Tuesday, September 22, 2009

Speed Racer.

Today the Wall Street Journal published an article about Hu Bin, the 20-year-old son of a wealthy Hangzhou resident, who drove his Mitsubishi tuner into Tan Zhuo, a 25-year-old telecom engineer and son of a poor laid-off family from Hunan.

The WSJ reported on not only the accident, but questions it raises about the consequences of China's meteoric rise to economic prowess.

Deng Xiaoping, when he started opening China's doors, still fought for a classless China, but with a wealthy rather than impoverished country where "to get rich is glorious". He mentioned that some would have to get rich first, but that the rest of the country could then follow.

The article notes that there is the potential for growing unrest in China over the division of power and wealth. This is true. There is a lot of corruption in China. The article reports that Tan Zhuo, the victim of the story, got into the very prominent Zhejiang University partly by coming in third in a math Olympiad in high school. I'm not a betting man, but I'd feel my money was pretty safe in wagering fifty bucks that at least one of the first two finishers in the "Olympiad" had wealthy parents who had some pull with the school.

I think what happened to Tan Zhuo in Hangzhou, getting run down by a kid driving a souped up sports coupe at around 80mph while crossing the street, is horrible. I've walked down the quiet streets around West Lake in Hangzhou. Not only are they curvy and slow, but they are tree-lined and littered with crowds of people most times of the day and night. Driving 80mph is nearly psychopathic. To think you WON'T kill someone doing that kind of speed in those quiet little streets speaks to a level of disregard that I doubt exists even in struggling US city centers like Compton.

The reporter points out the high potential for unrest and the level of outrage that immediately arose from this tragedy. While this is true, I also think it's important to put the whole incident in perspective.

First let me say I believe Hu Bin should be crucified for his disregard of human safety. His friends, who stood next to the police car he was sitting in at the accident site, smoking and laughing, should be thrown in a jail in Hongyuan for a few days or made to work on some of the hard-labor farms their parents had to toil through to give them perspective on their callousness. And if the rumors that his family hired a stand-in to serve his slap-on-the-wrist three-year prison sentence are true, the local government is going to be in serious hot water. But I also know that in every developed country's history there was a period of growth: an economic boom when nations like the US and the UK industrialized and grew in wealth and power. There were battles against monopolistic companies. Old-boy networks were created. Corruption ran rampant. I've read The Jungle and worked in a meat-packing plant. I grew up in a small town and got an education at a good school. I had to work harder than some to get where I am now, and not as hard as others. One and a half centuries ago, I probably wouldn't have had the opportunities that existed for me.

China is struggling with massive growth problems. Its interior has grown more slowly and received less attention since the doors opened in the late 70s. Its rural population received little attention after June 4th, 1989. Since the early 90s, China's technocrats have focused on helping the larger state-run corporations grow, while ignoring the entrepreneurs trying to start businesses in the poorer central and western regions.

The country's leaders are trying to change this. They're working to put more social services in place, changing the country's banking system to make financing available to small businesses, building up infrastructure. These things will ultimately lead to a wealthier country. As the interior becomes more stable politically and economically, the rest of the country will benefit.

There is no doubt China suffers from a massive divide between an elite wealthy class and an impoverished working class. Last fall I traveled to China for the first time in eight years. What I saw fascinated me. I went to a Shanghai night club populated mostly with upper-class Chinese. My friends and I arrived at around 9pm. When we left at about 1am the party was going strong, and there were two Ferraris, one Lambrogini, and somewhere between five and ten Porsches parked right out in front.

The next morning I got on a plane to Chongqing to visit my friends there. They were doing well. Their small businesses were going strong, they had bought cars and houses, and they were happy. But they weren't wealthy. I saw no Lambroginis in Chongqing. Although it is a huge city, the streets are not the greatest. A car like that might exist in the city, but it would be tough to drive it there.

I walked around downtown one day and chatted with some locals. I met people running small clothing stores, selling cold drinks on the corners, or noodles in little street-side alcoves. Their future plans were limited.

A friend took me to get a foot massage at a nice little place on the Jailing river, and the masseuse told me she made about $100USD per month. Her husband's income was similar (in China, it's not considered rude to discuss such things). They pay for their daughter to go to private school. Everything they work for is so she will have a better education and a greater chance at a good future....both for her and for them. The money they save goes towards her college education, still 13 years away. This, in effect, is their retirement fund. If she gets killed by a rich kid racing cars in Hangzhou, they have little to support them at the end of their lives.

China needs to sort out its class issues. It needs to build a stronger middle class and bump up its social services. It needs to create greater opportunities for its most impoverished. I believe the country will accomplish these things in the future. There is no other option. What I saw in Shanghai and Chongqing was growth. Massive growth. But in Shanghai the growth was vertical. Literally. There were taller buildings and higher incomes everywhere. I walked by Ferarri stores and Bently stores. I saw people wearing watches that cost more than my annual income and smoking cigarettes more expensive per pack than my daily food expenditures. In Chongqing mostly I saw more people. The city was twice its original size, and there was a little more money in town, but nothing like I saw in Shanghai.

Will this cause problems? Yes. Of course it will. Is it too late for China to turn things around and move in a newer, better direction for its people? No. Look at recent history. In 1977 it was illegal, ILLEGAL, to own a private business. Now China is one of the world's economic powerhouses. They're wealthy enough to have snotty rich kids plow souped-up Mitsubishis into working class success stories. It only took them 30 years to get there. That leads me to believe that the next 30 years will show further growth and development. Tan Zhuo might be one of the terrible tragedies that stirs the powers that be to change their policy, to make a better, stronger country with more equal treatment of its people and more opportunities for its children, no matter what is in their parents' bank accounts.


  1. What a great blog! Where's the next update, maybe something from your most recent readings....research, mmmm?

  2. Sure, you are welcome to use the photo from Chongqing. Thanks for asking.

  3. Ben! I have been trying to figure out how to just message you directly, but am too daft apparently to do so... so leaving a comment instead. I de-activated my fb months ago, too, so don't know how better to send you a message. Dan and I are headed to Hong Kong for a few weeks in September and will be able to catch the majority of the mid-Autumn festival; considering heading to mainland China for 4ish days to maybe Shanghai or Beijing. I know you are probably not in those areas (or are you?), but wondered if you had any advice for a couple of newbies. :)