Williams Vampire State

The Rise and Fall of the Chinese Economy
1. Auflage 2024
ISBN: 978-1-78885-678-2
Verlag: Birlinn
Format: EPUB
Kopierschutz: 6 - ePub Watermark

E-Book, Englisch, 368 Seiten

This is the terrifying story of China's vampire economy. State capitalism. Socialism with Chinese characteristics. A socialist market economy. There have been numerous descriptions of the Chinese economy. However, none seems to capture the predatory, at times surreal, nature of the economy of the world's most populous nation - nor the often bruising and mind-bending experience of doing business with the Middle Kingdom. Rules and agreements mean little. Markets are distorted, statistics fabricated, foreign industrial secrets and technology systematically stolen. Companies and entrepreneurs, at home and abroad, are bullied - often with the collusion of the victims themselves. The Party is in every boardroom and lab, with businesses thriving or dying at its will. All this is part of realising President Xi Jinping's ambition of China becoming the world's pre-eminent economic, technological and military power. One of the Financial Times' Best New Books on Economics in 2024

Ian Williams was foreign correspondent for Channel 4 News, based in Russia (1992-1995) and then Asia (1995-2006). He then joined NBC News as Asia Correspondent (2006-2015), when he was based in Bangkok and Beijing. As well as reporting from China over the last 25 years, he has also covered conflicts in the Balkans, the Middle East and Ukraine. He won an Emmy and BAFTA awards for his discovery and reporting on the Serb detention camps during the war in Bosnia. He is currently a doctoral student in the War Studies department at King's College, London, focusing on cyber issues.

Autoren/Hrsg.

Williams, Ian

Leseproben

CHAPTER 1

The Death Star Canteen

‘China became the world’s factory floor. Consumer goods, which were hardly ever seen in the country in 1981, are now abundant.

The Made-in-China list today grows ever longer, its products more sophisticated . . . the world’s factory is now the world’s laboratory and marketplace.’

Among the more seasoned traders, the lobby bar of the Sheraton Hotel in the southern Chinese city of Dongguan was known as the Death Star canteen on account of the dizzying number of languages and dialects to be heard there. During the Canton Fair it was packed day and night with buyers who came from every corner of the planet to visit the world’s largest trade show. Rather in the manner of the fictional space station of the movies, the bar did have a common language of sorts, its own version of ‘galactic basic’, with conversations punctuated by the universal commercial jargon of ‘lead times’, ‘MOQs’ (minimum order quantities), ‘costs’, ‘price’ and ‘schedules’. The bar was to one side of the hotel’s cavernous lobby, which was lined with artificial palm trees, tall mirrors and giant television screens looping kitschy videos – a log fire, coral reef, mountains. Large chandeliers hung from a distant ceiling. The traders huddled in excitable groups, barking loudly at each other or into mobile phones that transmitted their deal-making across multiple time zones. It was always a mystery to me why they preferred to discuss their business in the bar rather than in the privacy of their rooms, to which they would only occasionally dash to collect or deposit documents or samples. The atmosphere was always urgent, bordering on the neurotic, and when riding in the elevator with a group of traders it was wise to stand clear of the console as fingers stabbed manically at the door-close button at each stop, as if every micro-second lost was business forfeited. Perhaps it was.

An enormous fleet of minibuses stood ready to whisk the traders back and forth to the China Import and Export Fair Complex, the largest of its type in the world, consisting of forty-five hangar-like exhibition halls covering more than 1.6 million square metres.1 That is roughly equivalent to 225 Wembley football pitches and is larger than London’s Hyde Park. In the years before the Covid-19 pandemic hit travel and commerce, demand was so great that the event was split into two, one in the spring and one in the autumn, and together they regularly attracted around 400,000 buyers from more than 200 countries. Each fair lasted two weeks and was subdivided into three phases. Phase one included electronics and home appliances, lighting, vehicles and accessories, machinery, hardware tools, building materials, chemical products and energy. Phase 2 was given over to daily consumer goods, gifts, toys and home decoration, while the third and final phase included textiles and clothing, footwear, office, luggage and leisure products, medicine and health care, and food items. The changeover seemed seamless as the stands and displays of one army of factories gave way to the next. As a buyer, planning and focus were essential, as was stamina. Navigating the vast and crowded complex could be exhausting, and even veteran buyers admitted they’d only ever explored a fraction of it. If a product wasn’t on display it could be made to order, and some traders arrived armed with their own samples, marvelling at the ability of the factories to reverse engineer and then quickly reproduce the most complex of products at a fraction of the price. This truly was the workshop of the world, and it was easy to understand the buzz of the Death Star canteen as the buyers took in the enormity of it all as well as the raw and addictive power of ‘Made in China’.

