In recent years, Beijing has made the eradication of poverty one of its primary goals, giving rise to significant reforms to support citizens living on society’s margins. At the same time, the government is confronting several pressing economic and demographic challenges. These include a rapidly ageing society with a growing need to protect the elderly and those in ill-health. It is also seeking to replace the gap in social security once provided by state-owned enterprises that have been in decline since being broken up in the post-1980s reform era.

By 2025, China’s welfare spending could rise to over a third of gross domestic product. The Ministry of Human Resources and Social Security has committed to expanding its programme of welfare expansion across childcare, education, employment, medical services, elderly care, housing and social assistance, but serious obstacles remain. Here is a snapshot of the current policy paths being undertaken.

Urban migration

China’s “hukou” system requires residents to register in a particular area. For sixty years, the policy has been a key determinant of access to public services and protection from the state. In cities, where competition for resources is fierce, an urban hukou is needed for everything from health insurance and school and university places, to certain jobs and even to buy property.

First introduced in 1958 in the early years of the Communist regime, the hukou (literally translated as “household individual”) was envisaged as a modern way to track the population and control internal migration across a vast country. In 1985, it was extended into physical form through the creation of ID cards.

Today, certain privileges are reserved for “real” city residents, effectively meaning those from elsewhere, particularly migrant populations, are often treated as second-class citizens. This has meant that hukou reform has become central to achieving China’s current 14th five-year plan to alleviate poverty and make China a near-majority middle-income country.

More than half of the Chinese population now live in cities, but only 35% of city dwellers have an urban hukou. It is estimated 250 million migrant workers lack access to social payments, whether for children’s education or medical assistance.

“A lot of the problem with migrant workers that go from the rural areas into the cities is that they are not incorporated into the welfare system,” says Professor Jane Duckett, Edward Caird Chair of Politics at the University of Glasgow, who specialises in Chinese politics and social policy. “They are not entitled to those kinds of benefits. Although the trend has been to push employers to give better contracts to those people and include them on that basis.”

In recent years, hukou policy reform has shifted in a direction that makes it easier for migrant workers to gain access to welfare. In 2014, the Chinese government created its “new urbanisation plan,” which promised to assist over 100 million residents in the process of swapping their documentation, for example.

But some provinces are reforming faster than others. According to Professor Duckett: “There are some parts of the country that are more dependent on migrant labour and therefore are doing more to provide for this group. Guangdong and Zhejiang [in the south east] tend to provide more for migrants whereas other areas such as the ‘rust belt’ in the northeast do not.”

Meanwhile, many rural areas have been locked out of China’s “economic miracle”, and lifting rural welfare has become a hot button issue for President Xi Jinping. Since 2010, “barefoot social workers”, a flagship programme to assist remote communities, have been deployed to rural areas, with over 600,000 in the field as of the start of 2019. However, the system falls short, with Chinese social policy experts saying many social workers lack proper training, citing inefficient local enforcement of national strategies.

“The focus of the child support system has shifted from helping the neediest children to striving for universal welfare,” Zhang Rongli, a professor at China Women’s University and a renowned expert on children’s rights and welfare, told Sixth Tone last year.

1-2-3 child policy

In May 2021, couples in China were allowed to have three children following a sharp decline in birth rates stoking fears around the economic implications of an ageing population and dwindling numbers of those of working age. A two-child limit was in place from 2016, replacing the decades-old controversial one-child cap on family planning that applied to all but the wealthiest. “Like in most countries, declining working populations [in China] are finding it increasingly challenging to support growing retired groups,” Mark Tanner, managing director of The China Skinny, explains. “Chinese have traditionally supported their parents in their old age. But that role was once shared amongst many children, so the burden is far greater on the only-child generation. On top of that, the average Chinese retirement age is 54, and people are living longer — jumping from 44 in 1960 to 77 today. Together, [these factors] are nothing short of some of the most extreme imbalances to support elderly anywhere.”

However, removing the restrictions on the number of children a family can have has failed to lead to an upsurge in births, as would-be parents say they are deterred by the rising cost of raising children in cities. Experts suggest that recent policy moves such as the ban on after-school tutoring and exam cramming schools and controlling house prices will have more of an effect on the birthrate than the three-child policy.

There is speculation that China could soon remove all birth restrictions entirely. But such a move could lead to a cascade of other problems and exacerbate the wealth disparity between rural and city residents, as women living in richer cities delay or avoid having children while those in the country follow tradition and have larger families. It could also worsen discrimination in the job market. “Social pressure in China is significant. But many people do not have the money, time or energy to have more children,” says Xizi Luo, a PhD student in the Department of Economic History at LSE. “The labour market also still has a strong underlying discrimination against pregnant women. Households need to balance the potential income reduction and cost increase when they make the decision [to have a child].”

Unemployment

The world’s largest means-tested form of basic income, known as dibao (short for “minimum livelihood guarantee”) was created in China in the 1990s, and provides unconditional cash transfers and benefits to recipients whose income falls under a threshold set by local governments.

The number of dibao recipients has been shrinking since 2011 in both urban and rural areas, partly because of local government funding constraints and resistance from the public who believe welfare decreases incentives to work, according to analysts.

