Cheng Li on His New Book, ‘Middle Class Shanghai’

Cheng Li is the director of the John L. Thornton China Center and a senior fellow in the Foreign Policy program at Brookings. He is also a director of the National Committee on U.S.-China Relations. Li focuses on the transformation of political leaders, generational change, the Chinese middle class, and technological development in China.

Li grew up in Shanghai during the Cultural Revolution. In 1985, he came to the United States, where he received a master’s in Asian studies from the University of California, Berkeley and a doctorate in political science from Princeton University. From 1993 to 1995, he worked in China as a fellow sponsored by the Institute of Current World Affairs in the U.S., observing grassroots changes in his native country. Based on this experience, he published a nationally acclaimed book, “Rediscovering China: Dynamics and Dilemmas of Reform” (1997).

Li is also the author or editor of numerous books, including “China’s Leaders: The New Generation” (2001), “Bridging Minds Across the Pacific: The Sino-U.S. Educational Exchange 1978-2003” (2005), “China’s Changing Political Landscape: Prospects for Democracy” (2008), “China’s Emerging Middle Class: Beyond Economic Transformation” (2010), “The Road to Zhongnanhai: High-Level Leadership Groups on the Eve of the 18th Party Congress” (in Chinese, 2012), “The Political Mapping of China’s Tobacco Industry and Anti-Smoking Campaign” (2012), “China’s Political Development: Chinese and American Perspectives” (2014), “Chinese Politics in the Xi Jinping Era: Reassessing Collective Leadership” (2016), “The Power of Ideas: The Rising Influence of Thinkers and Think Tanks in China” (2017), and “Middle Class Shanghai: Reshaping U.S.-China Engagement” (2021). He is currently completing a book manuscript with the working title, “Xi Jinping’s Protégés: Rising Elite Groups in the Chinese Leadership.” He is the principal editor of the Thornton Center Chinese Thinkers Series published by the Brookings Institution Press.

The Carter Center intern, Kathryn Putz, conducted this interview on Li’s new book, “Middle Class Shanghai: Reshaping China’s Engagement.”

1. As you write in your book, the concept of the middle class in China was largely overlooked during the first four decades of the PRC, only recently gaining traction as a result of economic and social reform. Would you please provide some historical background in the Chinese context?

The term “middle class” (zhongchan jieji) was rarely used in the PRC during its first four decades. Even in the pre-Communist era, it was largely a foreign concept. The private entrepreneurs and petty-bourgeois intellectuals who had emerged in the preceding decades either quickly disappeared or were severely diminished in numbers after the Communist revolution.

Only after Deng Xiaoping instituted economic reform and opening up, or more precisely since the 1990s, did the term “middle class” begin to appear in Chinese academic writings. In the early stages of research on this concept, Chinese scholars often used the terms “middle stratum” (zhongjianceng), “middle-income stratum” (zhongjian shouru jieceng), and “middle-income group” (zhongdeng shouru qunti) to refer to this new socioeconomic force. Although the term “middle class” has now been widely accepted in the Chinese media, the Chinese authorities still prefer using “middle-income stratum” rather than “middle class” to avoid connotations of “class tensions” and “class conflict.”

2. What first inspired your interest in the Chinese middle class? How can a better understanding of the main characteristics of the Chinese middle class help assess the future impacts of China’s changing social stratification and foreign influence?

Western scholars have rarely applied the “middle class” concept to frame their analysis of social mobility and social stratification in China. Let me explain this in a more personal manner. This book on middle class Shanghai is not my first book on the subject, but actually my third book. In the mid-1990s, I had the exceptional opportunity to live in Shanghai for two years as a research fellow with the support of the U.S.-based Institute of Current World Affairs, the same institute that sent A. Doak Barnett, a distinguished China hand, to Shanghai to witness and write about the Communist takeover in the late 1940s.

Based on my Rip Van Winkle-like experience in my native city, I wrote a book manuscript on the emergence of the Chinese middle class. But the manuscript was rejected by publishers—a total of 6 or 7—one after another. The reason was largely the same: Reviewers did not agree with the overarching concept of the Chinese middle class. They believed that the concept of the middle class should involve civil society and core middle class values. Also, some reviewers commented that China consisted of only a rich and corrupt official class and a vast number of poor people, with no such thing as the Chinese middle class in between.

