Jul 26

“China feels very turbulent” – Part 1

Written by Buxi on Saturday, July 26th, 2008 at 9:52 pm
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I have enjoyed my few days so far in Beijing, all the feeling of a hexie society.  However, that is only the superficial view of one man.  According to this Tianya post (连接) from a mainland Chinese also overseas, the under-currents are not always so smooth.  Many of those on TIanya, feeling their own discontent with society, applaud this post as being critical but balanced. 

Last year, I ran into my ex-girlfriend on MSN Messenger.  She was pregnant, and without much meaning I reminded her to be careful with her baby’s health.  Just ordinary topics, like a reminder that she should try to breast-feed after birth.  I don’t know why, but she suddenly responded sharply: “Don’t think that our life in China is worse than yours.  Our classmates are all doing great; if we wanted to go overseas and play, we could.  You should just stay in America; there are so many people going overseas these days, even if you came back, you wouldn’t have an advantage.”  She continued, in great detail and color, to brag her happy life with her husband.  I calmly told her, I never felt I had any sort of advantage over you, and China’s future has plenty of hope.

I admit, my classmates are all living well in Beijing, including my former girlfriend.  Their standard of living is higher than mine.  Their houses are bigger than mine; even while I’m trying to save on rent, they’re trying to buy a larger ome.  Their cars are better than mine; I bought a used car with good gas mileage, they’re driving new SUVs with style.  And don’t even bring up food; they can eat out regularly, and I still wait for sals before buying meat.

But from what I have heard and seen, I am not that optimistic about China’s future.  I didn’t tell her about my concerns.  She’s so competitive; I’m afraid if I said anything she’d feel like I was competing with her.

I went to Beijing once last year.  The sophistication of Beijing is difficult to find in the US.  But the turbulence in China deeply disturbed me.  Although I am in the US, I’m only here to study and work for a short amount of time.  I still plan to return to China, because that’s still my motherland.  But many of the things I see in China makes me very uncomfortable.

My classmates, both those from high school and university, typically make 10000-20000 RMB per month.  Some make as much as 30000-40000 RMB, with the worst making at least 5000 RMB.  The great majority live very good lives.  But I’ve also seen that in the forest of restaurants in Beijing “help wanted” signs calling for waiters/waitresses: 800 RMB per month.  When I see those passionate, young waiters and waitressess, and then think about their income… this sort of economic gap makes me restless.

My little cousin came to Beijing from Shanxi after university.  She’s living in the house my mom bought to retire in, a 70m2 home near the 4th Ring Road (East).  She’s paying a symbolic rent of 600 RMB per month and taking care of the utilities.  I went to see her, and although she has 4000 RMB in income, she’s afraid to spend anything on dressing up.  She says that her mother (my aunt, still in a small town in Shanxi) is unemployed, and she can’t waste money.

On the roads, people will argue and even start raising fists over the littlest things.  These little conflicts that can be solved just by both sides giving a little, or understanding each other a little… inevitably escalate into cursing and fighting.  Cars on the road will fight for even a minute’s advantage, and people will fight for a win over the littlest thing.

In the bank, the people who had been patiently waiting in line after grabbing a number, will start to fight and curse to be in first in line as soon as even one other person tries to cut ahead.  I went to find a security guard, and asked can’t you do something about that person who cut in line, and let the rest of us restore order.  The security goard said, go find the manager!  I didn’t know you needed a bank manager to take care of a line-cutter… if there’s really a robber, I can’t imagine the guard can do more than calling the police.

I went to a police station in Haiding district to take care of something.  An old man brought in a little dog, I think he was there to file for a temporary residential permit in Beijing.  The police told him to take the dog outside.  It’s as if he didn’t feel safe about the dog, and refused to go outside.  The police officer followed up by asking him for a dog permit; if he wouldn’t show a valid dog permit, they’d confiscate the dog.  As I saw a conflict about to erupt, I quickly ran over and tried to talk to the old man, saying, “grandpa, if you trust me I’ll watch your dog outside, and you can finish your paperwork.”  The old man’s face was full of suspicion, “I don’t know you… this dog’s my baby.”  I said trust me, I have no reason to take your dog, just finish what you have to do.  And I waited outside for him to finish his paperwork, and then went in to do mine. 

The truth is, the police in this station still treated people with a very good attitude, and were pretty courteous to the grandpa.   I went to a different police department in Chaoyang district, and the police there had far worse attitudes.  Everyone had a ferocious expression, and these young officers were ordering around the people who came in for help, didn’t show a hint of respect to those who were older.  And they were complete barbarians to those who came from outside Beijing.

Riding the buses, everyone’s eyes are red with greed, searching for seats.  As soon as someone stands up to buy a ticket, someone else can stick their butts in there… and a battle begins.  I chose to stand to one side the entire trip, wouldn’t sit even if there was a space.  I think that these seats aren’t really that important, not to a young person.  What they’re fighting for is really a concept, a feeling, something that might be extremely important to the current generation of young people.

