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Metamorphosis of Market Economy with Chinese Characteristics and the Criticality of Anhui Peasant Re


Capitalism and capitalist roaders do not any longer invite abhorrence in the People’s Republic of China (PRC). It all ended with resurrection of Deng Xiaoping phenomenon in late 1970s, sounding last post to much touted Maoist socialist mode of economic organization.[i] The country has now come to fathom the cardinals of capitalism in all its hues, albeit without official acknowledgements. It has been managed through conceptual conduits to steer clear criticism of ideological descends in public eyes. The jargon ‘market economy with Chinese characteristics’ has gone down well in the pursuit.

Manifestations and ramifications are but tell tale all around. The foremost victim is China’s egalitarian credentials within the framework of a socialist state. According to Hurun 2009 Wealth Report, China had since 825000 individuals in a population of over 1.3 billion people holding assets worth 10 million Yuan.[ii] Among them, there were then 51000 individuals who held assets approximating 100 million Yuan. Notwithstanding, of the 10 top billionaires with five billion or less individual net worth, there are as many as eight who made their fortune in real estates business. It happened as the long held Marxist tenets of ‘ from each according to his abilities and to each according to his needs’ breathed last.

It shall be music to the ears of most that the Chinese mandarins did not envisage much less work out the pathways to the changes to this effect. It has happened by default. The Chinese peasants in Anhui province characteristically rebelled against the diktat under the erstwhile three leg commune system.[iii] It literally gave wind to the sails of what can be termed as Deng Xiaoping phenomenon, known in popular parlance as ‘ socialist market economy with Chinese Characteristics’. The Chinese mandarins do at best hold credit to have seized the opportunity and then persistently build upon there on, brick by brick and in tandem to the needs of the hour.

There has since been myriad of institutional and other changes in the Chinese economic set up and systems. It literally holds true in the case of all the three sectors of the Chinese economy with minor variations in degree of thrust and preponderance-the primary, secondary and tertiary industries. In overall perspective, the form and shape of such changes constitute a queer blend of the old and the new, and an admixture of the two that tended to reflect transformation and transition with a characteristic pattern of its own kind. The old elements here relates to the socialist institutional framework; and, the resurging critical elements of age old Chinese capitalism.[iv] The new elements constitute a fair amount of convergent effects of globalization and cross-border learning and the tantalizing effects of Chinese local modes as such.

Anhui province has decidedly been a pioneer of change. It took lead first, in the economic life and set the ball rolling for startling changes in the whole perceivable gamut of the society. Education certainly played pivotal role while it grew from strength to strength with growth in societal demands. The phenomenon thus raises a set of intellectual problems, the understanding of which could provide a framework for emulating and/ or taking lessons from the experience. In this paper, there is effort to unfold the process of developmental change in the social life of Anhui.

The assumptions of the study included: the event of Anhui peasants, in particular those belonging to Xaogang Production Brigade, persuasively forcing the authorities to divide commune land and lease them out on contracts to individual household, beaconed little short of a silent rebellion; the Anhui experiments stood ground to establishment of “production responsibility system” and last death nail to the three leg commune system, set up in late 1950s; the success story of production responsibility system thus far in the primary industry led to the secondary and tertiary industries to follow the suit; and, the organization of the economic activities in the existing form and shape in China is much a product of evolution rather than a blue print and hence, full of loop holes and gaps. Schematically, the study shall focus on: the Socio-Geographic Space for the Wind of Change; the Driving Force of System Metamorphosis; and, the Sweep, Sway and Dimension of Change.

Geo-Economic Space for the Wind of Change

Anhui has as many as five topographically distinct areas.[v] They are: Huabei plains, the Jinghuai hill area, the Dabie mountain area, the Wanzhang alluvial plain, and the Wannan mountain area. While the capital city Hefei is more or less cosmopolitan, the above mentioned five topographical regions sport distinct socio-cultural life to 53 minority nationalities besides the Han majority nationality inhabiting the regions.

