Archive for May 8th, 2008

A superficial overview of modern China

May 8, 2008

While I like to limit the subject matter of my posts in this blog to Venezuela, on very special occasions I digress, but this post is likely to be one of the biggest departure from the focus of this blog. I just spent three remarkable weeks traveling through China and somehow I feel not only the need to put together my thoughts, but it also seems fitting to tell you about it in view of the large differences between what is going on in Venezuela and what is happening in China from both a political, social and economic point of view.

I visited China twenty-two years ago in 1986 when I went to a conference and I wanted to go back and see the changes that I have read so much about. I have actually followed quite closely a lot of what is happening there, but even then nothing prepared me for what I saw and I am still trying to understand and digest it all. Three weeks barely gives you time to understand a country as complex as China, which is undergoing such a massive transformation in all aspects of its life, but I will try to give you my own biased and superficial description of what I saw in that fascinating country.

China is certainly a quirky country, full of contradictions and contrasts. I visited some major cities like Beijing, Shanghai, Xian, but also visited what may be a tiny city there, the picturesque town of Guilin in the south, as well as numerous towns and cities along the Yangtze river, where I spent four days, including Fulin, Fengdu, Yichang and Chongqing, the last one having a population in its metropolitan area of 32 million people, more than all of Venezuela. Thus, I saw the remarkable metropolis that Shanghai has become, the elegant beauty of Beijing, but I also saw life in rural areas and the transformation caused by the gigantic Three Gorges Dam, which will be completed later this year.

I barely recognized Beijing or Xian, the two cities I visited in 1986. The transformation has been simply staggering. If it were not for the historical monuments, such as Tian An Me or the Forbidden Palace, it would have been hard to say I had been there earlier.

The forces unleashed by Den Xiao Ping on the Chinese economy are remarkable. From what I understood, there are two features that dominate the new China: the conversion to a market economy and the decision to give regions a lot of independence in what they can do and their planning. While certain issues are still decided in Beijing, provinces and municipalities function essentially independently, raising funds through real state “sales” (land is owned by the Government, so they are truly selling only 70 year leases) and taxes and using the money for their own local infrastructure projects.

What is most impacting is how rational and pragmatic the process is. Local authorities hire the best and are not second-guessed by the central Government. The orders are to be fairly pragmatic and empty of ideology. Simply put the people should improve their lives. And market polices dominate the how it is done, as simple as that. Wealth is seeing as something good in the belief that it will trickle down. Differences between top and bottom do remain huge.

The “best” rule through a complex process by which only the best and brightest are able to go to the University (11% of those eligible are accepted in a very competitive system for university posts) and the Communist party attracts the best from those that graduate. But beyond that, the Chinese also have an incredible work ethic. Students have hours that would seem absurd anywhere in the West, starting classes early in the morning and ending late at night. At river town Yichang, the best school in the city starts at 7 AM and ends at 10 PM, as students stay to do their homework. Similarly, students make sure they do their weekend homework early, so as to be able to attend the “special” classes, special activities and training required if you want to get ahead.

While one hears about the large-scale projects taking place in China, what impressed me the most is how infrastructure, both roads and housing has been the priority everywhere in the belief that good infrastructure leads to economic prosperity. It was clearly impressive to see the effort in relocating 1.2 million people along the Yangtze riverbanks, but it was more impressive to see the roads everywhere, the huge high rises, the airports, the power plants, which were everywhere. If in the peak of the housing boom in Spain the crane was jokingly said to have become the national tree, then in China I saw forests of them.

Of course a lot of this infrastructure building is only possible because labor is very cheap, allowing architects and designers to create projects that would be prohibitively expensive anywhere else. We did see housing built in the late eighties and early nineties that looked poorly built, already aging and with problems. But overall quality seems to be improving. Curiously, when you get or buy an apartment, you get no plumbing, air conditioner, appliances, toilets and even wiring. This leads to huge high rises with hundreds of exterior air conditioners, which create rain in the summer as they drip.

