 respondents, 222 or 35.9% of them are “very satisfied” or “satisfied”
with their housing condition; 285 or 46.1% of them consider their hous-
ing condition “just so so”; while 111 or 18% of them feel “dissatisfied”
or “very dissatisfied”. See Fig. 13.7.
c. Life and education of their children

Migrant workers were once described as “migratory birds in cities”. They
are moving from place to place and changing jobs frequently, it is hard for
them to spend plenty of time accompanying their children. Some migrant
workers leave their children at their hometowns, while the others choose
to take along their children to cities. In rural areas, quite a number of
children are those left behind by their parents, some of them live with
their relatives, some of them live alone without an adult guardian. For
the children living in cities by the side of their parents, they must learn to
integrate into urban society and go to school together with local children.
Among the 346 respondents who have children, the major-
ity of them (233 or 67.3%) have left their children in their home-
towns; 102 or 29.5% of them have brought their children to their side
(see Fig. 13.8). Among the 274 respondents with children going
to school, 201 or 73.4% of them send their children to the schools in
Fig. 13.7 Housing conditions of the migrant workers in Suzhou

Fig. 13.8 Residence of children of the migrant workers in Suzhou
Fig. 13.9 Schooling of
children of the migrant
workers in Suzhou
their hometowns; while 73 or 26.6% of them send their children to the

schools in Suzhou (see Fig. 13.9). Among the respondents with children
going to school in Suzhou, 66.7% of them send their children to public
schools and kindergartens; only 33.3% of them choose the schools and
kindergartens specially for the children of migrant workers. As for the
tuition, 58.5% of them said it is “too expensive” or “a little expensive”;
while 33.8% of them said it is “affordable”.
(4) Protection of the political rights and interests of migrant workers
Chinese migrant workers are a giant group, an important force con-
cerning the country’s political stability and social development, and an
indispensable social stratum for examining the political participation
of citizens. After an investigation of the political participation of the
migrant workers in Wuhan City, Xu Zengyang and Huang Huixiang
have found that their political life, like their living conditions, is margin-
alized as a result of the urban–rural dualistic system. Such marginality
manifests in two aspects: in rural areas—registered permanent residence
of migrant workers, the essential ways for them to participate in politics
are to join in village self-governance and village committee election, but
they are interested in neither of them; the cities—where migrant workers
live and work—are closely related to their interests, they are eager to take
374 K. HAN
part in the management of cities so as to express their demand and pro-

tect their interests, but they are blocked from doing so.36 Due to their
unique identity (farmers) and occupation (workers), migrant workers
are in an inferior position to access the urban political affairs. This gives
rise to an awkward situation: in urban areas, the right to vote and the
right to be elected seem irrelevant to migrant workers; in rural areas, lots
of migrant workers are unable to join in the village committee election
because of geographical restrictions.
During our surveys, we have learned that many enterprises that
employ migrant workers do not have labor unions. Among the 559
respondents, only 73 or 13.1% of them have joined labor unions;
486 or 86.9% of them have not; lots of them even not know what is
labor union, let alone take part in its activities and seek its assistance.
Interestingly, among the 551 respondents, 295 said they want to be
members of labor unions, accounting for 53.5%; while 207 or 37.6% of
them have never thought about it.
(5) Protection of migrant workers’ social insurance rights and interests
Chinese migrant workers seem like a “marginalized group”. If regarding
them as “farmers”, then the absence of their social insurance rights and
interests is mainly attributed to the unfulfilled construction of the rural
social insurance system. If regarding them as “citizens” that are due to
be covered by the urban social insurance system, there are long-standing
obstacles for them to integrate into urban society. In a word, owing to
the unique identity of migrant workers, the impairment of their social
insurance rights and interests has become commonplace.
Suzhou implements a unified social insurance policy so that migrant
workers could receive the same social insurance benefits as their urban
counterparts. As required by Suzhou Municipal Labor and Social
Security Bureau, the migrant workers that work in all types of enterprises
in Suzhou shall be covered by the five social insurances, i.e., endowment,
medical, unemployment, work-related injury and maternity insurances;
the contribution ratio, contribution base and benefit of endowment,
medical, work-related injury and maternity insurances is the same with
those of urban employees, while the unemployment insurance con-
tribution is defined in reference to the Regulations for Unemployment
Insurance; for the migrant workers that flow from one work unit to
another in the city, their work units and the social security agency shall
handle the formalities for transferring their social insurance relations in
a timely manner; for the migrant workers that cease working for any rea-
son, their individual insurance account shall be retained, both the pay-
ment period and deposit amount of their account could be calculated
accumulatively.37
Among the 620 respondents, 184 or 29.7% of them have partici-
pated in the urban endowment insurance in their work units; while 72
or 11.6% of them have participated in the rural endowment insurance in
their hometowns. When asked “if your work unit and yourself make cer-
tain contributions to your individual insurance account every month, and
when you retire in the future, the money in your account will become
your annuity, would you like it?”, 458 respondents said “yes”, accounting
for 74.2% of the total 671 respondents; 62 or 10% of them said “no”;
while 97 or 15.6% of them said they have “never thought about it”.
As for the issue of medical insurance, we surveyed 611 migrant work-
ers and learned that 162 or 26.5% of them have participated in urban
medical insurance in their work units; 73 or 11.9% of them are covered
by the new rural cooperative medical system in their hometowns; 339 or
55.5% of them haven’t got any type of medical insurance. In the absence
of an institutional guarantee, migrant workers have to undertake their
medical expenses by themselves. Among the 615 respondents, 446 or
72.5% of them said their medical expenses are borne by themselves or
their families; while 160 or 26% of them said their medical expenses are
shared by themselves and their work units. Among the 620 respondents,
538 or 86.8% of them complained the current medical expenses are “too
expensive” and “relatively expensive”; while 80 or 12.9% of them said
such expenses are “affordable”.
It is worrying to see that a majority of migrant workers are not yet
covered by either work-related injury insurance or unemployment insur-
ance. Among the 603 respondents, only 178 or 29.5% of them have par-
ticipated in work-related injury insurance; while 425 or 70.5% of them
have not. Among the 614 respondents, only 83 have participated in
unemployment insurance, accounting for 13.5% of the total; while 470
or 76.5% of them have not. See in Table 13.3.
(6) Social life of migrant workers
Migrant workers are on the whole a marginalized group in urban soci-
ety. In their surveys in Tianjin Municipality in 2004, Pan Yunkang and
Zhang Xueyun noticed that migrant workers seldom attend or sepa-
rate from the social activities in cities; lots of them bury themselves in
376 K. HAN
Table 13.3 Social insurance coverage of the migrant workers in Suzhou
Types of Endowment Medical Work-related Unemployment

