From Durkheim to Weber, Parsons and Wall erstein, and from Rostow to Chenery, Lewis and Kuznets, sociologists and economists have formulated all kinds of social transformation theories, such as the transition from traditional to modern society, from pro industrial to indus trial society, from the periphery and semiper ipheral countries to the core, from a poor (low income) to a wealthy/middleincome country, from a lessdeveloped to a developed country, and so on. In some sense, however,
Transformation from a selfsufficient and semisufficient product economy to a planned commodity economy
Before the reforms, the developmental level of Chi na's commodity economy was rather low. The highly concentrated planned econ omy, to a large extent, was a product economy associ ated with a low level of pro ductivity. In essence, it was still a natural or deformcd natural economy. The urban and rural economics were operated not by market mechanisms but by administrative plans in the whoic proccss from raw material supply to product circulation. In rural areas, the nature of the natural economy was more obvious. Except for the suburbs of some metropolitan areas and a few developed coasted regions, the majority of rural arcas were selfsufficient and semisufficient with a very low commodity output, and the rural cconomy was a closed economic system where production was mainly for selfsufficiency.
After the reforms, the commodity economy was adopted as a new social factor, which gave rise to enor mous changes in the traditional economic struc ture. These changes were revolutionary in nat ure. And through these changes, the other aspects of society have been transformed.
The most remarkable characteristics of economic transformation in the rural areas are: (1) the household responsibility system gradu ally turned farmers into relatively independent commodity producers with autonomy of pro duction, exchange, consumption and manage ment, which greatly motivated them for econ omic activities; (2)the development of non agricultural sectors in rural areas replaced the former singlesector economic structure, and the nonagricultural industries (e.g. manufacturing, construction, transportation, commerce, and service industries) experienced rapid develop ment. By 1989, the proportion of nonagricul tural product value in thetotalrural product value increased from 31.4 per cent in 1978 to 54.9 per cent; (3) on the basis of rapid agricul tural development, the government reformed the system of state monopoly for the purchase and marketing of agricultural and sideline prod ucts existing since 1953, and adopted the new system of contract purchase and free marketing for the surplus products beyond state orders. In marketing, the government let the prices of the overwhelming majority of agricultural and side line products (except for grains, cotton, and edible oils) float freely with market demands, and raised state purchase prices for agricultural and sideline products several times; (4)the rural markets were opened up, and commodity circulation in rural areas is prospering. By 1989, the number of rural markets increased from
The transformation of the economic st ture in the urban areas has two aspects, being the reform of the highly concentrated planning system and the other the introduction of competition mechanisms, closely related to each other. Reform in the urban areas orig inated with the delegation of power and profits to the enterprises by the state. After the adop tion of a taxation system and various forms of management contract systems, enterprises no longer 'eat out of the big rice pot'. Rather, they become economic actors with more autonomy of management, and the state cuts down on command plans for them. Except for a few products and labour services crucial to national development and people's life which are still under the control of state command plans, all the others are regulated by the directing plans of the state and market demands. From 1979 to 1989, the number of products on the state com mand plans administered by the StatePlanning Commission decreased from about 120 to about 60, and materials distributed by the state decreased from 256 to 26. The proportion of industrial output controlled by state and province level command plans decreased from 80 per cent in 1984 to 16 per cent at present, that by state directing plans increased to 43 per cent, and that by market demands increased to 41 per cent.
Based on the reform of the highly concern trated planning system, a socialist commodity market system was established. Along with the perfection of the commodity market for con sumption goods, a market for the means of production (e.g. capital, raw materials, tech nology, information, and labour) also came into existence. In some regions and cities, real estate and stock exchange markets also emerged. In 1989, the proportion of production materials allocated by state plans decreased to less than 20 per cent, and in Shenzhen it was less than 5 per cent; the proportion of products sold at fixed state prices accounted for 56 per cent, and the proportion of materials bought at fixed state prices accounted for about 65 per cent.