Some Beijing’ers still discriminate against those from outside, and this has nothing to do with their cultural background.  At a post office, I saw a Beijing person arguing with someone from elsewhere.  The Beijing person was dressed well and seemed to be perfectly cultured, but used the most crass and disgusting words to curse the outsider.  He could only see the non-standard putonghua spoken by migrant workers, and their less than perfect exterior… but it’s as if he’s unaware that every building in Beijing has mixed in its construction the sweat from these outsider migrant workers.  They’re trading their labor for the thinnest of compensation, and they’re the ones who’ve brought Beijing its sophistication and success.

China has been reforming and opening up for 30 days, and some people have had their standards of living dramatically improved.  That is something that can not be denied.  But as Deng said, let some people become rich first, and then reach down to help others, that way we can all together walk towards shared wealth.  This phrase is far from being realized, and in fact, we’re going in the opposite direction. Now, it’s the poor who are getting poorer, while the rich are getting richer.  The middle class has the trend of dividing into two opposite poles.

The biggest achievement of opening up and reform is increasing the people’s productivity.  But although productivity has clearly improved compared to 30 years ago, but when compared to medium-developed countries, the level is still far too low.  High efficiency in China has instead depended on very hard work.  In other countries, any work above 8 hours per day, the employer will need to provide double the pay.  This must happen very rarely in China, so that the title of “Factory to the World” that China has earned through its low cost, in my eyes isn’t any sort of high praise, but instead an evil label generated by the pressure of foreign capital and buyers applied on ordinary Chinese workers.

America’s most dominant area isn’t their military equipment; their dominance comes from the US dollar.  20 years ago, they used their dominance over the dollar and ferociously feasted on Japan’s 30 years of development.  Now, it looks like they’re set to feast on China.

The RMB has been appreciating… and for those making 10000 RMB a month, that’s a good thing.  But for those making 3000 RMB or less, its a nightmare.  If it cost 3000 USD to go overseas and vacation, it used to cost 25000 RMB, but now only costs 20000 RMB… those making high incomes are happy!  But a consumer product that used to be exported for 100 USD, can still only be exported for 100 USD… it used to translate into 820 RMB of which 100 RMB would be the worker’s income.  But now, it’s only being exchanged for 700 RMB… how much is left for the worker’s income?  If workers want to maintain their original income, they have to produce more goods and maintain the factory’s profit margin.  The workers workload has increased, but pay has remained the same or even decreased.  And combined with higher costs in China, the RMB’s appreciation is punishing the people at the lowest layers of society.

China seems to have accumulated large amounts of green bills, and our Premier Zhu used to even brag about this, talking about it everywhere he went.  But after buying large amounts of American debt… although I’m not clear on the actual amount, I often see Americans secretly celebrating.

Chinese people are accumulating dollars; Americans are raising debt.  But dollars are printed by the Americans.  America forces the use of dollars on the international oil trade, and that means they set the prices. China is the “world’s factory” and petroleum is really as valuable as gold to the industry.  Don’t focus just on gasoline costs, that’s only 10% of petroleum.  In order to maintain industrial production, the Chinese government has been offering subsidies.  And even so, just a slight raise in oil costs leads to huge complaints from industries and the people.  In contrast, the United States is letting oil prices soar; 8 years ago, gas in the US cost less than 2 USD per gallon, and now its almost 5 USD per gallon.  During the same time, minimum wage in the United States has grown by over 50%.  And what about those earning the lowest wages in China, how much have their incomes increased?

Americans are using Chinese people’s money to attack Iraq.  In 2007, military budget was 500 billion; 2008, 800 billion.  The great treatment Americans give their soldiers is famous, with currently enlisted soldiers earning no less than average white-collar workers.  And veterans after retirement can enjoy lifetime health insurance, with double pensions after retirement.  Soldiers can attend school for free, not to mention an additional supplement.  The rent they pay is lower than average people, with the difference made up by the government.  When old soldiers buy a home, the property tax they pay is also lower. 

These advantages, once you do the math, you’ll figure out that the bill is really being picked up the Chinese people.  The dollars that China has in its reserves, the money that China has leant to Americans… how much oil and gold could it purchase 3 years ago, and how much can it purchase today?

So, the wealth of the Chinese people are being gradually swallowed by America.  Why?  Because the right to control this wealth isn’t in the hands of the Chinese people.  The right to control this wealth belongs to some officials and experts, and whether unintentional or not, they have not properly protected this wealth, and the United States has been stripping it away using under-handed methods.

And related to this, some officials are corrupt and have taken advantage of holes in supervision; they then use their feet “democratically”, running to Western counties.  The country’s money, the people’s money, they might not take proper care of… but their own money, they’ll never spare a cent.  When their children and spouses arrive in the West, they can immediately buy villas and brand-name cars, completely different attitudes from normal emigrants.

And as the number of people doing this increases, then the number of Chinese who still trust the Party and government is leading them to a xiaokang/wealthy society, will naturally decrease.

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34 Responses to ““China feels very turbulent” – Part 1”

  1. Buxi Says:

    I hope this is already obvious, but I will make it clear: I don’t agree with all (many?) of the perspectives above. But many Chinese felt this description of China resonated strongly with them, and that’s good enough reason for it to be translated here.

    How do others feel about this? Is China’s future a turbulent one?