insurance injury
Number % Number % Number % Number %
Covered 184 29.7 235 38.5 178 29.5 83 13.5

Uncovered 436 70.3 376 61.5 425 70.5 531 86.5
Total 620 100 611 100 603 100 614 100
Note The data in this table are results of the questionnaire survey (“Social Protection of Migrant
Workers”) in Suzhou, instead of representing the overall situation of the migrant workers across the city
working to earn money, only a small number of them are interested in

local social activities. Among their respondents, only 5% them have par-
ticipated in neighborhood committee elections and self-governance,
10.5% of them have taken part in local group activities, 25.4% of them
are doing physical exercises with local residents, 6.5% of them have been
members of security patrols, 9.7% of them have been volunteers, and
35% of them have participated in donation activities.38
When we were doing the surveys in Suzhou, we asked the migrant
workers what is their biggest difficulty in the city, 32.6% of them chose
“high living expense”, 18.6% of them preferred “deduction or arrears of
wage”, 14.3% of them believed it should be “hard to find jobs”, 12%
of them said their “work is too hard”, only a small number of them
said they hate being “discriminated and excluded by local people” (see
Fig. 13.10). These figures tell that since migrant workers have risen to
a giant group in urban society in recent years, local people have grad-
ually learned to accept them. After coming to cities, the foremost dif-
ficulty they have to overcome is the expensive living cost. When their
life falls into difficulties, a majority of the respondents (94.7%) will seek
help from their families, relatives, friends, fellow townsmen, workmates,
foremen or their work units, only 2% of them turn to their landlords or
acquaintances in the city or neighborhood committee, police station,
labor union and women’s federation. For most migrant workers, their
network of interpersonal relationship only includes their workmates and
other rural laborers, it is rare to see them walk out of that circle to con-
tact with the urban subject society.
Through our description of the working and living situations of the
migrant workers in Suzhou in the preceding text, it can be seen their
Fig. 13.10 Foremost difficulty for the migrant workers in Suzhou
right to employment and personal rights and interests are well protected
on the whole. But a majority of migrant workers are not yet covered by
the work-related injury insurance, thus making those injured at the work-
place hard to get compensation; and there are also obstacles for them to
send their children to local schools. Comparatively speaking, the impair-
ment of migrant workers’ social security rights and interests is common-
place, and they are generally isolated from the urban subject society.
13.3.3 Causes for the Damages to the Rights

and Interests of Migrant Workers
Well, what causes the infringement of migrant workers’ rights and inter-
ests? According to some scholars, the “culprit” is the dual-structured
labor market since it restricts the upward social mobility of migrant
workers and makes it impossible for them to change their underpriv-
ileged situation through normal social mobility. In the dual-structured
labor market, migrant workers are excluded from the employment sys-
tem for urban residents, just like “collective exclusivity” described by F.
Parkin, and their rights and interests are infringed by this kind of col-
lective exclusion.39 But some scholars propose that the non-urban iden-
tity makes the migrant workers unaware of their due right of being
city dwellers. The way to solve the problem of “migrant workers” is
to transform the problem of “civil rights” at the national level into the
378 K. HAN
problem of “citizenship” at the urban level, and transform the problem

