12 L. World rural poverty as seen through one small Chinese village, 2nd excerpt.
I will talk about work, as translated to income, although it is meaningless to relate it to the world market. I give some figures, but I hope it is not too complicated to follow.
First, I will give a background on Chinese villages, during Mao’s time, but it’s similar going back centuries. Charts and graphs usually demonstrate economic conditions, but a better understanding comes from actual people, what they earned, and what they could do with that money. Rigorous accounting was an important part of the commune system, to ensure fairness. (5,400 words)
Jiangxi county has a village system, established 100’s of years ago, and relatively fixed since then. We are studying the very small area of Gao Village. Its population grew from 161 to 300 in about 40 years, much because of the reduction in child mortality. Gao village is in a commune production brigade with the close Xu village and the Cao village. All the villages in this area are Clan Villages, in that they are relatively closed to people outside the clan. Yes, women can marry into the clan, and daughters can marry outside the village. But then they belong to the other village. Everyone in the clan has the same surname, Gao in Gao village, Cao in Cao village and Xu in the Xu village. Our author is Gao Changfan, (Mobo C.F. Gao) as his name is westernized.
Historically, these clans have always been self-sufficient, and the villages don’t mix with each other. They produce most everything they need, and basically there were no markets in any one of these villages. They would only buy matches, salt, soap, kerosene for lamps, joss sticks to burn in front of the Buddha, some red paper for writing couplets (lucky sayings), for the Spring Festival, and rationed sugar if they could afford it. So, the clans don’t interact. (Accept in the communist communes they did, but still kept their separate identities, and their separate loyalties.) Then in the 1980’s when the communes were abolished, they went back to the isolated clan system, kind of back to 1949 politically. At the time RURAL, was 80% of the Chinese population.
So, I would ask: where could upward mobility come from, if resources and land were fixed for 100’s of years, and the clan structure, the power hierarchy, and the belief systems were also fixed? There is no movement outside of sustainable agriculture, not even a horse drawn wagon. You could only walk on foot paths, no roads, or you could push a wheelbarrow (even long distances), or carry things in two baskets with a shoulder pole. Free range chickens were prohibited because they would eat the growing grain. No horses, cows, no dairy, no beef, no goats or sheep. Only pigs and fish, (and buffaloes pulled the plows). Of course, China knew horses; with 1,000’s of years of war with the Steppe nomads. But horses were not in this province.)
[NOTE: We can already notice differences with western poverty. Western farmers grew products to sell, not to only-consume. Middle men could manipulate prices during harvest so they were at or below the cost of production. Farmers were thus driven off of the land. The Chinese government set the prices for grain, such that there was no surplus to the farmer. In rural China land and resources were fixed at the border with the next village. The opposite in America, with plenty of space, industry moved out. People were left with the “rust belt”, derelict and obsolete factories. Even mid-sized cities had boarded-up central districts in the USA.]
Village Income
It is very difficult to talk about income in a language that is understood in the “West”. Throughout the Mao era, a more or less barter economy existed in Gao Village. Secondly, the frame of reference does not make much sense. For instance, nowadays, the rough exchange rate between Chinese money and the US dollar is that 1 yuan equals US$0.125. An average migrant worker from Gao Village working in Shenzhen Special Economic Zone could earn about 400 yuan a month, which is about US$50. After deducting all the expenses, the migrant worker may be able to send 100 yuan a month back to Gao Village, which is US$12.50. What does this amount mean as income for the Gao villagers? It is difficult to see the significance of this amount of income without listing the price and cost of living indexes in Gao Village.
As this is not a textbook or a monograph on economics, I will avoid a comprehensive price comparison. In any case there are no Official Statistics on Gao Village. However, I will list the prices of certain items of daily necessity in the 1970s before I discuss the income of Gao villagers at that time. It has to be pointed out that inflation was very low from the 1960s to 1970s.
