Ten new characteristics of changes in China's social class structure (Part 2)
Flexible workers have evolved into a large social stratum, placing new pressures on traditional employment forms, as well as on the government's public services, social governance, and regulation.
Hello. In today’s newsletter, I’d like to pick up from where we left off on my previous newsletter "Ten new characteristics of changes in China's social class structure (Part 1)," and look into the second half of this analysis which elaborates on the sixth to tenth characteristics.
Just to refresh everyone's memory, let's briefly recap what I covered last time.
Understanding the latest shifts in China's social classes and their impact on current governance could be of great help in gaining more detailed insights into this country. That's why I picked the article on this particular issue for you, and given the depth and length of the article, we've split the translation into two parts for your reading convenience and only shared the first five features in the last newsletter, leaving the remainder features for this newsletter.
Highlights of the newsletter last time:
1. Deeper integration of the blue and white collars in the expanding working class with their internal differentiation more pronounced
2. Further segmentation of traditional peasantry with the decline of agricultural laborers and the rise of professional farmers
3. Strengthened role of intellectuals in shaping the social cultural-ethical ethos in an era where higher education reaches more people
4. Growth slowdown of migrant workers due to policy adjustments and economic landscapes
5. Steep rise of individual laborers against the backdrop of rapid development of online platforms
The piece was originally published in 行政论坛 Administrative Tribune, Issue 4, 2024, under the title "现阶段中国阶层格局变化的十大新特点 Ten New Characteristics of Changes in China's Social Class Structure at the Present Stage." Administrative Tribune, first published in 1994 and formerly known as Management and Teaching, is a comprehensive academic journal overseen and published by 黑龙江省行政学院 Heilongjiang Academy of Governance (中共黑龙江省委党校 Party School of Heilongjiang Provincial Committee of CPC)
The article, co-authored by 朱光磊 Prof. Zhu Guanglei, director of the United Research Center of Chinese Government Development at Nankai University, and 韩林秀 Dr. Han Linxiu, a research assistant with the same center, provides an in-depth analysis of the ten new characteristics of the social classes in contemporary China and offers a comprehensive view of the complex shifts in social mobility.
Zhu Guanglei, director of the United Research Center of Chinese Government Development at Nankai University
In this edition, we cover the latter half of the ten characteristics.
Highlights:
The non-public sector is on the rise, with private entrepreneurs and enterprises growing in number and getting increasingly socialized.
The stratum of flexible workers continues to expand, placing new pressures on traditional employment forms, government's public services, as well as social governance and regulation.
Civil servants in China, with more regulated income structures and increasingly demanding work responsibilities, still have the potential to grow as more Chinese seek stability over uncertainty.
Social mobility in China remains relatively fluid, with no rigid social stratification taking hold, and education still plays a vital though insufficient role in facilitating upward mobility.
Relations between social strata are overall harmonious, with cooperation and progress being the main focus, but radical ideas or overgeneralization of a few negative cases should be alerted and further avoided.
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▍公有制经济与非公有制经济融合发展，私营企业主阶层的数量有所增长，并且社会化发展特征明显。
There is integration between the public and non-public sector, with private entrepreneurs growing in number and displaying clear signs of socialization.
In China, various economic forms are closely intertwined. China will unswervingly consolidate and develop the public sector and unswervingly encourage, support, and guide the development of the non-public sector, and strive to develop the non-public sector while promoting economic development. With such policy support, coupled with deepening economic globalization and market-based development, private enterprises have maintained steady development, with an increase in investors. Private enterprises are an essential part of the non-public sector. As of September 2023, the number of registered private enterprises nationwide had exceeded 52 million, accounting for 92.3 percent of the total enterprises registered in China. Judging by this figure, the number of private entrepreneurs was around 80 million.
In 2018, while presiding over a symposium on private enterprises, Xi Jinping, general secretary of the CPC Central Committee, stressed the important role the private sector plays in the Chinese economy, saying the sector contributes more than 50 percent of tax revenue, 60 percent of gross domestic product, 70 percent of technological innovation, 80 percent of urban employment and 90 percent of new jobs and new firms. In terms of foreign trade, private enterprises now contribute more than half of the total volume, responsible for 54.3 percent in the first half of 2024. They also play a significant role in technological research and development and external exchanges, especially in people-to-people exchanges with the Hong Kong Special Administrative Region (SAR), the Macao SAR and the Taiwan region, as well as international economic exchanges.
