China in Ten Words (19 page)

During the 2008 Beijing Olympics many low-income Chinese longed to visit the “Bird’s Nest” National Stadium and the “Water Cube” National Aquatics Center, symbols of the new China. They spent long days and nights journeying by train and long-haul bus, arriving in Beijing travel-worn but tingling with anticipation. Asking directions all the way from the station to Olympic Park, they longed to go in and explore, but entrance tickets to the park alone were in very short supply, and the tickets resold by scalpers were outrageously expensive. For security reasons, perhaps, people without tickets were banned from entering Olympic Park, so they had no choice but to stand a long way off and take a photo of themselves with the Bird’s Nest and Water Cube in the distant background. Even so, their faces were wreathed in smiles.

At the same time there was no shortage of empty seats inside the stadiums—seats with excellent views of the events as well. High officials and big shots, being accustomed to an extravagant lifestyle, set no great store by the plum seats they had been given, never bothering to reflect that the tickets going to waste in their pockets would have been treasured by other Chinese. Nor did they give a second thought to the fact that such a multitude of ordinary people would travel so frugally to Beijing and then be unable to get their hands on even a basic sightseeing ticket for Olympic Park.

C
hina today is a land of huge disparities. It’s like walking down a street where on this side are gaudy pleasure palaces and on that side desolate ruins, or like sitting in a strange theater where a comedy is being performed on one side of the stage and a tragedy on the other.

When Louis Vuitton, Gucci, and other such luxury brands build huge outlets in the most glamorous streets of Chinese cities; when exhibitions of luxury goods are greeted with open arms in places like Shanghai, Guangzhou, and Shenzhen (where sales exceeded 200 million yuan in just a few days); then people suddenly realize that China has changed overnight from a luxury-goods processing site to a luxury-goods consumption center. The financial crisis may have caused sales of these goods to undergo a steep decline in the traditional European and American markets, but they remain hugely popular in China.

Since June 2008 luxury goods have been the weakest segment of retail sales in the United States. But in China, according to a recent report, sales of these goods grew by about 20 percent in 2008. By 2015, when sales are expected to maintain 10 percent annual growth, they may well surpass $115 million; this would make China the world’s top consumer of luxury goods, with 29 percent of the world’s total consumption. A study by China’s Brand Strategy Association reported a development even more startling: Chinese consumers who can afford international name brands already number 250 million.

At the same time, poverty and hunger are still endemic in many parts of China, and there is no end to heartrending stories. Here is one that I heard: A long-unemployed husband and wife, out walking with their young son, pass a fruit stall. The boy sees that bananas are cheap and asks his parents to buy him one. But what little change they have in their pockets is not enough to buy a banana, so they hurry him on. The boy bursts out crying: it’s been so long since he had a banana. He cries all the way home and keeps crying once he’s home. His father, exasperated, hits him. His mother runs over, pushes the father away; they start to quarrel. The harsh words and the boy’s unending cries suddenly overwhelm his father with despair. He hates himself, his uselessness, his joblessness, his empty pockets. He goes out on the balcony and throws himself off without even a backward glance. His wife screams, dashes out the door, down ten flights of stairs, kneels on the ground, cradles her husband’s head, sobs, calls his name, feels his life leaving him. Minutes pass, she pulls herself together, sets the broken body down, presses the elevator button. Back in the apartment, her son still crying, she rummages around for a piece of cord, puts a stool in the middle of the room, ties the cord to a ceiling hook. Her son sits there watching, bewildered, so she jumps off the stool, turns his chair to face another way, climbs back on the stool, fastens the noose, and kicks away the stool.

Here’s a second story: Another jobless couple, the daughter in primary school. She comes down with a fever; forehead scalding hot, she asks them to take her to the doctor. They have no money, they tell her; they have to go out and look for work; they don’t have time. She understands, she says just borrow a little money from a neighbor, she’ll go see the doctor herself. Her father tells her mother to borrow the money, and she tells him the same; they start to argue. They’ve cadged so many loans and never been able to pay them back, they can’t face the prospect of having to ask for more. Never mind, the girl says, she doesn’t have to see a doctor. But she feels faint, she’s not up to going to school; she’ll have a nap in her room instead. Her father sets off on his job hunt; her mother stays to clean the kitchen. As she leaves, she checks to see if her daughter is asleep. When she pushes the door open, she finds the girl hanging by her red scarf, the one she patted flat before folding every night, that she tied carefully around her neck every morning, her favorite accessory.

There are many other such stories I could tell. It’s not that I so relish stories of misfortune; rather, that Chinese realities are telling us these stories every day. Our realities, of course, tell us other kinds of stories, too. For example, there are already hundreds of thousands of Chinese whose disposable assets exceed 10 million yuan—825,000 of them, according to the latest
Hurun Report
. This figure includes 51,000 individuals with more than 100 million yuan, whose annual expenditure is said to average 2 million yuan.