Organization of economic life in Anhui traditionally quite evidently goes along the nature and character of resource endowments in those topographic areas. As for the primary industry, particularly farming, the areas north of Huai He River typically constitute wheat and sweet potato belt and areas south of Huai He river rice and wheat belt. In particular, Chahu lake basin and Qingyi river valley are known as rice bowl where as Huaibei plain produces both rice and wheat. Huabei plain does as well grow and produce cotton, tea, peanuts and sesame. Wannan hilly areas and Daibei Mountains are mainly tea producing belts. Notwithstanding, the Daibei mountain area abounds in bamboo and oak. The province abounds fresh water fish farming, where the popular species include black carp, grass carp, silver carp, and hilsa herring, etc.[vi]

Almost in the same vein, secondary industry has since grown in raw material rich region. Cheap and trained manpower, infrastructure, proximity to the seat of political decisions and over all policy matrix constituted other factors. Ma’an Shan prefecture, for example, is rich in iron ore. It prompted growth and development of Ma’an Shan Iron and Steel Co. Ltd. that has come to be recognized as one of the 10 largest iron and steel company in China. The case of Anhui Conch Cement Co Ltd. in Wuhu prefecture is no different. Huainan and Tongling prefectures are rich with coal and copper. The province is besides rich in manganese, zinc, lead, molybdenum, phosphorus, alum, gypsum, limestone, and halite. Capital city Hefei sports China’s one of the largest electrical home appliance manufacturing company Rongshida Group. Prominent foreign companies operating in Anhui included ABB Inc., the Coca Cola Co., Mitsubishi Heavy Industries Ltd., Sanyo electric Co. Ltd., Uniliver Plc. and Uniliver President Enterprises Corp., etc.

Life conditions of 65.9 million people of Anhui, which included occupational structure and socio-cultural ethos characteristically draws much of strength and sustenance again from a number of location related variables.[vii] For example, the five topographically distinct regions, spread over to 0.13 million sq Km of territorial expanse falls between 29:41-34:38 North Longitude and 114:119: 37 East Longitude. There is, accordingly, a temperate and humid non-monsoon climate, characterized by a distinct four seasons. Annual thermal and precipitation range of 14-17 degree Celsius and 700-1700 millimetres respectively. The northern flatter part along the Huai He and further north, are akin to neighbouring provinces like Henan and Shandong. In contrast, the southern hilly and mountainous parts are more similar to adjoining hilly and mountainous provinces, like Zhejiang and Jiangxi. It relates to linguistic and their dialect related identity as well.

The family size in urban and rural areas as much among 53 minority nationalities and Han majority nationality differ while there is general trend for a decline. The average family size in Anhui, for example, in 1990 stood at 4.14 persons. Ten years hence in 2000, it gradually dropped down to 3.51 persons. It is likely to dip down still further. With intra-regional variations, there is general trend for increase in the number of single person and nuclear families. This is despite general adoration for joint family system. Han as much as other minority nationality couples traditionally hold strong preference for male child. The sex ratio was extremely low during 1980-86, when the national one child policy was strictly implemented. It presently accounts for 1.8 male children per female birth as against the national average of 1.06.This has obvious telling effects on couple’s reproductive behaviour and their treatment of girl child. They are being breastfed for lesser duration than their boy sibling. The situation is particularly acute, when they had an older sister and no brother.[viii] Working age population between 15-64 years cover as much as 67.03 per cent of the total population. The youth and old age persons between 0-14 years and 65 plus years constituted respectively 25.52 per cent and 07.45 per cent.[ix]

Driving Force of System Metamorphosis

In the province, the peasant households, sick of the archaic commune system, struck chord with their respective production teams to divided the commune land and earn profits after meeting procurement quota. It happened in the broad daylight, and the Third Plenum of the 11th Central Committee of the Communist Party of China (CPC) had but to formally accede to the new arrangement, known as “household responsibility system (HRS: Jiading Shengchan Zhidu).[x] It turned out harbinger of rural and urban reforms, and sounded last post to so much orchestrated collective socio-economic living.[xi] It has also sown seeds for the rise of individualism on the debris of egalitarian sops, euphemistically called “all eating from the same big pot“, and “iron rice bowl”.

