The Impact of the Markets on the Ethnicity in China - Term Paper Example

Market’s impact on the ethni in China According to Mackerras (2006, p in China there are 55 minority nationalities which along with Hans (a majority) takes the count to 56. The minorities take up about 5/8th of China’s territory. This is the reason behind the much out of proportion importance of these minorities with respect to the total population of China. Hans Chinese, a majority in China makes up for 91.9% of the total population whereas, Zhuang, Uygur, Hui, Yi, Miao, Manchu, Mongol, Buyi, Korean and other nationalities make up the rest 8.1% of the total population. These ethnic minorities seem to enjoy a pretty harmonious relationship with each other and also with Hans, which is more economically prosperous than the other minorities. But sometimes these social and economic inequalities have led to tensions and violence; China is a booming economy with tensions that have resulted from unequal growth opportunities. Riots in Northwestern Xinjiang, dissatisfaction in Uyghurs etc. show that these minorities are feeling left behind, even though the Chinese economy is prospering because increasingly, the economic opportunities are being taken up by the Han locals or other migrants. This paper attempts to bring out the impact of the markets on the ethnicity in China. The 1970s economic reforms During the period of 1970s, China was suffering from the problems of stagnation in the economy, disguised unemployment and low productivity in both rural as well as the urban sector. To overcome these problems, the Chinese government had embarked some programs of economic reforms, as a result of which, the last two decades has seen a remarkable change. The real per capita GDP has seen a more than 5 fold increase, with an annual growth of about 9% (Wu & Song, 2010, p. 2), whereas millions and millions of people have been lifted out of absolute poverty. However, these benefits have not been distributed evenly as a result of which inequality has risen rapidly in the last few years. Gini coefficient, a very popular measure of income inequality, shows that in 1978, China’s gini coefficient measure was 0.317 whereas in 2005 it was 0.449 (Wu 2010, p. 2). It is further seen that the eastern provinces that are nearer to the sea have developed more than the interior western provinces. Again, these reforms have resulted in increased gender wage gap as well as increased urban-rural income gap. (Fazio & Huges, 2004) Impact of these reforms on the ethnic minorities Minority groups were initially classified on the basis of common territories, language, culture, economy etc. However, many a times, the members of these minority groups did not fulfill all the criteria. Therefore, the Chinese government has now allowed people to claim minority on the basis of ancestry i.e. if a person has at least one minority parent or grandparent, he/she can be classified as a minority person. Many a number of people are coming forward to claim minority because of government’s preferential policies like relaxation on government’s family planning program, tax benefits, admission of wards into preferred schools, hiring and promotions etc. (Fazio & Huges, 2004, p. 2) Post the economic reforms; there has been an increase in the employment wage in the ethnic minority areas (approximately 8.25 times increase) but the national wage has increased by approximately 10.8 times. (Fazio & Huges, 2004, p. 3) According to Mackerras (p. 66), during 1994-1999, the number of people belonging to the officially impoverished ethnic minority has fallen down from 45 million to 14 million but it also points out the fact that 36.5% of the people remaining in absolute poverty as of the year 2000 are also from the ethnic minority group. Reasons behind the violence between the ethnic groups in China Violence between the ethnic groups in China has mostly been attributed to the failure of the Chinese Ethnic policies. Going by the Han Chinese point of view, the large investments and fiscal transfers by the central government for the betterment of the ethnic minorities as well as the favoritism shown to them while, all the time discriminating against the Hans Chinese has led to the present state of hatred and violence. On the other hand, the ethnic minorities claim that the government did not work hard enough to protect their rights as the main benefactors of this economic growth have turned out to be Han Chinese. (Wu & Song, 2010, p. 1) Ethnic minority & China’s labour market The Chinese pre-reform urban labour system was such that neither the worker’s choice nor the manager’s choice mattered much. The enterprises were neither allowed to recruit the particularly suitable workers nor remove the unproductive ones. The workers were paid