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Social scarcity

4. Welfare: Socialism with Chinese...actually no, not socialism at all

If you think American healthcare is in disrepair, try visiting a Chinese hospital. Rising episodes of hospital violence, including a spate of stabbings, are symptoms of an ailing healthcare system in which corruption and spiraling costs drive patients to extreme action. The horrendous state of the social welfare system is beyond simple demand and supply considerations. A man-made and policy-induced scarcity of reliable, affordable healthcare and an underfunded pension system compound the insecurity of average Chinese people. As demands for a better system grow, the government is struggling to prevent a revolution of rising expectations.

5. Education: Give me equality...but not until after my son gets into Tsinghua

Admission slots in choice schools are scarce in China’s intensely competitive educational system. But the very uneven distribution of these scarce opportunities is even more important to understanding education in China, and its role in Chinese society, than is the average degree of scarcity. Beneath the ostensibly meritocratic system of national test-taking lies an educational system that, like much of the country’s welfare state, reserves premium opportunities for holders of urban household registrations. One or two generations ago, this was a force for social stability, keeping potentially unruly urbanites invested in the status quo. But today, the educational system’s bias toward urban-registered households actually serves to destabilize Chinese city life. That’s because of the systematic discrimination against the migrant class, a group that increasingly and perhaps uncomfortably resembles the kind of “proletarian mass” from which orthodox Marxists would expect social revolutions to rise. Something has to give.

6. Housing: Home is where the wallet is

The housing market was a tremendous driver of growth during the first decade of the 20th century. It also served an important role in maintaining social stability: providing wealth to the emerging middle class, job opportunities to the migrant class, and huge fortunes to the elites. It is such a perfect microcosm of everything that makes the Chinese economy tick that economics professors would have to invent it if it didn’t already exist. But the tailwinds that made housing an indisputable boon to developers, investors, and tax collectors over the past decade have now turned into headwinds that could hamper economic and social development. Demographic, economic, and political pressures converge to create an impression of chronic scarcity in China’s housing market. The threat of a collapsing real estate bubble may preoccupy foreign observers, but it’s the pervasive sense of scarcity of affordable housing that remains a pressing concern for the average urban Chinese family.

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