A box of matches cost 2 cents (of a Yuan), in Chinese currency.[10] 1 jin (equals half a kilo) of sugar cost 60 cents, 1 jin of pork 69 cents, 1 jin of soya sauce 13 cents, 1 jin of salt 7 cents, a bar of soap 16 cents, 1 jin of fish 40 cents, 1 jin of shrimps 30 cents. A school textbook cost about 50 cents, a pair of sneakers 3 yuan, (37 cents US) a pencil 5 cents, an average package of cigarettes 20 cents. While a watch or a bike could cost 120 yuan, ($14 US) a meal in a factory or university canteen cost less than 50 cents, (6 cents US). A transistor radio in the early 1970s cost more than 100 yuan, but 100 jin (50 kilos), of un-husked rice had to be sold to the state, at the price of only 9.8 yuan, ($1.22 US). This was the income that the villagers had to live on. There were no other sources of exchange. Of course, they ate the grain, and grew vegetables, but very little meat. Abundant fish were all killed by pesticide run-off.
Before we proceed with a discussion of the villagers’ income, we need a brief introduction of how the commune system recorded and evaluated its members’ contributions. Every farmer belonged to a production team of about ten to twenty households. The way of recording and evaluating a member’s contribution to the team was the calculation of “work points”. Every day, the production team leader would assign different kinds of work that needed to be done on that day to each individual member. Most of the time, in order to simplify the task of work assignment and to monitor the team members’ work effectively, several work groups would be formed, each of which was headed by a group leader. The production team leader would assign a specific task to each group leader the night before and the group leaders would assign specific tasks to its members the next morning.
In the evening, the group leaders and the production team accountant would work together to record each member’s work points. Any member who worked for a full day from dawn to dusk would be recorded as having earned ten work points. Half a day’s work would be given five work points and so on.
Note 10: - 1 yuan has 100 cents.
However, these work points were only gross points which recorded the team member’s labor time, but not labor-value because the team members’ ability varied from individual to individual. Some were stronger than others, and some were more skillful.
A way of distinguishing between the labor time and labor value of each team member was the annual evaluation of each member’s labor value. This was again measured in terms of points, on a scale from three to ten. The labor value point was called the base point, as opposed to the gross point. If the best laborer was evaluated as having ten base points, he would earn ten points for a full day’s work. In other words, his or her gross points and base points would be the same. In this system, the gross points recorded the team members’ labor-time while the base points recorded labor-value. If person A had a base point of five and person B had a base point of ten, then the labor value of person A’s full day’s work would be only half of that of person B. If person B worked for half a day, his or her gross point on record would be five which would give a base point of 2.5.
The best woman laborer in Gao Village, according to the official record of 1964, scored only 5.6 base points and the best male laborer scored 9.6 base points. In other words, the best woman laborer’s full day’s work was worth only a little more than half of the best male laborer, 58%. During the Cultural Revolution in the early 1970s, because of radical policies, the best woman laborer could earn as much as eight base points, 83%. For the villagers, the rationale for gender inequality was that men and women were often, but not always, assigned different tasks. A child laborer might earn three or four base points. An elderly man might earn six or seven base points for a full day’s work. One can imagine how important the annual evaluation of base points was for the villagers. My life experience was that the system worked quite well and DID more or less reflect the true contribution that each member made to the team, gender inequality aside.
Finally, it has to be noted that each member’s base points only reflected his or her contribution. The true value of each member’s contribution depended on the total income of the production team, and this varied from year to year. Suppose the total income of the production team in a particular year was 700 yuan and the total base points of the all the team members was 10,000, then every ten base points (one days work), would be worth 0.7 yuan, (8.75 cents US). Accordingly, the best laborer, evaluated as having ten base points, would earn 0.7 yuan for a full day’s work. A woman who was evaluated as having five base points would only earn 0.35 yuan, (4 cents US) for a full day’s work.
To bring the system to life it will help to discuss the income of one family in the years 1963, 1972 and 1992, each being representative of a different political period: 1963 and 1964 were claimed by the Chinese authorities to be the best years after the Great Leap Forward and before the Cultural Revolution, 1972 was in the middle of the Cultural Revolution period, and 1992 was in the middle of the post-Mao reform years of Deng Xiaoping’s era. In 1964, my family consisted of five people: my father Gao Renfa, my mother Gao Yuanrong, my two younger brothers Gao Changxian aged ten and Gao Changwen aged four, and myself aged thirteen. I worked during school holidays, and my mother worked occasionally. My father was very weak and therefore was assigned to look after the production team’s buffaloes as a special concession. The whole household together earned 1,886 base work points. In 1964 every ten base points was worth 0.72 yuan. The total value of my family’s work points was 131.50 yuan. In that year, my family also contributed some household fertilizer to the team which was worth 3.77 yuan. The total value of my family’s contribution to the team was therefore 135.27 yuan. In the same year, grains and other agricultural produce distributed to my family by the production team were valued at 215.40 yuan. Thus, my family was 80.13 yuan in debt.
