The Party Forever by Rowan Callick

Author:Rowan Callick
Language: eng
Format: epub
ISBN: 9781137365521
Publisher: St. Martin's Press
Published: 2013-03-14T16:00:00+00:00

CHAPTER 9

DOING BUSINESS

Every child’s dream as she or he counts down the sleeps to Christmas is to find the place where toys come from. It’s easy enough to do.

First, fly to China’s great southern center of Guangzhou (formerly Canton), then take a brief commuter flight east. You arrive at a small airport, then drive through a landscape pleasantly warm but so polluted that sunlight rarely seems to penetrate. You pass ten-story buildings, at the base of which are convenience stores, beauty parlors, mechanics’ workshops. A massive poster urges people to Learn English the Easy Way. Another strongly suggests a diversion to Budweiser Amusement City. And another, proudly protectionist, shouts: Source from China!

You drive past a large training center run by the cosmetics firm Amway. In the middle distance are hills pockmarked with quarries. Banana plantations tended by people in conical hats are bisected by a golf driving range.

This is Shantou, a pulsating manufacturing center of 4 million people about 300 kilometers east of Hong Kong, on the coast in Guangdong province. It has been home to busy merchants for far longer than Hong Kong. The East India Company had a trading post on an island in the harbor 250 years ago. In 1860 it became a treaty port known as Swatow.

Today, it is well known for two reasons: as the birthplace of the wealthiest man in Asia, Li Ka-shing (known as “Superman” in Hong Kong, where he has lived since arriving there as a penniless 13-year-old in 1941), and as Toytown. Like the rest of China, Guangdong is of course changing quickly, and the provincial government is intent on guiding the province upmarket, toward a high-tech, service-based future, while factories shift inland to chase cheap labor.

In this chapter we shall look at what China has become best known for—its role as the world’s factory, as the engine room of global economic growth—at the people who have made this happen, and at their plans to build a new economy based on domestic consumption rather than exports. We shall meet some of those who have been left behind. And we shall see how the party is enlisting the country’s new entrepreneurs through the vast state-owned corporations that still dominate most strategic sectors of the economy. China’s economic world is brimful of such apparent contradictions.

Yasheng Huang, professor of political economy and international management at Sloan School of Management, Massachusetts Institute of Technology, explains in his book Capitalism with Chinese Characteristics how the reforms of the 1980s advanced the private sector, especially in rural China. And how since then, economic changes have advanced the state sector in the cities. The wealth of Shanghai, Professor Huang points out, which so impresses visitors with its apparent dynamism and openness, comes chiefly from state-owned enterprises, foreign corporations and resources sourced from other parts of China.

China supplies about 70 percent of the world’s toys. Guangdong’s toy exports account for about 75 percent of all such exports and earn the province US$15 billion every year. Almost half of these

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