Life in the cities: The Zhangs (South) and the Wangs (North)
Zhang and Wang represent several real persons combined.
Zhang came from Shanghai. He is thirty-four years old, and has lived in the
Southern metropolis of Shenzhen for almost eight years now. His father, a
robust, jovial man aged sixty-seven, worked as a salesman for a state-owned
company, back in Shanghai until a year ago, when he retired. Zhang´s
mother still works there as a translator. Her English is fluent. That of the
old man is simple, but has always been good enough to talk with foreign
customers. Zhang followed his older sister, who had moved to Shenzhen eleven
years ago. They both work as sales people, too. But they
don´t work for state-owned companies. Their bosses are from Hong Kong,
and the investment comes from abroad. Their incomes are several times as big
as those of their parents (who can count themselves to China´s still
small middle class, as well).
Shenzhen isn´t for everyone. You don´t move to another
place in China, the way you would in a Western country. Your ID card tells
where you live, and to move somewhere else, you need it changed. To get it
changed, you have to get permission to leave your old place, and to move to
the new place. Even if you, as a non-resident, find a job in Shenzhen, it is
to some or much extent at the discretion of the authorities to decide if
they let you move to the place. And of course, you only get a job there if
you have much-needed qualifications to offer.
Shenzhen has become some kind of Hong Kong for many mainlanders. There are people from all provinces. It is not
easy to get there, and you will have to stay for years, before your
temporary residence right may become a permanent one. Shenzhen is one of the
world´s biggest container ports now. It is a place where they develop
software. It is full of foreign-invested companies. For those who can afford
the tickets, it is full of cultural events, too. And of course, the place is
close to Hong Kong. You can watch free-speech television in Shenzhen, every
Zhang bought a flat two years ago. One year ago, he bought a Japanese car.
Half a year ago, he got married to Yun, a lady from Hunan province. His
decision surprised his parents, but they didn´t oppose his choice,
even though they thought he should have married a girl from his native Shanghai, or
Jiangsu Province. But then, there are many more people from Hunan in
Shenzhen, than people from other distant provinces. And Yun isn´t just
another girl. She earns about as much as Zhang does. They aren´t even
sure if they want to become parents, or just continue to work – and enjoy
life after hours. By Chinese standards, this is a revolutionary attitude.
* * *
Wang is thirty-nine years old, and lives in a city in Northeastern China.
Twenty years ago, his home town was much bigger than Shenzhen – both in
terms of inhabitants, and industrial performance. Wang´s father had
been a worker for a state-owned heavy-industrial company, until retirement. Wang worked for
the same company, and so did his older brother, until five years ago. The
trouble didn´t come overnight. About ten years ago, the company
started cutting the wages of its workers. About eight years ago, it would
only pay for the medical needs of its employees. Five years ago, it went bankrupt under a new
national law that made bankruptcy of state-owned companies legally possible.
Wang became a cab driver, once the company had reduced its payments to
medical help. Then he and his brother started a restaurant, and now take
turns in working there, and in driving their cab. When both of them are busy
with the restaurant – especially on weekends -, they pay someone else to
drive the cab.
Their business pays the bills, but there is no money left for investing into
the future. Customers do no longer spend their money as easily as they did some years ago. There is no time left either, for other things than work. Wang
sometimes thinks of attending evening school and acquire further
qualifications. He also looked for a woman for marriage on the internet until
a year ago, but then gave up on both projects – at least for the time being.
" I wish I had a sister who could marry up, and provide for a rich
brother in law," he says with a grin. "There are more men than women here.
Women can choose. I can´t compete with most other men that I
know. Just look at what I earn. I have nothing to offer but hard work in a
small restaurant. No flat of my own, no great car of my own, just an old,
small domestically made cab banger that I co-own with my brother, and my
father. Maybe I will try to get a poor woman from Russia, in a year or two, who isn´t afraid of long, hard working days.
A girl with common sense, but nothing to her name. That could work."
Maybe five years ago, his saying was still a joke. More or less so, anyway.
But gradually, Wang is falling in love with the idea. Russia isn´t too
far away from his town. And Siberia is no economic miracle at all.
* * *
There are a lot of differences between Zhang and Wang. But as odd as it may
sound, they have something in common: they belong to China´s middle
class – by their own definition, and probably by international ones, too.
