Primitive accumulation in modern China

Michael Webber

Published online: 24 September 2008

� Springer Science+Business Media B.V. 2008

Abstract This article surveys the history of primitive accumulation in China, from

the early 1980s to the mid 2000s. It observes that the principal means of primitive

accumulation have been the transformation of state and collective enterprises into

capital, the peasants’ loss of land through various forms of dispossession, and the

voluntary migration of peasants from agricultural to industrial pursuits. These mix

dispossession and market mechanisms in complex ways. They have involved the

creation of markets; but more, the creation of workers and capital. While the pro-

cesses that drive primitive accumulation have economic logics, they also have

logics that derive from concerns over social welfare, over environmental manage-

ment, and over ethnic struggles. Furthermore, the state has been closely involved in

the entire process—as a regionally differentiated actor, directly involved in own-

ership, asset transformation and the control of migration. Primitive accumulation in

China does not have one motive, does not simply reflect class interests, is not a

particular case of a global capitalist project, but is complex and localised.

Keywords Capital � Workers � Development � Class � Dispossession �China

The nature and dynamics of primitive accumulation have been widely debated.

Empirical, theoretical and polemical contributions have drawn on the experience of

various parts of Europe from the 16th century on (Hilton 1978, 1985; Laslett 1979),

of colonial and post colonial India (Banaji 2002; Chari 2004; Das 2001), SE Asia

(Fforde and de Vylder 1996; Hall 2004; Sneddon 2007), Africa (Moore 2001), Latin

America (Veltmeyer 1997; Kay 2000) and 19th century China (Allen 2004; Brenner

M. Webber (&)

School of Resource Management and Geography, The University of Melbourne,

Melbourne, VIC 3010, Australia

e-mail: mjwebber@unimelb.edu.au

123

Dialect Anthropol (2008) 32:299–320

DOI 10.1007/s10624-008-9039-8

and Isett 2002; Pomeranz 2002). The historical and spatial range of this work has

made it difficult to discern what is common, what is happenstance (Glassman 2006;

Perelman 2007).

Debates about primitive accumulation in European history have been concerned

above all with the transformation of a peasantry, theorised as independent

commodity producers, into proletarian agrarian labour (Perelman 1983) and—

given productivity growth—into an industrial proletariat (what Bernstein 2004 calls

the classic agrarian question). The origins of this transformation are disputed, but

historians have pointed to local class structures and powers (Bois 1978; Brenner

1976, 1977, 2001; Bryer 2006; Cooper 1978; Croot and Parker 1978; Post 2002;

Wood 2002; Wunder 1978); colonial plunder (Blaut 1994; Frank 1969); and

population dynamics (Ladurie Le Roy 1966; Postan 1966). More recent transfor-

mations have also been conceptualised as primitive accumulation or, in later

terminology, new enclosures or accumulation by dispossession. These transforma-

tions encompass a huge variety of phenomena: the conversion of common,

collective and state property rights (including intellectual and genetic property) into

exclusive property rights; the slave trade (including in its modern form, the sex

industry); public debt; colonial, semi-colonial, neo-colonial and imperial appropri-

ations of assets and natural resources, including the conservation of forests and

biodiversity; dismantling of welfare states; and other forms of suppression of

alternatives to capitalist use of human and natural resources (Arrighi 2004; de

Angelis 2001, 2003; de Marcellus 2003; Harvey 2003, 2006; Heynen and Robbins

2005; Isla 2005; Liverman 2004; McMichael 2006; Midnight Notes 1990; Moore

2004). To Harvey (2005), recent accumulation by dispossession is a global

hegemonic project, a response to overaccumulation of capital; but others regard it as

geographically differentiated (Peck and Tickell 2002) or incoherent (Barnett 2005).

Rather little attention has been paid within this literature to modern China; much

of what does exist is devoted to a generalised contrast with the post-socialist

transitions in eastern Europe and the states of the former USSR (for example,

Szelenyi 1998; but see Seldon 1993). Given the scale of primitive accumulation in

China, involving more than a sixth of the world’s population, the relative neglect is

surprising. In this article, I seek to deploy evidence about the history of China since

Mao to develop an understanding of its primitive accumulation. The next section

offers some introductory definitional remarks about primitive accumulation. It is

followed by an outline of the major forms that primitive accumulation has taken in

China since the late 1970s. The third section of the article uses this evidence to

make a series of critical observations about the debates over primitive accumulation.

A brief conclusion ties the critical and observational sections together.

But, first, a comment on method. The empirical material in the article derives

from more than a decade of visiting China for 1–2 months each year. About half

that time has been spent visiting villages, sometimes with colleagues, sometimes by

myself; the remainder has been spent in cities that range in size from the 20 millions

of Shanghai to small county capitals of 50,000 or 100,000 people.

Many visits to villages have been informal, spending a few days in casual

conversation and observation: finding out what’s going on. These provided the basis

from which I deliberately selected for study villages where new forms of social

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organisation have evolved; apart from this criterion, no formal village selection

method was used. Most of the villages were visited more than once. In each village,

I interviewed the leader of the village committee and/or the secretary of the local

branch of the Communist Party of China and 20–40 individuals. The individuals

were selected by me, outside the influence of village leaders. They were asked about

household composition, work history, agricultural practices, and the changes in

these that have taken place over the previous decade. The managers or owners of

enterprises within the villages (or that interact with the villages) were also

interviewed.

Information about the changing lives of urban Chinese derives from two principal

sources. One is a series of informal visits, like those to villages, where leaders (or

members) of the neighbourhood committee and up to twenty individuals were

interviewed about household composition, work history, housing, education, and the

changes in these that have taken place over the previous decade. The other is a

series of formal interviews with one manager and five workers in each of 38

enterprises located in Beijing, Hangzhou, Ha’erbin, Lanzhou, Kunming and Wuhan

(part of a study of human relations and work—family relations in enterprises that

are undergoing restructuring, jointly conducted with Zhu Ying and John Benson).

