Abstract
At first glance, a book on the Chinese coal industry might not appeal to more than a few boutique specialists. In fact, Tim Wright’s new book on the Chinese coal industry addresses a very broad and fundamental range of issues relating to the political economy of post-Mao China, and as such is likely de rigueur reading for serious students of China’s transition from the plan to the market and its economic, social, and political consequences. As Wright points out, the Chinese coal industry is foundational, providing 70 per cent of total energy consumption and 75 per cent of China’s total energy production. Half of China’s coal production is used to generate electricity and coal accounts for upwards of 70 per cent of the total cost of generating electrical power. The so-called Chinese economic miracle has thus been fuelled by China’s ‘black gold’ and as such Wright’s detailed study addresses one of the pillars of the contemporary Chinese economy, a factor that might induce some non-specialists to consider reading the book, which is a valuable follow-on to Wright’s well-regarded Coal Mining in China’s Economy and Society, 1895–1937 (Cambridge, Cambridge University Press, 1984).
The real salience of Wright’s book, however, lies less in the specific details of the inner workings of the Chinese coal sector, although these are in themselves fascinating and illuminating. Rather the impact of his book lies in its penetrating analysis of the concurrent dismantling and unravelling of the old Maoist-planned economy. Prior to the reform period, the coal sector occupied a position of both economic and political importance. Imbued with strong ‘proletarian’ credentials and central to the architecture of China’s pseudo-Stalinist command economy, the coal sector was nevertheless a ‘victim’ of the administered price system that deflated raw material prices in order to subsidize upstream industries, including electrical power generation. Whereas the planned economy in part militated against the negative financial consequences and perverse productive incentives inherent in the scraping-off of rents from the coal sector, moving away from that system confronted decision makers with the complex challenge of creating prices that would allow the coal sector to achieve profitability and encourage significant increases in production, while also preventing rising coal prices from adversely affecting the economic viability of expanding industrial production and sharply increasing residential consumers’ energy bills. As in other sectors, central decision-makers opted for a combination of incremental, ad hoc price reforms and adjustments, and the creation of a new subsector of ‘out of plan’ coal producers, including a new township and village mine (TVM) sector. While partially solving one set of problems, incremental price reform and ‘growing out of the plan’ spawned a complex interplay between the centre’s attempts to manage the coal sector’s transition from the plan to the market and emerging market forces that often worked at direct cross purposes to such efforts. As Wright shows, the result was a dialectical and often messy process wherein the coal sector evolved toward the market over two decades.
Wright does not, however, confine his analysis to the structural transformation of the coal sector but instead examines the social and political ramifications of these changes. Reform dramatically altered the relationship between management and labour and between the central and local governments. The urbanized ‘vanguard of the proletariat’ workforce found itself not only losing social status and facing the loss its ‘iron rice bowl’ of cradle-to-grave job security as state-owned mines and processing industries were transformed into market-driven companies, but it also faced challenges from the countryside where chronic underemployment sustained an ‘army’ of unskilled miners willing to accept much lower wages and worse working conditions. The central government, meanwhile, found itself confronted with new challengers, including local governments, a powerful new class of private nouveau riche coal barons, and miners, all of whom were decidedly less than willing to automatically comply with Beijing’s dictates, but were instead prepared to engage in ‘complex game playing’ on issues such as mine safety, environmental protection, and protection of worker rights.
In sum, Wright’s analysis of China’s coal sector provides an insightful and highly readable account of the complex dynamics of what Wright describes as the ‘successful’ systemic transformation of this core segment of the Chinese economy as it moved from, in Wright’s terms, the plan, to reform (dual track), and then into the capitalist mode of productions. To the extent that there are shortcomings, they are primarily in Wright’s occasional tendency to dwell on the technical issues relating to coal production and the question of sectoral profitability. These are, however, minor issues and do not detract from a powerful analysis not simply of the coal sector but rather the macro-dynamics of economic reform in China.