"Everyone will become rich": in China, the newly wealthy live in contrast with the old rural poor

China's middle class is on the up and the state aims to eradicate poverty by 2012. But a third of the country's wealth is held by 1 per cent of the population

October 30, 2017
(170926) -- MILAN, Sept. 26, 2017 (Xinhua) -- A model presents a creation at the show of Chinese fashion house He Yi Chuang Yi, part of the Fashion Shenzhen event, during Milan Fashion Week Spring/Summer 2018 in Milan, Italy, on Sept. 25, 2017. (Xinhua/Ji
(170926) -- MILAN, Sept. 26, 2017 (Xinhua) -- A model presents a creation at the show of Chinese fashion house He Yi Chuang Yi, part of the Fashion Shenzhen event, during Milan Fashion Week Spring/Summer 2018 in Milan, Italy, on Sept. 25, 2017. (Xinhua/Ji

Last week’s Chinese Communist Party Congress was a series of interminable, triumphant speeches glorifying the achievements of the Party and Xi Jinping, its increasingly dominant leader. While it’s tempting to dismiss the Congress as an exercise in authoritarian artifice, it’s hard to deny that the Party has managed to steer the country through a profound transformation over the last four decades. The economic reforms introduced in the late 1970s have certainly led to improvements in many people’s material circumstances, in some cases dramatically.

On a recent trip to China I met Peimeng, a middle-aged man with a plump, satisfied face and all the trappings of low-level wealth. He wears expensive suits, drives a new Audi, has the latest iPhone, and sends his two daughters to private school. He’d come a long way from his childhood in a fishing village on China’s south coast in the 1970s. He recalled that at night the small houses in his village were completely engulfed by the dark. If the villagers needed to buy salt or sugar, they had to walk 10km to a small market town. They didn’t go more than two or three times a year; when they did they bought fabric to make new clothes. When Peimeng was 15 he left school and started working for the village production unit. “My main jobs were separating wheat, planting yams, and extracting peanut oil,” he recalled 40 years later. He did not remember the work as being especially hard. “It was no problem. It’s Chinese culture,” he said and nodded in approval.

But Peimeng acknowledged that luck, more than hard work, had made him and the other villagers wealthy. Their land now forms part of the city of Shenzhen, a shiny, modern city of 11 million. Shenzhen was where China broke decisively with Maoist ideology and embraced capitalism in order to develop an export economy. Over the next three decades the combination of cheap migrant labour, easy access to raw materials, and investment from Hong Kong made the city flourish. Though the villagers didn’t own the land, they had the right to control how it was used. By building, then renting out accommodation for workers, they were able to get rich. As Peimeng said, “After 1995 the opportunities to make money were everywhere. So it has been a golden age ever since.”

Long gone are the days when Chinese people’s material aspirations could be summarised by the phrase sanshengyixiang – which referred to owning a bicycle, wristwatch and sewing machine. At the Party Congress Xi Jinping announced that “in this era everyone will become rich, sons and daughters of China will achieve their dreams.” If you only visit China’s big cities you might feel optimistic about this promise (their pollution notwithstanding). But if you compare these with the situation in China’s inner provinces, especially in the countryside, a completely different picture emerges.

When I first went to China in 1999 to teach English in Hunan province, in central China, there was a considerable gap in living standards between urban and country life. But although most migrant workers have been sending money home to their rural relatives, this gap has continued to widen—last year urban residents’ average income was almost three times higher than that of people in rural areas. At the same time, there has been a corresponding decline in investment in rural healthcare and education. Many rural schools have closed; students from the countryside are seven times less likely to attend college than those from urban areas.

Living conditions in the Hunan countryside today aren’t that different to how they were almost 20 years ago. Many houses have bare concrete floors and lack plumbing or sanitation. Aiguo, the father of one my friends, grew up in similar conditions to Peimeng. In his village the darkness at night was (and is) absolute and there were also no shops for miles. Like Peimeng, he left school when he was 15, to help his father in the paddy fields. But despite forty years of hard work, he hasn’t been as lucky as Peimeng. Up until the mid-2000s his meagre income was further diminished by heavy taxation. Though the abolition of most of these taxes in 2005 eased his burden slightly, like many people in the countryside he’s only able to afford the most basic medical insurance (which doesn’t provide much coverage). When I last saw him he’d developed a tremor in his hand that none of the doctors in the local clinic were able to diagnose.

While China’s rulers don’t deny these vast differences in wealth, they remain supremely confident that they will be able to wipe out poverty by 2021, and that by 2035 the nation will have narrowed its wealth gap. At present a third of the country’s wealth is held by 1 per cent of the population. Exactly how they aim to enact such a profound redistribution in the next 18 years remains a mystery.

Chasing the Chinese Dream: Stories from Modern China is out now