This ethnographic material is supplemented by statistical information, usually

from county governments, by similar research conducted by graduate students under

my supervision, and by reported research conducted in the 1980s and early 1990s.

The result is a broad-ranging picture of social and economic change in villages,

urban enterprises and neighbourhoods across modern–traditional, coastal–inland,

rich–poor, and Han-minority regions of China.

Primitive accumulation

Primitive accumulation is the process (or set of processes) through which capitalist

production emerges from pre-existing conditions of work. That is, it is the process

through which emerge capitalists, who advance capital to purchase means of

production in the hope of making a profit, and workers who, separated from the

means of production, have only their commodity labour power to sell. Capitalists

come to have property rights in their means of production and profits; workers come

to have property rights in their capacity to work and their wages; and capacities to

work, like commodities made by capitalist firms, come to be sold on a market (see

also Holmstrom and Smith 2000; Moore 2004). Thus, for example, agrarian

capitalism includes forms of subsumption of labour based on the dispossession and

control of labour by agrarian capitalists who are engaged in farming as a business

(Banaji 2002). In principle, this process is not simply historical, once and for all;

rather, it occurs whenever capitalist forms of production take over production that

had been organised under other social relations (Amin 1974; de Angelis 2001;

Glassman 2006; Hart 2006; Perelman 1983). However, and despite Amin (1974),

primitive accumulation is not equivalent to the domination of or unequal exchange

between capitalist and noncapitalist formations: it is a transformation in the social

Primitive accumulation in modern China 301

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relations of work. For an alternative definition, based on the performance and

appropriation of surplus labour, applied to China, see Gabriel (2006).

There are many other ways of producing goods and services (Gibson-Graham

nd). They include people working within a household to reproduce its members

(including subsistence farmers); peasants and small traders who are independent

commodity producers; cooperative organisations that integrate ownership and work

in various ways; and state planned and controlled organisations that are not in

business to make profits and in which labour power is not a commodity (perhaps

allocated by fiat or personal relationship rather than the market). These are all ways

of organising the production of goods and services, and there are many others. In

most places all of these ways are present, in different proportions. China had, and

still has, all of them.

These definitions are common. Yet they are strict, precise. A worker, for

example, is a person who has no means of subsistence other than his or her labour

power, that is sold on a market. Reality is not so tidy. On the one hand, many

peasants in China own some land, sufficient perhaps to support their households in

times of need, yet principally derive their living from work in a capitalist enterprise

for pay. Other workers are engaged in former state-owned or collective enterprises

that have been corporatised, possibly even transformed into shareholding corpo-

rations; yet governments interfere in the operations of those enterprises to ensure

that they meet social goals (including, commonly: do not lay off too many, hire at

least some locals). Other peasants remain landholding farmers, operating as

independent commodity producers; yet they are contracted to urban enterprises to

produce high quality vegetables, mushrooms, milk and other commodities that are

becoming more highly sought after by the middle classes of China’s booming cities.

These are all people who are partially proletarianised; they are not ‘‘pure’’ workers

but neither are they any longer independent commodity producers or state

employees. China has many people like these who, a foot in both camps, are—like

the society they are members of—in transition to a new form of existence (for a

similar comment on agrarian India, see Banaji 2002).

Primitive accumulation in China

Between the late 1970s and the early 1980s, a series of local experiments in the

redistribution of (rural) commune land to individual households coallesced into a

government-sanctioned household responsibility system that was eventually

formalised in the Land Management Law of 1987 (Seldon 1993). In this system,

rural land was still owned communally, but rural households were given

responsibility for, and the rights to use, a defined portion of it. Initially, villages

were required to meet agricultural production quotas (which were passed on to

households); even in the early 1990s, the state still procured about 30% of the grain

output (Carter et al. 1996), though by then the difference between state and market

prices for grain was small (Huang 1996). These household farmers produced

subsistence goods, sold (an erratically declining) quota of production to the state at

low prices, sold some commodities to the market and paid a variety of taxes. They

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were typically independent commodity producers, though a few large state farms

(run as state-owned enterprises) remained and, particularly in more remote regions,

there were (and remain) some purely subsistence farmers. Despite small farms and

their fragmentation into even smaller parcels, decollectivisation was associated with

a dramatic fall in absolute poverty and rapid agricultural growth (Bramall 2004;

Lyons 1994). In 1988, fewer than 3.8% of rural households were landless, and that

figure included the households of Party members, owners and managers of

enterprises, and industrial workers (McKinley 1996).

Over the same period, the communal enterprises were transformed into township

and village enterprises (TVEs). The vast majority of these were in the coastal

regions of China. Some of the TVEs were in reality disguised private enterprises,

especially in such locations as Wenzhou (Chen 1990 describes class relations in

Wenzhou at this time), but most were owned by township or village governments

(Xu 1995). The finance for TVEs (even the private ones: Li (1990)) was local—

loans from peasants (eg, those seeking a job), community funds, and the

Agricultural Bank of China (Ho 1994): few individuals had the funds with which

to start private enterprises (Oi 1999), but there existed a variety of regionally

specific models of TVE development (Yuan 1994). The goals and performance

standards of the TVEs were set by village and township leaders (Ho 1994). Initially,

rural cadres distributed jobs to friends and relatives, and as rewards. Subsequently,

as more jobs became available, they were distributed more or less equally among

the households in the community. Only after the supply of local labour was

enhausted did the TVEs hire workers from outside the community (neighbouring

villages and then other counties, and finally other provinces: Wu 1994). TVE net

incomes were used to support agriculture (through purchases of equipment, income

subsidies to farmers), collective welfare (medical expenses) and their own

expansion (Ho 1994). These were communal enterprises, producing commodities

for sale in a market, but not hiring labour in a free market (see Chen et al. 1994).

