MOBO GAO. China’s enduring core values.

 China: Social Changes that Impact Relations with Australia

The economic takeoff that has pushed China up to become a middle-income country has certainly brought great social changes. Economic development has lifted hundreds of millions of people out of absolute poverty, but one marked social change is increasing disparity as a result of sharp stratification of social classes.  

This stratification concerns the issue of whether the PRC is a developing country, the issue of social mobility in terms of career choice and internal promotion, and even demographic trends. All these are relevant to current Australian exports of education, tourism and agricultural produce such as wine and dairy products.

Let us look first at the straightforward issue of demographic change in the PRC. The “one child per family” policy that applied from 1980 to 2015 was in fact one of the most egalitarian policies in the history of the Chinese Communist Party (CCP), in that it applied to all sectors of the society regardless of people’s social position. For instance, most CCP party officials of the age group affected by the policy, including the current leader Xi Jinping, have only one child. One consequence is that China seems to get old before it gets rich and the relevance of this is that Australia can expect many opportunities to export its old aged care service industry.

Another social change is the commercialization of health care and education. A consequence of this development of neoliberalism in the PRC is the increasing inequality of access to education. Though China has implemented a policy of compulsory nine-year education, most rural children have difficulty in accessing tertiary education. These and other social changes are discussed in my recent book Gao Village Revisited: Life of Rural People in Contemporary China, Chinese University of Hong Kong Press, 2019. Urbanites have more chance of being tertiary educated because they have better resources, and the young of the urban sector do not need to work like robots on assembly lines, as young rural migrant workers do. Even the urbanites encounter fierce competition for tertiary education. That is why there are relatively such large numbers of Chinese students enrolling in Australian universities: they come to study in Australia either because they have quit or failed the rat race in the PRC. For this reason, many Chinese who are enrolled in overseas education institutions are not necessarily the most talented. Because the base number of the Chinese population is so huge (residents in Shanghai alone exceed the total number of people in Australia), a small number in relative terms can mean a large absolute number for Australia.

The rural/urban divide in the PRC means that there are pockets of areas that are well developed. Shanghai, for instance, where socio-economic indexes such as infant mortality, housing, life expectancy and average personal wealth (if property assets are included) are better than some developed countries, can be said to be a developed region. But if you examine the income and life style of the majority of the 1.4 billion population, China is definitely a developing country. According to one report, more than 1.2 billion people do not have a passport (https://www.yicai.com/news/100113019.html). The income levels, working conditions and life styles of hundreds of millions of migrant workers are not something Chinese urbanites want. This is hardly the life of the people of a developing country – South Korea, Singapore, UAE, Qatar, Hong Kong and Taiwan are all treated as “developing” according to the current World Trade Organisation (WTO) framework.

The fact that the PRC is the largest source of international students and tourists in Australia can lead to the misperception that Chinese people are affluent and live in a developed country. In fact, those who can afford to come to Australia as students or tourists belong to the absolute minority in China and are a tiny percentage of the total population. I have written elsewhere about “Why China is so unequal.”

What is relevant to this discussion is the current US-PRC trade war, in which the argument is being put that the rest of the world must have a level playing field with China. The assumption is that, according to WTO rules and conventions, concessions are allowed for developing countries in terms of state subsidies, trade tariffs and import protection. The argument is that the PRC has enjoyed these protections as a developing country and now it is time to put a stop to this regime of protections. Henry Gao and Weihuan Zhou have pointed out what very few realize, that is, after more than 13 years negotiation with the US government, when China entered the WTO it agreed to forego many developing country concessions and benefits. In any case, it does Australia no good to get involved in this issue since Australia already has a trade agreement with China that serves both sides very well.

Whether China is elsewhere accorded the status of a developing country will have no impact on Australia’s trade with the PRC or on exports of education, dairy products or wine, not only because all these industries have high quality products that readily find acceptance overseas but also because even if only a small proportion of the population of China can afford these luxury goods and services, this is already a big market for Australia. This also means that if the PRC for whatever reason decided to cease all trade with Australia, very few Chinese consumers would find this really inconvenient. On the other hand, it would be devastating for Australia. Australia can and should diversify its trade partners and this is what is being done by many industries, such as Australian universities; but there are economic logics and intrinsic human conduct that cannot be reversed simply by trying to find alternatives to our trading links with the PRC.

It is likely that the economic growth of the PRC will slow down further, and I think China’s internal problems resulting from recent decades of enormous social changes will get worse before they get better. This means that both tourism and education exports to China may suffer. But for Australia, whatever happens in China, the market always provides more opportunities than risks because the simple logic is that even a niche market in the PRC means that a small quantity of goods and services for China in terms of the country’s total demand is a large number for Australia.

Mobo Gao is a Chinese Australian Professor of Chinese Studies at the University of Adelaide. His research interests include studies of rural China, contemporary Chinese politics and culture, Chinese migration to Australia and Chinese language. See also:

  • Gao, Mobo. “The Great Wall that Divides Two Chinas and the Rural/Urban Disparity Challenge,” in Joseph Cheng, ed., China’s Challenges in the Twenty-First Century, Hong Kong: City University of Hong Kong Press, 2003, pp. 533-557
  • Gao, Mobo. “Whither Rural China? A Case Study of Gao Village”, The China Quarterly, 2017: pp. 23-43
  • Gao, Mobo. “Review of Zhun Xu, From Commune to Capitalism: How China’s Peasants Lost Collective Farming and Gained Urban Poverty” in Journal of Labour and Society, (December) 3rd March 2019, pp. 1-3

See also previous articles in China Series:

JOCELYN CHEY. Pearls and Irritations China Series.

DAVID WALTON. China finding its place in the world.

YINGJIE GUO. China finding its place in the world.

WANNING SUN. China finding its place in the world.

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2 Responses to MOBO GAO. China’s enduring core values.

  1. J.Donegan says:

    Thank you Professor Gao for your excellent summary.
    Concerning our exports to China, you are manifestly correct. If all Australian trade with China was to cease, that would be a minor inconvenience to the Chinese but would be devastating to Australia. This calls for considerably more pragmatism from our elected leaders and ‘opinion makers’ than is presently on offer. I do hope they are up to the task and therefore if necessary, are prepared to tell the Americans to mind their own business.

  2. R. N. England says:

    Best of the series so far.

    China has a long way to go. The rich need to be weaned off their junk lifestyle, so that they can be educated and can experience the satisfaction of serving and enriching their culture. The poor need relief from long hours of hard labor, so that they can do the same. The cultured lifestyle is full of gardens and parks, where people tread lightly and are full of knowledge.

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