January 20, 2006


By David Kelly

For an authoritarian state to recognize in its own councils that social confrontation and protest is on the rise is not something to quibble over, even when the statistical basis of the assertion is cloudy. This is the case in the PRC, where the figure of 87,000 incidents was just announced by the Chinese government on January 19. The figure is no doubt a conservative estimate. Nevertheless, little doubt is left that “social harmony,” an increasingly prominent policy objective of the Hu-Wen administration since its installation in 2003, is no “motherhood” ideal: rather, it signals a regime in crisis management mode. Much of the protest is confined to the countryside, where issues connected with land confiscation, the environment and local exactions have recently produced a series of violent incidents. As these are dealt with in the next article, the present essay confines itself to urban side of these conflicts.

The causes of social unrest are likely to be more varied in the context of large concentrations of population; the fact that China’s population of urban residents has doubled in the past 25 years, reaching 40 percent of the total population, only adds to this innate complexity. It is, however, possible to generalize: urban movements largely cluster around the core issues of employment, social welfare and real estate. Before looking at these areas, a few general features of the urban context may be sketched. The stakes are higher in any form of urban social action. State control can be effectively mobilized and concentrated in urban areas, and fractious elements, for their part, can concentrate and coordinate more readily, with better access to sources of support (media, law, and the state itself). That said, the Chinese government stands a better chance of incorporating and, in a sense, taming urban conflict. Properly handled, the seething discontent evident among city dwellers today could very well be channelled to stabilize the regime, allowing it to concentrate on the more intractable problems of the countryside.


Labor shedding and layoffs have been a feature of China’s reforms since the mid 1990s. The processes have been well documented: it is clear that new disadvantaged strata have appeared in society because of them. The state sector was formerly the Great Provider of employment and the fairly comprehensive range of social welfare benefits which was packaged with it. Economic growth is of course expected to absorb workers made redundant by the transformation of technological and ownership modes in the state sector, and it is a fact that private enterprise has emerged as the main source of new jobs. On the other hand, a laid off older worker and a new em¬ployee in the non-state sector are not necessarily the same person. When the projected adjust¬ment fails to materialize, organized protest resistance may and does erupt. Despite being fertile soil for protest, however, observers point out that the political goals of movements among the legions of laid-off workers and related groups (such as the elderly demanding their rightful pension benefits) are often relatively modest. They seek reaffirmation of their “masters of society” status, a popular myth promoted by the authorities in the 1950s-1970s that the urban working class was the leading force in the newly established People’s Republic. It is the peasants—who were never given any such status—who have more readily made the transition to citizen politics and recognize themselves as citizens endowed with legal rights in a quasi-contractual relationship with the state. It often appears that the urban worker, in fact, will struggle more readily for dependency on the state.

Social Security

Old age support, health care, affordable housing and education were part of the overall package available to urban dwellers through their membership in work-units. Yet a fundamental task of economic reform is to deal with these government-sponsored social security packages that are responsible for the ruinous economic circumstances of much of the productive enterprise in the country. Enterprise-funded schemes have to be savagely slashed; even those workers who keep their jobs or find new ones are under pressure to provide more for their own social secur¬ity. Outbreaks of unrest related to these issues are directed less toward this concept of social security than at the manifold failures of its implementation. Embezzlement of funds, arbitrary and unsatisfactory levels of provision, and brutal disregard for the subsequent fate of those affected have been frequent triggering factors. The “neo-traditional” bias noted with regard to movements of the unemployed also apply here: people often pose their plea in terms of restitution of dependent benefits, rather than as citizens owed a duty of care by the state.

Real Estate

Property rights in housing are generally the most significant assets of urban families in China. Faced with an unmanageable burden of welfare housing allocated through the danwei, the govern¬m¬ent commercial¬ized housing in the 1980s. Urban residents assumed title to their hous¬ing, which was sold off cheaply. With population grow¬th and urban expansion, the market for housing has become a major driving force in the market economy, accounting for up to a quarter of China’s GDP growth.

Regulation of this market is imperfect. The government issued instructions to curb speculation taking effect in June 2005, but concerns linger that prices will not be held in check for long. In fact, few urban dwellers can financially afford to purchase their own housing without their work-unit support. A study by a Peking University scholar indicates that it would require 13 years’ salaries for a typical household with three persons to purchase a 70 square-meter apartment. In cities such as Shanghai, the corresponding numbers were much higher [1].