100 jin of un-husked rice was valued at 7.9 yuan in 1964 and my family received about 2,600 jin of un-husked rice plus about ten yuan’s worth of other agricultural produce. The rice distributed to my family was hardly enough for us to survive for the year. To put rural income at that time in context, as my father’s base point was above average at seven, he was required to work for 244 days to buy a bicycle. A top laborer could just about earn enough in one day to buy 1 jin of pork, or fish, or sugar. In that year, fourteen households were in the black and twenty-three households were in the red. Gao Renkai, who was ill most of the year, incurred the greatest debts and his family ended the year owing the team 191.82 yuan in the red. Gao Changniao, the best male laborer, was 113.04 yuan in the black.
The income described here did not include the income each household received from working on their private plots. My family had in some years had as much as 2.5 mu (one mu is 667 sq mt), of land as a private allotment to grow vegetables, cotton and other economic crops. As I said before, we never lacked vegetables and those were entirely grown on private allotments. Also excluded was income from fishing, raising pigs and (chickens when allowed). However, it is impossible to establish a statistical basis for these sources of income. An annual income of 100-200 yuan per household would not be an over-estimate.
Having examined the income of one family, we next review the income of one production team in 1963.[11] The total income of one production team (there were two teams in Gao Village at that time) was 7,317.90 yuan, of which 93.8 per cent was agricultural income and 6.2 per cent was from sideline production income such as raising ducks and selling fish. Production costs totaled 1,712.29 yuan, of which 1,576.22 yuan, 21.5% per cent of the total income, was spent on agricultural input; 75.98 yuan, 1.03% per cent of the total income, was spent on sideline production; and other management costs amounted to 60.09 yuan, 0.8% per cent of the total income. 9.88% per cent of the total income, i.e., 724.24 yuan was paid to the state as agricultural tax. Taking away the production cost of 1,712.29 yuan and the state tax of 724.24 yuan, the rest was considered to be the team’s net income. However, a further 195.25 yuan (4 per cent of the total net income) for the Public Accumulation Fund and another 146.25 yuan (3 per cent of the total net income) for the Public Welfare Fund had to be paid to the production brigade. Another 90.80 yuan was taken away as salary for the brigade officials. Eventually, only 4,384.87 yuan (60% per cent of the total income) was distributed to the households, with a resulting average household income of 292.31 yuan and per capita income of 56.86 yuan (for the year). This was a 4.5 per cent increase on the per capita income in 1961. As stated in the preface to the production team record sheet, 1962 was a year when the government stressed that production team income should be distributed to its members as much as possible and Public Accumulation arid Welfare Funds should be kept at a minimum.
Note 11. The figures of 1963 are shown here because official figures for 1964 were not available. To the best of my knowledge, there might be some variations, but the differences between 1963 and 1964 would be small enough for our purposes.
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By 1972, my father had been dead for a number of years and I was the main laborer in the household. In 1972 my family earned a total of 1,099.4 base points, (1,886 before), which was valued at 89.05 yuan. The “unit labor value”, i.e. the value of every ten base points, was roughly 0.81 yuan. I also earned another 197.36 yuan as a “barefoot teacher”. The value of agricultural produce distributed to my family in 1972 was calculated to be 381.33 yuan. My family was again in the red, owing the team 94.92 yuan. In 1972 I was teaching grade seven students, mathematics and Chinese and my salary for the whole year was only 197.36 yuan. My colleagues at the school who had similar responsibilities but were appointed by the government, and had urban resident status earned five times more than I did. (986 yuan) The urban housing registration advantage.
