History has no parallel for modern China’s economic transformation. To what do we owe the China “miracle”, in which annual GDP growth averaged 9 percent over 40 years, wages up roughly tenfold in 30 years, and more high-speed rail built in ten years than the rest of the world in all time?
In the heyday of globalisation, people said China proved the magic of free markets and free trade. These days, people are more likely to attribute the country’s success to some special Chinese characteristic, such as its state-directed investment or its “Communist” dictatorship.
These perspectives share in common a wilful or ignorant blindness to capitalism’s real wealth creators. Economic value comes neither from the market’s “invisible hand” nor the state’s “guiding hand”, but plain old everyday hands. The secret to China’s “miracle” is the not-so-miraculous condition of its working class.
Beginning in the 1990s, the greatest ever number of wage labourers was assembled through the collusion of profit-hungry foreign capital with millions of venal bureaucrats and their repressive state machine. Three hundred million people decamped from rural poverty to seek better lives in China’s cities, while urban compatriots in state-owned mines and mills lost their livelihoods through merciless privatisation.
China’s working class is legally stratified into “migrant” and “resident”, subject to the severest dictatorship of their bosses, and deprived of political rights to speak out or unionise. Apply hundreds of billions in Western and Taiwanese investments, lather, rinse, repeat for decades, and voilà! You have the most “miraculous” economic growth in capitalist history.
China’s migrant workforce
We are used to hearing about how important migrants are to Western economies, but migration—the internal kind from village to city, not country-to-country—has been even more critical to China’s boom. In the 1990s, the government enticed young villagers with the prospect of independence, new experiences and better pay in newly established, deregulated Special Economic Zones with low wages and low taxes.
Lu Qingmin first left her family’s half-acre farm and came to Dongguan, a burgeoning megacity in the southern manufacturing heartland of the Pearl River Delta, in the early 2000s. Bosses preferred migrant women like her, considering them doubly docile. Writer Leslie Chang, in her 2008 book Factory Girls, described Lu’s experiences at her first job in a Hong Kong-owned alarm clock factory:
“A day on the assembly line stretched from eight in the morning until midnight—thirteen hours on the job plus two breaks for meals—and workers labored every day for weeks on end. From the moment she entered the factory she wanted to leave.”
The Pearl River Delta opened wide to investment in such sweatshops, and American-style hyper-individualism flowed in with it. Self-help books, life-coaching gurus, pyramid schemes, talent markets, unregulated colleges: each refracted through the false prism of empowerment what migrant workers already felt in their bones: you are on your own.
Hukou: China’s internal visa system
Every migrant who left for the cities took the same thing with them: their rural hukou (户口), a residential registration that acts like an internal passport. Originally designed under Mao Zedong in 1958 to prohibit rural-to-urban movement altogether, the hukou household registration system was repurposed to create a pliant, defenceless workforce with second-class citizenship wherever it went.
Out-of-town hukou holders, also called the “floating population”, now represent just under half of the country’s workforce. Registered to villages far away, they are denied health insurance and pensions by the local government where they actually live. Many cities bar them from buying property, and local schools charge significant sums to teach their children.
Think of them like the United States’ undocumented immigrants, who can get driver’s licences but not Social Security, who work in practically every key industry, but technically are not supposed to be there at all. Except there are now as many in China as the entire US population.
China does not offer the equivalent of America’s birthright citizenship: children inherit their parents’ hukou wherever they are born. Locked out by the prohibitive cost of urban schooling, tens of millions of “left behind” children grow up in the countryside with their grandparents, only seeing their parents once a year.
The first generation of migrant workers (1992–2002) viewed themselves as temporarily itinerant farmers; the second (2003–15) identified as wage labourers from elsewhere. The third generation (2016–today) feel like urban natives except for the jarring fact of their hukou. “Increasingly, if you walk around any cities in China, you won’t be able to tell who’s a migrant worker or not”, labour researcher Kevin Lin said. “There’s a pipeline from the technical vocational school into factories, but many others are college educated.”
