How to Loosen Class Rigidity and Build an Upwardly Mobile Society | Living With the Future ⑪

What this piece can tell us is which mistakes to avoid in the future. As a huge economy, China can now be damaged far more by one small mistake than it could back when it was weak.

Lei Yi, a researcher at the Chinese Academy of Social Sciences, laid out three facts he had come across. The first he saw in the countryside: a migrant worker can often only afford to build a house back home after working in a big city like Shenzhen or Beijing. "Doing the same heavy work in your hometown, no matter how hard you work, building a house is very difficult." The second: in one small Italian town, every young person is determined to get to Milan or Rome. The third: apart from Osaka, which can hold its own against it, no other region in Japan finds it easy to gather people the way greater Tokyo does.

Lei Yi said: "On one hand, we really do think it's a shame that the countryside is gradually withering. So some people propose that urbanization happen in cities near people's hometowns, without their having to go to the big cities. But in practice, for the most part, people still cluster in the big cities — think how many workers those industrial parks in Suzhou hold. Or Shanghai, Beijing, and especially Shenzhen and Dongguan."

The cities he named are also the ones where, over the past year or so, the news and the conflict have concentrated: how to define a city's functions, and how to control its population.

What Lei Yi is describing is urbanization — more precisely, the problem of big-city urbanization.

The other side of the problem is farmers, the countryside, and, touched on in passing, agriculture — what in China is called the "three rural issues": agriculture, rural areas and farmers.

China's urbanization, like its industrialization, produces enormous wealth, but not everyone realizes it.

The core of urbanization is the urbanization of farmers. Yet whenever we face this question — even though we now often call ourselves rich — resources remain a huge problem we cannot get around: saturated cities, education, healthcare, transport, elderly care… every existing tension points back to scarcity.

This is also why policymakers — who are themselves vested interests in the cities — prefer policies that harden class lines.

In the previous article, the scholars' worry about "two nations" and about Latin-Americanization came, at bottom, from policy. The consensus that policy has produced around the "middle class," or the "privileged class," is really a consensus of vested interests; backed by their command of public discourse, it is becoming the consensus of society as a whole. A fractured society is taking shape.

The price of that is giving up the enormous wealth stored inside urbanization: using stability as a pretext while practicing de-urbanization, and forfeiting the golden window for future development.

In this piece, scholars of society and economics each explain, from their own field, what China's own traditional society and the already-developed countries can teach us about loosening class rigidity; what kind of ecosystem a city ought to be; the relationship between the household registration (hukou) system and urban-rural integration; how government can allocate resources in ways that favor fairness; and how to build a society of equal rights underneath the problems of agriculture, the countryside and farmers.

Describing what a mobile, upward, positive society should look like — what kind of future we ought to have — may not be easy. But what this piece can tell us is which mistakes to avoid in the future. As a huge economy, China can now be damaged far more by one small mistake than it could back when it was weak.

1. Why Didn't the U.S. Have the Postwar Slump Everyone Expected?

He Fan, Professor at Peking University HSBC Business School

[Closing schools for migrant workers' children in Beijing, Shanghai and elsewhere] is a crude and blunt way to do things. In the end it drains the vitality of big cities. Because a city is really an ecosystem.

Broadly speaking, raising mobility at the bottom depends on two things: education and migration. But look at education now — the bottom is already sealed off. By a farmer's own arithmetic, primary school and middle school may be worth investing in, because by the end of middle school you can read and write and finding work is no problem. But high school is mostly preparation for the college entrance exam, and there you run into all sorts of unreasonable [institutional] arrangements. The places with the best schools have the lowest cutoff scores — the competition is unfair. Tuition is high, job prospects are poor, and so people are unwilling to invest in it. Solving that, I think, has to come from government.

