People are not wealthy in Wenzhou. Only the top 1-5% are. And the difference is not comparable to wall-street. The poor people are really that poor that they only have less or equal to $100 a month. If all in this story is true and you read it without pink sunglasses, you can see that "Guanxi" means Mafia, not relationship. These companys seriously use slave workers or at least keep their workers in a situation that is 90% comparable to slave work. The black market loan sharks are really more like what you know from the movies then a healthy businessmodel. They hire killers and use them to keep the workers in line and make the people pay back the money with incredible monthly interest.
Where do u think all the gambling boots come from? And do u think the whores in the Karaoke bars are all students who need some extra? Who do u think is paying back these interests if there is no knife threatining them?
What you think is happening only in bad gangnster movies is actually what is going on in these Chinese cities and villages far away from regulatory organisations. Not the paradise that improves peoples wealth.
(I feel the need to add that I was in in the same province as Wenzhou for a year and had a girlfriend there who's uncle is a knife killer for the mafia there. So it's not just my blooming fantasy speaking here.)
So basically the article is describing it as some sort of anarcho-capitalist paradise, whereas in reality it's some sort of anarcho-capitalist dystopia.
No, reality is both. The problem with China is that whatever you say about it is true and false at the same time. As Pascal said earlier: "La Chine obscurcit" (China darkens).
The mafias and anarchist dystopia described by GP exists in China. In my nearly 9 years here I have received some reflections of this (random pick: I have spent a night near a children factory near Hong-Kong).
But saying that China, or even Wenzhou is an anarchist dystopia is wrong. It is similar to describing New-York with a picture from the Bronx during a "bad day".
On the opposite, saying that Wenzhou and other places are economic paradise where anyone can do whatever they want without the central government even being aware of this is false. These coastal regions have been set up as an experiment on economic opening by Deng Xiaoping, and Jiang Zemin and Hu Jintao have been in fact "chosen" by him, in order to continue in the same tracks. You can count on the current government to care about these places, and to be ready to do whatever is needed if it goes too far.
What is happening in China right now is impressive, and such a fast mutation is probably unseen in the world history at this scale.
It will have a great impact on the world. Will it be for the best or for the worst? I can't be sure, but what I know is that knowing better each other, increasing exchanges between West and East, is the best and only way we have to push a little, just a little bit, away from the worst case scenario.
China todays always reminds me of Dickens's Tale of Two Cities:
"IT WAS the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness, it was the epoch of belief, it was the epoch of incredulity, it was the season of Light, it was the season of Darkness, it was the spring of hope, it was the winter of despair, we had everything before us, we had nothing before us, we were all going direct to Heaven, we were all going direct the other way."
What you say is correct. I can't give an objective view, either. The truth is, that you can't understand China, if you don't go there for a long time (>6 months at least). For me it was really a schocking experience, because even though I saw such things in cinema before, deep in my sould I couldn't believe that this can really be the true daily life of people on this planet. If you life in a high quality, European country it is just not possible to imagine that human rights are not a natural thing to be, that police could be feared not for a speed ticket, but for putting you in jail without reason, for stealing from you, beating you, raping you and maybe even killing you. Or that quite normal people never went to any doctor, or that there house has neither electricity nor flowing water. Experiencing all that in a short time was really a shock for me and I am sure that overexagarate. I just can share my experience, how I experienced it.
Yes. I saw them all as they went for dinner. Mostly boys, aged from 13 to 20. They didn't look harassed though, they didn't look like slaves, they looked like kids who had grown faster than others, who bought their own shoes with the money they made in the factory behind.
It is not necessarily relative absence of government that is creating some negative fallout. The same sort of things you mentioned do happen all over China, even in Beijing and Shanghai where government police presence is substantially larger.
Keep in mind that westernization of China over last 30 years should be considered as a brand new phenomenon in historical context. China is still learning. Experimenting with market capitalism ensured China that it would grow at a tremendous pace, but it also resulted in a huge environmental, social and legal errors along the way. But what else would you expect from a country that is just starting to wake up from monarchical and communist despotism for several millennial?
