Pew Survey shows that much of the world doesn’t see China as a warm and fuzzy country

 

Shifting Chinese Attitudes on Socio-Economic Inequality Should Concern China’s Leaders

Beliefs among ordinary Chinese regarding the sources of socio-economic inequality have undergone a drastic change over the past decade.  While this shift does not portend widespread open social protest in which people take to streets against the ruling Chinese Communist Party (CCP), it is something that ought to worry President Xi Jinping. 

As is well-known, starting in the 1980s, China rejected the model of tight Communist state control over the economy in favor of market reforms.  To be sure, a high degree of state involvement in and control over the economy remained in place.  The MIT economist Huang Yasheng, whose book, Capitalism with Chinese Characteristics, remains one of my favorite works on the Chinese economy rightfully characterized the post-Maoist model as “state capitalism” (he made this comment during a brief conversation I had with him at a conference on Sino-American relations and the 2016 elections held at my undergraduate alma mater, USC).  Nonetheless private business formation was allowed and encouraged and Deng Xia Peng famously proclaimed “To get rich is glorious.”

One of the “special characteristics,” or 特色 (tè sè), of China’s economic miracle came with dramatically rising socio-economic inequality.  Huang argues that this trend was especially pronounced starting in the 1990s, when he notes that the regime, largely in reaction to the Tian’anmen pro-democratic protests, clamped down on small businesses, especially the Town and Village Enterprises that had been nurtured during the early 1980s phase of market reforms.  This set China apart from its East Asian Tiger economy neighbors, notably South Korea, whose distribution of wealth remained relatively egalitarian during its rapid economic development and industrialization.   

However, much like the guard dog that failed to bark in the famous Sherlock Holmes mystery, “The Adventure of Silver Blaze,” while social protests occurred in factories and the countryside across China, this unrest fell short of expectations.  In particular, it did not generate major pushback against the CCP and its hold on power.  The failure of this to happen is more than little puzzling.  The Chinese populace had, after all, been subjected to several decades of relentless Maoist and Communist ideological indoctrination extolling the virtues of socialist egalitarianism and evils of excessive individual wealth accumulation.    

From 2004 to 2014, a group of scholars based in the US and China, whose work was led and coordinated by Harvard University sociologist Martin King Whyte, conducted detailed surveys of Chinese attitudes on their country’s rising socio-economic inequality.  Their painstaking and rigorous empirical research shed important light on this matter.  The findings of this pathbreaking scholarly investigation are ably summarized and explained by Professor Whyte in his important 2010 book, Myth of the Social Volcano:  Perceptions of Inequality and Distributive Justice in Contemporary China (Stanford University Press, 2010).       

The main findings of the multiple surveys done by Whyte and his collaborators can be summarized as follows.  First and foremost, the Chinese people largely viewed inequality as the logical and legitimate product of a market economy (as noted above, while China may have fallen short of being a full market economy, popular perceptions are what mattered).  In line with this belief, the success of people in this new economic order were seen as stemming from the hard work and ability of individuals.  Conversely, the failure of people to get ahead could be chalked up to their lack of ability and personal failures.  Last but certainly least, people surveyed were optimistic about the future of the Chinese economy and felt they would see marked improvement in their own economic well-being.  What is striking about these beliefs is how closely they dovetail with the attitudes of politically conservative individuals in the West, especially those living in America. 

