The Mirage of the ‘Chinese Dream’

A look at ‘The American Dream is Alive. In China’ by The New York Times
November 26, 2018 Updated: November 26, 2018

“The American Dream is Alive. In China.” This headline not only pits the concepts of the American Dream and the Chinese dream against each other, it also turns the century-old mainstay of American newspapers, The New York Times, into a main front in this battle. Aside from raising eyebrows from the Chinese Twitter community, a careful parsing of the article uncovers a sobering subject for Americans — the onslaught of globalization against the American Dream.

Upward Mobility in Chinese Society Has Long Been a Thing of the Past

The official Twitter account of The New York Times published the following tweet on November 19: “There are two 18-year-olds, one in China, the other in the United States, both poor and short on prospects. You have to pick the one with the better chance at upward mobility. Which would you choose? Not long ago, the answer might have seemed simple. The ‘American Dream,’ after all, had long promised a pathway to a better life for anyone who worked hard. But the answer today is startling: China has risen so quickly that your chances of improving your station in life there vastly exceed those in the United States.”

These words are excerpts from “The American Dream is Alive. In China.”, with the key word being “upward mobility”. This is precisely the essence of the American Dream” that Americans hold in such high esteem. As to interpretations of the Dream, there are many versions. The one that has long captured the imagination of the general public is: no matter what one’s class is at birth, one is able to, through determination and hard work, climb up the ladder of society. In short, the essence of the American Dream is the possibility of upward mobility through one’s own efforts.

Because I live the United States, I find the perspective that this article takes quite interesting.

The article cites the 49-year-old Xu Liya—a poor farmer whose family rose to middle-class affluence. This is a common occurrence in the coastal areas of Zhejiang, Guangdong, Fujian and other provinces. However, the focus is not on such stories, but on the the point that specifically within China’s growing middle class, children have higher incomes than their parents.

This has indeed been the reality in China over the past 40 years, and especially so for those born in the 1940s and 1950s, having experienced tremendous changes resulting from China’s evolution from extreme poverty to being the second largest economy in the world. Except for the large number of workers in state-owned enterprises who were laid off in the mid-1990s, the income of most Chinese was indeed increasing, and people’s social status improved, to various degrees. Income during the latter half of life was also much higher than the first half.

But this upward flow in China was short-lived. It began in 1978 and lasted to around 2004, or only a couple decades. As early as 2005, Peking University instructor Wen Dongmao wrote a survey report titled “The Influence of Family Background on Higher Education Opportunity and Graduate Employment in China.” The survey subjects were college and university graduates from around the country, and their fathers’ occupations and education level were taken as indicators of family background. One section of the report analyzed the influence of family background on graduate employment, and found that the father’s occupational status tended to determine his children’s employment opportunities. Other factors, such as salary level and chances for promotion, were also directly related to the social status of one’s parents.

The survey showed that, in terms of salary, the higher the father’s social class, the higher the average starting salary of the graduates. The average monthly income of the graduates whose fathers are peasants were on average 400 and 300 yuan less than fathers who held positions in administrative and managerial work, respectively. The survey revealed that the overall trend in Chinese society pointed to a cruel reality of increasing stratification. Later, more of these kinds of surveys were published surveys, verifying that rural and urban children without any connections have a hard time seeking employment.

Chinese born after the 1970s and 1980s did not experience the Cultural Revolution. Although their wages are much higher than their parents’ generation, increases in the pricing of housing, children’s education and other expenses have been climbing faster than wages. In particular, those born after the 1980s, even if they graduate from college, are deeply aware that the path to success has become extremely narrow. Unless we naively accept the existence of people like the Party-approved internet celebrity Zhou Xiaoping as an example of how social mobility in China is still smooth, it is obvious that China has long suffered from social stratification.

And with opportunities to ascend in Chinese society being increasingly scarce, pent-up frustration has made the downtrodden more prone to violence than ever before.

The expansion of the middle class has long since ceased. This class reached the most brilliant point of its expansion 10 years ago when it made up 23 percent of the population, but it has been shrinking ever since. The latest survey data released by Professor Li Qiang of Tsinghua University in 2017 says that the middle class makes up only 19.12 percent of the population. As to the “happy life” that the middle class enjoys, an article recently published and widely shared in China called “The Pains of 200 Million New Members of the Middle Class” cited an online survey concluding that the new middle class was being suffocated by home loans, costs of education, and expenses for taking care of elderly parents. Members of this class have been colloquially dubbed the “green pepper crowd,” as the Chinese for “green pepper” meaning pronounced the same as that word that means “anxiety.”

The author of “The American Dream is Alive. In China.” appears to be quite unfamiliar with these recent occurrences.

As the ‘American Dream’ Fades, Young People Gravitate Toward Socialism

The reason the New York Times makes this comparison is because in the past 20 years, the income, job opportunities, and opportunities for upward mobility of American youth have not been as good as their parents.