of “national treatment” into the problem of “citizen treatment”.40 We
believe that the damage to the rights and interests of migrant workers
is not only attributed to the economic and social systems, but to the
migrant workers themselves and the defective social insurance system.
(1) Migrant workers do not have a strong consciousness of rights protection
From their own part, most migrant workers have little consciousness of
rights protection. Through a survey of migrant workers, we have found
that some of them (36.1%) will seek legal assistance when their legitimate
rights and interests are infringed, but lots of them don’t know about the
relevant legal provisions. For example, of the 609 respondents, the vast
majority of them (79.8%) are unaware of the compensation standards
for work-related casualties; of the 623 respondents, the vast majority of
them (75.4%) have learned about the Labor Law, but nearly half of them
(46.9%) are unaware of the Constitution, 81.9% of them don’t know
about the Labor Union Law, 60.8% of them have no idea about the Law
on the Protection of Rights and Interests of Women, 57.1% of them are
blind to the Work Safety Law, and 80.4% of them are ignorant of the
Law on Prevention and Control of Occupational Diseases. As such, when
their legitimate rights and interests are infringed, lots of them (26.6%)
usually turn to their relatives, friends or fellow villagers for help, while a
small number of them (6.4%) bury the grievance in their heart instead of
asking for help.
(2) Lack of protection from organizations
Historically, guilds or trade associations are the products of the develop-
ing commodity economy, and their function is to work out trade rules
within the same industry and safeguard the common interests of industry
insiders. Modern labor unions are formed to reconcile the contradiction
between labor and capital, resolve labor disputes and safeguard workers’
rights and interests. In the era of planned economy, the labor unions in
China were in essence a functional department of enterprises for man-
agement of workers’ labor insurance. Under the condition of the mar-
ket economy, the Chinese labor unions no longer have any management
function, and their inherent function of being an ally of laborers are not
yet fully performed for various reasons.
Through a survey of migrant workers, we have found that labor unions
and other similar organizations are of little significance for this particular
group of laborers. Of the 601 respondents, only 8 of them (1.3%) turn to
local neighborhood committee, police stations, labor unions or women’s

federations for help when falling into difficulties. As for the companies
where they are working, the migrant workers do not have any rights pro-
tection organization to count on. Of the 576 respondents, 81.8% of them
work in the companies without a labor dispute mediation committee.
Many of the companies have no labor union. Of the 559 respondents,
only 73 of them (13.1%) have joined labor unions, while 486 of them
(86.9%) are not labor union members. See Fig. 13.11.
(3) Social insurance system remains defective
As mentioned above, the proportion of migrant workers that are cov-
ered by social insurance is far less than those uncovered. For the needs
of both work and life, few of them are satisfied by the social insurance.
For example, we surveyed 242 migrant workers that had been jobless,
75.2% of them were forced to live on their previous savings after unem-
ployment, 18.6% of them were supported by their relatives and friends,
4.5% of them asked for help from fellow villagers and former work-
mates, and 1.7% of them were relying on the unemployment compensa-
tion from their former employers, no one was living on unemployment
insurance. Moreover, during our surveys and interviews, we also learned
that many companies, for fear of being held accountable for not con-
tributing insurance premiums for their employees by the labor depart-
ment, subscribe to collective insurance instead of individual insurance for
each worker, so the mobility of migrant workers has no impact on their
insurance ratio. In fact, migrant workers are eager to participate in social
insurance. Of the 590 migrant workers surveyed, 157 of them (26.6%)
want the government to establish a social security system to enable them
to access to various social insurances, 124 of them (21%) expect the gov-
ernment to provide them with some relief when they encounter special
difficulties.
Fig. 13.11 Proportion
of migrant workers join-
ing in labor union
380 K. HAN
13.4 Social Inclusion of Migrant Workers in Cities
13.4.1 Inevitability for Migrant Workers to Integrate into Cities

The issue of migrant workers has never drawn such great attention
from the Chinese government and academic circle than it does today.
However, no matter the state policies or existing studies, their standpoint
is usually at the economic aspects, taking social policy as part of eco-
nomic policy, showing the characteristics of the “Handmaiden Model”
presented by Richard M. Titmuss.
We believe that the key to solving the issue of migrant workers is to
help them integrate into urban society by changing the tone of policy
that migrant workers shall make contributions to economic development
and conscientiously implementing social policies. Also, a long-term view
for urbanization and social structural transition is required. Currently,
migrant workers—due to the particularity of their marginal identity—are
a unique group in urban labor market or in state of unstable employ-
ment. They are drifting from urban to rural areas but rooted in the latter.
They have to date not genuinely “included” into urban life.
The flow of migrant workers into cities is an irresistible trend. In
the future, migrant workers will remain an important part of both the
industrial workforce and social life in urban areas. The integration of
migrant workers into cities not only indicates their entry into the labor
market, but an all-round entry into every aspect of urban life. This is
because of the following reasons:
(1) Inclusion of migrant workers into cities is an intrinsic requirement of
labor force value
For the Chinese migrant workers, the unique feature of their employ-
ment is their low labor force value, which is caused by the separation
between their working environment and living environment. Such sep-
aration can reduce labor cost, because employers don’t have to pay for
the means of livelihood of migrant workers. So they have to bear all the
expenses on housing, medical care, entertainment and children’s tui-
tion, which are beyond their labor force value. Despite a small number
of them dwelling in cheap houses or sheds provided by their employ-
ers, most of them have to rent houses and solve the bread-and butter
problem in high-cost cities on their own. Migrant workers have been, to
a large extent, reduced to an instrument for employers to make money.
According to Marx’s labor value theory, labor value consists of three

parts: (i) The value of the means of livelihood for workers to reproduce
their own labor force. (ii) The value of the means of livelihood for work-
ers to produce offspring, so as to continue labor force supply. (iii) The
expenses on education and training to train the labor force needed for
reproduction. The general labor value theories hold that employers shall
pay for the living expenses of migrant workers on themselves and their
families, it is an objective requirement, otherwise there may be crisis like
“shortage of migrant workers” or other social problems in cities. Given
this, enabling migrant workers to integrate into cities is an essential
means to help them lead a better life and manifest their labor force value.
(2) Inclusion of migrant workers into cities is materialization of policies
In recent years, the Central Government has attached great importance
to the issue of migrant workers and kept promulgating policies in this
regard:
• In 2002, at the Central Rural Work Conference, Wen Jiabao, the