Prior to the reform of giant state-owned enterprises that culminated in the 90s, many Chinese workers enjoyed job security and full cradle-to-grave benefits under what has been nicknamed the “iron rice bowl” system. It was not uncommon for on-site medical care and childcare to be included. But since the reforms, China has failed to provide a strong unemployment insurance programme.

“There had been a lot of cooperative schemes in the 60s and 70s, but they collapsed in the early 80s and weren’t replaced until 20 years later. It hasn’t been a priority,” Professor Duckett says. “Officially, 90 to 93% of the population have some form of health insurance but one of the problems is that as an employee or a social official then your scheme is much more basic. What [the Chinese government] has done in the past decade is to merge the urban-rural scheme to help with mobility; they have been trying to break down the barriers in those two systems.”

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On 1 July 2021, China’s ruling Communist Party celebrated the 100th anniversary of its founding in 1921 in Shanghai’s French Concession. The official festivities included a massive show titled ‘Great Journey’ held at Beijing’s Olympic Stadium. The performance was attended by the Party’s top brass – including Chinese President Xi Jinping – and featured hundreds of dancers re-enacting some of the key moments in the Party’s history.

But the centennial celebrations were not confined to China’s political circles. The Party’s media apparatus has been in overdrive to remind absolutely every one of the anniversary’s significance. The event has even sparked a thriving market for CCP themed souvenirs and decorations.

For China analysts, the Chinese government’s commemoration of past glory offers an opportunity not only to look back at the turbulent – and often tragic – history of a Party which has been in power for 72 years of its existence but also to wonder how the future might look. In this update, Torsten Weller outlines four important trends and developments that may shape Chinese politics and policies in the coming decade.

Background

Communists steeped in Marx’s concept of ‘historic materialism’ have traditionally been close followers of socio-economic macro trends and their political significance. It is therefore only fitting that we outline some key developments from the last decade and look at how they could shape China and its foreign relations in the near future.

We will look at four major trends in the political, economic, business and social realms. On the political side, Beijing’s growing reach into all walks of life and the improvement of China’s state capacity is definitively the most important development of the last decade. Economically, the opening up of China’s financial markets and the increasing importance of foreign capital in local debt markets is a second major development that is already shaping policy decisions worldwide. For businesses, the emergence of a truly innovative and competitive Chinese tech sector, and its expanding role abroad, is another important trend. Finally, the fragmentation and radicalisation of Chinese nationalism poses some challenges, not just for its foreign targets, but increasingly for China’s leaders as well.

Trend 1: Increased state capacity

In a vast country like China, getting central orders implemented locally has always been a challenge. Under Mao, most policies were carried out in a ‘campaign style’ whereby local Party members would mobilise officials and the broader population to put policy into practice. While there are still remnants of this approach – take, for example, the widespread tree planting to fight desertification – most of today’s policies follow a much more institutionalised approach. As a result, government effectiveness has improved vastly. According to the World Bank’s Government Effectiveness Index, China’s score has improved continuously over the last ten years, jumping from less than 0.1 in 2010 to over 0.5 in 2019.

Most of the reform initiatives that have enhanced China’s state capacity preceded Xi, but it was under his leadership that they gained steam. Whether it was the landmark judicial reform starting in 2013 or the passing of China’s first Civil Code in 2020, most laws passed over the last decade had been debated for years, rarely moving beyond the initial legislative stages. That so many of these reforms were finally brought to a conclusion could well be one of Xi’s greatest achievements.

China’s score on the World Bank’s Government Effectiveness Index

One of the major projects of this trend is the development of a nationwide Social Credit System (SCS). Often decried as an Orwellian surveillance tool, the SCS’s main function is a standardisation and harmonisation of China’s fragmented and inconsistent legal system. While far from complete, the improved exchange of information across departmental and even regional borders has made it much easier for China’s central agencies to monitor both citizens and businesses.

Alongside this reform has come the consolidation of many supervisory agencies. The major institutional reorganisation in 2018, and the merger of important regulatory bodies, like the one combining three different anti-monopoly bureaus into the single State Administration for Market Regulation (SAMR), streamlined the central government’s decision-making process and thus enhanced effectiveness.

The first results of the reform were seen in the financial sector, where the China Banking and Insurance Regulatory Commission (CBIRC) – itself the successor of two previously independent regulators – managed to clean up China’s vast shadow banking sector.

Last year, the CBIRC’s effectiveness spilled over into the tech sector, with SAMR getting more active, too. The ultimate clarion call came when Alibaba, China’s largest online platform company, had to cancel the IPO of its fintech subsidiary Ant Group only days from its planned listing. Since then, a flurry of new regulations and investigations has engulfed China’s tech sector, with ride-hailing giant DiDi Chuxing being just the latest – but surely not the last – target of central administrators.

Trend 2: The growing importance of foreign capital

The second trend which will become an important factor in Chinese policymaking in the coming decade is the country’s increasing reliance on foreign capital. While foreign direct investment (FDI) has long played a crucial role in China’s economy and rapid modernisation, the recent opening-up of the country’s financial sector has triggered a veritable rush into China’s debt market by foreign investors.

