An Overdue Letter from China

Cafaro

Photo from Jacob Cafaro

By Jacob Cafaro

Between our discussions of live-rat-consumption and Jeremy Lin, he asked what people in the United States thought of China. I was sitting on a bus bound for Zhang Jia Jie National Park next to a Chinese soldier named Peng Jun. He was in plainclothes and on leave for Tomb Sweeping Day. He explained that the Chinese know more about America than Americans do about China. Glancing up at the bus televisions, I saw Mark Wahlberg in Shooter sipping product placed beers and being a general badass. Peng Jun is right. The America of Hollywood thrills and name brand oligopolies is ascendant in the People’s Republic.

Americans, or at least me and my friends, are accustomed to the vaguely eerie “Welcome to Walmart” greeting, absurdly bright fluorescents at 7-11, and the savory cardboard flavor of Pizza Hut crust. In the age of artisanal hipsterdom, it’s easy to poke fun at these mass consumed goods. But they give the middle class its identity. Americans dream of consumption and mass-produced goods help us live that dream.

These goods are unavailable for the 90 million Chinese people who are designated as urban poor. Urban poor live on U.S. $0.41 to US $0.82 per person per day. In China, it’s growing harder each day to remember these impoverished masses—a group more numerous than Germany’s total population. This unawareness spreads as people relax into a story of Chinese ascendancy that is diverging from an ugly truth.

It’s easy to look back and see only a glittering arc towards prosperity. Since the beginning of China’s reform in the 1980s, the private sector has grown by an average of 20 percent per year. By 2004, private business delivered 60 percent of the gross national product. After the Cultural Revolution, when the national consensus demanded change, Deng Xiaoping led China to free its marketplaces. But the Communist Party remained the only party allowed. As housing towers rose from the earth and color televisions illuminated the villages, the honeymoon of capitalism enthralled China. The honeymoon is over.

Most of the problems with China’s economy center on income inequality. Apartments advertise unaffordable prices and then sit empty. Commercial shopping centers stock luxury brands and the working class comes to window shop but not buy. As China grows in wealth, it is also grows in inequality.

Thomas Piketty has discovered in his work, Capital in the 21st Century, that marketplaces across the world will have a higher return on capital than on output and wages. People who already have money will continue to get money faster than those who are getting it for the first time. This conclusion says that April showers bring May showers and May showers bring June showers—no picnic weather to be found.

Two other economists, Abhijit V. Banerjee and Esther Duflo’s, wrote in 2011’s Poor Economics about how poor people are likely to have even lower incomes in the future. They call this the “poverty trap”. They’re different from Piketty not only because of their optimism, but also because they offer a small-scale prescription. They suggest NGO projects, mainly in micro-finance, healthcare, and education. All three experts are working to understand the new global poverty.

This is a good time to confess that I’m not an economist. But I know that a uniquely shared perspective always accompanies an economic situation. Here in China, I’ve noticed an attitude I’ll call fast food consciousness. People are paying less attention to the quality of a product and are more interested in the idea that it represents.

Take the world famous company from Seattle for example. Just inside my local Starbucks is a tall shelf full of branded mugs, hats, and knick-knacks. On top of this, I’ve never overheard anyone order regular coffee. People ask for the cream-sweetened drinks with light coffee flavor. In between sips from my plain “American Style” coffee, I have often wondered how many people there really like coffee. Starbucks attracts many customers just because it symbolizes wealth and luxury. This preference for image over substance is at the root of the new global poverty.

While I was on the bus with Peng Jun, I asked if he had eaten a Big Mac Burger. He claimed he had, but that he didn’t like it much. I wasn’t sure whether to believe him. Peng Jun laughed and remarked that when children from his rural hometown go to the city, they think that McDonalds is Chinese food.

The Chinese chain food marketplace is worth 90.5 billion dollars in total. The Yum brand, which manages KFC and Pizza Hut among others, had 6,715 restaurants in 2014. Over 50% of KFC’s global profits come from China. And that’s only counting western brands. Domestic competitors are copying the formula. In 2013 Yum only made up 5% of the market share. That means there are likely over a hundred thousand fast food restaurants in China. Ambitious businessmen and women have taken the western model of mass-produced food and made it digestible for Chinese society. A new image of wealth and success is coming to inspire the lives of 1.3 billion people. In the center of the frame is a fast food meal.

The bus stopped to pick up a middle-aged couple that had filled garbage bags with their belongings. They had been walking along the highway and it was raining. I noticed a woman across the aisle drinking a Starbucks beverage from the bus station. When inequality is this clear I can feel a whistling energy inside of me—like getting caught in the motion of subway crowds and then abruptly remembering, I need to take Line 2 not Line 4.

As our bus passed into a storm, Peng Jun and I finally fell silent—only the sound of the raindrops beating on the windows was heard. Peng Jun piped up one last time, “So, what do people in America really think about China?”

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2 comments

  1. Perhaps we only know what China wants us to know about the Chinese people. Do you think the lack of information that flows in and out of China has an effect on our knowledge of the people and the country? I just finished reading Without You, There is No Us: My time with the sons of North Korea’s elite. Based on the writer’s experience teaching well-to-do young men in Korea, it seems clear that North Koreans know very little about us and we know only slightly more about them. Without open communication it is difficult to truly know about a group of people other than what movies and fast food restaurants tell us about them.

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  2. “Most of the problems with China’s economy center on income inequality.”

    I think I would disagree with this assessment. The problems don’t **center** on inequality, inequality is always but a symptom of a greater problem with the economy, almost ALWAYS related to some kind of government intervention. The expansion of the money supply and the re-distributions of wealth it entails, and price inflation it creates, for example, is a great cause for disparity in the States. Not sure how that is in China, but their problems can’t really be pinned on private enterprise, which has brought whatever small amount of wealth that China actually has today.

    “Thomas Piketty has discovered in his work, Capital in the 21st Century…”

    I encourage you to look into the critiques of this book and Piketty’s thesis by people such Tom Woods, Gene Epstein, etc. I’m no economist either, but if I remember right, Piketty smuggles in some sort of unjustified assumption to get his book to say what he wants it to say.

    Regarding fast food, it is a bit strange to read of your concern for China’s poor, yet also a sort of disdain for cheap food. Don’t get me wrong, I wish every citizen of China could eat lobster, but that just can’t happen (yet at least). I’d much rather the impoverished masses of China have access to cheap fast food than no food at all (or food that’s not typically meant to be food, like rats or other street animals. Big Mac doesn’t look so bad in comparison…).

    China needs to stop doing crazy shit, such as building giant ghost-cities. Under genuine capitalism, this would NEVER EVER take place. A waste of resources that massive simply wouldn’t occur. I imagine China’s woes stem from policies like this, the creation of massive bubbles in the economy which skew the price system and cause harmful dislocations. Certain wealthy state-connected actors will be insulated from the damage, while the average person is screwed. Works the same just about everywhere.

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