A chemical factory specializing in producing paraffin wax in Shenyang, Liaoning Province. Photo: TUCHONG

The process of modernization, which involves comprehensive and fundamental societal changes, has profoundly impacted Chinese society. Despite its progress, certain aspects of modernity, such as the state, institutions, capital, and market, have yet to be fully assimilated in China. Chinese society maintains a stable and continuous “social ground” or “social foundation” that encompasses cognitive structural concepts, informal institutions, behavioral norms, social relationship structures, and ethical conventions. It is therefore of great significance to understand both the changes and the relative stability in the social composition of a society undergoing transformation to fully comprehend Chinese modernization. One of the key sociological topics surrounding China’s modernization is the shift from the “iron rice bowl” danwei (work unit) system to a market-oriented society. Unresolved issues pertaining to the transformation of the danwei system are particularly evident in how we understand the social change observed in Northeast China. Once the socialist industrial heartland, this region has since become the first to experience economic decline in China.

To fully grasp the social transformation in Northeast China, a holistic perspective is necessary, which requires examining the actual life experiences of individuals from the region. Existing research has only considered the one-way influence of institutional changes on individuals, failing to consider how society as a whole changes in response to the unfolding of individual lives. So far, the academic community has not provided a theoretical framework to examine the experiences of “life in transition.” This paper attempts to establish such a theoretical framework by analyzing the interactive mechanisms between two temporalities–life time and institutional time, focusing on three dimensions: life planning, agency, and generational dynamics.

Interactions between life time and institutional time

First, individuals construct “life plans” to understand their own lives. These plans are built upon existing life course institutional arrangements and involve envisioning an idealized future. Nevertheless, such life plans are inevitably disrupted during periods of institutional transition. Facing new institutional arrangements, individuals reflect on their lives in the present, replan, make new decisions, and implement these revised plans.

Second, from a sociological perspective, most individual actions can be attributed to habits, as individuals tend to rely on available, pre-established routines to guide their actions. However, under institutional changes, social structures and situations cannot be replicated across various time periods. Therefore, the habitual patterns of social behavior are disrupted, challenging the binary framework of “structure” and “agency” and prompting us to examine individual actions during these transitional moments.

Third, individuals in the present are not merely concrete manifestations of current society, but rather they are historical beings. If we view society as stratified by generation, individuals from different generations, each with their own unique historicality, shape society in their own way. This is crucial for understanding both present and future societies.

The empirical data used in this paper is drawn from fieldwork conducted in Beihe City, Liaoning Province, from 2017 to 2022, focusing on the transformation of the danwei society. Through life history interviews, the author inquired about the respondents’ personal experiences in the context of significant social changes, such as how major life decisions concerning education, career choices, and post-danwei employment were made, as well as choices made at critical junctures of reform and the motivations behind those decisions.

Life planning ‘within the danwei system’

In the early 1980s, Beihe City continued to vigorously expand state-owned enterprises. These enterprises offered employees prestigious social status and favorable marriage prospects, which made jobs within these enterprises appealing. During that period, the combination of limited opportunities for university admission, increased enrollment in technical schools, and the strong societal preference for “good danwei” jobs shaped a generation’s educational prospects and their vision of the future. Consequently, a significant number of young people were attracted to join the danwei system.

Danwei employees planned their lives with the intention of working in these enterprises for their entire working lives, thus establishing a “normal biography” under the full-fledged danwei system. Unless employees committed serious infractions or disciplinary violations, they were usually assured of employment until retirement. Young people eagerly joined the danwei, planning their future lives in accordance with this “normal biography,” following the rules of this small world, seeking to earn seniority, and hoping for steady promotions and upward mobility.

Locals assessed the working environment outside the danwei based on such “normal biography” as well. They regarded the external market as “abnormal” and hence something to be avoided, leading many to gradually distance themselves from market activities. When faced with operational difficulties and temporary layoffs, many danwei workers, fearing the loss of their “identity” and thus the loss of their pension calculated by seniority, often chose to keep their post at their original danwei, rather than terminating their affiliation with it and fully venturing into the market. This deeply affected the trajectory of local social transformation during the initial stages of market reform in Northeast China.

