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Between 1990 and 2008, around 88 million Chinese peasants, more people than the entire population of Germany, lost their land and joined the growing ranks of the “dispossessed peasants” (shidi nongmin). Chun Peng, a lawyer at Peking University and the author of one of the reference studies on this transformation, calls the scale of these expropriations “unprecedented in the history of humanity.”
To grasp China’s economic take-off, one must measure the upheaval at its core. What took England three centuries to accomplish on the eve of the Industrial Revolution, China achieved in a single generation, on a different scale and in the opposite direction.
The work of E. P. Thompson, The Making of the English Working Class, helps illuminate this contrast. This classic study forcefully recounts the emergence of a workers’ consciousness in England, notably during the decisive years from 1780 to 1832, and places it within the context of the “enclosures movement,” which since the late fifteenth century had dispossessed peasants of their land, leaving them with no option but to sell their labor power.
Since Marx, the English working class has been regarded as the quintessential form of the proletariat of nascent Western capitalism, the pathbreaker of industrial capitalism. At the opposite edge of the Eurasian landmass, the Chinese working class embodies a different kind of proletariat, emblematic of advanced capitalism and confronting us, with China’s recently acquired superpower status, with the natural limits of development.
This parallel is often highlighted in China itself, where people speak of a “new enclosure movement” (xin quandi yundong) to describe the dispossession of the peasantry. Yet the order of steps is reversed there. In England, peasants were first driven from their lands, then reduced to wage labor; in China, starting in the 1990s, the commodification of industrial labor, which gave rise to the country’s gleaming urban horizons, was accompanied by an inexhaustible influx of internal migrants to the cities—peasants who still retained their land rights.
Why, then, expropriate a peasantry that had already submitted to capital under economic pressure, without needing to forcibly relocate them?
The answer lies in a paradox: capitalism flourished in China largely because it was built on socialist foundations. To understand this, one must examine the reconfiguration of the relationship between city and countryside, as well as the redefinition of the country’s links with global capitalism.
When China embarked in 1978 on economic reforms that remain ongoing, it counted among the most egalitarian countries in the world. By the Gini index, it is now one of the most unequal great powers. The fate of its working class sits at the heart of this revolution—or, more precisely, this counter-revolution—since the Chinese Communist Party has made economic development, rather than equality, its absolute priority.
The Formation of China’s Working Class
The formation, as well as the disintegration, of China’s working class has gone hand in hand with that of the peasantry. Marx believed that communism would abolish the conflict between city and countryside. Yet the socialist industry of the Mao era, just as today’s sprawling megacities, was built on a poor hinterland.
It is the different relationship of peasants and urban workers to land and labor that enabled the state to organize a continuous transfer of resources from the countryside to the cities, first to sustain industrial labor under state socialism, then to subsidize capital on a global scale after China shifted toward state capitalism in the 1990s. It is the evolution of this relationship that helps explain China’s astonishing transformation—and its global reverberations—at a pace that is hard to match.
Contrary to England, China did not need either a purely agrarian capitalism or the dispossession of its peasantry to spark industrial development. Paradoxically, capitalism thrived in China largely because it was built on socialist foundations. To this day, it remains subsidized by various socialist legacies, themselves often rooted in kinship institutions dating back to the imperial era. And because China occupies a central place in the world manufacturing industry, this socialist subsidy benefits economic actors worldwide, enabling consumers to buy more and cheaper goods than they otherwise could, thereby accelerating the destruction of the environment upon which our existence depends.
The England comparison particularly highlights the decisive role of the distinct forms of public ownership of rural and urban land in the People’s Republic of China. For there has never been a single People’s Republic of China: at least two peoples have always existed, if not two republics in the proper sense. Since the collectivization of agriculture that followed the early-1950s land reform, every parcel and every individual has been legally and administratively classified as urban or rural. Unlike their socialist counterparts, China never expropriated its peasantry by nationalizing all land. It has always maintained two forms of public ownership: urban land owned by the state and rural land owned by the collectives who farm it.