One month’s salary for an experienced lecturer at university level was almost as much as I earned from all sources during a whole year. It took only two months for an average (migrant) porcelain factory worker in Jingdezhen to earn as much as I earned for the year as a rural teacher. The cost of living in urban areas was no higher than in rural areas because prices were fixed nationally at the same level by the government. It is true that rural residents did not have to buy vegetables from the market since they were allowed to grow them on their private plots. However, vegetables did not cost urban residents much because of the price cap and government subsidies. For instance, it cost only 5 cents in Chinese currency to buy one jin of Chinese cabbage in the 1970s. Yet although my earnings were meager compared with my colleagues who had urban resident status, my position as a “barefoot teacher” was the envy of every Gao villager.
Gao villagers, like other villagers in the area, had a brief honeymoon with the post-Mao reform policies during the early 1980s when the price of agricultural produce were allowed to rise dramatically, and when the prices of industrial goods did not follow the increase without a delay, and the local authorities had not yet introduced various kinds of taxes and levies. After 1984, however, the situation deteriorated rapidly, for two main reasons. The first was that following a quiet period immediately after the death of Mao, the cost of chemical fertilizers and insecticides and other industrial goods rose quickly.'* On top of this, various kinds of taxes and levies imposed by the local authorities over and above the government agricultural tax were too much for the villagers to bear. In 1991, Gao villagers had to pay various levies on twenty-nine items. In 1992, this was reduced to twenty-six items. All the*levies were imposed on a per capita basis.
Although the price of agricultural produce rose dramatically after the reforms started in 1979, by the early 1990s the price increase became nominal. For instance, in 1992, 100 jin of un-husked rice could be sold to the state at more than 40 yuan, which was more than three times the price in 1972. However, if input costs and other payments are taken into consideration, this price increase for agricultural produce did not mean an increase in income. The family of my brother Gao Changxian is an example. Gao Changxian is married with three children, two daughters and one son. With my mother living with him there were six people in the family. In 1992, he had 4 mu of paddy fields and 2 mu of dry land on which he grew cotton and rape seed. 4 mu of rice yielded 2,000 kilograms which gave him 832 yuan; 2 mu of dry land yielded 50 kilograms of ginned cotton which gave him an income of 300 yuan; and 300 kilograms of rape seed gave him 360 yuan. The total yearly income was therefore 1,500 yuan. Production costs were 80 yuan for seeds and 648 yuan for various chemicals. The taxes and levies in 1992 totaled 80 yuan per person, which for Gao Changxian’s family came to 480 yuan. The family’s net income was 292 yuan. Gao Changxian and his wife each spent about 180 days in the field, which means that they each earned 0.8 yuan a day, which is about US $0.10 at the present exchange rate.”
Note 12: As for how and why the cost is so high see Chen Feng, “Huafei Shengchan Gongying He Xiaoshou de Genben Wenti he chulu” (The Fundamental problems underlying the production, supply and sales of chemical fertilizers and the Way Out), in Gaige Sikao (Contemplating the Reform), Rural Development Centre, ed. Beying, 1992.
Note 13: The example of Gao Changxian is based on information obtained through personal interviews with him at the end of 1992. The example is also cited in David Schak, ed., Entrepreneurship, Economic Growth and Social Change: The Trans- formation of Southern China, Queensland, 1994.
In spite of an aggregate 200 per cent inflation since 1972, Gao Changxian and his wife each earned 0.8 yuan a day, which is more or less the same amount at face value as the best village laborer could earn back in 1972! In 1992, 0.8 yuan was only a little short of being enough to buy two and a half of the popular Kent-cigarettes, or Three - Fives-cigarettes. However, for most of the villagers in the 1990s there was a noticeable improvement in the quality of life, reflected in things such as clothing, housing space and other consumer goods. The key to the improvement in the 1990s does not lie in income from growing agricultural produce, but in income from young Gao villagers who have become migrant workers thousands of kilometers away from Gao Village.
Consumer goods
Throughout the 1960s and 70s Gao villagers used very few consumer goods that they could not make themselves. Even a washbasin was made of wooden boards strung together with bamboo strings. In 1962 my father managed to buy an enamel washbasin at the cost of something like 3 yuan. He said it was for me to use at high school when I had to board there. No one was allowed to use the basin and it was safely put away for three years until 1965 when I took it to high school. My father, an avowed Buddhist, never spent a cent on buying something for himself except matches and incense. He used these not to burn joss sticks before the Buddha but to light his tobacco. He grew his own tobacco and he smoked heavily. Very often, he would use a wooden stick instead of incense in order to save money. My elder sister’s favorite story of how my father scrimped and saved was his refusal to use an umbrella. He would explain that every time an umbrella was used its life got shorter. Usually, Gao villagers could only afford paper umbrellas painted with tung oil, made by a local craft worker. Only the well-to-do could afford a cloth umbrella.