Take the United States — why didn't it have the postwar slump everyone expected after World War II? It had to do with the policies it adopted at the time. There was the GI Bill, for instance. If you wanted to go to college, the state paid your tuition, so a huge number of veterans went to school. If you couldn't get into a four-year college and went to a junior college or a vocational school instead, the state paid for that too. Today, when improving mobility through education depends on individuals paying tuition themselves, they can no longer afford it — that is the argument for making high school universal. But beyond making it universal, what should high school actually teach, and how? That's a problem too. The other thing is population movement: you have to create conditions that let rural people stay in cities for the long term. How do you get them to stay? The matching public services have to keep up. The hukou system, where migrant workers' children go to school, where migrant workers go when they are sick — all of it has to be solved.

[Closing schools for migrant workers' children in Beijing, Shanghai and elsewhere] is a crude and blunt way to do things. In the end it drains the vitality of big cities, because a city is really an ecosystem. An ecosystem contains all kinds of things: tall trees, low shrubs, and also moss and lichen. You can't say you want only the high-end population and not the low-end population. It is an ecosystem: it has high-end talent and low-end talent, and they support each other. If everyone were high-end talent, if everyone in Beijing had a doctorate, who would take out your garbage? Who would deliver your packages? Who would sweep the streets? It's impossible. You have to build a city where both the so-called high-end population and the so-called low-end population feel at home. A city takes everyone in, the way the sea takes in every river; it can't discriminate. So policies like these are anti-urbanization policies, de-urbanization policies.

2. How Did Mature Societies in Ancient China Achieve Class Mobility?

Ma Yong, Researcher at the Institute of Modern History, Chinese Academy of Social Sciences

If you study Zeng Guofan, Li Hongzhang and the other top figures of each dynasty who were not born into the imperial family, you find that their ancestors three, four or five generations back may have been nothing more than a lowly xiucai, holder of the lowest imperial-exam degree. Generation after generation kept striving, and in the end a Zeng Guofan, a Li Hongzhang or a Zhang Jian would appear. This kept China's classes and strata under constant adjustment — hence the Confucian saying that a family's fortune is cut off by the fifth generation, which is about how fluid strata and classes were.

I have said before, in historical discussions, that although the imperial examination system had many problems, across a thousand years of Chinese agrarian civilization and traditional society it did keep class in a relatively fluid state. People at the bottom could change their standing through the exams — not necessarily by finishing first or becoming a jinshi, the highest degree. Passing as a xiucai alone changed your status, and passing as a juren gave you influence for dozens of li around. In an agrarian society a juren carried great weight, and what he did for his family was extraordinary. If you study Zeng Guofan, Li Hongzhang and the other top figures of each dynasty who were not born into the imperial family, you find that their ancestors three, four or five generations back may have been nothing more than a lowly xiucai. Generation after generation kept striving, and in the end a Zeng Guofan, a Li Hongzhang or a Zhang Jian would appear. This kept China's classes and strata under constant adjustment — hence the Confucian saying that a family's fortune is cut off by the fifth generation, which is about how fluid strata and classes were.

After China entered the modern era, we imported the Western education system. To be honest, we imported it simply because it was something a modern society needs. I have written several pieces on education, which should be findable online, about how the examination system turned into the new education.

What this really involved was education as a new institution. The new education had barely arrived in China before Chinese people were dissatisfied with it. We only formally began it in the 1910s — the New Policies started in 1901, and only then did it really get going. But by the 1920s, in 1926, Liang Shuming was openly voicing his dissatisfaction and withdrew from Peking University. He believed the modern system was about transmitting knowledge but lacked any meeting of minds between teacher and student, and lacked the whole-person influence a teacher should have on a student. Liang Shuming's withdrawal from Peking University in 1926 signaled dissatisfaction with the new education. At that point the new education had existed in China for only 10 years.

3. Importing Grain While Farmland Sits Abandoned: This Is What Policy Has Produced

Ren Jiantao, Professor of Political Science at Tsinghua University

Rural land management really does need a brand-new policy, and it has to arrive in time. Otherwise the countryside as a whole will be flung far behind China's pace of development and become a source of severe instability for the Chinese economy.

