Equity in Post-crisis China. A Feminist Political Economy Perspective
Given the gendered slant to the economic slowdown in China, the Government needs to adopt a stimulus plan first to address disparity and vulnerability, while not adversely affecting the strong growth rate, and second to meet the longterm need in society for a more equitable approach to economic and social development.
The aftermath of the financial crisis that began in 2008 has had similar features in both advanced economies and a number of emerging markets: the asset market crisis in terms of the decline of real housing and equity prices; the banking crisis, which is also associated with declines in output and employment; and the increase in government spending or accumulating debt while tax revenues contract (Reinhart & Rogoff, 2009). However, mainland China (hereafter, China) seems to be a different case from countries such as Indonesia, Malaysia, and the Philippines (ibid.). It shares only a few of the above features such as declined output in export sectors and increased unemployment.
For example, the housing market in China did not collapse as it did in many other countries in 2009. Although uncertainties in the market and the economy have caused loss of confidence in real estate in some areas, in other areas there has been a slight rebound because the Government intervened through its control of banks and state-owned corporations. With interest rates falling, banks ready to lend, and developers offering their apartments at lower prices, the Government has also taken steps to prevent the housing market from heating up by stopping issuing loans to individual purchasers of third apartments, especially in major cities like Beijing and Shanghai (National Bureau of Statistics of China, 2010a; Wang, 2010; Xinhua News Agency, 2009).
China has also so far been spared by the crisis in the banking sector, largely because the Government has kept the domestic financial market fairly insulated from international speculation and interference while it promotes the country’s participation in the globalizing supply chains of nearly all productive sectors. Through the control of banking and the adoption of draconian labor regimes, especially in the export-oriented industries (where women form the majority of the labor force), it has been able to accumulate the largest foreign reserve in the world: USD 2 trillion (US dollars throughout), half of which is invested in the United States. While the Government is rich, however, the majority of Chinese still have relatively low incomes with little opportunity to save. The net per capita income of the rural population in 2007 was only 4,140 RMB (at the time of writing, 1 Chinese yuan [RMB] = 0.15 United States dollar [USD]), while the per capita disposable income of the population with urban residential status was 13,786 RMB (Hu, 2007). In 2006 56 percent of the population lived in the countryside or held a rural household registration (National Bureau of Statistics, 2007).
The negative effects of the financial crisis in China can be better understood in the context of its reforms toward globalization. Over the past 30 years, as it made vigoros moves to globalize and became a major economic player in the world, the country has been an archetypal model of “miracle” growth, with an average of over 10 percent growth each year. Since it has been largely focused on developing an export-driven economy, the contractions in world markets have thus affected its trade, output, and employment. Some 20 million migrant workers have lost their jobs in the manufacturing processing zones of southern China alone between the last months of 2008 and the beginning months of 2009 (Premier Wen Jiabao cited in Wen, 2009). Moreover, there are close to 50 million college graduates entering the job market every year (People’s Bank of China, 2010; Wen, 2009).
While job creation is, therefore, high on the Government’s agenda, labor demands for better pay and working conditions—as well as citizens’ uneasiness at the rising prices of foodstuffs, costs of care, and income disparity—have encouraged it to take steps to live up to its promise of “building socialism with Chinese characteristics.” The construction of a harmonious, socialist, “Xiao Kang” (well-off) society was adopted in 2006 as a Chinese goal in ideological and material preparation for the achievement of the MDGs agreed on by the international community. The construction of such a society—as Hu Jintao, the Chinese President, has stated—will require an approach to balance economic growth with social development and to orient China to people-centered governance based on principles of harmony, fairness, and equality as well as openness and participation (Hu, 2007).
To what extent will the Chinese intervention policies, as part of its “stimulus effort” to combat the impacts of the recent financial crisis, result in an increase in social well-being or economic stability? This chapter takes a feminist political economy perspective to identify shortcomings in the intervention, arguing that these largely stem from the existing systems that have buttressed the gendered nature of China’s economic growth in the process of globalization over the past decades (see Chen, 2008; Gaetano, 2009). A gender equity strategy is needed both to overcome the gendered effects of the crisis as well as to rebuild progress based on more equality and fairness to underpin the attainment of physical, mental, and social well-being for all.
Such qualities of progress require not only equitable distribution of the rights to resources in a balanced approach to economic and social development, but also public policy-making that responds to the concerns of grassroots women and men and answers to shared commitments to international goals and standards. These rights to resources include goods and services as well as incentives and benefits to which one is entitled not only through inheritance and one’s own capabilities but also through financial transfers from government and legal and moral recognition of one’s contributions (see Elson this volume).
Therefore, key to the above requirements for rebuilding progress is the idea of integrating production and social reproduction in one process of post-crisis economics, which should be supported especially by policymakers putting social justice first and by those (academics, researchers, professional associations, social organizations such as trade unions and women’s groups, etc.) who may have an influence on policies. It also requires that grassroots women and men of different ethnic backgrounds and of disadvantaged or less favorable social and economic standing exercise agency to influence policies so as to have their rights respected and protected. These two aspects are at the core of the concern of the feminist political economy perspective, which it is suggested should help guide the Chinese response to the effects of the financial crisis. One may argue that there is also a racial overtone to the effects of the crisis, given the recent eruption of ethnic conflicts in the country; this chapter emphasizes gender as many have pointed out that gender cuts across race and class (see, for example, Kabeer, 2003).