then Vice Premier of the State Council, put forward a principle to
solve the issue of migrant workers: equitable treatment, reasonable
guidance, improving management and doing a better service job.
• In 2003, the Central Government successively issued three direc-
tives (Guobanfa No. 1, No. 78 and No. 79) and amended one reg-
ulation. According to Guobanfa No. 1, the state shall abolish all
discriminatory policies and regulations against migrant workers and
unreasonable fees imposed upon them; help migrant workers solve
the problems of wage arrears or deduction, so as to safeguard their
rights and interests; guarantee their children to access to compul-
sory education; arrange vocational trainings to migrant workers;
improve their living and working conditions in cities; and provide
follow-up services for migrant workers in cities.
• In 2004, the Central Government issued a directive calling for
improvement of the employment environment for migrant workers
in cities.
• In early 2005, the State Council issued a directive to further
improve the employment environment for migrant workers in cities.
Document No. 1 released by the CPC Central Committee in 2005
included migrant workers into the industrial workforce.
382 K. HAN
• In 2006, the Opinions of the State Council on Solving the Problems of

Migrant Workers were released to elaborate on the policy thinking
in this regard.
Although the introduction of a slew of policies has, to a great extent,

improved the public opinion environment for migrant workers, and
pointed out the direction for solving the problems about them, it is still
hard to change their social status as the ones to be sympathized, or help
them obtain recognition and sense of belonging in urban area. In our
opinion, based on the conscientious implementation of these policies,
the way to thoroughly solve the problems of migrant workers is to build
a docking mechanism for them to integrate into cities.
(3) Inclusion of migrant workers into cities is an inevitable choice for
urbanization
When concerning the problems of migrant workers, lots of researchers
regard their flow into cities as a kind of progress in Chinese society and
a driving force for the urbanization process. According to Bai Nansheng
and He Yupeng, the migratory-bird-style flow of rural laborers is a
unique way to gradually realize China’s urbanization and a contribution
to the national economic growth and restructuring.41
Regarding the patterns of China’s urbanization, in the 1980s, Fei
Xiaotong put forward the theory of “small towns”, i.e., promote con-
struction of small towns through vigorous development of township
enterprises, so as to form an urbanization pattern of “farmers leaving the
land but not leaving the hometown”. At that time, there were also the
notions of developing large and medium-sized cities and absorbing the
non-native population. The patterns for China’s urbanization are by no
means a single one, but diversified, migrant workers have thus become a
new leading force to advance the urbanization process. Therefore, their
integration into cities is an important issue concerning China’s urbaniza-
tion and social development in the long run.
(4) Inclusion of migrant workers into cities challenges urban social
management
It should be noted that the flow of migrant workers into cities has also
generated some negative influences, posing new requirements and chal-
lenges for urban social management. The crimes committed by migrant
workers are especially a serious social problem. In his researches, Zhao
Shukai noticed that the number of urban crimes committed by migrant
workers has increased significantly, posing a severe challenge to social

order and management of urban society. Take Beijing for instance,
among the total criminals that were arrested, the proportion of migrant
population accounted for 3.41% in 1980, then rose to 9.28% in 1985
and 23.3% in 1988; of the total criminal cases that are cracked since
1995, those committed by migrant population account for about
50%; among the 10,519 criminals that were arrested in 1998, there
were 11,028 non-native persons, accounting for 62%. The situation in
Shanghai, Guangzhou and other cites is similar or even worse.42
At present, the limitation of urban social management lies in that it
overemphasizes the security control and employment restriction at the
livelihood aspect, but ignores the social integration at the institutional
aspect. The prominent problem is that various regulations and measures
come out in succession, but not fairly compatible with each other; and
there are also some inconsistencies within the management system itself,
which sometimes aggravate the existing conflicts. Therefore, in terms of
management of the urban migrant population, the key to realize their
integration is that policy formulation and system design shall reflect the
idea that migrant population is “new citizen” rather than “temporary res-
ident” that prevailed under the old system. In order to win migrant work-
ers’ recognition of urban government administration, the essential means
is to treat them as equal counterparts, rather than dissidents in cities. This
may not stay in propaganda and public opinion, but institutionalized,
i.e., we shall urbanize migrant workers and let them genuinely integrate
into the urban society. The urban social management of migrant workers is
made up of several parts, such as employment, public security, temporary
resident population, family planning and social security, but the current
focus is placed on employment and management of temporary residents.
In addition to the above defects, the management main bodies are severely
separated; it is the top-down coercive management that plays a dominant
role, instead of immersive management that advocates fair treatment.
13.4.2 Ways for Migrant Workers to Integrate into Cities