Eventually I changed the book title to Rediscovering China: Dynamics and Dilemmas of Reforms and deleted most of the explicit references to the middle class. This book, published in 1997, turned out to be a best-seller and became widely used as a textbook at colleges in North America.

My second book on the Chinese middle class was an edited volume China’s Emerging Middle Class, published in 2010, at a time when the Western business community was fascinated by the economic implications of the rise of the Chinese middle class. I also want to mention that academic circles in the West were still hesitant to accept the concept of the middle class, and that book was one of the very few English language books on the subject. But at the time of the publication of my second book on the Chinese middle class, over 20 percent of the Chinese population, concentrated in Shanghai and other major cities, enjoyed a middle-class lifestyle with private property, personal automobiles, improved health care, accumulation of financial assets, and could afford overseas travel and foreign education for their children. They had already transformed China’s socioeconomic structure and began to have a far-reaching impact on the global economy.

Let me also point out that the pervasive view in Washington today about middle-class development in China, however, is no longer one of hope for positive change for peace and prosperity in the world or mutual benefit for both countries. Rather, it is one of fear that this development benefits only China and may undermine American supremacy and security.

The dominant references to China nowadays in Western media are terms like “Communist China,” “the Chinese Communist Party,” “Chinese virus,” “the failure of U.S.-China engagement,” “economic decoupling, genocide,” “the clash of civilizations,” “whole-of-society threat,” and “existential threat.” We hear little to no discussion about or reference to the Chinese middle class, Western influence in China, and the enduring positive impact of people-to-people exchanges.

Of course, China has its problems, and the CCP’s tight political and media control is alarmingly detrimental. Human rights in Xinjiang and Hong Kong are very important issues that deserve international attention. To sustain free and fair international trade, Beijing must change its excessive Chinese mercantilist approach to international trade and other economic activities.

Yet, we also need more work that humanizes–rather than demonizes–China, the most populous country in the world. We should understand that the PRC is not just Beijing, and that there is a distinction between state and society.

3. In your book, you argue that the Chinese middle class is gaining traction and sway in Chinese society, through its members’ roles as lawyers, officials, and university administrators. What are some of the likely impacts of the Chinese middle class on the social stability and political development of the People’s Republic of China?

First of all, the middle class in China––and in Shanghai––is a diverse lot. In terms of occupational composition, the Chinese middle class comprises three major clusters, as I’ve categorized in my book.

  • The first is an economic cluster composed of small business owners and entrepreneurs, real estate and stock speculators, and foreign and joint-venture employees.
  • Next is a political cluster populated by low-level government officials, office clerks, and state-sector managers.
  • The third cluster is oriented around culture and education and consists of media figures, academics and teachers, and other intellectuals.

Let me add that members of the middle class in Western countries are just as diverse in terms of family backgrounds, occupational identities, and educational attainment as their counterparts in China. The middle class in Western countries is also subdivided into many groups.

To directly answer your question, I would like to make three points.

First, two ancient philosophers, Aristotle in the West and Mencius in the East, are frequently quoted in Chinese scholarly writings that draw a correlation between a strong middle class and sociopolitical stability in society. Aristotle asserted over 2,000 years ago that the middle stratum is a balancing and stabilizing force. Absent such a stratum in society, dynastic crises and social upheavals are far more likely. Mencius voiced roughly the same principle: “Those who have property are also inclined to preserve social stability.”

Some Chinese scholars also argue that the existence of a large middle class in advanced economies and Western democracies is a crucial factor for the enduring social stability and political institutional development in these societies. In other words, it is natural that the Chinese middle class is inclined toward sociopolitical stability in China.

Second, many members of the middle class––those in the political cluster––want to maintain the Chinese authoritarian system. Many Chinese elites are deeply familiar with two major events in the 1990s, namely Japan’s “lost decade” of economic growth and the collapse of the Soviet Union. Some official Chinese sources have implied that both episodes were products of an American conspiracy. Fear of a similar plot against China might ultimately be enough to tip support in favor of the CCP’s authoritarian rule.

Third, your question specifically asks about lawyers or legal professionals. The Chinese legal tradition has been weak throughout the country’s long history. In the current political environment that emphasizes the ultimate authority of the party, the country has a long way to go to develop an independent legal system abiding by the rule of law.