Compared to migration workers, day-to-day workforce, or most of
China´s still 900 m farmers, even Wang´s worries are only small. But there are differences, and
from within, the lower middle class looks less glitzy than
what you would expect after having read articles from the international
press, about the Chinese economic miracle. These articles´ focus on people
like Zhang in Shenzhen – and on the upper class.
Both Zhang and Wang drew on capital stocks that were accumulated by
their parents, at a time when China was more egalitarian than now, as far as
income distribution is concerned. Old Zhang, as a salesman, and his wife as
a translator, did already achieve the official Chinese dream of xiao
kang, which means something like "modest wealth". Their two children had the opportunity to study, and then move to Shenzhen, and they earn
very good money.
Old Wang was a worker. His work allowed for some modest savings. His sons,
aged 39 and 41 respectively, accumulated some capital too, before their
employer went broke. That, and some entrepreneurial spirit, makes the
Wang´s middle class, as well. But if they can ever build capital for future
children of their own, for basic and further education, and for life as
members of a Chinese middle class again, is an open question. To date,
it doesn´t look too good (unless they get ready to take much bigger risks), and that illustrates the widening social gap
Needless to say, Old Wang´s and his wife´s greatest remaining
wish for their lifetime is to see grandchildren of their own. Being a grandparent means final fulfillment for most older Chinese
people. But adding to questions of education and fostering, one child – as just any member of the family - falling ill might break the
family´s neck, economically.
The Wangs want children. The Zhangs probably won´t have any. Does that
mean that the Zhangs´ taxes will pay for the Wang childrens´
education? Hardly so. Much of the taxes that people pay can be negotiated
individually. Besides, their taxes will mostly stay in Shenzhen, or within
surrounding Guangdong province. The Northeasterners will see little, or
nothing of it. Peking has been trying to redistribute money from wealthy
provinces to poorer ones for many years, but when it comes to money, China
isn´t really one country, but rather a conglomerate of
Life in the countryside
Even when China was undoubtedly still a third-world country in the 1970s and
1980s, the country could pride itself on an impressive literacy rate. Both a
reform that simplified characters, and public schooling, even in very remote
areas, had helped to achieve this. The literacy rate in 2002 was 95.1% among
men, and 86.5% among women, according to the world factbook. But the
sad story of growing social inequality starts right here. In a book titled
Chinas Wirklichkeiten, Henrik Bork, a German correspondent,
tells the story of a thirteen-year old child whose father – a farmer in
Hebei Province - had been unable to pay the school fee of 35 Yuan RMB. That
doesn´t sound like an impressive fee for half a year – but on average,
people within the district described by Bork don´t earn more than 100
Yuan a year.
The farming side of China (which is still more than two-thirds of the
population) has not had a big share in the country´s development. On
more recent sessions of the National People´s Congress, China´s
new premier Wen Jiabao addressed these problems and promised tax breaks and
other ways to relieve the farmers´ burden. But in a country like
China, it isn´t always easy to tell which political and administrative
level will be affected by a drop in taxes first. Chances are that local
administrations will be expected to do with less funding than before. Chances are, too, that there are local authorities which will simply ignore the national law, or invent new local taxes. All that, and poor incomes in general,
don´t mean free schooling for all children in rural areas,
either. Education would be the most basic capital stock to develop upon, and
only something to begin with. But even this can´t be taken for
granted, in the Chinese hinterland.
To let some people get rich first, as Deng Xiaoping put it decades
ago, isn´t wrong, according to many economic scholars. There can be
such a thing as a trickle-down effect from the rich to the poor, certainly
in smaller countries. But you can´t expect that to happen without
regulation. None of the "East Asian Economic Miracles" of the
1980s shied away from massive administrative regulation. After almost thirty
years of reform and opening in China, it is time to let some more
people get rich – or rather, offer them some more opportunities to escape poverty, than before. All through
Chinese history, revolutions were peasants´ revolutions.
Little is reported about the situation outside the big cities, except for
some often unconfirmed rumours about peasant revolts, particularly in
Sichuan, Hunan, and recently Guangdong Province. The place of foreign
correspondents is usually in the big cities. But it could be in the
countryside where the future of China will be decided.
