The greater leap forward
Ric Dolphin - Monday,22 May 2006
Western Standard
DONGGUAN, China--I am reporting to you this week from the biggest Chinatown you ever saw. The province of Guangdong in South China is the place whence most of Canada's Chinese restaurants and their owners trace their ancestry. These days, it's also whence most of the shoes, jeans, furniture, tools, knick-knacks and one's local Wal-Mart's inventory trace their provenance. For an Albertan who thought he knew booms, this newest and biggest of industrial revolutions is a humbling thing. Another point of interest for the Albertan: their thirst for oil is big and becoming gargantuan.
An hour down the six-lane toll highway from where I'm staying in Dongguan is the port of Yantian in Shenzhen City, debarkation point for the 10 million 40-foot-long metal containers that head out onto the South China Sea each year--a volume roughly 10 times that of Vancouver's. The region is paved with factories and is the source of a good deal of Canada's $25 billion in Chinese imports. In return, we send back a relatively paltry $6 billion in nickel, pulp, wheat and other fodder for the machine--not an unusual imbalance for western countries. Chairman Mao's Great Leap Forward five decades ago was nothing of the kind. This baby--hatched by every modern Chinese citizen's favourite historical figure, Deng Xiaoping, in 1979--is the real thing.
I'm here in Guangdong as a buyer of furniture and other consumer products for an Alberta business in which I have a stake. For the past couple of weeks I've been visiting factories and showrooms where polite Chinese girls and boys serve tea to my two Chinese assistants and myself, show us around factory floors populated by silent workers in uniform T-shirts, and give us the bloated wholesale prices on the items we like. The factories are in the three major cities of the industrial zone--Shenzhen, Dongguan and Guangzhou (Canton)--that straddle the Pearl River delta. It's an area roughly the size of B.C.'s Lower Mainland that contains five million more people than does Canada.
This conflagration of concrete, industry and humanity lies just north of Hong Kong, where my 13-hour flight from Vancouver landed. Although the British handed that colony back to the People's Republic of China nine years ago, Hong Kong's capitalistic soul has been preserved in the unfortunately acronymed "special administrative region" (S.A.R.), and is protected by a border crossing requiring a visa. Hong Kong, the free port that has done so well for itself, is the model and inspiration for the new China. Many of the owners of the factories in Guangdong keep their corporate headquarters in the more cosmopolitan, more expensive S.A.R. For Hong Kong, which produces the movies and fashions that China watches, retains the westernized cosmopolitanism that the Chinese wish to emulate. HK is Manhattan with a British sneer. The Guangdongians I have met--many of whom are not allowed to cross from Shenzhen into Hong Kong--seem at once resentful and envious. The way things are going, however, it will not be long until Guangdong and Hong Kong--connected by a 40-minute light rail transit line--are indistinguishable pieces of the same seething mess of pottage.
Shenzhen is certainly starting to resemble Hong Kong and is already bigger. Thirty years ago, it was a wee fishing "village" of about 20,000 people. Today Shenzhen's population stands at around 10 million, and most of the rice paddies and banana fields have submitted to the concrete that they are literally demolishing mountains to produce. Mao had a parable about "The Foolish Man Who Moved Mountains." The point was that the man wasn't foolish at all; that the Chinese could clear away the mountains of feudalism and imperialism and move on to the utopian tomorrow if they dug hard enough. I'm not sure this is what he had in mind.
I ate dim sum and drank Heineken beer with Victor Wan atop one of Shenzhen's two revolving restaurants. This was the older one, on the 49th floor, with ratty carpets and an antechamber decorated with faded backlit photos of an aging Deng when he came to visit. As we made our one-hour circumnavigation, we could see the city stretched out as far as the eye could see. Admittedly, "as far as the eye can see" isn't quite like back home, for the mists of the Pearl River delta and the emissions from the factories and vehicles create a virtually permanent smog that limits visibility. Combined with the 90 per cent humidity, it turns the air into a translucent and slightly suphurous soup, rendering the Miami-like climate toxic. China has 16 of the world's 20 most polluted cities, and this is one of them.