Transformation from an agricultural to an industrial society
Industrialization is a necessary condition for modernization. In this sense, the transformation from a traditional to a modern society in essence is the transformation from an agricultural to an industrial one.
Viewed from thc general law of economic development in the developing countries, the transformation of economic structure usually takes three paths in chronological order: first, in the direction of output value structure, that is, the proportion of agricultural output value in the gross national product decreases to less than 50 per cent; second, towards urban and rural population structure, that is, the pro portion of urban .population increases to over 50 per cent of the national total; third, towards employment structure, that is, the proportion of the labour force employed in nonagricultural industries increases to over 50 per cent. In
In the process of transformation from an agricultural to an industrial society over the past decade, village and town enterprises have made important contributions. In 1978, the proportion of agricultural output value in the total rural output value still accounted for 68.6 per cent. After the beginning of reform, village and town enterprises arose as a leading force in rural development and became the backbone of the rural economy. In 1987, the total output value of village and town enterprises reached 459.2 billion yuan, overtaking agricultural output value and accounting for 50.8 per cent of total rural output value. In 1989, the total output value of village and town enterprises reached 842.28 billion yuan, which accounted for one quarter of the gross national product and 58.0 per cent of the total rural output value, while the number of employees in village and town enterprises reached 93.668 million, or 22.9 per cent of the total rural labour force. It is clear that industrialization in a traditionally agricultural society has started.
Another important sign of transformation from an agricultural to an industrial society is the development of tertiary industries. According to the standard adopted by the World Bank, the proportion of tertiary industries in the gross national product should be above 45 per cent in a modern society. At present, this proportion in developed countries has reached over 60 per cent, that in middleincome countries about 50 per cent, and in lowincome countries an aver age of about 40 per cent. Over the past decades,
The process of urbanization in
The rapid rise of towns is, first of all, fuelled by the development of a commodity economy. Ever since ancient times, there has never been a single town without commodity exchange activities. From its very beginning, the town emerged as the transfer point for commodities and the distribution centre for agricultural and sideline products. From the end of the 1970s, the reform beginning with the introduction of the household responsibility system promoted the development of nonagricultural industries, and the specialization, socialization and concen tration of nonagricultural industries in turn promoted the prosperity and development of towns. In the vast countryside, the town is becoming the centre for enterprises, commodity circulation, finance, transportation, communi cation and information exchange, and is playing a critical role. In addition, viewed against the development of cities, although barriers between urban and rural areas still exist (e.g. population registration which restricts geo graphical mobility, the grain and nonstaple food supply system, the housing, the education system, medical care, employment, social secur ity, labour protection etc.), in some cases they arc greater. Reform has to a great extent broken down the restrictions that the former economic structure imposed on the circulation of pro duction elements, the prosperity of urban lifc itself demands the circulation of the labour force between urban and rural areas, and especially, the transfer of the rural labour force becomes an irrestible trend. Furthermore, the develop ment of free trading and floating purchase and marketing for agricultural and sideline products provides means of subsistence and market con ditions for farmers to work and live in urban areas. According to statistical data, the transfer of rural labour during the period from 1981 to 1987 is the fastest, the annual transfer recorded being of 9.9 million people. After 1984, how ever, the transfer of rural labour to urban areas slowed down. From 1988, there has been a new trend for the rural labour force to leave urban areas and return home.