Generally, then, rural people in the early-mid 1980s had control over their means

of production—either directly in the case of farmers and fisherfolk, or indirectly

through the local state in the case of those who worked in TVEs (and even they

usually had access to household responsibility land). Production on farms and in

factories was coordinated by township and village governments in order to meet

quotas and other social development goals (Liang 1994), so production decisions

were not totally individual. Rural household income at this time derived principally

from the value of subsistence consumption (41%), net cash income from the sale of

farming, industrial and subsidiary products (income from independent commodity

production: 33%), the rental value of owner occupied housing (10%), income from

wages and pensions (including from working in TVEs: 9%) and a variety of

transfers (dividends, property income, private transfer payments, and net transfers to

governments: 8%) (Khan et al. 1993).

Urban residents (that is: officially recognised urban residents) in the mid 1980s

generally worked in state-owned enterprises (SOEs). These included not only

manufacturing operations, but also retailers, government bureaucracies, transport

and broadcasting companies—owned by the central, provincial, prefectural or

county governments. Such residents were provided with subsidised food, through

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the state, and with accommodation, health care, school education and recreation

facilities through their workplace. Jobs were bureaucratically allocated (in the same

way as resources and operating funds) and carried absolute tenure; wages were

relatively equal and largely independent of qualifications and performance; children

had rights to their parent’s job (Byrd 1991). Urban household income derived from

wages (working in SOEs: 44%); the net value of food, housing and other welfare

subsidies (39%); pensions and payments to retired or nonworking members of the

household (7%); the rental value of owner occupied housing (4%); and income from

property, individual enterprises and private transfers (5%) (Khan et al. 1993). The

people who were employed in SOEs regarded themselves as workers, but they

certainly had access to a broad range of means of subsistence that did not depend on

finding a job in a competitive labour market or on subsequent performance in that

job.

Cities were also becoming home to an increasing number of rural–urban migrants

(estimated at 50 million in 1985: Chan 1996). Some were legal migrants (whose

residence permits were transferred), but most were outside the law, fleeing

overpopulation and relative poverty in rural areas and filling a variety of niches left

vacant by SOEs, especially street trading, restaurants and personal services. This

floating population of migrants, outside the law and with rural residence permits,

was not provided the goods of the urban subsistence regime and was absolutely

segregated from the labour market of the official urban population. Periodically in

some cities (notably Beijing), migrants were forcibly—but only temporarily—

returned to the countryside. These migrants usually still had access to some land;

but they were seeking to make a living in a desperately competitive labour market,

usually working on their own account, for petty traders or for private individuals.

As in other late industrialising societies, such as Taiwan and S. Korea (Wade

1990; Hamilton 1986), there were substantial transfers out of agriculture and rural

areas. These transfers were effected through pricing policies for quota production

(state procurement prices were 60% or so of market prices at the end of the 1980s);

real net transfers (agricultural expenditure was far less than taxes and levies); and

transfers instituted through rural credit cooperatives (their deposits exceeded their

rural lending). Carter et al. (1996) estimated that the total transfer was equivalent to

about 20% of agricultural GDP and more than 10 times farmers’ annual investment

in productive assets.

By the mid 2000s, much had changed (Chen et al. 2000). In rural areas, a variety

of forms of dispossession has removed rural people from effective control over their

means of production. Appropriation of collective and household assets occurred

through the application of superior power—village, county, provincial or central

government—to privatise control over communal assets (notably TVEs, but also

such non-commercial assets as local amenity) and household assets (principally the

use rights in household responsibility land).

On the edges of many cities, especially the booming cities of the east, rural

villages have been overtaken by urban and industrial expansion (Ding 2007).

Although households control production decisions on their responsibility land, the

village committee decides who shall use land and for what purpose. Thus, the

transformation of agricultural land use is not an individual but a village decision.

304 M. Webber

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For example, the village of Xie, in Mudu township west of Suzhou, has seen

virtually all of its farmland appropriated for estates to accommodate the factories of

the expanding industrial economy of Suzhou, the centre of one of China’s models of

non-metropolitan industrialisation. The villagers receive in return an annual

payment, equivalent to the average household’s former rice production, and can

work in the new factories. Many households rent out their houses to the floating

population that has come to Xie to work in the new factories, and use the

combination of land compensation, new job and rent on the old house to build a

new, grander house. These households have lost their production land but gained a

rental income as well as a paid job. (In and around Yangling’s agricultural high and

new technology development zone, the emergence of new, large capitalist

horticulture or nursery farms sees a similar process.) But peasants are also

dispossessed of their land whenever new dams—such as Xiaolangdi (Webber and

McDonald 2004) and Three Gorges (McDonald 2006)—are built and whenever the

state forces people to leave their degraded pasturelands and resettle elsewhere, as

has happened on the steppes of Inner Mongolia (Dickinson and Webber 2007).

So land dispossession has occurred, leaving some rural residents landless or with

very small holdings. Yet these are still only a small minority of rural residents. Land

holdings remain more equally distributed than income (Bramall 2004) and their

periodic reallocation functions as a social security system in villages (Carter and

Yao 2005). What there is little of in rural China are the forms of agrarian capitalism

that Banaji (2002) detected in India: commercial capital that cascades down to the

farm level through debt and controls over land possession; large scale farms,

cultivated by hired labour; and wealthy farmers, who have grown rich by

expropriating others. There is, though, growing inequality within rural places and

between them (Ke 1996).

