Contribution of social structural changes to the development of China’s economy

Changes in China’s social structure have significantly contributed to the development of China’s economy. In modem society, apart from state intervention and market adjustment, the transformation of social structure is another “invisible hand’’ that affects the allocation of resources and economic development. It is both the result of economic growth and a driving force of social change.¹³

The recovery of the economic functions of the family promotes economic development

After 1949, with the completion of the socialist transformation, rural land became collectivized. The productive function of rural families was seriously damaged. After 1978, with the introduction of the household contract responsibility system, fanners obtained the right to use and manage the contracted land with individual households as the units. The productive function of fanners’ families was restored, which greatly increased fanners’ enthusiasm for production. The development of agriculture in China entered a new stage of rapid growth.

In cities and towns, the economic functions of families were basically transformed after 1956. On the one hand, with the transfonnation of the individual

Social construction at the new stage 97 economy, the household-based individual economy lost its space for existence. On the other hand, the establishment of the national supply system and the policy of high accumulation and low consumption kept the consump

tion function of urban families within the strict institutional arrangements of the state. Urban families lost the space of autonomous consumption. After the focus of the policy of refonn and opening up was shifted from rural areas to cities, the development of the individual economy was first allowed by the policy. Families in urban areas regained the possession and control of the means of production. Individually owned businesses emerged like bamboo shoots after a spring rain, opening the prologue to urban refonn. At the same time, with the development of commodity economy and the boom of the market, the consumption function of the family returned automatically, which further promoted the development of the commodity economy.

Adjusting the employment structure to rationalize the allocation of labor force

Before the reform and opening up, China’s labor employment system was highly unified and administered by the state. The employment structure was quite rigid, and the flow of labor force was hindered. After the refonn and opening up, with the refonn of the economic system, a large number of agricultural workers rapidly moved from the primary industry to the secondary' and the tertiary industries. Fanners gained the right and opportunities to obtain employment in non-agricultural sectors. This not only solves the problem of the urgent need for a large number of cheap laborers in the secondary and tertiary industries, but also makes the income of rural laborers more diversified. Moreover, it makes China a “world factory,” and its products have gained more competitive advantages under the trend of globalization. In other words, the entry of a large number of ratal laborers into cities has not only accelerated the pace of urbanization and changed the urban-rural structure, but has also realized an optimal allocation of human resources in urban and rural areas, which is of great significance for the overall development of the economy.

The return of the functional autonomy of social organizations promotes the reform of the economic system

Before the refonn and opening up, the state exercised the overall control of the entire society, forming an all-embracing organizational structure.¹⁴ After 1978, along with the changes in the organizational structure, the functions of the three major organizations - the state, the economy, and the society - began to return to the direction of autonomy. First, the overall control of the state continues to shrink and evolves towards standardization and legalization, thus gradually changing the situation of the state assuming all responsibilities. Second, the production functions of enterprises have been strengthened and their social functions gradually' removed, which is of great importance for the development of themarket economy. Third, autonomy in social life continues to grow, and relatively independent social organizations begin to develop. Social organizations grow in the process of the gradual withdrawal of the state from the social sphere and economic organizations as the main body of the market continually stripping off their social functions while failing to assume the social responsibilities as they should. Therefore, social organizations have the function of filling the gaps left by the withdrawal of the state and enterprises from the social sphere in an organized form. In view of these changes, one can say that the return of the autonomy of various organizational functions intensifies the diversification of resource allocation mechanisms under professional differentiation. In other words, the allocation of resources and opportunities has changed from being entirely controlled by the state to joint allocation by the state, the market, and the society, which has greatly improved the efficiency of resource allocation and made an important contribrrtion to economic growth and social development.

Adjustment of urban-rural structure enables the unfolding of the spatial build-up effects of resources and opportunities

Cities are regional structural arrangements to reduce the costs of resource allocation. The larger the city, the lower the costs. The structural changes in urban and rural areas since the reform and opening up are, in essence, a reallocation of resources and opportunities between urban and rural areas. Although urbanization today still lags behind industrialization and the urban-rural structure is still unsound, urbanization in China has accelerated in the past 30 years of reform and opening up, which has made the allocation of resources and opportunities between ruban and rural areas more efficient and effectively promoted economic development. First of all, it has boosted the build-up effect of vocational production; second, it has facilitated the adjustment of the industrial structure; and third, it has promoted the growth of consumers and the expansion of consumption, which in turn has stimulated the growth of the economy.

The rise and development of new social strata greatly enhances the vitality’ of the socialist market economy

In the new structure of social strata that has been developing continuously since the reform and opening up, the strata that control and operate economic resources are rising and growing steadily. They include private business owners, managers, and individual industrial and commercial households. The sustained and rapid growth of China’s economy since the reform and opening rtp is closely related to the growth of these strata that control and manage economic resources. It can be said that without the development and growth of these new social strata in the market economy, China’s economic growth could not have been as great as it is today. In 2007, private enterprises in China amounted to 62.25% of the total number of domestic enterprises. The registered capital was 9.3873 trillion yuan, and the amount of paid taxes was 477.15 billion yuan. Private enterprises have become

Social construction at the new stage 99 an important force in promoting the development of the market economy in China. In addition, the emergence of migrant workers as a new social stratum has created enormous wealth for the country. The great contributions made by migrant workers should occupy a very important and glorious position in the history of China’s industrialization, modernization, and urban construction.