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What Americans Don't Get about China

(This article originally appeared on this blog. It was later reprinted in People's Daily June 13, 2017 in both English and Chinese editions)

In China, almost every major city has a subway, new, clean, and graffiti-free. Even though most riders are Chinese, the speaker system makes announcements in both Mandarin and British-accented English. At each stop, passengers are reminded to “mind the gap” between the platform and train.Tesla

“Mind the gap” is good advice also for Americans who have not visited China lately. During a recent three-week, six-city trip around China, I was surprised by its widespread economic prosperity—no longer based on cheap labor or exports.  Flights between cities were full—not of foreign tourists but almost entirely of Chinese travelers. The lobby of the fanciest hotel in Shanghai—the Grand Hyatt in an 88-story skyscraper—was packed with locals eager to pay US$200 or more for a single night of luxury. The view from the high-speed train showed large-scale agribusiness, highly mechanized, and block after block of high-rise apartment buildings ready to house the farmers now leaving once-grueling jobs in the fields. What a contrast from China’s crowded countryside in the 1980s, when I covered the country’s economy for Business Week. This time, I didn’t see a single charming coolie hat or water buffalo.

Bride and groom

 Common American perceptions of China—fueled by then-candidate Donald Trump’s campaign rhetoric of unfair trade practices—are sadly out of date. More than 81 percent of China’s GDP is now fueled by its own domestic demand, not by Walmart’s made-in-China toys and sporting goods. That’s up from 64 percent ten years ago. Wages are rising in China, so that cheap-labor factories are forced to relocate to Mexico or Vietnam. Most of my husband’s relatives, poor thirty years ago, now own several condos and new cars. One just bought a second home on the tropical island of Hainan. Another invited us to a luxurious wedding in Nanjing with a huge banquet,  gorgeous bridal outfits, and live entertainment with a professional singer, bubbles, and a stage show.

  What really struck us was how well-off ordinary Chinese are now. My husband’s nephew, raised in a rural home with no running water, now owns a Nanjing company selling sound-proof booths for hearing tests. A friend’s son, once unable to gain college admission in China, now sells his own brand of cosmetics and employs two hundred people. My husband’s niece’s husband quit his job as a newspaper editor to run a winery started. He produces two thousand bottles of red wine, and the quality—as judged by our wine-happy American relatives—is up to international standards. These products are all sold only in China. With an annual growth rate of 6.7 percent and a population of 1.37 billion, who needs to think about exports? Our San Francisco son-in-law expressed envy that Chinese entrepreneurs faced such obvious odds of success.

Construction cranes dot the skyline of China’s major cities—too many to count, as the urban population booms. We rode to the top of the 128-story Shanghai Tower, the world’s second tallest building; it’s higher than any skyscraper in the United States. Highways are packed with Mercedes, BMWs, Toyotas, Fords, and—one of the most prestigious models—Buicks. Most are made in China, with joint venture partners. Shiny shopping centers are popping up everywhere, many with imported designer brands like Gucci, Guerlain, Burberry, and TUMI. In Shanghai, we visited a Tesla dealership, next door to a shop selling high-end drones. A huge two-story Apple store dwarfed the one at home, and at a Sony store we tried out the latest virtual reality headset. Even Chinese tea and pineapple cakes are packaged as high-end products. Sony VR cropped

  American misperceptions are fed by media reports about China’s flaws and lack of Western-style freedoms. But that doesn’t matter to most Chinese. The “great firewall” bothered a young Chinese cousin who formerly worked in Beijing for Oracle, but everyone else was happy with Baidu, WeChat, and Didi, the Chinese-developed versions of Google, Facebook, and Uber. In just a year since our previous visit, electronic payment by cell phone has become widespread, and Didi is so popular that it’s almost impossible to hail a taxi in Beijing. On the subways, about 90 percent of riders stared at their smart phones—some using Apple, some Samsung, some a Chinese brand you’ve never heard of. They can’t read The New York Times, but they have far more access to world news than their grandparents did.

 One gap the Chinese do mind is the growing inequality between rich and poor. As recently as 1978, more than 97 percent of Chinese lived in poverty. After decades of fast growth, that number dropped to only 7.2 percent as China has lifted more than 700 million people out of poverty. But the same free-market reforms that opened opportunities to all have also created more than 400 Chinese billionaires, and that fosters resentment. Peasants in remote regions are acutely aware of how far they lag behind.

Still, China’s president, Xi Jinping, has vowed to eradicate poverty by 2020. In 2015, he estimated there were still about 70 million Chinese below the poverty line, defined as about $440 per year.  So far, Beijing claims to have reduced the number of poor to 45 million, or 3.3 percent of the population. Compare that to the United States, which reports that 19.4 million live in “deep poverty” – about 6.1 percent of all Americans. Chinese who visit the United States are shocked at the sight of homeless people living in tents under freeways or on streets in all weather.

 Shanghai dumpling lunchMeasured by per capita GNP, China still lags far behind the United States. China’s average income was $8,133 last year, a remarkable rise from $300 in 1980 but well below America’s $57,436. But China is rapidly urbanizing, with mind-boggling government investment in new airports, roads, and high-speed railroads, which now total 12,500 miles. Even at this year’s slower projected rate of 6.5 percent, China is growing three times as fast as the U.S., so the gap is narrowing.  

 During a two-hour drive from Shanghai to a charming river town, I quizzed our cab driver about living standards. Driver Wu’s father was a farmer; he has driven a taxi for twenty-three years, often working more than twelve hours a day; his son now pilots planes for Shanghai Airlines. In three generations, Wu’s story traces the trajectory of the modern Chinese family. But even his aging father in the countryside has no financial worries; he gets a pension and health insurance from the government and monthly rent from another peasant who now farms his land.

The gap between Americans’ perception of China and the Chinese perception of themselves doesn’t bother most people in China. They have the opportunity to make life better for themselves and their children. As their incomes rise, generation by generation, they are closing what was once a yawning gap between living standards in the United States and China. That’s a gap worth minding. 

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