The 500-room Sheraton Dongguan was not the closest of the countless hotels that serviced the Canton Fair complex, which was set on an island in the Pearl River on the outskirts of Guangzhou, the regional capital. However, it was convenient for its proximity to the factories, which were concentrated in a vast arch around the Pearl River delta, to the north of Hong Kong and Shenzhen. To those who came by car or train from the former British colony, this journey too was a revelation. The landscape was one of endless sprawling factories, tens of thousands of them, mostly identikit low, squat buildings with walls of stained white, pale blue or peach tiles and surrounded by tall fences. The blocks that housed adjoining dormitories were distinguished only by the laundry hanging from windows, the meagre possessions of the migrant workers on whose backs China’s economic miracle was built. Guangdong province, which hosts the Canton Fair, is China’s most populous and has the country’s largest transient population – more than a quarter of its 126 million people are migrants, mostly working in the factories.2 Across China, the annual return of migrants to their home provinces for Chinese New Year has been described as the largest movement of humanity on the planet, with an estimated 2 billion journeys taken during the holiday period. It is not so much a workforce as an army, a force which turned China into the world’s biggest exporter, dominating trade in everything from toys to textiles, mobile phones and other consumer electronics.

China even spawned a series of towns that traders less familiar with the Mandarin language named after their dominant product or service. There was ‘zipper and button town’ (Qiaotou in Zhejiang province), which dominated the international market in both; ‘bra town’ (Gurao in Guangdong province), which had an iron grip on global underwear; ‘jeans town’ (Xintang, also in Guangdong), which was built on denim; and ‘rubbish town’ (Guiyu, still in Guangdong), the world’s largest electronic waste dump, where mountains of e-waste were imported for recycling. By the time Xi Jinping came to power in 2012, labour costs in China were rising and many buyers of lower-end products, such as shoes and textiles, were looking at cheaper locations, such as Cambodia, Bangladesh or Indonesia. But the word among the hard-nosed buyers in the Death Star canteen was that this was easier said than done. The would-be usurpers simply couldn’t compete with the depth and sophistication of China’s supply chains. Not only could just about every imaginable product be bought or made in China, but so could all the components that made up those products, and the components that made up those components – all to a schedule and of a quality that was hard, if not impossible, for others to compete with.

Where rising costs did drive low-end manufacturers away from China, the Chinese Communist Party (CCP) did not mourn their loss, at least not officially, since it became a Party mantra that China needed to go upmarket. It was not enough to be the world’s factory, a manufacturing superpower, Xi Jinping wanted China to lead the world in innovation and the technologies of the future. In his eyes, Shenzhen, the gaudy high-rise gateway to southern China, was testament to the success of that policy. This was where China’s economic reforms began, a laboratory for paramount leader Deng Xiaoping’s ‘reform and opening’ policy, which we shall examine in more detail in the next chapter. It was China’s first Special Economic Zone, established by Deng in 1980, and initially was fenced off from the rest of the country. Back then, it was a sleepy settlement with a population of barely 30,000; at the time of writing, it is the fifth most populous city in China, home to nearly 18 million people and a forest of glistening skyscrapers, just across the border from Hong Kong.

Shenzhen led the way from low-wage manufacturing to more ‘value-added’ businesses, in the jargon of economists – or ‘high-quality growth’ as Chinese leaders called it, the city becoming a symbol of their high-tech ambition. In 2020, Chen Rugui, the city’s mayor, claimed it already hosted 70,000 tech companies and that the ‘new economy’ accounted for 60 per cent of GDP.3 The city’s Yue Hai district was the high-tech hub, boasting dozens of home-grown start-ups, nurtured with generous government support, and the mayor had a roll call of some of China’s leading tech giants. Shenzhen was the base of Tencent, a gaming and social media giant and owner of WeChat ( in Chinese), the app for everything, and DJI, the world’s biggest manufacturer of consumer drones. Huawei, China’s telecoms champion, had a sprawling campus – a city within a city – on the edge of town. Also here was BYD, now vying with Tesla as the world’s top seller of electric vehicles. Shenzhen Inovance Technology, a big robot maker, aspired to supply the area’s factories with humanoids, preparing for the day when the supply of cheap migrant labour dried up. Even the city’s highways had a tech theme – including Science and Research Road and High Tech Road. The city was presented by officials as China’s answer to Silicon Valley. It boasted of being the country’s fastest growing metropolis, a city of youth and opportunity. A popular 2022 comedy drama, (), the story of a poor twenty-year-old who started out repairing mobile phones, overcoming numerous difficulties to achieve success, played to that legend.

Opening the Communist Party congress in October 2017,...