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The Politics of Social Welfare Reform in Urban China: Social Welfare Preferences and Reform Policies

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Abstract

China’s social welfare reform since the mid-1980s has been characterized as incremental and fragmented in three dimensions—social insurance, privatization, and targeting. This paper attempts to explore the micro-foundation of China’s urban social welfare reform by examining the diverse social welfare preferences and the cleavages among societal groups. It argues that the diversity of the societal groups’ preferences for social welfare has given rise to two lines of cleavage in urban China with respect to social welfare—between state sector and non-state sector employees and between labor market insiders and outsiders. The Chinese authoritarian regime’s political priority—economic growth with social stability—has induced the government to accommodate public social welfare preferences in social welfare policies. Therefore, the three dimensions of Chinese social welfare reform policies since the mid-1980s reflect and respond to the social cleavages derived from societal groups’ different preferences for social welfare.

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Notes

  1. Labor market insiders have formal labor contracts with employers and receive stable compensation, including salary and social welfare benefits. In contrast, labor market outsiders either do not have a formal labor contract or have a flexible contract without complete social welfare coverage.

  2. Immergut [32] understands the state broadly, as a set of institutions that constrain developments and actors—“the rules of the game.”

  3. From 1978 to 1999, the central government’s share of national health care spending fell from 32 % to 15 % [37].

  4. According to the regulation, laid-off workers can register at the re-employment center for only three years and health benefits are not insured beyond that period.

  5. This paper will not study employees of government and public institutes such as hospitals, schools, non-profit social associations, etc. because first, their social benefits during the period of reforms have experienced less change compared to those of enterprises employees; and secondly, the numbers of this kind of employee is much smaller than those of enterprise employees.

  6. SOE mainly refers to public enterprises owned by either the central or local government.

  7. It should be noted that, before 2001, laid-off workers (dismissed from the state sector) and unemployed people (mainly from the non-state sector) were officially distinguished by the Chinese government. The former were not officially treated as “unemployed” because they were supposed to maintain labor relations with their enterprises though they were not on the enterprise’s payroll anymore. Laid-off workers maintained their labor relations by registering at the re-employment centers built in the SOEs or the city/district where their enterprises locate. By contrast, “ordinary” unemployed people registered at the Labor Bureau.

  8. Large SOEs are more likely to survive not only because of their size but also because of the state’s preferential policy—“grasping the large, letting go the small” (zhua da fang xiao) during the SOE reforms.

  9. The Chinese concept of labor relations is nearly synonymous with work unit membership. A worker’s dossier (dang’an) was kept in the work unit with which he or she had labor relations. Once labor relations were severed, the work unit ceased to have any formal control over or responsibility for the worker and had to surrender the dossier. See Hurst, W. 2009 [31].

  10. Family planning is also referred to as a task to assume veto power in O’Brien and Li [43].

  11. According to the data of China Ministry of Finance, Chinese government’s fiscal revenue increases by more than 5 % of GPD during the period of 1998–2005. Expenditures on pension and social welfare programs increased by almost 2 % of GDP.

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    Xian Huang

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Table 6 List of informants and interviews
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Huang, X. The Politics of Social Welfare Reform in Urban China: Social Welfare Preferences and Reform Policies. J OF CHIN POLIT SCI 18, 61–85 (2013). https://doi.org/10.1007/s11366-012-9227-x

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