Building a “Xiaokang Society”—China’s Poverty, Peasantry, Post-Socialism

By Rachel Lietzow

Since Deng Xiaoping’s administration that began in 1978, the Chinese Communist Party (CCP) has oscillated between two main pursuits: economic growth and social equality. While impressive yearly GDP statistics hovering at or above 9% have demonstrated China’s economic success story, China’s journey towards social equality has been—and will continue to be—a long and arduous one.

The term xiaokang, literally translated “small comfort,” first emerged 2,000 years ago in the Book of Songs and Book of Rites, both ancient Chinese classics. The current definition of xiaokang does not diverge far from its original meaning: “a social state in which people led a fairly comfortable life”. [1] This concept became a keyword for Deng Xiaoping’s pro-growth ambitions for China, as it effectively attached a semi-socialist tone to a capitalist approach: he suggested that “a Xiaokang Society is the goal and essence of China’s own modernization.” [2] The idea implies a certain degree of social equality, where pockets of poverty are entirely removed and all citizens can be “moderately prosperous.” While the English translation commonly emphasizes wealth as the sole target of xiaokang, the Chinese party-state has seemed to portray a xiaokang society as possessing overall welfare (cultural, environmental, educational, in addition to income equality). However, to what extent has this “well-off society” been built, and what challenges remain?

According to World Bank estimates, China ushered in the new millennium with a relatively high Gini coefficient that had steadily increased over twenty years: 0.421. [3] A commonly used metric for income inequality, the Gini coefficient ranges from 0 to 1, where 0 indicates a society with perfect equality in wealth distribution and 1 represents complete inequality (hypothetically a single member of society earns 100% of the society’s income). Though the Gini coefficient is arguably not the best depiction of China’s equality or wellbeing, its peak in 2010, followed by a slight decrease over the past nine years, indicates that the Chinese government has historically prioritized growth and only recently has realized its neglect of social effects. [4] 

During the three decades of breakneck economic growth sparked by Deng’s “Opening and Reform” policy, China pulled around 700 million Chinese citizens out of poverty and catapulted its economy into the world’s second-largest. [5] Though the average Chinese person’s living standards are dramatically higher in 2019 than every year prior, economic growth and modernization have exacerbated existing problems such as the urban-rural income gap, the floating population of 221 million, underprovided public goods in rural areas, and land expropriation. [6] Common to all of these problems is the victim: China’s rural population. As post-Mao Chinese policy transitioned away from socialism and embraced capitalist markets and globalization, peasants struggled to catch up.

Once communal capital had been replaced with the Household Responsibility System, rural residents who had previously relied upon the villages to provide public goods such as healthcare and education could no longer acquire these services affordably or at adequate quality. Urbanites were largely insulated from these effects, as the lingering hukou system provided city residents with numerous benefits and higher wages, while prevented migration from the countryside. [7] As the demands of industrialization and the shrinking of arable land forced peasants to leave the agriculture livelihoods they had cultivated over many generations, they collectively became the feared phenomenon of “surplus rural labor.” The CCP amended the hukou system’s rigidity with the household registration system in order to allow cities to absorb some of the surplus labor, seeing the largest scale internal migration in history. [8] The migrant problem has resulted in slum-filled cities, and a subordinate “floating” population without healthcare and educational provisions.

Another policy initiative involved creating Township and Village Enterprises (TVEs) and factories in the countryside to provide displaced peasants with a renewed “iron rice bowl” (tiefanwan), a term referring to job security. TVEs succeeded temporarily, but eventually faded out due to inefficiencies, debt, and privatization. Rural factories also left a lingering byproduct: intense pollution. Economical zinc smelters and coal plants unfortunately failed to consider environmental effects or health risks, resulting in often irreparable damage to waterways, crops, and air quality. The persistent Sannong problem, or “Three Rural Issues [8],” became a common catchphrase used by Chinese leaders and officials when grappling with growing concerns over China’s farming sector and the modern-day peasantry. [9]  While various schools of thought have emerged to address this crisis—including the New Rural Reconstruction movement led by Wen Tiejun and other activists—the Chinese government has struggled to uncover a long-lasting solution. [10]

During the late 1980s, the Chinese Communist Party also focused heavily on developing its cities, attracting foreign investment, and improving infrastructure in these areas. For instance, the Chinese party-state designated a number of cities such as Shenzhen and Zhuhai as Special Economic Zones (SEZs), which enjoyed loosened economic policy, early decentralization, and privatization of resources, all of which incentivized entrepreneurship, foreign cash inflow, and rapid infrastructure development. [11] With the CCP’s attention turned away from central and western China, these primarily rural regions “missed the boat” and now still experience difficulty in acclimating to competition from the world market.