  2. FOARP Says:

    @Buxi – I have to say I see little here that I can agree with. I don’t know how China was before reform and opening, but by all accounts the kinds of arguments described here would not look out of place in any non-revolutionary era of Chinese history. He seems to have totally missed the symbiotic nature of China’s trade with the US. As for ‘foreign capital and buyers’, it is within the power of the Chinese government, and Chinese factory management, to alleviate the pressure on the work force, and conditions in Chinese-owned factories are no better than those in foreign owned factories.

    I think there can be little doubt that the next 20 years will be more, not less turbulent that the last 20 years. After the TAM massacre few dared to challenge the government, as growth took hold fewer still dared to rock the boat. The economic climate in the outer world is now reaching a point where a down turn seems likely, maybe inevitable. Most of the people alive in China today have never seen a recession, or even GDP growth below 4%, I thnk their reaction to a downturn in the Chinese economy would be adverse in the extreme. However, perhaps the cost-cutting that would follow a down-turn in the west would help the Chinese economy – who can say?

  3. deltaeco Says:

    “The right to control this wealth belongs to some officials and experts, and whether unintentional or not, they have not properly protected this wealth,”

    There is an additional problem. The accumulated wealth can not be used for a massive social help programs, the demand on resources will create an increase in inflation, nullifying the positive effects and maybe even creating a much worst situation for the whole society. It is a vicious circle.

    On the other hand, why CH buys dollars like crazy. A deep fall of the dollar’s value will affect the competitiveness of CH products in its biggest market, which is mainly based on rock bottom prices.

    Name a single high status CH product or brand that US or EU consumers would by a the same high price as a similar US/EU brand.

    Last but not least, any policy which could significantly reduce the value of the amount of $$$ cash upon which the CH government is seated, will reduce the value of that pile of wealth. CH put itself in that predicament, willing or unwilling I cannot tell.

    An embarrassment of riches indeed

  4. Gan Lu Says:

    It’s easy to be sanguine about China’s prospects when you live, work, and study abroad – or when you make tens of thousands of yuan per month. From my apartment in Renmin University, it’s not so easy. Minor disagreements aside, I couldn’t agree more with the writer of this post. The next thirty years will be far more difficult, I believe, than the last thirty. In fact, I’ve read several essays in the past few months (in both English and Chinese) that suggest that we will all look back at the years 1990 to 2010 (or 2020) as the best of times, China’s Golden Years. I just finished reading an interesting essay in the Washington Post by John Pomfret (yes, I know he’s not well-liked here, but it makes excellent reading alongside this post) entitled “A long wait at the gate to greatness.” In it, Pomfret describes many of the challenges that China confronts. For those who are interested, the link is here:


    Similarly, with all due respect to Buxi, China’s “harmonious society” is a fairy tale fiction conjured up by China’s ruling elite to placate the masses – most of whom are decidedly not harmoniously inclined. In this respect, it is not much different from the idea that China is presently “in transition” – that is, the idea that a few lucky people will get rich first and then pull everyone else up after them. I don’t believe that I’ve met a single graduate student or professor (or food service worker, for that matter) at Renmin University who regards the phrase 和谐社会 (hexie shehui = harmonious society) with anything less than a smirk and a rolling of the eyes. Anyone who knows anything about China and its people knows that China has never – and I mean never – been harmonious. Truthfully, it’s very “law of the jungle” here – every man for himself.

    Food for thought: according to the World Bank, three hundred million Chinese live on less than $1 per day. Another couple of hundred million (perhaps more) live on less than $2 per day. Upwards of twenty percent of Chinese are unemployed, with many more under-employed. The air and water here are disgusting. The price of oil is now something like $140 per barrel, forcing China to use more coal to fuel its economic expansion. Food prices for things like pork, rice, fruits, and vegetables are through the roof. There is no social safety net. Longer life expectancy and low fertility rates mean that China’s population is aging rapidly. China’s economy must grow at least seven percent each year simply to keep pace…I could go on, but what’s the point? Flag raising/lowering ceremonies and the Olympic Games are great theatre, but they don’t feed, clothe, or educate China’s poor.

    In the end, I think that the best measure of the truthfulness of this post is the response it received on Tianya. I, for one, see more truth in it than in all the feelgood talk about 和谐社会 and the Beijing Olympics.

  5. someonewhohatetianya Says:

    If China was to follow the opinion of internet forums, it will crash tomorrow. Their idea of a good policy is a giant welfare system that distribute free money to them. Especially the miscellaneous chat section, where the lazy poor population and liberal university students (who think the government is keeping everything from them) make up the majority. There is no such thing as debate on those forums, mainly because there are just too many people. All they know is to dismiss oppositions by calling them brain-defective. Majority of the repliers only read the thread starter’s post and agree or disagree with it based on whether it’s pro or anti-ccp, not whether the arguments are well made. They either hate ccp to death and wish to be born a rich foreigner or be incredibly xenophobic and call every criticism anti-chinese, although the second found their base in strong country or anti-cnn forum. Of course this only happens with political post, where it seems to attract only angry trolls. Take their opinion lightly for normal people do not hang around there.

  6. AC Says:

    @Gan Lu

    Some say the glass is half empty, some say the glass is half full, but can you deny the fact that the glass is being filled? For every pessimistic statistic you listed here, I can counter it with a optimistic one. How many poor people were there in China 30 years ago? Are you better off than you were 5 years ago? You need to look at the trend.