There has also been privatisation of TVEs. In the 1990s, increasing competition

(from larger numbers of TVEs and expanding urban capitalist enterprises in an

increasingly integrated national economy), rising labour costs and higher standards

of production have raised the costs and the risks of owning TVEs. At the same time,

a group of experienced TVE managers with access to some finance (including

banks, but principally families) and other business assets had emerged. After some

experimentation with alternative forms of management (leasing, shareholding

companies, corporatisation of village activities), many TVEs have in many places

been sold off to private owners (Oi 1999), often to their former managers or

government supervisors and often at subsidised prices. This process is more

advanced in richer localities than in poorer. In Mudu township, Suzhou, by 2002,

60% of the (43) formerly communal enterprises were in private hands (either

Chinese or foreign) and another 24% were owned by enterprises that combined

foreign and private capital with some communal finance. The remaining communal

TVEs are principally public utilities.

Privatised TVEs generally shed their local service obligations. They are no

longer subject to local leaders’ planning (though leaders may still meddle!) nor to

employment targets for local residents. They are increasingly able to compete in

China’s integrating markets for commodities and they drain fewer local state

resources than formerly; but they also hire workers in a labour market (Ho et al.

Primitive accumulation in modern China 305

123

2003) and pay wages that are set competitively. Those workers may still have

responsibility land, but they have lost one communal productive asset—preferential

access to the jobs of local TVEs.

However, not all of the changes in the social relations of production within the

countryside are caused by dispossession. There is, for example, market-based land

consolidation (Lin 1997). In some localities, especially where there is ready access

to well-paying jobs in the local enterprises, peasants hire other peasants, from

poorer places, to do their farming for them; or a group of peasants amalgamate their

farms and contract one of their number to produce crops, often with the help of hired

labour. Lin (1997) describes a farm of nearly 100 ha in the Pearl river delta, on

which the manager hires a team of 20 or so labourers and I’ve seen similar, though

smaller operations in Shandong. No one is dispossessed in this form of production:

the hired labourers still have their land, back in their villages; the original peasants

still have rights to their land, were they to choose to exercise them. Nevertheless,

such experiments are evidently on a path to capitalist farming with hired labour

power.

Likewise, capital has invaded the countryside. Not only have many TVEs been

privatised, but there have also emerged new enterprises—hotels, restaurant chains,

small transport and tourism companies, construction companies, some resource

processing. As yet, though, there has been little indigenous capital accumulation in

the countryside. In small cities and towns, the commanding capitalist heights of the

local economies are overwhelmingly owned outside the locality or by people who

have returned to their home locality after learning a trade and its associated business

skills (Murphy 1999, 2000) and acquiring a little capital.

In urban China, people have also been dispossessed of communal assets,

principally SOEs. Urban residents have in addition seen many of their rights to

universal, low cost public services, such as health, education and housing,

transformed into privatised, more expensive, user-pays systems.

A series of attempts has been made to reform SOEs. In the late 1970s, SOEs were

given some profit incentives and by 1983–1985 a full profit-tax system had evolved

(Byrd 1991). However, until the mid 1990s further reforms were derailed (Chai

1997) by a downturn in the economy, the struggle between moderates and

conservatives, as well as Tiananmen and its aftermath (Field 1996); furthermore, the

state was in the ideologically difficult position of being both employer (as owner of

the SOE) and representative of workers (Williams 1998). Subsequent reforms have

seen many, especially smaller, SOEs abandoned (and effectively bankrupted).

Others have been corporatised or transformed into shareholding companies. Some

have entered into joint ventures with foreign companies. Some SOEs have spun off

private capitalist enterprises (Duckett 1998), providing a means for managers to

become owners of a risk-free, capital investment-free enterprise (Holmstrom and

Smith 2000; Walker 2006). The pace and extent of transformation of SOEs has been

regionally specific—depending on whether the central government or a province or

prefecture or county owns the enterprise, on the attitude of the administration to

reform, and on the local unemployment rate. Also in the 1990s, private capitalist

enterprises began to appear, owned by individuals with access to funds or by foreign

(including overseas Chinese) enterprises. Nevertheless, despite subsequent private

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and foreign capital formation, the principal mode of primitive capital formation in

China since the late 1970s has been the privatisation, corporatisation and

development as shareholding corporations of SOEs, together with their capitalist

offshoots. This is the arena of the first capital formation.

The capitalisation of enterprises has been accompanied by the emergence of

labour contracts to replace the former lifetime employment system. All firms have

been obliged since 1986 to hire new workers with contracts. In 1986, less than 5%

of China’s workforce was on contracts; by 1994, this had risen to more than 25%

(and 41% in manufacturing) (Guthrie 1999); and between 1998 and 2003 in a

sample of 38 manufacturing firms the proportion of workers on contracts rose from

62% to 73%. Still, some firms do not place all workers on contracts, for reasons of

fairness (they worked for low wages in the past), loyalty (they worked for the

enterprise for so long) and socialist ideals (firms are still responsible for much of

urban China’s social welfare system). Likewise, there has developed a structure of

wage determination that increasingly reflects skills and the profitability of an

enterprise (through the payment of bonuses), but labour mobility remains low (since

SOEs still offer above average benefits and their managers are less likely to fire

workers than are the managers of private enterprises) (Meng 2000).

As a consequence, whereas in 1980 the state, collective and private sectors

contributed 76%, 23.5% and 0.5% of national industrial output; by 2001, these had

changed to 39%, 15% and 46%, respectively (Liu et al. 2006). (Note that the 2001

data refer not to formal, immediate ownership but to ultimate ownership; the

ultimate ownership of 21% of output could not be identified precisely.) Privatisation

remains partial: of 2,700 SOEs surveyed in 2004, 42% had been restructured; of the

privatised firms, only 34% had undergone a full privatisation (Liu et al. 2006).