centrally fixed wages (using grade system), thereby receiving nearly equal wages regardless of their productivity or performance. Even in the primary sector such as the agricultural sector, the workers did not enjoy any liberty to choose their own occupation. They were placed in different production teams by the virtue of their locality and not their preferences. In this sector as well, the remuneration was not on the basis of productivity and therefore the agricultural production was stagnating. The situation was further worsening because the government’s investment policies were partial in favour of the urban sector and the capital intensive industries at the cost of the agricultural sector. (Fazio & Huges, 2004, p. 7) As the reforms started spreading, during the early 1980s, the profit minded hiring managers started asking for more flexible and efficient labor recruitment arrangements whereby both the workers and the managers had the right to choose their employee and employer respectively. Also the demand for more productivity based remuneration arose, as a result of which wage variations across sectors increased compared to the pre reform era. Thus, a considerable amount of change was seen in the working environment of the Chinese workers during that period. (Fazio & Huges, 2004, p. 8) A decade after the commencement of the market reforms of 1978, the Communist Party of China (CPC) abolished the job assignment system whereby the previous system which guaranteed for life jobs in the government sector, state owned enterprise or collective owned enterprise was removed and in place of it, individuals were urged to take up jobs in the emerging private sectors (“China - Higher Education”, n. d). Thus, individuals were now required to find occupation for themselves within the parameters of wages, experience and choosing from the available, new occupational categories. From the data of the past few decades, it can be seen that the ethnic minorities are not faring very well post the termination of the job assignment system. Using the census data for 1982 and 1990, a gap between procurement of occupation between Hans and the minorities can be seen. A dramatic increase in income gap between Hans and the minorities was seen in 1995, when it had risen to 35.9% as against 19.2% in 1988. Data shows that in the rural area, minorities receive 19% less wages than their Hans counterpart whereas this figure for urban areas is approximately 4.5%. (Hasmath, Ho and Liu, n.d., pp. 1-2) Reasons for these findings can be explained as follows: Discrimination: A minority can be discriminated against because a company’s hiring manager might have less enthusiasm for hiring a worker because he/she belongs to some ethnic group which is perceived to have lower quality of human capital. It can be that on a previous occasion, a worker from that minority group had not performed well and therefore there would be apprehension towards the rest of the people belonging to that ethnic group. Again, sometimes, ethnicity transforms into a proxy for signaling potential future productivity i.e. members of an ethnic group may be thought to have higher or lower levels of productivity than other workers with similar kind of qualifications (Crowley, 1994). Again, an employer might undervalue a candidate’s qualifications on the basis of his/her ethnic group. Since 1978, the CPC is actively working towards increasing educational opportunities for ethnic minority students (Yi, 2008, p.47). In order to achieve this, students from these groups are given preferential treatments during admissions to university etc. Some Universities make it a point to ensure that a percentage of minorities are given admissions every year. This type of preferential treatment towards the minorities often signals lesser talent or productivity to the potential employers. (Hasmath, Ho and Liu, n.d., pp. 7-10) With the growth in the Chinese economy, demand for more and more skilled workers was increasing. This increased the “return to education” for the Chinese people i.e. people were going for higher education as the wages depended on qualifications. But studies have shown that many low income class families (mostly minorities) were finding it difficult to send their wards to school because of the introduction of different types of fees for every level of education. The percentage of uneducated minorities exceeds the same for Han Chinese (Fazio & Huges, 2004, p. 11). Lacking Social Network Capital: Ever since the job assignment system was abolished, in order to secure employment, methods of open market job search (such as direct application, newspaper advertisements, online job search engines, social contacts etc.) are being used. Many a people get jobs based on the reference of someone already working