There was very little that Gao Village would buy from the shops, the nearest shop being some 3 kilometers away. They would have to buy matches, salt, soap, kerosene for lamps, joss sticks, some red paper for writing couplets for the Spring Festival, and rationed sugar if they could afford it. But Gao villagers would make their own soya sauce from soya beans. They would make sugar from sugar cane or from sweet potatoes, or even from rice. They would also make their own wine from rice, a spirit called sake in Japanese. Before my sister was married in 1960 my family could not afford kerosene, so we continued to use an oil lamp, a very dim light, but economical. After my sister’s marriage, light improved dramatically because my brother-in-law, an engine mechanic on a ship, was able to supply my family regularly with used engine oil. I always eagerly looked forward to my brother-in-law’s visit. Once every two months he would bring several apples or some sweeties and biscuits, a great luxury for the family. My mother would cook two eggs for him while we children looked on with our mouths watering. She would only let us have a taste of my brother-in-law’s presents and put them away for more important use such as treating a guest or giving gifts to the right people on the right occasion.
Until the late 1970s no Gao villagers could afford a watch, a bike, or a radio. One of the doctors stationed in Gao Village from 1962 to 1970 had a radio. Every night, groups of Gao villagers would go to the clinic to listen to his radio. Before the late 1970s only two people in Gao Village had a watch. One was Gao Yunfei the landlord’s son, a school teacher, and the other was Gao Shihua, a “barefoot doctor”. I managed to buy a watch for 120 yuan only in 1977, when I was sent by the government to study in Britain. The government paid for it as part of the scholarship allowance. In order to have a presentable image, all of us who were going abroad were given a huge amount of money, something like 950 yuan, to smarten ourselves up. When I wrote back from Beijing to tell my brother about this, he could not believe that so much money had been given to me for nothing. To the Gao villagers it was like the Arabian Nights. Since I was young, I had always wanted three things: a knife that could be folded, a torchlight, and a pair of rubber boots. I had none of them until I left the village.
In the whole of Qinglin brigade, with 593 households and a population of 3,610, there were only thirty-six watches, twelve bicycles, twenty-five sewing machines and thirty radios by 1978. Nowadays, however, small consumer items such as gloves and socks, or a torchlight, a hat or a scarf are no longer thought a major consideration in the family budget. There were only two bicycles in Gao village in the early 1980s. Now there are forty-two. There are also a couple of color, and twenty black and white television sets.
Six years after I left the village in 1973, the fortunes of my family changed for the better. One reason is that all my brothers have grown up. However, the main reason was the extra cash income that I started to send home. When I graduated from Xiamen University in 1976, I was assigned to teach English there. At that time, the salary of those employed by government institutions, as opposed to those employed by government enterprises which had a salary system of eight grades, were scaled in twenty-four grades. My salary was at the lowest grade, which was 38.5 yuan a month.'* Then in 1977, because of my poor family background and “good performance” and after I successfully passed three tests in English, one oral, (spoken), one aural, (listening), and one written, I was sent by the Chinese government to Britain to study English. I was there for three years, and my salary of 38.5 yuan a month was continuously paid to me back in China. Since every aspect of my expenses was taken care of by the Chinese government, plus - 3.08 UK pounds a month pocket money, I could afford to let my mother and brothers have all my Chinese salary. As a result, my family was the first in the village, after the “barefoot doctor” Gao Shihua, to have a bicycle. They were also the first to have a color television, because I bought it for them in 1992.
Because of the “consumer boom” in the area since the late 1990s, many villagers have set up small stands selling a variety of goods. A typical stand is made of a small shelter with one opening facing the road where the traffic comes and goes. These can be locked up at night and they are just big enough to store all the goods on sale, which are displayed on three sides. There is a counter at the front, usually with a family member sitting behind it who serves customers. They cannot be called street corner shops because there are no streets in the villages. There is only one road running through the villages to the Boyang County Town and all the shops are installed along this road. A kilometer away to the east of Gao Village, there are now half a dozen shops along the road. About 2 kilometers to the west of Gao Village there are another half dozen shops set up along the road.
