The Price of China's Economic Development: Power, Capital, and the Poverty of Rights

By Zhaohui Hong

“This work provides a theoretically sophisticated analysis of major political, social, economic, and cultural trends in China.” —Roger des Forges, author of Chinese Walls in Time and Space

The People’s Republic of China has experienced significant transformations since Deng Xiaoping instituted economic reforms in 1978. Subsequent leaders continued and often broadened Deng’s policies, shifting the nation from agrarianism to industrialism, from isolation to internationalism, and from centralized planning to market-based economics. As the world strives to understand the nation’s rapid development, few observers have comprehensively examined the social and cultural price of the economic boom for the majority of the Chinese people.

Zhaohui Hong assesses the sociocultural consequences of these reforms in this provocative study. He contends that modern China functions as an oligarchy or plutocracy ruled by an alliance of political power and private capital where the boundaries between the private and public sectors are constantly shifting. This “power-capital institution” based on three millennia of Confucian ideology and decades of Maoist communism exercises monopolistic control of public resources at the expense of civil society and social justice for the majority of citizens.

The Price of China’s Economic Development urges policymakers to alter their analytic lens. While industrial and commercial development is quantitatively measured, Hong argues that social progress should be assessed qualitatively, with justice its ultimate goal and fair allocation of resources and opportunity as the main index of success. This sophisticated analysis introduces English speakers to the varied and significant work of contemporary Chinese scholars and substantially enriches the international dialogue.

“Presents a new perspective on China’s economic growth and ongoing political problems.” —Xiaobing Li, author of China’s War in Korea

• Language: English
• Publisher: Open Road Integrated Media
• Release date: Jul 21, 2015
• ISBN: 9780813161174

Book preview

The Price of China’s

Economic Development

THE PRICE OF

CHINA’S

ECONOMIC

DEVELOPMENT

Power, Capital,

and the

Poverty of Rights

ZHAOHUI HONG

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Copyright © 2015 by The University Press of Kentucky

Scholarly publisher for the Commonwealth,

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Library of Congress Cataloging-in-Publication Data

Hong, Zhaohui, 1959–

The price of China’s economic development : power, capital, and the poverty of rights / Zhaohui Hong.

pages cm. — (Asia in the new millennium)

Includes bibliographical references and index.

ISBN 978-0-8131-6115-0 (hardcover : alk. paper) —

ISBN 978-0-8131-6116-7 (pdf) — ISBN 978-0-8131-6117-4 (epub)

1. Economic development—China. 2. Human rights—China. 3. China—Social conditions—1949–    4. China—Economic conditions—1949–    5. China—Politics and government—1949– I. Title.

HC427.95.H68155 2015

338.951—dc23

2015006202

This book is printed on acid-free paper meeting the requirements of the American National Standard for Permanence in Paper for Printed Library Materials.

Manufactured in the United States of America.

To Lan, Nicole, and Emma

Contents

Introduction. A Tale of Two Chinas: Power-Capital China and Rights-Deprived China

Part I. The Power-Capital Institution: The Haves

1. Economy: The Marriage between Power and Money

2. Entrepreneurs: From Red Capitalists to Intellectual Elites

3. Political Culture: Combining Tradition and Innovation with Chinese Characteristics

Part II. The Poverty of Rights: The Have-Nots

4. Urban China: The Forgotten Corners

5. Rural China: The Divested Farmers

6. Migrant Laborers: From Economic Deprivation to Social Segregation

7. Protestant House Churches: From Legal Exclusion to Religious Repression

Conclusion: The Linkage between the Power-Capital Institution and the Poverty of Rights

Acknowledgments

Notes

Selected Bibliography

Index

Introduction

A Tale of Two Chinas: Power-Capital China and Rights-Deprived China

It has been more than thirty-five years since China embarked on a road of economic reform and modernization that has led to the most dramatic economic development, social transformation, and cultural metamorphosis in its five-thousand-year history. China’s rapid development has challenged established theories about economic modernization, which do not seem applicable to the peculiar Chinese situation.¹

The last few decades have seen a great number of in-depth studies on China’s economic development. However, while the world is recognizing and marveling at China’s economic accomplishments, few, if any, works have examined the social and cultural price of the nation’s economic development in a systematic and comprehensive fashion. Analyzing a series of puzzling and seemingly incomprehensible phenomena generated by the process of China’s economic development requires all interested scholars to make an effort at mapping China’s development and in interpreting the progression of human civilization as a whole.

