The Chinese economic reform 改革开放 is the program of economic reforms first led by Deng Xiaoping, often credited as the “General Architect”. Before the reforms, the Chinese economy was dominated by state ownership and central planning. From 1950 to 1973, Chinese real GDP per capita grew at a rate of 2.9% per year on average.
Economic reforms, helped by China’s WTO membership since 2001, greatly improved the fortunes of hundreds of millions of Chinese people. Available (official) data showed that 850 million people had been lifted out of poverty. Residents, expats and tourists alike would not have failed to notice the improvement in infrastructure and purchasing power of the people. There’s now the high speed rail and glittering office buildings and shopping malls pack the cities. Chinese authorities once boasted that the country would completely eliminate absolute poverty by 2020.
However, behind the curtain, China’s economic “miracle” didn’t turn out to be that miraculous (even though some folks continued to be mesmerised) after all. The country’s conspicuous wealth and prosperity over the past 40 years was a matter of course. As the state gave way to the market, private enterprise and trade flourished, growth quickened, and incomes rose. What made it appear miraculous, was the massive borrowing by regional governments to develop and redevelop land, mortgaging and remortgaging to build way beyond capacity and necessity. Majestic in many ways, these burgeoning construction projects give the impression that the streets in China are paved in gold.
While much of the gains from the last 40 years are still intact, it also ought to be obvious that the reform era has ended with the meteoric rise of of Xi Jinping, who let Communist Party reassert control over various aspects of Chinese society, including the media and the economy. China is once again, seeing an economy dominated by state ownership and central planning.
It has been estimated that only 70 million people in China have any disposable income. It’s a small proportion of the total population, but that’s the entire population of Thailand and when they travel and invade the shopping areas in other countries, they are a formidable force that makes vendors bend over backwards to accommodate their “idiosyncrasies”.
A far more representative picture of the average Chinese worker is shown in the video below. Hand to mouth, day to day. And there are millions who are worse off.
Decades of excesses, with indiscriminate borrowing and spending and with the Party now backtracking on reforms and opening, have led to some very serious consequences felt at street level, the roaring GDP growth rate notwithstanding.
The real lives of real people tell a very different story. Wages are stagnant or insultingly low. Cost of living have gone through the roof. On a recent visit to Xiamen, I found that goods sold at the shopping malls are more expensive than the same stuff sold in Malaysia. The challenges are very real. More of it is evidenced by the once bustling and now mouldering malls which were quiet before the pandemic and decidedly deserted after it.
It’s all about numbers. Shenzhen is supposed to be the most economically vibrant city in China. While there are definitely some rich people here, the shocking fact is that the majority do not even own their own homes. Out of 20 million people in Shenzhen, 1.37 million people own one apartment. 150,000 have 2 apartments. Only 50,000 have 3 or more apartments.
This is just an introduction. Under this parent page, are many “on the road” videos shot by Mr Shi Bing Feng who hails from Fujian, showing us the aftermath of China’s unbridled and artificially inflated real estate growth. While successful developments can be found all over China, there is a huge number of previously bustling old towns and villages that have been demolished and rebuilt into ghost cities. There are huge plots of productive farmland that had been acquired and turned into water-logged, weedy, unfinished luxury housing projects. These raw footage demonstrate the ugly reality. China’s wealth is balancing precariously on the apex of a pyramid of debt.
<h2>Mr Shi Bing Feng’s 烂尾楼</h2>
Fabricated Ancient City, Taohuayuan
Huge abandoned Construction Project in Guangzhou