I was preaching the same words you preach now. What changed? There is really, f*in slavery, child work, forced prostitution, gambling additiction + loan sharks and so on. I couldn't believe it until I was there. Now, that I feel connected to the people and the deep culture there, I can't say anymore "give them time". It is time for a change and that change will come. Chinese people themself have enough of it, although I think it will still be 5 or 10 years until they really start to fight.
What you describe and what shocked you is daily reality in most developing countries--poverty is ugly.
During the next 2 years will be the handover of gov't to the next president and it will be up to him where China goes: the way of Brazil and many African countries with a Gini-Index of 70 and above, or a society with more social equality like the US or even Europe.
However, I have become rather pessimistic in the past two years if there is even a chance for the next president to push China towards more equality. Because that would mean paying taxes and rule of law for the rich. And the rich will not like that.
I agree that the next government very likely can't change the inherent problems of the Chinese society. But I think the Chinese youth can. If you look at the Chinese news you see young people rebelling against the system every day and they become more. Also the government is not as strict and well organised as it was many years ago, when their tanks where fighting the student protesters. The Chinese government itself is fat, lazy and far away from the real life situation of most Chinese citizen.
I think the chances are not too low that there will be revolution kind of change. Maybe cultural, maybe not with weapons and that stuff. But the Chinese people know too much about the wealth of their rich comrades, of their big cities and of the western countries.
You ask what changed? You seriously underestimate the kind of China has gone through. China over last 30 years has seen changes that were monumental. Literally, millions and millions of people can now feed themselves with 3 meals a day. China has never been as prosperous as this before, and things are getting better.
Keep in mind that all the horrible things you mentioned are not unique phenomena historically. All those things were there in abundance long before industrialization took place in China. Therefore, these phenomena are not results of industrialization. In fact, more industrialization, more modernization, freer market, removal of notoriously bureaucratic China's communist government regulatory hurdles are what would make China prosperous.
Having been to Wenzhou just a few weeks ago, I just can say that it is a very ugly city, even by Chinese standards.
Wenzhou is not succesful because of less gov't involvement, but because there is a well connected network of overseas Wenzhounese that works as the worldwide distrubtion channels for cheep Wenzhou products.
The anarchy part is a consequence, not a cause. If you are rich in China (well in any developing country), the law does not really apply to you, you just buy it. Sucks to not being a millionaire in such a place.
China is getting its incredible growth mostly because of the relaxing of communist idealism and the increasing dose of laissez faire allowed by the central government.
Let Chinese do their own business, they will move mountains.
In the 1990s China privatized many areas of its economy and that triggered the development of private companies and businesses. The coal mining in Shanxi is an impressive yet frightening example what happens when the gov't goes from one extrem (gov't run) to the other extrem (no oversight at all). Alternatively just google for deadly coal mining accidents.
Wenzhou is interesting not because of the "anarchy", but because it has a working network of overseas Wenzhounese.
You said above: "The anarchy part is a consequence, not a cause." I suppose you meant "a consequence of economical growth", because the article and other comment said something similar to "anarchy is the cause for growth" and you seemed to bring a counter point to the discussion.
Then, maybe you can explain why and how anarchy could be a consequence of economic growth.
Economic growth makes a few rich, and those can do whatever they want, especially in a society with low ethical standards. The executive or judical powers are neutralized with money (a.k.a. corruption).
For a very good look at life in these cities for workers see Last Train Home, a superb, emotionally-tense documentary following a Chinese family from a farming community as they move to the city for work in a clothing factory (without making any statement about conditions). I found it a really accessible and poignant film to understand a little better the Chinese drive towards personal independence.
Guangzhou is also in southern China and noted as a 'city of new wealth', just a guess on my part if factory life and migration is the same (I have no insight on this whatsoever).
Over and over as I read this article I was reminded of stories of London just before and at the beginning of the Industrial Revolution, both in reality and as parodied by Terry Pratchett as Ankh-Morpork.
...the flipside of which is that in London if not A-M, the living conditions of the poor and unlucky in that time period were truly atrocious. That's not directly addressed in the article, although it's hinted at in a few paragraphs (and in the photos).