Because in a sense China has to move toward large-scale, intensive agriculture. General Secretary Xi Jinping has already stressed this himself. Scaled-up rural operation is intensive agriculture, and intensive agriculture now conflicts with the way we manage rural land. In 1978 the farmers of Xiaogang village wanted the household land-contract system restored. Under large landholdings and collective ownership, that system did fire up people's enthusiasm.

So the change at Xiaogang became one of the most important signals of rural reform and opening-up. But today the rural contract system has become a serious obstacle to the output of land we have farmed for a thousand years. Our land yields are very low. Some people explain this by a natural cause, the loss of soil fertility. That isn't the root problem. The root problem is intensive management of the land. Because of the way our policy is laid out and the dual political identity of city and countryside, we have not been able to farm rural land intensively and raise its performance. So the third point is this: how does the countryside now move toward a new cooperative economy? That's the term the left likes. From the right, or from a modern point of view, it means moving toward an intensive, industrialized farming system. In fact the two sides can agree. The countryside cannot go on for another 40-odd years sustaining its development on a household-based contract responsibility system. The very fact that we now raise the question of food security shows that agriculture, the countryside and farmers can no longer serve as the social and resource stabilizer they were before reform and opening-up. We already have to import grain in large amounts. And on the other hand, absurdly, this household land-contract system has led to farmland being abandoned on a large scale as people move to the cities. Of our 1.8 billion mu of farmland, how much lies abandoned? Because the national land-resource survey hasn't published the figures, we can't really tell. But when I go back to my hometown in Sichuan — my father left the countryside for work and still goes back for a look now and then — basically the whole village's land has been abandoned, and everyone has moved into the county town.

Towns and townships have essentially been emptied out. Given that, rural land management really does need a brand-new policy, and it has to arrive in time. Otherwise the countryside as a whole will be flung far behind China's pace of development and become a source of severe instability for the Chinese economy.

4. Hukou Isn't the Biggest Obstacle to Urban-Rural Integration — Unlocking Farmers' Capital Is

He Fan, Professor at Peking University HSBC Business School

The poor do have assets, but if those assets can't be transferred they can't become capital. Capital is an asset that can be traded. The value of property lies not in ownership but in the right to trade it. If you can't trade it, you can't discover its price. So set ownership aside for a moment: how do you make it tradable?

We always used to say hukou, hukou, but that framing misleads. In Beijing and Shanghai, yes, it is hukou. In first-tier cities, hukou blocks the movement of labor. But go to some third-tier cities and hukou itself isn't the problem. When we did fieldwork in Zhejiang and Fujian, those small third-tier cities were very willing to give migrant workers hukou. Because hukou is really welfare. You can live there without any trouble, but without hukou you can't get public benefits. So these third-tier cities say: we're very willing to provide the same [public benefits] — schooling, healthcare, public libraries, even the vote; whatever there is, we'll give you all of it. For them that's rational too, because to attract investment you need enough labor locally, so wherever labor goes, capital follows. But then ask farmers whether they are willing to give up their rural hukou and move it to one of these small cities, and they aren't. Why? Because they reason: I still have a plot of land back in the village; if it's ever demolished for redevelopment, or if I can't work anymore, I still have that plot to fall back on.

So I think the crux is really the rural land system. The only way to achieve rural revitalization is to let the factors of production be exchanged and move. As for labor, the young and able-bodied rural workforce has basically already gone to the cities; that process is essentially finished. What's left is really this: can urban capital get into the countryside? In the past there was no way for it to get in — what would I do there, what did I have to trade for? If rural land had more chance to be transferred, some capital might flow into the villages with better conditions, and those villages might then have more chance to develop. On the other hand, you have to admit that some villages really are past saving. What do you do then? Then government policy has to backstop them. Some places have fragile ecosystems and were never suited to farming or herding in the first place. For those regions and those people you can only work through land conservation, national parks and other instruments of public finance. But where conditions allow, I think the only way is to let more private capital into the countryside — and once you have brought that part of the countryside back to life, urban-rural integration can genuinely move forward.