The sprawl is nonetheless impressive: the little, 25-storey, Soviet-style concrete apartments and tenements built 20 years ago; the grimy Dickensian factories of the same plan (five stories, flat roofs, rectangular windows); the shiny, 60- to 70-storey glass-and-steel monstrosities of Chinese architecture with their illuminated top stories and stylized pagoda hats; the ubiquitous neon just starting to light up for the evening; and all the under-construction buildings rising through the gaps, clothed in the bamboo scaffolding and green netting that gives the appearance of giant rectangular pods about to pop fruit.
I've been told that the term "Shenzhen speed" is used to describe rapid construction. The little armies of construction workers here are said to be able to construct one storey a day. This may be another of the superlatives one hears bandied around in the new Texan China--where everything is the biggest, fastest and richest--but the 24-hour construction gangs sure as hell put the North American slackers to shame. "Your first time here, right?" says Victor, laughing as I goggle. "Your eyes are still wide."
Victor is a 56-year-old marketer with a Guangdong-based trading company, who divides his time between here and his family in Edmonton. His current project is the promotion of Perrier water in China. It's being distributed to the higher-end hotels and western chains, such as Starbucks, but they aren't promoting Perrier as assiduously as Victor thinks they should be. Down below, in one of Shenzhen's bright new shopping centres, we visit a Starbucks--no different than the western version, albeit with only Chinese drinking the mochaccinos and using the in-store Wi-Fi. Victor good-naturedly berates the manager for not having Perrier on the menu or advertised on the counter. The manager, all Chinese smiles, assures him the matter will be corrected. Perrier is a hard sell in China, where bottled, still water is drunk in place of the non-potable tap water and costs around 2 yuan ($0.28). Fizzy stuff costing ´15 ($2.15) has yet to finesse the market, but Victor is confident it will happen.
Why not? This is not the China we newcomers from the West were brought up to imagine. Neither the bucolic poverty nor much of the Orwellian uniformity is in evidence anymore. Brands denoting European success are coveted, and you'll see more BMWs and Benzes than you will in Calgary. Of course, this being China, there are little metal shops turning out the insignia of these vehicles for application on 125-cc scooters and motorcycles.
There is still a large "peasant" class, if that's what you want to call them. There are the factory workers who make the equivalent of $175 a month plus room and board in an eight-person dormitory. There are the menials who sweep the streets at night and those who zip in and out of traffic on ancient bicycles collecting cardboard and other detritus for resale. There are the farms--in the remaining acreages between the highways and factories--where one can see coolies in lampshade hats hand-planting for wages that make the factory workers rich by comparison. There are even a few beggars on the street--though no more than one sees in a Canadian city. It's true that the per capita GDP is only about $7,000. But for a population of 1.3 billion in a country that experts have said can only support 800 million, a country which under the experimentations of the senile Mao starved tens of millions, things aren't nearly as bad as they might be.
This isn't Africa; it isn't even India. No one goes hungry in China these days, and with a GDP rising at around 10 per cent a year, there is the hope of the better life that capitalism always had as its trump card. The masses have cell phones, scooters, Internet connections and enough extra yuan to hang out in the noodle places for an evening. Most things cost a quarter of what they do in Canada. And whatever might be said about the Chinese and their historic compliance to authoritarian regimes--whether imperial Con***ian or Marxist-Leninist--these guys will do whatever it takes to make a buck.
One of the things I notice in my guided trips around factory floors is the relative youth of most workers. Some look as young as 13 and it's the minority who are older than 30. According to our driver, Ha Fa, the factory is a step along the way for those like him who leave their much poorer farming villages for the cities--a bit like the oilrigs of Alberta. Ha Fa got as far as grade six in middle school, left his village in Jiangxi, and came to Dongguan to work in a factory making knock-off watches like the "Rolex Submariner" I bought at a market stall in Shenzhen for ´90 ($13).
Over a period of about four years he saved enough money to buy a motorcycle taxi. Most of the $55 a day he made taxiing came from guiding container trucks to and from the factories, which were being built so fast that their streets had no names and were certainly not on any maps. After a few years, Ha Fa raised the $26,000 he needed to buy the nice, Chinese-made, four-cylinder Buick that carries visiting foreigners like me for about $100 a day. On this income, Ha Fa, who's in his mid-30s, keeps his wife and child in an apartment in Chang An, where your basic 400-square-foot one-bedroom with shower and Chinese crouch toilet costs $100 a month. He's also bought a house in his hometown (for around $15,000) in which his parents live, taking in lodgers to supplement the family income. But Ha Fa's bored with the cab game. He wants to sell his car and get into another business. He's not sure which, but says there are many options.
