Social Structure and Social Stratification in Contemporary China by Lu Xueyi;

Author:Lu, Xueyi;
Language: eng
Format: epub
Publisher: Taylor & Francis Group
Published: 2020-07-15T00:00:00+00:00

A review of the emergence and development of the private economy and the stratum of private business owners in the new era

In the early years of New China, there were more than 9 million individual industrial and commercial households and laborers and 160,000 private industrial and commercial households in China. Through the socialist transformation in the 1950s, the number of individual industrial and commercial households and laborers was reduced to 1.56 million by 1966. After the Cultural Revolution, by 1978, there were only 150,000 individual industrial and commercial households left. The bourgeoisie as a class was eliminated, but as individuals, they were still there. However, a vast majority of them had been transformed into cadres or workers in state-owned or collectively owned enterprises.

Reform and opening up began in 1978 after the 3rd Plenary Session of the 11th CPC Central Committee. In rural areas, private plots were restored first and family sideline production was allowed again. Market trading was opened, and the household contract responsibility system was introduced. As a result, the private economy, which was almost extinct in the land of China, re-emerged and grew quickly. First, at farmers’ markets in small towns, a group of semi-agricultural and semi-commercial farmers did business and ran catering services. Later, markets in counties and small and medium-sized cities also opened up. Unemployed people in cities and towns found their own way out by setting up small businesses and services. In the late 1970s and early 1980s, more than 10 million educated youth returned to cities. The government, public enterprises and institutions could not accommodate them for the time being. They had to find jobs themselves and seek their way out in the market. A large number of individual businesses, services, and small industrial enterprises were set up. Thanks to the existence of urban and rural markets, long-distance transport and commercial exchanges flourished. A large number of households specialized in business, and services came into being. They were households who left the land, but not their home villages. There were some households who became specialized in long-distance transportation. Before long, the phenomenon of hiring workers emerged, and private business owners came into being.

In February 1979, the state convened a meeting of directors of administrative bureaus for industry and commerce. It was proposed that jobless laborers with official household registration should be allowed to engage in repairs, services, and individual handicraft labor, but they were not allowed to hire workers. A document from the meeting was forwarded to various places across the country upon the approval by the Central Committee and the State Council. This was the first document allowing the existence and development of the individual economy since the reform and opening up.

In 1980, the Central Committee convened a national conference on labor and employment and clearly stated: “Under the overall planning and the guidance of the state, a policy of combining employment through labor authorities with self-conscious organization for employment and individuals themselves searching for jobs should be adopted.” This conference opened the way for the existence and development of the individual economy.

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