One of my favorite China commentators is Peter Hessler, the longtime New Yorker correspondent who first came to China in 1996 as a peace corps volunteer assigned to teach English in the small town of Fuling along the Yangtze River.
In his book River Town, Hessler tells of arriving in Fuling on the day of the celebration of Mao’s Long March. All the townspeople were gathered at the university for a concert, so Hessler joined them. He watched as, one after another, each class took to the stage to sing a song celebrating the feat. The odd thing, Hessler noted, was that they all sang the same song. And as one group left the stage and another came on, they would exchange jackets so they were all singing it in the same uniform.
Through the first decade of the 21st century, Hessler had a front row seat on the great transformation of China from a rural to an industrialized country. Fuling is one of hundreds of small towns that lay in the path of the Three Gorges dam construction, and their history is preserved today in an underwater museum you have to walk down a tunnel into the water to visit.
When Hessler taught in Fuling––he was the only English-speaking person in the town–– he was intrigued by the country rituals of the older village elders at the same time he was being bombarded by questions from his young students about the capitalist culture creeping into China’s far off cities. He was, you might say, there at the beginning of the new China.
He followed his students as they drifted off to jobs in newly established “economic zones” in his second book Oracle Bones. In his latest, Country Driving, he provides a riotous account of renting a car and driving along the route of China’s Great Wall. The take-away from them all is that capitalism has changed China in profound ways that can never be rolled back.
A Rush to Capitalism
After Mao Zedong died in 1976, China embarked on an abrupt shift to capitalism that America was slow to recognize. Deng Xioping, the first of China’s reform leaders, reopened universities closed during Mao’s Cultural Revolution, allowed citizens to “buy” their own homes (or technically, lease them back from the government on 70-year mortgages), and began luring in foreign manufacturers with the promise they could operate their businesses on a capitalist model.
Outside of Hong Kong, he established a Special Economic Zone where enterprising Chinese businessmen could do the same. The experiment proved so popular, special economic zones began popping up around the country.
This was an odd form of capitalism––“social capitalism,” he called it––underwritten by the state. Communist central party planning dictated which areas of the country would be developed, but private entrepreneurs would carry the burden of doing it. Key industries remained under government ownership. (Even today, 50 percent of China’s businesses are state owned.) Subsidies and trade tariffs would help the others compete in critical industries like steel and construction, but the door was open to foreign manufacturers who wanted to take advantage of China’s cheap labor market.
Over the next 20 years, Deng Xioping’s reforms spread through the big cities. China, once walled off from the world, burgeoned into a world power. Today, it exports $2 trillion in products, creating a $240 billion trade balance every year––even though the country imports 50 percent of its food and its 1.3 billion citizens are snapping up brand name western goods like credit card junkies at a Black Friday sale.
The New Economics
The new economics of China are most readily apparent in its three major cities: Chongqing (pop. 29 million), Shanghai (pop. 23 million) and Beijing (pop. 21 million). All operate under the direct control of the central government, so they were the seedbed for the new capitalism––and a magnet for young, on-the-make Chinese wanting to try their hand at free enterprise.
As a result, a country that was 80 percent rural in 1980 is 50 percent urban today. An estimated 10 million young Chinese a year continue to leave their rural farms to find work in the cities or nearby factories. And with over 60 institutions of higher learning, including the prestigious Peking and Tsing Hua universities, Beijing is awash in students. Its cosmopolitan mix of politics, the arts, and unbridled commerce has made it a breeding ground for hope, and disappointment.
Seeing the Sights
Our first day on the Affordable Asia tour bus takes us to Tiananmen Square, The Forbidden City and the emperors’ Summer Palace, all of which look better in the postcards. As sightseeing goes, there’s history to be found in each––and a lot of souvenir salesmen.
On the way to Tiananmen Square, Nina leads us on a walking tour of Qianmen Street, a commercial thoroughfare that was once the heart of downtown Beijing, but in preparation for the Olympics, the Chinese government rebuilt as a tourist showcase. It is all but empty on this Sunday morning. Show windows for stores like Sephora, Zara and Calvin Klein advertise to no one because nobody wants to live there, Nina says. Since the Olympics, the sterile environment doesn’t merit the Olympic size rents the new landlords are demanding.