Despite the vigorous development of the private sector, private enterprises are generally small in scale, mainly in low-tech, light-capital sectors without much research and development. Wholesale and retail businesses make up nearly 6.3 percent. By the end of 2022, China had only 349,000 private industrial enterprises above the designated size, primarily in the light industries such as apparel, toy manufacturing, and agricultural and sideline food processing, as well as in bulk consumer goods industries with low technological input, such as ceramics and cement production. Of them, traditional family businesses have a strong presence, and most business owners are not very "rich."
Another noticeable trend in private enterprises is that they are getting socialized at an accelerating pace. First, China's private sector emerged amid a worldwide trend towards a joint-stock system. As their enterprises expand and to reduce investment and operational risks, the joint-stock system becomes a proactive choice for private entrepreneurs. From the outset of registration, businesses are faced with the prospect of having multiple partners, given the increasingly higher threshold for registration, including growing registered capital amounts. From the perspective of ownership, a private enterprise is no longer the private property of an individual as it was in the past.
Second, a significant portion of the enterprise's funds is used to purchase factory buildings and production equipment, most derived from social loans. These funds, as fixed assets, are utilized collectively by a broad workforce rather than being kept in monetary form by the individual business owner. Third, unlike Western capitalists, private entrepreneurs in China are not rentiers completely detached from production and business operations; they remain a combination of capital and managerial labor. Fourth, China's private enterprises are intertwined with public sector economic organizations in socialist modernization and specific business activities. Within the framework of a mature socialist system, they regulate each other and learn from one another in building a socialist market economy, forming a healthy relationship that involves both competition and cooperation. As the mixed economy and socialization of enterprises continue to evolve, the concepts of "private enterprise" and "private entrepreneur" may gradually be replaced by "non-public enterprise" and "non-public entrepreneur."
▍灵活就业者群体已经发展成为一个阶层，且规模庞大，对传统的劳动方式和政府的公共服务、社会管理和相关监管工作形成了新的压力
Flexible workers have evolved into a large social stratum, placing new pressures on traditional employment forms, as well as on the government's public services, social governance, and regulation.
Flexible workers, distinct from the mainstream factory-based employment model, enjoy significant autonomy in labor relations, working hours, income methods, work settings, and benefits. In China, where the population is vast and resources are limited, the longstanding shortage of conventional jobs—further propelled by internet technology and the pandemic—has led to the rise of a flexible workforce characterized by informal employment, flexible working hours, and independent work arrangements.
Individual laborers, freelancers, migrant workers in irregular employment, and domestic helpers such as nannies represent traditional flexible workers. The development of the internet, digital platforms, and mobile communication technology, in alignment with the absorption by digital economy enterprises, has given rise to a new workforce of flexible jobs. They, along with part-time workers, collectively constitute the stratum of flexible workers in a narrow sense. Narrowly speaking, flexible workers primarily include new forms of employment such as ride-hailing drivers, delivery personnel, online talent show livestreamers, online tutors, and tourism guides. They are characterized by flexible employment methods, a scattered group structure, and rapid turnover. Together with traditional flexible workers, they form flexible workers in a broad sense.
As an emerging social stratum, flexible workers usually engage in the circulation, exchange, and delivery of commodities, as well as consumer sectors including cultural training and everyday services. The use of the internet has provided a variety of jobs for workers from different backgrounds, who engage in diverse fields and earn varying incomes. Their work can be done in both groups and individually or on a both long-term and temporary basis. They do not produce goods directly, but deliver and sell them via internet platforms. Those goods now even include culture and art. So they also promote and sell an abundant supply of literary and artistic works on those platforms.
Due to the nature of flexible employment, where specialized job training is not required, most flexible workers do not have an advantage in terms of educational background, skill level, or professional competence, and their income levels are not high. Currently, they are predominantly concentrated in low-end operation and simple service industries as simple laborers in a vulnerable position in social status, remuneration, and social security. At the same time, more well-educated individuals are joining, eyeing opportunities in industries like marketing, course tutoring, and culture introduction. This has also brought some problems, though. Owing to the openness of these industries, private capital intervenes in the choices of social members, leading to common phenomena such as hyping, induced consumption and big data-enabled price discrimination. These practices have had a significant impact on the ideological understanding of social members and public opinion trends.
The "flexibility" of employment conditions not only brings greater uncertainty to the career development of flexible workers but also poses new challenges to traditional labor protection and social welfare systems. The Report to the 20th CPC National Congress explicitly states the need to protect the rights and interests of those in flexible employment and new forms of employment. This indicates that the development scale of flexible employment and the living and working conditions, as well as the social management and security of the workers involved, have received the attention of the Party and the government. Relevant social issues will also be addressed in policy-making.