In the new China, such aspirations are now actually realistic. "To be rich is glorious," was the famous utterance of Deng, in whose honour a giant statue has been erected in Shenzhen. These days, at least in the south, one can finally aspire to riches. For despite what one might think about riches, they are surely better than the alternative.
It's hard to say where this boomingest of booms will lead. Hard to say what it bodes for places like Alberta, currently on the cusp of selling an awful lot of oil to fuel the factories, trucks and ships that make the opening of my window at the Lotus Hotel an unpleasant experience--not to mention the cars whose numbers are doubling every couple of years.
Should Canadians be doing all they can to facilitate pipelines and rail lines to supply the seemingly insatiable appetites of Cathay? Should we be upsetting our traditional American trading partners in order to hedge our bets? Or will China's boom bust, as all the booms we have known inevitably do, leaving us friendless to the south and market-less in the Orient?
"We can always fool a foreigner," is a popular Chinese aphorism. Is it inconceivable that this could apply to the current liberalism of trade between them and us? No one really knows what the inscrutable Abbott and Costello routine of a leadership--Hu the president, Wen the premier--is really up to. Might the current flirtation with the bourgeoisie be just a revised methodology on the road to the Socialist Paradise? Could they just be waiting for riches to get China up to speed in order to socialize the whole shebang? A more pragmatic variation on the Great Leap Forward?
Alternatively, might China find herself unable to get enough oil or cheap labour to sustain the momentum and implode? Or maybe her biggest export customer, the United States, will finally experience the recession that so many have been predicting for so long. Then where would Alberta and Canada be?
Best not to think about such things. After all, if China dips, there's still India, Vietnam, Malaysia, the Philippines . . . Engines revving all over Asia, and engines need oil. For the time being, I've got furniture to buy. They have an awful lot of it here--more than 100,000 factories, according to my translator Jerry--and for the time being, at least, there are real bargains to be had.
Ric Dolphin - Monday,22 May 2006
Western Standard
DONGGUAN, China--I am reporting to you this week from the biggest Chinatown you ever saw. The province of Guangdong in South China is the place whence most of Canada's Chinese restaurants and their owners trace their ancestry. These days, it's also whence most of the shoes, jeans, furniture, tools, knick-knacks and one's local Wal-Mart's inventory trace their provenance. For an Albertan who thought he knew booms, this newest and biggest of industrial revolutions is a humbling thing. Another point of interest for the Albertan: their thirst for oil is big and becoming gargantuan.
An hour down the six-lane toll highway from where I'm staying in Dongguan is the port of Yantian in Shenzhen City, debarkation point for the 10 million 40-foot-long metal containers that head out onto the South China Sea each year--a volume roughly 10 times that of Vancouver's. The region is paved with factories and is the source of a good deal of Canada's $25 billion in Chinese imports. In return, we send back a relatively paltry $6 billion in nickel, pulp, wheat and other fodder for the machine--not an unusual imbalance for western countries. Chairman Mao's Great Leap Forward five decades ago was nothing of the kind. This baby--hatched by every modern Chinese citizen's favourite historical figure, Deng Xiaoping, in 1979--is the real thing.
I'm here in Guangdong as a buyer of furniture and other consumer products for an Alberta business in which I have a stake. For the past couple of weeks I've been visiting factories and showrooms where polite Chinese girls and boys serve tea to my two Chinese assistants and myself, show us around factory floors populated by silent workers in uniform T-shirts, and give us the bloated wholesale prices on the items we like. The factories are in the three major cities of the industrial zone--Shenzhen, Dongguan and Guangzhou (Canton)--that straddle the Pearl River delta. It's an area roughly the size of B.C.'s Lower Mainland that contains five million more people than does Canada.
