For thousands of years, the agrarian heartlands were the very heartbeat of Chinese civilization. Writing years before the establishment of the first imperial dynasty and long before the industrialization of China, reformer Shang Yang deduced that harnessing the plow was the path to harnessing power in the context of the tumultuous Warring States era. His recommendation of “emphasizing agriculture and restraining business” to the Qin state passed down through the subsequent dynasties. Though Shang Yang’s reforms were a boon to Qin productivity, state wealth, and facilitated the establishment of the first Chinese empire, modern China has chosen to address its current challenges with a different approach. While the contrast between agriculture and business remains intact, the growing chasm between the rural and urban worlds may have more negative political ramifications than positive ones in the current Chinese political economy.
Today, the People’s Republic of China’s wealth and power can be found concentrated on the coasts, which have rapidly developed since the 1978 implementation of an “open door policy” ushered in a frenzy of technology absorption and economic entwinement with the world market, marked especially by special economic zone development. Around this time, prevailing perceptions in China conceived the rural sector and the developed, urbanized one as rather disjointed, with economists and policymakers at the forefront of the Coastal Development Strategy envisioning an increased interdependence between the two spheres. The last phase within this roughly 20 to 30 year plan prescribed a leveraging of the wealth derived from industry to develop the agricultural inland areas.
More than 30 years have gone by since this framework was first introduced, and the integration of urban and rural prosperity leaves much to be desired. Income inequality, disparity in education opportunities, and stark differences in market participation show the huge gaps that persist between the urban and rural worlds of the same nation. This sharp contrast is due largely in part to the Hukou system, a policy set by the central government under Mao in 1958, which local governments possess the authority to enforce today. Under this system, citizens must register their birthplace as their permanent residence and can only change this registration by obtaining a special permit. Local governments set numerous bureaucratic hurdles for would-be migrants to jump over in order to control demographics and human capital. Given that the typical direction of migration in China is from poorer, rural areas to wealthier, urban ones, newcomers to the metropolises have an especially onerous time obtaining permits, and therefore frequently find themselves barred from accessing public social support services and stalled in their quest for upward mobility. As a result, the polarization between urbanites and country-dwellers persists.
Sowing Division Under Maoist Socialism
Mao Zedong, a so-called son of the soil, led his army of peasants to victory against the Chinese Nationalist Party and ushered in an age of “Socialist Serfdom.” On an ideological level, Maoism is grounded in the quest for equality, in the destruction of the hierarchical feudal ways and days of old. In reality, the disenfranchisement of Chinese rustics is in many cases firmly rooted in Mao-era policies. As with many other facets of modern Chinese society, stepping out of the shadow cast by Chairman Mao’s legacy poses a serious challenge to untangling the political, economic, and social aggravations of this fissure.
From the very beginning of the Chinese Communist Party’s (CCP) rule, cities have been an exceptional pressure point on regime stability. For most of the Chinese Civil War, cities stayed loyal to the Chinese Nationalist Party, and before that, were largely beholden to foreign interests and exploitation. The CCP desperately needed to grab the reins of these hotspots of crime and dissension, and they perceived the influx of post-civil war migration as a key source of destabilization. Hence, while the immediate aftermath of the war saw the pattern of urban migration that one might expect in the wake of major upheaval, the CCP began to devote serious time and effort to taming both the urban and rural populations- typically by offering the former a carrot and the latter a stick. For example, the countryside was negatively affected by the implementation of the Unified Purchase and Unified Sale system in 1953 by the state setting the price at which it would buy the mandated quota of crops, which naturally came under market value. The government then distributed the purchased food in urban centers, lowering the cost of living there and thereby necessitating more stringent migration policies. Consequently, the hukou system came into effect in 1958, granting governments the power to control people’s movements.