In the countryside, the momentum of the reform increasingly touched one and all spheres of economic activities. It set tones for specialization while picking and harnessing talents all over. Where as contracting a piece of land held dominance, the household responsibility system sprang up in fields such as the fishpond, animal husbandry, water conservancy, pest prevention and control and other services. In each case, the contracting individual player acquired rights to keep the residue after paying various taxes and contributing to funds for capital construction, operating expenses, welfare, education, etc. In the urban centres, in the township enterprises, the system has come to be known as factory director responsibility system (HRS: Gongye Zuzhang ShengChan Ziran Zhidu).[xii]

The critical roles of education in such developments in Anhui society, theoretically, stand undisputed. There is gradual increase of institutions to cater different sets of clientele. There is thrust for science and technology related higher education. As many as 917 research institutes of science and technology, 321 of which set up by large and medium enterprises have accordingly come up in the province. Four of the eight universities in the province are thus squarely devoted to science and technology teaching. Quite characteristically, two such science and technology universities are located in Ma’an Shan prefecture and one in Huainan prefecture that constitute the hub of basic industries in Anhui. The fourth one is of course located in the capital town of Hefei. There is one university each devoted to finance and economics as well as medicines respectively in Bengbu and Wuhu prefectures. The two other universities catering largely liberal education are again located in the capital city of Hefei. They control and administer 19 institutes with postgraduate programmes and 83 institutes with undergraduate programmes with intake potentials of respectively 25,000 and 66,000 learners. There are 786 senior middle schools and 3301 junior middle schools. They have intake potentials of respectively 1.3 million and 3.5 million learners. Meantime, there are quite a large number of vocational education schools, capable of enrolling 0.8 million learners. Primary schools, 40 per cent managed and run by the local government and the rest 60 per cent by various social groups including township enterprises cater over 5.5 million primary school cohorts.[xiii]

Sweep, Sway and Dimension of Change

There have been myriad of consequent developments. The rural households, once tightly bound to the farm job in the production teams of their respective communes, has now got to spare additional family work hands for non-farm jobs. Following let up and change in the hukou (household registration) system, they migrated in hundreds and thousands to the urban centres. There have simultaneously been bouts of demographic and economic urbanization of the countryside. The policy to open up of the economy to foreign enterprises and investments, and its integration into the national and global economy provided due impetus. Townships, which assumed the government function from the defunct People’s Commune, did not interfere in the production, management or other operational aspects of economic life. It involved itself just in over all planning of the local economy. The urban household do as well witness astounding changes in their lives. There is all time increase in their options and opportunities for economic gains and social esteem. As the end destination for non-farm jobs for rural migrants, the urban households have had to bear with the consequential pang of demographic changes to social life of the people.

The leeway to take critical decisions besides the incentive to retain fruits of ones initiative has aroused a competitive environ for individual growth and affluence. However, the net benefit to individual players at long last rested on various factors, such as the location and resource endowments of the geographic region, where the specific group of people worked, the sector of their engagement, and whole lot of intervening variables like gender, age, professional competence, etc. All this again, in over all context of macro level policy dynamics and institutional settings that sought to promote creativity with ever-new ingenuity.

Given a fairly good carrying capacity of the productive resources, the province holds population density of 429 persons per Sq Km, which is nearly 3.2 times larger than that of national average. [xiv] However, inter-regional distribution of population is not even for obvious topographical reasons. It is broadly dense in north and sparse in south. The top four densely populated areas include Huaihe plain, places along Chang Jiang and Huaihe rivers, the hill area of Jiang Huai, and mountainous area of West Anhui.

At the end of the day, the socio-economic status of Anhui measures low to medium for China. There are signs of gradual improvement. For example, it held 23rd place in terms of gross national product (GNP) in 2005. It then earned RMB 534.92 billion Yuan. It registered 12.9 per cent growth in 2006 and has come to occupy 21st place.[xv] Introduction of household responsibility system in primary industry and one or the other forms of responsibility system including that of factory director responsibility system in secondary industry besides reckonable growth of tertiary industry hold the credit. The contribution of primary industry to the GNP of the province works out just 16.7 cent as against 43 per cent and 40 per cent respectively in the case of secondary and tertiary industries. The rest others including construction contribute barely 0.1 per cent. The average disposable income of rural residents engaged largely in primary industry thus stood at RMB 2969 Yuan as against RMB 9771.1 Yuan in the case of urban residents engaged in secondary and tertiary industries.[xvi]

Relatively better-placed prefectures and better-organized individual households in resource rich topographic divisions of the province have come to display their distinct life style. It has given rise to a social phenomenon, euphemistically referred as “red eyes disease” to denote social discord, borne of envy against relatively successful people.