This conflagration of concrete, industry and humanity lies just north of Hong Kong, where my 13-hour flight from Vancouver landed. Although the British handed that colony back to the People's Republic of China nine years ago, Hong Kong's capitalistic soul has been preserved in the unfortunately acronymed "special administrative region" (S.A.R.), and is protected by a border crossing requiring a visa. Hong Kong, the free port that has done so well for itself, is the model and inspiration for the new China. Many of the owners of the factories in Guangdong keep their corporate headquarters in the more cosmopolitan, more expensive S.A.R. For Hong Kong, which produces the movies and fashions that China watches, retains the westernized cosmopolitanism that the Chinese wish to emulate. HK is Manhattan with a British sneer. The Guangdongians I have met--many of whom are not allowed to cross from Shenzhen into Hong Kong--seem at once resentful and envious. The way things are going, however, it will not be long until Guangdong and Hong Kong--connected by a 40-minute light rail transit line--are indistinguishable pieces of the same seething mess of pottage.
Shenzhen is certainly starting to resemble Hong Kong and is already bigger. Thirty years ago, it was a wee fishing "village" of about 20,000 people. Today Shenzhen's population stands at around 10 million, and most of the rice paddies and banana fields have submitted to the concrete that they are literally demolishing mountains to produce. Mao had a parable about "The Foolish Man Who Moved Mountains." The point was that the man wasn't foolish at all; that the Chinese could clear away the mountains of feudalism and imperialism and move on to the utopian tomorrow if they dug hard enough. I'm not sure this is what he had in mind.
I ate dim sum and drank Heineken beer with Victor Wan atop one of Shenzhen's two revolving restaurants. This was the older one, on the 49th floor, with ratty carpets and an antechamber decorated with faded backlit photos of an aging Deng when he came to visit. As we made our one-hour circumnavigation, we could see the city stretched out as far as the eye could see. Admittedly, "as far as the eye can see" isn't quite like back home, for the mists of the Pearl River delta and the emissions from the factories and vehicles create a virtually permanent smog that limits visibility. Combined with the 90 per cent humidity, it turns the air into a translucent and slightly suphurous soup, rendering the Miami-like climate toxic. China has 16 of the world's 20 most polluted cities, and this is one of them.
The sprawl is nonetheless impressive: the little, 25-storey, Soviet-style concrete apartments and tenements built 20 years ago; the grimy Dickensian factories of the same plan (five stories, flat roofs, rectangular windows); the shiny, 60- to 70-storey glass-and-steel monstrosities of Chinese architecture with their illuminated top stories and stylized pagoda hats; the ubiquitous neon just starting to light up for the evening; and all the under-construction buildings rising through the gaps, clothed in the bamboo scaffolding and green netting that gives the appearance of giant rectangular pods about to pop fruit.
I've been told that the term "Shenzhen speed" is used to describe rapid construction. The little armies of construction workers here are said to be able to construct one storey a day. This may be another of the superlatives one hears bandied around in the new Texan China--where everything is the biggest, fastest and richest--but the 24-hour construction gangs sure as hell put the North American slackers to shame. "Your first time here, right?" says Victor, laughing as I goggle. "Your eyes are still wide."
Victor is a 56-year-old marketer with a Guangdong-based trading company, who divides his time between here and his family in Edmonton. His current project is the promotion of Perrier water in China. It's being distributed to the higher-end hotels and western chains, such as Starbucks, but they aren't promoting Perrier as assiduously as Victor thinks they should be. Down below, in one of Shenzhen's bright new shopping centres, we visit a Starbucks--no different than the western version, albeit with only Chinese drinking the mochaccinos and using the in-store Wi-Fi. Victor good-naturedly berates the manager for not having Perrier on the menu or advertised on the counter. The manager, all Chinese smiles, assures him the matter will be corrected. Perrier is a hard sell in China, where bottled, still water is drunk in place of the non-potable tap water and costs around 2 yuan ($0.28). Fizzy stuff costing ´15 ($2.15) has yet to finesse the market, but Victor is confident it will happen.
Why not? This is not the China we newcomers from the West were brought up to imagine. Neither the bucolic poverty nor much of the Orwellian uniformity is in evidence anymore. Brands denoting European success are coveted, and you'll see more BMWs and Benzes than you will in Calgary. Of course, this being China, there are little metal shops turning out the insignia of these vehicles for application on 125-cc scooters and motorcycles.
