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Danwei: a key to understanding social enterprise discourse and ambitions in China

Revd Timothy CurtisSenior Lecturer in Social Entrepreneurship

University of Northampton

HEFCE/Unltd Ambassador for Social Entrepreneurship in Higher EducationProject Manager, British Council Prime Minister’s Initiative Connect project

Supported by

Philosophy

• Looking at social enterprise as a general response to inequity, exploitation and exclusion in the workplace

• Rather than a more narrow attempt to resolve specific social problems caused by the general conditions mentioned above

• Contrast European models of ‘economie sociale’ rather than American models.

• Should social enterprise be for the whole economy or just the tails of the normal probability curve

Unemployment in China• An article published by the Chinese news agency Xinhua on 2 February 2004

reported that the number of new job seekers entering the labour market in China will be around 15 million people every year between 2003 and 2020.

• However, according to the article, only eight million jobs can be created annually, even if the economy maintains a growth rate of seven percent.

• Registered urban unemployment – 4.5%• In the northern industrial areas, unemployment is at least as high as twenty

percent. • from 1997-2000 SOE jobs decreased by forty three million, and the private

sector and non-state sector jobs increased by 16.5 million. • The number of registered jobless people in cities is around eight million,

and the total number of job seekers in urban areas is around twenty four million people

• At least 150 million rural Chinese make up the floating population

‘socialism with Chinese characteristics’

• The actual control of assets and revenues by the danwei is so extensive that one might argue that the main form of property rights in China has long been "work unit ownership," rather than state ownership.

Distinct geography

Special type of public

• In Chinese society, "public" (gong) is regarded as anything that is outside the private domain (si) of the individual or family.

• The state is not distinguished from the public: It is the public.

• However, the "minor public" of the danwei constituted a different kind of gong, which was in some ways at odds with the state, or "greater public."

Danwei -Work Unit

• tool of the state for organizing and controlling urban society allowed the Maoist state to monitor the political loyalty of its citizens

• limited the mobility of their employees. Without proper permission duly noted in their dossiers (dang'an), employees could only dream about a job transfer.

• constitute a "small society" (xiao shehui) with little need for interunit exchanges.

Social Function of Danwei• a horizontal "bundle of activities,“• secure jobs, affordable housing, inexpensive medical care, a

range of subsidies for everything from transportation to nutrition, and generous retirement pensions

• Housing -Unlike in the Soviet Union, where urban housing was controlled by municipal governments, Chinese work units controlled 90 percent of urban public housing

• Despite recent changes in Chinese urban society, the Danwei may still be involved in matters of health, marriage, family, love relationships, studying abroad, etc.

• An individual belonged to a danwei, which was responsible for the political and social well-being of its members

Qiye danwei

• or enterprise units. This category covers all units engaged in production or profit-making.

• According to one set of official figures, there were 316,875 units of this sort in 1990. 13

• At the end of 1994, the enterprise units employed 113.7 million people. 14

Shiye danwei, • or nonproduction, nonprofit units. This designation includes

scientific research institutes, educational institutions, as well as government- sanctioned social and professional organizations (e.g., the Consumer Rights Association), health services, cultural organizations, and athletic organizations.

• By official figures, as of 1995 there were more than 1.3 million units in this category. 15

• This remains the largest of all three main types of units, employing more than 24 million people. 16

• Before the fiscal reforms of the 1980s, the budgets of these units were allocated by the state ( Ministry of Finance).

• It has been shrinking because of the conversion of many shiye danwei into self-supporting, profit-generating entities no longer dependent upon the state budget or subsidies.

Xingzheng danwei• or administrative units. In 1990, there were 253,587 such units. 18 • At the end of 1994, 10 million people were employees of

administrative units. 19 • This category is often confused with shiye danwei for an obvious

reason: Administrative units are also nonproduction and nonprofit entities.

• Sometimes they are regarded as a subcategory of the shiye danwei. But because administrative units have their own characteristics and involve state power, they should be treated as a separate type.

• Included under this rubric are government agencies, mass organizations (e.g., the Women's Federation, Communist Youth League, Federation of Trade Unions), and other organizations that receive regular budgets from the state.

Downsizing the danwei

• enterprises needing to make cuts in their workforce did so initially by getting rid of non-core or marginal employees, and then by persuading other, permanently employed workers to transfer to less secure forms of employment relationship with the work-unit.

• depended on the ability of local authorities to step in with basic social-security provision for former SOE workers who have lost their access to a wide range of welfare benefits along with their jobs.

• i.e. transfer of social security infrastructure out of the danwei to the state

Danwei were not perfect

• The state and enterprise institutions always distinguished between permanent, temporary and contract workers, between unionized and non-unionized labour, and sometimes between male and female workers or between older, more established employees and new, young entrants to the workforce, in an attempt to limit the proportion of the industrial workforce that was entitled to the most extensive welfare benefits and which enjoyed virtually unassailable security of employment for life

• the true ‘iron rice-bowl’ was only ever available to a minority of permanently employed, unionized state-sector workers at the biggest and most prosperous urban enterprises.

Unique features of ‘danwei’ for SE• 1. Labour aspect --usually including the right to hire, fire, and arrange transfers

to other units. A danwei controls the dossiers of its employees, which play a key role in personnel-related matters. Sometimes, however, even when a lower unit controls dossiers, important personnel decisions are made by its superior unit.

• 2. Spatial aspect (often in the form of a compound with living quarters physically separated from the outside by walls)--including residential housing, dining hall, health clinic, fleet of cars, and other basic service facilities.

• 4. Urban aspect. A rural commune or village was never regarded as a danwei. On the other hand, a state-owned industrial plant located in a rural area is considered a danwei. This reflects urban geographical notions of an urban cultural milieu even in rural areas (Pahl, 1965). Some danwei were so large that they constituted a city within a city (Li, 2005).

• 5. Social aspect. The danwei provides a ‘horizontal bundle’ of social infrastructure activities- health, education, employment, civil society- everything that pertains to ‘state’ provision in the west (and also in Soviet economies) were delivered in and through the danwei structure.

Conclusions?

• “The ‘little public’ of the danwei is a unique contribution to social enterprise theory”

• “The challenge to social enterprises and ethical, social purpose organizations, might be not just to focus on, and fix, one discrete social problem, but to be the unit through which all social infrastructure is delivered.”

Kowloon- total danwei!

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