Yet, there have been some important developments in the past two decades. Notably, in the early 1980s, there were only around 3,000 lawyers in the PRC—a country of approximately 1 billion people—and all of these lawyers were allegedly state officials at that time. The legal profession has nevertheless burgeoned. By the end of 2018, China had a total of 423,000 registered lawyers, and the total number of law firms practicing in the country surpassed 30,000. Most of them are now administratively outside of the system, and some play the role of protecting the rights for the public against the state.

In 1978, there were hardly any textbooks on law, but now law-related books usually constitute a quarter of the books carried in academic bookstores. In 2007, about 400 books and 70,000 scholarly articles on law, including translated works, were published in the country. In 2009, China had over 200 professional journals that focused on law. China’s legal education and profession are profoundly shaped and influenced by Western legal doctrines that have made their way to China through international educational exchanges. A good example is the birth and growth of China’s legal clinics, which were initiated and sponsored by the Ford Foundation in the United States.

In recent years, a growing number of Chinese students have gone to Western countries to study law and the social sciences, and many of them returned to China, where they now practice law. With the United States and other Western countries pressuring China to meet international norms and standards—especially in regard to enforcement and compliance with intellectual property rights—these Western-educated Chinese lawyers may be instrumental in promoting both legal development in China and cooperation across the Pacific in the years to come.

My above observations suggest both the problems and promises associated with the Chinese middle class in terms of their role in China’s political development.

4. While Shanghai is home to a large contingent of Western-educated returnees, or “sea turtles” as Chinese call them, very few are willing to move to rural and inland China. Do you think Chinese policymakers can prevent this regional gap in human capital from growing over time? Relatedly, what other challenges do you foresee being associated with the growth of the Chinese middle class?

Chinese foreign-educated returnees or “sea turtles” (in Chinese, the words for “returnee” and “sea turtle” have the same pronunciation) are indeed overly concentrated in coastal cities such as Shanghai, Beijing, Shenzhen, and Guangzhou. In 2009, for example, Shanghai was home to more than one-fourth of the country’s foreign-educated returnees. In a way, this was similar to the overly concentrated middle class in coastal cities a couple of decades ago.

According to a study conducted by Dominic Barton (former head of McKinsey and now Canadian Ambassador to China) and his colleagues at McKinsey, in 2002, 40 percent of China’s relatively small, urban middle class resided in the four Tier-one cities—Beijing, Shanghai, Guangzhou, and Shenzhen. The fast growth of the middle class has spread beyond these Tier-one cities in recent years to other Chinese cities, including Tier-two and Tier-three cities in inland regions. By 2022, the proportion of China’s middle class that resides in those megacities is expected to drop to about 16 percent, and 76 percent of the middle class will live in Tier-two (45 percent) and Tier-three (31 percent) cities. In terms of geographic distribution, it is expected that China’s middle class will shift from 87 percent living in coastal regions and 13 percent in inland regions in 2002, to 61 percent and 39 percent, respectively, by 2022.

The question is whether the pattern of the geographic distribution of returnees will follow that of the middle class in the country. My answer is yes. Some major inland cities like Chengdu, Chongqing, Xi’an, Hefei, and Changsha are already home to many returnees. Some less developed inland provinces such as Guizhou and Qinghai now use policy measures to recruit top talent in the IT, data science, and energy sectors.

Yet, the employment pressure on college graduates and returnees will remain a major challenge. The government may not be able to meet their high expectations, especially of those who do not graduate from the top-tier schools in and outside China. Also, the competition and tensions between “sea turtles” and “land turtles” (domestically educated elites) also deserve greater attention.

5. The middle class is frequently associated with democratization. However, in China, it appears that the rise of the middle class has not generated any momentum toward political liberalization, and has actually pushed China further towards authoritarianism. How do you explain these conflicting ideas?

Pioneering works on the correlation between middle class and political liberalization by distinguished social scientists Barrington Moore Jr., Talcott Parsons, Seymour Martin Lipset, among many others, all emphasize the vital role of the middle class in a transition to democracy.

Moore believes that the existence of a forceful middle class—or in his words, the “bourgeois impulse”—creates a more autonomous social structure in which new elites do not depend on coercive state power in order to flourish, as is the case in an aristocracy. Talcott Parsons posits that shared core values must play a central role in the formation of a socioeconomic stratum.