This book will discuss the price of Chinese economic development, focusing on social and cultural consequences since 1978 from historical and comparative perspectives. It will provide a comprehensive account of how much China has paid to reach its current stage of development. The perception of the China Miracle or China Model is incomplete if the price of economic development is ignored, miscalculated, misperceived, or misinterpreted.² Overall, the book will concentrate on the institutional costs, social price, and cultural consequences of China’s economic development since 1978.

DEFINING THE POWER-CAPITAL INSTITUTION

As a result of its economic development since 1978, China has been experiencing three parallel historical transitions: from a planned economy to a market one, from an agrarian society to an industrial one, and from a traditional culture to a civic one. The combination of these triple transitions in political economy, social economy, and cultural economy has generated a power-capital institution (quanli ziben zhidu) that comprises the power-capital economy, the power-capital culture, and power-capital entrepreneurs.

One of the critical ingredients of the power-capital institution is, of course, power, which in this book specifically refers to political power in the executive, legislative, and judicial realms. In general, as James Burns articulates, power consists of motive and resource, which are interrelated. In addition, power is a collective relationship instead of merely the behavior of one person.³ During a process of integration of both political power and economic capital, officials are power holders and businesspeople are power recipients. Both have similar intentions to pursue their common goals. Therefore, power will deal with the resources of both holders and recipients, along with the relationship among all motives and resources of power.⁴ Here, power holders represent supply and power recipients function as demand, thus creating a market of rent seeking. In reality, however, both the supply and demand are changeable, as the businesspeople can supply money and officials can offer the demand. Successful transactions between the two are often facilitated by some special agents, who constitute a critical force in transforming power into capital, or vice versa.⁵

The second critical component of the power-capital institution is capital, which covers two dimensions in this book. One is economic in nature, with specific focus on financial and natural capital. According to Werner Sombart, Capital can be defined as that amount of wealth which is used in making profits and which enters into the accounts.⁶ In other words, economic capital is wealth in the form of money or other assets owned by a person or organization, available or intended for a particular purpose. Here capital is different from money, as the latter is used simply to purchase goods and services for consumption. In contrast, capital is more durable and is used to generate wealth through investment.

Another dimension of the capital is social in nature, with particular emphasis on the individuals, groups, and classes who are capitalists or employers and distinct from employees or the working class. Comprising social, instructional, and human facets, this capital is the small but highly influential group of entrepreneurs, owners or holders of the means of production.⁷ In addition, "Labour is always a primary efficient cause, while capital, the whole collection of means of production, remains a mere instrument or instrumental cause."⁸ Therefore, capital itself does not exist until it is produced. In an effort to produce wealth, capital must be combined with labor, the work of individuals who exchange their time and skills for money. Once capitalists establish a political and economic coalition with political power, they not only produce exceptional profits but also maximize their exploitation of laborers. Consequently, the successful cooperation and integration of both political power and economic capital are indeed the nightmare of laborers, employees, and disadvantaged groups.

The third key factor in the power-capital institution is institutions. As Jonathan Turner defines them, institutions are a complex of positions, roles, norms and values lodged in particular types of social structures.⁹ Similarly, in Anthony Giddens’s view, Institutions by definition are the more enduring features of social life, including institutional orders, cultural discourse, political governments, economic systems, and legal systems.¹⁰ In sum, according to Seumas Miller, an institution has three dimensions, namely, structure, function and culture.¹¹ Therefore, by definition, the power-capital institution is a kind of mixture that combines and integrates political power and economic capital essentially embedded in structures, functions, norms, values, faith, discourses, governance, economy, law, and ways of life.¹²

Obviously, the study of the power-capital institution is one of hybridities, for it is a description of and reflection on the hybrid system produced by China’s development since 1978, such as the socialist market economy and shareholding cooperative enterprises. In particular, this study of the power-capital institution is connected to yet different from the several popular analytical frameworks on China studies. Interestingly, despite their interpretative differences, many scholars recognize the hybrid nature of Chinese development, evident in their observations about the party-state, state-society, phony capitalism, the totalitarian or authoritarian state, and bureaucratic capital. While providing a number of unique perspectives on the characteristics of the China phenomenon, however, these observations differ from scrutiny of the power-capital institution.

