Market penetration and life chances in a transforming economy : evidence from rural Guangdong, China, 1978-2004

Abstract

What are the effects of market reform on the life chances of rural people in China? Based on ethnographical evidence from rural Guangdong province, this study argues that the reform in rural Guangdong progresses as a process of market penetration. This process affects rural people’s life chances in two ways: first, market penetration increases the varieties and quality of overall earning sources for all in rural areas, even though village cadres still have an advantage in access to sources of earning under their jurisdiction; second, market penetration lowers state taxes, various levies, ad hoc surcharges - i.e., the main “burden” on peasants - and increases the state’s expenditures on social welfare for the rural community, improving peasants’ well being. By examining these two issues, this study contributes to stratification studies of transforming economies in four ways: first, it introduces “the burden on peasants” into the stratification studies of rural China, since existing studies mainly focus on their “incomes”; second, it redefines village cadres’ advantages by assessing how their advantages change accompanying the market penetration process. Third, it shows how market penetration progresses as an instituted process, which has led to the changes in earnings sources, a key issue that existing studies have not adequately explored. Finally, this study furthers the state-market interaction view in two ways: by apply state-market interaction view to studies of rural cases and illustrate how state-market interaction affects individual life chances. Key words: social stratification, transforming economy, peasants, Rural China,