Tiananmen Square is where Mao used to parade China’s military might before millions on May Day. It’s also where students staged protests in 1989 and one famously stared down a government tank. It’s a vast and open space, filled with tourists, flanked by the People’s Hall where the politburo meets, Mao’s tomb, and the Gate of Heavenly Peace leading to The Forbidden City. Tour groups pause there just long enough to get photos. But the most interesting thing in the square is a long TV screen sculpture that shows wind farms, horse races, and combines combing through rich wheat fields that, presumably, can be found somewhere else in China.
Inside the heavenly gate, emperors from the Ming and Qing dynasties kept their families (and concubines) for 500 years. The Forbidden City is one of those mandatory stops on a China tour–– because it is so close to Tiananmen, it’s sort of like two birds with one stone–– but it comes across as a monument in need of a good dusting. To see it in its full glory, check out Bertolucci’s The Last Emperor, the last movie to be shot on site. (All movies since use a replica Hollywood set in the suburbs.) But don’t expect to see much more than cobblestone courtyards and empty rooms. Since Chiang Kai-Shek took most of the imperial treasures with him to Taiwan when he was exiled in 1949, The Forbidden City––which the communists have renamed The Palace Museum–– is a little like visiting Versailles without the gardens, or furniture.
As we travel along on our tour bus, I am increasing intrigued by Nina. Her full name is Nina Yin. She is 49-years-old and married to an accountant. Together, they earn somewhere between $60,000 and $80,000, which makes solidly middle class in China, and they have a 20-year-old daughter––the product of China’s one child per family policy––who is studying biology at the university.
Nina was still a toddler when Mao undertook his Cultural Revolution in 1966. Her father was an engineer in Beijing and her mother worked in an office. They made 120 yuan ($20) a month between them. But that was before Mao closed the universities and sent her father to a live on a communal farm for four years.
Nina can still remember the rationing that took place under Mao. To buy food, you needed both money and a coupon. Each family received a coupon every month for its allotment of meat, or eggs, or dairy products. No matter how much you made, you couldn’t get it without cash and a coupon. “Everyone was treated the same, and everyone was poor,” she recalls. Nina was still in high school when the reform movement started. She was one of the lucky 10 percent of her class who went on to college, getting a degree at the Institute for Foreign Languages. Today, she points out, 70 percent of high school students are college bound––if they can pass their final exam.
An Education on the Bus
But education doesn’t come cheap in China. Public universities have an annual tuition of 10,000 yuan ($1,650) plus books, boarding, activity fees, etc. The more rigorous private colleges are two to three times more expensive. But the competition is so intense wealthy parents often send their children to American colleges, which have lower admission standards.
What disturbs Nina most these days is the growing chasm between the rich and poor in China, especially in the cities. There are cranes everywhere in Beijing, throwing up new high rise residences for the favored few. But even a modest apartment––1,000 square feet, two bedrooms, one kitchen, one bath––rents for $1,000 a month. If you want to buy it, you can easily spend $210,000, and you may need as much as 40 percent as a downpayment.
Most young people in Beijing get by with help from their parents. “Saving for the future is a Chinese tradition. All those US treasury bonds that we hold? That’s our savings,” she warns. “So be careful with our savings.”
A Mirror of America
“You think because we are communists, we get everything free,” Nina adds. “But we pay for it. Our health care is not free. We pay a percentage of our income to health insurance. In the cities, we pay 25 or 40 percent of our income for health insurance. The farmers, who have little income, are charged even more, so they don’t have insurance and can’t afford to go to doctors.“
Nina is the first person to talk about “the farmers” but not the last. It is a loose English translation of peasants, who were the heart and soul of Mao’s people’s revolution. They are revered in China for their historic role in creating the new state, but also pitied because the new prosperity has left them out.
“The young people, they come to the city thinking they will get rich. They get jobs in restaurants or in small shops, but after a couple years they cannot afford to stay,” Nina says. “There is all this money around them, but not everyone can have it.”