As I get deeper into designing my Chinese Sci-Fi novel, I’ve started reading more and more about the rising dragon. Americans don’t spend a lot of time paying attention to much beyond their shores, but when they do, they spend a disproportionate amount of time thinking about the meaning of China’s rise. As I study the red dragon, I’ve come to realize that one of the defining characteristics of Chinese society is the concept of duality. There seems to be two sides to everything in China. There is the surface that they want to show the world and there is reality. There is the face they show in public and the face they show at home. There are the rich and the poor. There is the state and everyone else. There are the winners and the losers. There are the lucky and the unlucky. There are those with guanxi, or networks of connections and influence and prestige, and those without. Like the ancient god Janus, China has two faces.
One of the stories that has gotten so much press recently is the story about China’s economic miracle. In China, all kinds of books are cropping up, talking about how state capitalism is superior to the chaotic mess of American style open markets. After 2008 America got smacked back. Our credit bubble imploded and we didn’t look so smart anymore. Our economic policies looked like failures. State capitalism appeared as a strong alternative. Countries figured they could let the markets do their work, but smooth out the problems with a strong guiding hand. It is a compelling idea, one that hits people at a primordial level. It seems to embrace the duality of our own nature, the chaos of emotions and the will of our logical minds.
Of course, nobody can make the markets do anything. There are too many variables in economics. I remember watching one of Hitler’s chief economic advisers talk. He said “we underestimated what you can do with price controls and the like, but eventually it comes crashing down.” Hitler’s socialism worked quite well for some time. Public works, price controls all made Germany the marvel of its time. Economic manipulation works for awhile but no person or committee can figure out all the variables of an economy, because an economy is alive and moving and dynamic. Perhaps computers will one day be able to do so, but not yet.
If you need any proof, check out this dateline story from last year about Chinese ghost cities. The scale of this insanity will blow your mind. The Chinese government wants to maintain the illusion of GDP growth at all costs, so they tell local governments, you must grow by XYZ percentage in the next few years. The easiest way to stimulate fake growth has been in politicians arsenals for years, public works projects or “shovel ready” projects. We did a lot of it during the great depression. We did it again during the great recession. Hitler did it during the 30s when they built the Autobahn. But the Chinese are doing it on a scale never before seen. They have literally built cities of twelve million people that are 75% unoccupied. They have been that way for years. The cities are complete. They have malls, hospitals, millions of empty apartments and nobody living in them. They knock down poor Hutangs, or Chinese slums and they build cities that nobody can afford to live in. Apartments cost 100,000 to 300,000 while the average Chinese peasant makes 6,000 a year. With no credit and the need to put down as much as 50% up front and pay off the rest in 3 years, few people can afford to live in these cities. There is a credit bubble and deceptive lending and there is no credit at all. There must be balance.
Cities must grow naturally. It’s not random or by chance the cities usually grow around water. That makes them ports where planes and boats can get to them easily. Markets make cities. Cities are really places where people begin to come together for a common economic goal. When a government comes in and just plants a city, where there is no desire or need for one, that is far away from where anyone wants to live, you have an economic disaster waiting to happen. These are massive economic inefficiencies and utter wastes of human and monetary capital. This is not a smart guiding hand, this is outright manipulation and interference and stupidity and waste. When the government diverts money like this, it could have gone into people’s pockets, where they could have chosen to build up their own homes, or buy in the place they actually wanted to live. Unfortunately, without bribery or influence, it’s hard for the average Chinese to even do that. They want to move where they want to, where jobs are better, but they can’t because of danwei, or “work units.” These define where a person is supposed to live and most importantly where their children can go to school or where social services come from for their family. In other words, they restrict the natural flow of people to the places they want to congregate to build schools, homes, businesses and lives.
It’s hard to tell what all this means for China and the world. Do they have enough solid economic infrastructure to come in for a soft landing or is it all smoke and mirrors? As they grow, do they naturally loosen? How deep does the tofu cement run? In many ways it is symbolic of the way China has always done things. They put on a show, a dance. They put on a strong face. And it is beautiful. The Chinese Olympics were the most astonishing and lovely of my lifetime. For those at the top of the pyramid, at the center of the web of guanxi, it is a true economic miracle. The migrant workers who have come to the real cities of Beijing and Shanghai, do have a better life, even if it is not a life you or I would love. But for those on the other side of China’s dual faces, the poor, those without connections, those on the wrong side of the state, those behind the mask of the Great Wizard in Emerald City, life can be a nightmare. “Pay no attention to the man behind the curtain!”
All this reminds me of an amazing scene from the Borgias last week. The Pope angers the king of France and he marches on the city, ready to raze it to the ground with his awesome cannon fire power. The Pope demands that the city quickly build cannons, but they’ve sold all their copper to pay for pomp and circumstance. The Pope’s son comes up with a brilliant idea with a local artisan. They build a bunch of cannons out of plaster and in a show of incredible guile, they reveal the cannons to the French king. The ruse works and the king goes around Rome fearing a blood bath. They question is, how deep does the deception go and what will happen when everyone finds out?