Rural China Key to Building a Harmonious Society

By WEN CHIHUA

China’s rapid and consistent economic growth since implementation of the reform and opening policy in 1978 may be gratifying, but is nonetheless at the root of the central government’s emphasis on the need to maintain social stability over the past year.

In his address to a high-level seminar at the Party School held in Beijing in February 2005, General Secretary of the Communist Party of China, President Hu Jintao, stated that “ … building a harmonious society” would enable “… all citizens to benefit from the achievements of reform and opening,” and “… ensure prosperity for all.” President Hu defined a harmonious society as one incorporating: " Democracy, the rule of law, equality, justice, sincerity, amity and vitality."

China’s annual 9.5 percent GDP growth over the past two decades is nothing short of an economic miracle. In 2004, the country’s GDP hit RMB13.65 trillion (RMB 8.27 = US$ 1) and its per capita GDP surpassed US$1,000, according to sources at the National Bureau of Statistics. Economic glory, however, does not necessarily ensure social stability, says Dr. Ding Yuanzhu, prominent sociologist with the Academy of Macro-economic Research under the National Development and Reform Commission. “On the contrary,” Dr. Ding states emphatically, “social crises are most likely to occur during an economic boom. Behind the current ostensible stability of macroeconomic growth lurks a potential social backlash, born of widening social economic disparity, particularly between urban and rural inhabitants, high unemployment and rises in the cost of medicine, house prices and school fees. "

The income gap between rich and poor and urban and rural residents has widened dramatically in recent years. In 1998 the Gini coefficient -- international index for income inequality within a given population – in China was 0.386, but by now might well have exceeded 0.4, according to the State Development and Reform Commission (SDRC). The Gini coefficient ranges from a minimum value of zero, when all individuals are equal, to a theoretical maximum of one, which expresses absolute inequality. An index of 0.4 indicates glaring societal inequality. The Chinese government has hence pulled out all stops in its efforts to ensure that the people's rights and interests are honored.

One measure was its revocation of agricultural taxes in 28 of China’s 31 provinces, municipalities and autonomous regions. In the three remaining provinces where agricultural taxes are still payable – Shandong, Hebei and Yunnan -- the rate of taxation has been reduced from 5 percent to less than 2 percent. The central government has guaranteed abolition of all agricultural taxes in 2006. This, as experts note, will make a considerable difference to some 730 million Chinese farmers.

Huang Wenfa, a farmer in east China’s Anhui Province, grows rice and wheat on 1,200 mu of land (80 hectares or 198 acres), on which RMB 46.5 tax per mu of crops was formerly payable. Cancellation of agricultural tax at the beginning of 2005 has saved him 55,800 yuan (eight yuan = one dollar at the current rate of exchange). Moreover, the government grain production subsidy of around RMB 20 per mu, to which the Huang household is entitled, translates, as Huang happily confirms, into “Extra income of RMB 24,000 per year!”

The year 2005 also saw a reining in of housing prices. Less available land and a squeeze on bank loans, both to developers and house purchasers, put a brake on the rate of increase in real estate prices; it dropped from 12.5 percent in the first quarter to 10.1 percent in the second to 8.8 percent in the third quarter.

Education and the cost of schooling figures prominently in the endeavor to build a harmonious society in rural China. A study conducted by the China Students' Federation showed that the average cost of a full-time four-year university course is RMB 38,500, equivalent to 40 years’ income for a poor farmer in west China. Consequently many rural children are denied their right to a full education. In order to ease the problem, the Chinese government has guaranteed subsidies to ensure that children from poverty- stricken households in rural areas receive the mandatory nine years of primary and secondary education.
As to healthcare, less than 10 percent of China’s 900 million rural inhabitants are covered by medical insurance, according to the Ministry of Health, compared to 1979, when 80 to 90 percent received medical services through the cooperative health system that operated until the early 1980s. The central government, cognizant that access to healthcare is vital to social harmony in rural areas, is in the process of implementing a new state cooperative health insurance scheme, which will cover all of China’s rural population by 2010. The program -- successor to the now defunct cooperative health system -- has been in place for two years. Rural residents take part on payment of just RMB 10 per year, which is matched by a further RMB 10 each from the local and central governments. By the end of 2004, 80 million farmers had joined the program, 41.94 million of whom claimed a total RMB1.394 billion reimbursement of medical expenses. The central government has also made medical treatment more accessible to 40 percent of China’s citizens by increasing from 1,500 to 2,400 the types of medicine that are under government price control.

Another potential source of social malcontent, Dr. Ding warns, is China’s 120 million or more surplus rural laborers and 30 million urban unemployed. “Until such time as they can reap their fair share of the country’s current economic prosperity, they are a potential source of social catastrophe," says Dr. Ding. In 2005, the Chinese government acted to prevent this contingency by setting itself and fulfilling the target of creating 9 million jobs for urban residents, according to Ma Kai, minister in charge of the SDRC. In a bid to ameliorate unemployment, the government will spend RMB 10.9 billion on "re-employment," and another RMB 3 billion on upgrading industrial health and safety, especially in the country's coalmines.
As Dr. Ding Yuanzhu points out, “The rural population is a vital aspect of the current drive towards a harmonious society. We cannot live in harmony and stability unless the plight of the country’s poverty-stricken farmers is eased. Equal opportunity, whereby the needy have access to basic public services such as healthcare, housing and a minimum income, is pre-requisite to realization of the government’s goal."

Dr Ding’s opinions concur with President Hu’s monition to government officials that the people cannot live contentedly in a society that lacks equity and justice.

Economic inequality is at the root of potential social conflict. "Paying equal attention to all interests is concomitant to the long-term, systematic project of building a harmonious society,” states Jing Tiankui, director of the Sociology Institute of the Chinese Academy of Social Sciences.

The concept of building a harmonious society signifies maturity in the ruling Chinese Communist Party’s basic aim of serving the people. As Dr Ding Yuanzhu says, "These policies constitute the theoretical structure through which to promote sound societal development, steady economic growth and abundant social wealth in the years to come. As long as we abide by them, social harmony is achievable. "

WEN CHIHUA is a journalist with China Features.