The class structure of Chinese society has undergone a profound transformation since the beginnings of the reform-policy period in 1978. The elite, previously selected on a political basis, is now also being recruited on the basis of ‘wealth’ and ‘merit’—profoundly affecting the underlying social structure. These new sections of the elite are now beginning to form their own interest groups, social organizations and lobbying channels, beyond the already established political ones. The working class, hitherto the constitutionally decreed ‘leading class’, and the peasantry, the ‘semi-leading’ class, have both been marginalized; intermediate social organizations are developing apace. All these processes have led to thorough-going changes in the relations between the state, society and the individual. We have reason to believe that, after China joins the WTO, interest groups will multiply further, and relations between them will undergo yet more complex change.

Before the Reform Era, China was a highly unified, centralized society, in which political, economic and ideological centres largely overlapped. The whole society obeyed a paramount interest—that of the Party—and the value-system appeared to be equally unified. This situation reflected the distribution of essential resources. At that time, the government monopolized not only the basic material resources of society—land, property, income and so forth—but also the political resources of power and prestige, and the cultural resources of education and information. There were no independent, non-governmental resources, and no intermediate organizations; an essentially binary structure, ‘state vs. people’, prevailed. Chinese people at that time had no material goods beyond some simple furniture, clothing, cooking-ware, bedding, and so on. Their incomes, too, were woven into the governmental distribution system. Peasants lived under the rural institutions of the People’s Communes, mainly dependent on the labour-point system for their earnings, while urban dwellers relied on the wage scale fixed by the Personnel and Labour Ministries. Under this highly unified, monolithic state, it was impossible to form any social group with independent goals.

The thrust of Chinese reforms has been gradually to reallocate the possession of social resources. However, as this author has repeatedly pointed out, the principal form this has taken has been a process of privatization of juridically public assets by the power-holding stratum. Its most striking feature has therefore been a glaring inequality in the distribution of national resources—an inequality that has been the starting point of the restructuring of class relations in China in the past twenty years. The way in which current political and economic elites have crystallized has been tellingly described by the sociologist Sun Liping and his colleagues. They write:

Transferability between political, economic and cultural capitals in China has yielded a type of commutation significantly different from those analyzed by Ivan Szelenyi, which we may call ‘insider’s transfer’. Characteristic of this phenomenon is the pattern of ‘missing no chance’, whereby inter-generational transfers of various types of capital within a family lineage have reinforced the switchable potentials of the different capitals themselves. In other words, in each upheaval in the distribution of resources, the existing power-holders have never missed out. Some of the high points in this sequence have been: the resumption of nation-wide university-entrance examinations in the late seventies; the opportunities for study abroad in the eighties; the openings for speculation in the experimental urban reforms of the mid-eighties; the selection of the ‘Third Generation of Leaders’ in the late eighties; the commercial fever—‘jumping into the sea’—of the early nineties; the trade in diplomas of higher education in the mid-nineties. These were all links in a chain of ubiquitous capital accumulation by this group. If a middle class has had difficulty emerging in China, it is partly because so many of the resources necessary for one have already been cornered.footnote1

Though the total size of the elite that now controls a stock of ‘all-encompassing capital’ is not large, it enjoys commanding power over political, economic and cultural life. Most of its members made their fortunes not through technological innovation or industrial enterprise, but by reproducing and exploiting monolithic positions of power to accumulate personal wealth.