Consider, in contrast, the following figures: if you define the poverty line in China as a 2006 income of 600 yuan or less, then there are 30 million Chinese living in poverty; if you raise the threshold to 800 yuan, there are a full 100 million. When I pointed this out at a talk in Vancouver in 2009, a Chinese student rose to his feet. “Money is not the sole criterion for judging happiness,” he objected. This remark made me shudder, for it is not just a single student’s view; a substantial number of people in China today would take a similar line. Surrounded by images of China’s growing prosperity, they have not the slightest inclination to concern themselves with the hundred million who still struggle in almost unimaginable poverty. That is the real tragedy: poverty and hunger are not as shocking as willful indifference to them. As I told the Chinese student, the issue is not how we judge happiness but how we address a widespread social problem. “If you are someone with an annual income of only 800 yuan, you will earn a lot of respect for saying what you did,” I replied. “But you’re not.”

I
n the past thirty years, China has developed at a remarkable pace, maintaining an average annual growth rate of 9 percent and in 2009 becoming the second-largest economy in the world. In 2010 China’s revenues are set to hit 8 trillion yuan, and we are told proudly that we are on the verge of becoming the second-richest country in the world, trailing only the United States. But behind these dazzling statistics is another, unsettling one: in terms of per capita income China is still languishing at a low rank, one hundredth in the world. These two economic indicators, which should be similar or in balance, are miles apart in China today, showing that we live in a society that has lost its equilibrium or, as the popular saying has it, in a society where the state is rich but the people are poor.

Unequal lives give rise to unequal dreams. About ten years ago China Central Television interviewed Chinese youngsters on Children’s Day, asking them what gift they would most like to receive. A boy in Beijing wanted a Boeing jet of his own, while a girl in the northwest said bashfully, “I want a pair of sneakers.” Though much the same age, these two children were worlds apart in their dreams, and the girl is probably no more likely to get a pair of sneakers than the boy is to get his own plane. Such is China today: we live amid huge disparities between recent history and contemporary reality, and from one dream to the next. The comment from the student in Vancouver makes me feel these are disparities that Chinese society is perfectly prepared to accept.

I will tell one more true story to end this chapter, an episode set in one of China’s southern cities. There, amid the myriad clusters of high-rise buildings and the packed shopping malls, a sixth-grader was kidnapped. The two kidnappers embarked on this crime in desperation, having hardly a penny to their names and no experience whatsoever in kidnapping. After getting nowhere in their search for employment, they decided to take matters into their own hands. Without planning or preparation, they seized a pupil on his way home from primary school one day, clapped their hands over his mouth, and dragged him, struggling, into an unused factory workshop. Then they asked the boy for his mother’s mobile number, went to a callbox nearby, and delivered instructions about the ransom. They didn’t realize they needed to call from some other place completely, and the authorities, tracing the call, quickly sealed off the area. Before long they were in police custody.

While waiting for the ransom to be delivered, the kidnappers ran out of money, so one of them went out and borrowed just enough to buy two box lunches, gave one to the boy, and shared the other with his accomplice. On his rescue, the boy told the police, “They’re so poor! Just let them go, won’t you?”

*
chaju

†
Lei Feng, killed in a freak accident in 1962, aged twenty-one, was posthumously lionized as a devoted servant of Chinese socialism.

‡
The Long March is the name given to the arduous trek by Communist forces during the mid-1930s, when they escaped from encirclement by Nationalist troops in central China to a safe haven in the northwest.

grassroots

F
ive or six years ago a ritzy development began to go up in a bustling downtown area of one of China’s main cities. When completed, it rose more than forty stories; its accommodations included six luxury apartments, each more than twenty thousand square feet in size and lavishly equipped with top-of-the-line kitchen and bathroom fixtures from well-known international brands. These hundred-million-yuan apartments were all snapped up as soon as they came on the market, and the first person to purchase one was not a celebrated real estate agent, financial investor, or information-technology baron but an inconspicuous actor on China’s economic stage: an impresario of blood sales or, in common parlance, a blood chief. This wealthy blood chief was such a free spender he purchased the apartment outright with a single payment. It is a good place to begin my story of the grassroots.
^*

In my novel
Chronicle of a Blood Merchant
, published in 1995, I drew on childhood memories to create a character named Blood Chief Li. At that time “grass roots” in Chinese simply meant “roots of grass,” but within a few years we imported from English a new meaning, and in China “grassroots” has come to be used in a broad sense to denote disadvantaged classes that operate at some remove from the mainstream and the orthodox.