    “Harmonious society” is a goal, nobody said it’s already a reality. The only thing pessimists know is complaint, it’s always the optimists who will build a brighter future.

    Yes, China is facing many serious problems, but I am more interested in your solutions than your whining.

  7. JD Says:

    If China prefers to put its FX reserves in gold an oil it should do so, but of course, that wouldn’t make a lot of economic sense. Much more effective would be moving towards an FX float (wasn’t that the eventual objective?) and pursuing other sensible reforms which will make China are more affluent, influential, and stable society. Sensible reforms with confidence supported by a free flow of information, analysis, and debate.

  8. C to the HOVA Says:

    BUXI – your post is idiotic. America didn’t let the price of oil soar to its current price.
    It’s called the free market. Americans are hurting as much as Chinese from the
    new price. Did you even take a single economics class here in the US? Do you
    think that the debt we americans owe to the chinese is free? We pay interest on it.
    Do you think americans are happy about the loss of value in dollars? It’s crippling
    the US.

    Your post is so utterly ignorant of basic economics.

  9. Buxi Says:

    @C to the HOVA,

    Thanks for dropping by. I understand you’re new here, but I didn’t “write” this post (the original in Chinese). I often translate and make available popular posts from the Chinese world for discusson.

    That said, from an econmics point of view, while no one can reasonably believe that the current administration wants high oil prices, there’s little doubt that they made a strategic decision to allow the US dollar to depreciate. Doing so makes American exports more competive internationally, and makes foreign imports more expensive domestically… all else being equal, both are “nice things” for the American economy. One of the side effects, however, is soaring costs (in USD) for commodities the US is importing from abroad.

  10. EugeneZ Says:

    I did not finishing reading this long article yet, but from what I read, I would say that for every piece of his negative experience, I can come up with a piece of positive experience in China. I would not be so negative about the state of Chinese society, especially not about its future. China is huge, rapidly changing, and the development of society has ben very uneven, in fact, the country is in the proces of soul-searching and trying to define what a modern China means to everyone.

  11. Gan Lu Says:


    Thanks for characterizing my comments as so much whining. Very gracious of you. You are, of course, one of the outspoken optimists who live and work abroad.

    Sorry to burst your bubble, but the goal of a “harmonious society” is unrealistic to the extreme. In fact, past Chinese regimes (the present one included) have engaged in similarly happy-sounding campaigns – all to no avail. The current emphasis on harmony does little more than highlight the CCP’s nervousness concerning the potential for large scale discontent and unrest. On the one hand, I’m sympathetic – the CCP has good reason to worry – China is a basket case. On the other hand, many of China’s problems are the CCP’s own doing. Chickens coming home to roost, and all that.

    As you fixate on the conspicuous, wealthy middle-class here in Beijing and Shanghai, more than a billion Chinese struggle mightily against nearly insurmountable odds. Moreover, the remarkable growth that has defined the post-reform period is unlikely to continue for very much longer. Many economists are even saying that China’s embrace of global capitalism – in combination with other factors, of course – may actually be changing the system in ways that hurt China. In any case, China’s success during the past several decades says more about how badly China was governed prior to reform than it says about the keen mental vision and steady handling of Deng, Jiang, and Hu. The Chinese model? What model? It’s all a juggling act.

    The optimistic statistics that you threaten me with are known to everyone. They change nothing. The cards are stacked against China.

    Solutions? More political reform, more media freedom, more civil society. The CCP must learn to allow, indeed welcome, dissent. The Chinese people must be allowed to participate meaningfully in the national debate about how to proceed. The time has long since come to reveal the CCP’s claim to represent the best interests of the Chinese people for what it is – a sham that has done more harm than the British, Japanese, or Americans ever did. The CCP’s monopoly on political discourse is a travesty – and it has hurt China.

    Time to stop congratulating ourselves on a job well-done and begin preparing for the difficult times ahead.

  12. JL Says:

    Interesting post
    My feeling is that that upper-middle class Beijinger lifestyle really isn’t sustainable. The affordability of the SUVs will surely decline, as surely China can’t continue to subsidize petrol in the face of rising numbers of cars and rising oil prices. Likewise houses; if the wages of construction workers increase (and most people here surely hope they do), these costs (+rising costs of building materials) will have to be passed on to those buying the new and bigger houses.
    I don’t think this fortells a collapse of any kind, but I would say that in strictly material terms right now might be the best time to be an upper-middle class Beijinger.

    I note that the vast majority of the comments to the original post (at Tianya) agree with the writer.

  13. Buxi Says:


    That original post was at “Misc Chat” on Tianya. To put it mildly, the tone of that board is negative towards both the government and society at lage. You’ll struggle to fnd any positive/optimistic messages on that particular board… unless it’s a post about the United States. One of the reasons I like to post messages from both Tianya and KDNet is to point out the diversity of opinion in China.