However, not all the people who become workers for capitalist producers have

lost the assets that might provide an alternative to marketed labour power as a

source of income. In terms of sheer numbers, more important than dispossession

in removing rural people from their means of production, has been the market

mechanism—through migration. For such rural residents, their land is simply not

worth enough in comparison with the new opportunities offered in, or by, cities.

The allegiance of these people to wage labour is purchased through the market

rather than compelled by dispossession. Waves of internal migration into China’s

cities have been triggered by the gap between rural and urban incomes and the

relaxation of migration controls (Fan 2002; Solinger 1999). Perhaps 150 million

rural citizens (net) have migrated to China’s cities (Knight and Song 2005),

principally to find a better life. Migrants cite poverty to explain their move to the

city; however, family strategies and conflicts (Woon 2000) and the desire for the

modern play their part too. Upon arrival, migrants enter a labour market in which

gender and ethnicity increasingly mark difference, as older institutionalised

employment patterns merge with or are replaced by newer unregulated patterns

(Fan 2002, 2003).

The power of the urban economy not only attracts people as migrants to urban,

wage employment. The social relations within rural areas are also altered as

peasants enter new contractual relations with urban firms. Tourists visit villages, to

(pay to) watch minority people make clothing or hold tea ceremonies, and take

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guided tours of significant sites. Urban entrepreneurs organise new forms of

household production in the countryside, contracting people to make what were

formerly household or bartered items like aprons and head wear in new, urban

designs specifically for sale to the Han majority. Large urban milk processing

companies stretch deep into the countryside to draw supplies of milk for the wealthy

urban middle class, engaging in new contractual relations that are starting to reduce

farmers’ freedom to make their own production decisions (Webber and Wang

2005).

Through these various processes, urban China has developed a highly segregated

labour market (Sargeson 1999). There is a formal distinction between contract

system workers (who have urban residential registration and get the same pay and

benefits as the remaining tenured workers) and contract workers (who usually have

rural registration and are not eligible for the same social security packages).

Contract workers are generally contingent employees; few have contracts and those

contracts are commonly disregarded by employers (since local states do not protect

the conditions enshrined the the national labour law of 1995). Within cities, the

bases for this distinction are residence (whether a local or not), rural–urban

difference and social connection (which remains important not only in hiring but

also in guaranteeing the terms of contracts). Increasingly, rural–urban migrants are

pitted in the job market for contract workers against the estimated 60 million

workers who have been laid-off from the bankrupted or restructured SOEs (Knight

and Song 2005).

Thus workers typically regard themselves as exploited and even identify that

their exploitation was made possible by state-sanctioned territorial and social

inequalities, unequal access to opportunities and the lawful and unlawful

privatisation of resources and firms (compare Weil 2006). Yet many workers are

convinced that the appropriation of their surplus was facilitated by nonclass factors

(Sargeson 1999): residence of registration, localism, ethnicity and particularist

social networks, together with the exercise of power by local officials. Around

construction sites in Urumqi, Uyghurs earn about 30% less per month than Hanrespondents, a differential that breeds Uyghur alienation from what is perceived as a

Han colonial system. Place—and the markers that it carries of registration, urban–

rural disparagement, guanxi and ethnicity—have been fundamental to the experi-

ence of capitalism in China.

Class, as a result, is experienced in particular forms. There are thousands of

protests each year against dispossession and law breaking (Walker 2006). Most are

small, though Gulick (2004) reports a protest of 10,000 farmers in Kunming over

agricultural prices, and some protests by urban laid-off workers receive international

attention (China Labour Bulletin 2008 contains much of this news). But these

protests, like the struggles of ethnic Mongols against resettlement on the steppes

(SMHRIC 2008), are generally understood by the participants as being against the

particular manifestation of exploitation and dispossession. Despite rising inequality,

loss of the former urban subsidies and job tenure, and other forms of proletari-

anisation, a self-perceived working class with common interests does not (yet?)

exist.

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Implications for debates about primitive accumulation

The recent history of the social relations of work in China permit interventions into

debates over primitive accumulation. Here, several of those observations are

sketched.

The first observation is that primitive accumulation is not the same as either

dispossession or accumulation by force. In the early history of capitalism in the UK,

force appears to have been necessary (Perelman 1983). As Perelman (2001) points

out, the compulsory formation of a working class took the form of enclosing the

commons; removing traditional rights to communal resources, such as woods,

quarries, hedgerows and the like; and removing alternatives to wage labour, such as

vagrancy and welfare. Andreasson (2006) and Arrighi (2004) reinforce this view; de

Angelis (2001) goes further, claiming that the defining characteristic of primitive

accumulation is that it occurs other than through the market, principally involving

force. Khan (2004) deploys the case of Bangladesh to similar effect.

As Perelman (2001) claims and as the recent history of China confirms,

dispossession, outside the market, is involved. But the market has been implicated

too. Peasants have made decisions about migration; others have chosen whether or

not to begin producing agricultural products and handicrafts under contract; yet

others have chosen to consolidate their land holdings so as to work in factories.

True, they are poor; but that poverty is now as much a matter of the market and

unequal exchange as it is of direct suppression by the state and control over prices.

Whether dispossession or the market are the principal processes in a particular

historical-geographical circumstance of primitive accumulation is a matter of the

specific existing class relations, technical conditions of production and external

influences (compare Glassman 2006).

A second, related, observation is that primitive accumulation and the formation

of markets are different processes. Brenner (1976, 1977), in his accounts of

transformations at the end of English feudalism, lays much stress on the

development of markets—both for inputs (principally land) and for outputs (food).

On the other hand, Wood (2002) contests this view, arguing that an economy in

which commodity production is generalised is not necessarily a capitalist one.