Harvard professors Raj Chetty, Nathaniel Hendren, and Brown University professor John Friedman jointly established a series of research projects titled “The Equality of Opportunity Project” to explore changes in class mobility and the social factors behind these changes of the American generation spanning the past half-century.

The researchers collected income tax return data from 1996 to 2012 and investigated 6.3 million U.S. citizens born between 1980 and 1981. Through the family kinship declared on the forms, they were able to successfully “match” 95 percent of the respondents with their parents. Their research shows that American social mobility has declined significantly over the past half-century. About 90 percent of the population born around 1940 have a higher income level than their parents, but for those born in 1980, that figure had slipped to just 50 percent. For the American public, the simple American Dream of “living a better life than one’s parents” looks increasingly out of reach.

In January 2017, a report issued by the American youth organization “Young Invincibles” showed that compared to “baby boomer” parents from post-World War II, although the overall level of education increased, members of the “Millennial Generation” (also known as “Generation Y”) born between 1980 and 1995 lagged in terms of income and real estate.
Using data from the Federal Reserve, the report compared millennials between the ages of 25 and 34 in 2013 with “baby boomers” of the same age in 1989. The findings were that millennials had a median annual income of $40,581, 20 percent less than their parents’ generation, a median net worth of $10090, or 56 percent less than the “baby boomer” generation, and had a house ownership rate of 43 percent, also 46 percent lower than their parents on average. The Associated Press noted that the report revealed “painful gaps” between the two generations.

Understanding these gaps helps us to understand why 52 percent of millennials wish they lived in a socialist country, and why 6 percent of young people see communism as the optimum choice in ideology: it is because the American Dream is fading.

What’s Behind the Misconception?

The misconception that opportunities for upward social mobility are greater in China than in the United States is an illusion created by the social upheaval in China over the past 40 years. From the 1980s to the present, by means of state-commercial relations characterized by transactions of power and money, China has produced a cohort of super-rich who started from rock bottom.

In 2018, China had 819 billionaires, outstripped the United States’ 571 billionaires for the third consecutive year. For the world outside China, the behind-the-scenes opacity of Chinese-style state-commerce relations is seemly unimportant. To them, the long list of rich Chinese individuals is enough to prove that China must have afforded its population many opportunities for development and upward social mobility.

Meanwhile, in the United States, the progressive ideology is currently mainstream, and as such is difficult to challenge. Because of this, it is inconvenient to recognize the obvious fact that the decline in income and increase in unemployment among young Americans corresponds directly to the globalization that began in the 1990s.

In May 2016, former World Bank senior economist Branko Milanovic and Yale University political science professor John E. Roemer published an article in the Harvard Business Review, pointing out that following the trend of globalization and the rapid rise of China and India, inequality around the world had been greatly reduced. But within many countries, the polarization between rich and poor continued to expand. From 1988 to 2011, the income of middle- and lower-class families in developed countries had barely changed, and the growth rate was quite slow. In most countries, especially big countries like the United States and Russia, the gap between rich and the poor is increasing.

The process of globalization began in the 1990s after Bill Clinton took office as U.S. President. At the time, the United States began opening its arms to immigrants from all over the world. During the Obama era, the door was opened even wider. No matter old or young, as long as you wanted to come, it was usually possible to get in. This generosity gave many people in developing countries the opportunity to improve their living conditions. But the United States has also changed from a melting pot to a salad bowl. An unexpected problem for American society is that American youth must now compete with the best young people from all over the world, which greatly increases the difficulty of finding a job.

It is not merely the case that immigrants are competing for job opportunities with American blue-collar workers; elite universities have also continuously produced foreign “academic refugees.” According to a New York Times report in December 2013, a 2011 National Science Foundation survey of elite universities showed that 35 percent of new PhD degree holders—and 43 percent of humanities PhDs—did not sign an employment letter of intent upon completing their studies. It is expected that less than half of the doctorates intend to pursue a lifelong career as an educator.

“The American Dream is Alive. In China.” ignores the vast differences between the Chinese and American social and political systems, as well as their degree of openness. It compares China’s flash-in-the-pan upswing of a little over 20 years with a short-term decline in the United States’s greater trend of upward flow. It is the study of a discrete point: the speed with which a minority of people got rich is lost in the article’s bias, and its conclusions border on absurdity.

He Qinglian is a prominent Chinese author and economist. Currently based in the United States, she authored “China’s Pitfalls,” which concerns corruption in China’s economic reform of the 1990s, and “The Fog of Censorship: Media Control in China,” which addresses the manipulation and restriction of the press. She regularly writes on contemporary Chinese social and economic issues.

Views expressed in this article are the opinions of the author and do not necessarily reflect the views of The Epoch Times.