The New York Times


February 29, 2004

China's Wealthy Live by a Creed: Hobbes and Darwin, Meet Marx

Associated Press
The rich, and the Rolls-Royce, fit in at a Beijing mall

EIJING The rich in China these days are moving into the villages of Napa Valley, Palm Springs, Long Beach, Upper East Side and Park Avenue, all in the suburbs of Beijing and Shanghai. When I grew up in Shanghai, places were called New China Road, Workers' New Village and People's Square. Now China's real estate tycoons have chosen American place names, and adorned what they build with Spanish arches, Greek columns and faux Roman sculptures.

But the settings themselves are not bucolic. The vast majority of these new single-family homes, which cost $800,000 on average, are huddled together in walled compounds with 24-hour security guards. The few rich who dare to live on their own in the countryside almost always become targets of burglars, who, in desperate moments, are willing to kill.

This is the dark side to China's new wealth: Envy, insecurity and social dislocation have come with the huge disparity between how the wealthy live and how the vast numbers of poor do. Clear signs of class division have emerged under a government that long claimed to have eliminated economic classes.

China still calls itself socialist, and in an odd sense it is. While the income structure has changed, much that was intended to underpin social order has not. The criminal justice system, for example, has remained draconian. When caught, burglars invariably receive lengthy sentences. But there is no shortage of burglars, and the reason is clear: 18 percent of Chinese live on less than $1 a day, according to the United Nations. The poor are visible on the edges of any metropolis, where slums of plywood apartments sometimes abut the Western-looking mansions.

The most recent measure by which social scientists judge the inequality of a country's income distribution indicates that China is more unequal, for example, than the United States, Japan, South Korea and India. In fact, inequality levels approach China's own level in the late 1940's, when the Communists, with the help of the poor, toppled the Nationalist government.

In 1980, when the turn toward a market economy started, China had one of the world's most even distributions of wealth. Certainly, China before 1980 was a land of material shortage. When I was a child in the 1970's and 80's, I can recall, every family, equally poor, collected ration coupons to get flour, rice, sugar, meat, eggs, cloth, cookies and cigarettes. Without coupons, money was largely useless. Today, huge Western-style supermarkets offer French wine and New Zealand cheese.

But an odd change has come about in some shoppers' minds. As members of China's business and political elite, they have come to believe that the world is a huge jungle of Darwinian competition, where connections and smarts mean everything, and quaint notions of fairness count for little.

I noticed this attitude on my most recent trip to China from the United States, where I moved nine years ago. So I asked a relative who lives rather comfortably to explain. "Is it fair that the household maids make 65 cents an hour while the well-connected real estate developers become millionaires or billionaires in just a few years?" I asked. He was caught off guard. After a few seconds of silence, he settled on an answer he had read in a popular magazine.

"Look at England, look at America," he said. "The Industrial Revolution was very cruel. When the English capitalists needed land, sheep ate people." (Chinese history books use the phrase "sheep ate people" to describe what happened in the 19th century, when tenant farmers in Britain were thrown off their land to starve so that sheep could graze and produce wool for new mills.)

"Since England and America went through that pain, shouldn't we try to avoid the same pain, now that we have history as our guide?" I asked.

"If we want to proceed to a full market economy, some people have to make sacrifices," my relative said solemnly. "To get to where we want to get, we must go through the 'sheep eating people' stage too."

In other words, while most Chinese have privately dumped the economic prescriptions of Marx, two pillars of the way he saw the world have remained. First is the inexorable procession of history to a goal. The goal used to be the Communist utopia; now the destination is a market economy of material abundance.

Second, just as before, the welfare of some people must be sacrificed so the community can march toward its destiny. Many well-to-do Chinese readily endorse those views, so long as neither they nor their relatives are placed on the altar of history. In the end, Marx is used to justify ignoring the pain of the poor.

What the well-off have failed to read from history, however, is that extreme inequality tends to breed revolutions. Many of China's dynasties fell in peasant uprisings, and extreme inequality fed the Communist revolution.

While the gross domestic product has grown at least 7 percent a year in the last decade, the income of the rich has grown much faster than that of the poor. Political and business elites are merging, as state factories are sold at cheap prices to managers who often have government ties.

Wu Jinglian, a senior economist with China's State Council Development Research Center, recently called this "the abuse of power to create income," in an interview with People's Daily, the Communist Party newspaper, which was once just an official mouthpiece. A December article on the paper's Web site gave examples of China's politician-businessmen buying multimillion-dollar properties, for cash, in and around New York City and Los Angeles.

Meanwhile, as the Communist Party recruits successful businessmen as new members, blue-collar workers have lost their moral and social standing. Millions have lost their jobs, and older laid-off workers have been described in many publications as "historical baggage.''

Often, they are from the generation born just after the Communists took power in 1949. My mother is of that generation. Born in 1950, she never finished high school because Mao Zedong closed almost all schools during the Cultural Revolution, from 1966 to 1976. She started work at age 16, at a textile factory, and stayed there until 1999, when the plant closed.

Luckily, I was studying in the United States by then, and soon I began working and sending money home. My mother, unlike some of her colleagues with younger children, didn't have to take a 90-cent-an-hour job as a maid or milk deliverer.

It still puzzles my mother that she has become "historical baggage.'' Weren't her contemporaries the heroes of China's rapid industrialization? Sometimes she notes that she is the unluckiest of three women - my grandmother, herself and me. My grandmother, a daughter of a department store owner in pre-Communist China, went to private schools. I thrived in China's public schools during the economic reform.

The voices of my mother's generation are seldom heard today, because the government puts a lid on news coverage of the layoffs. A mostly compliant press is another holdover from the old days. Sun Liping, a sociology professor at Tsinghua University in Beijing, is one of the few scholars who openly talk about them. "They are not 'historical baggage,' " he said of the unemployed. "The wealth of the Communist country, the assets of the state factories, were created by the blue-collar workers."

He said the reason that the unemployed are not yet despondent is that "they have put their hopes in their children.'' "So long as their children have a chance to get a good education, they won't completely despair," he said.

Here in Beijing, I rode in the cab of a middle-aged driver who works 14 to 15 hours a day, seven days a week, to make $350 a month. "My daughter is bright," he beamed. "She is a college freshman studying interior design. She is our family's hope. When she finishes college, I'll quit this job."

China's leaders have vowed to reduce income disparity, and the press has been eager to cast them as advocates for the poor, much as it once described leaders as exemplars of the proletariat. But they face daunting tasks. They need to build a social safety net and basic medical care with tax revenue equaling 17 percent of the country's G.D.P., according to Anbound Group, a Beijing-based consulting firm. (According to the World Bank, United States tax revenue represents about a third of G.D.P., in a much larger economy.)

There are other ways in which the oddly mixed and cynical legacy of Chinese Marxism presents difficulties for anyone who would try to redistribute wealth. The reform era began with concepts like "truth," "kindness" and "beauty" already devalued; in the Maoist period, people learned to scoff at such notions. For a few decades, Communist ideals like saving humanity from capitalist oppression had displaced Confucian teachings like respecting the elderly. That left a moral vacuum when Communism's grip loosened, and nothing has yet emerged to fill it.

"A lot of people simply don't believe that things like truth, selflessness and altruism exist," said a government researcher in Beijing. "We have a very cynical population."

Copyright 2004 The New York Times Company