Because land in China is extremely complicated. It is collectively owned, and yet homestead plots and the like belong to the farmers themselves. Even during the Three Antis and Five Antis campaigns, the deeds to farmers' homesteads stayed in their own hands. So in form it is collective; in substance it is the farmer's own land, his contracted land, his homestead. How do you protect farmers' rights? That matters a great deal. Hernando de Soto put it this way: the poor do have assets, but if those assets can't be transferred they can't become capital. Capital is an asset that can be traded. The value of property lies not in ownership but in the right to trade it. Without the ability to trade, there's no way to discover a price. So set ownership aside: how do you make it tradable?

For instance, can it be mortgaged? Can it be put in as equity? Can it carry a right of transfer? A right to lease? Property rights are a bundle of many rights. You have to break them apart, then take the ones that can be brought to a transaction and protect them, so that they can circulate.

5. Upward Mobility Isn't Just About Basic Eligibility — It's About How All Resources Are Allocated

Ren Jiantao, Professor of Political Science at Tsinghua University

Upward social mobility itself needs a healthy interaction between a vibrant society and broad upward movement. For the past 20-odd years we have mainly stressed that stability outweighs everything, so the policy tilt, the energy and the resources put into cultivating a vibrant society have all been limited.

Social mobility generally runs in two directions. One is horizontal. This is something China's 1954 Constitution actually affirmed — citizens' freedom of movement. I live wherever I want to live. But China's provincial planning and its stress on where a person is from both restrict horizontal movement. That fits badly with the social order 40 years of market-economy development have produced.

But what more often catches people's inner attention is vertical mobility. Vertical mobility means movement up the social ladder; the question you just raised is whether there is enough room for it and whether the channels are clear. There is also downward mobility, but a society moving down is a tragic one, and people generally don't discuss it. Look at what happened after the Arab uprisings — a great deal of turmoil, the middle class turning into the propertyless. That is malignant downward mobility. What we are looking at is still, relatively speaking, a positive subject. Although some leaders in party and government bodies may not like it — they may feel that discussing upward mobility implies the society has seized up, that class is fixed, status is fixed, the gap between rich and poor is fixed. Is that so? No. Simply affirming that we are discussing how society can move up makes it a positive subject. We are not discussing how society is moving down, which would mean the society had rotted and we were all full of resentment toward it. As long as we still care about moving up, it proves our frame of mind is still positive; we just feel the channels aren't clear enough, the means aren't varied enough, and the results aren't satisfying enough.

Because for China, we have indeed entered a hard period for upward mobility. The reason is that upward mobility was so fast in the early years of reform and opening-up because Mao Zedong's decade of Cultural Revolution had left the society static and frozen, with basically no movement at all. Even the college entrance exam had been abolished; people at the bottom could change their standing only through the very narrow channel of recommendation as "worker-peasant-soldier students," and because enrollment was capped, their numbers stayed small, so most people didn't give upward mobility much thought. Then, with the entrance exam restored in 1978, education became the single most powerful lever for moving up. Ten thousand horses crowding across one narrow bridge: from the late 1970s to the mid-1990s, that built a new national elite.

So objectively, the room and the positions available for moving up have shrunk. That is an objective cause and we have to acknowledge it. Once the generational handover at the top was complete, the space tended to go static. The other side of it, and the more important side, is what we are focused on: policy adjustment. The room for policy adjustment keeps narrowing and the will to adjust keeps weakening. For instance, while the college entrance exam is doing what it does, how do we design national education policy carefully enough to tilt it toward the countryside and the lower strata of society? In other words, you need guaranteed admission quotas, and on this point we haven't given it enough political thought. Over the past three to five years, as rural children's chances of reaching the top universities through the exam have kept shrinking, it has set off wide public debate. That is why elite "985" schools like Peking University and Tsinghua have only lately begun paying attention to it.