FDI has seen steady growth over the last decade but has received a further boost from recent market liberalisation, for example in the automotive sector, and the lack of similar opportunities in western economies. In 2019, FDI into China surpassed – for the first time – the threshold of £100 billion and jumped yet again by 15.4%, reaching £117.8 billion in net inflows last year, according to data from UNCTAD.

Foreign direct investment flows into China 2000-2020 in £ billions (source: UNCTAD)

China’s attractiveness for foreign businesses is hardly surprising, but the growing influx of foreign capital into China’s debt market is an interesting development, given the country’s opaque financial system and the debt-ridden public finances. Between January 2020 and March 2021 alone, the value of Chinese onshore bonds owned by foreign entities surged by over 61% from £253 billion to over £408 billion. Since 2014, the amount increased more than eightfold according to data from China’s central bank.

However, the overall share of foreign investment remains tiny compared to debt owned by domestic institutions. By the end of 2020, foreign entities held only around 3% of China’s total onshore bond volume, according to calculations by Bloomberg. But the growing presence of foreign lenders nonetheless increases pressure on both debtors and regulators to handle debt in a far more consequential way than previously.

While the additional incentive for better market oversight is welcomed by Chinese reformers, the growing influx of foreign capital also brings new risks. Chinese regulators have already warned about ‘hot money’ and the potential dangers which could be caused by a sudden reversal of capital flows.

RMB onshore bonds owned by foreign entities (in £ billions); Source: People’s Bank of China

More importantly, Chinese authorities will also have to find a sustainable solution for how to deal with insolvent debtors. Recent bond defaults – including by a rising number of SOEs – indicates a growing reluctance for Chinese authorities to bail out struggling companies. Nonetheless, it is uncertain whether China’s financial system could withstand a major default by a large debtor like real-estate developer Evergrande.

Trend 3: Chinese companies abroad

A third trend is the growing global presence of Chinese private companies – both as investors and competitors. During the last decade, Chinese outbound foreign direct investment (OFDI) flows nearly doubled. After reaching an initial peak in 2016 at over £140 billion, Chinese investments abroad somewhat decreased to £97.4 billion last year but still remained above the level of 2014.

Total Chinese outbound FDI from 2010 to 2020 in £ billions (source: MOFCOM, Statista)

Yet more important than quantity is the changing quality of Chinese investment. Ten years ago, nearly all Chinese OFDI was carried out by State-Owned Enterprises (SOEs). For example, in 2011, only 7% of Chinese investment in the EU came from private companies. By 2020, the situation was almost completely the opposite. Only 18% of Chinese capital invested in the EU and UK came from SOEs whereas private investors accounted for 82%, according to research by Merics and Rhodium Group.

Gone are the days when Chinese firms only invested in oil fields in Venezuela or European football clubs. Today, Chinese investment focuses more on higher value-added activities – like a new plant for EV batteries in Sunderland together with Nissan or offshore wind farms.

Share of private FDI in the UK and the EU from 2011 to 2020; Source: Merics, Rhodium Group

Chinese outbound investment thus more and more resembles that from other advanced economies like the US, Germany or Japan. What’s more, China’s own government support for Industry 4.0 technologies could mean that Chinese firms will soon become global leaders in certain key technologies such as battery storage capacities, 5G and other advanced manufacturing and technology sectors.

Keeping Chinese investment and high-tech firms out will therefore become a less viable strategy and could even be detrimental to other countries’ own industrial development.

Trend 4: China’s changing nationalism

The last trend concerns the changing nature of China’s domestic nationalistic sentiment. In particular, extreme nationalists – who are mostly active on social media platforms such as Weibo and WeChat – are turning their ire and incriminations increasingly towards domestic targets, sowing division and risking a similar destructive polarisation of Chinese society as we have witnessed in some western democracies of late – most notably the US.

Although nationalist outbursts are not a new phenomenon in China’s public sphere, they were usually directed at foreign governments and – by extension – businesses from these countries. Most prominently, the dispute about the Diaoyu Islands (Japan) or the stationing of US THAAD Missiles (South Korea) all have in common that the targets of Chinese online vitriol were non-Chinese entities. Usually, they ebbed once the official discourse changed. But recent attacks by high-profile netizens suggest that this link has been broken.

In a recent interview with Guancha, a Chinese news website, the Chinese Ambassador to France, Lu Shaye, explained that the support and approval from Chinese netizens for aggressive public statements is more important than diplomatic etiquette.

Although this attitude is not confined to Chinese diplomats, the permissive and even encouraging approach towards nationalist online influencers has created an environment where online attacks have shifted more and more from foreign governments and companies towards domestic individuals who – in the eyes of China’s online warriors – are considered as not patriotic enough.

That this trend also affects trade and investment became clear when nationalists called for a halt to plans by Taiwanese chipmaker TSMC to invest an additional USD2.87 billion (~£2.1 billion) in its Nanjing plant, arguing that it would harm the mainland’s own semiconductor industry.

The CBBC view

The four trends outlined in this update will play an important role in Chinese policymaking over the next decade and maybe even beyond. Some of them support a more optimistic assessment of China’s political trajectory than the one which is commonly presented in western media. In particular, the improved regulatory capacity of the Chinese central government should generally be welcomed as it reduces legal uncertainty, even though the security-focused approach by Chinese authorities towards many issues might suggest the opposite. As the case of the new Personal Information Protection Law shows, national security-oriented legislation can lead to better legal protection for all affected parties.