in that firm. Studies show that 2/3rd of the Han interviewees had found their current jobs by making use of their social network connections. On the other hand only 10% of the interviewed minority candidates managed to secure jobs using their connections. In general minority status has been viewed upon as the origin of economic inefficiency and social injustice and challenges the principles of equality of opportunity as far as the legal and public policy arena of China is concerned (Becker, 1957). A disinterest in choosing candidates using the open market methods prevails among the employers as these channels are managed by the CPC officials. In this scenario, guanxi has become the main way of matching the job seeker with the employer (Gold & Guthrie, 2002, p.156). The problem here lays in the fact that it might so happen that the best qualified person for a job is not the one with the best connections. Again, more importantly, when job search process fails, it ends up discouraging the minorities (making them discouraged workers) which in turn hampers the performances of their future generations. (Hasmath, Ho and Liu, n.d., pp. 10-11) Feeling like a misfit in the working culture: Since the hirings are mostly on the basis of informed contacts, homogeneity at the organization level can be seen. This further weakens the position of the minorities because the power now lies in the hands of the majority to steer or shape the working culture. Working culture includes things like interpersonal relationship, way of communication, decision making etc. Here, the supervisor of the enterprise plays the most important role by encouraging the minorities to feel a sense of belonging with the present working culture. (Hasmath, Ho and Liu, n.d., pp. 11-12) Conclusion These studies are showing that there is a gap between the income earnings and also in the process of the ethnic minority labour acquisition in China. It has been highlighted that the ethnic minorities are at a disadvantage as far as the process of job acquisition or retention is concerned. The reasons for this can be that the qualifications of the minorities tend to be undervalued because of the preferential treatment policy present in the system. The employer feels more comfortable in hiring a Han worker with similar qualification than someone from minority. Again, the problem of finding jobs using social network capital puts the minorities at a disadvantage. Moreover, a considerable number of minorities feel that they do not fit into the existing working culture at their work place i.e. they are treated as outsiders (Iredale, Bilik and Guo, 2003). Against this background, it can be said that if the minorities keep on facing the existing disadvantages in their job search or their workplace environment, time will come when all this might lead to their withdrawal from the labour market. Moreover, the preferential treatment provided to them in higher education is paradoxically making things worse as this preferential treatment is leading to a greater extent of discrimination. Finally, it can be said that in order to maintain unity in China, the issues related to China’s minorities are of supreme importance. China needs to overcome the economic backwardness that exists in most of their minority groups. Inequality needs to be addressed to. Failure in achieving the above said may result in wide spread social unrest. Therefore, development of economically backward ethnic groups of China is a very sensitive issue. References 1. Becker, G. S. (1957). The Economics of Discrimination. Chicago: University of Chicago Press. 2. “China - Higher Education” (n.d), State University, retrieved on September 25, 2011 from: http://education.stateuniversity.com/pages/274/China-HIGHER-EDUCATION.html 3. Crowley, B.L. (1994), The Road to Equity, Stoddart 4. Hasmath, R., Ho, B. & Liu, E. (n.d), Ethnic Minority disadvantages in China’s Labour Market?, retrieved on Sept. 24,2011 from http://www.class.uh.edu/econ/faculty/emliu/ethnic_minority.pdf 5. Gold, T & D. Guthrie, (2002), Social Connections in China, Cambridge University Press 6. Iredale, R.R., Bilik, N. & F. Guo (2003), China’s minorities on the move, M.E. Sharpe 7. Fazio, M.M. & Hughes, J.W. (2004), The Economic Status of China’s Ethnic Minorities, retrieved on Sept. 24,2011 from http://econrsss.anu.edu.au/pdf/china-abstract-pdf/maurer-fazio.pdf 8. Mackerras, C. (2006), Ethnic minorities, Critical issues in contemporary China, London: Taylor & Francis. 9. Wu, X. & Song, X. (2005), Ethnic Stratification in China’s Labour Markets: Evidence from Xinjiang Uyghur Autonomous Region, retrieved on Sept. 24,2011 from http://soc.haifa.ac.il/~haifa2010/wp-content/uploads/song.pdf 10. Yi, L. (2008), Cultural Exclusion in China, London: Taylor & Francis Read More