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Macmillan Childrens Publishing Group

The Myth of Chinese Capitalism

The Worker, the Factory, and the Future of the World

Dexter Roberts

St. Martin's Press



When I arrived to live and work as a journalist in Beijing in early 1995, Deng Xiaoping, China’s once-paramount leader then retired and reliably reported in ailing health, was still widely discussed by academics and businesspeople, cadres, and average Chinese folks alike. Years earlier he had already given up his last formal position, as head of the military forces, and his only remaining title was head of the China Bridge Association; he had been an avid player. But despite his precarious physical state, Deng’s influence over everything from top party promotions to economic policy making was still hotly debated. Just hours after getting off the plane from New York City and emerging into the cold, dry January evening of Beijing, I listened as two foreign journalists discussed their plans to write obituaries for the tough, chain-smoking Sichuan native. As had happened before, rumors of his imminent demise had swept the capital; they would flare up every few months, sparking similar conversations, interspersed with more speculation about whether he was still strong enough to wield power from behind the scenes, until he died, just over two years later, at the age of ninety-two.

We were sitting in a restaurant serving Maojiacai, or “Mao family dishes.” (Mao Zedong was born in the province of Hunan, next to Deng’s Sichuan, both places known for peppery food and producing national leaders.) The pungent smell of the coal briquettes then still burned for heat was sharp in the night air as an American reporter chided her boyfriend, an Australian reporter, for not having started writing his obituary. Whenever Deng did die, any self-respecting journalist would have to be ready to push the SEND button on an expansive piece looking at the legacy of the leader who more than any other was credited with moving China away from its autocratic past and into the modern world. And that obituary inevitably would focus on Deng’s seminal role in launching economic reforms.

In carrying out what Deng called gaige kaifang, or “reform and opening,” the paramount leader had taken a decisive step away from Mao’s radical egalitarianism and set China and its people on a path toward today: a country with a high-speed railway network that accounts for two-thirds of the world’s total; cities with craning skyscrapers and roads jammed with new cars while below the ground ever more intricate webs of subway networks expand; a growing power in artificial intelligence and the world’s second-largest producer of patents; and a country behind only the United States in producing billionaires with an ever more assertive leadership. At least two policies closely associated with Deng had been key: The first was ending the Mao-era communes and allowing China’s hundreds of millions of farmers to begin to till their own agricultural plots or leave the land and work in manufacturing; the second was welcoming foreign investors, at first in the newly created special economic zones in Shenzhen, Xiamen, and other coastal cities, while at the same time encouraging the growth of private business.

The story of farmers abandoning the communes in particular has become central to the official narrative of China today. In it, we are told, the pragmatic nature of the Chinese Communist Party shines: it shows how top officials were capable of accepting crucial changes when necessary, even while maintaining their unassailable ruling position. Much the way they allowed entrepreneurial Chinese in cities to create their own private businesses, they, too, had shown tolerance when farmers began to take charge of the land, deciding what to plant and where to sell it, while at the same time boosting productivity and powering new economic growth. Similarly, when foreign investors were invited to set up factory operations, the business-minded party had provided them with labor; the excess rural workers freed up as the communes were dismantled could now travel to the coast and, earning much more in their new jobs as factory hands, build better lives for themselves and their children—thus setting off the biggest human migration in history.

It, too, was what I had learned while studying contemporary Chinese history at Stanford University some years earlier. China’s transition from an autarchic Maoist state to a country led by new practical, reform-minded leaders seemed pretty much unquestioned, among academics and corporate heads alike. Awful tragedies like the June 4, 1989 massacre raised serious questions about the future of any significant political change. But the course toward an ever more open economy seemed certain. Uneven development would be inevitable in the process. As Deng himself had reportedly said, in his version of trickle-down economics, “Some must get rich first.” But opportunities for all able Chinese, including hundreds of millions of farmers and migrants, were part of an implicit bargain: The people would not openly criticize the party or demand political and civil rights; the party would preside over a constantly evolving economic system, one that, above all, would ensure rising material welfare.

In the years following my arrival and long after Deng had died, the deal still seemed alive, at least in China’s cities. In the fall of 1997, at the 15th National Congress of the Communist Party of China, the leadership formally announced that private business, once banned, henceforth was “an important part of the economy,” a reflection of its already fast growth, with more and more Chinese making their fortunes outside the confines of the state. In 1999, the reform-minded premier Zhu Rongji, like Mao a native of Hunan but by contrast an advocate of loosening party control, had overseen the difficult market-opening concessions necessary to win entry into the World Trade Organization. China’s leaders promised to welcome foreign companies into everything from the automobile and agricultural industries to banking, insurance, and tourism; that liberalization would later bring a flood of money from overseas, creating jobs and opportunities for tens of millions of Chinese. And in a sign touted as evidence that the new China was fast becoming a desirable place to do cutting-edge business, by the millennium an internet boom had seized the country, with then-hot web companies like,, and soaring in value after listing on Nasdaq. People in the know in the country’s big cities started using a new initialism: “VC,” for venture capital. And for the first time since the outmigration of Chinese students overseas had begun in the 1980s, Chinese students educated abroad started to return in large numbers, eager to get in on the action.

The new web boom, however, was of limited interest to me, even as news stories about deal making drew readers. When I had decided to study China, years earlier, my motivation had been to see how an ancient country with a very different culture from the West had gone through an agrarian revolution before becoming socialist and finally was changing to a market economy. Now, working in Beijing as a reporter for Businessweek, I wanted to see how the laobaixing, literally “old 100 names” or regular folks, were faring during the new reforms. As I explained to friends at the time, I hadn’t come to China to write about Harvard-educated MBAs, former McKinsey consultants, tapping VC money to fund internet start-ups in China. That, in fact, completely bored me. (I was pleased when I discovered, many years later, that academics writing about rural China used “VCs” as shorthand for “village committees,” the lowest level of government in the countryside.)