But the policy attention given to it is plainly not fine-grained enough. How large a hard quota is set aside, specifically, for genuinely poor rural students who also have strong records, so that they can move? That is missing. The matching policies are missing too — for instance, when rural graduates enter party and government bodies, is there upward movement in social position? Getting into school only settles the basic eligibility to move up; you also need somewhere to work. So is there any tilt in favor of children from the countryside and from the lower strata? This is exactly what Rawls's two principles of distributive justice stress: those disadvantaged by birth and those disadvantaged later in life both need the tilt. In policy terms, the response required is extremely complicated. In our party and government bodies, still heavily marked by the planned economy, it is very hard to do. And because of our whole-nation system, grand displays of scale come easily to us; but fine-grained policy doesn't need grand displays, it needs meticulous design and solid, painstaking work. That is a severe challenge to the way we make and carry out policy today.

So the third point is this: upward social mobility itself needs a healthy interaction between a vibrant society and broad upward movement. If our society is now run largely through tight control — because for the past 20-odd years we have mainly stressed that stability outweighs everything — then the policy tilt, the energy and the resources you can put into planning a vibrant society are all limited.

6. Now That Shenzhen Is a Mature Metropolis, It Has Become Strongly Exclusionary

Ren Jiantao, Professor of Political Science at Tsinghua University

For the urban middle class, and even the privileged, opportunities are so plentiful that they come to look down on the people struggling to move up — and that contempt is the social-psychological ground of a vicious circle

In a sense — let's not take an old city, let's take a new one like Shenzhen — it once drew in the most ambitious officials and the most enterprising ordinary people from everywhere, all converging on Shenzhen. Now that Shenzhen is a mature metropolis, it has also become strongly exclusionary. At that point the society runs short of dynamism, and the desire to move up belongs only to the small number of people who actually are moving up, not to the public as a whole — and that turns into a vicious circle.

So only by building a virtuous circle between upward mobility and a vibrant society can we undo the harm of too little mobility, and truly fire up a society that reaches upward, pursues excellence and therefore seeks room to rise. Right now, even a rural child who gets into university may feel the future isn't really open to him, and his own ambition may not be strong either. Meanwhile, for the urban middle class and even the privileged, opportunities are so plentiful that they come to look down on the people struggling to move up — and that contempt is the social-psychological ground of a vicious circle. So to check this negative, malignant mood, the only way is policy adjustment, recreating the lively conditions of reform and opening-up in the early 1980s. That alone can produce a desire to move up, and a state in which everyone pursues it — a virtuous circle.

7. Letting Farmers Trade Their Land Solves Part of the Property-Rights Problem, but the Core Issue Is Equal Rights for All Citizens

Ren Jiantao, Professor of Political Science at Tsinghua University

Has the state given any thought to a systematic policy design and the resources to follow — vocational training for farmers afterward, and helping them adapt to city life? It looks like relatively little thought has been given to it.

For rural China, the issues involved are extremely complicated. Complicated how? Because China's property-rights arrangement for the countryside can be called an advantage, and can equally be called a disadvantage. The reason is that we have state ownership, collective ownership, and individual citizen ownership. Rural land is under what's called collective ownership, but the biggest trouble with collective ownership is that the land is owned collectively while its use is allotted by household. So in a sense collective ownership in the countryside has become quasi-private ownership; but at the same time this rural land structure has produced a rigid structure full of violent conflict. It is also what has driven the 40-year argument between left and right over rural land rights, the land transfer system, and the way forward for agriculture, the countryside and farmers. In "three rural issues" research, it is fair to say this has always been the problem that troubles China.

Where does this conflicted structure show up? First, we have never actually treated the countryside as one component part of national policy planning. As everyone knows, for the past ten or twenty years the central government's No. 1 Document each year has been devoted to solving the three rural issues. So everyone gets very excited and cheers about how important agriculture, the countryside and farmers must be in central policy. What people don't see is that a No. 1 Document written specially for the three rural issues actually cuts agriculture out of the Chinese system and handles it apart. Even if the intent is to tilt policy and resources toward it and to put it first in the order of business, because it "disembeds" the three rural issues — refusing to treat them as a component part of China's overall modernization — the reality is that no matter how many No. 1 Documents are issued for them, they remain hard to solve. It has detached the countryside from China as a whole, disembedded it; now it has to be re-embedded, considered on the same board as China's modernization.