Cities still have the potential to support increases in population. At present, the popu lation density in
Transformation from a closed and semiclosed to an open society
The closure and semiclosure of Chinesc society in the past have many causes. The smallpeasant economy characterized by selfsufficiency and semisufficiency determined the closcd nature of traditional Chinese society. After the Song Dynasty, the government adopted a closeddoor policy to maintain declining royal power. And from the ban on maritime trade with foreigncrs under the Ming Dynasty to singleport trade with foreigners (in
The decision to open up to the outside world taken at the Third Plenary Meeting of the Eleventh National Congress in 1978 represented a turning point in
Opening to the outside world greatly stimu lated the development of foreign trade. For the three decades from 1950 to 1979, total foreign trade value only accounted for 10 per cent of the national income. By 1989, however, it has risen to 31.7 per cent. For the decade from 1978 to 1988,
The transformation from a closed or semi closed to an open society is not only charac terized by opening to the outside world, but also by opening to the domestic world, indicated by greater social mobility. The level of social mobility is an important demarcation between a closed and an open society and between a traditional and a modern society. In the past, Chinese ideology viewed social mobility and stability as conflicting notions, tended to stress the importance of structural stability in social organization and management, and made every effort to restrict social mobility. As a result, birth place, family origin and job assignment often determined one's lifelong occupational status. The relaxation of government policies and the reform of education, employment and income distribution systems made the mobility of labour more rational. At present, there is a floating population of about 20 million. In Beij ing alone, it is over 1 million. It is inappropriate to call farmers in the cities 'blind floaters' because, with the development of human society, it is a natural feature of social mobility and labour transfer for farmers to come to the city for employment. It is no good to try to prevent the farmers from entering the city. Rather, the government should make the best of the situation and try to solve the problem by organizational reform, especially by promoting the growth of the city and by narrowing the gaps in organizational structure between the city and the countryside.
Opening to the domestic world depends upon two important information communication channels, one being commodity circulation and the other, mass media. In 1989, national total retail value reached 810.14 billion yuan, which was an increase of more than four times over 1978 (155.86 billion yuan), the increase of rural retail value being much faster at 4.6 times over 1978. The increase in the quantity of commodity circulation is not just an economic phenomenon; since commodities are carriers of technology and information, it also spreads modern technology, life styles and social values.
The development of mass media also played an important role in the opening of Chinese society. It connected the formerly closed countryside and cities with the outside world. According to statistical data, ownership of radios and television sets was only 7.8 and 0.3 per hundred households respectively in 1978: ten years later, it increased to 23.9 and 13.2 respectively. In 1989, the coverage of national radio broadcasts reached 70.6 per cent and that of television reached 75.4 per cent of the population. From 1978 to 1988 the number of television stations increased from 32 to 422 across the nation and that of radio stations increased from 93 to 461. Through radio and television, the formerly isolated, vast country side was connected with the whole world, which gave rise to great changes in the knowledge structure and social expectations of farmers, the younger generation of farmers becoming less and less satisfied with the restrictions of the countryside.
Transformation from a homogeneous and unitary to a heterogeneous and diversified society
The transformation from a homogeneous and unitary to a heterogeneous and diversified society is not a temporary and transitional phenomenon, but a natural trend of social devel opment and an ongoing process of change in the social structure. This process should be with the rise of the social integration level (in essence, it is the rise of the social absorption capacity). Since the reform, the acceleration of social differentiation has exhibited new patterns with the development of the national economy.
In terms of the ownership of the means of production, the old concept that the 'purer' the public ownership the better has been aban doned, and a new structure of coexistence of multiple ownerships, with public ownership being the leading force has emerged. Generally speaking, before the reform there were only two forms of public ownership: state ownership and collective ownership. The reform broke the economic structure of monopolypublic owner ship. As a result, individual ownership rapidly developed and private ownership of units with more than seven employees subsequently came into existence. After the establishment of the special economic zones and the opening of the coastal regions, joint ventures and independent foreign enterprises emerged. In the meantime, public ownership itself also assumed several forms and a number of economic organizations crossing urbanrural lines, ownerships, regions and economic sectors emerged. Now, the new economic system is composed of the multiple economic elements of state ownership, collec tive ownership, individual ownership, private ownership, and joint ownership (including joint ownership between the state and collectives, between the state and individuals, between col lectives and individuals, between China and foreign countries, between overseas Chinese and businessmen in Hong Kong and Macao, and between foreign companies). The changes in the ownership structure and the finer division of labour brought changes to the occupational structure, reflected not only in occupational classifications but also in the life style, income, educational level, consumption patterns, interpersonal contacts and other aspects among different occupational groups. The high homogeneity in the occupational struc ture before the reform has been changed, and it is developing towards increasing diversification. So far, there have emerged the major occu pational groups of workers, cadres, farmers, intellectuals, professional staffs, company man agers, individual labourers, and private com pany owners. Within these subgroups can be distinguished, for example, those working in state enterprises, urban collective enterprises, village and town enterprises,and private enterprises. The diversification of occupational structures gave rise to the diversification of interest demands. As a result, problems of inter est dissatisfaction and conflicts among different occupational groups become more and more evident.