The structural change in the work environment, life style, and lastly, in the very approach to social and individual life prefigure stupendous change in the social system, social pattern and social bonds in the Anhui society. Education, both in quantitative and qualitative terms, has been a major catalyst. Theoretically, the change phenomenon in the socio-economic and the demand generated thereof for education as much as the effective access of the social groups in varied form and shape stand to complement and supplement the transformation and change much less growth and development of the society as whole.

Notwithstanding, Anhui society, for the most part carries heritage of Confucian ethics as the majority Han community make up for 99 per cent of the total population. Hui, practicing Islam constitute the majority among the 53 minority nationalities with 0.6 per cent share. While distinct and different in ethnic composition, they subscribe common interests of working and living together. Going by Gerhard Lenski’s typology, adjudged on the grounds of level of technology, communication and economy hitherto attained and imbibed by the whole lot people in their socio-economic life, the Anhui society displays an admixture of advanced agriculture, industrial and virtual societies.

Traditional Anhui family, or Jia, ideally consisted of father, mother, all their sons, unmarried daughters, their son’s wives, and children and so forth for as many generations as possible. When two or more sons survived to adulthood, the family often suffered division in the event of internal feud or the death of father. The separated families in either situation would be beginning a new family unit, and strive to multiply male offspring, expand earthly possessions and desire to set a hallmark in social life. Confucian edicts called for proper family relationships and elaborate rituals. The centrality of family has continued to rule the roost even under communist practices. Surname or Xing worked as a badge of family dignity and lineage identity in forging familial bonds including marriage, individual’s status within the family and society as against his/her sex and age. Once part of the family function was transferred to the community during the heyday of three-leg commune system, the influence of the family, especially the authority of head of the family suffered a drubbing.[xvii] Nonetheless, the Anhui society, particularly the rural ones, sport patriarchal authority hierarchy.

The beeline of rural men folk to urban centers for non-farm jobs and avocations has led to feminization of agriculture and household business.[xviii] The positive sides of the phenomenon included better say for the women folk in the family decisions, acclaim for their individual achievements in local social circle and last but not the least, infusion of elements of self confidence in their personality to stand alone in the hours of personal and family crisis. The development nonetheless goes to alter family authority relationship. In the bargain, the disciplining role father is beginning to come to a naught. Overburdened homemakers suffer alienation, and the newly earned authority often prompts them to take up issues and fight them out in full glare of their children. It has potential to erode the authority biological parents in the family, and the contempt as much as disregard so held in the minds of children of impressionable age as such may, theoretically, get transferred to their surrogate parents at schools (teachers/ headmaster) with a resultant deterioration in the control that school personnel need for students in order to conduct the typical educational programme.

With fewer children per family, there is general craze among parents for higher education for their offspring. It begins with early childhood, peer socialization, etc. This was something that in earlier times was achieved at home in the family of many children. Notwithstanding, a mother and father with one or two children have more time to share emotions. Depending on quality of parent and child conversation, the small family size could theoretically help in rapid cognitive development of the Child. However, it had potential to impair child’s ability to adjust to varied individuals and combinations of them. The phenomenon was driving parents to financial tensions. However, the growing demand to cater learning needs of tiny tots has unleashed latent energy of the society to institutionalise the system. The same holds good for other levels of education. This has implications both for the home and school environment to change to meet the challenge. Rural families and ones in lower socio-economic bracket are put to greater challenge of transition than urban families and those of middle and upper socio-economic brackets.

Anhui society is experiencing transition in sex roles, with the main trend of females seeking, and increasingly obtaining, more privileges and responsibilities formerly held by males. In rural settings, it has come with household responsibility system, particularly where the men folk have migrated to urban centres for non-farm jobs. In urban setting, it is but a result of combination of factors including work schedule. Here, in quite a number of cases, the male folk partake childcare and home making that were formerly the main province of females.