The increasing interconnectedness of Chinese investment and financial markets with the rest of the world also points towards a more positive trade relationship in the coming years. Despite frequent talk about decoupling, commercial links between China and the rest of the world are deepening. This means that it is not only western governments who are forced to adapt to China’s growing role; Chinese policymakers, too, can no longer ignore global challenges and regulatory environments. China’s role in global talks on climate change and its support for the planned 15% global minimum tax on corporate profits indicates that cooperation with China on these issues will have to deepen as well.

The final trend of the turning inward of Chinese online nationalism highlights that Chinese society is changing, too; and the public statement of a leading Chinese diplomat that soothing public anger expressed online is more important than the guidance of a supposedly ‘enlightened’ technocratic Party leadership suggests that the ‘democratic’ element in Chinese politics has become far stronger than many analysts are willing to admit.

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At a meeting of the Politburo of the CPC Central Committee on Monday, 31 May 2020, it was announced that China will now allow couples to have a third child. This follows an earlier move in 2016 that allowed couples to have two children. Xinhua reported that the new policy aims to “help improve China’s population structure, actively respond to the ageing population, and preserve the country’s human resource advantages…”

The policy change comes soon after the results of the 2020 census, released on 11 May 2021, showed China’s population growing at the slowest rate in decades and a fertility rate that had dropped to just 1.3 children per woman, far below the replacement rate of 2.1 needed for stable population growth. China is also ageing rapidly, with the number of people aged 65 and over increasing by 4.6% from the 2010 census to 13.5% in 2020.

The introduction of the “three-child policy” marks a remarkably quick response to these challenges, however, it remains to be seen whether couples in China will decide to have bigger families. As the census shows, the previous relaxation of the one-child policy in 2016 failed to increase the country’s declining birthrate. After decades of family planning policies, there has been a cultural shift towards acceptance of having fewer children, and many young people are put off by the prohibitive costs of raising a child in urban China.

It will be some time before the impact of this new policy on brands and companies operating in China becomes apparent. However, if it does take effect, in the short to medium term, companies in fields such as pre and post-natal care, children’s toys and products, and early childhood education could see a jump in demand. In the announcement on 31 May, the Party also pledged to reduce family spending on education and improve support for women in the workplace pre and post-birth, the latter of which companies will need to be aware of if it leads to concrete policy changes.

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China’s rapid economic development and digitalisation have brought huge changes to the lives of the country’s women. From new work and study prospects to the ability to instantly buy a Gucci handbag online, the unique challenges, opportunities and societal pressures for China’s 685 million women are shifting. A new mini-documentary “Women in China: Social pressures, ‘she-economy,’ and media representation,” created by Dao Insights, delves into some of these issues.

China leads the world with its female entrepreneur power

Chinese women are showing that, as Mao once famously said, they do indeed “hold up half the sky.” Millions of inspiring female entrepreneurs have transformed society by smashing through glass ceilings in their respective industries. Among them are China’s biggest live streamer, Viya,  who has made her way to the top of a billion-dollar industry, and record-breaking YouTuber Li Ziqi, who has shown off rural China’s charm to the world. Meanwhile, TikTok lovers have Zhang Nan to thank as the CEO of one of the world’s most valuable unicorns and TikTok parent company, ByteDance.

Women in China are rushing ahead when it comes to entrepreneurship; China is home to an astonishing two-thirds of the world’s top female billionaires. However, women are still lagging behind in the political sphere, especially at the most senior levels of China’s political system. Just one woman holds a position in the 25-person Politburo, the Party’s top decision-making body.

A still from one of popular YouTuber Li Ziqi’s videos

Women are still expected to be at the helm of the family

While women’s rights have taken a turn for the better, traditional gender roles do still influence today’s society, especially when it comes to family and marriage. The term ‘leftover women,’ which refers to women in their late 20s who are still single, is going out of fashion, but the idea that women must be married by a certain age still holds strong. ‘Marriage pushing’ is common, and young women face considerable pressure from their parents and relatives to get married. Marriage markets, where parents tout their children armed with a CV-like advert containing their educational status, work, income, and height, remain common.

Rising house prices, education costs and career motivations mean that it is becoming more and more unappealing for many Chinese women to have children. Paired with China’s falling birth rate, this has led to concerns about China’s declining population. Since the end of the one-child policy, family planning policies are actively encouraging women to have children, and they are expected to take on the majority of the cleaning, cooking and caring on top of their professional workloads.

Getting women’s rights #trending: Social media, TV shows, campaigns, and more

As in many countries around the world, things are changing and women are taking a stand against gender inequality. China’s 989 million internet users have stirred up noise about women’s rights online. The discussion has been amplified in the public sphere over the last few years through media, trends, marketing campaigns and news stories.

TV shows and films have also played a major role in igniting discussion online. This year, the movies My Sister (我的姐姐) and Hi, Mom (你好, 李焕英) have inspired conversations about women’s roles within the family and the continuing gender preference for men. With an unusually female-focused plot and a (wonder) woman director, Hi, Mom was hugely successful at the Chinese box office and surpassed Wonder Woman to become the top-grossing film of all time with a female director.

