Yongxin Zhou - Socialist Welfare in a Market Economy: Social Security Reforms in Guangzhou, China

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SOCIALIST WELFARE IN A MARKET ECONOMY

Socialist Welfare in a Market Economy

Social security reforms in Guangzhou, China

Nelson Chow
University of Hong Kong
Yeubin Xu
China Civil Affairs Cadres Training Institute

First published 2001 by Ashgate Publishing

Reissued 2018 by Routledge
2 Park Square, Milton Park, Abingdon, Oxon OX14 4RN
711 Third Avenue, New York, NY 10017, USA

Routledge is an imprint of the Taylor & Francis Group, an informa business

Copyright Nelson Chow and Yeubin Xu 2001

All rights reserved. No part of this book may be reprinted or reproduced or utilised in any form or by any electronic, mechanical, or other means, now known or hereafter invented, including photocopying and recording, or in any information storage or retrieval system, without permission in writing from the publishers.

Notice:
Product or corporate names may be trademarks or registered trademarks, and are used only for identification and explanation without intent to infringe.

Publisher's Note
The publisher has gone to great lengths to ensure the quality of this reprint but points out that some imperfections in the original copies may be apparent.

Disclaimer
The publisher has made every effort to trace copyright holders and welcomes correspondence from those they have been unable to contact.

A Library of Congress record exists under LC control number: 2001086235

ISBN 13: 978-1-138-71698-8 (hbk)
ISBN 13: 978-1-315-19676-3 (ebk)

Contents

1. PART ONE:
   ECONOMIC AND LABOUR REFORMS IN CHINA
2. PART TWO:
   FROM LABOUR INSURANCE TO SOCIAL SECURITY
3. PART THREE:
   THE GUANGZHOU EXPERIENCE FOR THE NATION
4. PART FOUR:
   A LONG AND WINDING ROAD OF SOCIAL SECURITY REFORM

Guide

China decided to adopt an open-door policy in 1978 and since then its economy has been making remarkable progress. Studies and, hence, books and articles on the successful story of economic development in China are not difficult to come by as there are certainly lessons that other developing countries would like to learn. While these books and articles have not totally ignored the impacts of the economic reforms on the livelihood of the Chinese people, attention was mainly given to the improvements in living standard.

The achievements that China has made in uplifting the living standard of her people should no doubt be applauded. They are even more remarkable when one considers the fact that economic reforms have only started for just over twenty years, and during this period, the extent of poverty has drastically been reduced. What is intriguing is that China, as a socialist country, has achieved all these by first welcoming foreign investments and later by openly adopting a market economy. No wonder queries have been raised, by critics both outside and inside, about whether China has forsaken its socialist ideology or not? The answer given by the Chinese leaders is that as long as the reforms bring in progress, China is on the right way to develop its own form of socialism.

In order to justify that China remains socialist, the Chinese leaders have been conscious to maintain the dominant role of the state-owned enterprises. The state-owned enterprises are important because, as a socialist country, the Chinese government can never let go of the control of the means of production. It also cannot let down the employees of the state-owned enterprises who, for a long time since the founding of the Republic, have depended on the country for their support and protection. Hence, when the Chinese government announced its intention to turn the state-owned enterprises into modern ones, the decision was as shocking as that for adopting a market economy. Employees of the state-owned enterprises, who still constitute the majority of the urban labour force, understood that their 'iron rice bowl' and the protection that they used to enjoy, would soon be cracked, if not broken into pieces.

This book examines the reforms that China has carried out in its state-owned enterprises and the associated labour and welfare systems. It is the product of a study that the authors have carried out, in the latter part of the 1990s, on social welfare development in Guangzhou, the most populous city in southern China. There is no intention to map out here every detail of the changes that state-owned enterprises in Guangzhou have undergone, as well as that in their social security provisions. The focus is on how these enterprises have responded to the call to make them competitive in the market and, at the same time, honour their promises to provide for the welfare of their employees.

Even with this limited objective, we have found the study not an easy one. There are several limitations that we have to accept. First, we tried to understand what has happened at the central level as well as what has actually been implemented in Guangzhou, since it is still imperative for local governments in China to adhere to what has been decided centrally. While central directives are readily available, as they can easily be found in announcements and decisions of the State Council and concerned government departments, information on their application at the municipal level is often missing. We have to construct the picture from the various channels that we are able to get hold of. Though we are certain that our findings on the Guangzhou situation, presented in , should be very close to what has actually happened, there are bound to be gaps that we are unable to close.

Second, as we have mentioned several times in the book, Guangzhou is in fact not representative of other cities in China. We have taken Guangzhou as our case to study because we have the full co-operation of the Guangzhou Academy of Social Sciences and we have benefited a lot from our discussions with their researchers. Notwithstanding the fact that the Guangzhou experience is a non-typical one, we understand that what happened in Guangzhou often became an example for other cities in China to follow. In this way, the study of social security reforms in Guangzhou is a worthwhile attempt.

Third, though we have tried to link up, as far as possible, the reform of state-owned enterprises with that of their social security obligations, the two are not necessarily interrelated with one another. We have to accept that reforms in each area would have their own justifications and it is not easy to say which comes first and has a higher priority.

This book is divided into four parts and twelve chapters. reforms of the state-owned enterprises and the changes in their social security provisions. The final part is a brief discussion of the observations that have arisen from our study.

Ever since the beginning of the economic reforms in China, and hence the reforms of the state-owned enterprises, there is always the question whether or not China can maintain its socialist welfare system. There is certainly no ready answer, but we hope that this book can contribute to a better understanding of this seemingly didactic question.

This book comes out of a study on social welfare in Guangzhou, the most populous city in southern China and one of the first cities in China to go into market economy. We would like to acknowledge the assistance of the Guangzhou Academy of Social Sciences, our collaborator in the study. The study has been made possible with a sumptuous grant from the Research Grants Council of the Government of the Hong Kong Special Administrative Region of the People's Republic of China. Finally we would like to thank the people, whose names are too numerous to mention here, who have assisted us in the course of conducting this study and given us valuable advice.

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