Via Economic Policy Journal

Guangdong, China

Dr. Rainer Zitelmann

The coastal province of Guangdong, with its capital Guangzhou, has traditionally been a pioneer of market reforms in China. Guangdong has a humid subtropical climate, which means the weather varies from warm to hot all year round. It is also China’s most populous province, home to more than 110 million people, and is famous for its unique spirit of innovation and entrepreneurship.
Deng Xiaoping, the chief architect of China’s economic reforms, visited the Shenzhen Special Economic Zone on the central coast of southern Guangdong province in January 1992. The interviews he gave attracted attention throughout China.

Deng, who became China’s paramount leader not long after Chairman Mao Zedong’s death in 1976, spent five days in Shenzhen and was amazed to see just how much the city had changed since his last visit in 1984. He was impressed by grand boulevards, glass skyscrapers, bustling shopping streets, and an endless number of factories. People were dressed in the latest fashions, wore fancy wristwatches, had the latest cameras and other more expensive consumer goods.

Incomes in Shenzhen were three times higher than in the rest of China. Deng’s demonstrative Southern Tour went down in history and generated a huge amount of coverage in the Chinese media, who eagerly reported on Deng’s uncompromising criticism of internal opposition against his reform policies. One day before Deng’s return to Beijing, the People’s Daily ran a widely acclaimed editorial under the headline “Be Bolder In Reform.”

My Chinese publisher, who has published four of my books in China, invited me to visit Guangdong in December. This was the first time I had been back to the province since August 2018. During this trip, I was able to speak with representatives of a private think tank. The head of the think tank is a professor, who does not belong to the Communist Party or any of the other eight political “parties” in China.

“Perhaps we will be the last defenders of capitalism,” he observed at one point. He is just as bemused that socialist ideas are experiencing a renaissance in Europe and the United States as he is by the climate hysteria that is sweeping Germany: “Here in China, hardly anyone still believes in Karl Marx’s ideas.”

At no point during my ten days in China did I hear anyone talk about climate change, with the exception of a 21-year-old student who is vegan because she wants to do her bit for animal welfare and against climate change. Being a vegetarian myself, I was surprised by the large number of exceptional vegetarian restaurants, some of which have even been awarded coveted Michelin stars. There is no climate hysteria here, but there are more electric cars and electric scooters than I have ever seen in any city in Germany. As a pedestrian, this swarm of completely silent scooters can take some getting used to. You can easily find yourself in a dangerous situation if you are used to being alerted to fast moving vehicles by engine noises.

China is full of contradictions: I visited an Innovation and Entrepreneur Hub in Shenzhen, where young entrepreneurs work on cutting-edge robots and other state-of-the-art technologies, financed by venture capital firms and supported by the state.

As you walk in to the hub, you are greeted by the question “What’s NEXT?” rendered in huge letters—a callback to the company Steve Jobs founded after leaving Apple. The hub’s lobby features an exhibition of films and photos as testament to the modern entrepreneurial spirit, along with a photo of Karl Marx and the Communist Manifesto.

I was deeply impressed by the vibrant entrepreneurial spirit and hunger to advance and accumulate wealth that I encountered in China. On one occasion, I was invited to speak at Peking University HSBC Business School in Shenzhen. The timetabling of my talk was less than ideal: Friday evening at 7:30 p.m. Nevertheless, the room was full to bursting with over 800 students (the school has a total of 1,000 students enrolled). Some members of the audience even had to stand or perch on windowsills around the lecture hall because the seats were all taken.

My talk was on the subject of “The Seven Most Important Factors In Getting Rich.” How many students at Western universities would spend almost three hours on a Friday evening at a talk on how to get rich? I suspect that universities in Europe and the United States would be more enthusiastic about organizing lectures on the evils of capitalism, a topic that would, in turn, seem so quixotic to their Chinese peers.

During my Chinese tour, I was invited to speak in the cities of Shanghai, Shenzhen, and Guangzhou. One of the most striking features of my speaking engagements was the large proportion of women in the audience. Whenever I speak on financial and economic subjects in Germany, my audiences are overwhelmingly male. In China, it’s different. We know from surveys in Europe and the US that Western women are significantly less likely to aspire to get rich than their male counterparts. I haven’t seen any comparable surveys in China, but based on my firsthand experience, it would seem that at least as many women as men are interested in learning more about success and wealth.

It is frequently claimed that Asians have a collectivist mindset, while we in the West are commonly described as individualists. But such claims paint only part of the picture. In some respects, Chinese people today are actually more individualistic: Chinese women, for example, are not trying to improve their situation by demanding quotas and political reforms, but through individual striving for success, education and wealth.

I also spoke with some journalists while I was in China and not a single one questioned whether wealth is a legitimate objective to pursue, or insinuated that the wealthy are shallow and superficial. Everywhere I went, people just wanted to know how to get rich. No one I met turned their noses up at entrepreneurship and the pursuit of wealth.

In fact, entrepreneurs such as Steve Jobs and Jack Ma are revered; in the office of one private think tank, the walls were lined with oversized photos of Jobs and Ma.

One of the things I was most surprised by was how badly most Chinese people speak English, despite the country’s increasing openness to the outside world. At the reception desk of a Hampton by Hilton hotel, not a single employee spoke English, nor did the taxi drivers. So a taxi ride can easily become its own little adventure because it is all but impossible to communicate with the driver. Even in international airports and upscale hotels, many Chinese employees speak little or no English. It was only in hotels such as the impressive Four Seasons in Guangzhou that employees could communicate fluently in English. And yet, even at the Hilton in Shenzhen, most of the receptionists spoke little more than broken English. And lots of young Chinese entrepreneurs also speak little or no English because they are so strongly focused on their home market.

Still, the situation wasn’t all that different during my youth in Germany—if anything, general English skills have only really improved over the last decade or two.

With numerous interlocutors, I was also able to engage in honest and critical discussions about the lack of political freedom and limits on freedom of opinion in modern China. One of the scientists I met had lived in the US for several years and admitted that there are very narrow limits to freedom of expression in China—especially when it comes to criticizing the political system or the country’s leaders. On the other hand, he was equally disturbed by the widespread political correctness he had encountered at universities in America, where a single “wrong” utterance could quickly be interpreted as sexist or racist and potentially lead to the immediate end of a person’s career.

On the subject of economic freedom, however, the Chinese are bristling with confidence. Several of the experts I spoke with told me that any comparison of state regulation in the EU and in the Guangdong area would probably come down in favor of Guangdong. Unfortunately, only a handful of well-informed insiders know both systems well enough to appreciate this. Most students, as became clear in the discussions that followed my talks, overestimate the degree of economic freedom in the US and Europe, just as Americans and Europeans overestimate the influence of the state on the Chinese economy.

According to a paper published by the World Economic Forum:

China’s private sector—which has been revving up since the global financial crisis—is now serving as the main driver of China’s economic growth. The combination of numbers 60/70/80/90 are frequently used to describe the private sector’s contribution to the Chinese economy: they contribute 60% of China’s GDP, and are responsible for 70% of innovation, 80% of urban employment and provide 90% of new jobs. Private wealth is also responsible for 70% of investment and 90% of exports.

Thus, whenever Western politicians cite the rise of China as an argument for greater reliance on the state in the United States or Europe, their line of reasoning is nothing short of absurd.

Dr. Rainer Zitelmann is a historian and sociologist. He is also a world-renowned author, successful businessman and real estate investor. His most recent book, The Power of Capitalism, was released in 2019. 
The above originally appeared at FEE.org/

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