Yet talk of hukou reform is just that; local governments simply save too much money by denying pensions, health care and education. As labour academic Eli Friedman explained in response to recent flowery statements by the State Council:
“Such a project [hukou abolition] would need to be funded by taxes on the rich and capital. It could also drive up the cost of business and undermine China’s dominant export machine. It is precisely because deep hukou abolition entails profound fiscal and social reform that it has been quietly opposed, undermined, and diluted across the decades.”
Housing: the China dream?
Despite the headline figure of “90 percent home ownership” in China, between half and two-thirds of the migrant population are renting in cities far from the family home they “own”, according to a series of studies over the last decade.
“Urban villages” offer cheap, informally subdivided dwellings in once-rural outskirts now enveloped within city limits. Occupying a legal grey zone, residents in these neighbourhoods can face sudden eviction and demolition. Private developers build expensive new suburbs on the rubble, forcing migrants further out in cycles of gentrification familiar to residents of Sydney or New York City.
The Beijing city government went further in cleansing the whole capital of its “rat tribe”: people forced to rent out cellars, underground bunkers or even spaces inside walls. After a deadly fire killed nineteen people in 2017, officials launched an eviction drive of such ferocity that even Beijing’s urban residents, often seen as coldly indifferent to migrants’ plight, raised a public outcry. Many of the 120,000 evicted migrants had to sleep rough through the northern winter. The Communist Party made no dwellings available in the lavish gated communities or in the empty second properties owned by the city’s wealthiest residents.
The factory dormitory system also lets companies extend labour hours and better monitor absenteeism, but workers cannot live with family, easily form relationships, or enjoy any privacy. Cramped quarters, however, can create stronger social bonds and explosive pressure, as in April 2014, when one retiring woman’s despair at finding that the Yue Yuen shoe factory had never paid into her social insurance triggered a ten-day strike of the entire complex’s 40,000 workers.
Rising wages and falling poverty
The most widespread defence of the Communist Party dictatorship is that, on its watch, 800 million people have been lifted out of absolute poverty. Undoubtedly, wages and living standards have risen sharply over the past 30 years. This is an inevitable, contradictory component of capitalist industrialisation, already analysed in Karl Marx’s 1861 work Capital. Socialism requires workers’ democratic control over such explosions of new wealth to meet collectively determined needs. Instead, China has followed the same development path charted by anti-communist dictatorships in Singapore, South Korea and Taiwan.
For perspective, absolute poverty is a very low bar, since even rock-bottom wages are a lot of money for the poorest farming families. When one woman, Leiya, moved to Shenzhen in the early 2000s, she instantly became the family breadwinner. “She put together gift boxes for the factory’s clothing line, earning RMB 600 (US$70) a month, working from 8am to 2am”, Yuan Yang recounted in her 2024 book Private Revolutions. “As a fifteen-year-old in the city, Leiya was already earning three times what the average farmer earned back home.”
Sending wages back to the village as remittances did most of the heavy lifting in raising living standards; it has similarly reduced absolute poverty in Pakistan, the Pacific Islands and the Philippines, as workers leave to be exploited in Australia or the Gulf monarchies.
Industrialisation turned rural privation into something far more profitable and productive: urban wage labour. Figures for business profits, labour productivity and capital investment in China run rings around wage growth. This process of value extraction, which Marxists call exploitation, has benefited foreign investors, “Communist” bureaucrats and local billionaires and multi-millionaires. It has also buoyed a well-to-do middle class that is much more likely than the working masses to support China’s stabilising, profiteering dictatorship.
Capitalist growth widened the wealth gap immeasurably faster than it reduced poverty. A 2022 report jointly produced by China’s Ministry of Finance and the World Bank found that the country’s Gini coefficient, a measure of income inequality, skyrocketed from 0.30 in the mid-1980s to 0.49 in 2008—that’s worse than the United States. China’s “semi-elasticity of poverty”, which measures the percentage reduction in the absolute poverty rate per percentage of GDP growth, was just 0.27. That means that, pound for pound, China reduced poverty less efficiently than Pakistan, South Africa or Indonesia.