The government promptly began to exercise its newfound powers by recruiting millions to work in the factories meant to fuel the Great Leap Forward. This leap landed with a faceplant, and tens of millions of workers were deported back to the countryside, where tens of millions of people subsequently starved to death. The consequences of this were not only that migration to cities became even more difficult, but also that rural areas were increasingly left to fend for themselves. Depressed by unemployment and all the social ills that entails, rural regions were mandated by Mao to dust themselves off and get to building infrastructure that would boost agricultural production. That surplus, of course, would be handed over to the government at cheap prices to then be exported overseas in order to fund industrial development. The Mao era undoubtedly exhibited urban bias, a bias which persists today. Back then, as is largely the case now, urbanites enjoyed many more public goods and social services than their rural counterparts, such as education, maternity leave, pensions, medical care, and housing assistance. Moreover, the welfare provided to urban residents was in no small part funded by the labor of farmworkers, as by some estimates, the practice of buying agricultural goods at low prices resulted in the government transferring around 534 billion yuan away from the rural sector between 1955 and 1985.
It might be curious that for all the CCP is anxious about discontentment breeding regime instability and achieving social harmony, their long-held practice of neglecting the well-being of the rustics continues to drive a wedge in between the urban and rural populaces. But this is not without consequences; dissatisfaction on both sides has long driven protests and government insecurity, perhaps hinting at an overall pattern of poison from within.
Seedlings of Social Unrest
So what about the reform era? Surely, the government after Mao’s death saw some improvement in the lives of farmers. And indeed, while fiscal policy did raise the price at which the government purchased agricultural goods, thereby benefiting rural areas, the government quickly caved to pressure from urbanites, who sought to maintain their relative advantages. As was the case under Mao, the CCP feared the political repercussions of disgruntled city-dwellers and thus resumed the pattern whereby urban citizens cowed the government into maintaining their higher standards of living.
Even when the government chose to respond to political unrest with military action, such as in 1989 when inflation racked the urban cost of living to the point of protest, the follow-up included amendments to the economic policies in order to quell urban discontent. Furthermore, although the reform period is known for walking back the controlled economy model, pressure for urban protections led to fund transfers to subsidize struggling state-owned enterprises.
For all that the reform period championed economic growth, the government considered it worthwhile to sacrifice economic efficiency in order to ensure regime stability. At the same time, the CCP greatly relies on its ability to deliver on economic outcomes in order to keep the peace. By centering the economic heart of China in urban centers, and devoting significant resources to keeping that heart beating, even at the expense of rural reforms, the government has trapped itself in an unsustainable cycle. With every turn of this cycle, the second-class status of rural citizens becomes more entrenched.
To better compare, consider the CCP response to rural outcry. In the 2000s, the government continued to take over land for urban development with an explicit lack of regard for local input, and these protests were punctuated with a 2010 demand to end the Hukou system. At the time, Premier Wen Jiabao had alluded to the possibility of dismantling the system, but when the government had to respond to the clamor by suppressing circulation of these sentiments, he quickly changed his messaging to suggest more moderate changes.
Herein lies the tension between social stability and economic improvements. To some degree, the economy is an ever-growing vine attached to the tree of Chinese societal harmony. The vine enhances the outward vibrancy of the tree, bestowing a majestic weight, and to remove the vine would peel off the protective bark with it. And yet, cultivating the vine has allowed it to grow beyond the tree’s control, consuming the life force of its host.
This Season’s Harvest
While the economic risks the CCP continues to run by not addressing the growing gulf between rural and urban residents are surely troubling, it is important to acknowledge that the divisions Hukou creates have a human impact on real people’s hopes and dreams and happiness. Where someone lives and what industry they work in is part of a much greater story about what they call home.