First of all, some scholars define countries with a one-party system such as present-day China as the hybrid of party-state pattern in order to emphasize the close relationship between a political party and the state with a focus on the party’s influence on the country’s overall development.¹³ Among this school of scholars are both pessimists and optimists. The former stress the inevitable crisis of the Chinese experience as it poses a challenge to the legitimacy and sustainability of the Chinese Communist Party (CCP), and therefore they are convinced of the party-state’s loss of control and the consequential imminent collapse of both the party and the state. Gordon Chang sensationally predicted in 2001 that the collapse of China would take place in 2010.¹⁴ As Larry Diamond argued in 2006, China cannot remain a completely closed political monopoly and remain stable. Therefore, he continued, It may not be in ten years, but I am pretty confident it [China’s collapse] is going to be within 25, maybe 10 to 15 [years].¹⁵ Susan Shirk shared this notion when she asserted that China may be an emerging superpower, but it is a fragile one because Chinese leaders are haunted by fears that their days are numbered and the more developed and prosperous the country becomes, the more insecure and threatened they feel.¹⁶ Similarly, Bruce Gilley strongly stated in 2004 that, for the record, I would be surprised if this [democratic] change were delayed beyond the year 2020.¹⁷ Arthur Waldron also referred to the China Sickness in predicting regime change, while James Mann believed that the notion of a democratic China is a fantasy.¹⁸ Essentially, the pessimists have painted six negative images of China: declining party legitimacy, eroding party organizations, increasing noncompliance with party directives, a hollow party ideology and moral vacuum in society, rampant corruption, [and] parasitic officials who engaged in rent seeking and other predatory practices.¹⁹

On the other hand, a number of optimists emphasize the CCP’s willingness and ability to undergo necessary adaptation despite its continuing dominance of the state, with an eye on its flexibility and resilience. David Shambaugh has argued that the CCP actually has never stopped reforming, as it finds itself coping with a constant cycle of reform-readjust-reform-readjust; as a result, the CCP is simultaneously proactive and reactive. In his view, if the CCP receives stimuli, it is able to grow in a dynamic way. Therefore, according to Shambaugh, the CCP is adapting fairly (but not entirely) effectively to meet many of these challenges because it has learned the negative lessons of other failed communist party–states.²⁰ In addition, Andrew Nathan has noticed that the resilience of the CCP is closely related to the balance of political power among high-level party factions. In Nathan’s view, the CCP is politically balanced in representing different factions in the Party; . . . [yet it] lacks one or two dominant figures, and is thus structurally constrained to make decisions collectively.²¹ In 2006 Bruce Dickson concluded that the CCP is not in imminent danger of collapse because it has enhanced its governing capacity through the strategy of survival without undertaking fundamental reforms of the political system.²² Thus the CCP is creaking and cracking, but creaking and cracking can also mean growth.²³ Similarly, Martin Whyte argued in 2010 that although serious inequality and distributive injustice had become evident in contemporary China, most Chinese citizens have accepted and are busily organizing their lives under the new market principles and heightened inequalities unleashed by China’s reforms since 1978. Therefore, in Whyte’s view, the anticipated social volcano caused by angry revolts was a fallacy.²⁴ Recently, Martin Dimitrov stated that Communist resilience depends on a function of continuous adaptive institutional change.²⁵

Despite the coexistence of pessimism and optimism and of conservatism and liberalism, scholars of the party-state school are invariably convinced of the intertwining connectivity between the CCP and the state as well as of the necessity of understanding both in order to comprehend China and solve all of its problems. In reality, however, even though the Communist Party is still powerful enough to control the state, its hold on the society and on regional apparatus has been weakened. It is rather common for political orders to come from places other than Zhongnanhai. The effective cooperation and compromise between power and capital since 2008 have led to the expansion of the public sphere, the multipolarity of the blogosphere, a loosening of political authority, and the malfunction of government when confronted by the market economy, thus successfully challenging the traditional party-state system and culture. These aspects are precisely the topics within the analytical scope of studies on the power-capital institution (chapter 3 will specifically address these changes).