Letting peasants retain ownership of the land they tilled provided ideological justification for loading them with the responsibility to sustain themselves and to serve as social protection. At the same time, China drew on the Soviet model to build a national heavy industry. Lacking access to foreign capital, the state taxed rural resources to create, in the urban areas, elite production units that took the form of state enterprises. This is how the Chinese working class was first forged, with one major difference: while the English working class formed a subordinated industrial proletariat, the labor force of state-owned enterprises constituted a privileged class, a socialist workers’ aristocracy. Unlike peasants, these urban workers enjoyed guaranteed lifetime employment and social coverage, financed by the countryside.
The Transformation of the Chinese Peasantry
To keep this regime and literally keep peasants in their place, the People’s Republic of China established in 1955 a strict household registration system (hukou). It was essentially a caste-like system enshrined in law, which subordinated a whole range of public benefits—from food rations to schooling and medical care—to one’s place of residence. In this regime of urban-rural segregation, being classified as a “peasant” (nongmin) rather than a “worker” (gongren) did not merely tag someone with a social label; it conferred a legal and administrative status. Moreover, once established, the registered place of residence was virtually impossible to change and was transmitted to offspring through the female line, turning rural poverty into a hereditary condition. Unlike England, the foundations of industrialization were not laid by dispossessing peasants of their lands, but by tethering them to those lands. What had once been a peasantry composed of smallholdings was feudalized.
It is a well-known fact, though often forgotten: China’s post-M Maoist economic transformation began in the countryside, with agricultural reforms followed by rural industrialization. It was the spectacular rise of rural entrepreneurship, from the 1980s to the mid-1990s, that pulled millions of peasants out of poverty and powered the country’s remarkable growth during that period. In a reversal of fortune, the following decades saw rural areas stagnate while cities largely took the lead, and gleaming megacities came to define the horizon of the new millennium. Yet, during the first two decades of the reform era, when foreign observers spoke of the “Chinese economic miracle,” they were in fact describing a rural industrial revolution, not the entire Chinese economy.
The 1978 economic reforms were primarily aimed at reducing rural poverty. Each household was granted a temporary user right over a small plot, as well as the right to sell everything produced beyond the allocated quota. Although rural land remained collectively owned, this modest reform gave rise to a market—though a limited one—for agricultural products. At the same time, a new rural industry emerged, organized into rural cooperatives, known as “township and village enterprises” (TVEs).
The dazzling success of TVEs is often attributed to a nascent liberalization of the economy, as if they embodied the spirit of capitalism that spontaneously sprang from the Chinese soil. Yet the early rural reforms were part of socialist development: a locally rooted form of public local enterprise, TVEs transformed what had been an agricultural commons into an industrial commons.
The expansion of TVEs in the 1980s and early 1990s quickly reduced the living standard gap between peasants and urbanites. But it also increased pressure on the urban public sector, which grew increasingly strained. In the mid-1990s, the state took a decisive turn, abandoning rural reform for urban reform, privileging industrial state capitalism at the expense of collectivized rural industry. It is this state capitalism and the spectacular urban landscapes it forged that today serve as China’s showcase in international media.
The Disintegration of China’s Working Class
The state launched a new round of urban reforms by redefining its legal relationships with capital and with industrial labor. Under a new company law that came into force in 1994, state enterprises were transformed into privately held companies. While remaining the majority shareholder, the state turned to international capital to convert its enterprises into profit-seeking firms. As for the workers of state enterprises, who did not own land, they were stripped of their main socialist right: lifetime employment security. This commodification of industrial labor, which came to be known as “breaking the iron rice bowl,” marked the end of the Chinese working class as a privileged socialist stratum and signaled its transformation into an ordinary urban proletariat, akin to the one Thompson described.
Moreover, especially after China joined the World Trade Organization in 2001, its cities were flooded with foreign capital, and urban labor alone proved insufficient. The countryside, by contrast, teemed with unemployed or underemployed peasants. A wave of migrant labor then poured increasingly into the cities. The dismantling of state enterprises was accompanied by the commodification of urban land destined for housing and private real estate development—a process that has fed a gigantic real estate bubble threatening China’s economy today. As housing and other essentials became market-based, peasants could settle in the city without being registered as residents. They remain second-class citizens, denied much of the benefits reserved for registered urban residents. They make periodic trips between their place of work and their village, consistently relying on the lands that their families continue to cultivate to meet their needs when they lose their jobs, are not paid, or are injured.
