One of the richest cities in China with a regime that borders on anarchism

http://reason.com/archives/2011/11/15/chinas-black-market-city/singlepage

by dmix • 15 years ago

94 49 15 years ago

marquis2• 15 years ago

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.

http://en.wikipedia.org/wiki/Last_Train_Home_(film)

iamjustlooking• 15 years ago

For those that have netflix streaming http://movies.netflix.com/Movie/Last-Train-Home/70129380

dmix• 15 years ago

Note the city they move to isn't the one mentioned in the article, its http://en.wikipedia.org/wiki/Guangzhou

But I still also highly recommend this movie.

gbog5• 15 years ago

Peter Hessler's "Country Driving" is a great book which second part is on topic.

PakG1• 15 years ago

Another great book is "Factory Girls" by Leslie T. Chang.

westiseast3• 15 years ago

yes! this is a good film. It's funny, poignant and tells a really moving story about a family in a fairly common situation in China.

mrb• 15 years ago

Added to my netflix list. Thanks.

makhanko• 15 years ago

How many schools are in this city? Or anyone over 10 years old automatically gets a job at the factory? Nice!

stretchwithme4• 15 years ago

In societies that are not yet rich enough to allow them not to, children work.

kaybe2• 15 years ago

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).

burgerbrain• 15 years ago

From the wikitravel article:

"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."

So there are at least some schools there.

yaix6• 15 years ago

"... but your passport might not bear up to scrutiny..."

Not that it would really matter.

stretchwithme4• 15 years ago

"Within six years Cai was able to leverage his money and know-how into building a factory of his own, which now employs more than 100 people."

That is why wages rise. When workers can compete with their employers, workers have to be paid more.

colanderman• 15 years ago

I highly doubt Cai was a typical factory worker.

yaix6• 15 years ago

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.

tlear• 15 years ago

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.

stretchwithme4• 15 years ago

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.

namank• 15 years ago

This is very interesting.

Is this how capitalism starts? You can't call this China's Silicon Valley (for manufacturing), can you?

stupandaus• 15 years ago

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.

JVirissimo• 15 years ago

"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.

kgthegreat• 15 years ago

Not so complicated roads though. http://g.co/maps/cuc5p

westiseast3• 15 years ago

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.

wisty• 15 years ago

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).

westiseast3• 15 years ago

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 :)

yaix6• 15 years ago

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.

gbog5• 15 years ago

Respectfully disagree.

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.

yaix6• 15 years ago

We don't even disagree on this.

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.

mling• 15 years ago

The Wenzhou people are notoriously known for their merchant class. It was that area where proto-capitalism supposedly first started in China.

blahedo• 15 years ago

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).

known• 15 years ago

Unlike in America, Economic mobility and Social mobility are mutually exclusive in Chindia.

erikb6• 15 years ago

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.)

antihero• 15 years ago

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.

jsnk2• 15 years ago

Not really.

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?

All I can say for now is, give it more time.

gbog5• 15 years ago

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.

erikb6• 15 years ago

Yes, that is exactly how my experience in China is different from what I read in this article.

noarchy• 15 years ago

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.

One of the richest cities in China with a regime that borders on anarchism

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