China Power

The Chinese Dream: Still Dreaming?

Fulfilling Xi’s vision could allow China to better share its prosperity among ordinary Chinese.

During Chinese President Xi Jinping’s June visit to the United States, he noted that the two nations share many similarities and areas of policy overlap, including the concept of a national dream. Xi had already introduced his “Chinese Dream” after becoming chairman of the Chinese Communist Party (CCP), as a vision that seems to combine the idea inspired by the American Dream of rising living standards with an undefined “great rejuvenation of the Chinese nation,” apparently combining a stronger military with collective progress in Chinese society.

When visiting recently at the Neusoft Academy of Software and Technology in Dalian, a wealthy port in northeastern China, I saw evidence of this dream at work. Graduating seniors had a 90 percent employment rate at technology companies like Neusoft and IBM, illustrating that education can lead to social mobility. But there is a problem. With increasing levels of income inequality and the vast wealth of the Chinese political elite, is that dream accessible to all – or is it reserved only for the elite?

During the 1980s and 1990s, economic growth in China brought rising incomes for most citizens. Chinese were raised out of poverty at a rate unprecedented in history, with hard work and investment in education serving as paths to career advancement. Since the mid 1990s, however, the Chinese economy has been redirected away from promoting small private and collective enterprises and back toward giving more emphasis to large national state-owned enterprises, or SOEs. The top SOEs dominate the country’s economy and wealth.

One indication is the statistic known as the Gini coefficient, a measure of income inequality. This measure rose sharply between 2000 and 2012. Another indication is the wealth of members of the legislature, the National People’s Congress: 83 representatives are billionaires according to one report, while many others are the affluent children of senior party officials or SOE executives. This makes clear that political connections can matter more than career success for those who want to get ahead politically and economically. For the more than 155 million rural migrants who work in the cities with neither legal status nor social welfare benefits, does the incredible wealth of these second-generation elites let them believe in the ruling party’s Chinese Dream, or do they feel great resentment because they –  and most citizens – seem excluded?

For the CCP to create a Chinese Dream accessible to all, it must reform the household registration (hukuo) system that allots welfare benefits only to urban residents and not to migrant workers and their families. It must also make land assets available to the rural poor and develop a social safety net to support a consumer-driven service economy intended to employ the rising middle class. These reforms, while technically and politically difficult, would eliminate a great deal of China’s enormous inequality and restore a more level playing field, one that would again let family businesses and the benefits of education bring economic success for those without prior wealth or political connections.

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At this time, it is unclear how much of the official talk about a Chinese dream truly resonates with the Chinese public, although the Party may feel rising pressure to deliver on its rhetoric. However, if the mobility the concept promises is to become reality, the Party must make these difficult but necessary policy changes. Whether Xi has the needed political will and drive remains unclear, but they are essential if China is to achieve long-term economic growth by shifting from export-led manufacturing to a consumer-driven service economy.

The Chinese Dream has the potential to justify the reforms needed to make this possible, and raise living standards of the middle class and rural poor. Like the American Dream, the possibility of mobility – that each generation could do better than the one before – helps maintain social stability. For the Communist Party, fulfilling that dream is essential for its own long-term survival.

Jessica Teets is an assistant professor of political science at Middlebury College, specializing in civil society and local government policy innovation in China.