Since the beginning of the reform, 'farmers' by the conventional definition have experienced the most obvious changes. No doubt,
In step with structural differentiation among occupational groups, the organizational structure also changed. Before the reform, the organizational structure prevalent in
1. Structural transformation of enterprise organization Stateowned enterprises were transformed from product producersto commodity producers, from executors of state orders without financial autonomy to independent economic actors with all the rights and responsibilities for their econ omic activities. With the separation of property ownership from production operation, various new management systems were adopted. One of them is the contract system, under which the total wage mass floats with the economic success of the enterprise if it pays state taxes and carries out designated technological transformations. The second is the lease system, still on trial, designed mainly for small modest enterprises with profits. At present, there are still a number of difficulties in evaluating the ownership enterprises. The third new management system is the jointstock system, which is in the explo ration stage. The practical intention is not just how to amass idle funds from the public and the workers, but more important, how to make the enterprise the legal owner of its property with the state as the ultimate owner. At present, since most enterprises enjoy autonomy of oper ation, full responsibility for profits and losses, selfaccumulation of capital, and selfregulation
2. Extensive expansion of enterprise organizations
(a) Banks, credit unions, insurance com panies, supply and sales associations, and postal and telecommunication services have aban doned their former administrative patterns and adopted enterprise management systems, and they are becoming important economic means for macromanagement and regulation;
(b) various types of crossregional and crossindustrial enterprise groups take an active part in organizational activities of economic life as economic actors;
(c) some newspapers, magazines, pub lishing houses, radio stations, television stations and other nonprofit organizations have also adopted enterprise management systems. 3. The spread of enterprise organization in rural areas This is reflected not only in the development of village and town enterprises, but also in the fact that many productionrelated service organiza tions adopted enterprise patterns and manage ment systems. In some of the southeastern regions with a high level of economic develop ment, agriculture has become a production branch or 'workshop' in a comprehensive enterprise group.
Types of communities are more diversified than before. In addition to the original three regional patterns existing in eastern, central and western parts of
In the rural areas where lineage and geo graphical relations exist as ties in the social network, occupational relations are becoming more and more important with the development of the economy and the opening of the society Large numbers of farmers left their villages an homes to work in village and town enterprise or engage in business and service industries. and they established their connection with the outside world through occupation relations. Far mers learned how to do business through con tract, agreement, credit certificates,bills and other legal documents. According to statistical data, the number of notarized business contract reached 2 million a year after 1985, of whid those signed by rural residents account for large proportion. In 1987, 1,896,752 busines, contracts were notarized, of which agriculturn (including farming, forestry, husbandry, fisher and sideline production) contracts and produce purchase and sale contracts accounted for about 30 per cent. The popularization of economic laws and regulations is a major indicator of a society abiding by law. With the development of the commodity economy,
In the process of social transformation, the legal values of people have also changed. The conventional sense of rule by person, the sense of separation beween right and responsibility, and the dislike of lawsuits are all weakened. People are liberated from traditional beliefs, moral norms, administrative orders, authority's wish and other modernization proceeds, laws will break down thc conventional demarcations of "punishing crime" and 'maintaining order' and become the 'software' of organizing and creating a new society.
Note *This article was prepared as part of a 'Social Development Report' of the Social Development Research Group of the Chinese Academy of Social Sciences.
Li Peilin is Senior Research Fellow and Director of the Section of Industrial of Industrial Sociology at the institute of sociology of the