I remember as a child seeing a man pay peasants for giving blood at the hospital. He dressed in a white coat just like a doctor, but it was always grubby, with dirty gray stains on its elbows and seat; a cigarette invariably dangled from the corner of his mouth. Among prospective blood vendors he was known simply as Blood Chief, and he exercised unquestioned authority over his empire of blood. Although his status in the hospital was lower than that of the most ordinary nurse, he had a profound grasp of the benefits that accrue from steady, daily accumulation, and over the passage of years he quietly confirmed his standing as a king of the grassroots. In the eyes of the peasants who, from poverty or from some yet more dire cause, had come forward to sell blood, he was sometimes even seen as a savior.

Hospitals in those days had well-stocked blood banks. From the start he made the most of that circumstance, planting seeds of uncertainty in the minds of the blood vendors as they journeyed from afar, sparking anxiety as to whether they would be able to find a buyer for the blood flowing in their veins. And he effortlessly cultivated their respect so that it came straight from their hearts, and on that basis he imparted to these simple country folk an understanding of the importance of gifts. Although most of them were illiterate, they knew that interaction is essential to one’s relationships with others. Through him they came to realize that gifts not only are the most vital prerequisite for interaction but actually constitute an alternative language, one predicated on a certain degree of personal loss but also able to communicate such sentiments as favor, homage, and esteem. Thus he made them understand that, before leaving home, they should make a point of picking up a couple of heads of cabbage, or a few tomatoes and a handful of eggs. When they presented to him their cabbages, tomatoes, or eggs, they would be paying him a compliment and addressing him with deference, whereas if they arrived empty-handed, this would be to forfeit language and lose the power of speech.

For decades he managed his kingdom with unstinting devotion. Then times changed: hospital blood banks began to encounter shortages, blood purchasers had to fawn on blood vendors, and the authority of hospital blood chiefs was undermined. But this did not worry him in the least. He was now retired and took advantage of the opportunity to become a real blood chief, no longer affiliated with a hospital in the traditional manner.

This blood chief passed away some ten years ago, but before he died, he pulled off an amazing feat. In late 1995 my father, who had just finished reading
Chronicle of a Blood Merchant
, told me over the phone that the blood chief had found a way to greatly boost his retirement income. As China’s market economy began to thrive, the chief discovered that blood prices differed from one region to another, and in short order he organized close to a thousand blood vendors to travel some three hundred miles, through a dozen different counties, all the way from Zhejiang to the county in Jiangsu where he knew blood commanded the highest price. His followers thereby increased their earnings, and his own wallet bulged like a ball that’s just been pumped up.

What an epic journey that must have been! I have no idea how he managed to induce this band of misfits, all strangers to one another, to form such a motley grassroots crew. He surely must have established some code of discipline, emulating a military chain of command and conferring limited powers on a dozen or so members of this untidy rabble, authorizing them to give free rein to their respective talents, whether threats or cajolery, flattery or curses. His officers kept those thousand foot soldiers in line, while he simply needed to oversee his dozen officers.

Their collective enterprise bears some resemblance to the operations of a mobile infantry unit during wartime, or perhaps a religious pilgrimage in full swing, as this dense mass of humanity clogged up long sections of highway. Men argued and women gossiped, clandestine affairs were conducted, and the unlucky were laid low by sudden illness. No doubt there were touching cases too of mutual support, or true love coming to fruition. You would be hard put to find anywhere a throng of people as colorful and diverse as this ragtag army of grassroots blood vendors.

If my childhood blood chief had not died so early, he would surely have accumulated enough wealth to move into a luxury apartment too, although he was not, of course, in the same league as the blood chief in the big city, who exercised even greater authority and is said to have commanded the loyalty of a hundred thousand blood vendors. Such is Chinese reality today: although blood vendors must hand over a percentage of their earnings to their boss, they still make more money than if they were to sell blood independently.

This big blood chief enjoys an opulent lifestyle under an assumed name, and nobody knows just how big a fortune he has. Whenever blood bank reserves run low, all the big hospitals eagerly seek his services, and sometimes he is so heavily booked that it can be impossible to set up a dinner date. To him business is business, and he will make sure that the blood he controls flows in the direction of whichever hospital offers the best price for his product.

Blood selling, which seems such a humble and demeaning profession, turns out to be just the kind of story on which
Forbes
magazine would love to do a feature: a quintessential rags-to-riches story. Another such tale concerns a trash recycler sometimes known as the Beggar Chief but more often dubbed the Garbage King. Although he is Garbage King in only one district of one municipality, he has managed to amass a fortune in the many millions. In Chinese cities every residential neighborhood has people who specialize in recycling trash; they buy cheaply items that the residents plan to throw away and, after sorting, sell them at a slightly higher price to bigger recyclers—like the Garbage King. After jacking up the prices, he resells the waste to manufacturers, enabling them to save on raw materials. When this millionaire Garbage King was interviewed, he struck a modest, unassuming pose. How had he discovered this business opportunity? the reporter wondered. “I just did the things nobody else was willing to do,” he replied.