In the decade since Whyte’s initial 2004-2014 wave of surveys, China has confronted major headwinds to its economic development.  The pace of economic growth had been slowing even before the Covid 19 pandemic shock, when the government’s draconian zero-Covid policies, particularly the mass 2022 lockdowns, further dampened business activity.  These measures led to widespread, if brief, social protest that forced the government to roll them back, while underscoring popular unease over less stable economic and social conditions in China.  At the same time, Xi and the CCP have sought to emphasize ideological compliance and doubled down on support for state-owned enterprise at the expense of private firms.  Private companies involved in training and education, financial services, and some high-tech sectors, have faced government crackdowns, which has helped lead to soaring levels of youthunemployment, especially among university graduates.  While the wages of factory workers have risen, due to labor shortages stemming from China’s adverse demography, employers have responded by automating production, leading to the loss of manufacturing jobs.  And lest we forget, the popping of a massive property bubble and subsequent steep fall in real estate prices is squeezing ordinary Chinese households, whose main store of wealth is the value of the apartments they own.  The real estate meltdown has hit middle-income households especially hard.  Amidst all of these changes, one thing has remained constant:  the high Chinese Gini index coefficient.  That index measures socio-economic inequality, with a .0 coefficient signifying complete equality and a 1 coefficient signifying complete inequality.  According to World Bank data, China had a Gini Coefficient of .371 in 2020, which was only slightly below the US score of .398 in 2021. 

In the wake of all this major economic and social change in China, it behooves us to ask whether Chinese attitudes toward the persistently high levels of socio-economic inequality in their country have changed.  Fortunately, for all of us China hands and observers, Professor Whyte and other scholars, notably cofounder of the Center for Strategic and International Studies (CSIS) “Big Data China” Project, Stanford University Professor Scott Rozelle, have struck again (I will note here that Rozelle’s latest book, Invisible China:  How the Urban-Rural Divide Threatens China’s Rise [University of Chicago Press, 2020] is absolutely essential reading).  In 2023, Whyte, Rozelle, and their colleagues, including Chinese researchers at the Research Center on Contemporary China, Peking University, revisited the questions asked a decade earlier gauging Chinese attitudes on socio-economic inequality.  The bottom on their new findings can be summed up as follows:  boy, what a difference a decade makes!

Their new findings are laid out by CSIS fellows Scott Kennedy and Maria Mazocco in the think tank’s July 2024 report/analysis “Is it Me or the Economic System?  Changing Evaluations of Economic Inequality in China.”  This summary notes that Chinese attitudes on socio-economic inequality have undergone major changes, with people becoming much less optimistic about their own prospects and the future direction of China’s economy. 

To start with, in marked contrast to the earlier 2004-2014 surveys, respondents in 2023 were much less prone to believe that individual lack of effort, schooling, and like were the main drivers of poverty in China.  Chinese more recently surveyed now believe that while education still matters a lot, structural factors, particularly unequal opportunity and lack of fairness in the overall economy are equally important in determining why people remain poor.  Individuals surveyed were also asked why Chinese become rich.  Unlike the earlier surveys, respondents viewed individual level factors as less important compared to structural advantages.  The latter include that all-important commodity in China, good connections, or 关系 (guānxī), coming from growing up in an affluent family that can provide that asset, as well as access to excellent educational opportunities.  Once again, unfair structural economic factors were seen as a determining factor in enabling individuals to becomes wealthy.

Staying on the subject of why Chinese believe individuals succeed or fail economically, the 2023 survey shows a big change attitudes regarding this matter.  In 2014, well over 60% of respondents believed that lack of ability and effort largely explained why individuals were poor.  In 2023, on the other hand, the percentage of those surveyed holding such views had fallen by over half, with 31% agreeing that lack of ability mattered the most and 33% agreeing that lack of effort as important.   

The 2023 survey also looked into popular perceptions of inequality, asking respondents to reply to a series of statements opportunities and the systemic fair in the Chinese economy.  Once again, the differences with 2004-2014 attitudes expressed on this issue are striking.  In 2004, just a quarter of those surveyed disagreed with the statement, “Whether a person becomes rich or remains poor is their own responsibility.”  In the 2023 survey, that figure doubled, rising to 48%.  At the same time, those who agreed with the statement, “In our country, effort is always rewarded,” fell from 62 to 28%.

Thus, in stark contrast to the 2004-2014 surveys, a majority of Chinese now see the economy as rigged against those who are not at the top and strongly favoring individuals who, to use a baseball metaphor, are born on second-, third-base, or home plate.  This view is also reflected in the pessimism respondents expressed about their future economic prospects.  The share of those surveyed who believe they will be better off in the coming years fell across all income levels in 2023 compared to previous years.  As China’s economy faces more severe headwinds and economic opportunities and chances for upward mobility contract, Chinese appear to be less willing to accept socio-economic inequality and are more concerned about the fairness of the system.