▍公务员阶层在政治行为方式、规模等方面充分保持稳定，考核方式更加科学，收入更加规范，工作也更加辛苦
Civil servants maintain great stability in political conduct and scale, with more scientific assessment methods, regulated income structures, and increasingly demanding work responsibilities.
According to the latest available data from the 2016 Annual Statistics Bulletin on Human Resources and Social Security Developments published by the Ministry of Human Resources and Social Security, China had 7.19 million civil servants at the end of 2016. Broadly speaking, civil servants should also include employees working in public service and within Party and mass organizations, trade unions, Communist youth leagues, women's federations, and related systems, bringing the total number of civil servants to over 19 million—approximately 1.4 percent of China's total population. These figures are relatively low compared to developed countries. And compared to employees in other industries of China, they do not earn a high salary. Since the 18th CPC National Congress in 2012, under the eight-point decision on improving Party and government conduct and the strict anti-corruption measures, civil servant salaries have become more standardized, and gray income has been effectively curbed.
At present, civil servants are a social stratum with the stablest income and lifestyles as China deepens reform of the socialist market economy and given more uncertainties in international economy and natural factors. This explains why young people are choosing to pursue government jobs over private sector positions. And China needs more civil servants to deal with more public affairs that come with the acceleration of urbanization and the advancement of market-based reforms, and high-level, refined handling of public affairs to meet the needs of the public for better public services and social governance. These factors are likely to translate into an appropriate increase in the number of civil servants, and an improved civil servant structure across different levels and departments under the principle of "cutting the number of positions in central government departments while redistributing them in key areas" while building a digital government.
The civil service exam system was formally established in 1989, and a bachelor's degree has now become the basic requirement for most positions, reflecting an improvement in the overall quality of the workforce. Furthermore, civil servants are moving towards professionalism in recent years as civil service positions, especially those through provincial "Selected and Assigned Graduates" pathway (where governments select high-performing fresh graduates from top universities and assign them into government jobs with civil service titles), specify requirements for the degree and major of applicants. In a phase where modernization and post-modernization advance simultaneously, civil servants must exert considerable effort to manage extensive policy information and daily administrative tasks, and working overtime has become the norm. This stands in contrast to the stereotype that civil servants merely idle away their time in the office, as some claim. Civil servants, just like members of other social stratum, are hard-working laborers and builders of society. Under the leadership of the CPC, civil servants comprise a team dedicated to serving the people, and their fundamental, leading role in society is set to become increasingly prominent.
▍社会流动状况基本正常，并没有形成所谓的“阶层固化”
Social mobility is basically normal, without the so-called "social stratum solidification."
At the current stage, individuals can move from rural areas to cities and pursue their desired professions without policy restrictions. Education remains a robust catalyst for social mobility across different strata, though the widespread availability of education has reduced the marginal benefits of academic qualifications, leading to negative sentiments such as "the futility of studying" or "lying flat." But the fact is education still significantly contributes to enhancing the labor conditions, work environments, remuneration, access to public goods, and social welfare for individuals. As noted earlier, China faces a shortage of skilled blue-collar workers and high-quality white-collar workers. To qualify for related jobs, individuals must possess a certain level of educational attainment and receive specialized training. The importance of educational qualifications has evolved from being a "sufficient condition" to a "necessary condition" for employment.
New technologies, such as the internet, big data, and artificial intelligence, have spawned a plethora of new industries and jobs, imposing new demands on the competency of the labor force. These factors not only provide a consistent impetus for social stratification and mobility, but also afford a more diverse and expansive array of social options. Unreasonable phenomena encountered by members of society during the process of mobility will also exert pressure for the improvement of social policies, particularly by promoting the continuous integration and improvement of unbalanced and inadequate public services and social security resources.
The changing demographic structure in China, coupled with specialization in social division of labor, means there will be an increasing number of job positions with low educational but high skill requirements across various industries. The challenge of coordinating complex job demands with educational positioning remains an area that calls for further research, and it is crucial to optimize both the educational and labor systems. The key to institutional reform lies in breaking through the development ceiling for skilled professionals and establishing promotion channels for workers across different fields. It should be acknowledged that obstacles to long-distance social mobility still exist. China's economic development level remains insufficient to meet people's expectations for upward mobility, and far exceed the actual material gains brought about by its economic development. Additionally, the barriers created by vested interest groups cannot be overlooked.