    But don’t think for a second that there’s any sort of “consensus” that turbulent times are ahead for China. There are a lot of very smart people who also “hatetianya” like the poster above. I don’t hate it, but I certainly disagree with many (most?) of the opinions on zatan. You’ll note that for all of the hand-wringing by the author… he doesn’t really analyze in any great detail why his ex-girlfriend and other classmates are optimistic. Frankly, even though he tries to adress the issue early on, I think there’s more than a little bit of sour grapes here.

    Here’s my take on the issue of turbulence. I can agree that there’s reason for concern; no one in modern history has done what China will be doing on the scale that it’s doing, and there are new challenges that the Chinese government (by defintion) has not proven yet it knows how to solve.

    What I find very skeptical, however, are those claims that the past 30 years were “less” turbulent. (That’s you, Gan Lu.) With the benefit of hindsight, of course you can easily claim that all of the problems the Chinese government were solvable. But how many felt that way at the time these problems were actually appearing? I don’t know how long the original author has been paying attention to national issuse, but from the way he describes it… it doesn’t sound like it’s very long. A few years?

    I remember when inflation was raging around 1993-1994. (I spent 3-4 months in Zhenjiang/Nanjing.) At the time, many, many thought the People’s Republic of China was at an end. Only 4-5 years after the end of the 1989 uprising, and a few years after political prisoners like Wang Dan was first released… the market economy didn’t really exist, but the planned economy was clearly breaking down. No one knew what was going to happen next, but inflation was surging at double-digit rates. I guess nobody had any savings, that was the only good thing you could say about that period. More than a few predictions of collapse came out that summer.

    Zhu Rongji got on top of it, and China got through it.

    Reforms continued… until 1996, when the hard times REALLY started for much of urban China with the first waves of downsizing in state owned enterprises. For the first time since the famines of the Great Leap Forward, there were actually hungry people in the streets. Who here remembers that? In restaurants, there were unemployed, *hungry* people waiting by the walls. When you finished your dinner, people would rush in and eat food off of your plate. Again, I’m talking about Nanjing, not some distant rural corner of the world. There were more than a few doomsday predictions in that day and age.

    China got through it.

    Reforms continued… until 1997, when the Asian economic crisis swept through southeast Asia. Remember that people were REALLY relying on being factory to the world in those days, we’re talking about the days when making lighters and shoes for less than Vietnam and Bangladesh was China’s only hope. And when Thailand, Indonesia had their export-driven economics collapse almost over night, when their currencies depreciated by an order of magnitude (making their exports far cheaper than China’s)… well, considering China was in the midst of its economic transition, there were more than a few doomsday predictions in that day and age.

    China got through it.

    Reforms continued… until 1999. In my opinion, this was probably the roughest period in China’s reform process (worse than today). This was when the wave of privatization of state-owned enterprises hit its peak. This was when tens of millions of employees of state-owned enterprises + hundreds of millions of relatives, people who’s entire lives from housing to schooling to healthcare to retirement pensions were tied to a specific work unit, had their lives torn away from them. Urban unemployment and poverty was unheard of before this point in China, something that didn’t even exist during the Great Leap Forward or Cultural Revolution.

    I remember going to the Rust Belt in the Northeast, and seeing the chemical plant (with 500,000 employees) that my father used to work during the Cultural Revolution…. in his former 车间, they were still hammering out chemical train cars by hand, just like he had decades ago. And after work, they’d pick up their kids from their company-schools, go eat in their company-cafeterias, and then go to their company-dorms. I thought it was pretty ludicrous at the time for them to think they could compete with the West, I thought death was guaranteed.

    If you remember, 1999 was when the Falun Gong issue exploded in China. It had been growing in strength for years, especially in the Rust Belt amongst elderly pensioners who now had nothing left. So, when people began to argue that China had been inflating its growth in earlier years (like Rawski at Pitt), there were more than a few predictions of collapse.

    But you know what, China got through it.

    And then there’s 2001. Well, what do I need to say beyond the fact that Gordon Chang published “The Coming Collapse of China”, which was received with all seriousness that year? WTO entry was imminent, and many (including Chang) thought that meant the death of China. Combined with a banking system that was supposedly insolvent due to pension obligations, and overloaded with bad political loans to state-owned enterprises on life-support… well, how can this country NOT be on the road to collapse?

    The Pew Global Attitudes survey that I talked about in the “optimistic Chinese” entry a few days ago… if you recall, that mentioned an optimistic rating in the 40s back in 2002. Hell, that sounds kind of high to me!

    So, when FOARP says that most Chinese haven’t lived through an economic slow-down… well, he’s right on a statistical sense. But for anyone who’s older than the age of 30 (and I doubt the original author fits in that category), we remember economic depression on a personal scale far greater than anything China is likely to face in the near future.

    Now, will the current administration face future challenges as beautifully as they handled past economic challenges? Will the new generation of Chinese under the age of 30 be as patient as those of us above the age of 30? Will the income gap between rich/poor continue to increase, or will they shrink? These are open question. But frankly, there’s plenty of reason for people like AC and I to be fantastically optimistic.

    As I got back from roaming packed malls in Beijing (Li Ning stores are everywhere, and I have a new Team China warmup jacket to prove it)… I will certainly call bullshit on the claim that the middle classes are more “perturbed” today than they have been in years past. It’s simply not true.

