Primitive accumulation in modern China

Author(s): Michael Webber

Source: Dialectical Anthropology , December 2008, Vol. 32, No. 4 (December 2008), pp.
299-320
Published by: Springer

Stable URL: https://www.jstor.org/stable/29790846

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Dialect Anthropol (2008) 32:299-320
DOI 10.1007/sl0624-008-9039-8

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 (El)
School of Resource Management and Geography, The University of Melbourne,
Melbourne, VIC 3010, Australia
e-mail: mjwebber@unimelb.edu.au

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300 M. Webber

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; Overman 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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Primitive accumulation in modern China 301

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 2CM-0 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 /fan-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

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302 M. Webber

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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 Primitive accumulation in modern China 303

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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 304 M. Webber

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.

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Primitive accumulation in modern China 305

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.

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306 M. Webber

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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Primitive accumulation in modern China 307

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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308 M. Webber

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 Han
respondents, 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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 Primitive accumulation in modern China 309

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.

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310 M. Webber

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

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 Primitive accumulation in modern China 311

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);

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 312 M. Webber

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

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Primitive accumulation in modern China 313

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

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314 M. Webber

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

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 Primitive accumulation in modern China 315

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 DP0209563.1 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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