ABSTRACT
Introduction The processes of economic reform and growth in China are bringing with them huge social and economic transformations. The economic reforms started in the late 1970s have unquestionably enabled some social groups to become wealthy but the same processes have also widened the gap between the rich and the poor, as well as intensifying regional disparities (Keng 2006; Weil 2006; Yao et al. 2004). The most recent China Human Development Report 2005 indicates that the gap between the rich and poor in China has been widening: the richest 10 per cent of urban dwellers controlled 34 per cent of urban wealth while the poorest 10 per cent held a mere 0.2 per cent. Commenting on the urban-rural income gap, the United Nations noted that China had perhaps the highest income disparity in the world (UNDP 2005). At the same time, forms of protection and security that were associated with the command economy have been undermined and replaced by new modes of welfare provision and new kinds of citizen entitlements. For most, access to benefits is no longer connected with stable membership of local work units but is increasingly the product of other factors: self-reliance or community self-help; a history of compulsory contributions linked to employment; or a claim based on ‘ability to pay’. In this context, fundamental issues are only now beginning to be raised about the role of the state in social provision in a ‘socialist market economy’. Under state socialism the role of the state in social provision and protection was limited and ambiguous, because much of the responsibility for collective welfare devolved directly on the shoulders of the productive, wealth-generating sector (state-owned enterprises, collectives and other production units) rather than on the state budget proper. This responsibility was largely devolved to the work unit – the danwei – which performed vital social support roles. In the command economy, the state claimed its legitimacy from successfully managing and directing the key productive sectors of the economy, which in turn provided for those members of society who were directly engaged in them. But with the nexus between the state and workplaces fractured as a result of marketization, new questions about the role of the state in social provision have emerged.
