Source: Beijing Daily

The world economy seems to have entered a long period of low growth in the wake of the international financial crisis. The IMF calls it the “New Mediocre”, but how long the period will last remains uncertain in the short term. At home, after a 30-year growth period with annual GDP as high as 10%, China readied itself for the next two decades of GDP in the 7-8% range, but few could have expected to see sub 7% GDP so soon.

In fact, the change in economic growth is more attributed to the shift in China’s industrial structure than to international situations. The change started more than a decade ago, but the pressure from the change has never been felt so deeply. Industrial restructuring is a general trend, and, correspondingly, China steps into a new stage for social structure transformation.

Chinese social scholars began discussions about transformation of the social structure in the late 1980s and early 1990s, when they just discussed the relationship between China’s economic system reform and social structure transformation, and realized that transformation of the social structure is a longer and more difficult process when compared with economic system reform. In fact, transformation of the social structure is a process of industrialization, urbanization and modernization, with the implication being that the huge structural changes are highly correlated to each other. According to the correlation, the long process of modernization can be divided into several major stages: in the early stage of industrialization, population flows into cities on a large scale; in the middle stage of industrialization, cities expand into suburbs; in the late stage of industrialization, counter-urbanization takes place. At present, although the downward pressure on economic growth increases, transformation of the social structure continues to move forward rather than slowing down or coming to a halt. Instead of being represented by widespread construction sites, manufacturing factories and tall buildings, it’s more like a quiet revolution. In other words, there is plenty of data at the level of social experience to suggest that China’s social structure is not fixed, as considered by some scholars, but highly elastic. The experience of some foreign countries also shows that even in a period of slow economic growth, the social structure can still undergo profound changes.

The present transformation of China’s social structure is mainly reflected in the following aspects: first, social movement between urban and rural areas is very fast. Trends like non-agriculturization and urbanization remain robust at all the levels, ranging from economic output, employment and residence, to lifestyle, values, and behavior orientation; second, social mobility among occupations is fast, too. Modern service sectors grow fastest, and employees in tertiary industry not only outnumber those in secondary industry, but also outnumber the combination of both the primary and secondary industries. This marks a major turning point at which a new and huge so-called “white-collar” class is coming into being; third, social mobility among different classes as driven by innovation is emerging. If we say the first wave of social mobility that came after China’s reform and opening-up was powered by capital and the second wave of social mobility was advanced by urbanization, the third wave of social mobility that is taking place now is driven by innovation. The three kinds of social mobility are essential to China’s vitality. Social mobility is expected to improve social output, increase social efficiency and enhance the abilities of social members. If there are any indicators available for explanation, the big change may not be stabilized till China’s urbanization increases to 75% of the population, employees in tertiary industry comprise 65% of the workforce, and the gross enrollment ratio at the higher education level reaches 60% or above.

Of course, to accurately understand the long process of social structure transformation is quite an undertaking, and examining the new characteristics of each stage is akin to examining layer upon layer of concrete. The problems and challenges we will face have changed greatly when compared with those arising in the 30 years following China’s reform and opening-up. Some iconic turning points have emerged in many fields, including urban-rural integration, labor supply, and changes in the occupational structure, income distribution and an aging population. In other words, the first 30 years after China’s reform and opening-up and the next 30 years we’ll undergo seem to be two stages with different characteristics. We once defined them respectively as the “stage of economic take-off” and the “new growth stage”. But the terms are not quite accurate and further research is needed.

(Li Peilin, Vice President of the Chinese Academy of Social Sciences and President of Shanghai Academy)