China was by the mid 1990s, indeed, a place where commodity production was

generalised. Most people were engaged in production for a market; subsistence

production was the principal occupation of only a few, though the sideline of many.

There existed markets for most produced commodities. There was a market for rural

land, of a sort: local governments could agree to rent land out to developers and

peasants could agree to lease their land for other peasants to farm. Likewise, land in

cities could be leased for development. Yet peasants were then not proletarians;

many TVEs were still in communal ownership and most SOEs still in state

ownership—meaning that their socialised job conditions continued and their success

or failure was largely outside market competition. Likewise, these were largely not

capitalist enterprises, seeking to make profits, trying to accumulate capital and

running the risk of failure. This was not, in the mid 1990s, a system of generalised

capitalist production, despite the markets.

Primitive accumulation in modern China 309

123

Since the mid 1990s, markets have been created in a far larger array of assets.

There is now a housing market in cities. There are even markets for labour, though

segregated and still imperfect. Many SOEs have been transformed and their labour

relations are closer to those in the west than to those of the 1970s. Now urban China

is far closer to a system of generalised capitalist production, though the countryside

is still stubbornly dominated by independent commodity producers. It was not the

development of markets that marked the emergence of generalised capitalist

production in urban China, but the changing social relations within production—

opposing on the one side workers who had lost rights to jobs and social security and

on the other side capitalists who had gained the freedom to decide for themselves

who to hire and what to make, and who took real risks to make real profits.

Thirdly, I observe that primitive accumulation does not simply follow economic

logics. There are, of course, economic logics, even of dispossession (more details

about the examples in this paragraph are in Webber 2008). For example, peasants

lose their land to developers because that land is cheap as compared to urban

incomes: by 2005, the average urban household per capita annual income could buy

0.89 ha worth of average agricultural output, roughly double the area of 1978. A

hectare of suburban land in agriculture might cost 300,000 RMB to purchase, but

could be sold to developers for 10–50 times that: the difference, earned by the city

government, can pay village officials to agree to the transfer of land, fund social

services, line the pockets of local officials, and build urban infrastructure and

industry—enabling local officials to meet social targets set by upper level

governments (Edin 2003). Likewise, the commodification of health, education

and water has seen increasing shares of the total expenditure on these items being

paid by individuals: personal expenditure on education was more than five times

greater in 2004 than in 1996, and on health 3.6 times. It is proposed that the price of

water to farmers in northern China should rise from the current 0.02–0.15 RMB/m3

(Zhou and Wei 2002) to about 4.00 RMB/m3 (He and Chen 2004). These rising

demands for cash to pay for what used to be communally provided services are

driving many to engage with the market. Finally, the appropriation (through sale or

lease) of such state or communal assets as TVEs and SOEs rests on the difference

between an agreed price for the asset under current social relations of production

and the market value of the asset when some of the pre-existing job conditions have

been stripped away. These are cases of dispossession certainly, but for economic

reasons.

Each of the forms of primitive accumulation thus has an economic logic that rests

on two different kinds of conditions. One kind of condition is the specific

institutional structure of urban and rural China—ownership of land; the rural–urban

divide; the mechanisms of local government finance; and the technical and social

relations within TVEs and SOEs. The other kind of condition is the changing

orientation of the central government and its policies for economic development—

new freedoms for private and foreign capital; preference for industrial over

agricultural development; new degrees of competition for markets within China;

commodification of communal services. The mix of conditions makes for different

causal relations in each case, though the orientation of the central government—

itself partly a reflection of changing class interests—underpins a common drift

310 M. Webber

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towards capitalist social relations within each of the specific forms of primitive

accumulation. These conditions, note, are all essentially local; ‘‘global capital’’

plays little role.

However, many of the state and other actions that have helped primitive

accumulation along its way have little or nothing to do with such economic logics,

but are driven by quite different considerations. The war on poverty (see Rozelle

et al. 2000) has taken various directions, but since the late 1990s direct transfers to

poor households have been replaced by projects to promote economic development

and the growth of enterprises. In Qingshuihe county, south of Huhehaote in Inner

Mongolia, the local version of the war on poverty is drawing peasant households out

of remote, mountain communities and into new, lower-lying, densely settled

villages where the peasants work in commodity-producing (often contract)

agriculture and as wage labourers. In similar fashion, environmental conservation

through the creation of forest reserves is responsible for people’s loss of assets. In

the Tibetan regions of northern Yunnan, around Zhongdian (recently fancifully

renamed Shangri-La), new forest reserves have excluded people from using forest

wood for building houses and making furniture and tools; from collecting firewood

and herbs for medicine, fodder, weaving, dyestuffs and decoration; from hunting for

additional food. In Tibet, the World Bank funded China Western Poverty Reduction

Project is converting wind-swept, arid lands from traditional nomadic pasture into

intensive agricultural production for the benefit of Han Chinese settlers who are one

of the tools of Tibet’s integration into China (Clark 1999). These projects have goals

of social welfare, environmental protection and political struggle against ethnic

minorities; but they all are encouraging primitive accumulation.

The intersection of the several logics of change is particularly clear in places of

ethnic tension. On the steppes of Inner Mongolia, between 200,000 (Xinhua News

Agency 2003) and 650,000 (Togochog 2005) people will be resettled between 2001

and 2011. Such resettlement pulls entire (often, dispersed) communities of herders

and pastoralists off the land and resettles them, with government assistance and

compensation, in different (nucleated) villages where the former pastoralists engage

in intensive milk production under contract and in paid work (Dickinson and

Webber 2007). The policies are consistent with the Inner Mongolian government’s

goals of economic development and with its intentions to develop as a milk

economy (Webber and Wang 2005). Inner Mongolia’s large dairy processors are

thus enroled in the project. However, the logics underpinning this policy have to do

with much more than economics.

