Socialist Welfare in a Market Economy: Social Security Reforms in Guangzhou, China

Abstract

Using the southern Chinese city of Guangzhou as a case study, this text looks at how China has adopted a market economy, whilst still maintaining state-owned enterprises and an all embracing social security system which protects the majority of Chinese workers. This volume examines three questions: can socialist social welfare co-exist with the market economy?; can state-owned enterprises survive in a market economy?; and has China succeeded in creating a market economy without sacrificing its socialist ideals? This book explores these issues through the experience of Guangzhou the most populous city in southern China and one of the first major cities in the country to convert to a market economy. The study demonstrates that compromises have been necessary to accomodate both socialist and market objectives. continuing to support workers with social security benefits has, for example, made enterprises less competitive, and disparities in benefits arise as workers are allowed to supplement the minimum guaranteed income through savings in individual accounts. This study provides a picture of what is really happening in China as it carries out its economic and social reforms.