Seeds of unrest in China

May 23rd, 2013
Chartres, France
Song of the Day: Lights by Elie Goulding
Mood: Cold

Cutthroat
China is the most cutthroat country I've visited. On planes, people don't wait for one another to put their bags in the overhead bin; they simple push by each other. I saw little old ladies walk by their row on the plane. When they realize their mistake, they turn around and literally shove people until they get to where they want instead of asking people to move. In addition, no one acknowledges or thanks people that serve them. In Singapore, people queue politely on the subway. In China, people wait briefly, but then people use whatever means they can to get out or in. It's just an accepted part of life. Overall, it is a culture where people fight tooth and nail to get whatever they can.

Subway in Beijing. Unless the economy keeps growing,
people don't feel there is enough for everyone

*Important Disclaimer: I have many good friends who are Chinese and even more Chinese-American friends. They have been overwhelmingly kind, welcoming, and generous towards me. The previous paragraph describes interactions with strangers.

Disillusionment

People are striving because they want a better life for themselves and their family. However, disillusionment is starting to creep in. Millions of people have left their hometowns to move to major cities like Shanghai in search of better work. However, their dreams are not being realized after years of hard work.



View from Wild Goose Pagoda in Xi'an. People are flocking to the cities.
In China, there are 163 million migrant workers who work in a province away from their hometown.
In comparison, there are 154 million workers in the entire US workforce.

People are beginning to believe their ambitions are out of reach. For example, in Chinese culture, a young man needs an apartment and a car before he can ask a woman to marry him. Now, apartments are reaching 2,000,000 yuan and a tour guide can only make 5,000 yuan per month. One subway rider told me, "We gave up our culture for prosperity, but in reality, we got nothing."

 

Chairman Mao's Cultural Revolution decoupled
Chinese society from its deep Confucian roots

Resentment

Malcontent is magnified when people see the very wealthy prospering and living extravagant lives. In response, the central government has told officials to tone down celebrations. As long as people believe they can be rich if they work hard, society remains stable. However, if people feel they can't prosper in the current system and they are subsidizing the rich, they look for ways to change the system.

 

Old man in Yangshao. People need to believe that if they work hard,
their needs will be taken care of and they can provide for their families



Guanxi

People worry that they can't get ahead because their don't have guanxi, or curried favor and connections. In all cultures, someone's network matters, but the Chinese culture particularly revolves around guanxi. Disillusionment grows when people pursue an education and skills, but they don't get a job because someone who is less qualified, but more connected is given preference. People feel that they need a quality job to gain guanxi, but they cannot get one with guanxi. It is like the vicious cycle that employers only hire applicants with experience, but an applicant can't get experience if no one will hire him or her.

Threats

I see two major threats to Chinese stability:

1. Corruption. China is internationally ranked as corrupt as countries like Serbia, which is far more corrupt than developed countries and less corrupt than the Somalias and North Koreas of the world. If corruption is continually tolerated, the people who are not prospering will grow angry

2. Outsourcing. China is becoming decreasingly competitive for manufacturing because wages continue to rise. BCG, my former employer, predicts that in 2015 jobs will start moving back to America. Obviously a large number will still be in China, but the Chinese economy will face a lot of pressure from new low cost countries in southeast Asia as well as in-sourcing.

 

10-30% of the goods the US imports from China
could shift back to the US by 2020 Source: BCG

I sense a small, but growing sense of hopelessness on the streets and subways of major Chinese cities. People are okay as long as the economy continues to grow, but if corruption continues and people start losing their jobs, there will be great unrest in China.