One logic is environmental restoration. Environmental degradation on the Inner

Mongolian grasslands includes reduced vegetation cover and density, and loss of

species and landscape diversity (Williams 1996; Tai 2000), extensive desertification

and environmental degradation (Hinton 1990; Huer and Gang 2000; Jia 2003; US

Embassy 2001). Mongol herders also identify loss of water access, windbreaks and

medicinal resources (Williams 2002). Environmental degradation is manifest in

frequent, severe dust storms in Beijing (Soil and Water Conservation Commission

2002), Korea and Japan (US Embassy 2001) and even north America (MacLeod

2001). The central government’s principal responses include environmental

resettlement; prohibitions on pastoralism in springtime (when grasses regenerate);

Primitive accumulation in modern China 311

123

tree and grass restoration (US Embassy 1999); planting a ‘‘Green Great Wall’’

around dune areas (US Embassy 1999); and incentives that encourage people to

begin nonland-based activities like tourism. This is one logic, that enrols

environmentalists and the downwind ‘‘consumers’’ of degradation in the project.

But the logic of ethnic conflict is at play, too. Whatever the origins of Inner

Mongolia’s environmental problems, analyses of the causes of Inner Mongolia’s

environmental degradation—and attempts to reverse it—are ethnicised processes

(SMHRIC 2005; Sodbilig 2005; Togochog 2005). The interaction between

environmental degradation and land use in Inner Mongolia is contentious because

land use practices are ethnically demarcated: rural Mongols were formerly

pastoralists, rural Han typically sedentary farmers. The central and Inner Mongolian

governments discourage pastoralism as being ‘‘primitive’’, incompatible with state-

led development polices of agricultural intensification. Environmental resettlement

is one of the means of discouraging or outlawing pastoralism (SMHRIC 2005 has

many accounts of disputes between local governments and peasants over land uses

and resettlement). But to disparage pastoralism is to blame those who practice it:

Mongols, already marginalised within their ‘‘own’’ autonomous region. The

resulting intensification of agriculture has pushed aside the Mongol traditions of

pastoralism—and its cultural baggage. In the context of already complex Han-

Mongol relations, resettlement schemes further challenge the integrity of Mongol

culture (SMHRIC 2005). This logic enrols those who would bolster the integrity of

the Chinese state and seek to ‘‘develop’’ ethnic minorities.

All of these logics are at play in resettlement on the steppes. The supporters and

the opponents draw on different ways of thinking about social life to argue the

merits and demerits of the project. The project, its scale and form, depend not only

on an economic logic of development, but also on environmental and ethnic politics.

The decision to implement the policy was thus not decidable in economic terms

only. Nor is the detailed form of the project a matter of economic logic alone. That

is, primitive accumulation depends not only on the logic of competition between

capitalist and noncapitalist forms of production but also on extra-economic

agendas—in this case of environmentalism and ethnicity.

Fourthly, the nature of the competition between capitalist and noncapitalist forms

of production does demand clarification. Once capital has first been created and

once a group of workers has been forced or induced to enter the market for wage

labour, then—despite the logics of social welfare, environmentalism, ethnicity and

nationalism—much of the interaction between capitalist and other forms of

production is mediated by the market. However, this does not imply that the

competition occurs through differences in productivity. Indeed, the relative

productivity of different forms of production (capitalist, independent commodity,

communal, slave, subsistence) cannot be defined: their goals are different. The point

about capitalist production is that it makes a profit; the others make only net income

or aggregate wellbeing. All inputs into, and outputs from, capitalist production are

priced; the other forms of production have nonpriced inputs (notably labour;

sometimes land) or nonpriced outputs (notably social welfare; sometimes subsis-

tence commodities; sometimes quality of working life), and face consumption-

related claims on their net output. Capitalist production, then, is scalable in a way

312 M. Webber

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that the others are not: capitalists can produce more, can operate bigger enterprises.

This, in modern China, is the principal form of competition between capitalist and

noncapitalist production systems: the one is expanding as capital is accumulated; the

other is constrained by the supply of direct producers and of output net of

consumption claims.

The final observation concerns the state’s role in primitive accumulation in

China. It is generally understood that primitive accumulation in China has—unlike

the transitions in the former USSR and eastern Europe—proceeded without any

grand plan (Chai 1997), has been hesitant and suffered reversals, proceeding fastest

when and where resistance is least (Nee 1994), has been regionally variable

(Cheung et al. 1998) and has evolved as the class interests created by earlier phases

of primitive accumulation come to demand change in new directions that are

sympathetic to new class interests (Webber et al. 2002). However, it should not

therefore be thought that the central government has administered a process of

primitive accumulation that has these characteristics.

In the first place, the Chinese state is quite different from eastern European states.

Although China is a unitary state, its bureaucracy nevertheless operates in a

hierarchical but devolved manner. Laws, decrees and administrative decisions flow

down from the centre in Beijing to officials in the provinces, prefectures, counties

and townships in good, hierarchical fashion. But those local officials are embedded

in a local bureaucracy with all the other officials from all the other ministries and

departments. They have dual responsibilities, to their superiors within their ministry,

and to the local government in which they are working (and, often, parallel dual

funding). Government, in this respect, is highly localised. Thus the central

government can deploy power effectively and forcefully, when the resources used to

effect that power are under its direct control; suppressing uprisings in Tibet or

searching for survivors from the earthquake in Sichuan exemplify this power.

Likewise the central government can restructure the SOEs which it owns directly.