Will these rumblings of discontent translate into broad-based and direct protest against the CCP and government?  As I said at the start of this post, methinks that is not likely.  To start with, while social protest has been erupting across China, this unrest has been highly localized and has not targeted state political institutions.  People have directedtheir anger toward real estate developers after buying flats and making mortgage payments for them in unfinished “rotten tail,” or 烂尾 (lán wĕi), apartment buildings.  In another notable case of unrest, people in the capital city of Henan Province, Zhengzhou, mounted a mass demonstration againstbanks over losing their savings after being tricked into putting those funds into fraudulent “wealth management” products.  The one exception to this pattern, the fall 2022 protests against the severe Covid 19 lockdowns, were directed against a specific government policy, as opposed to the CCP’s one-party rule.   

Moreover, even if masses of Chinese were ready to take to the barricades, the government retains immense power to crush such dissent.  In particular, the tight surveillance authorities exercise over ordinary people, which has been buttressed by Big Data/AI and facial recognition—high tech sectors where China is a world leader—makes it nearly impossible to collectively organize mass protests.  Just ask those who participated in the demonstrations that ended the Covid 19 lockdowns.  Even though they sought to hide their faces with white paper, which led the movement to be called the “White Paper,” or 白纸 (báizhĭ), protests, scores were rounded up by thepolice for questioning and warnings after the Covid restrictions were lifted. 

Instead of taking to the streets, Chinese are expressing their frustration over ongoing socio-economic inequality and an economic order that is now seen as systemically unfair by adopting what can be called “passive resistance.”  This behavior is very evident among young Chinese, above all those with college degrees.  After years of diligent study to get into the best universities and attain excellent educational credentials, these individuals are facing an ultra-competitive job market with dismal career prospects and greatly diminished chances of attaining an affluent and comfortable life.  The Chinese dream of securing “moderate prosperity,” or 湿度繁荣 (Shìdù fánróng), much less getting rich, seems to be increasingly out of reach for ordinary people lacking a leg up in life.  These adverse circumstances gave rise several years ago to the “lying flat,” 躺平 (tăng pīng), movement.  As the name implies, “lying flat,” involve rejecting struggling to get ahead to meet the high social expectations and norms Chinese have been expected to follow.  “Lying flat” adherents have eschewed such behavior in favor of just getting by and adopting a low desire and minimalist lifestyle.

A more recent and, for Chinese authorities, more worrisome iteration of this attitude is the 摆烂 (bǎi làn), or “let it rot,” movement.  This outlook actively embraces worsening circumstances, rather than seeking to change them for the better.  As a May 15, 2022 Guardian bǎi làn story noted, this phrase had already, two years ago, generated hundreds of millions of hits and discussions on the Chinese internet, with netizens generating numerous tweaks on this point of view.  One netizen, for example, groused, “Properties in Shanghai too expensive?  Fines, I’ll just rent all my life, as I can’t afford it if I only earn a monthly salary anyway.”  After struggling without success to find employment, another netizen wrote, “Hard to find a job after graduating this year?  Fine, I’ll just 摆烂—stay at home and watch TV all day.” 

The passive resistance of “let it rot” followers can also be seen in the reaction of Chinese women of child-bearing age to government calls for them to have more babies.  While authorities have pleaded with women to have large families to deal with China’s accelerating demographic crisis, theseladies are having none of it, preferring instead to have fewer children, or, in many cases, remain childless (and unmarried).  Indeed, the latest data suggests that the total Chinese fertility rate, or number of children a woman will have in her lifetime, is set to fall from 1.15 in 2021 to 1.0, which is way below the 2.1 level needed to maintain the population.  The trend of lower birthrates is especially evident younger well-educated urban women, who are prioritizing career advancement, or, among those choosing not to do that, pursuing individual self-development over traditional female roles of marriage and motherhood.  These ladies are ignoring public shamingby government authorities over their refusal to produce babies for the motherland.