The hallmark of this “cheap labor” Chinese workforce lies in the hybrid character of its migrant workers. Under socialism, the state extracted the value of peasants’ labor. Today, it is urban capital that appropriates the most skilled peasant workers—though temporarily and in cycles—while their villages continue to sustain them. Migrant workers actually form a reserve army of labor that bears the costs of its own reproduction—much like undocumented immigrants in the United States, for example. It is this perpetual dependency on the support of relatives left in the countryside that enables urban employers to pay them meager wages. The question, therefore, is not how these migrants escaped expropriation, unlike the English industrial proletariat: it is precisely because they still own land that state capitalism in China can exploit them.
The Vanishing Chinese Peasantry
After the first wave of urban land commodification in the 1990s, the enclosure of rural lands took the form mainly of suburban villages being absorbed by neighboring cities. The current wave of enclosures aims to transform the countryside itself. The state’s objective is to consolidate agricultural lands into large industrial operations and relocate the displaced peasants to urban areas, notably in “new towns” (xincheng) built for this purpose. To achieve this, rural lands themselves become commodities: members of rural cooperatives are now allowed to transfer the usufructuary rights to their land to third parties, including agro-industry firms. Officially, households can only transfer the usufructuary rights of their plots—subject to certain permissions and land-use restrictions. The Party can thus continue to claim that all land remains publicly owned. The consolidation of family plots into industrial enterprises thus takes on the appearance of freely chosen market transactions, but in reality, these transactions are often constrained, “facilitated” by bureaucratic involvement. With the arrival of agro-industry, the countryside also integrates into Chinese state capitalism, ceasing to be its “other rural.”
Since accession to the WTO, China no longer lacks capital or labor—first flowing from global markets, second from the countryside. What it now needs most to sustain growth are outlets, including within its own territory. The problem with migrant labor is that its proletarianization remains partial. It depends on capital for wages, but as long as it can retreat into subsistence agriculture, it does not depend on it exclusively. Moreover, not only do peasants remain partly independent from markets, but their economic and social precarity drives them to save every penny, thereby consuming even less than they otherwise would. They are, in short, first-rate workers but second-rate consumers. The commodification of industrial labor has already made them a reserve army of labor. With rural land brought into the market, they could also become a reserve army of consumers—dependent on capital for their survival, with no option but to buy everything they need. The enclosure of China’s countryside thus completes the proletarianization of the peasantry.
The Limits of Development in the Era of Chinese Capital
The consequences of enclosing the countryside extend far beyond China’s borders. What will happen when state capitalism in China can no longer rely on the subsidy provided by migrant workers from the countryside? Marx saw primitive accumulation as the economic equivalent of the theological “original sin.” The revolutionary socialist Rosa Luxemburg, by contrast, argued that even a capitalistic system that has reached maturity cannot generate surplus value from nothing—it is not alchemy, after all. To reproduce itself as a system, capitalism must relentlessly pursue primitive accumulation, and it has always needed an unequal external to draw resources from.
As the “new enclosure movement” continues, Chinese capital—both public and private—seeks more and more to invest abroad, for example in extractive projects in Africa. With the New Silk Roads, China further extends its investments. Short of land to enclose and populations to dispossess on its own territory, Chinese capital globalizes itself as well, weaving production chains centered on China from the Indian Ocean to Latin America. Thus the question arises: what are capitalism’s planetary limits?
Understanding the rise and decline of China’s working class is therefore essential for imagining capitalism’s future. We are inundated with information about China, but we will struggle to make sense of it unless we can situate it within a broader whole—structural, historical, and global. A clearer grasp of China’s central role in advanced capitalism will compel us to rethink our relationship to work and land, to production and nature, and ultimately to the planet on which we travel through space and time.