So while talk of hot new internet plays gripped Beijing, I headed south in the summer of 2000 to visit two parts of China then still largely untouched by the web craze: Guangdong, home to China’s top export-manufacturing base, and Guizhou, its least developed and poorest province. The Pearl River Delta, which had won China the sobriquet “factory to the world,” was already home to millions of migrant workers laboring in thousands of factories, including in Shenzhen, the country’s first special economic zone, and just north of it in Dongguan, a rough-and-tumble string of factory towns, each distinguished by an industry, including shoes, toys, furniture, and lamps. Guizhou, meanwhile, had long been a frontier region of China, known for its beautiful plunging green karst mountains, among which lived a startling variety of ethnic minority groups with a history of rebelling against central control. Then, as before, it was known for a dearth of arable land and much poverty. And those conditions meant that most young people left for the coast to find factory or construction work. “No three days are clear, no three feet of land are level, and no one has three ounces of silver,” as an old Guizhou saying put it.

My intention was to see how the party’s grand bargain was working for the Other China, of workers and farmers from lagging interior provinces—not the relatively well-off residents of its showcase coastal cities, where signs of material success were becoming increasingly apparent. Earlier that year, policymakers had launched another major economic policy, whose name, the Develop the West plan, suggested that things were not going as smoothly in the hinterlands. The plan, the brainchild of President Jiang Zemin, the most urban of leaders—he had spent the bulk of his career in Shanghai—aimed to bring economic growth to China’s inland provinces, including Guizhou, Guangxi, Sichuan, and Gansu, as well as Tibet and the sprawling city of Chongqing. Tax breaks and low-interest loans were to lure big Chinese and multinational companies into investing, combined with massive government spending on infrastructure, including roads, rail, and power projects. Officials in Beijing recognized that parts of the country were falling behind, as inequality between regions and urban and rural areas widened. Less openly expressed was that the new policy aimed to ensure that migrants, after years laboring in the factories, would eventually go home; that required some minimum level of prosperity in China’s interior.

At the dawn of the twenty-first century, the electronics-manufacturing town of Changan was a top destination for migrants; indeed, with a population of almost six hundred thousand, it was the country’s most populous zhen, or town. (With its huge population, China’s government is split into five levels: the central government in Beijing; provinces; cities; counties; and townships, which sometimes can be home to hundreds of thousands of people, as Changan is. Villages, although not officially part of the administrative system, have their own village chief and party secretary.) Changan, like all the factory towns that together made up Dongguan, was spread along the 107 Guodao, the national highway that runs north to south across China, from the capital city of Beijing to the border with Hong Kong. Here, on the final stretch, the ugly inner workings of the country’s export machine became apparent; for kilometer after kilometer, dust-stained two-story factories with bars on their windows jostled for space along this artery that led to the massive Yantian Port in Shenzhen. Occasionally glimpses of villas could be seen, the homes of Taiwanese and Hong Kong factory owners, hidden behind gray cement walls. Only when a typhoon swept over was Guangdong once again recognizable as a semitropical region, the lush green mountains reasserting their presence in the distance, as rain temporarily washed clean the industrial landscape.

Mo Meiquan was one of four migrants here hailing from the same small village in Guizhou. At eighteen years old, she was already on her second year of factory work in 2000. After dropping out of school at fifteen, making her one of the most educated in her village, she had helped her parents in the rice fields for two years before coming to Changan in 1998. Still dressed in her blue work smock, worn for the fourteen-hour shifts she put in every day checking videocassettes and audiocassettes for flaws, Meiquan seemed painfully shy. “There were no jobs at home, and our land was a very small plot. So I left home to find work,” she said, carefully avoiding my gaze as we sat in a restaurant across the street from the Triton Electronics Factory. Her pay was only one yuan (twelve cents) an hour, she explained, staring at a spot on the table. And while a dormitory room was provided, it was sweltering in the summer and bone-chillingly cold in the winter, and she shared it with fourteen others.1 “I think it’s pitiful. I want to go back and start some small business, and never return to Dongguan,” said her distant cousin Mo Yukai—twenty-four years old, a red streak of dye in his hair giving him a stylish flair—who had joined us for dinner.2

Later I met the other two migrants from the same Guizhou village. Thirty-two-year-old Mo Wenzhi had been the first to come to Changan, and now worked as a cook in a Taiwanese-owned electronics factory, but fretted about his wife and five-year-old daughter, back in the countryside, whom he got to see only once a year. Twenty-five-year-old Mo Rubo, who worked as a welder in the same factory, had an easy confidence about him rare among the migrants, and was determined to stay in Dongguan. Sitting in the dank dormitory room he shared with ten others, he marveled at how easy it was to buy everything from toothpaste and music cassettes to the many different varieties of food available in the many small shops and restaurants that lined the street outside the factory; in his village, one had to wait for the weekly market. At the foot of the bunk bed Rubo slept in lay two barbells he used every evening after his long shifts. On a nearby scuffed small desk was a simple model of a motorcycle; one day he hoped to get a real one, he said. The self-assured Rubo had a pretty girlfriend his age, who worked in a nearby factory, and came from a farming family in Henan, far north of Guangdong and Guizhou. Later that night he introduced us when I met them on the bustling nearby street, with tiny eateries catering to the migrants from all over China.3

Copyright © 2020 by Dexter Roberts