Abstract
The emergence of a new urban underclass in China is a major challenge confronting the Communist Party, and its potential for fomenting instability has unnerved the Party. A strong case can be made, however, that the members of this emerging group have been cast into their current plight chiefly as a result of the marketization reforms that the regime itself set into motion two and a half decades ago. The group is comprised of recently laid-off workers, underpaid and underprivileged migrant labourers from the countryside, and any others who have fallen into penury with the withdrawal of job and welfare security and the elimination of free health care in the cities, which have accompanied the government's “economic reforms”. However, the challenge may not be as great as is often feared, for the same reforms have equipped the leadership with a battery of “weapons” that have the power to mitigate the expression of grievances, including new welfare measures, state-of-the-art surveillance technologies and crowd control equipment.