Chinese women take hold with a new wave of consumption in the ‘she-economy’

Today, International Women’s Day is also known as ‘Queen’s Day’ as brands encourage women to treat themselves like queens for a day. However, there have also been some more meaningful campaigns as brands seek to resonate with their female audience in China. One of the most talked-about campaigns this year was Neiwai’s ‘no body is nobody,’ which provoked discussion around beauty standards by featuring women of different body shapes, ages and personalities.

Brands like Neiwai are tapping into the ‘she-economy’

In the run-up to International Women’s Day, e-commerce platform Tmall released a report highlighting how women have promoted a new wave of consumption. Indeed, 80% of Tmall’s top new brands in 2020 were focused on female consumer’s needs. This consumption trend is increasingly being referred to as the ‘she-economy’.

Chinese women have also started to display their increased confidence through their personal style. For example, in recent years, the minimalistic ‘sexually frigid’ style (think shapeless and simple clothes) has become popular among women who want to express their individuality.

What does the future hold for women in China?

From birth to the workplace, from the political sphere to the home, women in China still face significant challenges in terms of gender equality. However, sparks of hope abound: women have access to more job opportunities, are graduating from university in greater numbers than ever before, and women’s issues are becoming more widely discussed across society. For companies keen to advance their cause, success awaits.

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This column usually looks at business books, case studies, histories, or economic treatises, but this time we’re focused on fiction. Te-Ping Chen is a Chinese-American writer and journalist who has been based in both Hong Kong and Beijing with the Wall Street Journal. But she has another life as a short story writer and has been published in an impressive array of journals including The New Yorker and Granta. ‘Land of Big Numbers’ (Scribner) is Chen’s first published collection, consisting of ten short stories, all of which engage with contemporary China in one way or another. All of her stories shed light and bring voices to a variety of Chinese characters we may have briefly read about or interacted with but have never really known. Here are the call centre worker, the subway commuter, the migrant, the computer gamer, the nail house dweller, the stock market day trader, the back yard engineer.

In ‘Land of Big Numbers,’ you’ve chosen to use fiction to tell contemporary stories. Anyone reading China stories in the newspapers in the last decade will recognise many of your initial premises as ‘ripped from the headlines,’ but they invariably head off in other directions, taking unexpected turns.  How do you feel your fiction writing adds to your journalism?

Working as a reporter, especially when writing short dispatches, it can sometimes feel like you’re capturing the architecture of stories, but not always what’s inside them. As a foreign correspondent in Beijing, the headlines I covered were mostly driven by high-level news: foreign relations, state policy, trade. Yet what I found most compelling about life in modern China was what was inside the house: the people, relationships, the particular and the human. From a distance, so much of China tends to get reduced, with the country often seen as a monolith; people think about GDP, statistics, the Chinese Communist Party. I hope ‘Land of Big Numbers’ in some ways offers a corrective to that: a reminder of the highly individual voices, pursuits, and people – creative, ambitious, and deeply resilient – that define life in China beyond the headlines.

I truly believe you can’t understand modern China without having a deeper view of its people, and that’s what I hope ‘Land of Big Numbers’ offers up: a nuanced, more empathetic portrait of a place that often gets lost in translation. I also found fiction was a way to capture certain parts of what I love about the country that journalism doesn’t perhaps as easily render: its beauty, humour, and playfulness, in addition to its politics.

Your first story, Lulu, concerns two twins who go in different directions in life. To me, this story, as well as elements in some of the others, speak to the extreme randomness that often seems to apply to life in China – who wins and who loses can seem so random compared to our perhaps more structured lives in Europe or North America. Do you see anything in that reading?

That’s a good question! I tend to see life as full of ungovernable outcomes. No matter where we live, so much of what we endure or are uplifted by seems like accidents of birth or privilege or being at the right place at a particular time (or the wrong one). What fascinates me in Lulu, and some of the other stories as well, is how two people can respond to the same set of circumstances in such radically different ways. So, in Lulu, one twin ends up becoming an online activist and dissident of sorts, while the other winds up becoming a professional video gamer. Even though they’re born to the same expectations in the same society – and the same household! – they wind up on starkly divergent paths, all because of the contrast in the lenses they apply to the world.

As someone who regularly skids back and forth between fatalism and optimism, I’m drawn to characters like Lulu, who are able to see their purpose in the world with such clarity. As you note, life can feel shot through with so much randomness. It’s rare to meet people like Lulu, but as a reporter in China, I felt fortunate to encounter more than my share.

Many of your strongest stories seem to invoke allegory. New Fruit is a favourite of mine. A delicious new fruit – qiguo – appears in markets all over the city. At first, everyone loves the new taste, the senses it invokes, but then the following year the taste is different, something has changed, it’s all a disappointment where before it was a revelation. Is it fair to see New Fruit as an allegory for the pace of change in Chinese society over the last three decades?