Meanwhile, another group of scholars applies the hybrid of state-society framework to examine present-day China, but they attempt to deemphasize the party’s power while paying more attention to the relationship between the state and society, especially the roles played by the middle class, private entrepreneurs, and social media.²⁶ Margaret Pearson, for instance, discussed China’s new business elite in 1997, asserting that China had created a hybrid pattern of state-society relations that contains both ‘socialist corporatism’ and clientelism, but her research on corporatist institutions focused on the political consequences of China’s economic reform instead of the social and cultural price of the reforms.²⁷ Bruce Dickson in 2003 perceived the red capitalists or entrepreneurial class as a key player in the Chinese state and in society because this new class had been recognized and accepted by Jiang Zemin’s Three Represents.²⁸ As a result, in Dickson’s view, the CCP no longer represented only farmers and workers, its traditional base of support, but now also incorporated . . . the advanced productive forces (referring to entrepreneurs, professionals, high-tech specialists, and other urban elites).²⁹ Dickson believed that the red capitalists had begun to penetrate mainstream Chinese society, but his research did not extend to the level of institutions that encompass Chinese culture, values, and society. In addition, Teresa Wright emphasized three larger forces that had shaped state-society relations in China—state-led economic development, market forces, and socialist legacies—which contributed to the uniqueness of China’s developmental experience.³⁰ Although her excellent book covers private entrepreneurs, professionals, farmers, and state and private sector workers, it does not offer a comprehensive inquiry into the political culture or the social and cultural price of China’s development.

Obviously, the party-state and state-society perspectives remain highly valuable in evaluating the contemporary Chinese experience, but it is difficult for them to encompass the various other angles of Chinese development due to their focus on politics and society. The study of China’s power-capital institution, on the other hand, is designed to establish a more extensive analytical framework capable of examining a variety of hybrid phenomena, including not only the party and state but also the complex intersections between Chinese society, culture, and economy.

Admittedly, scholars who have defined the Chinese model of economic development as phony or crony capitalism have looked at some characteristics similar to those of the power-capital institution. Defined by Liwei Zhuang in 2001, Asian crony or phony capitalism represents the immoral integration between business and government, connecting to premodern paternalism, political authoritarianism, clan networks, and social connections.³¹ Zhuang’s ideas have been echoed by other scholars in their research into Chinese finance, business, politics, culture, and history.³² However, the practice of crony capitalism originated in other Asian capitalist countries, such as the Philippines, Malaysia, and Thailand, and was also developed in Latin American capitalist societies. Today’s China is not yet a capitalist society or a full capitalist system, though it shares many capitalist patterns. By definition, capitalism is an economic and political system in which a country’s trade and industry are controlled by private owners for profit, rather than by the state.³³ In China property is still, to a large extent, controlled by the state and state-owned enterprises, though the private sector is enlarging its capital shares. Therefore, it may be more accurate to define China’s political economic system as a power-capital institution instead of phony capitalism.

In addition, many scholars are still in the habit of using terms such as totalitarian state or authoritarian state as their analytical framework to interpret China since 1978.³⁴ While some classical studies on Eastern European Communist regimes in the 1950s remain meaningful, their perceptions of the totalitarian bureaucracies, as articulated by Miloran Djilas and Rudolf Bahro, are not quite relevant to China studies.³⁵ As Susan Shirk has indicated, China is less totalitarian and more capitalist, less monolithic and more diverse, less drab and more colorful, less isolated and more globalized.³⁶ Andrew Nathan also concurred with Talcott Parsons’s analysis of the four conditions necessary for a totalitarian regime to adapt to modernity: abandoning utopian ideology and charismatic leadership, empowering a technocratic elite, introducing bureaucratic specialization, and reducing control over private speech and action.³⁷ It seems to Nathan that the CCP has been able to do all these things without triggering a transition to democracy.³⁸ He further acknowledged in 2009 that twenty years after Tiananmen, the resilience of Chinese authoritarianism still surprises us.³⁹ According to him, studying CCP’s dynamics will help spark a revival in the analysis of comparative authoritarian systems.⁴⁰ Although Nathan clarified and modified his resilient theses in 2013, he did not discuss the synthesis of China’s reforms, which shapes and reshapes the image of China.⁴¹ Thus, instead of debating whether China is a totalitarian or an authoritarian state, it is my belief that the study of the power-capital institution affords a much more effective and comprehensive perspective for observing and understanding today’s China.