However, it is impractical or impolitic to use such direct means to force provinces or

other local governments to restructure SOEs that they own, or to administer labour

laws effectively, or to restrict rural–urban migration (Lyons 1994). If provincial-

level governments are relatively successful economically, so that they do not need

subsidies from the central government, and if potential (or actual) ethnic unrest has

not caused the central government to intervene directly in local affairs, then those

provincial-level governments have a deal of autonomy. (Likewise, prefectures and

counties have power with respect to their provincial-level governments; and

townships with respect to counties.) There has been a variety of primitive

accumulations within China, in which local states have played different roles and

led localities along different paths (Chen et al. 2000 measure some of these

differences; Cheung et al. 1998 describe their politics). There are a thousand stories

of the manner in which specific local class interests, resource endowments, demands

from and freedoms offered by higher level governments and interactions with the

world outside China have intersected to produce the specific forms of primitive

accumulation in different localities in China.

Secondly, the state is itself a player, not just an administrator or arbiter of class

interests. The wellbeing of the people in a locality, the fiscal health of a local

Primitive accumulation in modern China 313

123

government, and the administrative careers of officials all depend on the interactions

at that local level between officials, businesses, workers and peasants. At all levels,

from the central ministries down to the smallest township governments, bureau-

cracies have operated as entrepreneurs (running businesses for profit), as corporatist

states (promoting local development strategies) or as development states (acting as

the managers of gigantic social corporations which possess independent profit

centres) (Duckett 1998). Officials within the bureaucracies have dual incentives; on

the one side are the official rewards of bonuses and promotion that derive from

meeting targets, the critically important of which are social stability (thought to

depend on economic growth) and birth control (Edin 2003); on the other side are the

private benefits that come from control over or interest in local enterprises. Thus, it

is the state that has been the principal converter of SOEs and TVEs into capitalist

enterprises—a process intended to provide localities with tax revenues and designed

to provide officials with side payments; equally, it is city governments that are the

converting rural land into urban land and developing it for industry, in the process

destroying peasant agricultural livelihoods in the suburbs (McGee et al. 2007). One

implication of this direct role is that the state is not simply an agent of capital, nor

even an arbiter of class relations: the state (and its bureaucrats) has its own direct

economic interests to look after as well.

Conclusion

This article has sketched the history of primitive accumulation in China, from the

early 1980s to the mid 2000s. By this account, there have been three principal

means of primitive accumulation. One is the transformation of many state and

collective enterprises into capital, by far the largest source of primitive capital in

China—supplemented later by foreign investment and the reinvestment of profits.

The transformation is by no means complete, but it has led to the loss of jobs and of

working conditions and rights that were set outside the market. Secondly, the

peasants have lost some land and other assets through various forms of

dispossession, notably land development and resettlement, leading them to take

up paid employment. Third is the voluntary migration of peasants from rural to

urban areas, leading to a change from (usually independent commodity producing or

subsistence forms of) agriculture to paid labour in (often capitalist) enterprises.

Surrounding these direct transformations have been a variety of other processes—

loss of entitlements to state or communal welfare services (health, education,

retirement and unemployment benefits) and contract farming, for example—that are

increasingly leading people to the market to earn the cash to pay for these services

for themselves. These paths to primitive accumulation mix dispossession and

market mechanisms in complex ways.

Primitive accumulation has certainly involved the creation of markets. These

have arisen as the state has withdrawn from issuing production quotas and then

distributing that produce directly or at subsidised prices. This happened early in the

history of primitive accumulation, so that by the mid 1990s most production quotas

were ineffectual in agriculture (and their prices were market prices) and were

314 M. Webber

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generally replaced by net income or other similar targets in SOEs. From the late

1970s on, the great migration from rural into urban China was underway, but has

accelerated as controls have been relaxed, peasant’s consumption demands have

risen, and the cities’ demands for their labour have grown. It was not until later,

however, that the great thrust of creating capital began—selling off SOEs and

TVEs, turning their assets into capital and their employees into more regular

workers. Obviously, the creation of markets and the creation of capital and labour

power are related processes; but markets were the easier and the earlier to create.

The processes of primitive accumulation have economic logics. In this sense,

there may exist dynamics that can be traced, perhaps reflecting struggles between

classes or the dominance of one class interest. But substantial forms of primitive

accumulation have arisen from logics that derive from concerns over social welfare,

over environmental management, and over nationalist and ethnic struggles. When

these logics are at play, class interests are subservient to other concerns. In addition,

the particular compositions of interests and of classes depend critically on the pre-

existing social formations: the fragmentation of China’s proletariat by residence of

registration, localism, ethnicity and particularist social networks reflects this

complex intermingling of the old with the more homogenising influences of the new

social relations of production.

Furthermore, the state has been closely involved in the entire history of primitive

accumulation in China. It is not an arbiter or a champion of one cause, but a

regionally differentiated actor, directly involved in ownership, asset transformation

and the control of migration. This means that the state has its own ‘‘side’’ to

champion, its own production interests to protect. It also means that change is

differently paced in different places and takes different directions. Most impor-

tantly, it makes little sense to talk of primitive accumulation in China as being slow,

hesitant, partial; in some cases, like Guangdong, it was early and fast; in some, like

Shanghai, later but then fast; in others, especially the west, it was late, hesitant and

slow.

In other words, primitive accumulation in China does not have one motive, does

not simply reflect class interests, is not a particular case of a global capitalist

project; it is instead, complex, particular and localised—a mix of dispossession for

economic reasons, dispossession for other reasons, and market-led processes.

Acknowledgement The research reported in this article was supported by ARC grant DP0209563. I am

grateful to Jon Barnett, Harapriya Rangan, Eric Sheppard and Zhu Ying for their comments on this

research program. I am also grateful to my former students, Debbie Dickinson, Ben Hopper and Brooke

McDonald, who conducted some of the empirical research I rely on; to Zhu Ying and John Benson, who

collaborated on the research on the transformation of enterprises; as well as to Brian Finlayson and Mark

Wang, who have been colleagues on some of the exploration that underpins the empirical work.

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