by Joe Studwell
Atlantic Monthly Press, 2002 256 pp $22
Inequality and Poverty in China in the Age of Globalization
by Azizur Rahman Khan and Carl Riskin
Oxford University Press, 2001 240 pp $45
This spring, workers pushed out of China’s state-owned enterprises (SOEs) unleashed a wave of protests that began in the famed Daqing oilfields of northwest China, now owned by the partially privatized PetroChina Company. They staged massive, though largely peaceful, demonstrations against the meager severance payments and health care benefits they were left with in the wake of widespread layoffs.
The job cuts are the price paid by workers as part of a restructuring of the oil industry engineered by the Chinese communist regime with the guidance of an army of Western consultants that includes PricewaterhouseCoopers, Goldman Sachs, and McKinsey and Co.
The oil workers’ protests were soon followed by others in several industrial districts in China and included small but unprecedented demonstrations inside Beijing itself. The situation has been brewing for some time, with similar demonstrations occurring with greater frequency in the past few years. University of Michigan sociologist Ching Lee describes these events as a “veritable labor insurgency.” Whether or not this wave of unrest will lead to a final reckoning with the communist regime or whether that regime will be able to manage a secure transition to some new form of authoritarian capitalism is an open question.
Joe Studwell’s The China Dream draws on his decade of firsthand experience writing for the international financial press from China. Studwell edits the China Economic Quarterly, an independent and reliable source of information about China’s economy. The value of his book is that it helps the reader move away from the traditional framework that the outside world usually applies to China. There is no question that the movement for civil liberties evidenced by the battle of the Falun Gong for religious freedom, the Tibetans for national liberation, or the Chinese working class for jobs and independent unions are critical social struggles. But Studwell asks the reader to focus on the impact that important changes to that country’s economic and financial structure can have on political change, a relationship that has been misunderstood in the past.
It is instructive to look at what happened in Eastern Europe. When I visited Poland during the martial law period of the late 1980s, I had a lengthy and intense discussion-animated, perhaps inevitably, by a good deal of vodka-with several underground Solidarity activists in the textile district of Lodz. Their near fanatical adherence to the free market ideology of Friedrich von Hayek and Milton Friedman was truly ...
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