Finally, it is necessary to differentiate the power-capital institution from bureaucratic capital (guanliao ziben) during the 1930s and 1940s in Republican China. Both the power-capital institution and bureaucratic capital successfully integrated economic capital and political power into a national economic institution. With a dual economic structure comprising both a centralized economy and a free market as well as the resultant dual foreign exchange and dual exchange rate systems between 1937 and 1949, a monopolistic bureaucratic capital was formed during the Republican era.⁴² However, compared to the current power-capital institution, the bureaucratic capital system was characterized by a rather seamless integration of official position and political power. In other words, the bureaucratic official and capital became synonymous, because the two had chemically merged into one inseparable entity. In the power-capital construct, however, power and capital remain two distinct entities, as power does not necessarily possess capital nor does capital automatically own power. In a given place or due to a specific event, the two may undergo physical change and form a certain alliance during a particular time period. Such an alliance tends to be expedient in nature, and its durability is subject to a multitude of external conditions.

Furthermore, bureaucratic capital in Republican China was almost exclusively monopolized by the four leading families, namely those of Chiang Kai-shek (president of the Republic of China), Charlie Soong (minister of the treasury), Kung Hsiang-hsi (minister of finance and governor of the Central Bank of China), and Chen Li-fu (minister of education). In contrast, in the current power-capital institution, power does not necessarily equate to an official position. Similarly, there is no guarantee that an official position can automatically be translated into economic resources, though admittedly the mutual conversion between power and capital is often an easy one. Therefore, if the bureaucratic capitalism of the 1930s and 1940s could be deemed as a system dictated by officialdom, then the present-day power-capital institution is dominated by power. There is a clear difference between the two despite their intrinsic connectivity. Besides, the power-capital institution does not simply create a few individual monopolistic power holders; its scope is much more extensive because it has generated an entire social stratum signifying a seamless marriage of political influence and economic clout.⁴³

Furthermore, it goes without saying that power and capital are different from wealth and power (fuqiang), a persuasive rhetoric connoting the government’s policy to enrich the nation and strengthen its military. It is possible that those seeking the integration of political power and private capital today originally shared the Chinese dream of fuqiang by means of Chinese nationalism, Marxism-Leninism, and then by authoritarian capitalism since the middle of the nineteenth century.⁴⁴ However, China’s economic reforms during the past thirty-five years have turned this Chinese dream, with its nationalist slant, into a reality underscored by the relentless monopolization of political power and ruthless accumulation of private capital. Indeed, such a system has hindered the realization of a rich nation and strong military. The fundamental difference between wealth and power and power and capital lies in the fact that the former centered around national interest while the latter seeks to maximize personal and family gains at the expense of national interest by exercising monopolistic control of public resources and depriving others of their due rights. Some power capitalists, often including corrupt officials and exploitative businessmen, may have originally been motivated by the prospect of building a rich nation and strong army and indeed contributed to that process. However, the growth of the power-capital institution during the last three and half decades has caused China to pay a hefty price for its development, and its current existence may further hinder the country’s future socioeconomic progress.

The relationship between political power and economic capital in China has undergone dramatic changes since 1949. During the Maoist era (1949–1976), political power dominated all areas of the country but economic capital did not have any substantial roles to play in Chinese society. By contrast, since the inception of reforms in 1978 economic capital has not only drastically enhanced its value and influence but also successfully established an alliance with political power to effectively influence economic policy-making and share political governance. The entrenchment of the power-capital institution is the logical consequence as well as the price of China’s economic development. Institutionalized corruption is one of the key elements of the power-capital institution, with three ways of connecting power and capital: making money through abusing power; seeking power through exercising bribery; and pursuing power and/or money by pawning intellectual capital.