Although it is an irresistible trend for migrant workers to integrate into
cities, there are still obstacles to overcome at present. According to our
survey, most migrant workers in cities are young and middle-aged, and
properly educated, they are usually regarded as “elite” in rural society.
However, after these rural elite enter cities, they are forced to reposition
384 K. HAN
themselves in urban society, while the established urban social strata have
formed a circle that shuns from non-native population. The classical social
stratification theory holds that one’s position in society is determined
by multiple dimensions, among which the status group is an important
dimension to distinguish one stratum from another. According to Weber,
a “status group” means that most people in a large group manage to
obtain a special kind of social respect or status monopoly. Status groups
may arise (1) from their own lifestyles, especially their occupational types
(“self-given” or occupational status groups); (2) from hereditary succes-
sion (hereditary occupational status); and (3) from monopolization of
political or priestly power (a status group of politicians or priests).43
The social exclusion of migrant workers, which is a continuation of
the long-standing urban–rural divided household registration system and
regional exclusion, has become an institutional barrier for migrant work-
ers to integrate into urban society.
In order to realize the integration of migrant workers into cities, we
shall pay attention to the following two aspects:
First, in order to realize the integration of migrant workers into cit-
ies, it is important to gradually include them into the community service
system. Community is an important place for survival and dwelling of
individuals, and for cultivating their sense of group belongingness. The
urban community service in China has been implemented for years since
the 1980s thanks to the active initiative of the Ministry of Civil Affairs.
The Opinions of the State Council on Solving the Problems of Migrant
Workers explicitly point out that a community-based service and man-
agement platform for migrant workers shall be built; migrant work-
ers are encouraged to participate in community self-governance, so as
to enhance their awareness as community members, and improve their
abilities of self-management, self-learning and self-service; give full play
to the social integration function of community, and facilitate migrant
workers to integrate into urban life and live side by side with local peo-
ple harmoniously; improve community-based public services and cul-
tural facilities, open urban public cultural facilities to migrant workers,
and allow enterprises with proper conditions to set up leisure venues
for migrant workers; carry out various amateur cultural activities to
enrich the spiritual life of migrant workers. At present, the government
shall further integrate management functions of different departments,
i.e., the labor and social security department and civil affairs depart-
ment shall work together to absorb migrant workers’ participation in
community management and services, help them resolve the difficul-

ties in employment and labor security. At present, the main content of
Chinese community services involves the following aspects: employ-
ment, social security and assistance, health care, family planning, culture,
education and sports, floating population management and services,
and public security. We believe that community management and ser-
vices shall play a greater role in helping migrant workers integrate
into cities.
Second, the integration of migrant workers into cities shall be
achieved by stages to prevent from “honeycomb effect”. To solve the
problems about migrant workers, we shall take overall consideration,
set short, medium and long-term goals, and develop supporting poli-
cies, so as to avoid after effects that result from excessively short-sighted
acts. In the near and medium term, the key to include migrant work-
ers into urban society is to safeguard their economic and security rights
and interests, including employment opportunities, labor remuneration,
occupational safety, education and training, children’s schooling, hous-
ing and medical care. The long-term goal is that migrant workers can
decide on their own whether to include into urban society or return to
their hometowns, benefit from national development like their urban
counterparts, participate in democratic politics on an equal footing, and
join urban residents in cultural activities.44 Moreover, when working out
specific policies for social inclusion of migrant workers’ in cities, the gov-
ernment shall guard against the so-called “honeycomb effect”, which
means that once there is a gap in policies, but no enforceable limits, it is
sure to see massive migrant workers and their children flock into cities.
Given this, in order to solve the problems about migrant workers’ urban
integration, we shall firstly coordinate the development of urban and
rural areas from the macro level. Specifically, if concerning the system
design, we shall set up some thresholds for migrant workers to include
into urban society, such as employment, vocational training and quali-
fication certificates, to prevent from hypercorrection which may lead to
over-urbanization and other new social problems.
13.5 Conclusion
The group of migrant workers is no doubt a progressive force for China’s
social development. The phenomenon of rural laborers flowing into cit-
ies highlights the structural contradiction between China’s traditional
386 K. HAN
agricultural society and modern industrial society. How to give full

play to the positive role of migrant workers in expediting China’s social
restructuring? We believe that the social mobility of migrant work-
ers requires active policy intervention, which is not only the need for
social harmony and stability, but critical for the qualitative change of
China’s social structure. As such, the following two issues are worthy of
discussion.
13.5.1 Institutionalization of Migrant Workers’ Social Mobility

Through a longitudinal analysis of migrant workers’ social mobility, we
have found that their mobility has roughly gone through the following
stages: spontaneous outflow, a labor market mostly constituted by fellow
villagers and friends is formed in cities, and finally the government-led
outflow, i.e., a “blind-orderly-institutionalized” flow process. No matter
it aims for their employment or inclusion into urban society, the impor-
tant measure for institutionalizing migrant workers’ social mobility is to
establish a vocational training system for them, so as to help them access
to further education and skill training, and then enter the labor market in
an organized manner.
13.5.2 Social Mobility of Migrant Workers and Alternative