The shifts in sex roles within the family can, theoretically, influence educational programmes, and ultimately professional achievements of a person in several ways. For example, courses formerly limited to one sex have been made available to both, so that boys enrol in home economics classes and girls in industrial and technical studies. Certain type of jobs earlier male bastion has accordingly turned an option for females.

There is apparent change in age role. It is but natural. Societies vary in pattern of age role expectations and those expectations keep on changing over time and by socio-economic status and rural-urban setting. The rural part of the province displays characteristics of low technology agricultural and herding society. In the urban centres, particularly in the townships, the secondary industry, known as town and village enterprises (TVEs), continues to use low technology and hence, hold the characteristic features of nearly early stage of industrial society. As a result, both in rural agricultural and urban industrial settings, the children constitute valuable labour commodities. They start working from an early age as a family help. However, the growing competitive work environ in rural, as much urban settings seem to bring about gradual change. One obvious educational consequence of the age related trend is that more children and youth need to be accommodated in schools. A second consequence is that the efforts of the government to enforce compulsory nine year education runs counter to people’s wish to maintain traditional family labour assignments, in which children and other youths stay at home to help in farming, fishing, care for younger children, and do house keeping.

There is fast change in the caretaker role of the family in Anhui society. In the traditional Anhui society, the mother and grandmother or aunt who lived in the family has had mostly shared child rearing. When the People’s Commune got into being, and community nurseries were set up, the care taking function of the family was transferred to the society. Now, as the People’s Commune system as such is a thing of past, and joint family is a rare commodity, it is but for the biological mother and father themselves to undertake the responsibility. In the rural Anhui where the men folk of the nuclear family have migrated to the urban centres, the job is handled by biological mother alone, and if there is an older sister, the care taking role of the family is shared between the mother and older sibling. In certain cases, it is shared with the extended family as well. In the urban Anhui, the problem has led to the growth of professional care taking organization.

The shift and variations in care taking roles theoretically hold significance in over all socio-economic development of children, particularly the ability to respond in interpersonal relations. The role assignment also help determine which kind of people the child will trust, to whom he, or she gives affection, and the way the child in later life will behave as parents.

These and various other changes taking place in the family life in broad contexts of Confucian heritage, regimental communist practices and the alien influences, etc., the Anhui society, in its totality, stand to set a future course of a learning and growing mould for society of its own kind. It can be a model case to emulate as much as to evade consequences of avoidable brusque developments, if any, for larger effects.

( The writer, Dr Sheo Nandan Pandey, is an eminent analyst on China, based in New Delhi)


[i] Deng Xiaoping, purged twice, carved out his place under sun after outmaneuvering Mao’s successor Hua Guofeng. His aphorism for ideology neutral socio-economic development model, expressed in the cliché “I don’t care if it is a white cat or a black cat; It is a good cat so long as it catches mice”, served him the first purge. Once in forefront along with Liu Shaoqi, he was sent to Xinjian County Tractor Factory in rural Jiangxi province to work as a regular worker during the Great Cultural Revolution. He was severely attacked by the red guards. His son Deng Pufeng was even imprisoned. He was rehabilitated only after the bedridden Zhou Enlai persuaded Mao Zedong in 1974. It did not last long. He was purged once again in March 1976 as a fall out of Qingming Festival. He had to weather “Criticize Deng and Oppose the Rehabilitation of Right wing Elements” movement.


[iii] Anhui Province is situated in northwest of East China. The region has been administered in different names in the past. It draws its present name from two cities in South Anhui-Anqing and Huangshan City. It is known as “Wan” in its abbreviated form. It borders with Jiangsu and Zhejiang on the East, Hhunan and Hebei on the West, Jiangsi on the South and Shandong on the North.

[iv] Chinese capitalism is a phenomenon, which is exhibits role of family (jiading) and contacts (guanxi). It transcends beyond political space. Millions of ethnic Chinese in East and Southeast Asia have since practiced the system with a difference. In theoretical perspectives, the phenomenon conforms Max Weber’s rather than Karl Marx’s view of capitalism. Imbued in China’s socio-cultural contexts, it does not compare with Anglo-American, German or Japanese genres.