This article is great, and from living in another similar city in China (Fuzhou) I'd make a friendly reminder that it's not just Wenzhou. The media seems to have picked up on Wenzhou only, but many other cities in the south are very very similar. Underground banking, entrepreneurial spirit (if you can call it that) and flagrant breaking of laws etc. are pretty common features of any southern city from my experience. Wenzhou is just a standout example of the trend.
Is it peculiar to the south, or simply any part of China (minus Beijing) that has any kind of development? There's a very common Chinese expression - "Heaven is high, and the Emperor is far". If the demands of distant rulers aren't energetically enforced, most people don't pay attention. Heck, if you get away from Chang An street (the bit where Tiananmen square, Mao's memorial, and the Chinese national parliament are located), most of Beijing's backstreets are pretty relaxed. Unless you commit a violent crime, piss off an official, or are actively revolting or dissenting the Chinese legal system does not care.
The downside is, China seems overly reliant on two sources of revenue - land sales, and the profits of State Owned Enterprises (government-owned companies). Income and corporate taxes are something of a joke, unless the company paying them is either large, foreign, or both. Given that SOEs suck up all the capital (moral hazard - the government won't let them go bust so banks love loaning them money) and really inefficient (especially if you account for their free or cheap land, and special considerations, though on the other hand they can't break the law as much as private companies), and the damage China's housing bubble might do, they might need to think about a land tax soon (which they seem to be already doing).
My guess is that the 'Wenzhou' model is everywhere to some degree, but I only really know about where I live (Fujian).
I think there's two factors - (1) is that there haven't been many great places to invest money, so rich people throw them into houses, stock bubbles and 'alternative' non-legal investments (like lending groups). (2) is a generalisation, but Chinese people tend to be quite speculative - I guess a few years ago the average Brit would be happy with a 4.5% return on a 2year bank bond, whereas many Chinese people are more willing to take much riskier investments with possibly much higher returns.
As for ignoring laws, the whole-country model (not just Wenzhou) is that many laws are ignored until the government decides to crack down on something. When they decide to crack down, you react quickly. So, for example this month in Fuzhou it's fire safety month, and everyone is suddenly getting their fire-safety certificates in order. Next month it might be traffic, or health... who knows :)
Most likly he was lucky to get a connection with some gov't official, that's the usual way you rise so quickly in China. Without Guanxi you will never get anywhere here.
But of course he'll never tell about that part. And the Western journalist doesn't want to hear it, because he wants to advertise "less government" with his story.
It doesn't matter if he is. What matters is that employees can compete with employers. Not all employees must be ready to become employers for there to be competition for employees.
Entrepreneurs in any country are never typical, he played by local rules and succeeded at least for now good for him. I also suspect that price of failure there is significantly higher then here.
An interesting article, but the title's talk of "anarchism" is of the anarcho-capitalist variety. It has to do with the state, and says nothing about other forms of hierarchy and domination.
The problem with these laissez-faire systems is that there is no regulation. Wenzhou is known for speculating a lot in housing and real estate, which has pushed development of the Chinese property bubble.
"Regulation" causes investment strategies to be more homogeneous, which often means one large bubble instead of lots of small ones. It is far from obvious that this is a better situation to be in.
Which is also a good reason not to forbid it, because then it will be done illegally, and abused children won't be able to get help as easily. This is also stated by the children themselves, for example in the Bolivian Union of Child and Adolescent Workers (UNATSBO).
"Teach English. Schools licensed to employ foreigners to teach English include D.D. Dragon, Dr Mike's, Kid’s Castle, English First and Web International English. Always inquire about a Z-Visa and check that the school has a license from the local government. There are many unlicensed schools, some of which provide a good teaching experience but your passport might not bear up to scrutiny."
What you think is happening only in bad gangnster movies is actually what is going on in these Chinese cities and villages far away from regulatory organisations. Not the paradise that improves peoples wealth.
(I feel the need to add that I was in in the same province as Wenzhou for a year and had a girlfriend there who's uncle is a knife killer for the mafia there. So it's not just my blooming fantasy speaking here.)