Having clearly defined the nature of the power-capital institution, it becomes easier to delineate the power-capital economy (chapter 1), the power-capital entrepreneur (chapter 2), and power-capital culture (chapter 3), all of which have stemmed from the all-encompassing institution. The power-capital economy can be defined as the economic status, system, mode, and relations that have resulted from the hybridization between power and capital, while power-capital culture comprises a subjective attitude, values, communication signals, and rational behavior. Similarly, the power-capital entrepreneur refers to the groups of individuals who, as the primary holders of both power and capital, have benefited from China’s development. They simultaneously embody the historical changes and continuities of China’s political culture while being affected by the unfolding social, economic, political, and cultural transitions since 1978. Indeed, we need to study the hybrid China.

An in-depth study of the power-capital institution necessitates a complex set of questions: What historical factors have contributed to the formation of this power-capital institution? What are its main characteristics and functions, compared with a planned economy and a market economy, respectively? Is this an established, independent system or a temporary institutional transition? Does it promote the development of a pure market economy, a diversified society, and democratic politics in China, or does it produce barriers to such developments? Perhaps more importantly, as a new dominant force, how do power-capital entrepreneurs exert their political, economic, and cultural influences? Evidently, China’s power-capital institution is becoming a window through which one can observe the nation’s current and future political, economic, social, and cultural transformations.

DEFINING THE POVERTY OF RIGHTS

Another phenomenon that has accompanied China’s economic development for the last three and half decades is the increasing poverty of rights. In general, the concept of the poverty of rights has arisen from three other related theories on poverty. One is the prevailing theory of social deprivation and social exclusion in Europe. In 1979 a British scholar came up with the idea of relative deprivation or social deprivation in interpreting poverty as the socioeconomic reality in which individuals, families, and groups lack the resources to obtain the types of diet, participate in the activities and have the living conditions and amenities that are common in their society and further that their resources are so seriously below those commanded by the average individual or family that they are, in effect, excluded from ordinary living patterns, customs and activities.⁴⁵ Closely connected with the theory of social deprivation is that of social exclusion, which refers to the exclusion of an individual from the various socioeconomic resources that his or her fellow citizens have access to or are entitled to.⁴⁶

While no doubt valid, these two theories might help to explain the discrimination experienced by poor sectors of society, while the concept of poverty of rights encompasses the causes and effects of such exclusion and deprivation. In China, disadvantaged groups suffer not only from exclusion but also from serious violations of their various rights. To put it specifically, poverty may not stem solely from social, political, economic, and cultural exclusions, and those who are excluded may not all be poor, but those without due rights are invariably poor.⁴⁷ Applying the concept of the poverty of rights can therefore render the analysis of human poverty in contemporary China more precise.

Additionally, the theory of capability, advocated by Amartya Sen, is also used to explain the cause of poverty. Sen believes that, instead of simply applying the traditional yardstick of personal income or resources to measure wealth or poverty, individual capabilities should be regarded as another reference in assessing the quality of life. In other words, one’s ability in self-actualization has to be taken into consideration because the lack of capability is the true culprit regarding poverty.⁴⁸ Sen maintains that ‘real’ equality of opportunities must be achieved through equality of capabilities and that capabilities are notions of freedom and synonymous with opportunities.⁴⁹ Sen’s theory is applicable to the Chinese situation in that the three without groups—those who are without the ability to work, without any source of income, and without legal sponsors or guardians—are indeed plagued by the lack of capability. Sen’s main contribution lies in his emphasis on the necessity to develop individual capability in order to solve problems of unemployment and the consequential poverty, in addition to offering material assistance to the poor.⁵⁰

However, many people who find themselves mired in poverty do not lack capability; rather, they are poor due to the lack of equal rights that will enable them to realize their potential. In other words, many disadvantaged groups are capable of performing their work well, but they are unable to find a job. Inadequate and unequal access to employment have a negative effect on the level of income and thus lead to poverty. While emphasizing the importance of individuals’ internal condition, the theory of capability seems to overlook the role of the external environment. Effective solutions to poverty depend on comprehensive analyses of both factors. It is true that individuals can enhance their own ability through self-help, but it is also true that the government and society have responsibility for ensuring individuals’ rights and providing certain opportunities. Thus I maintain that the fundamental cause of poverty is the lack of rights. Though Sen supplements the theory of social exclusion with that of individual capability, it remains necessary to address the issue of rights, which is at the center of all forms of exclusion and deprivation.⁵¹

