Two Important Issues on how to Let Chinese Workers Have Equal Share in Achieving Moderate Prosperity Society

"Moderate prosperity society" is continuously an economic and social development goal of the Chinese government for the next five-yearplan. Premier Li Keqiang made it clear that to attain this goal it is necessary to ensure economic growth, and to " let the people live a better life. Whether the people have a better quality and standard of life is a key indicator of a moderately prosperous society." 1 In the past years, China has maintained a high growth of gross domestic product (GDP). Only a small number of the population are better off, but most of them do not share the fruit of economic success. Consequently, the disparity between the rich and the poor have been becoming more serious (Gini coefficient rose from 0.29 in 1980 to 0.52 in 2013). At the end of the day, whether the moderate prosperity society benefit a few people or most people? From the perspective of workers, there are two important issues to consider in order to advance the quality of life of worker and to ensure decent work in the thirteenth five-year plan of China.

What can the rank and file workers in the manufacturing sector get from economic transformation?

The official statistics revealed a lower productivity growth in 2015 and shrinking manufacturing sector. Facing the economic crisis, the government’s strategy is industrial upgrading.

In 2013, Xi Jinping aimed at replacing manufacturing-based secondary industry by domestic consumption driven tertiary industry as well as replacing the low-end industry by high-end industry. The past experience of Hong Kong proved that development of the financial and service sectors did not provide more job opportunities and job securities. Hong Kong's unemployment problem in the 1980s and 1990s were mainly because of factory relocation to mainland China. The proportion of manufacturing jobs in Hong Kong decreased from 35.8 percent in1986 to 9.75 in 2006. Since then, many semi-skilled and middle aged workers lost their jobs in the manufacturing sector. Most of them are female workers who had found it very difficult to get a new job in other sectors and ended up living in poverty. The job openings in the tertiary industries are either professional positions or non-skill and low-paying job2. Many workers has been suffering from long term low paid and irregular employment. If China is to repeat the same path of Hong Kong, how can it improve the living standard of the people?

On the other hand, the immediate impact of industrial upgrading is jobs cut with inadequate compensation. Starting from 2010, the number of strike in China has been doubled every year and reached to 1400 cases in 2014. Most strikes occurred in Pearl River Delta according to the Investigative Report on Labour Rights of HKCTU. It is reported that nearly 80% of strike were caused by factory closures and relocations, as well as weak enforcement of labour law and social insurance. The running away capitals are tolerated by local government which is really robbing the poor to pay the rich. As for the transition from low-end to high-end foundry industry, the vocational and technical training for workers are missing in the policy planning. How can workers see hope in the industrial upgrading?

Make a better life to the rural migrant population in urban areas

In 1978, the rural migrants in urban areas (rural household registration) accounted for 18% of the urban population. In 2014, the proportion of rural migrants had risen to 55%. The vast majority of them are migrant workers, however, affected by the social system, they are gaining lower than the urban population in terms of income and social security. GaveKal Dragonomics, a senior economic researcher found that rural household’s savings rate of the 40% lowest income population is only about 10%. Their total spending accounts for only a small part of the overall consumption of the mainland, which is about 17.5%. This is obviously because they earn less than half the national average3. In terms of social security, rural migrants are getting lower level health care and pension comparing to urban citizens and their children are not entitled to free education in the city.

How does the next five year plan reduce the inequality so as to improve the lives of low-income families? This question involves a fair wage levels and a fair allocation of social resources. Government needs to put into practice of wage system, social insurance and labour contract law to pursue labour rights, to eliminate rural and urban household divisions and to deal with labour dispute in a partial manner with a respect for the rights workers’ representatives in collective negotiation.

A participatory five-year plan

The above-mentioned problems are truisms. Reducing the income gap, providing basic social protection etc have been repeatedly stressed by the leaders of Chinese government in the past 10 years. Are the measures that were used by the government to deal with these issues the right remedy? How do the people participate in the process of making this influential five-year plan? "Social participation" is one of the goals in the 13th five year plan. Allowing manufacturing workers and rural migrants who are deeply affected by the economic policy to participate in policy-making and to take their opinions seriously helps to establish a more comprehensive strategy.

  1. Li Keqiang (2015), Objectives of building a moderately prosperous society, China's Ministry of Human Resources and Social Security (MOHRSS)
  2. Oxfam (2004), Working poor: Employment and poverty in Hong Kong,
  3. GaveKal Dragonomics (2015),Growth of income of migrant workers does nothelp much in boosting domestic consumption, 2015-02-16