Second, what does the land system touch on? The nature of the political regime: a people's democratic dictatorship based on the alliance of workers and peasants and led by the working class. This isn't only a question of dividing power; it involves changing the state's ideology. For farmers' land to be freely transferable is for it to become private property, and our state system and political system are firmly against private ownership. So the people who study the three rural issues in order to defend the ideology of the party and the state are not entirely without a case. Unless you make an adjustment at the constitutional level, you can't privatize rural land and let farmers transfer it. Chengdu, for instance, once launched exactly this kind of reform, opening up land transfer and setting up an exchange for land property rights. Trading land property rights is indeed one method. The Chongqing model traded land for an apartment — or you could call it trading land for a change of status: you could move into the city and live in a flat, but you had to hand over your land. This is precisely what that group of researchers defending the established ideological framework have identified as the crux of the problem: in a sense it strips farmers of their land property rights. Because apart from land as the basis of production, farmers have no other means of making a living in the city. In that sense it is also hard to say that privatizing land and allowing transfers would by itself solve the problem. Once farmers move into flats, what do they live on? Has the state given any thought to a systematic policy design and the resources to follow — vocational training for farmers afterward, and helping them adapt to city life? It looks like relatively little thought has been given to it.

So in that sense, the group pushing land transactions, the ones tagged as leaning somewhat right, have a case too. Under the present system of collective rural land ownership, farmers have in effect sacrificed their own land property rights — in other words, when the village committee signs land-transfer agreements with a city on behalf of all farmers, farmers' collective land rights have not really been fully respected. The right has seen this, and argues that rather than continue that way, we should hand the land property rights to the farmers themselves, so they can realize the market value of their land through the principles of market transaction.

So at this point the interpretation of land rights splits badly. This is also where we once meant to make a major breakthrough in trading rural land property rights. Later, because of the split between left and right, the practical difficulty of carrying out the policy, the question of how farmers would take it, and our unwillingness to bear the consequences of a collapse in the order of agriculture, the countryside and farmers, we pulled back.

In that situation, a third problem stands out. Within the whole urban-rural dual system built up since the founding of the country, how should we solve it? One answer is equal citizenship. From the standpoint of the person, the dual identity has to be resolved first. We are a people's democratic dictatorship based on the alliance of workers and peasants and led by the working class. Before the constitution is amended, the first thing is to break the dual identity. We should be equal citizens. You cannot have city residents standing above everyone else, and rural citizens who hold only land property rights that aren't fully protected either; there should instead be a system of equal citizenship for the People's Republic of China. That takes an adjustment at the constitutional level.

The second is subdividing property rights. Correspondingly, on the collective ownership of land, since this basic policy has run continuously since 1968, you need a sense of history. What kind of sense of history? You need to respect fully, within the farmers' collective property right, the concrete share of the land held by each household and each individual, rather than letting the rural collective right be exercised by the village's grassroots power structure claiming ownership on behalf of all farmers. Property rights should be subdivided instead. Subdividing them also means guaranteeing fairness within rural life — for instance, by our customary practice, property rights are unequal between men and women. Once a woman marries out, she stops being an owner. In fact the left-leaning friends who work on the three rural issues have never considered these injustices; they talk about resources in the abstract. Farmers' property rights have a gender dimension, a father-and-son dimension, a brother-and-brother dimension. These finer structures have to be sorted out clearly. Rural land property rights must be subdivided so that every farmer holds a real stake in the land.

The third is trading property rights. Should we head toward a system of large landholdings, or take up China's traditional practice of capping how much land any one person may register in his own name? China needs to think this through carefully.

Interviewees in this report:

Graphics: Feng Xiuxia

Cover image: a still from the film I Am Not Madame Bovary, via Douban