Oh, wow, I’ve gotten quite a bit of commentary from readers on New Fruit, but haven’t actually heard that interpretation before. To be honest, that hadn’t occurred to me, but I love that you read the story that way. Nostalgia works in such funny ways. As it happens, while I was writing New Fruit, the neighbourhood in Beijing that I was writing about – one of the old hutong areas near Beixinqiao – was undergoing extraordinary changes, with the government bricking up many of the mom-and-pop establishments that made up the fabric of the area and many residents getting displaced. I wasn’t strictly thinking about nostalgia while writing that story, which to me was more about using magical realism to explore what it’s like to live in a society where so much has been deliberately forgotten or sits veiled. But a feeling of nostalgia was absolutely bound up in the writing of that story, given how swiftly everything was being transformed around me.

China isn’t one story, it’s billions of stories

This isn’t nostalgia, exactly, but I was also writing ‘Land of Big Numbers’ at a time when the government’s attitude toward foreign media and peoples’ willingness to engage was changing in very palpable ways. And that awareness also shaped the writing of the book and gave it a feeling of greater urgency, too.

Your story Shanghai Murmur concerns Xiaolei, a migrant worker who finds a job as a florist and, of course, dreams big dreams. Yet it seems Xiaolei can only ascend so far in the city before she hits a glass ceiling that pushes her back. It seems to suggest you think social mobility beyond the basic rise out of poverty is not really possible …

I wouldn’t say so. The odds are steeply stacked against Xiaolei, but she’s also someone who takes risks and has drive and a sense of her own self-worth. She gets on a train with nothing more than a fictitious job offer. She quits a job once her superior starts harassing her. When we meet her, she’s still very young, and the scope of her ambitions and aspirations exceeds her reach, and we see moments when that realisation chastens her, most notably in an encounter involving a customer and a Mont Blanc pen. Yet I actually feel optimistic about Xiaolei’s life chances. No, she won’t likely become a millionaire, but during my time in China, I spoke to many people who had wrested themselves out of seemingly impossible situations and created new lives that, if not strictly wealthy, were something much more proximate to it, a life of comfort and ease and choices. There are, of course, many more millions of migrant workers like Xiaolei who don’t end up substantively changing their life circumstances beyond a basic rise out of poverty. But there are absolutely those that do.

The story that gives the collection its title, ‘Land of Big Numbers’, concerns China’s stock market dreams. Two young men, one poor, the other rich, play the market. Aspiration can make people vulnerable to cheats and con artists as get-rich-quick schemes proliferate. Does the fact that new innovations and possibilities – wealth, stocks and shares – come without any schooling in these new phenomena mean that some people lose out and are ultimately unable to catch up?

I think Zhu Feng, the poor investor, is the victim of naïveté, as well as a certain misplaced faith in the government. He’s a young government bureaucrat who prides himself on being street smart and savvy, much more so than the older men left behind by the economy like his father, who he scorns. Yet at the point we meet him in the story, like many of his generation, he’s never truly been tested or tried, and when he gets swept up in the frictionless ease of this new playground, the stock market, he really doesn’t have many defences. Ironically, it’s his unschooled father who turns out to be wiser in some ways. The story is absolutely about two young men playing the stock market but to me, it was also about a generation gap between the main character and his father, and the surprising knowledge of each other that they acquire along the way.

And yes, it’s also about what you describe – what it’s like to be young and ambitious and desperate, and trying to find any way possible to catch up with your wealthier peers, while also having a certain blindness to the struggles of those around you.

This is also perhaps a theme of my favourite story in the book, Gubeikou Spirit, where a group of subway commuters become stranded in a station. They cannot leave, no trains come, they must persevere against the backdrop of the repeated slogan, ‘We’ll Get There Together’. Yet the tale suggests that while that may ultimately be true, not everyone will get there at the same time, in the same way, or by the same route and that the concept of ‘there’ is different for everyone anyway. In the story, we see that trains don’t always stop for everyone, tunnels often lead nowhere, some cave in, some are dead ends, others are under construction just beyond our reach. Is this your perfect allegory for China in the 21st century so far?

I’m so glad to know you enjoyed that story. I don’t know what the perfect allegory for China in the 21st century is. But you’re correct that so many of the themes the story evokes are precisely the ones that, to me, are at the heart of life in modern China. On the one hand, it’s a story about public transportation, bureaucratic overreach, and a system that breaks down. But it’s also about what it means to live in a society in which one’s choices are so constrained, and how adaptive human nature is, and how powerful – and frightening – that trait can be.

Over the course of the story, we see this group of commuters alternately turn on each other and band together, and how their sense of self is shaped by state media. We see their sense of civic pride and how resilient they can be, and how that resilience is a double-edged sword. There’s ramen and politics and bad TV shows. There’s earnestness and cynicism, romance and recriminations and people like the main character, who are determined to find their way out. Each time I reread it, I find myself sympathising with a different character, and likewise, I hope the reader comes away being able to see through different eyes, as well. China isn’t one story, it’s billions of stories, and I hope ‘Land of Big Numbers’ opens up more audiences to the complexity of the world it contains.

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When four siblings, aged between six and fourteen years old, committed joint suicide by drinking fertiliser in the village of Cizhou, south China, in 2015, the nation was horrified. 

In a note, the eldest boy wrote that he had “dreamed of death,” an end to the years of suffering and neglect they had endured. The children came to symbolise the “left behind generation,” the young who live alone in rural areas abandoned by their parents who have migrated to cities in search of work.