But there was also cleanliness and a level go hygiene that was not present 22 years ago. There has been a very direct campaign at the grassroots level to improve habits. The cities are clean, sadly, cleaner than Venezuela now. Running water is everywhere, which was not the case 20 years ago. I am not sure how it was done, other than I heard subsidies in which the Government would help pay certain expenses for improving hoes, but they were always shared with homeowners.

The economy is incredibly free. The Government controls certain things, but is always looking to liberate them. State owned companies go public almost daily, giving managers the mandate to make running them more open and always with profit in mind. The financial system seems a little bit obscure in how it functions, but even in that area the Government is opening up to foreign competition.

There seems to be corruption at the Government level, but there are also examples that while the Government is allowing some officials to make some money, there is a limit to excesses. One of the Shanghai officials that successfully led to the renovation of certain parts of the city is in jail for 16 years, he was just too obvious.

The scale of developments is simply beyond anything I ever expected and I have been a China believer for some time. But it is one thing to read about it an another to see it. How do you explain Shanghai going from 20 to 2,000 skyscrapers in 20 years? Or Beijing going from 85,000 cars in 1986 when I was last there to 3.5 million today? Or that sometime in the next four years China’s per capita income will exceed Venezuela’s, but they do not depend on oil? Or China’s GDP exceeding that of the US before 2030?

Those are massive changes and they have been achieved in a period of time unparalleled by anyone in history.

More importantly, China has now a modern infrastructure, something that the US or Europeans countries can’t boast they have. I thought of that as I crossed Frankfurt’s airport, full of long and somewhat dreary corridors and compared them to Beijingss brand new incredible airport or Shanghais new airport terminals. Even small cities have brand new pretty airports that would put Maiquetia to shame.

Family life is very special. The old live for the young and the one-child policies have emphasized that even more. The whole of family life is centered upon improving the kid’s life, sacrificing everything along the way. People express their love for the young in ways the West does not do. Basically, the sacrifices and efforts end only at death and go as far as leaving apart from the kids. Nothing is too small to guarantee the future of the kids. The children from the one-child only era, have become in their own words “Little Emperors”, pampered to death, but at the same time subjected to incredible pressures to succeed.

In my way, China is still divided in two by class an
d family. By class, because despite the remarkable progress, 60% of the population remains rural and largely poor, while the rest is prosperous and lives in the cities. Similarly, there is a division by age, the young have accepted and embraced the changes and the challenges, while the old still may have misgivings. Life for the old was simple and most things used to be guaranteed. The system was unfair, but everyone understood it. Now too many things are changing, individual imitative is the key, but the fear of uncertainty permeates their thinking.

But neither group questions what is happening. For the old, the great leap forward and the Cultural Revolution were policies they backed and they simply failed. For the young, they were events to be understood and analyzed, but neither group wants to see it from a critical point of view. Both Mao and Ping have an almost deity status, together with Dr. Sun Yat Sen, the founder of the Chinese Republic in 1919. No matter how much I asked, I found little criticism of either of them.

A prosperous and enterprising 74 year old lady living in a town in the Yangtze, who is doing today much better than twenty years ago (she has a new apartment and three stores), skirted gracefully my question as to who her preferred leader was by saying that all of them, whether Mao or Ping, made positive contributions and tried different things for the “people” and while some failed, other succeeded in making things better and that is what is important. I got similar answers everywhere as I tried to get some criticism of Mao, but failed to so.

Of course, the Chinese people have been repressed and controlled in the way they think for a long time and what they have today is simple a continuation of those policies. The state controls the media and all of the news flow. There is guidelines and censorship. Most Chinese only heard of the killing of ethnic Han Chinese in Tibet, but have heard nothing of the killings in reaction to that. Most of them have heard the Government’s story that Tibet has always been part of China, ignoring 700 years of independence up to 1951. Thus, what is big news in the West seems irrelevant and puzzling to most Chinese.

Because in the end the Chinese are extremely nationalistic and proud. To them the Olympics is something, which is not only a priority, but it should have taken place in China long ago, to show the progress their country has made. They feel they were short changed in earlier picks for Olympic cities. Any interference with that has to be politically motivated.