    The middle classes are a larger group than at any other point in history, and they’re spending with greater confidence than any other point in Chinese history. They’re buying cars, homes, and traveling overseas with abandon. More and more Chinese experts and students are choosing to return from overseas. Domestic consumption is becoming a larger and larger segment of the economy, isolating the economy at large from the collapse of markets overseas.

    There are indeed clouds on the horizon, but as someone who’s been looking up for quite some time… I have no doubt that right now, more Chinese are enjoying the golden age than at any other point in my life. So, let’s be aware of the risks, let’s focus on seeking productive solutions instead of sailing ahead blindly as if everything is destined to be perfect… but in my opinion, the chicken littles who are doing most of the screaming could use a little aging.

  14. Buxi Says:

    Oh, I’m a little embarassed sticking myself in AC’s category actually. Since he’s a veteran of ’89, that means he’s probably getting close to the 40s. Heck, he has more reason to be optimistic than even me.

  15. deltaeco Says:

    No matter how dark the future may look is better to be an optimist than a pessimist. Pessimist tend to throw the towel too soon.

    Even if the worst is to come, better to go down with a smile than with a whine.

    Hope is the last thing we loose, that is what we say here.

    Even in the darkest dooms there is crack, a rift, through which a little of hope shines in.
    A fool’s hope maybe, but hope none the less.

    The British now this very well, even in their darkest moments in history, the did not stop to have confidence in themselves. And that can make a big difference in the end

  16. someonewhoatetianya Says:

    @Gan Lu
    Dissent to what? Do you disagree with the direction that the central government is taking the country? Do you think you have a better national plan? Right now, China has the most competent batch of leaders in recent history and you still think you can do better? Chinese people participating in national debate? You think that the mass is more intelligent than the powers that be right now? China will really collapse if common people decides upon the national policies. No one will get anything done. People will not behave so ideally as to dissent only to help the state. Some guy will come along and make a mountain out of a mole hole in a dissenting fashion, just to gain popular support and political power. If you want to vent your political views, then do so on a forum, but don’t assume that you can make better decisions than the central leadership. They simply have a better comprehensive view of nation from up there and most likely have put more thought into policy making than any average Joes.

  17. wuming Says:

    Bravo Buxi! a great concise expository of Chinese history of last 20 years. The odds were always against Chinese, 1.3 billion people living on a land that had been cultivated (and exhausted) for thousands of years. The last 30 years of Chinese history is miraculous precisely because they achieved rapid economical development despite the odds. This fact is the basis of Chinese optimism.

  18. bianxiangbianqiao Says:

    I do not understand even the basic economics being discussed. However, I have solid common sense, which led me to look at the following things when I was in China.

    1. Do people have goals and plans that they fervently pursue? Based on my observations my answer was yes. People want to buy houses, get educated, have good jobs, eat well, find mates, have great family lives and etc.

    2. Are people in a position to take effective actions to achieve their goals? My answer is yes. All the people I have seen are working really hard, and dressing and presenting themselves in the best ways they can afford. I was especially impressed by the poor men and women collecting plastic bottles from trash bins at tourist sites. The Chinese people I have seen are busy satisfying their needs. They are productive. Productive people cannot be unhappy. A society consisting of mostly productive members can only be harmonious. I have not seen many able-bodies individuals in the prime of their lives hangout out listlessly in the streets, without engaging in any productive activities. Even the beggars worked really hard.

    The thing that worries me most is the air pollution.

  19. JL Says:


    Yeah, whatever ‘it’ is, China will get through it, although it will change in all sorts of ways we don’t expect.
    The greatest challenge, I believe, is the same as that faced by every country: how to avoid environmental catastrophe, and then live well without exhausting all that the planet’s resources.

  20. S.K. Cheung Says:

    Interesting post. I dare say, China seems to be accumulating the problems of a western country like Canada, without the benefits. Our dollar is at par with the US, give or take, so it’s great for consumers of imports, but bloody hell for our exporters and manufacturers. We too have a widening gulf between rich and poor, and the rise in commodity prices means that cost of living is outstripping income rise particularly for those who can least afford it.
    However, the author seems to focus solely on the outlook of CHina’s economic future. If she continues her current trend, I have no doubt that overall it will be bright. But I would personally be more interested in their insight into CHina’s social and political future; I am not so sure it will be as peachy, particularly if the economic gulf within China widens. 30 years ago, when everyone was dirt poor, there may have been discontent owing to one’s inability to fulfill needs and wants; but today, when some are stinking rich but many still very poor, those same feelings of discontent will be amplified by envy and jealousy. I wonder how China will evolve her systems to deal with that (of course I have my preferences).

  21. Fapiere Says:

    I would like to point out some factual errors regarding how you state American soldiers are treated. Since my husband is retired military, I am aware of some of these benefits. We do not receive subsidized housing or tax reductions, although a loan for the first home purchase can be subsidized. My husband’s military hospitalization does not kick in until he reaches 65 and can only be accessed by going to VA hospitals or to a military base, which are not known for the highest quality care. Double pensions come only as the result of employment in the civilian sector of the military so the extra retirement is earned income.

    I must admit, I am puzzled by your statement that America “ferociously feasted on Japan’s 30 years of development.” Last time I looked, Japan was doing pretty well. If Americans “feasted,” they also boosted Japan’s development.