Protocol matters on every national border, but especially in China. When
entering the country, there aren´t just the usual immigration gates
such as Chinese citizens, foreigners/tourists, VIP, and
so on. For people who are foreign citizens (but ethnic Chinese), there is an
extra channel, for not-quite Chinese people. Some time ago, an Overseas
Chinese paper quoted French citizens of Chinese origin who complained about
that extra immigration channel. They felt discriminated against. They wanted
to be part of the great Chinese success story – at least while staying
It is hard to tell if the article was mere propaganda, or if this was real
life, and real quotes. But it could be a real story, and it shows how strong
China´s image as a successful nation has become.
"Why do foreign multi-nationals run into walls in China?", asked
Ouzhou Shibao (European times), a European Overseas Chinese
publication, on September 28. They didn´t ask Western investors who
had hurt their heads on a Chinese wall. That is understandable. An investor
who has negative experience to share, won´t usually talk to the press.
There would be many stories to tell, indeed. But that´s not Ouzhou
Shibaos side of them. Theirs was about yet another bad Japanese (who else?)
company that hadn´t respected the rights of Chinese consumers. After a
short description of the wrongdoings of the Japanese thugs, the paper points
out a more general problem: that foreign companies invest too little into Resarch & Development
centres within China itself. If you go by virtually all big overseas
Chinese papers, not to mention domestic mainland Chinese papers,
multinational companies have every reason to do just that. And until
recently, most Western papers would have easily agreed.
But the times, they are a´changin´ Not
dramatically, but enough so to make some Chinese and foreign people a bit
more skeptical about the country´s opportunities in the globalizing
world. For many potential German investors – of which the majority is small
and medium-sized companies who shun big risks – the story
about the Maglev train that was sold to Shanghai early in 2001 – and allegedly copied
by 2006 – was just another, this time striking, confirmation for their
reluctance to get too deeply engaged in Chinese business, anyway. The
Chinese version of that same train (but "all developed by Chinese
technicians themselves", say the officials), left even the most pro
free-trade papers in Germany with little to say for the defence of
China´s real-life protection of intellectual property. If global
players can be that grossly cheated upon, how could smaller foreign
companies possibly protect their legal interests in China?
The September 23 edition of the Economist gives an additional answer
to as to why there may be foreign investors who "run into a wall"
in China. It reprints a list of 130 countries and territories (published as
the "Economic Freedom of the World Index" by the Fraser Institute,
Canada). The index, it says, measures how far a country´s policies and
institutions support property rights, competition, and personal choice.
Among these 130 countries listed, China ranks 95th, which would be behind
Vietnam, Indonesia, and even Iran. India, China´s emerging global
competitor (or strategic partner), ranks 53rd.
Statistics have to be taken with a pinch of salt, but China can´t afford a complacent attitude in
the long run, when it comes to attracting foreign investment. It isn´t viewed as much as a developing country by donour countries and development funds as it used to be. And the richer Chinese
provinces aren´t going to pay a big share to help the poorer ones to
develop, either. Projects like the "Go-West"
campaign" which wants to help poorer hinterland provinces to develop
infrastructure and win foreign investment won´t be substantially
financed by provinces like Guangdong, Fujian, or Jiangsu, who prefer to do
without competitors. Money will have to come from foreign investment, rather than from the government or domestic tax-payers.
First warnings were given as early as five years ago, as by the Chinese
government mouthpiece China Daily.
Since new generation of political leaders (Hu Jintao, Wen Jiabao et al)
has succeeded the generation of Jiang Zemin and Zhu Rongji, problems of income disparity have been addressed more frequently,
and officially, from the highest national level. But much remains to be
done, if China is to become the sustainable economical success story that
many people – especially outside China – are already taking for granted.
sources and related topics:
Henrik Bork: "Chinas Wirklichkeiten (China´s realities) – ein ausgewiesener Reporter
berichtet", Campus Verlag, Frankfurt/Main, 1996, page 72.
Ouzhou Shibao, 2006-09-28, p. 7: Why do foreign business people run into walls in China? (waishang zai hua weihe peng bi)
Human Development Report on income gaps and social stability, December 2005
BBC on Guangdong Province: The center isn´t always in control
BBC: The high price of illness in China
compiled 2004 – 2006
More external links about this topic
New rural health scheme "little more than a partial solution"
BBC News, October 19, 2007
Don´t get carried away with GDP, warns Raymond Zhou
China Daily, Aug 4, 2007
Gini coefficient – calculating (in)equality of distribution
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