Economic growth has indirectly spawned another insecurity for rural residents, particularly farmers: land expropriation. In the illuminating words of Xuefei Ren, a comparative urbanist, “While bottles of champagne were opened, ribbons were cut, and millionaires and billionaires were made, many ordinary residents lost their homes and relocated to the urban periphery, joining the army of the urban poor”. [12] This clear contradiction to China’s top-down policies endorsing economic wellbeing and equality extends to farmland ownership. In favor of urban development and provincial or regional economic growth, local government officials frequently allow developers to forcefully relocate farmers and give them meager sums in return. Corrupt local governance and the central government’s inability to control illegal land acquisition have led to approximately “forty million peasants over the last decade losing their lands through real estate fraud and collusion. In U.S. terms, this would be equivalent to all citizens who live from Massachusetts to Maine being swindled out of their property and forced to relocate.” [13] 

In short, the Chinese Communist Party faces a number of formidable barriers to its achieving a xiaokang society. Just this year, Xi Jinping has highlighted the critical nature of lingering rural poverty and the displaced peasant problem. While China’s economic slowdown captured the CCP’s focus last year, Xi has “urged Chinese officials to redouble their efforts to fight poverty and pollution so that the Communist Party can deliver its promise of creating a ‘comprehensively well-off society’ by 2020. [14] To complete what Xi has called the “last mile,” the Chinese government will likely intensify efforts to build rural infrastructure and subsidized housing, which will prolong social stability and keep party legitimacy delicately hanging in balance. [15] 

Rachel Lietzow is a recent graduate from the University of Kentucky, where she studied Chinese, International Economics, and International Studies.

Works Cited:

[1] People's Daily Online. (2002, November 10). All about Xiaokang. Retrieved May 13, 2019, from

[2] Peng, C. (n.d.). Xiaokang, Datong and the dangerous debate over China's future. Retrieved May 14, 2019, from

[3] World Bank. (2015). GINI Index. Retrieved May 13, 2019, from

 [4] World Bank. (2015). GINI Index. Retrieved May 13, 2019, from

[5] Liu. (2018, April 23). China's record in poverty reduction unparalleled in human history: British expert. Retrieved May 13, 2019, from

[6] Ren, X. (2013). Urban China. Cambridge: Polity Press.

[7]Friedmann, J. (2005). China's Urban Transition. Minneapolis, MN: University of Minnesota Press.

[8] Jennings, R. (2018, February 05). Despite China's Fast-Growing Wealth, Millions Still Remain Poor. Retrieved May 13, 2019, from

*Three main areas: nongmin (peasants), nongcun (rural society), and nongye (agriculture)

[9] Hu, S. (2015, January 28). China must look beyond subsidies to improve the lot of its farmers. Retrieved May 14, 2019, from

[10] Day, A. (2013). The Peasant in Postsocialist China: History, Politics, and Capitalism. Cambridge: Cambridge University Press. 

[11] Day, A. (2013). The Peasant in Postsocialist China: History, Politics, and Capitalism. Cambridge: Cambridge University Press. 

[12] Ren, X. (2013). Urban China. Cambridge: Polity Press.

[13] Grumbine, R. E. (2012). Where the Dragon Meets the Angry River Nature and Power in the Peoples Republic of China. Washington, DC: Island Press/Center for Resource Economics.

[14] Zhou, C., Tang, F., & Zhou, X. (2019, April 25). Xi Jinping tells Chinese officials to shift focus back to fight against poverty. Retrieved May 13, 2019, from

[15] Jennings, R. (2018, February 05). Despite China's Fast-Growing Wealth, Millions Still Remain Poor. Retrieved May 13, 2019, from

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