Paths to China’s Urbanization
Regarding the alternative paths for China’s urbanization, Fei Xiaotong
once put forward the “small towns” theory in the 1980s, advocating
that China shall press ahead with construction of small towns by devel-
oping township enterprises, so as to promote the urbanization model
of “departing farming without leaving native land”. At that time, there
were also proposals for developing large and medium-sized cities and
absorbing non-local population. The social mobility of migrant workers
seems to become an alternative path for China’s urbanization. Since the
1980s, the Chinese large and medium-sized cities are becoming larger
and larger, and there are countless examples of developing local non-ag-
ricultural industries and rural urbanization.45 In the long run, regional
inequality and urban stratification will remain as the objective existence
in China’s urbanization process. The outflow and backflow of migrant
workers just proves that China’s urbanization is by no means via a single
path, but diversified development models.
Notes
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2. NBS Department of Population, Social, Science and Technology Statistics,
MLSS Department of Planning and Finance, 2004, China labor statistical
yearbook 2004, Beijing: China Statistics Press, p. 30.
3. State Council Research Office Discussion Group, 2006, Chinese migrant
workers investigation report, Beijing: China Yanshi Press, pp. 3–4.
4. NBS Department of Population and Employment Statistics, 2017, China
population & employment statistics yearbook 2017, Beijing: China Statistics
Press, p. 16.
5. Popenoe D., 1999, Sociology, trans. Li Qiang, et al., Beijing: China
Renmin University Press, p. 254.
6. Lu Xueyi, ed., 2004, Social mobility in contemporary China, Beijing: Social
Sciences Academic Press, p. 9.
7. Li Peilin, 1996, Social network and social status of migrant workers,
Sociological Study, Issue 4.
8. Wang Xiyu, Cui Chuanyi, Zhao Yang, Ma Zhongdong, 2000, Mobility
of rural labor force and their policy choices based on dual structure of
Chinese society, Management World, Issue 5.
9. Li Qiang, 2004, Migrant workers and stratification of Chinese society,
Beijing: Social Sciences Academic Press, p. 155.
10. Zhai Xuewei, 2003, Social mobility and relationship trust—Impact of rela-
tionship strength on migrant workers’ job-hunting strategies, Sociological
Study, Issue 1.
11. Wang Chunguang, 2003, Social mobility of migrant workers and changes
on their social status, Journal of Jiangsu Administration Institute, Issue 4.
12. Bian Yanjie, 2002, Chinese social stratification and social mobility, Annual
Review of Sociology, Vol. 28, pp. 91–116.
13. Zhao Yaohui, 2003, The role of migrant networks in labour migration:
The case of China, Contemporary Economic Policy, Vol. 21, Issue 4,
pp. 500–11.
14. Giddens A., 2003, Sociology (4th edition), trans. Zhao Xudong, et al.,
Beijing: Peking University Press, p. 310.
16. Sun Liping, 2001, Mobility of Chinese migrant workers, ed. Shen Mingming,
Reform, development and social changes in China, Beijing: Huaxia
388 K. HAN
17. Zhu Li, 2003, Characteristics and social status of the stratum of migrant
workers, Journal of Nanjing University (Philosophy, Humanities & Social
Sciences), Issue 6.
18. Hassler John, Rodriguez Jose V., 2000, Intelligence, social mobility and
growth, The American Economic Review, Vol. 4, p. 888.
19. Li Peilin, 1996, Social network and social status of migrant workers,
20. Blau P. M., Duncan O. D., 1967, The American occupational structure,
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J. O. Jonsson, Sorteringen i skolan, Stockholm: Carlssons, pp. 132–71;
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pp. 251–62.
23. Bai Nansheng, He Yupeng, 2003, Return to the countryside or continue
working in cities? in Li Peilin, ed., Migrant workers: An economic and
social analysis of Chinese Migrant workers in cities, Beijing: Social Sciences
Academic Press, p. 27.
24. Research Group on “Mobility of Farmers and Rural Development”, 1999,
Backflow of migrant workers and rural development, Chinese Rural
Economy, Issue 10.
25. Pang Wen, 2003, Infringement and protection of the rights and interests
of migrant workers in urban areas—An investigation report on the status
quo of the migrant workers in Wuhan City, Urban Problems, Issue 3.
26. Qian Yaxian, 2005, Protection of migrant workers’ rights & interests and
government responsibilities, Journal of Hubei Administration Institute,
Issue 5.
27. Zhang Lihong, 2005, Exploration into and analysis of migrant workers’
political rights, Theory and Modernization, Issue 1.
28. Xinhuanet, 05/08/2006, The opinions of the state council on resolving
the problems about migrant workers, The Central Government portal,
http://www.gov.cn/jrzg/2006-03/27/content_237644.htm.
29.
Research Group on “Migrant Workers”, 1995, The situation of the
migrant workers in the Pearl River Delta, Social Sciences in China, Issue
4; Xu Zengyang, Huang Huixiang, 2002, Survey of the political partici-
pation of the migrant workers in Wuhan City, Strategy and Management,
Issue 6; Li Rui, Tang Liyaning, Chen Yang, Fang Dongping, 2005,
Survey of the working and living conditions of the construction migrant
workers in Beijing, Construction Economics, Issue 8; Li Dingjia, Zhang
Yanping, 2005, An empirical survey and analysis of the migrant work-
ers’ living conditions in Guiyang City, Journal of Guizhou University
of Finance and Economics, Issue 5; Chen Zhuo, Yue Wei, Li Zhizhan,