Expedient life decisions under institutional modifications

Abrupt termination of employment, known as “binggui” during the transition to the 21st century, was an unexpected crisis for individuals in these state-owned enterprises. During this period, employees were forced to severe their relationship with their danwei. Just before the completion of the termination process, employees who were close to retirement age and in poor health were given the option to retire early. Many danwei workers opted for retirement during this period to escape an unpredictable future. However, qualifying for early retirement required proof of illness or frailty that hindered the ability to continue working. Some interviewees mentioned having to forfeit their cadre status and feign illness in order to retire.

A significant number of those who underwent the transformation believed that industrial enterprise work units were the true “victims” of the reform. They expressed jealousy towards more “stable” work units in the reform process, such as government agencies, public institutions, and state-owned monopolies.

Individuals who personally experienced this transformation experienced several “new scenarios” brought by successive institutional reforms. In retrospect, many of their decisions made in the past were short-sighted. Nevertheless, most were incapable of making long-term plans. A series of “expedient measures,” or pragmatic actions, prevented them from accumulating self-efficacy over the long term, diminishing their capacity to exert control over their own life trajectory and resorting to fatalism.

Thus, we can see that the shift from a “planned economy” to a “market economy” was not a smooth transition between two coherent institutional systems, but rather an intricate process of institutional reconstruction. The old danwei society was built around a comprehensive institutional system that covered all aspects of life. However, reform efforts were inconsistent across various institutional domains throughout the process, resulting in a lack of clear direction for the individuals involved. Ordinary individuals, in the context of transformation, involuntarily resorted to expedient solutions as they faced each new reform scenario.

After leaving their danwei, most laid-off workers could only engage in repetitive and non-expandable informal work. If danwei employees, particularly former cadres, could not cope with the psychological impact of the resulting decline in status and starting anew at less “decent” jobs, they might refuse to work altogether and stay at home. Refusing to move on and clinging to the past dignity system was also a way for some individuals to maintain their “dignity.”

Upon leaving the danwei, workers often leveraged their existing social networks and institutional resources to hedge against the new uncertainties brought by the market. Due to limited options, numerous individuals were unable to become successful “market pioneers.” Hence, they sought support from their familiar social relationships and fragmented welfare arrangements. The emphasis on relationships (guanxi) and the prioritization of jobs at the public institutions in Northeast industrial cities were not merely remnants of the old “danwei culture,” but rather a desperate response from ordinary people in an environment where the local economic pillars had collapsed and there was a dearth of economic expansion.

‘Transition generation’

In Northeast China, individuals born in the 1950s and 1960s have been the most affected by the market transition. This birth cohort, commonly referred to as the “baby boomers,” faced a local employment crisis in the late 1970s and early 1980s in the industrial danwei society of Northeast China. During this period, state-owned enterprises successfully addressed the local employment crisis by themselves, as well as through the establishment of newly formed collective enterprises under their control. This generation entered state-owned enterprises en masse and comprised a significant portion of the young workforce absorbed by the rapid growth of danwei employment in the 1980s. They joined during the peak period of danwei employment, so the “normal biography” based on danwei system was applicable to this age group. What they failed to anticipate was encountering a series of uncertain transitions.

Today, the “transition generation” remains a significant demographic in local society. Be examining the generational composition of society, we may find new solutions to problems in Northeast China. Besides the top-down, industry-centered revitalization plans, it is necessary to improve the appeal of local job opportunities for young people, while also ensuring adequate local pension benefits. An increase in the young demographic could alleviate pension deficiencies and bring new economic growth opportunities.

Looking back, the national reform and opening-up policy could be characterized by interactions between the “reform logic” and “opening-up logic.” Under the “reform logic,” individuals encounter more institutional modifications and uncertainties, necessitating frequent alterations to their future plans, hence impeding the development of long-term potential. Meanwhile, the “opening-up logic” enables individuals to prioritize the present, leading to a more sustainable accumulation of wealth and life experience.

Whether “reform logic” or “opening-up logic” dominates is contingent upon the local economic and social characteristics at the onset of the reform, as well as national policies and other factors during the reform process. The “reform logic” is expected to have the greatest impact on Northeast China, which has a higher proportion of its urban population covered by the danwei system and limited space for incremental growth during the market transition process. In contrast, regions like Wenzhou in the southeastern coastal area had fewer individuals integrated into the danwei system. These places focused more on incremental development, where individuals experienced more of the “opening-up logic.” In order to avoid policy deformation and unintended policy consequences, future policy-making should take into account the interactions between institutional time and human life time in social transformation.

Xie Wen is from the Department of Sociology at Peking University.