Besides engaging in passive resistance within China, Chinese are expressing their unhappiness with current socio-economic and, relatedly, political conditions by voting with their feet.  China’s rich have for some time been marked by footloose behavior, which they resumed after the strict Covid lockdowns were lifted and the country ceased being completely sealed off.  According to a June 24, 2024 Financial Times article, it is estimated 15,200 Chinese multi-millionaires and billionaires will leave the People’s Republic this year.  That is up from the 13,800 who left the country last year and will set a new record for emigration by wealthy Chinese.  That figure underscores how pessimism regarding China’s economic future has extended to even the most affluent members of its population.  Key factors driving this exodus are the increasingly arbitrary nature of CCP rule and fear this has inspired about the security of property rights.  The ranks of those eyeing the exit in China go beyond the super-rich.  They have recently included large numbers of middling to poor Chinese who took advantage of an agreement between China and Ecuador, giving them visa-free entry into the latter.  They then undertook the arduous journey across the jungles of Columbia and Panama and across Mexico, paying smugglers to get them into the US illegally.  In 2022-2023, more than 24,000 of these irregular migrants were apprehended trying to enter America, more than the previous decade combined.  That figure speaks to the desperation and despair felt by large numbers of less affluent ordinary Chinese over how they perceive the fairness of the socio-economic order in their country and chances for making headway within it. 

Once again, does any of this poses an immediate threat to CCP’s grip on power?  Although the popularity of “let it rot” among Chinese youth will not topple the current regime, it is something that ought to worry President Xi.  To start with, having lots of high-end, well-educated and high-credential talent decide to leave the high-powered career rat race in favor of a slacker life-style can only harm the Chinese economy.  Younger people are typically less risk averse when it comes to career choices, making them more entrepreneurial and willing to set up businesses in new and cutting-edge fields.  In the US, for example, Millennial and GenZ entrepreneurs are helping to reshape the business environment.  Because they are less stuck in older ways of doing things and more driven to try out new problem-solving methods, well-educated youth can also be a source of fresh ideas and innovation in when working in existing firms, at least among those that open to change.  In these ways, the popularity earlier “lying flat” and more recent “let it rot” outlooks among younger Chinese will hinder China’s effort to dominate new and innovative economic activities.  These attitudes also fly in the face of PresidentXi’s admonition to young Chinese to establish “great ideals” and work into their personal goals the “bigger picture” of the Chinese national and people.

The same can be said about the reproductive choices of Chinese women able to bear children.  The CCP can certainly stay in power for some time to come, even in the face of declining birthrates in China.  But while this behavior is quite understandable and makes perfect sense from the standpoint of many individual women, it is also clearly exacerbating China’s already awful demography:  the past two years saw its population dropby nearly 3 million people (850,000 in 2022 and 2.08 million in 2023).  The Peterson Institute for International Economics notes that China’s population decline is nowbecoming irreversible.  That, in turn, will have highly negative ramifications for the ability of China to support consumption-led economic growth and maintain an adequate labor force.  Having a mass exodus of ordinary working people certainly exacerbates the latter problem.  While China’s footloose rich are not as large in number as their less affluent countrymen, they are taking their wealth out of the country—more on that matter below—depriving it of private capital.

While governmental authorities can easily suppress open protest, dealing with the passive resistance of large numbers of young Chinese and women of child-bearing age to established social norms is a much tougher task.  Addressing the former simply involves arresting and imprisoning those loudly voicing their dissent.  When it comes to “let it rot” followers, what is the state to do?  Deny them chances for career advancement or material perks, such as opportunities to travel?  That would make no difference for people who’ve adopted a minimalist lifestyle and no longer harbor grand employment goals.  It will be hard to get these individuals off their couches if they perceive that the usual channels of career/job success are closed off to them.  This is especially so when those perceptions are increasingly aligned with existing Chinese socio-economic realities.  Arresting such individuals en masse for simply idling away their time watching TV or sipping tea in cafes could well be a step too far, even for a regime as oppressive as the one now ruling China.  The government faces similar difficulties in changing the procreative behavior of Chinese women.  Having ended the harsh one-child policy, it is now discovering that it was much easier to stop couples from having as opposed to getting them to give birth to children. 