[v] There are 17 administrative divisions of Anhui Province, known as prefectures. They are known by the names of their HQ cities. They are: (a) Hefei; (b) Suzhou; (c) Huaibei; (d) Fuyang; (e) Bozhou; (f) Bengbu; (g) Huinan; (h) Chuzhou; (i) Ma’an Shan; (j) Wuhu; (k) Tongling; (l) Anqing; (m) Huangshan; (n) Lu’an; (o) Chaohu; (p) Chizhou; (q) Xuancheng. Capital city of Hefei and six prefecture level cities such as Anqing, Huangshan, Tongling, Ma’anshan, Huinan, Bengbu and Bozhu are but major cities of the province.

[vi] In the primary industry, farming has obvious lead over other components. Total cultivated area in the province for the present runs to nearly 6.2 million hectares, of which the area under wheat cultivation constitutes 1.11 million hectares. In cropping choice, summer and autumn grain crops followed by oil plants hold primacy. Among the commercial crops, cotton followed by tobacco and in plantation, tea hold importance. Cocoon, vegetables and fruits do as well engage sufficient man power and contribute to rural disposable income basket in the province.

[vii] The total population of 65.9 million constitutes 61.1 million permanent hukhou holder residents and the rest floating population, primarily those living in urban areas but without an urban hukou.

[viii] Maurean J graham, Ulla Larsen and Xiping Xu, International Family Planning Perspectives, Vol. 2, No.2, 1998.

[ix] Major Figures on 2000 Population Census of China, China Statistical Press, 2001.

[x] 20 peasants, representing 20 rural households from Xaogang Production Brigade of Fengyang County in Anhui province, were first to come out to put their fingerprints on a contract in Dec 1978 to divide the Commune land among the household. By doing so, they could raise production level to a new height to earn profit after meeting the procurement quota. The practice soon spread to other parts of the province. It earned tacit approval of the then provincial Governor, Wan Li. The popular demand of the kind forced the 11th Central Committee of the CPC to uphold and the government to endorse “production responsibility system” as such in 1982. This is notwithstanding the fact that the system existed in various forms in various areas at different points of time. It was then collective responsibility, where the respective production teams. It answered the problem of shirking and often wastages. In the present form and shape, the contractor is the household. It brought into light incentive to individual players.

[xi] 26,000 People’s Communes, organized during 1958-59 in the frenzy of Great Leap Forward (Da yao jin), interceded much of the socio-economic functions of the Chinese society. In size, power, and relationship to its members, they were much a state agency than a community organization. Espousing the virtue of collective life and living in a pursuit to practice egalitarianism, it went all out to set up communal nurseries and communal dining halls. In the process, the People’s Commune heralded disruption of family life.

[xii] Household Responsibility System has had spontaneous growth and development. It did not have any blue print. As a result, it sprouted in different form and shape and was known by different nomenclature for quite a long time. In townships, the responsibility system in vogue primarily include: (a) Contract Responsibility System (Cheng Bao Jing Ying Zhi); (b) Leasing Management System (Zu Lin Jing Ying Zhi); and (c) Joint Stock System (Gu Fen Zhi).

[xiii] Anhui Province Statistical Year Book 2005, China Statistical Press.

[xiv] Anhui Province Statistical Year Book 2001, China Statistical Press

[xv] Statistical Communiqué on National Economy and Social Development of Anhui Province, 2006, Anhui Provincial Statistical Bureau, NBS survey Office, Anhui.

[xvi] Ibid

[xvii] Three legs in a People’s Commune as existed in China refers to the Commune, the grass root level governmental administrative unit next below to County. It was responsible for the supervision of the State Plan; providing unified local planning; managing important public services; and, oversees major agricultural and conservation projects. It had simultaneous ideological responsibility. Production Brigade and Production Team were the two respective middle and base level organizations, entrusted with the task of fulfilling their quota. The production team came to be referred as basic accounting unit.

[xviii] Anhui constitutes on the net out-migration province

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