2005, Survey and analysis of the protection of migrant workers’ rights
and interests in Harbin City, Journal of Qiqihar University (Philosophy &
Social Science), Issue 4.
30. Translator’s note: the “Sunan model” is used to describe the pattern that
the cities of Suzhou, Wuxi and Changzhou, which lie in southern Jiangsu
Province, try to achieve non-agricultural transformation through devel-
opment of township enterprises.
31. Cai Yuejin, Opening a green channel for migrant workers to get employed
in cities, restricted data of Suzhou Municipal Labor and Social Security
Bureau.
Bureau.
33. Suzhou Municipal Labor and Social Security Bureau, Create a sound envi-
ronment for migrant workers and protect their rights and interests (for inter-
nal use only).
Bureau.
ronment for migrant workers and protect their rights and interests (for
internal use only).
36. Xu Zengyang, Huang Huixiang, 2002, Survey of the political participa-
tion of migrant workers in Wuhan, Strategy and Management, Issue 6.
ronment for migrant workers and protect their rights and interests (for
internal use only).
38. Pan Yunkang, Zhang Xueyun, 2006, Migrant workers and urban subject
society, Tianjin Social Sciences, Issue 1.
39. Ren Lixin, 2003, The rights and interests of migrant workers in
dual-structured labor market, Theory Journal, Issue 4.
40. Chen Yingfang, 2005, Migrant workers—Institutional arrangement and
identity, Sociological Study, Issue 3.
41. Bai Nansheng, He Yupeng, 2003, Return to the countryside or continue
working in cities? in Li Peilin, ed., Migrant workers: An economic and
social analysis of Chinese migrant workers in cities, Beijing: Social Sciences
42. Zhao Shukai, 2001, Innovation of urban public management from the
perspective of migrant workers committing crimes, Journal of Oriental
Studies, Issue 5.
390 K. HAN
43. Weber M., 1978, Economy and society: An outline of interpretive sociology,

ed. G. Roth and C. Wittich, Berkeley: University of California Press,
pp. 305–6.
44. Zheng Gongcheng, Linda Wong, 2006, The problems of migrant workers
in China: Theoretical judgment and policy thinking, Journal of Renmin
University of China, Issue 6.
45. For instance, there are Hengdian Group in Dongyang City, Zhejiang
Province; Huaxi Village in Lianyungang City, Jiangsu Province;
Sanyuanzhu Village in Shouguang City, Shandong Province; Nanjie
Village in Luohe City, Henan Province.
Postscript
Social welfare is not only an important gauge for measuring the level of
national wellbeing, but an indispensable condition for building an impar-
tial and harmonious society. In recent years, I have been doing researches
on social welfare in addition to the daily teaching work. It has all along
been my aspiration to produce an academic monograph on social wel-
fare, I believe it is the only means to convey my life philosophy and
career pursuit. Through years’ deskwork and field visits, the book Study
on Social Welfare in Transitional China has taken shape, finally fulfilling
my wish. I hope it could be a reference for the readers studying social
welfare, social security, social policy, social work, sociology and related
domains or doing the practical work.
This book is made up of two parts that respectively focuses on theo-
ries and institutions. The theoretical part, which consists of the former 8
chapters, introduces the theoretical researches on the macro-relationship
between social welfare and Chinese economy, politics and society. The
institutional part, from Chapters 9 to 13, evaluates the institutions that
concern Chinese old people, disabled persons, children, the urban poor
and migrant workers.
This book is partially indebted to the support from my mentors, col-
leagues and students. Wu Zhongmin, professor of the Party School of
the Central Committee of the CPC, is not only my mentor, but bosom

https://doi.org/10.1007/978-981-32-9660-2
392 Postscript
friend for years, has always been strong backing for my learning and
research work. The leaders and colleagues in the School of Labor and
Human Resources of RUC have created a liberal and multidisciplinary
academic atmosphere, which has benefited me a great deal. My graduate
students Wu Wenqing, Huang Shumin, Fan Gaijuan, Guan Hui and Li
Jin discussed with me about some viewpoints in this book and co-wrote
some contents with me. I want to express my heartfelt thanks to all of
them.
From topic selection until formal publication of this book, Director
Pan Yu and Deputy Director Zhang Guanyong of Humanities Branch
of China Renmin University Press provided me with full confidence
and support. Editor Zhao Jianrong edited my manuscript meticulously.
I can’t thank them enough.
I would like to express my gratitude to my family for their accompany
and support to my teaching and research work over the years. They are
power sources for me to keep forging ahead.
In case you come across any error or improper opinion in this book,
please contact me via my Email: kq_han@ruc.edu.cn. I’ll be appreciated
for your comments and suggestions.
Han Keqing
May 15, 2011
Qiushi Building, Renmin University of China
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SOCIOLOGY, MEDIA AND JOURNALISM