Currently, there is a need for vigilance with respect to downward social mobility among certain individuals that may occur under the pressure of economic downturn. This is especially pertinent in the context of deepened reform where the market plays the decisive role in resource allocation. Confronted with a sluggish global economy, China is witnessing a shift where numerous individuals are forced to move from more privileged strata to the general laboring class. For example, it has become a frequent occurrence for private entrepreneurs to return to the ranks of ordinary employees. Psychologically, Chinese society has not yet fully prepared for "bidirectional mobility," and the effects of downward mobility caused by economic volatility are particular pronounced within the middle-income bracket, thereby exacerbating the spread of "social stratum solidification" narratives. Nevertheless, it is crucial to highlight that the potential for social mobility among members of Chinese society remains strong, and the avenues for advancement remain accessible. At all times, realizing personal ambitions without robust skills and capabilities is impossible.
▍阶层关系的总体情况正常，合作与进步是主基调，但要提防破坏阶层和谐的人为性因素发生泛滥
Relations between social strata are overall healthy, with cooperation and progress being the main focus, but we must guard against the spread of human factors that might undermine the harmony between social strata.
Over a long period, people from various social strata and sectors have supported and integrated with each other in solidarity, creating a favorable domestic environment for the cause of socialist construction. However, three extreme public opinion trends warrant attention. The first is some try to squeeze private entrepreneurs out under the guise of "socialism." Private enterprises have emerged and developed under the support of the Party, with the policies of reform and opening-up and those aimed at enriching the people and strengthening the nation. They are also unique in encompassing a multitude of elements such as mixed economy model and corporation economy, each with its unique characteristics. The Party and the government have repeatedly emphasized that private enterprises "belong to our own family." The point is various types of private enterprises are an important component of China's basic economic system which sees public ownership play a dominant role with diverse forms of ownership developing side by side, equal participants in the socialist market economy system, and important forces that need to be united in the construction of the primary stage of socialism.
The second trend is that influenced by populism, some individuals often use harsh language to criticize the remarks of "experts," defaming professional technical personnel. Misrepresentations and misinformation are common, and such inappropriate forms of discourse neither represent an attitude towards research and problem-solving nor show respect for knowledge. These actions stir up internal conflict and damage the enthusiasm of professional technical personnel. Currently, experts in various fields mainly work in universities, hospitals, and scientific research institutes. They are those who create and spread knowledge and who even identify significant social issues and provide policy recommendations. They not just undertake research tasks required for national development, but also a significant amount of government research and public service work. Excessive attacks on them are a resurgence of the "futility of studying" fallacy and a social manifestation of an "anti-intellectual" tendency, with some comments even escalating into personal attacks and disruption of public order.
The third trend involves defaming the entire civil service stratum on the ground of the corruption of a few individuals. The vast majority of China's civil servants uphold the principle of "serving the people" and are the backbone of public services and social governance. The slander and verbal attacks against the civil service group are a mistake of targeting an entire social stratum because of the illegal actions of a few. This phenomenon is detrimental to unity among various social strata and can be exploited by those with ulterior motives, potentially leading to a shock to public order.
As reform deepens and new economic forms develop, China's social stratum structure is becoming increasingly complex, necessitating a clear understanding of the development status of each stratum, the relationships between strata, and the relationships between different strata and the government, areas where current research is insufficient. In the new development stage, social stratification and mobility continue, and China should stick to the development philosophy of "trading time for space." "Avoiding unnecessary trouble" is the basic principle for maintaining harmonious relations among social strata. History and the practices of various countries have proven that an inclusive, open social environment and political system have greater developmental advantages. Given the fact that various social strata have overlapping interests and in the face of a complex international landscape, the Party and the government must take proactive measures to manage the relationships between the civil servants, professional technical personnel and other strata, between low-income and high-income groups, between laborers and managers, private capital, and between blue-collar workers and white-collar workers.
The fundamental cause of conflicts between strata is the scarcity of per capita resources. To address the problem, it is essential to firmly grasp the general requirement of modernization, deepen income distribution reform, and balance other differences through economic development; adhere to reform and opening-up, promote communication and exchange among social members, foster cooperation through communication, and resolve differences through exchange; coordinate the relationship between free speech and precise discourse to prevent the spread of adverse public opinion; accelerate urbanization and promote balanced allocation of public resources. Members of all strata should be guided to leverage their enthusiasm and strengths to jointly promote social construction. Social members should not only enhance their professional skills but also improve their ability to discern right from wrong, especially by enhancing their social science literacy to develop a scientific and accurate understanding of China's current development stage. Enditem