The concept of the poverty of rights is also partially drawn from theories on civil rights. One such theory asserts that the improvement of civil rights is a gradual process that starts with certain basic freedoms before progressing to political and social rights, which involve the provision of medical aid, unemployment benefits, housing subsidies, and educational assistance to disadvantaged groups.⁵² This progression of civil rights was rather typical in Western Europe and more so in the United States. For instance, African Americans started with the acquisition of some basic rights, followed by their demand for political participation and social welfare. However, in many Asian countries, governments often have offered social welfare only at the expense of their citizens’ political rights. The provision of social rights can sometimes be more effective than the provision of political freedoms in gaining public support.⁵³ It has also been argued that it is necessary to combine civil rights with welfare, for only when the basic socioeconomic needs of civilians are satisfied will political freedoms become meaningful.⁵⁴ I argue that the lack of rights has been the most urgent problem for many Chinese since 1978, for these rights are prerequisites to a well-functioning welfare system and broader political participation. In other words, the availability of social, cultural, political, and economic rights is critical for maintaining and improving individuals’ economic gains; it is also the starting point for achieving political democratization.

On the surface, poverty appears to be a direct result of the lack of economic rights, but one’s economic rights are no doubt connected to one’s social and political rights. For instance, if a person’s character is defamed or an individual does not have the freedom to move or is unfairly passed over for promotion, then his or her rights are violated. In such a case this individual’s economic rights are a moot point. Similarly, if in a social environment someone’s personal dignity cannot be protected, then his or her political rights, such as those to vote and participate in political activities, will amount to nothing more than empty rhetoric. Poverty is more than economic in nature; it is, as defined by a British scholar, something that damages people’s self-esteem, integrity and self-identify, blocks their participation in any decision-making process and venues to other organizations. The relentless poverty in some regions of India, according to this scholar, is not due to a shortage of natural resources; it is primarily caused by institutionalized inequality, such as unjust social behaviors against the untouchables, unfair land distribution and transfer, the dependency of commoners on loan sharks, the monopolization of public resources in the hands of a few, and gender discrimination.⁵⁵ Obviously the quantity and quality of social and political rights, more than economic ones, are more revealing indexes of human poverty.

Meanwhile, the poverty of rights also refers to the lack of venues for obtaining such rights. It is usually difficult, if not impossible, for disadvantaged groups to exercise the same rights that are available to other social sectors, including the right to gain employment, accumulate capital, and make investments. The poverty that erodes the lives of many individuals is not rooted in their lack of ability or diligence; it often results from an unfair and unjust environment that has deprived them of necessary rights, thus generating a vicious cycle. As one British minister for international development has pointed out, many poor people are excluded as a result of their nationality, status, geographical position, gender and alleged lack of capability. Especially serious is the fact that, when decisions are made that will affect their lives, their voices are nowhere to be heard.⁵⁶

It should be emphasized that if disadvantaged groups ask the government simply for economic aid instead of social, political, and economic rights, they leave room for excessive administrative interference and abuse of power. Economic assistance programs can be implemented at the whims of government officials, who may manipulate the timing, amount, and method of determining recipients of aid for personal gains. Material or monetary assistance may provide temporary relief or a basic means of survival, but it does not offer a route to prosperity. Consequently, the poor and unfortunate remain at the mercy of the government at all levels—local, municipal, provincial, and even national.⁵⁷ In contrast, possession of rights guarantees the poor fair and equal access to economic resources and gives them more enduring power. Therefore, the absence of rights constitutes the root cause of poverty.

Another dimension of the poverty of rights is seen in an ambiguous and unstable legal system. The availability of various rights is still insufficient to keep people out of poverty. Without a complete and comprehensive legal mechanism, hard-earned rights can be easily lost and the disadvantaged can be thrust back into poverty. Only a well-established and