More information about this series at

Funded by 本书受到“中华社会科学基金 (Chinese Fund for the Humanities and

Sociology, Media and Journalism in China

Jointly published with China Renmin University Press, Beijing, China

Translation from the Chinese language edition: 转型期中国社会福利研究 by Keqing Han,

Cover design by eStudio Calamar

Part I Central Concepts

2 China’s Social Transition and Social Welfare Reform 17

2.2 Commonly Benefited: Key Principle for China’s

3 Impact of Economic Globalization on China’s Social

3.3.3 Economic Globalization Somewhat

4 Financial Crisis and Institutional Countermeasures

5 Social Stratification Objectives of China’s Welfare

6 Civil Society and China’s Social Welfare Reform 139

6.2.3 Sequential Problems in Civil Society

7 Social Quality Theory and Its Enlightenment

8 “Third Way” Theory and Chinese Way of Welfare

Part II China’s Welfare System

9 Development of China’s Elderly Welfare

9.4.3 Problems Worth of Attention for Marketizing

10 Development of Welfare for the Chinese Disabled

11 Changes on Children’s Palace and Fulfillment

11.3 Changes on the Function of Children’s Palace

12 Welfare Reconstruction for the Urban Poor: Taking

12.4 Qualitative Analysis Results 321

13 Social Mobility and Urban Inclusion of Migrant Workers 339

13.4 Social Inclusion of Migrant Workers in Cities 380

Fig. 3.1 China’s total foreign trade volume in 1978–2001

Fig. 4.3 Number of employees in China’s foreign-funded enterprises

Table 3.1 China’s paid-in foreign investment (Unit: bln USD) 58

Table 4.9 China’s policies in response to the financial crisis 95

Table 12.25 Overall evaluation of the Minimum Livelihood Guarantee

1.1 Definitions of Social Welfare

1.1.1 Definitions of Social Welfare

© China Renmin University Press 2020 3

social members with security to a reasonable degree, keeps them from

1.1.2 Origins of Welfare States

Law (1946), National Health Service Law (1946), Industrial Injury

1.2 Basic Functions of Social Welfare

people’s living standard. To be specific, social welfare could be inter-

1.2.1 Economic Functions

may end up in self-destruction.9 In short, whether China could continue

1.2.2 Political Functions

bureaucratic activities used to playing a decisive role in developing the US

1.2.3 Social Functions

1.3 Reforms and Reconstruction of China’s Social

Ministry of Human Resources were incorporated into the Ministry of

1.3.2 Reconstruction of China’s Social Welfare System

relief. In terms of welfare arrangement, the means-tested relief is only a

China’s Social Transition and Social

2.1 Social Structural Differentiation

2.1.1 Differentiation of Social System and Structure

Han Keqing, 1999, Commonly benefited: An important principle for China’s

© China Renmin University Press 2020 17

2.1.2 Impact from Market Transition on Social Structure

overlapped stratification criteria—income, status and prestige—become

2.2 Commonly Benefited: Key Principle for China’s

enormous “cake” of economic achievement, then everyone would have

2.2.1 Theoretical Bases

2.2.2 Effects of “Commonly Benefited” on Chinese Social Transition

the ultimate goal of social development is to improve the living standard

is mainly decided by the satisfaction of their demands. According to

Fig. 3.1 China’s total foreign trade volume in 1978–2001

Fig. 4.3 Number of employees in China’s foreign-funded enterprises

Table 3.1 China’s paid-in foreign investment (Unit: bln USD) 58

Table 4.9 China’s policies in response to the financial crisis 95

Table 12.25 Overall evaluation of the Minimum Livelihood Guarantee

1.1 Definitions of Social Welfare

1.1.1 Definitions of Social Welfare

1.1.2 Origins of Welfare States

1.2 Basic Functions of Social Welfare

1.3 Reforms and Reconstruction of China’s Social

1.3.2 Reconstruction of China’s Social Welfare System

China’s Social Transition and Social

2.1.1 Differentiation of Social System and Structure

2.1.2 Impact from Market Transition on Social Structure

2.2 Commonly Benefited: Key Principle for China’s

2.2.2 Effects of “Commonly Benefited” on Chinese Social Transition

2.2.3 Issues Need to Be Noticed

2.3 Equality: Core Value of China’s Social Transition

2.3.1 Basic Connotations of Equality

2.3.2 Issue of Equality During the Transitional Period

2.3.3 Discussing the Concept of Equality in the Current

2.3.4 Realization of Equality

2.4 Changes and Reconstruction of Chinese

2.4.1 Changes of Chinese Social Welfare System

2.4.2 Reconstruction of Chinese Social Welfare System

20. Wu Zhongmin, 1995, China’s social development, Hunan Publishing

46. In 1956, the National Outline for Agricultural Development (1956–

Impact of Economic Globalization

3.1 Economic Globalization: An Increasingly

3.1.1 Globalization and Economic Globalization

3.1.2 Impact of Economic Globalization on Wealth

3.2 Impact of Economic Globalization on China’s

Fig. 3.1 China’s total foreign trade volume in 1978–2001 (Source National

Table 3.1 China’s paid-in foreign investment (Unit: bln USD)

Table 3.3 Regression analysis of the impact of per capita total import-export

Constant 4936.410* 9625.349* 3894.020* 5983.769*

3.3 Economic Globalization and China’s Inequality

3.3.1 Economic Globalization: Key Factor Leading to Imbalanced

0XQLFLSDOLW\SURYLQFHUHJLRQ 7RWDOIRUHLJQWUDGHYROXPH POQ86'

Fig. 3.2 Ranking of China’s total foreign volume by municipality/province/

Fig. 3.3 Comparison of FDI among China’s three major regions in 2001

1XPEHURIIRUHLJQIXQGHGHQWHUSULVHV 7RWDOIRUHLJQLQYHVWPHQW 5HJLVWHUHGIRUHLJQFDSLWDO

Table 3.5 Layout of China’s industrial structure (Unit: %)

Fig. 3.5 Changes on China’s industrial structure (Source NBS, 2002, China

Fig. 3.6 Structure of China’s export commodities in 2001 (Source NBS, 2002,