There is still a large "peasant" class, if that's what you want to call them. There are the factory workers who make the equivalent of $175 a month plus room and board in an eight-person dormitory. There are the menials who sweep the streets at night and those who zip in and out of traffic on ancient bicycles collecting cardboard and other detritus for resale. There are the farms--in the remaining acreages between the highways and factories--where one can see coolies in lampshade hats hand-planting for wages that make the factory workers rich by comparison. There are even a few beggars on the street--though no more than one sees in a Canadian city. It's true that the per capita GDP is only about $7,000. But for a population of 1.3 billion in a country that experts have said can only support 800 million, a country which under the experimentations of the senile Mao starved tens of millions, things aren't nearly as bad as they might be.
This isn't Africa; it isn't even India. No one goes hungry in China these days, and with a GDP rising at around 10 per cent a year, there is the hope of the better life that capitalism always had as its trump card. The masses have cell phones, scooters, Internet connections and enough extra yuan to hang out in the noodle places for an evening. Most things cost a quarter of what they do in Canada. And whatever might be said about the Chinese and their historic compliance to authoritarian regimes--whether imperial Con***ian or Marxist-Leninist--these guys will do whatever it takes to make a buck.
One of the things I notice in my guided trips around factory floors is the relative youth of most workers. Some look as young as 13 and it's the minority who are older than 30. According to our driver, Ha Fa, the factory is a step along the way for those like him who leave their much poorer farming villages for the cities--a bit like the oilrigs of Alberta. Ha Fa got as far as grade six in middle school, left his village in Jiangxi, and came to Dongguan to work in a factory making knock-off watches like the "Rolex Submariner" I bought at a market stall in Shenzhen for ´90 ($13).
Over a period of about four years he saved enough money to buy a motorcycle taxi. Most of the $55 a day he made taxiing came from guiding container trucks to and from the factories, which were being built so fast that their streets had no names and were certainly not on any maps. After a few years, Ha Fa raised the $26,000 he needed to buy the nice, Chinese-made, four-cylinder Buick that carries visiting foreigners like me for about $100 a day. On this income, Ha Fa, who's in his mid-30s, keeps his wife and child in an apartment in Chang An, where your basic 400-square-foot one-bedroom with shower and Chinese crouch toilet costs $100 a month. He's also bought a house in his hometown (for around $15,000) in which his parents live, taking in lodgers to supplement the family income. But Ha Fa's bored with the cab game. He wants to sell his car and get into another business. He's not sure which, but says there are many options.
In the new China, such aspirations are now actually realistic. "To be rich is glorious," was the famous utterance of Deng, in whose honour a giant statue has been erected in Shenzhen. These days, at least in the south, one can finally aspire to riches. For despite what one might think about riches, they are surely better than the alternative.
It's hard to say where this boomingest of booms will lead. Hard to say what it bodes for places like Alberta, currently on the cusp of selling an awful lot of oil to fuel the factories, trucks and ships that make the opening of my window at the Lotus Hotel an unpleasant experience--not to mention the cars whose numbers are doubling every couple of years.
Should Canadians be doing all they can to facilitate pipelines and rail lines to supply the seemingly insatiable appetites of Cathay? Should we be upsetting our traditional American trading partners in order to hedge our bets? Or will China's boom bust, as all the booms we have known inevitably do, leaving us friendless to the south and market-less in the Orient?
"We can always fool a foreigner," is a popular Chinese aphorism. Is it inconceivable that this could apply to the current liberalism of trade between them and us? No one really knows what the inscrutable Abbott and Costello routine of a leadership--Hu the president, Wen the premier--is really up to. Might the current flirtation with the bourgeoisie be just a revised methodology on the road to the Socialist Paradise? Could they just be waiting for riches to get China up to speed in order to socialize the whole shebang? A more pragmatic variation on the Great Leap Forward?
Alternatively, might China find herself unable to get enough oil or cheap labour to sustain the momentum and implode? Or maybe her biggest export customer, the United States, will finally experience the recession that so many have been predicting for so long. Then where would Alberta and Canada be?
Best not to think about such things. After all, if China dips, there's still India, Vietnam, Malaysia, the Philippines . . . Engines revving all over Asia, and engines need oil. For the time being, I've got furniture to buy. They have an awful lot of it here--more than 100,000 factories, according to my translator Jerry--and for the time being, at least, there are real bargains to be had.
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