China Off Center

ECONOMIC MARGINS

ECONOMIC MARGINS Before the end of 2001, China was admitted into the World Trade Organization (WTO), a very long twenty months after it had been granted permanent normal trade relations with the United States. China’s admission into the WTO signaled ceremoniously what most of the world already instinctively acknowledged : China was the world’s fastest-growing economy and the globe’s chief manufacturer. In this context, it may seem willful paradox to have a section on economic margins. There is nothing at all marginal about WTO accession. It is a privilege extended to only the most exclusive economic winners, the mighty, not the marginal. However, as the reader will have learned by this point, the readings in this book assist a specific process of rearranging conventional perceptions, and this section is no exception. To assert what is least evident in the commonplace triumphalism of globalization —China is a developing country, and its present as well as future economic circumstances are perilous. The peril—human dislocation, the displacement consequent on rapidly developing economies throughout history— emerges clearly in this next reading, hovering in the margins of the national economy a decade ago and now salient in the Chinese urban landscape. There are apparently 150 million “floating” people (liudong renkou) in China. This population consists of those who are not tied to the residences where they are officially registered by the government. Since the late 1980s, and more starkly since the 1990s, the floating population has left the countryside, where economic reforms have brought about labor redundancy and class polarization, to pursue the prospect of economic benefit inherent in the sale of their unskilled or semiskilled labor. This economic and demographic development resembles uncannily what Marx described in volume 1 of Capital as a “reserve army of the unemployed.” Today in China, as in late-nineteenth-century Europe, this unemployed mass proved critical to the maintenance of low wages for workers and the high profitability of industry. Of course, this is an ironic but not sufficiently explored problem for Chinese, one that will soon be intensified by the government’s privatizating and closing of the great majority of state-owned enterprises (SOEs) and township enterprises, which employ 271 40–45 percent of the population. The agreements that China has signed as a condition for its admission to the WTO call for the establishment of rational and efficient enterprises that are above all else profitable. SOEs have long been the least profitable sector of the Chinese economy. The privatization and downsizing of unprofitable state enterprises began in 1998 and have already cost hundreds of thousands their jobs. The government has offered, albeit passively, programs for retraining displaced workers and, in some cases, severance packages that permit a few months or more of sustenance. But there is no larger safety net within which this first wave of China’s urban unemployed could be caught. Labor unrest is not reported in the Western press very much, but it is increasingly common. In a recent analysis of labor unrest in China, Weston (2000, 260, 261) reports that, in March 1997, some of the “worst labor unrest since the 1949 Communist Revolution” occurred in Sichuan, adding that, throughout 1998 and 1999, similar labor disputes were reported in other interior provinces, including Shanxi, Henan, Hubei, and Gansu. At the same time, the out-migration of peasant families from the countryside is likely to produce an explosion when these many millions contend with displaced SOE workers for increasingly scarce urban employment. The margins are swiftly becoming China’s economic mainstream.—Eds. 272 ...