The families of those migrants who attempt to make it in the metropolises despite their rural Hukou status are left behind on one side of the river while their loved ones desperately try to swim across. This has led to the phenomena of “left behind children,” a vulnerable group of youths who are emotionally, mentally, and academically delayed while their parents attempt to escape rural poverty. As an earlier section mentioned Socialist Serfdom, whereby Chinese society under Mao saw the systematic treatment of rural residents as the underclass, it appears this lowest class has split off into an additional caste, made up of migrants. While they do not have the same privileges as urban Hukou holders, they do have access to the amenities of city living and in general enjoy higher standards of living compared to the countryside. This comes at the cost of the families they leave behind, as Hukou restrictions limit access to both childcare and quality education. It is estimated that 1 in 5 children in China are “Left Behind,” unable to see one or more of their parents for most of the year.
On the flipside of this, the fallout from the Covid pandemic and the subsequent rise in youth unemployment saw numerous remarks made in the spring of this year regarding a push to return China’s youths to the countryside. Are we seeing the start of a new wave of “rustication”? President Xi has recently encouraged young professionals to focus on reenergizing rural areas, to convert their urban-bred talents into countryside innovation. The idea seems to have had a decent reception, with reports by the Chinese government of increased migration to rural parts leading to improved agricultural production and higher quality rural tourism. Social media has likely played a role in idealizing farm life, an Asian counterpart to the popular cottagecore aesthetic. However, the idyllic pastoral life is not at all like influencers portray, which the young rusticated urbanites soon discover. The comforts and economic opportunities of the city still hold considerable sway over someone’s choice of where to live, especially if that person is born with an urban Hukou and thus has greater options available. These accounts make it difficult to believe at face value CCP messaging about the great enthusiasm the youth supposedly have for rural life and reads more like an attempt to preempt social turmoil brought on by idle, disillusioned young people. The government’s decision to stop reporting the rate of youth unemployment altogether makes the whole narrative even more suspect.
This sense of disillusionment is growing stronger especially in the housing market, which like many aspects of the Chinese economy is an incoming crisis of the government’s own making. The housing market remains a sector under immense government oversight if not outright control, and the current issues it poses is in no small part linked to the Hukou system. Hukou is an instrument with which the government can control demand, and this leads to neglect of the supply side. Moreover, poor property tax systems render them an inadequate means of adjusting housing prices. And of course, in spite of the difficulties the government sets in citizens’ ways, the advantages of living in a city are still much greater in many cases than the difficulties. Decades of urban bias have built myriad social services, and even for those migrants who do not have the urban Hukou status to take full advantage of welfare, having some benefits is better than none. Although, because of the aforementioned informal caste system, migrants tend to be relegated to renting, which comes with significantly fewer benefits than home ownership. Home ownership is made even more valuable by the fact that it often dictates who gets priority to send their children to the best schools. Sometimes, even the length of time a person has resided in a school district can give them the upper hand in admissions.
In essence, the urban populace has been pitted against one another to fight for limited housing, but the government has made housing so necessary to access the full benefits of being an urban resident that demand climbs even as the fight becomes more fatiguing. The Hukou system ostensibly seeks to curb the demand, but in fact it only aggravates these various points of contention.
The housing crisis is a symptom of the Hukou system failing both Chinese citizens and the Chinese government. But while the former would likely be better off with the abolition of the system, the latter clings to any means of controlling its people. Some have suggested that the government simply does not know how to bring Hukou to an end without sparking an upheaval that would threaten the very stability it is trying to maintain, while others speculate that this is a sign of local governments flouting central government recommendations. Perhaps it is instead correct, if radical, to say that the system of Chinese government itself is unsustainable, constantly locked in desperate need to bolster prosperity and keep a leash on the beast it scrambles to feed.
With this understanding, the urban-rural divide is clearly antithetical to the themes of social harmony and cohesion that the CCP supposedly desires. And yet, to stay in power the CCP has had to exacerbate this divide time and again or risk its grip on power. It seems that this contrast is useful neither for economic efficiency nor for stability, and yet without it those goals could not stay afloat. There is a Chinese saying that warns not to drink poison to slake one’s thirst. The poison here is the polarization between the urban and rural worlds, while the Chinese government thirsts for authority and economic strength.