That year, President Xi Jinping pledged to eradicate rural poverty in China by 2020. Five years on and the leadership has successfully lifted more than 70 million out of economic hardship, according to official statistics. However, a great number still remain locked in a struggle to survive.

This month marks the halfway point of the 2020 deadline. It arrives at a crucial moment as the country begins to emerge from the coronavirus and months of economic deep freeze. But even as China looks set to avoid a technical recession, with GDP growth for the year up to 1.8 percent – the gap between rich and poor in society remains one of the highest in the world. 

Last month, Premier Li Keqiang made a statement that shocked many. Speaking at the 13th National People’s Congress, he revealed that 600 million people are living on less than 1,000 yuan (£115) a month, barely enough to afford to rent a room in a medium-sized city. Hardest hit is the countryside, where 40 percent of the population still live.

The World Bank said China has the fastest rate of poverty reduction ever recorded in human history

Internationally, China has been praised for its poverty reforms. The World Bank has lauded the “phenomenal success” in achieving “the fastest rate of poverty reduction ever recorded in human history” over the past 40 years. In 2018, Jim Yong Kim, the bank’s president, said Beijing’s model “offers a new option for other countries and nations who want to speed up their development while preserving their independence; and it offers Chinese wisdom and a Chinese approach to solving the problems facing mankind.” 

Meanwhile, President Xi himself has declared the war “basically done.” However, some experts say declarations of victory could be premature and politically motivated.

“China will most probably meet the target, as it is a political mission set by Xi Jinping and that being the case, everything will be done to make this happen, at least formally anyway,” says professor Steve Tsang, director of the SOAS China Institute in London. 

At the 13th National People’s Congress, Premier Li Keqiang said that 600 million people were still living on less than 1,000 yuan (£115) a month

“Let’s not forget that ‘poverty’ is a relative thing, and the idea of eliminating it is a political thing. Not formally meeting the target will be seen as a failure of Xi Jinping, hence it will not be allowed to happen as long as Xi is in power.  But it does not mean poverty, as is normally understood, will be eliminated. Even the wealthy socialist countries in Europe do not claim to have eliminated poverty,” says Tsang.

The lack of a universal definition of poverty makes assessing progress difficult. China’s targets define poverty as rural and income-based. Since 2011, the line has been 2,300 RMB per person, per year (based on 2010 prices), according to professor Qin Gao, founding director of Columbia University’s China Center for Social Policy.

Each year, the line is adjusted according to the Consumer Price Index. Currently, it stands at around 4,000 RMB (£460). 

Critics of China’s poverty strategy accuse the government of setting an artificially low threshold that is easier to meet. But Professor Gao says this is not true: “The World Bank’s line at  US $1.9 per person per day [set according to 2011 purchasing power parity], once adjusted, is about 2,800RMB – about 200 RMB lower than China’s 3,000RMB (based  on 2018 prices).”

Meanwhile, some scholars argue that China should adopt a “relative” measure as used by most OECD countries, including the UK. This takes the median income level and is better at capturing income inequality. Instead, China, like the US, uses a hard-set income threshold, or “absolute” measure.

Professor Gao says that one of the biggest barriers to sustainable poverty relief is dwindling social mobility. “In rural populations, there is much less upward mobility than in the cities. To address poverty you need to lift people up to higher living standards but, more importantly, to opportunities,” she says.

Wu Alfred Muluan, a scholar of welfare policy in modern China at the National University of Singapore, agrees that building long-term capacity in individual communities is more effective than offering hand-outs. He says that while Beijing has made great strides in poverty alleviation, its distinct top-down approach could present future challenges. 

“Many people who were not poor in the past now face financial difficulties,” says Prof Wu. “In each province, resources are a lot more concentrated. For example, in capital cities and Tier 1 cities, there are increasing resources. The general strategy is to push villagers to urban areas, from third-tier cities to second, from second to first, and so on…But at the same time, first-tier cities are asking low-end people to leave because they feel they cannot house these populations.”

Another controversial top-down method has been to migrate entire communities thousands of miles to richer provinces, for example from Gansu in the northwest, to Zhejiang and Fujian in the east. 

“It will remain a great challenge in the future as it’s not certain they can be integrated,” says Wu. “What is more important is for these communities to cultivate their own capacity, cultivate their own economics, and cultivate their own culture.” 

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The consequences of families being confined to their apartments for such long and intense periods might well lead to a spike in Summer divorces and November babies, but more seriously it is likely to have a long-term impact on the average person’s awareness of their work-life balance. People have, for the most part, enjoyed spending more time with their loved ones, and are recognising the importance of a sensible balance between time at work and time at home. Combined with the simultaneous experience of being able to experiment with working from home, many workers might demand more free time or flexible working when the crisis is over.

A reduction in travel

Work (and leisure) trips over the last several months have been all but entirely shut down. Face-to-face meetings, previously so important in China, have been replaced by video-conferencing and conference calls. Work still gets done, relationships are still maintained, and many companies are questioning whether they really need to jump on a plane to meet with a client. Time, cost and the environmental consequences of frequent travel are going to be questioned when technological solutions have proven equally successful. Likewise, many leisure travellers who have had their trips cancelled may well be thinking more about who they spend time with rather than where they go. Expect the reliance on organised package tours (and cruises) to continue to drop as the number of independent trips increase.