Of course, there have been many, many more pounds. “More than the ability to translate growth into poverty reduction, it was China’s sustained fast growth that was unusual by international standards”, the report found. Eighty percent of all absolute poverty had been eliminated by 2008, over which time universal health care and social security had been utterly eviscerated.
Workers in state-owned enterprises
Over the same period, living standards for workers in state-owned enterprises (SOEs) also fell. Approximately 70 percent of SOEs were partially or completely privatised from 1990–2002, resulting in 60 million job losses. The resulting insecurity was a “big layoff stick waved over the head of any rebel workers”, wrote Fan Wendong, a militant distillery worker, in My Twenty Years in a State Enterprise. Local bureaucrats, who once kept their jobs by hitting (or pretending to hit) production quotas, were now encouraged to get rich from the dirty work of mass sackings. The aim was not purely “efficiency”, but also to push managerial power even further out of workers’ reach. Fan wrote:
“Most of us were convinced that it was entirely possible that the factory could be run well if it wasn’t for the bureaucratic institutions ruining the operations. We workers never had the right to run our factories. All leadership positions in the enterprise were assigned top down, with the enterprise director post often filled by an inexperienced hand or even a crook.”
Company directors and party cadres forced workers to “buy into” the company before throwing them on the scrapheap, as Trotskyist Au Loong Yu described in a 2011 introduction to Fan’s book:
“Starting as a compulsory exercise to coerce workers into taking part in raising an enterprise’s capital, it would not be long before the enterprise would enter bankruptcy, perhaps by design, thus looting workers of their hard-earned savings in the process.”
Working hours: capitalism’s classic contradiction
The boom years, already pregnant with contradiction, gave way to slowdown. Over the past decade of declining wage growth, workers have raised their living standards only through inhuman, illegal and irrational amounts of overtime.
Inhuman because the average working week, at 48.2 hours or 9.64 hours per working day, is now the highest on record. The May 2026 figure from the National Bureau of Statistics is worse than the peak sweatshop era in 2005, and smashes contemporary averages for Japan, South Korea, and Vietnam of 36.6 hours, 37.9 hours and 41.5 hours, respectively.
Illegal because the 2008 Labour Contract Law caps the working week at 44 hours. Yet bosses know that most workers cannot live without overtime. Suddenly implementing the 40-hour week is a new form of “disguised layoffs”, a claim made by 3,000 mostly women strikers at Shenzhen Yilisheng electronics factory in December 2025. What kind of system forces workers to strike for illegal overtime?
Irrational because hours in China are “polarising” between the overworked and underemployed, as the ILO details in its 2025 report Short Hours of Work, Long Hours of Work and Work Hours Mismatch in China’s Labour Market. Since a record 10 percent now work fewer than 20 hours weekly, the 42 percent who work “over 48 hours” includes tens of millions clocking 60, 70 and beyond. So 30 years of unparalleled economic development have not reduced the working day. Working-class life is still caught in the clutches of monstrous contradictions, condemned so long ago by Karl Marx in Capital:
“Machinery in itself shortens the hours of labour, but when employed by capital it lengthens them. In itself, [machinery] lightens labour, but when employed by capital it heightens its intensity.”
Factory dictatorship
This heightened intensity shows up in brutal working conditions. Inside China’s gleaming new high-tech infrastructure—its modern offices, warehouses and factories—bosses have not stopped treating workers like absolute shit.
Managers subject employees to verbal and even physical abuse, while docking pay for workplace infractions. A firm’s list of fineable offences can stretch to more than 100 behaviours and typically includes talking on the assembly line, using one’s phone, taking too long in the bathroom, production mistakes and taking too many sick days.