Note 14: It was rumored among the Chinese that when the twenty-four-grade system was originally conceived, the first grade was designed for Chairman Mao, who, however, only agreed to accept a grade-three salary which was something like 500 yuan a month.
Gao Village has had one such shop since the late 1980s. It was owned by a Gao villager’s son-in-law, who used to be an army officer and who had lost his job at the county government. In 1991, however, with 6,000 Australian dollars that I had given my brother, Gao Changxian had a house 3 meters wide and 7 meters long built along the road and set up a shop. Soon afterwards the son-in-law’s shop disappeared because it could not compete with Gao Changxian’s shop. Gao villagers were very pleased about the affair. One village power-holder said to me in 1992 that Gao Changxian’s shop had saved face for Gao Village because it was actually owned by a Gao villager. The son-in-law was not a Gao villager and his surname was not Gao. To Gao villagers, to have a non-Gao shop in Gao Village indicated the weakness of Gao Village since nobody was wealthy enough ‘to open up a shop. Gao Changxian’s shop in 1994 had a turnover of around 30,000 yuan, with a very small profit margin, of around 200 yuan a month. (Gao Changxian went on to do many other things.)
A number of factors contributed to the consumer boom in Gao Village, but an increase in agricultural income is not one of them. The principal factor is the cash income from young Gao villagers working as migrant workers. To the present day, around 30 per cent of the people in the area have left as migrant workers. If each migrant worker sends an average of 100 yuan a month back to Gao Village (which they in fact do, as we will see in a later chapter), the cash income from ninety-eight Gao Village migrant workers in 1995 would amount to 117,600 yuan. This is a huge amount of money for Gao villagers, on top of which the absence of these migrant workers alleviates a substantial burden on food and village resources.
Another important factor is that some consumer goods are simply much cheaper now ‘than, say, ten years ago, thanks to the industrial boost since the 1980s. An ordinary watch costs around 50 yuan, or even less, nowadays, whereas its cost was at least 100 yuan before 1978. Today’s prices are such that if inflation is taken into account a villager should be able to buy a watch at a cost equivalent to 12 yuan fifteen years ago, whereas the actual price at that time was set at 120 yuan! This is just one example of how the government fixed the price of industrial goods to the disadvantage of rural residents. This price change applies to other consumer goods as well, such as bicycles, radios, rubber boots, garments and television sets.
The general picture at brigade level
The whole of Qinglin brigade was 593 households and a population of 3,610
Table 1 see Appendix 2, provides a general picture of income at the brigade level. It shows important indicators of income: per capita consumption of grains, “unit labor value” as defined above and annual per capita income in Chinese currency. The statistics in the table are not complete in that it only contains the figures from 1969 to 1978. The record book that I had access to leaves the year 1968 blank. The reasons for the incompleteness of records were discussed at the beginning of this chapter. 1971 and 1972 were the best years of all during Mao’s reign. 1973 was a year of disaster because of a serious flood in spring and a serious drought in summer. The villagers had to live on fan xiao liang, i.e., the grain collected from the peasants but stored locally and resold to the peasants by the state to avoid famine. The chart also shows that towards the late 1970s though grain production output kept steady (steady level of per capita grain consumption), unit labor value kept on declining and per capita annual income remained flat. This was the case because of the pricing system which suppressed the value of agricultural produce.
Towards the end of the 1970s the rural situation was indeed deteriorating. This was not just the fault of the collective system. It was the result of a number of combined factors. One was the continuous increase of population. Another was the gradual environmental degradation. Yet another was the detrimental pricing system. During the 1980s, further deterioration of the farmer’s situation was checked by the reforms, among which the increase in prices of agricultural produce had the most important impact.
By and large, living standards in forty years had hardly improved, though production output increased. The gains from the increase in output were partly taken away by the exploitative nature of the pricing system and the state’s compulsory purchase of grain, and partly cancelled out by the increase in population. In terms of material well-being, development in Gao Village during these forty years was involutionary and Gao villagers were kept in a poverty trap by the state policies, environmental degradation and population increases.
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