Mark Frazier's book explains the difficult and unique politics of Chinese pension reform better than any other study to date and is likely to remain the definitive work on the topic for some time. It also sheds light on wider issues of Chinese political economy and governance and, in so doing, points the way toward promising new research agendas on Chinese politics more broadly. Meticulously researched and beautifully written, Socialist Insecurity begins with the argument that China's particular pattern of uneven development has given rise to its patchwork admixture of pension schemes and welfare regimes, which have varied over time, between regions, and across different types of employers. It then traces the evolution of China's pension system, explores the dynamics created by specific financial and political incentives given to local governments, and unpacks how firms have influenced pension reform, before finally analysing public opinion and popular reactions to the changing pension system.
The core argument is that local cadres allied with enterprise managers to persuade policy makers at the centre to go against urban public opinion and enact a particular brand of pension reform that transferred key social costs and responsibilities of state-owned enterprise (SOE) reform away from firms and to the government and workers still employed. The story proceeds in several steps. In the 1990s, the Chinese government undertook to rework its 1950s-vintage enterprise-based pension system in order to ameliorate existing inequalities and reduce the social and political tensions resulting from on-going rounds of SOE reform. As the SOE workforce was dramatically reduced, many workers were shifted from payrolls to pension registers. Local governments assumed increasing control over pensions, through their administration of pooled pension funds (which could often be diverted relatively easily to fund priorities not directly related to pensions). Workers still on the job and their employers paid into these funds, which then provided local governments in rich areas (where the funds held far more assets than were needed to pay existing retirees) with massive new revenue sources. In poorer areas, where contributions were often insufficient to meet obligations, central government transfers made up the difference.
Frazier documents each twist and turn with interviews and documentary sources, based on his own fieldwork, as well as a Beijing survey conducted in 2004, and structured focus groups in Beijing, Nanjing, Changchun and Foshan in 2005. While he does not go into tremendous detail about the mechanics of his first-hand field research, Frazier clearly spent significant time extracting data at close range in at least Sichuan, Jilin, Guangdong, Shanghai and Beijing. Despite such thorough sourcing, however, this book may disappoint readers expecting troves of fresh primary data or revelations of previously unknown or misunderstood watershed events or information.
While all parts of the book are strong and contribute to the overall arc of the argument, for this reviewer the strongest section was Frazier's analysis of differing regional challenges and dynamics in the management of pension funds and the overhaul of the system (pp. 95–119). By showing how the Southeast relied on pension contributions from private and foreign firms that provided a large extra-budgetary revenue source ripe for exploitation by corrupt officials, while the Northeast scrounged to cobble together sufficient pension funds from surviving SOEs and state asset sales, “interior” or Western regions derived adequate funding from a few large SOEs and central transfers, and Shanghai ran large pension surpluses based on high contributions from a broad range of employers and sectors, Frazier illuminates not only the micro-processes of pension policy implementation but also critical aspects of China's regional political economy and politics as a whole. It is a pity Frazier did not apply a similar regional analysis to other aspects of his argument – for example his discussion of employers and firms in chapter five, in which his focus switches to a comparison of ownership types.
Conversely, the sections on the history of China's pension system and examination of the survey results seem to add less value to the book than do the other segments. Chapter two, at 28 pages one of the longest in the book, devotes too much time and energy to rehearsing commonly known background information. Chapter six focuses in on public opinion and details the findings of an impressive survey. But Frazier's story is not, at its core, about public opinion or mass politics. Rather, this is a tale of bureaucratic competition, elite posturing and innovative improvisation in policy implementation. As such, a chapter singularly devoted to mass public opinion risks being somewhat extraneous. That said, both chapters are well put together and the book is not excessively long.
In all, Socialist Insecurity is clearly the most comprehensive book on contemporary Chinese pensions yet written. Frazier has given us both clear insights into a set of thorny problems and set down guideposts for future research into myriad other areas of Chinese politics. No serious student of China's politics or society can afford to ignore this important work.
