A new class struggle is emerging in China

In the 1990s, when people were free to move from the countryside to the cities and choose what work they wanted to do, social mobility soared. With hard work and indigenous ingenuity, the transformation from farmer to factory owner could be accomplished in a few years. But as the meme suggests, optimism is beginning to fade. The economy is faltering. Opportunities for good jobs are drying up. Many Chinese now talk about shehui guhuaor social stagnation. Among the less fortunate, resentment grows against what is seen as a self-replicating elite. Class hostility increases.

Research led by two American scholars of China, Scott Rozelle and Martin Whyte, found that people in China once accepted stark inequality and remained optimistic that with hard work and skill they could still succeed. But they are now more likely to say that connections and growing up in a wealthy family are the keys to success, the academics found. This has irritated the Communist Party, which claims to have established a “people’s democratic dictatorship led by the working class and based on an alliance of workers and peasants,” as the Chinese constitution puts it. In recent years, China’s leader, Xi Jinping, has called for greater efforts to promote social mobility, while stressing the need to achieve “common prosperity.”

Such conversations, however, have had little visible impact on public sentiment, other than to spook businessmen and wealthier Chinese. In August, a user of Weibo, a microblogging platform, used his account (which has more than 100,000 followers) to rail against the elite’s high pensions. “Ordinary people, do you get it now?” he wrote. “Vested interests are sacrosanct, you can’t even talk about them,” he said. “They’re all parasites,” one person replied. “Vampires,” said another. “Social stagnation is getting worse,” a third chimed in. One even ventured: “Without a new revolution, it’s impossible to solve these bizarre injustices.” But China’s internet is heavily censored. The thread disappeared within days.

Is China really becoming more socially rigid? Experts debate the evidence. A common way to measure mobility is by looking at what economists call intergenerational income elasticity, or IGE. It compares people’s incomes to those of their parents. The closer they are to each other, the smaller the difference in social status between the two generations. IGE measures the ratio on a scale of zero to one, with a higher number indicating less mobility.

A study published in 2019 by the Institute of Labor Economics, a Bonn-based think tank, found that the IGE of those born between 1970 and 1980—the young workers of the 1990s—was 0.39. For those born between 1981 and 1988, it rose to 0.44. As in rich countries, the authors said, the decline in social mobility went hand in hand with rising inequality. The gap between rich and poor in China widened sharply in the 1990s as economic reforms took hold. In another paper, also published in 2019, Mengjie Jin of Nanjing University of Finance and Economics and fellow authors said the country was more socially mobile than America, but less so than Britain, Canada and Germany.

Xi has not admitted that there is social stagnation, but he has called for efforts to prevent it. “In some countries, the widening gap between rich and poor and the collapse of the middle class have led to social division, political polarization and rampant populism,” he said in 2021. “The lessons are enormously important!” In July, Han Linxiu of Nankai University wrote in an official journal that he did not believe there was stagnation, but that “the widespread presence of this negative emotion” was “a potential political risk.”

The C-word

To address the problem, the party published its first policy document on the topic of social mobility in 2019. As usual, the word “class” was not mentioned when discussing China. The idea that new classes could emerge remains unpalatable to the party’s ideologues. But it said that removing barriers to mobility would “provide powerful support for the continued and healthy development of the economy.” And it correctly identified some of the major obstacles.

The most notable is the cover household registration system, which limits the ability of rural migrants to access subsidized urban health care, education, and housing. The nearly 300 million who have moved to cities over the past three decades have enjoyed a one-time gain in social status. But in the cities, they are treated as second-class citizens, often excluded from higher-status jobs because of requirements that applicants hold a local hukou.

The party document called for “equalization of basic services… regardless of hukou status.” And reforms have gathered pace. Some offer migrants with stable jobs the chance to enjoy the same benefits as natives, even without changing their hukou. But hidden barriers remain: many migrants do not have contracts to prove their employment or residency status. And the party is reluctant to allow much change in the largest cities where the best jobs are concentrated. The biggest fear is the impact on social stability if a large number of them become unemployed and refuse to leave.

In rural areas, unequal access to quality education is a major barrier to progress. Rural schools pale in comparison to urban schools in terms of funding and staffing. Children with rural cover are much less likely to finish high school. A big increase in the number of places at universities and colleges in China – six times as many in the decade to 2008 – has opened many more doors. But rural students are vastly underrepresented at elite universities. Liu Baozhong of the Chinese Academy of Social Sciences estimates that at such institutions, nearly 40 percent of students are the children of managers and less than 10 percent are the offspring of farmers – even though more than 35 percent of Chinese live in rural areas.

China’s middle class has grown rapidly, from nearly nonexistent in the 1990s to some 400 million people today, according to official estimates. But within this new class, there is also resentment. Competition for advancement is intense. Parents pour money into helping their children get the best education possible. In 2021, the government attempted to level the playing field by banning most commercial tutoring services for students. But this gave the wealthiest an even bigger advantage: They could afford the sky-high prices that tutors began to charge for their illegal work.

Many Chinese scholars advocate improving public services to reduce the risk of the poor remaining poor for generations, due to the cost of health care, inadequate pensions, meager unemployment benefits and the hidden price of a good education. But the government is not keen on extravagance. “In order to promote the general prosperity, we must not adopt the approach of welfare policy,” Xi warned in 2021. It supported “lazy people,” he said. “Implementing ‘welfare state’ policies that exceed one’s means is unsustainable and will inevitably lead to serious economic and political problems!”

The party’s own elitism doesn’t help. Joining requires a long initiation, including frequent meetings to study party literature. But for civil servants and office workers in state-owned enterprises—desirable types of work—membership is essential for promotion. China’s civil service exam is highly regarded for its fairness, but who joins the party is at the mercy of insiders. And within the bastions of state, nepotism is rife.

In a report on its website in April, even state television agreed. It said that public concern about three-generations-in-tobacco and similar topics on social media was a sign that “there is still quite a bit of ‘inbreeding’ within state-owned enterprises and local government units.” The plague, it said, was “running rampant in hidden corners.” Netizens pounced on the rare admission. Although censors have cracked down on their comments, some survive. “These people are promoting traditional culture,” one joked, referring to one of Xi’s pet projects. “Dragons give birth to dragons, phoenixes give birth to phoenixes, and the son of a rat knows how to dig.”

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