Curiously, the Chinese seem to feel more sympathetic to the US than to Europeans, as the former have never occupied China and even helped the country in the war with the Japanese. The Japanese clearly do not occupy a very favorable status for most Chinese. I learned early in my trip that any praise for anything Japanese would be met with a negative or at least skeptical reaction and I even used it as bait when it seemed obvious that I would extract some sort of reaction.

I did try to probe on freedom of speech issues everywhere and was always met with the same response: “Yes, we have some limitations, but things are improving all the time”. It may be true, but the Government still exerts total control over the media.

Twenty years ago, sex was taboo and public displays of affections were a no, no. Today the young enjoy levels of freedom and openness unheard of before. They joke of an MBA meaning Married But Available and people live together before marrying in the big cities, even if mothers to dominate the kids lives, having they marry before a certain age and demanding prior approval of the perspective partners. Mothers seem to be truly overbearing in China, even after the recent changes.

Freedom of speech limitations are always scary, but there were less scary than twenty years ago. It is illegal to have satellite dishes that receive foreign signals, but some have them. The Internet is indeed censored and you can read the English paper and know it was written by the Government. But the Chinese know more about the world than they used to do and books and magazines are not censored the way they used to be.

Movement is also freer. When I was there in 1986, I could not go everywhere, neither could the Chinese. Today we both can roam essentially everywhere, the magnitude of internal Chinese tourism is staggering and migrations to the cities is such that an estimated 170 million people have move to the cities in the last two decades. How is that for scale?

I was actually more bothered by the issues of sexism, racism and classism more than others. Women are not only discriminated against but even the one-child policies today, give a remarkable strong preference to males over females. Similarly, there is a strong deference and preference paid to the rich and Government officials everywhere. The latter live in special compounds and have all sorts of privileges.

Racism is also present and there are clear policies to deal with it despite words to the contrary. Tibet may be part of China, but the new Tibetan railroad is being used to “export” Han Chinese to the area to dominate the Tibetan population, while the natural resources are used to develop the rest of China.

Finally there is the environment. It can get very bad. Chongqing was absolutely awful! Beijing was not better, except that it rained hard while I was there clearing the air significantly, I can honestly say that I did not see blue skies in the three weeks I was there and was bothered by pollution in at least two cities. The Government seems to be talking a lot about the environment but doing very little. It was on this issue that I heard the most criticism of all, including the negative possible effects of the Three Gorge Dam, which leads me to think that the Government itself may be promoting these protests as an excuse to attack these issues and have the population rally around protecting the environment.

But all in all, it was a very positive impression that I got from China, their slope is positive for most basic issues, including human rights. Here is a Government using all of its resources to improve the well being of its people, while at the same time maximizing foreign investment to help it improve the impact even further. It is a revolution, but based on the individual, rather than the collective (They tried that and failed!) It is a belief that the entrepreneurship of the individual will overwhelm state policies to the point that economic sectors that are liberalized become a free for all as there are no anti-monopoly rules except in sectors still under control by the Government. I never saw so many cell phone stores in my life!

It is indeed a belief in Deng Tsiao Ping’s famous “To be rich is glorious” that will expand and trickle down to the people. Combine that with decades of Government domination with very hard working people and you get an incredible miracle.

At times I worried that those same forces could be turned around and the whole process be reversed in the presence of an external threat. That certainly seems like a real possibility, but at the same time, the young have now lived for twenty years under this new system and have seen the improvements. I am not sure they can be turned off from on day to the next unless the threat was real.

In fact, if I were a Chinese Government official, I would worry about how these young people will react the day things slow down, or if the environment continues to deteriorate or more political freedom is not given to them. In the end, the Government has to continue on the positive slope on all fronts for people to be happy. Media control may one day allow the Government to turn the people in the face of an external threat. But in the long run, it will be internal development that will determine how the Chinese future plays out.
Right now, it looks very good.