For Lipset, a professionally educated, politically moderate, and economically self-assured middle class is an important precondition for an eventual transition to democracy in a given country. In his view, mass communications, facilitated by industrialization and urbanization, provide a broader arena in which cultural elites can disseminate middle-class views and values, thus creating a moderate, mainstream public opinion. At the same time, political socialization and the professional interests of the middle class also contribute to the growth of the legal system and civil society—key components of democracies.

I would like to make a few observations about the political views and behaviors of the Chinese middle class. First, it is too early to declare that the aforementioned theoretical perceptions made by the prominent Western scholars are wrong, because the rise of China’s middle class is still a relatively recent phenomenon. China’s nascent middle class tends to emphasize the status quo and is risk-averse in political views and behavior, but this may be only a transitory phase.

Second, in recent years, middle class protests or movements constitute the most important political challenges to authorities. Examples include:

  • The video Under the Dome by Chai Jing, a former CCTV anchor who became the country’s leading advocate for environmental protection, garnered approximately 200 million views in China when it aired in 2015, reflecting growing middle-class resentment about the government’s failure to prevent air pollution.
  • The collapse of the online P2P (peer-to-peer) lending markets, which wiped out about 7,000 platforms and cut off hundreds of thousands of middle-class investors from loan resources, led to a nation-wide protest.
  • The revelation that faulty vaccines for diphtheria, tetanus, and whooping cough that had been administered to nearly half a million children dominated Chinese social media, forcing the authorities to meet public demands for improved food and drug safety.
  • The nationwide public mourning in response to the tragic death of Dr. Li Wenliang, a whistleblower who exposed the coronavirus at the outset of the 2019–20 outbreak, was particularly revealing. The wave of widespread grieving reflected the public’s outrage at Dr. Li’s mistreatment by Chinese authorities.

In all of these cases, self-identified middle-class protesters or critics succeeded in pressuring authorities to change course or acknowledge their mistakes.

Third, proponents could reject the notion that the Chinese middle class lacks shared core values. Constituent members of the Chinese middle class are unified in their appreciation for the middle-class lifestyle, the development of a market economy at home and economic integration abroad, the protection of private property rights, a policy emphasis on primary education, and social stability. The prevalence of public discussion about the topic indicates that the middle class’s self-consciousness, group identity, and shared values are all on the rise.

Finally, Chinese middle-class views of the United States, however, are neither fixed nor homogeneous. Their disappointment with the United States seems especially acute because the American middle class has long served as a model for fellow strivers in China. Many Chinese students and scholars who studied in the United States and returned home retain their aspirations for American middle-class lifestyles and values.

But the statements by U.S. government officials implying that professors, researchers, and students from China serve as spies for the CCP, as well as official characterization of China as a “whole-of-society threat,” have bred hostility. Implicit or explicit racially charged statements about China have stoked outrage among Chinese citizens. Where once the Chinese middle class eyed the United States with envy, it now regards it with indignation. All these new developments have generated more nationalistic sentiment among the middle class and greater support for the CCP leadership.

Whether the Chinese middle class will remain in alignment with authoritarian rule is not entirely clear. China’s political trajectory is not predetermined, and it faces serious constraints as a result of both domestic and international factors.

6. In your book, you write that strengthening America’s domestic environment in order to outpace and outshine China should be an urgent priority. What are some concrete policies that would foster greater domestic power? Do you think such policy changes are possible moving into the Biden administration?

For analysts of American foreign policy, including those in China, there seems to be a fundamental contradiction between the Biden administration’s top priority for domestic renewal and its tough and aggressive foreign policy approach toward China as well as other authoritarian states. Prior to the 2020 presidential election, a group of foreign policy strategists and socio-economic policy experts, including current National Security Adviser Jake Sullivan, authored a substantial report, Making U.S. Foreign Policy Work Better for the Middle Class, which includes the following statement:

“There is no evidence America’s middle class will rally behind efforts aimed at restoring U.S. primacy in a unipolar world, escalating a new Cold War with China, or waging a cosmic struggle between the world’s democracies and authoritarian governments.”

The authors elaborate that the new President should avoid drawn-out military conflicts that “cost too many lives and taxpayer dollars.”