    As for China, I must say, that every time I purchase something manufactured in China, I can not help but think about the Chinese laborer, who created the item. One luxurious item, the tied tea leaves, that bloom into a beautiful flower in a teapot, especially bothers me. I imagine little women sitting in a darkened room, threading fine needles, with very fine thread, and very fine fabric, fashioning this lovely bouquet for my momentary amusement. So much of what Americans get from China, has been built from what is essentially slave labor. It sears my conscience, but leaves me helpless. I do not need to buy the tea, but so little else of what I can purchase does not have some little piece that comes from China. Our economies our so entertwined that little can be done as a form of protest to any great effect. Until the cry comes from within China to write its own Emancipation Proclamation, we are unwilling slave masters, with all the ugliness the term implies.

  22. bianxiangbianqiao Says:

    This discussion reminds me of the elegant and rigorous scholarship of Gordon Chang on a similar topic. Is anyone familiar with his works?

  23. pmw Says:

    “My classmates, both those from high school and university, typically make 10000-20000 RMB per month. Some make as much as 30000-40000 RMB, with the worst making at least 5000 RMB. The great majority live very good lives. But I’ve also seen that in the forest of restaurants in Beijing “help wanted” signs calling for waiters/waitresses: 800 RMB per month. When I see those passionate, young waiters and waitressess, and then think about their income… this sort of economic gap makes me restless.”

    I wonder how many of these passionate young waiting staff are from Beijing. It really says more about the city/country and east/west divide than anything else. While a huge problem, you see signs of improvement from the ‘labor shortage’ (or migrant worker drought) that’s been happening in the southern provinces for the past few years. The sweat shops and low wage jobs are gradually losing their purchase over the workers from even poor villages.

    This divide is going to continue for a long while due to the scale of the gap today. But eventually the migrants will assimilate and integrate into the cities. Right now the city(town) to country population ratio is almost 45:55. In a few years there will be more city residents than rural residents for the first time in Chinese history. Part of the city/country divide will no doubt transform into some form of divide within the cities, but the added fluidity of the social structure in the city will alleviate that. At the very least, I don’t expect any big city in China to develop a slum quarter like in Mumbai or Rio de Janero.

  24. pmw Says:


    The “ferociously feasted on Japan’s 30 years of development” part obviously referred to the Plaza Accord.
    The 30 or 40 years before 1990 was great times for Japan.

  25. FOARP Says:

    @PMW – Both Shanghai and Najing have their share of people (the ones I knew were new arrivals) living on the outskirts of the city in what, to my eyes at least, appeared to be shanty houses. I suppose the important thing is how quickly these people leave such accommodation for better, so that these areas (which appeared small) do not grow.

    I heard the talk of labour shortages in Shenzhen, but to most people the solution to this was diversifying in land and to Vietnam. At any rate, from my office I could see hundreds of new recruits arriving everyday, the company I worked for had 200,000 people working at their Shenzhen facility just before I arrived, two years later they had 300,000, I think that Shenzhen still attracts a good number of people from the interior, so long as they know that the job they are going to is one which offers better compensation and chances of development than staying in the village.

  26. Buxi Says:


    Thanks for dropping by. Just to clarify again (and I realize I need to make this more obvious in the post), I’m not the original author of the post… but the translator.

    On the military benefits paragraph, many Chinese have an over-inflated sense of the benefits provided by the US. Veterans are very, very respected in China… In this case, the author is more or less a “leftist” from a political point of view, and he’s looking to use the American model to make a point about China’s poor treatment of veterans. So, he’s inflated American benefits for veterans (which he doesn’t understand) to make a point.

    As for China, I must say, that every time I purchase something manufactured in China, I can not help but think about the Chinese laborer, who created the item.

    Well, I hope you keep reading this blog, because we’d love to give you a different view of the issue.

    There is only one thing forcing Chinese laborers into sweat-shops and slave-like labor conditions, and it isn’t the Chinese government: money, capital, whatever term you want to put on it. China is a poor developing nation. The United States is a wealthy nation, and all American citizens have the advantage of living off of this wealth.

    Even if you know nothing about investing or global economics… as long as you have a savings account, I’m sure you understand the concept of interest. If you have enough in your savings account, you will live very comfortably regardless of how much additional money you make. If you happened to be Bill Gates, you’d have very little need to work; your “interest” or return on investment would be in the billions every year. This is a description of where the United States lies, right now.

    On the other hand, China as a nation is poor, period. China has no alternative but to work very hard in order to accumulate capital, in order to build wealth.

    Where is this wealth? Think about the trillions in savings accounts accumulated by your government, and all 300 million Americans; this money allows you to purchase assets (domestic and international). Think about the roads that you drive on, the power and water plants that you rely on. Think about the excellent universities that your country has. Think about the talented engineers/lawyers/doctors/researchers that live in your country.

    Let’s talk about the hypothetical daughter of an average farmer from Henan province. Let’s say she has a 9th grade education, no savings account, and the family’s “assets” are limited to farming land and farming tools… what advice would you give? You don’t want her to work in a sweatshop; where should she work? How will she produce enough economically to improve her life, and her children’s lives?