This straightforward answer reveals a secret about China’s economic miracle. Chinese people today, inspired by a fearless grassroots spirit, have propelled the economy forward by seizing every possible opportunity. So it is that our economic life is full of kings: the Paper Napkin King, the Socks King, the Cigarette Lighter King, and so on. In Zhejiang there is a Button King who oversees a button range so extensive it boggles the mind. The profit on a single button may be minuscule, but so long as people go on wearing clothes, there’ll be a demand for his buttons everywhere in the world. The same goes for paper napkins, socks, and cigarette lighters: however humble such products may be, the minute they claim a significant market share, they are perfectly capable of becoming an empire of wealth.

A man I know runs a BMW dealership in the city of Yiwu. One day he was visited by an old man from the countryside, with a dozen or more children and grandchildren clustered around him. They all tumbled out of a van and bustled their way into the dealership, and the younger members of the family began to select a car for the well-heeled patriarch. A BMW 760Li with a sticker price of more than 2 million yuan caught his eye. “Why is this car so expensive?” he asked. But when the dealer listed all its advanced features and technological refinements, the old man just shook his head and said he couldn’t understand a word. Finally the dealer pointed at the driver’s seat. “It took two cows to make this,” he said. “The leather is cut only from the finest part of the hide.”

The old peasant, who as a boy had tended cattle long before he struck it rich, was won over right away. “If two cowhides were used just for one seat, this has to be a top-of-the-line vehicle!” he marveled. He bought the 760Li for himself and assigned cars in the BMW 5 series to his sons and daughters-in-law and cars in the 3 series to the youngest generation. When it came time to pay for their purchases, his family toted in several large cardboard boxes from the van, each filled to the brim with cash. The paterfamilias had no confidence in checks and credit cards; for him only currency notes counted as proper money.

On the basis of his life experience and simple, down-to-earth way of thinking, the old man immediately understood why the BMW 760Li was so expensive. Some Chinese grassroots may get involved in business without any knowledge of economics or any management experience, but they are perfectly capable of getting rich quick, thanks to their distinctive personal outlook on things. Just as the old man had his way of appreciating the 760Li, the grassroots way of thinking—even if it seems a lot like that of a country bumpkin—can enable one to get to the heart of the matter in no time at all.

With all the changes since 1978, there’s no end to such stories. China’s economic miracle of the past thirty years, it’s fair to say, is an agglomeration of countless individual miracles created at the grassroots level. China’s grassroots dare to think and dare to act; in the tide of economic development they will adopt any method that suits their purposes, and they are bold enough to try things that are illegal or even criminal. At the same time China’s legal system has developed only slowly, leaving plenty of loopholes for the grassroots to exploit and putting all kinds of profits within their reach. Add to that their dauntless courage, which comes from their having nothing to lose, since they began with nothing at all. “The barefoot do not fear the shod,” the Chinese say, or as Marx put it, “The proletarians have nothing to lose but their chains, and they have a world to win.”

If you look at the names that appear on the recent wealth rankings in China, almost all of these multimillionaires have come up from the grass roots. These honor rolls tell stories of sudden upswings—of empty-handed paupers transformed overnight into multimillionaires, of the glory and wealth that partner fame and fortune. At the same time they recount tales of sudden ruin, showing how disgrace follows glory and how wealth can vanish in the blink of an eye. Judging by the
Hurun
Rich List, during the past ten years there have been no fewer than forty-nine grassroots tycoons who either have been arrested or have fled to avoid arrest. Their crimes come in all shapes and sizes: misappropriation of funds, conspiracy to rob, conspiracy to swindle, corporate bribery, fabrication of financial bonds, illegal diversion of public funds, irregular seizure of agricultural land, contract fraud, credit certificate fraud, and so on. No wonder the Rich List is popularly known as the Pigs-for-Slaughter List. In China there’s a saying, “People fear getting famous just as pigs fear getting fat,” reflecting the observation that fame invites a fall just as a fattened pig invites the butcher. On the other hand, as Rupert Hoogewerf (aka Hu Run), the creator of the Rich List, has noted, “Pigs that deserve to die will die, whether or not they make it onto the rich list.”

In November 2008 Huang Guangyu, who rose from humble beginnings in a small Guangdong village to become known as the wealthiest man in China, was arrested by Public Security on a charge of gross financial misconduct. After the launch of Guomei Electronics in 1987, within ten years he had developed it into the country’s largest household appliance retailer. In 2008 he was listed as the richest man in China for the third time, with personal wealth of 43 billion yuan. In May 2010 a court found him guilty of “illegal operations,” insider trading, and bribery and sentenced him to a fourteen-year prison term. Several years ago, when Huang Guangyu topped the Rich List for the first time, he was asked by a journalist, “This Richest Man title of yours—did you have to pay for it?”