When considering President Biden’s top four priorities, which include combating COVID-19, accelerating economic recovery, ensuring racial equity and social justice, and coordinating on climate change, Beijing saw an overlap with China’s own interests and hoped this could provide a window of opportunity for U.S.-China reengagement. The Chinese leadership believed that the Biden administration could achieve these goals faster and more effectively through U.S.-China bilateral cooperation.

However, Chinese senior officials soon realized that the window of opportunity was extremely narrow, if it even existed at all, considering the political and strategic assessments of the Biden administration. Many Chinese now believe that the Biden administration could be more detrimental to U.S.-China relations than the Trump administration. In their view, the Biden administration’s strategic approach to create an anti-China alliance, and its ideological appeal to countries around the world to characterize the Chinese government as a genocidal regime, have backed China into a corner.

My view is that the Biden administration is still in its first few months of governance and will make adjustments as time moves on. President Biden’s speech to Congress last week emphasized middle class renewal with some specific discussion of, among other things, education, immigrant contributions to society, infrastructure development, tax reform, R&D spending, and climate change. The shrinking of the middle class in the United States over the past few decades, as my book argues, must be reversed if the United States hopes to effectively compete with China. The U.S. should be more engaged—both through competition and cooperation—with China’s middle class. This should be what Antony Blinken has described as “a race to the top, not a race to the bottom.”

7. Currently, one prevailing view in Washington is that there is a need to decouple with China across the economic, technological and civil society domains. You argue that decoupling and defining China as an enemy will have negative impacts for America’s national interests and global influence. Can you elaborate further on the risks of decoupling?

During the final year of the Trump administration, Beijing believed Trump’s hawkish team sought to defeat and destroy China in much the same way that the United States defeated the Soviet Union in the Cold War. This was evident on three main fronts.

  • On the economic front, the Trump administration established that a systemic and complete decoupling with China was no longer something remote, and not just a possible scenario; it happened in virtually every economic domain.
  • On the political and ideological front, the Trump administration pursued regime change to overthrow CCP rule.
  • On the military and security front, Beijing feared that the US would move toward supporting Taiwan’s independence.

China understandably reacted very assertively to these three policy moves, and huge damage was already done to the bilateral relationship. We have not escaped the dangerous and adversarial situation that the Trump administration left us.

The Biden administration is focusing instead on improving its relationship with its allies to confront the growing power and influence of China. Beijing’s increasingly assertive conduct, both in the region and on the world stage—including the pressure campaign against Taiwan, economic coercion against Australia, tight political and media control and pressing human rights violations in Xinjiang and Hong Kong, and retaliatory sanctions targeting individuals and institutions in North America and Europe—has caused serious concern in the U.S. and ally countries.

From the Chinese perspective, many of the Biden administration’s recent moves indicate that a new anti-China Cold War is imminent. These actions include restructuring global industrial and supply chains, initiating the so-called “chip alliance” or “semiconductor industry alliance,” joining “like-minded countries” to boycott Chinese products and China-sponsored events because of human rights issues, urging EU countries to reconsider the EU-China Comprehensive Agreement on Investment, and hosting the “democracy summit” at the White House.

The United States and China are entering the new era of competition. If not wisely and carefully managed, this competition may lead to destructive confrontation for both countries and for the world. Given that China’s challenge to the United States differs profoundly from that of the Soviet Union, it would be a mistake for American policymakers to assume that the outcome of a new Cold War would be the same. As the prime minister of Singapore Lee Hsien Loong recently wrote in Foreign Affairs Magazine, “[Any] confrontation between these two great powers is unlikely to end as the Cold War did, in one country’s peaceful collapse.” The technological revolution and its implications for asymmetrical warfare has further complicated military competition, making the prevention of hot wars even more difficult.

Most importantly, my book echoes Dr. Henry Kissinger’s recent assessment that the United States and China today are almost equally powerful and that neither country could win a total war or destroy the other. Both countries, therefore, need to find an entirely new way to coexist by reshaping U.S.-China engagement.

Author

  • Kathryn Putz is a junior at Dartmouth College majoring in Government and Asian Societies, Cultures and Languages. At Dartmouth, she serves as the co-president of the Dartmouth Women in Law and Politics club and works as an Admissions Ambassador. She studied advanced Chinese in Beijing, China. Kathryn is currently an intern in the U.S. Department of State's Bureau of Democracy, Human Rights, and Labor.