Staunching the emigration of non-wealthy Chinese has been a much more tractable problem for the government authorities.  This has simply involved having Ecuador end the agreement for the visa-free entry of Chinese into the country, which was stopped this summer.  Rich Chinese, on the other hand, have the funds and, in most cases, some kind of talent/skill set to enable them immigrate to other countries through legal channels, such as obtaining investment visas and the like.  To be sure, China’s capital controls make getting their wealth out of the country no simple matter.  However, these individuals have been very resourceful in finding clever ways of circumventing such controls.  This behavior accords with my own experience of living in China.  One thing that struck me about the Chinese is that they are geniuses in getting around the rules laid down by governmental authorities.  This talent is borne out of necessity:  anyone who tried to conform to all the ridiculous state dictates on individual behavior in China would never make any headway in life.

The impact of shifting views on socio-economic inequality in China have gone beyond promoting a slacker mentality among large numbers of Chinese and outbound migration from the country.  The pessimism underlying these shifting beliefs can also be seen in the recent highly negative and heavily censored 历史的垃圾时间 (Lìshĭ de Lājī Shíjiān), or “garbagetime of history” commentaries, which began appearing on the Chinese internet a year ago. 

The term “garbage time” has its origins in sports lingo, describing the behavior on the court of basketball teams who have given up after falling hopelessly behind their opponents; this term also describes the 2024 Chicago White Sox, who have set new records for futility in baseball.  The acute observer of contemporary Chinee politics, Claremont McKenna College Professor MinxinPei, argues that the “garbage time” commentaries reflect a fundamental shift in Chinese attitudes about their country’s economic future.  He notes that during earlier bouts of economic hardship, like the 1990s spike in unemployment caused by the mass privatization initiated by premier Zhu Rongji, or the 2007-2008 global financial crisis, which China weathered relatively well, Chinese believed that their country would bounce back.  Pei argues that such optimism is not present in China’s current economic woes.  Thus, a frequent topic in “garbage time” commentaries has been the decline of feudal Chinese dynasties, especially the ill-fated Ming Dynasty (1368-1644), which fell to peasant revolts and a Manchu invasion.  All of this thinking dovetails with the view recently and forcefully expressed by Rhodium Group scholar LoganWright that the global economic influence of China may well have peaked in 2021.  Whether or not this thinking is true, it underscore that the “performative legitimacy” of the CCP rule, which has been based on the people’s belief that the party could deliver the goods economically, is being sharply eroded.     

So what is the most appropriate metaphor for all of the dissatisfaction reflected in the changing Chinese attitudes on socio-economic inequality?  As I have tried to make clear in this blog post, the metaphor of the rumbling volcano about to erupt is misplaced; Professor Whyte is right, as he does in the title of his 2010 book, to call the “social volcano” image of China a “myth.”  Methinks that the fairly common kind of Periodontal gum disease, Gingivitis, is a better metaphor for how the marked shift in how Chinese view socio-economic inequality will impact the long-term political stability of their country.  If most Chinese continue, as they now do, to view persisting wealth gaps in their country as reflecting a rigged and unfair social and economic order, this attitude will, as is the case with individuals suffering from bad gums, eventually cause the current regime to slowly lose its teeth.

The Gingivitis metaphor reminded me of a major eccentricity of the founder of the People’s Republic, the “Great Helmsman” Mao.  Like many Chinese peasants, Mao did not brush his teeth, choosing instead to swish them every morning in green tea.  When told that his relaxed attitude toward dental hygiene was causing his gums to go bad, Mao airily replied, “The tiger does not brush his teeth.”  Well, we all know that a toothless tiger is, to use the common Chinese phrase, a 纸老虎 (zhĭ Lăohŭ), or paper tiger.