Almost all factory workers suffer from work-related musculoskeletal disorders, but statistics cannot capture what migrant worker-poet Zheng Xiaoqiong could in her 2012 recollection of a 17-year-old workmate:
Fatiguehas become her only word of expression On the assembly lineher body is stiff and clumsy her joints acheher fingers are heavy like machines In her backlegs waist she has lost control of the indescribable painpressing her body like a rock
With high turnover from stress and strain, bosses withhold workers’ first payment for two months as standard practice. Quitting before then means surrendering all wages, which some people still choose to do.
Labour law and trade unions: arms of the capitalist state
Most of the above violates the country’s 2008 Labor Contract Law. But the court system, expanded after a chilling crackdown on labour activism in 2015, is rigged against the workers. Bosses enjoy the upper hand in court as they do in life, winning 67 percent of unfair dismissal cases, according to a 2021 analysis of more than 2,000 rulings (employees win just 15 percent). Labour courts provide even less protection for those working without a contract, estimated at 85 percent of the 300 million in “flexible employment”.
China’s official trade union movement is even more useless. The All-China Federation of Trade Unions is a government-controlled institution represented in workplaces by upper management. It has not endorsed a single strike since at least 1982, when the constitution removed the right to strike. During the 2010 Nanhai Honda dispute, a landmark struggle inaugurating China’s last strike wave, union officials led a hundred goons in physical clashes with picketing workers.
China’s unruliest subjects
The victimised, exploited Chinese working class is potentially the most powerful agent of change in world history. A lot of the Communist Party’s authoritarian rule is preoccupied with keeping this potential suppressed.
Hardline repression of strikes is neither practical nor wise. The state cannot expend resources and political legitimacy every year repressing thousands of labour protests. The party-state’s responsive flexibility, offering concessions in one hand and flashing the police baton in the other, is a source of great strength.
However, strike leaders are unfailingly, ruthlessly, single-mindedly identified, sacked and even arrested to prevent ongoing organising. Labour NGOs, which once helped educate and organise migrant workers, were smashed in 2015, with activists jailed and centres permanently closed. For China’s capitalist rulers, who still view comparatively low wages as their international competitive edge, the right to form independent trade unions is the reddest of red lines.
Partly a strategic adaptation to repression, partly a real feature of its atomisation, working-class struggles remain profoundly defensive and depoliticised. Strikes rarely raise overtly political slogans and mostly demand what they already have a legal right to. Of 240 recorded factory strikes in 2023, the China Labour Bulletin (which, under expanding state repression in Hong Kong, was forced to shut permanently in 2025) reported that 68 percent concerned unpaid wages. “Give us our blood and sweat wages!” is the most commonly heard chant.
This does not mean that strikes are tame. With safety in numbers, plenty of workers are willing to curse bosses, push on police lines, block highways and chant outside government or company buildings.
In late November 2022, a riot shook Foxconn’s largest iPhone assembly complex in the city of Zhengzhou. The company’s COVID-zero “closed loop” system confined 200,000 people to work, eat and sleep in the factory. Pay frustrations and COVID fears resulted in a mass breakout attempt, with water cannon-wielding police fighting to hold back barricade-hurling crowds. Eventually, Foxconn, having lost US$7.4 billion in projected earnings, paid large bonuses to get the strikers to leave. The pro-democracy White Paper protests began on a Shanghai street the very next day.
It is impossible to predict exactly when new waves of struggle will erupt from China’s working class. Yet the awesome power slumbering in its lap, the simmering frustration which here and there boils over in indignation, self-sacrificing courage and resourceful self-organisation, makes it all the more galling that some so-called leftists choose to support the country’s ruling party of exploiters instead.
China is home to 700 million workers. Those who hate capitalism must be able to look them in the face and call them—without caveat, hesitation or hypocrisy—our siblings in chains, our comrades in struggle, our world’s grandest hope for a new beginning.