A newly released survey from the prestigious Tsinghua University shows that more than 80 percent of consumers wish to have stronger macro-level policies in controlling the rise of housing prices [2]. Local governments are frequently charged with rent-seeking behaviour in the housing market. Various agencies such as local bureaus of construction and real estate administration are able to collude with developers and real estate agents to facilitate speculators by such practices as allowing forward purchase on credit. This helps keep the prices on an upward spiral. It sometimes also results in the transfer of housing ownership to agents or speculators without the prior knowledge of the current owners, when their usage rights are used as collateral for the loans. The deeper issue here is the lack of clarity in property rights regarding housing.

This is the source of a nationwide surge in activities that defend citizen rights. So-called “homeowners rights protection movements” are common in every city, generally arising in high-rise housing development projects, where homeowner committees are flourishing and moving to replace the residents’ committees that formed the lowest level of urban community governance in the past.

Citizen movements in defense of urban housing have a different format to corresponding movements in the country, reflecting the very different nature of the property rights that are at stake. The peasantry strive to protect their stake in collectively owned arable land. They face severe limitations in that the constitution gives little room for their ownership claims and allows for legitimate requisitioning of land by transferring it from agricultural to other usage under the constitutionally valid grounds of the “interests of state.” In only seven years, China has lost 5 percent of its arable land to urban and industrial development. Yet the tension between the land grab and resentment from peasants is so high that Chinese Premier Wen Jiabao is now spelling out his concerns. In a speech given a few weeks ago, the remarks of which only recently made public, Wen offered the acknowledgement: “Some locales are unlawfully occupying farmers’ land and not offering reasonable economic compensation and arrangements for livelihoods, and this is sparking mass incidents in the countryside.” He warned that such “reckless occupation” of farmland will severely affect social stability (Xinhua, January 19; Reuters, January 20).

Urban homeowners hold their housing as private owners, and their titles, while by no means ironclad or completely unambiguous, are more difficult for predatory organizations to put aside or willfully misinterpret. Conflicts frequently break out concerning transfers of the usage of public amenities, access to which is included in the sales contract for an apartment, such as car parks, community buildings and facilities (club houses, local shopping centres, access roads, etc). As well as the loss of access to these amenities, the home¬owners are motivated by the very likely loss of value of their assets.

With urban-dwellers living in close proximity to each other—many of whom may have access to influential arms of the government and media and comprise a high-proportion of those with middle-income and professional backgrounds—the homeowners are in general better resourced to engage in rights protection than the rural disadvantaged or the laid-off. The interests at stake are quite distinct. Yet it should not be thought that campaigns waged by home¬owners are sedate affairs; they can be as bloody and protracted as those waged by peasants warding off enclosure in the countryside.


Given the harshness of the CCP’s techniques of social control, virtually all social protests seek to formulate strategies that avoid confronting the state head on. The new property-focused movements are more likely to invoke the legal rights of citizens and have tended to evolve a more visible type of leader who takes the role of spokesman for legality and citizenship and draws support from written law and central government policies. Other forms of housing-based citizen movements reflect the varying nature of property rights. For example, citizens “allocated” housing by their work-units have property rights different than owners and tenants of “rented-out housing” (jingzufang), who only retain their property titles when usage of their
properties was requisitioned by the CCP prior to the Cultural Revolution. As well as having more access to resources, including intellectual resources, activists in urban movements are attempting to influence policy-making legislation. Thus a number of them have been attempting to channel the common interests of homeowners to strengthen the Real Property Law, an amended draft of which was circulated for public comment in mid-2005.

These tendencies are in flux, and the outcome is uncertain. The state tends to respond coercively and vindictively to challenges on any level, which has the paradoxical effect of making the responses from below more uniform than they may otherwise have been. Countering this tendency is the government’s research and policymaking circles, which often seek more differentiated policies that allow the state to incorporate rather than alienate the varying interests. It would seem that the citizen movements exemplified in protests over real estate issues are both more adapted to present realities and offer more opportunities for the state to establish different game plans. To some extent they offer the state a lifeline and a road to greater stability.


1. China Center for Economic Research, August 29, 2005. http://www.ccer.edu.cn/en/ReadNews.asp?NewsID=5156

2. Sou Foun, January 20. http://news.soufun.com/2006-01-20/623989.htm

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