Improving clarity

The insurance industry is still under-developed in China as few individuals have personal, travel, health or home and contents insurance. The huge cost to businesses and individuals that the virus has caused will lead to many thinking about getting better insurance, which will bring insurance premiums down, allowing more people to get suitable insurance policies. Likewise, contracts that are sometimes written with intentional ambiguity or to be open to interpretation, will likely be written with much more clarity as companies end up battling litigation and legal battles for months to come from employers, suppliers and other providers who have been left out of pocket by the crisis.

Joined up thinking

China’s Social Credit System aims to connect the dots between private enterprise and regional government bodies to give individuals and companies a fully rounded economic and social credit rating. The virus has highlighted how disjointed the many government departments are across China’s different regions. Tax offices, labour departments and health and safety bodies vary enormously from province to province, making getting businesses back up and running a slow and complex ordeal for businesses with offices or factories spanning multiple provinces. Lessons learned from the virus epidemic with regards to information sharing are likely to speed up the Social Credit System’s roll out and its efficiencies.

How people in China report having spent their time during the pandemic so far

Entertainment beyond WeChat

During SARS, Beijing restaurateurs realised patrons were avoiding crowded indoor venues, and the Houhai Lake bar area emerged as a consequence. Al fresco and roof-top dining beside an attractive landmark emerged and created what is one of Beijing’s main tourist attractions today. Technological advancements have meant people no longer need to physically meet to catch up on local gossip, and video-sharing and gaming apps will be the biggest benefactors. No longer will they be the purview of the youth: expect older generations to get to grips with a wider range of apps and developers increasingly targeting an ageing population.

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Last year, China’s authorities went some way to co-opting rap in a bid to channel China’s youth culture and explain Chinese culture abroad. By the start of this year, China had turned the volume down on rap, banning hip-hop culture and tattoos. Along with actors of ‘problematic moral integrity’, the expected slew of rappers, hip-hop stars and other celebrities were dropped from TV shows and called out for their misogynistic and overly macho lyrics and actions. The nascent hip-hop culture disappeared almost as quickly as it had come into being.

Phoenix-like from the hip-hop ashes, a new generation of clean, safe, pretty boy bands emerged on TV talent shows, who didn’t have rips in their jeans (nor tattoos on their necks). A boyband known as New F4 rapidly became China’s new heartthrobs, but their androgynous looks and use of make-up drew criticism from some circles and it didn’t take long before state media broadcaster Xinhua called them out for being ‘Sissies’.

The PLA said that it was becoming increasingly hard to recruit healthy young men. The reason? Too many video games, too much fizzy pop and too much masturbation..

“These sissies promote an unhealthy and unnatural culture which has a not-to-underestimate negative impact on the youth. The sissy culture, driven by consumption, challenges the public order and worships a decadent lifestyle,“ Xinhua posted.

The use of the derogatory term may raise eyebrows, but nevertheless the question remains – are Chinese men having a masculinity crisis? It seems the People’s Liberation Army (PLA) think so. At the end of the summer, the PLA said that it was becoming increasingly hard to recruit healthy young men. The reason? Too many video games, too much fizzy pop and too much masturbation.

Sitting around all day in your pants playing by yourself apparently not only leads to increased lemonade consumption but also physical decline. The obvious solution was an immediate ban on all new video games but the problem remains for the PLA. Recruiting young men into the army is becoming harder as a rising level of unfitness is combined with an unwillingness to live a physically challenging lifestyle. The pass rate from one region in Hubei fell to a record low of just 25.6 percent last year from 30.8 percent in 2011.

Whilst various branches of Chinese media fought over whether boys should be able to wear make-up or if ‘Sissy’ is an acceptable or derogatory term, there is no doubt there has been a rise in androgynous men in Beijing’s urban areas. According to China Skinny, Chinese males in many cities are more like to own a pair of platform heels than a pair of work boots. Could it be the one-child policy has led to young men being doted on and not having to fend for themselves? Have they been given too much and prefer to spend their weekends shopping in the mall for designer clothes than spend it playing outside?  Or is it a reaction to the rising status of women and relative decline of the male?

China has always divided men into Wen (literary men) and Wu (fighting men) with literary men being granted higher status. As a strong patriarchal society, Chinese men have traditionally never needed to interrogate their masculinity. However, this position has, in more recent years, swung pendulum-like back and forth. During the Cultural Revolution, it was declared that ‘women hold up half the sky’ which led to an uncomfortable rebalancing act for many. In the 80s, films, actors and rock stars, possibly in recognition of western male stars or possibly to rebalance the male dominance lost in the 1970s, became much more macho.

Over the 40 years of economic growth since opening up and the one-child policy, women have become equally well-educated, hold key roles in companies, and will often be the main breadwinners. All this undermines traditional notions of macho masculinity and can encourage increasingly powerful women to look for a softer, more feminine form of male identity.

And, of course, businesses are fully aware of the opportunities that emerge from a new market. Whilst new ranges of male make-up hit the shelves and luxury fashion brands reach out to 20-something boys, wealthy parents can also now pay for their ‘Sissy boy’ sons to be re-educated at training camps to find their “lost masculinity”.

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