    So, don’t “feel bad” about purchasing products made by Chinese workers at what you consider slave-wages. I think its asking too much for you and your country to open up your checkbooks and help finance the world’s poor… but at the very least, give the world’s poor (including the hundreds of millions in China) the chance to work towards accumulating that wealth through hard labor.

    If you want to help China, buy China.

  27. Buxi Says:


    I wonder how many of these passionate young waiting staff are from Beijing. It really says more about the city/country and east/west divide than anything else.

    You are 100%, 100% correct. You’re also absolutely right about the urbanization of China being the only possible solution. As I said above, what should a young farmer in Henan do with his or her life? What alternative options are available to her?

    The only solution is doing just that: working as a waiter and waitress in Beijing. There’s a trickle-down effect in China right now… a segment of the Chinese people are “competitive” internationally, and able to pull down better pay by virtue of their skills and products. This is what you see in the skyscrapers in Beijing. You can’t pull these competitive people down, even if it temporarily neutralizes the income gap. Instead, give these competitive people ample opportunity to “help” the rest of the country. Tax the rich heavily, and then make sure they have the opportunity to consume.

    I feel no shame in consuming when I’m in China. That’s the best thing I personally can do to help the Chinese economy. When I stay in a hotel, take a cab ride, or eat out… I’m helping pay the salaries of people making less than I currently do. (PS: That said, I hate conspicuous consumption…. I’ll never buy anything from Gucci or LV for as long as I live.)

  28. Buxi Says:


    @PMW – Both Shanghai and Najing have their share of people (the ones I knew were new arrivals) living on the outskirts of the city in what, to my eyes at least, appeared to be shanty houses. I suppose the important thing is how quickly these people leave such accommodation for better, so that these areas (which appeared small) do not grow.

    And that’s a huge distinction between Chinese and Indian/Brazilian “slums”.

    These shanty houses that you refer to are usually better than their homes on the farm, so I don’t see the existence of shanty houses or poor accommodations as a problem. The biggest problem with slums in other developing countries is that they’re *permanent*. You have generations raised in the same slum; children grow up in the same shanties their parents lived in, doomed to not have access to education/training, doomed to raise children in the same shantytown.

    China has been able to avoid that trap so far, partly through very harsh government policies:

    1) hukou restrictions mean that migrant workers can not access some government services in these cities, while they are guaranteed services in their home town whenever they return.

    2) a ban on individual sale of farmland means that peasant workers will always have a fixed piece of asset that they can’t move: their family farm. If they struggle in the cities, they still have roots on the farm.

    There are very few permanent slum dwellers in China. Migrant workers live in harsh environments on the outskirts of Beijing, but most inevitably return home to build a nicer home on the farm, and/or migrate to a city/township permanently only when they have enough wealth to “qualify”.

  29. pmw Says:


    “As for China, I must say, that every time I purchase something manufactured in China, I can not help but think about the Chinese laborer, who created the item.”

    It may or may not help, but you can think about the laborer’s pal who’s living worse off on his paltry piece of farm land while you think about the laborer.


    “I heard the talk of labour shortages in Shenzhen, but to most people the solution to this was diversifying in land and to Vietnam.”

    And Vietnam pops a bubble in less than 3 years. There’s more to it than just labor cost. Actually the Chinese govt is intentionally curbing the growth of low level manufacturing, otherwise you won’t see a hike in corporate tax rate, a reduction in export rebate and a new labor law promoting employee welfares all at the same time. No doubt some factories will relocate, to Vietnam, to central and western China, and to wherever else. But China will remain the ‘world factory’ for a long while so that most of the rural population can lift themselves out of poverty through this. As the Chinese industry moves up the value chain, so will the worker’s income. Industrialization speeds up urbanization, and at some point you are gonna reach a good enough ratio of land to rural population that it becomes comparable or more profitable to farm again than to work as migrants. That I think would be the beginning of the end to the ‘turbulent’ China.

    “I think that Shenzhen still attracts a good number of people from the interior, so long as they know that the job they are going to is one which offers better compensation and chances of development than staying in the village.”

    Totally agree.

  30. S.K. Cheung Says:

    The posts here have been very interesting. It seems that, while we in the west (and I’m speaking generically, but without any pretense for speaking for all westerners) disapprove of extremely low pay and presumably poor working conditions in the places where “made in China” stuff gets made, those same laborers are doing so happily since it already represents a step up from wherefore they came. In some sense, given that these are jobs that Americans presumably won’t do, China is to manufacturing what Mexico has been as a source of manual labour, at least from an American perspective.

  31. Buxi Says:


    while we in the west (and I’m speaking generically, but without any pretense for speaking for all westerners) disapprove of extremely low pay and presumably poor working conditions in the places where “made in China” stuff gets made, those same laborers are doing so happily since it already represents a step up from wherefore they came.

    That’s definitely the oint, thanks for recognizing that.

    But the even more relevant question is… does anyone have a better suggestion? What should they be doing? Should they be working at Starbucks? If the point is just that they should make more money… I can’t disagree. But the key question is, how? Where’s the money going to come from? Are Western consumers willing to pay more for their products out of a sense fo charity?

  32. sohbet Says:

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