Chinese prosperity comes at a price

2012-05-26 10:47

To an outsider coming to Beijing, it is clear the good life has arrived in China.

Growth rates have been in the double digits and the Olympic Games in 2008 left behind beautiful buildings and an infrastructure to serve as a reminder that China is not only coming to the party hosted by capitalism, but wanting to be the centre of attention.
 
Best of all, it is open for business.

A significant middle class is developing rapidly, with many Chinese youngsters living better lives than their parents. They have money and are not afraid to

spend it, to which the many billboards advertising top-of-the-range designer brands attest.

In the Wangfujing shopping district, massive malls and department stores show people here have money to spend, and they do so openly and proudly.

But with expansion comes risk. China’s success is built on assets like a large and relatively peaceful population. Dedication and hard work at low wages is how the rest of the world came to think about the Chinese workforce.

Another assumption about the Chinese is that they are big savers, and therefore government has vast reserves of cash.

Government is, for the most part, left to its own devices – the media is heavily regulated and therefore criticism from citizens is limited to water-cooler gossip.

The Chinese are doing brisk business in the rest of the world.

As Chinese university professor Pang Zhongying told a conference in Beijing: “China is the world’s factory, so it is like a huge joint venture.”

But the situation as it exists is untenable, and those with access to government officials in China say there are increasingly urgent discussions taking place in the upper echelons of government.

The International and Commercial Bank of China (ICBC), which bought a chunk of the South African-based Standard Bank, sends its top managers for compulsory business training at Cambridge University, England, where they spend a year learning about Western business principles.

Those in the know say they return to Beijing, where ICBC is headquartered, with new ideas not always in line with those of the government, which runs about 90% of all companies in China.

Cheap Chinese labour and imports are also fast becoming myths, say Beijing-based businesspeople.

Labour costs are rising due to pressure from workers for decent wages and, increasingly, China is outsourcing its textile factories to neighbouring countries like Myanmar, where labour is still cheap.

Businesspeople asked to speak anonymously because in China the media is expected to be a benign force to promote and support government, not to be critical. Journalists are not allowed to film or take photographs in Wangfujing following riots about Tibet in the area.

Social media platforms like Facebook and Twitter have been shut down to avoid a mass-based organisation of revolt and an outcry followed the ejection of an al-Jazeera reporter who was critical of government.

These things don’t go unnoticed.

People have found other ways to communicate. Some use private networks to access the internet and especially younger government officials feed information into the grapevine.

Life is not as simple as it was before: the population is realising the benefits of accountability, and this may turn out to be the high price of Chinese prosperity.

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